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STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2024

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

10. STOCKHOLDERS’ EQUITY

Common Stock – As of December 31, 2024, our restated certificate of incorporation authorized us to issue 900,000,000 shares of common stock with a par value of $0.00001 per share.

The following table represents a reconciliation of the Company’s issued common stock shares for the periods presented:

​

​	​	​	​	​	​	​
​	​	Year Ended December 31,
​	​	2024	​	2023	​	2022
Common stock:	​	​	​	​	​	​
Balance, beginning of period	​	183,606,708	​	171,656,030	​	155,516,284
Shares issued for stock options exercised	​	380,919	​	832,993	​	2,105,237
Agent growth incentive stock compensation	​	1,787,280	​	2,219,881	​	2,571,569
Agent equity stock compensation	​	9,253,300	​	8,897,804	​	11,462,940
Balance, end of period	​	195,028,207	​	183,606,708	​	171,656,030

​

The Company’s stockholder approved equity programs described below are administered under the 2024 Equity Incentive Plan, beginning in September 2024. Prior to that time, the equity programs were administered under the 2015 Equity Incentive Plan which has since terminated. The purpose of the equity plan is to retain the services of valued employees, directors, officers, agents and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.

The Company declared and paid dividends of $0.05 quarterly in 2024, $0.045 in each of the first and second quarters of 2023, $0.05 in each of the third and fourth quarters of 2023, $0.040 in each of the first and second quarters of 2022 and $0.045 in each of the third and fourth quarters of 2022. Dividends are declared at the discretion of the Board of Directors and are based on various factors, including the Company’s financial condition, results of operations, capital requirements, and market conditions. The total cash dividends paid during each of these years were funded from available cash and were recorded as reductions to retained earnings.

Agent Equity Program (“AEP”)

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed residential real estate transaction in the form of common stock of the Company at a discount recognized by the Company. If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable.

For the years ended December 31, 2024, 2023 and 2022, the Company issued 9,253,300, 8,897,804 and 11,462,940 shares of common stock, respectively, to agents and brokers for $111,278, $135,226 and $164,104, respectively, net of discount, attributable to the AEP.

Agent Growth Incentive Program (“AGIP”)

The Company administers AGIP whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks. The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares performance metrics are achieved. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the years ended December 31, 2024, 2023 and 2022, the Company’s stock compensation attributable to the AGIP was $37,265, $43,178 and $30,861, respectively. The total amount of stock compensation attributable to liability classified awards was $2,251, $3,832 and $2,056 for the years ended December 31, 2024, 2023 and 2022, respectively.

The following table illustrates changes in the Company’s stock compensation liability, included in accrued liabilities for the periods presented:

​	​	​
​	​	Amount
Stock grant liability balance at December 31, 2022	​	$ 3,885
Stock grant liability increase year to date	​	3,832
Stock grants reclassified from liability to equity year to date	​	(2,717)
Balance, December 31, 2023	​	$ 5,000
Stock grant liability increase year to date	​	2,251
Stock grants reclassified from liability to equity year to date	​	(2,206)
Balance, December 31, 2024	​	$ 5,045

​

As of December 31, 2024, the Company had 7,959,572 unvested common stock awards and unrecognized compensation costs totaling $59,519 attributable to stock awards where the performance metric has been achieved and the number of shares awarded are fixed. The cost is expected to be recognized over a weighted average period of 2.01 years.

The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods:

​

​	​	​	​	​
​	​	​	​	Weighted Average
​	​	​	​	Grant Date
​		Shares		Fair Value
Balance, December 31, 2022	​	5,698,997	​	$ 17.68
Granted	​	4,642,035	​	15.04
Vested and issued	​	(2,219,881)	​	11.73
Forfeited	​	(1,245,862)	​	17.35
Balance, December 31, 2023	​	6,875,289	​	$ 17.80
Granted	​	4,588,562	​	12.22
Vested and issued	​	(1,787,280)	​	22.99
Forfeited	​	(1,720,193)	​	15.93
Balance, December 31, 2024	​	7,956,378	​	$13.80
​	​	​	​	​

​

Stock Option Awards

Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant. These options generally have time-based restrictions with equal and periodically graded vesting over a three-year period.

