AGNT (AGNT) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Investor Relations - Denise Garcia
• Chief Executive Officer - Leo Pareja
• Chief Financial Officer - Jesse Hill

TAKEAWAYS

• Revenue -- $1.4 billion, representing a 6% increase driven by higher transaction volume and the acquisition of NextHome.
• Net Loss -- $4.3 million, compared to a net income of $3.5 million in the prior year, primarily due to increased litigation contingencies and higher operating expenses.
• Adjusted EBITDA -- $17.1 million, a 3% decrease reflecting challenging macroeconomic conditions and elevated legal costs.
• Agent Count -- 87,457, an increase of 5% including agents joined through the NextHome acquisition in May 2026.
• Real Estate Sales Transactions -- 131,546, rising 8% year over year as agent productivity improved in a difficult market.
• Real Estate Sales Volume -- $59.3 billion, up 10% year over year despite a contraction in the overall residential real estate industry.
• Cash Position -- $111.4 million in cash and cash equivalents, which management stated is roughly flat compared to the same period last year.
• Productivity Per Person -- 5.5 transactions, representing a 6% increase when excluding the impact of the NextHome acquisition.
• Core Transaction Growth -- 1.7%, representing the growth in transactions when excluding the NextHome franchise platform.
• North America Realty Revenue -- $1.3 billion, a 5% increase year over year, though segment operating income fell 10% to $9.5 million.
• International Realty Revenue -- $51.7 million, representing 27% growth as the company continues to expand its global footprint.
• International Segment Losses -- $1.9 million operating loss, an improvement of 14% year over year as the segment scales toward profitability.
• Other Affiliated Services Adjusted EBITDA -- Loss of $500,000, representing a 58% improvement from the prior year.
• Q4 2026 Guidance -- Revenue projected between $1 billion to $1.2 billion, with an adjusted EBITDA range of negative $7 million to breakeven.
• Full-Year 2026 Revenue Guidance -- $4.85 billion to $5.05 billion, updated to reflect ongoing pressure from elevated mortgage rates.
• Full-Year 2026 Adjusted EBITDA Guidance -- $40 million to $47 million, reflecting increased visibility into year-end operating expenses.
• Agent Retention Metrics -- 90% of attrition occurs among agents completing fewer than seven transactions, while nearly 50% of nonproductive agents who left the firm also exited the real estate industry.
• Team Productivity -- 77% higher than that of individual agents, supporting the company's focus on recruiting and supporting team structures.
• Platform Engagement -- 3 million messages sent via The Hub in the last 90 days, with 1.2 million tool calls made through the MCP AI initiative since early October.
• Dividends -- $8.4 million distributed to shareholders in the third quarter, with a fourth-quarter dividend of $0.05 per share declared.
• Operational Expense Guidance -- $93 million to $97 million for the fourth quarter, driven by peak activity in legal matters.

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RISKS

• CFO Hill noted that legal costs are running high due to "several active matters that we believe are reaching peak activity in 2026," which has pressured adjusted EBITDA.
• Leo Pareja stated that the market "remains challenging" with mortgage rates sitting above 7.3%, leading to a conservative outlook for the fourth quarter.
• Jesse Hill warned that "rising interest rates continue to weigh significantly on housing demand," resulting in a softening of top-line performance.

SUMMARY

AGNT, Inc (NASDAQ:AGNT) reported revenue growth and increased agent productivity despite a challenging macroeconomic environment characterized by elevated mortgage rates and low housing inventory. Management discussed the transition to a multimodal platform, utilizing the NextHome franchise model to complement its core cloud-based brokerage. The company is prioritizing innovation through the launch of its Agent Tech operating system, designed to modernize transaction processing and support. Management stated that the business is focused on maintaining a strong balance sheet while investing in high-margin ancillary services and international expansion to drive future profitability.

• The company launched MCP, an AI-of-Choice initiative that uses connectors to integrate external AI tools like Claude and ChatGPT directly into the agent workflow.
• Management clarified that Open Real Estate is a stand-alone entity and a national initiative designed to create shared infrastructure for property listing data across the industry.
• CEO Pareja stated, "In a market that requires real skill, the agents who are doing the work are taking the share."
• The company expects to launch Revenos mortgage, a joint venture powered by NewRez, in early 2027 to expand its higher-margin ancillary services.
• CFO Hill stated, "We believe we are well positioned to support these initiatives and drive shareholder value long term."
• Management reported that 44% of new agent joiners in the third quarter were part of teams, which aligns with the company's focus on higher-productivity cohorts.

