Douglas Elliman Q3 2026 Earnings Call Transcript

Douglas Elliman (NYSE:DOUG) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Douglas Elliman reported $252.1 million in revenues for Q3 2026, a slight decline from $262.8 million in Q3 2025, attributed to the sale of its property management business.

Net income for Q3 2026 was $7.4 million, reversing a net loss of $24.7 million in Q3 2025. Adjusted EBITDA showed a loss of $5.3 million compared to a $1 million income in Q3 2025.

The company is focusing on AI transformation, cost reduction, and optimizing physical spaces to enhance operational efficiency and agent productivity.

Douglas Elliman is expanding its development marketing pipeline, notably in Florida, with $26 billion in gross transaction value actively marketed and $11.8 billion expected by December 2027.

The company maintains a strong balance sheet with $123 million in cash and equivalents and announced a $10 million share repurchase program.

Strategic expansion into new luxury markets both domestically and internationally is planned, with a focus on reinforcing the core business and extending brand reach.

Management emphasized a strategy of quality over size, prioritizing technology, infrastructure modernization, and high-quality agent recruitment.

Douglas Elliman aims to exploit competitive advantages by avoiding merger distractions, focusing on organic growth and new revenue streams in 2027.

Full Transcript

Heather (Investor Relations)

During this call, the terms adjusted EBITDA and adjusted net loss will be used, as well as last 12 months, or LTM, metrics. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted EBITDA and adjusted net loss are contained in the company’s earnings release, which has been posted to the Investor Relations section of the company’s website.

Before the call begins, I would like to read a safe harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in more detail in the company’s Securities and Exchange Commission filings. Now I would like to turn the call over to the Chief Executive Officer of Douglas Elliman, Michael S. Liebowitz.

Michael Liebowitz (President and CEO)

Thank you, Heather. Good morning, and thank you for joining us on today’s call. We will discuss the current operating environment, Douglas Elliman’s financial results for the three and nine months ended September 30, 2026, and provide an update on the AI transformation we launched last quarter. All numbers presented this morning will be as of September 30, 2026, unless otherwise stated. Before turning to the quarter, I want to step back for a moment and talk about where Douglas Elliman stands today and the significant progress we have made against the priorities we laid out earlier this year. Over the last two years, much of our attention has been focused on strengthening the foundation of this company, and we have succeeded in doing exactly that. Douglas Elliman is stronger and more focused today, allowing us to shift the conversation to what comes next, how we grow, where we see the future, and how we position Douglas Elliman to capture the opportunities ahead.

We have sharpened our focus around what this company does best: luxury residential real estate. At the same time, we are building a more productive, more efficient organization around that core. We have also been very deliberate about what we want Douglas Elliman to stand for. Success for us is not about being the largest for the sake of being the largest. It’s about quality. It’s about people, technology, and culture. It’s about having exceptional agents and professionals and giving them the support, technology, and resources to perform at the highest level. We’ve accomplished a great deal, but we are not standing still. We are continuing to allocate our resources against the measures that matter most: productivity, quality, service, and ultimately profitable growth.

Technology is central to that strategy, and the transformation we introduced last quarter has continued to advance as part of our broader efforts to modernize the business and reduce costs. I said previously that this was more than a technology upgrade, and that remains true. What is changing now is that the strategy is moving deeper into execution. Some of the most meaningful early opportunities are behind the scenes. There are workflows and processes across Douglas Elliman that can be simpler, faster, and better connected.

Modernizing those systems should make the company more efficient while giving our agents and employees better tools and more time to focus on client relationships and growing their businesses. That work is underway, and we remain focused on gradually realizing meaningful efficiencies in our non-commission operating expenses beginning in 2027. We are also continuing our efforts to reduce our lease obligations and optimize our physical footprint—another important part of modernizing Douglas Elliman and creating a leaner, more efficient cost structure. At the same time, we are being more strategic about the spaces we maintain, creating purposeful environments that serve as both agent workspaces and client-facing showrooms with an elevated in-person experience designed to better support how our agents work and engage with clients today.

Taken together, these efforts are about modernizing how Douglas Elliman operates and building a more efficient platform to support the business over time. Just as important as building the technology is putting the right people in place to turn it into results. Over the past quarter, we have added dedicated leadership around both technology and operations. Sharon Mills joined Douglas Elliman Realty as Head of AI Technology Transformation. Sharon is overseeing our enterprise AI strategy and deployment, as well as the broader technology transformation across the company.