The fair value of the options issued is calculated using a Black-Scholes-Merton option-pricing model with the following assumptions:

​

​	​	​	​	​	​	​
​	​	2024	​	2023	​	2022
Expected term	​	5 years	​	5 - 6 years	​	5 - 6 years
Expected volatility	​	73.51% - 74.29%	​	73.64% - 76.78%	​	72.84% - 76.49%
Risk-free interest rate	​	3.48% - 4.61%	​	3.28% - 4.86%	​	1.49% - 4.10%
Dividend yield	​	1.39% - 1.99%	​	0.72% - 1.64%	​	0.53% - 1.48%
​	​	​	​	​	​	​

​

The following table illustrates the Company’s stock option activity for the following periods:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	Weighted
​	​	​	​	​	​	​	​	Average
​	​	​	​	Weighted	​	​	​	Remaining
​	​	​	​	Average	​	​	​	Contractual Term
​		Options		Exercise Price		Intrinsic Value		(Years)
Balance December 31, 2022	​	5,774,522	​	$ 13.56	​	$ 2.21	​	7.63
Granted	​	2,468,299	​	14.81	​	-	​	8.46
Exercised	​	(832,993)	​	5.90	​	14.97	​	—
Forfeited	​	(1,198,706)	​	17.77	​	2.27	​	—
Expired	​	(12,578)	​	35.54	​	0.29	​	—
Balance at December 31, 2023	​	6,198,544	​	$ 14.23	​	$ 3.62	​	7.29
Granted	​	1,012,111	​	11.74	​	-	​	9.19
Exercised	​	(380,919)	​	5.29	​	5.79	​	—
Forfeited	​	(959,539)	​	18.84	​	0.05	​	—
Expired	​	(300,052)	​	23.60	​	0.04	​	—
Balance at December 31, 2024	​	5,570,145	​	$ 13.09	​	$ 1.17	​	6.97
Exercisable at December 31, 2024	​	3,380,785	​	$ 12.51	​	$ 1.83	​	5.86
Vested at December 31, 2024	​	3,380,785	​	$ 12.51	​	$ 1.83	​	5.86
​	​	​	​	​	​	​	​	​
​	​	​	​	Weighted	​	​	​	​
​	​	​	​	Average	​	​	​	​
​	​	Options		Exercise Price	​	​	​	​
Range of stock option exercise prices at December 31, 2024:	​	​	​	​	​	​	​	​
$0.01 - $10.00 (average remaining life - 5.08 years)	​	2,215,601	​	$ 8.74	​	​	​	​
$10.01 - $30.00 (average remaining life - 8.35 years)	​	3,112,541	​	$ 14.23	​	​	​	​
$30.01 - $60.00 (average remaining life - 6.39 years)	​	242,003	​	$ 38.37	​	​	​	​
​	​	​	​	​	​	​	​	​

​

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2024, unrecognized compensation cost associated with the Company’s outstanding stock options was $14,259, which is expected to be recognized over a weighted-average period of approximately 1.18 years.

Other Awards

In addition to the core programs described above, the Company may grant other equity-based or ad hoc awards as needed to attract and retain employees, agents, or team leaders. These awards are generally granted with time-based or performance-based vesting conditions, and the terms are determined based on the specific objectives of the grant.

To date, participation and grants of this variety have been limited.

Restricted Stock Units

Beginning in 2024, the Company granted restricted stock units (“RSUs”) to officers and certain employees and may grant them to directors and consultants in the future. Each RSU represents the right to receive one share of the Company’s common stock upon vesting, subject to time-based and/or performance-based restrictions. RSUs typically vest over a three-year period with equal and periodically graded vesting or cliff vesting, as applicable. RSUs do not have an exercise price, and no payment is required by the grantee to receive the shares upon vesting.

The fair value of the RSUs granted is determined based on the closing market price of the Company's common stock on the grant date. The total fair value of RSUs is recognized as stock-based compensation expense over the vesting period, with adjustments for estimated forfeitures.

For the year ended December 31, 2024, the Company granted 115,574 RSU’s with a weighted average grant date fair value of $13.00. As of December 31, 2024, the total unrecognized stock-based compensation expense associated with RSUs was $1,222 which is expected to be recognized over a weighted-average period of approximately 2.27 years.