INDUSTRY GLOSSARY

• aNPS (Agent Net Promoter Score): A metric used to measure agent satisfaction and loyalty on a scale from -100 to 100.
• MCP (AI-of-Choice): A technology initiative that allows agents to use preferred artificial intelligence tools natively within the company's software platform.
• Agent OS: A modernized technology operating system designed to handle transaction processing, agent payments, and support services.
• MLS (Multiple Listing Service): A suite of services that real estate brokers use to establish contractual offers of compensation and accumulate and disseminate information to enable appraisals.
• NextHome: A national real estate franchise platform acquired by the company to expand its multimodal brokerage offering.
• Revenos: An affiliated service segment focused on lead generation and referral services for real estate agents.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Agent Inc Third Quarter 26 Earnings Call. At this time, all participants are in a listen-only mode. There will be a Q&A session. Ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Denise Garcia, Investor Relations. Please go ahead.

Denise Garcia: Thanks, operator. Good afternoon, and welcome to Agent's Third Quarter 26 Earnings Conference Call. Joining me today are Leo Pareja, Agent's Chief Executive Officer Jesse Hill, Agent's Chief Financial Officer. Following our prepared remarks, we will open the call for Q&A. Questions can be submitted via slido.com using event code AGNT or simply scan the QR code in the supplemental materials available on Agent's investor relations website at agnt.inc. But first, I will review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. Forward-looking statements include all statements other than those of historical fact.

These statements are not guarantees of future performance but rather are subject to a variety of risks, uncertainties and assumptions. Our actual results could differ materially from the expectations reflected in any forward-looking statements. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website as well as the risks and other factors discussed in today's earnings press release. Additional information is also available in our quarterly report on Form 10 Q for the quarter ended September 30, 2026, which was filed today.

In addition, references will be made to certain non GAAP financial measures, Adjusted EBITDA is a non GAAP financial measure, and all other financial measures are GAAP unless cited as non GAAP. Information on non GAAP financial measures, including a reconciliation to the most directly comparable GAAP measure, is available in the press release issued this afternoon and on our Investor Relations section of our website at agnt.inc. Unless otherwise noted, reported figures are rounded and comparisons for the third quarter of 26 are to the third quarter of 25. With that, I will turn the call over to Leo.

Leo Pareja: Thank you, Denise, and good afternoon, everyone. it is a pleasure to be speaking with you for the first time as the CEO of Agent. I am excited to lead this company to our next era of growth, and I am looking forward to sharing our 2027 strategy on the next call when we wrap up the fourth quarter of 26. Today, we will cover a few items. Our operating environment, where we are focused for the rest of this year, and how the third quarter reflects that focus. Let me start with the market. Because it shapes everything. To be direct, it remains challenging, and we are planning accordingly.

Existing home sales are on pace to land at or near 4 million again this year. Inventory is up about 7% from a year ago, but it is still below pre COVID levels. Mortgage rates are sitting above 7.3%, and Fannie recently raised its 30 year fixed forecast to 7.4 for the fourth quarter and 7.5% throughout 2027. And these are up from earlier projections below 7%. We should expect this market to stay difficult for a while and we have said this to our agents. But we also want to make it clear about how we see it.

This is not a market that is broken. it is a market that is resetting to normal after 2 record booms warped expectations. Life events still force people to move. And in a market that requires real skill, the agents who are doing the work are taking the share. that is where we are well positioned. We have scale. We have a value stack for agents that we believe is unmatched. We have a competitive compensation structure and a strong agent based that is increasingly productive. And we are up for the challenge. An important industry announcement I wanna address. On October 26, agent along with Keller Williams Home Services of America, and RE/MAX Group announced open real estate.

A national initiative to create a shared infrastructure for property listing data. The idea is simple. A brokerage or an agent would create a listing once, using minimum set of standard fields, it would be shared with participating members and distributed to local MLSs, home search sites, and other platforms. When listings are fragmented or kept out of view, buyers can miss homes, and sellers can reach fewer potential buyers. Open real estate is designed to work alongside MLSs To Combat Market Fragmentation, And it is Open To Every Brokerage In America. as a free participating member.