Nick Pitino joined us as Director of AI Enablement, focusing on making sure these capabilities become part of how we actually get things done across the company, translating new technology into adoption, productivity, and measurable business value. And I’m extremely pleased to have Jamie Gagliano back at Douglas Elliman Realty as Douglas Elliman Realty’s Chief Operations Officer of Brokerage. Jamie brings significant experience working with agents and building businesses, and she is already looking across our national operations and how we simplify processes, strengthen support, and build a more scalable organization.

This will also allow me to focus more of my attention on the broader strategic opportunities ahead, including ways to expand our services and build new revenue streams. Vision is important, but it only matters if you execute. These additions give us experienced leaders who can drive that execution across the firm. That brings me to talent. The residential real estate industry continues to evolve, and we are positioning Douglas Elliman to remain the destination of choice for the most talented professionals in luxury real estate. Our focus is on building the highest quality brokerage and investing in productive agents and future producers who represent the strength of the Douglas Elliman brand and our longstanding commitment to exceptional service.

To support them, we are making meaningful investments in our technology and operations and agent resources while continuing to strengthen the high-touch service and support that have long differentiated Douglas Elliman. We see a significant opportunity to bring those strengths together: the relationships, expertise, and trusted advice our agents provide, supported by a more modern and efficient operating platform that allows them to better serve their clients and grow their businesses.

This is particularly important in the luxury markets where Douglas Elliman operates. These are highly personal and often complex transactions, and our clients continue to value the expertise, judgment, and market expertise of exceptional real estate professionals. Another important contributor to our long-term pipeline is development marketing, where our relationships with developers create an opportunity to do more across the life of a project. That can mean financing, capital relationships, and other services that sit naturally alongside the residential brokerage business.

Over time, us expanding those capabilities can make Douglas Elliman more valuable to developers while creating additional and potentially more recurring sources of revenue for the company. Elliman Capital fits directly into that strategy. Bringing financing capabilities closer to our agents, clients, and developers expands the services we can provide and allows us to participate in more of the economics surrounding the residential transaction. That same principle guides how we think about growth more broadly. The most compelling opportunities are those that reinforce our core business, extend the reach of our agents and brand, and make sense financially. That is exactly how we are approaching geographic expansion both domestically and internationally. Internationally, the Douglas Elliman brand is reaching more and more markets and more clients, and we are increasingly finding opportunities to generate value from the strength of our brand globally.

Importantly, the economics of our international expansion have fundamentally changed. Where we once paid others to extend our global reach, today we are increasingly getting paid for the use of the Douglas Elliman brand. There are additional international markets we are evaluating, but the approach will remain thoughtful and disciplined. This is not about putting dots on a map. It’s about finding the right partners in the right luxury markets where Douglas Elliman can add value and where the economics make sense to us.

The same standard applies domestically. There are luxury markets where our brand, platform, and agent network can travel extremely well, and we will pursue those opportunities when the people, economics, and strategic fit make sense. Taken together, these initiatives represent an important evolution in the Douglas Elliman story. Douglas Elliman enters this next phase from a position of strength with a strong balance sheet, no long-term debt, a more focused business, and a clear path for growth.

We are investing in talented people. We are modernizing the infrastructure beneath the company. We are giving our agents better tools. We are expanding our capabilities around new development and residential finance, and we are taking the Douglas Elliman brand into new luxury markets where the opportunity makes sense. Each of these efforts connects back to the same objective: a higher quality, more productive, and more profitable Douglas Elliman.

There’s a tremendous opportunity in front of this company, and we are excited about where Douglas Elliman is headed. With that, I will turn it over to Bryant, who will provide more details on our financial and operating performance for the three and nine months ended September 30, 2026.

J Bryant Kirkland III (See Remarks)

Thank you, Michael. Before reviewing the financial performance, we will provide some updates on our trends. First, our industry-best average price per transaction during the nine months ended September 30, 2026 has been consistent with the 2025 year-to-date period at approximately $1.88 million per home sale. For the last 12 months, our average price per transaction has been $1.87 million per home sale, compared to $1.81 million per home sale for the last 12 months ended September 30, 2025.

Next, our average daily cash receipts from existing home sales in October 2026 were up 1.9% from October 2025. However, because October 2026 had one fewer sales day than October 2025, receipts from existing home sales were down 2.7% from October 2025. Next, our development marketing division continues to demonstrate significant scale and momentum with a pipeline of actively marketed projects of approximately $26 billion of gross transaction value and another $11.8 billion of gross transaction value expected to come to market through December 2027. We believe this foundation of business bodes well for the future as we would recognize commission income from these projects if they close, which is generally expected to be between 2026 and 2032.