Stock Repurchase Program

In December 2018, the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the Company to purchase up to $25.0 million of its common stock, which was later amended in November 2019 increasing the authorized repurchase amount to $75.0 million. In December 2020, the Board approved another amendment to the repurchase

plan, increasing the total amount authorized to be purchased from $75.0 million to $400.0 million. In May 2022, the Board approved an increase to the total amount of its buyback program from $400.0 million to $500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $500.0 million to $1.0 billion. Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Exchange Act, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand.

10b5-1 Repurchase Plan

The Company maintains an internal stock repurchase program with program changes subject to Board consent. From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.  

On January 10, 2022, the Company and Stephens Inc. entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase up to $10.0 million of its common stock per month. On May 3, 2022, the Board approved a form of first amendment to the Issuer Repurchase Plan to increase monthly repurchases from $10.0 million of its common stock per month up to $20.0 million, which amendment was signed May 6, 2022. On September 27, 2022, the Board approved and the Company entered into, a form of second amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $20.0 million of its common stock per month to $13.3 million, in anticipation of volume decreases in connection with the contraction in the real estate market. On December 27, 2022, the Board approved and the Company entered into, a form of third amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $13.3 million of its common stock per month to $10.0 million, in connection with ongoing contractions in the real estate market.

On May 10, 2023, the Board approved and, on May 11, 2023, the Company entered into, a form of fourth amendment to the Issuer Repurchase Plan, to increase the monthly repurchase amounts during 2023 due to actual and projected changes in the Company’s cash and cash equivalents; specifically, to permit purchases of up to: (i) $17.0 million during May 2023, (ii) $22.0 million during June 2023, (iii) $18.67 million during any calendar month commencing July 1, 2023 through and including September 30, 2023, and (iv) $12.0 million during any calendar month commencing October 1, 2023 through and including December 31, 2023. On June 26, 2023, the Board approved, and the Company entered into, a form of fifth amendment to the Issuer Repurchase Plan to increase the maximum aggregate buyback from $500.0 million to $1.0 billion in accordance with the repurchase program limit. On November 17, 2023, the Board approved, and the Company entered into, a form of sixth amendment to the Issuer Repurchase Plan to reduce the monthly repurchase from (i) $12.0 million to $8.0 million during November 2023, (ii) from $12.0 million to $6.0 million during any calendar month commencing December 1, 2023 through and including June 30, 2024.

On March 5, 2024, the Board approved, and, on March 6, 2024, the Company entered into, a form of seventh amendment to the Issuer Repurchase Plan to increase the monthly repurchase from (i) $6.0 million to $20.0 million during any calendar month commencing March 1, 2024 through and including April 30, 2024, and (ii) from $6.0 million to $15.0 million during any calendar month commencing May 1, 2024 through and including December 31, 2024. On June 19, 2024, the Board approved, and the Company entered into, a form of eighth amendment to the Issuer Repurchase Plan to decrease the monthly repurchase from (i) $15.0 million to $11.7 million during any calendar month commencing July 1, 2024 through and including September 30, 2024, and (ii) from $15.0 million to $8.3 million during any calendar month commencing October 1, 2024 through and including December 31, 2024. On December 5, 2024, the Board approved, and the Company entered into, a form of ninth amendment to the Issuer Repurchase Plan to establish the monthly repurchase maximum as (i) $1.5 million during the calendar months commencing January 1, 2025 and ending February 28, 2025, (ii) $2.0 million during the calendar month commencing March 1, 2025 and ending March 31, 2025, (iii) $10.0 million during the calendar months commencing April 1, 2025 and ending June 30, 2025, (iv) $15.0 million during the calendar months commencing July 1, 2025 and ending October 31, 2025, and (v) $10.0 million during the calendar months commencing November 1, 2025 and ending December 31, 2025.

For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are considered issued but not outstanding. The following table shows the changes in treasury stock shares for the periods presented:

​

​	​	​	​	​	​	​
​	​	Year Ended December 31,
​	​	2024	​	2023	​	2022
Treasury stock:	​	​	​	​	​	​
Balance, beginning of period	​	28,937,671	​	18,816,791	​	6,751,692
Repurchases of common stock	​	11,957,151	​	10,110,152	​	12,408,430
Forfeiture to treasury stock for acquisition	​	-	​	10,728	​	-
Issuance of treasury stock for acquisition	​	-	​	-	​	(343,331)
Balance, end of period	​	40,894,822	​	28,937,671	​	18,816,791

​

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