To be clear, Open Real Estate is a stand alone company with its own board of managers, and its own leadership, which will be built over the coming months. Agent is 1 of the 4 founding equity members but Open Real Estate is not a consolidating subsidiary of Agent. We do not expect to have a material effect on our results. AgentShares Open Real Estate's conviction that access to information and transparency should be a benefit, not a barrier. To both buyers and sellers. With that, let's move on to where we are focused for the rest of the year. There are 4 key targets we are focused on to manage through this cycle and come out ahead.

Agents, innovation, operating efficiency, and margin expansion. Let me address each starting with agents. We believe Agent is a global operating system for the modern real estate entrepreneur, and we have worked to build this since our inception. Most recently, with the acquisition of NextHome, we created a multimodal platform. Independent agents, team leaders, and franchise owners can all find a home built for the way they want to grow. We established 2 models this year providing real estate with maximum optionality. We have also made real strides in providing agents with the tools they need to run their business. The goal is simple.

Help agents sell and manage their business get paid smoothly, and provide better training and support at every step. Our intention is to earn the right to continue to be the most agent centric brokerage on the planet. Moving on to our next area of focus. Innovation. Innovation is in our DNA. We built the first cloud based brokerage and we intend to keep our lead as a technology innovator in the space. At eXpCon last month, we announced 2 things we wanna highlight. Number 1 is MCP, our AI-of-Choice initiative. Most companies in our industry are building their own AI assistant. Their own chatbot, their own login, and a set of new habits that agents are asked to adopt.

We asked a different question. Why ask agents to change their habits at all? Our agents are already using AI they trust, whether that is Claude, GPT, or another tool. So we built MCP connectors that meet our agents natively wherever they are today. No new app to download. No new login to remember. An agent asks a question and gets the right answer where they are working natively. We are not trying to outbuild the largest frontier models in the world. We are going to connect to them instead. Number 2 is Agent OS. Which stands for Agent Tech operating system.

Our stock ticker AGNT, represents where the company is going. it is a full modernization of how eXp runs, agent-first, from the ground up, built for the world you are actually operating in today. MCP is the front door. Agent OS is the whole house. it is the full modernization of how we run from how agents get paid to how a transaction moves to how they are supported from day 1. And we are making this all easy to find in the hub. The Hub is now a scaled enterprise-grade software built for agents' specific needs.

Every line of code was written by AI, and much of its ongoing iteration and maintenance runs through our Agent Tech software factory methodology. With stakeholders directly shaping its evolution. Today, at the center of community and communication at Agent, The Hub continues to grow steadily month over month with nearly 3 million messages sent in just the last 90 days and more than 1.7 thousand active community groups. Our new hub MCP has received more than 1.2 million tool calls since its October 8 launch. As the rest of the Agent OS ecosystem takes shape with the hub being at the center of it, we expect to see adoption increase. Here's why this matters to you as investors.

These initiatives support 3 of our 4 pillars. On innovation, this puts us inside of the tools agents already use every day rather than asking them to adopt something new and diverting their attention away from closing deals and putting a drag on their productivity. On operating efficiency, modernizing the systems underneath the business should over time, reduce friction in transaction processing and how agents are supported. These are early days, so we will be careful not to overpromise on timing or financial impact. But we are encouraged by the direction, and we will share our 2027 plans on our next call. Now let me take you through our third quarter operating highlights.

We ended the quarter with revenue, real estate transaction sales, agents, and transactions per agent up all year over year. Our agents are increasingly productive even in a tough market. And we continue to retain our most productive agents. Consistent with Q2, over 90% of our attrition comes from the less productive cohort and nearly half of the nonproductive agents in The US who left eXp also left the industry. And we continue to add agents on teams with 44% of new agent joiners on teams in Q3, And this is important because agents on teams are 77% more productive than individual agents. Another priority is margin expansion. And there are several places I would point to. First, international.

We have consistently narrowed its operating losses and improved adjusted EBITDA while expanding our presence worldwide. Jesse will provide additional detail on the third quarter business segment shortly. Second, our ancillary services such as LuxeVT and Revenos are higher margin businesses that help agents win in the luxury market and generate leads in any market. At eXp Con, we also announced Revenos mortgage powered by NewRez, a joint venture we expect to launch in early 27. Third, franchise systems like NextHome. NextHome is not yet a significant contributor to overall gross margin. But we believe it has the potential to drive gross margin up over time as we scale. We are operating with discipline.

We are investing where we see real opportunity, and we are staying realistic about the market. With that, I will hand it over to Jesse.

