Douglas Elliman Posts $7.4 Million Profit in Third Quarter
Key Facts
Douglas Elliman said on November 9 that net income attributable to the company was $7.4 million in the third quarter ended September 30, 2026, compared with a loss of $24.7 million in the same period a year earlier. The turnaround in net results came as the company recorded operating income of $6.3 million, after an operating loss of $10.7 million a year earlier. Adjusted measures, however, remained negative: adjusted EBITDA was a loss of $5.3 million, compared with income of $1 million in the third quarter of 2025. The company also posted an adjusted net loss of $8 million, or $0.09 per diluted share, compared with a loss of $1.4 million, or $0.02 per share, a year earlier. The figures show that the reported profit was not accompanied by a comparable improvement in adjusted performance.
Quarterly revenue was $252.1 million, down from $262.8 million a year earlier. Excluding the property-management business the company sold in October 2025, revenue in the comparison period was $253.4 million, making the decline on an adjusted comparable basis modest. The company attributed the revenue drop to a $15.088 million decrease in development marketing revenue, and declines in existing-home sales of $6.725 million in the West and $3.861 million in New York. These were partly offset by a $24.162 million increase in existing-home sales revenue in Florida. Florida’s share of total revenue rose to 28.8%, from 19.1% in the comparison period after excluding property management, while development marketing’s share fell to 3.6% from 9.5%. The company said the change in revenue mix weighed on gross margin, alongside broker commission expenses rising to 79.4% of revenue, compared with 73.3% a year earlier, or 76.1% after excluding property-management revenue.
Part of the improvement in net income was tied to the settlement of a shareholder derivative lawsuit, rather than an unspecified general settlement. Douglas Elliman recorded net proceeds of $15.63 million from the settlement as a reduction in general and administrative expenses during the quarter. The gross settlement amount was $17.5 million, before deducting $1.87 million in attorneys’ fees and expenses. By contrast, in the third quarter of 2025, the company incurred a loss of $15.445 million from a change in the fair value of an embedded derivative in convertible debt. The absence of that noncash loss in the current period contributed to the year-over-year improvement in reported net income. Adjusted earnings nevertheless remained negative, highlighting the effect of the settlement and comparison-period items on the quarterly result.
For the nine months ended September 30, revenue was $749.9 million, compared with $787.6 million in the corresponding period of 2025. The company posted a net loss of $11.6 million, compared with a loss of $53.3 million a year earlier. In the second quarter of 2026 alone, the net loss was $2.7 million, down from $22.7 million a year earlier, while revenue rose to $283.4 million from $271.4 million. The third-quarter profit therefore followed a second-quarter loss, but did not erase the cumulative loss for the first nine months. In terms of activity, total deal volume was about $10 billion in the third quarter, roughly in line with the same period a year earlier. Average deal value rose to $1.83 million from $1.77 million.
Cash and cash equivalents totaled $102.7 million as of September 30, alongside $20 million in U.S. Treasury bills, and the company had no long-term debt. On November 9, the board authorized share repurchases of up to $10 million, with the expected purchases to be funded from available cash. The company said the authorization does not obligate it to repurchase any shares and may be amended or suspended. It had about 91 million shares outstanding on November 4. The decision sets a cap for the program but does not establish that the company will make purchases up to the maximum.
The chief executive said the company is investing in its people, technology and the modernization of its operating platform. The company estimates its development marketing pipeline at about $26 billion, with additional projects worth $11.8 billion scheduled to enter the market through December 31, 2027. Management expects to achieve gradual savings in non-commission operating expenses starting in 2027. On its second-quarter earnings call, the company said it was seeking to reshape its cost structure through its transition to artificial intelligence and by modernizing workflows, operations and infrastructure. The company held a call to discuss its third-quarter results on November 10, 2026, at 8 a.m. Eastern time, and made a replay available through November 24. Douglas Elliman shares closed at $1.74 in the November 11 session, according to EL7 daily pricing data.