In particular, we see positive indicators within our development marketing business in Florida, with approximately $19.5 billion of gross transaction value of the $26 billion of gross transaction value that is being actively marketed. For most projects in Florida, we receive progress payments during the marketing process and defer the related revenue and commission expense until the earnings process is complete, which is when the underlying sale closes.

As a result, growth in our net contract liabilities—which is the difference between our contract liabilities and contract assets—can be an indicator of future development marketing earnings. As of September 30, 2026, our net contract liabilities increased to $48 million from $35.4 million at December 31, 2025, a $12.6 million increase compared with a $3.5 million increase during the first nine months of 2025. As previously stated, we expect the amount of net contract liabilities which has increased in 2026 to be recognized as earnings when the related projects close.

Moving to the operating performance of the business in the third quarter, Douglas Elliman reported $252.1 million in revenues compared to $262.8 million in the 2025 period. Excluding revenues from our property management business, which was disposed in October 2025, revenues were flat from the third quarter of 2025—$252.1 million in the 2026 period compared to $253.4 million in the 2025 period. Net income for the third quarter was $7.4 million, or $0.08 per diluted share, up from a net loss of $24.7 million, or $0.29 per diluted share, in the 2025 period.

Net loss in the 2025 period included a non-cash expense of $15.4 million associated with the increase in fair value of derivatives within our convertible debt, which was retired in October 2021. Adjusted EBITDA for the third quarter was a loss of $5.3 million compared to income of $1 million in the 2025 period. Adjusted net loss in the third quarter was $8 million, or $0.09 per share, compared with adjusted net loss of $1.4 million, or $0.02 a share, in the 2025 period.

Moving to the operating performance of the business for the nine months ended September 30, 2026. As a reminder, the year-over-year comparisons for the nine months ended September 30, 2026 are impacted by a difficult comparable due to an unusually strong first quarter of 2025. Douglas Elliman reported $749.9 million in revenues for the nine months ended September 30, 2026 compared to $787.6 million in the 2025 period. Excluding revenues from our property management business, revenues declined by 1.1% from the 2025 period to $749.9 million from $758.2 million.

Net loss for the nine months ended September 30, 2026 was $11.6 million, or $0.14 per diluted share, compared to $53.3 million, or $0.63 per diluted share, in the 2025 period. Net loss in the 2025 period included a non-cash charge of $33.2 million associated with our convertible debt, which was retired in October 2025. Adjusted EBITDA for the nine months ended September 30, 2026 was a loss of $16.7 million compared to a loss of $3.4 million in the 2025 period.

Adjusted net loss for the nine months ended September 30, 2026 was $24.3 million, or $0.28 per share, compared to $13 million, or $0.15 per share, in the 2025 period. Douglas Elliman continues to maintain a robust balance sheet with $103 million of cash and cash equivalents and another $20 million in a U.S. Treasury bill maturing in March 2027, a total of $123 million at September 30, 2026. And as we announced in our earnings press release yesterday, our Board of Directors has approved a share repurchase program authorizing the company to repurchase up to $10 million of our common stock, reflecting our continued focus on disciplined capital allocation and long-term stockholder value.

Thank you for your attention. And back to you, Michael.

Michael Liebowitz (President and CEO)

Thank you, Brian. I really believe that Douglas Elliman is in an incredible moment. We’ve got an incredible brand, we’ve got financial flexibility, we’ve got the scale to do more while still being nimble enough to move quickly when we need to. That gives us the ability to look beyond the traditional brokerage model, explore things around development marketing, our branding, other services that naturally fit into what we already do. I think in 2027 you’ll see a lot more of those things come to fruition.

We have opportunities to broaden what we offer, create new revenue streams without losing the focus on our core business that is in good shape. And when I look at the competitive environment, look at a lot of our competitors, they’re basically spending most of their time on mergers integration. And that’s very distracting for management, creates a lot of uncertainty for agents, and we’re not in the middle of that at all. We’re in a growth stage. We can stay focused on our people, our business. I think this is going to create real opportunity for us to attract great agents, continue to grow our business, and do really exciting things in 2027 while keeping our cost structure at a level that we feel very comfortable about.

We’ve done a lot of work to get here. I’m here two years at the company now, and I really feel that we are in the best position to take advantage of the market—utilizing our brand, utilizing our incredible agents, and also with the ability to make our business a much more quality business with the highest level of agents that are producing. With that, I’ll turn it back over to the operator.

OPERATOR

Thank you for joining us on the Douglas Elliman quarterly earnings conference call. We hope you have a good day, and this will conclude our call. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.