Jesse Hill: Thank you, Leo, and good afternoon, everyone. I will walk through our consolidated operating and financial results for the third quarter. I will also provide more detail across our business segments and our outlook for the remainder of the year before opening up the call to questions. Starting with operational results, we ended the quarter with 87.5 thousand agents up 5% year-over-year. That figure includes the agents who joined us with NextHome acquisition in May. Real estate sales transactions were over 131 thousand up 8% year over year, and sales volume was $59.3 billion, up 10% year over year, both including NextHome. NextHome is the heart of our strategy to build a multimodal platform. And it contributed to that growth.

Excluding NextHome, transactions were up 1.7%, and productivity per person was 5.5, up 6% year over year. We are encouraged that the productivity gains and the transaction growth our core business are showing up in our numbers, and we are pleased with how NextHome is adding a franchise platform and reach to agents who prefer that model as we continue to integrate it. Revenue was $1.4 billion, up 6% year over year, and within our guidance range of $1.35 billion to $1.45 billion despite increased pressure from the macro environment during the quarter. Gross profit was $91 million, also up 6%.

Operating expenses were $87.9 million within our guidance range of $85 million to $90 million Operating income was $3.1 million, down 23% from last year. This was primarily the result of heightened legal costs which we expect to continue in the back half of the year as we flagged on last quarter's call. Adjusted EBITDA was $17.1 million, down 3% year over year and within our guidance range of $17 million to $22 million Finally, we ended the quarter with $111.4 million in cash, roughly flat with last year and up slightly from the second quarter, as we balance building our cash reserves against opportunistically buying back shares at these levels.

We continue to build our cash reserves to preserve optionality, and we remain debt free. North America Realty remains our largest operating segment. Revenue was $1.3 billion, up 5%. Operating income was $9.5 million, down 10%, and adjusted EBITDA was $22.3 million, down 3%. International remains our fastest growing segment. Revenue was $51.7 million, up 27%. While we continue to invest in expansion, the segment's operating loss was $1.9 million, a 14% improvement year over year, and adjusted EBITDA was a loss of $1.3 million, an 18% improvement. Our other affiliated services segment, contributed $700 thousand in revenue, with an adjusted EBITDA loss of $500 thousand a 58% improvement year over year.

In total, that is $1.4 billion in revenue, $3.1 million in operating income, and $17.1 million in adjusted EBITDA. Looking ahead, we remain focused on agent success innovation, operating efficiently, and margin expansion. For the fourth quarter, we project revenue of $1 billion to $1.2 billion operating expenses of $93 million to $97 million and adjusted EBITDA of negative $7 million to breakeven. Elevated mortgage rates have continued to pressure housing demand, we have updated our top line guidance accordingly. For the full year, we now expect revenue in the range of $4.85 billion to $5.05 billion As we approach year end, we have increased visibility on Q4 operating expenses as reflected in our updated OpEx and EBITDA guidance.

We now expect operating expenses in the range of $362 million to $367 million and adjusted EBITDA between $40 million to $47 million While the current operating environment remains challenging, we continue to focus on our top priorities, including agents, innovation, operating efficiency, and expanding margins. We believe we are well positioned to support these initiatives and drive shareholder value long term. With that, Leo and I would be happy to take your questions.

Operator: Thank you. We will now begin the Q&A portion of today's call. As a reminder, you can submit questions anytime on slido.com using event code AGNT or simply scan the QR code in the supplemental materials. To ask a question over the phone line during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. We will pause for a moment and I will hand it back to Denise for some kick-off questions.

Denise Garcia: Thanks, Denise. So while we are waiting, I will kick it off with a couple of questions we received from our analysts. I will start with you, Leo. Leo, what are the initial startup costs of open real estate and what is the financial impact as the collaboration scales?

Leo Pareja: Thanks, Denise. For some context, open real estate is a collaboration among 4 founding members today, and it is not consolidated into our financial statement. Our exposure is limited to our share as 1 of those founding members. Our startup costs and our spend to date have been very modest and not material to agent. Going forward, costs will be borne out of all the founding members, not just AGNT alone. As the venture builds out in key leadership and moves ahead with a platform development and expect costs to increase over the next 2 quarters. We do not expect that increase to be material to AGNT's results.

Denise Garcia: Okay. Thanks. And, Jesse, 1 for you. Can you expand on your fourth quarter and full year guidance? what is changed since you provided guidance in August?

Jesse Hill: Yes. Thank you, Denise. While our Q3 results were solid, our updated Q4 guidance reflects 2 primary factors really, the macro headwinds that we are all seeing and elevated legal expenses that we are seeing here at AGNT. So on the top line, rising interest rates continue to weigh significantly on housing demand, and we have seen that softening as we have headed into Q4 here. And on the bottom line, legal costs are continuing to run high to our baseline due to several active matters that we believe are reaching peak activity in 2026. And so both of these combined cause us to adjust our full year adjusted EBITDA guidance range accordingly.

And then just 1 more note on the legal cost. While we always expect to have some baseline of legal expenses, we are confident that 2026 is running above that baseline, and we believe it will normalize as we head into 2027. Thank you.

Operator: We have a question over the phone line from Stephen Sheldon with William Blair. Your line is open.

Analyst: Hey, thanks for taking my questions. Just I guess as we think about the cost structure, the housing market has been weak. You know, I guess if that continues through next year, are there things you could do to I guess, protect the bottom line and the profit trajectory here And maybe just kinda give us a refresh on you know, the expense base, how much of that is kind of fixed versus variable.

Leo Pareja: Good luck to you, Taylor. Thanks. Yeah. Sure. Thank you for the question. We have communicated very high level before. We do not break it out, when we show that unit economics in our key performance indicators that we track in the queue, The, fixed and variable split that you are asking for, it is generally 1/3, 2/3. that is a safe range. 1/3 variable, 2/3 fixed. We like to use internally the language direct and indirect. Right? it is not exactly fixed in the sense of, like, you know, having a factory or a tractor. And so even the indirect costs for us are slightly fungible, legal being an example here.

And then going forward to answer your question, you know, we intend to provide guidance in Q4. For 2027 when we have a stronger finger on the pulse for what interest rates are gonna look like, what trends are looking like when we have closed out the year here. But just initially, I can tell you we are really focused on operational efficiency. And what we can do with our unit economics. And, you are. We are gonna continue to focus on that as we head into 2027. Got it. that is helpful. And then maybe just as a follow-up. You know, I would love to get any detail on what you are seeing in the recruiting pipeline.

You know, for agents, teams, etcetera. And I do. You know, I think some peers have talked about agent industry agent churn picking up. I joined late, so apologies. If I missed this. But I guess, maybe talk about both what you are seeing in the pipeline, the ability to add you know, gross agents, and then the trends you are seeing on the churn side and, you know, if there is. If anything's directionally changing in any of those categories. Thanks, Steven. it is Leo. Yeah. So what we are seeing is pretty consistent. Over 90% of our attrition comes from the agents doing less than 7 or so transactions.

When we had the slides on the virtual world, I was able to point that out pretty clearly. And 49% of the nonproductive agents who left, left the industry in Q3. So 44% of all new agents joining us are joining on teams. So definitely seeing a skew over the last 5 years, if you will. I can give you an anecdotal story with 1 of our top team leaders. I was on the phone with her the other day, and she said 5 years ago, 90% of the agents joining her team were brand new agents. And now she says 65% of her agents are actually pretty seasoned who are just tired.

So, you know, we are we are really focused on productivity. Programs like FastCap. We just won 2 gold awards competing with companies like 3M and Pepsi in training. Is where we are really focused. I would actually give you a slightly different view of the churn. I feel like a lot of the inherent churn happened over the last 3 years, and the folks who are here are the survivors of the of the process. But, again, we are we are still seeing I would say, seasonal year over year, quarter over quarter ratios. So we have not seen an uptick, if you will, even though the industry continues to contract.

So in other calls, I have celebrated that on a contracting denominator basis feels really, really good. So it. You know, we are more of the same, really tough macro, but we are really focused on productivity. And I think I said 59%. I meant 49%. So, yeah, tough macro. We are really focused on skills. that is the agent that is going to survive in this market. Makes sense. Thank you.

Operator: Thank you. As a reminder, you can submit questions anytime on slido.com using event code AGNT or simply scan the QR code in the supplemental materials. To ask a question over the phone line during this session, you will need to press star 11 on your telephone. You will then hear an automated message. advising your hand is raised. To withdraw your question, please press star 11 again. We will pause for a moment. With no additional questions in the queue, we will wrap up today's call. Thank you to everyone who joined. A recording of this call and our latest investor presentation are available on our Investor Relations website at agnt.inc. Thank you, and have a great evening.

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