Douglas Elliman notched a victory in the fourth quarter of 2025, ending a three-year streak of losses with a $69 million net income.
But its return to the black was short-lived.
Earlier this month, the firm quietly reported it lost $16 million in the first quarter. The eight-figure loss was driven, in part, by a 15 percent annual decline in revenue due to fewer home sales, a slowdown in earnings from its development marketing division and the shedding of its property management arm.
The company managed to lower its operating expenses during the period by nearly $27 million, but wasn’t able to offset the income dip amid an increase in some of its costs, including litigation expenses and agent commissions.
The results highlight the tenuous state of Elliman’s efforts to recover from a period of significant losses, leadership upheaval and a share price that hovered just above $1.
A spokesperson for Elliman in a statement pointed to the firm’s status as “the only publicly traded independent luxury residential brokerage, with the highest average sales price of its peers, a debt-free balance sheet,” (Elliman eliminated its debt with proceeds from the October sale of its property management business).
CEO Michael Leibowitz previously touted the firm’s “new era” in 2026, but the latest results show Elliman has a long way to go.
Breaking down its revenue
The first quarter is generally considered one of the slowest periods of the year for home sales, and the lag showed up in Elliman’s earnings. Across Elliman’s brokerage segment, revenues declined more than 12 percent in the first quarter, as its gross transaction value fell from $9.9 billion to $8.6 billion, and the total transactions it closed in the period dropped from more than 4,900 to below 4,400.
Executives have repeatedly touted the firm’s $25 billion new development marketing pipeline as a driver of future earnings, with more than 100 projects across the country. That pipeline includes roughly $10 billion in projects that are still in the pre-development stage, some of which will launch sales later this year, according to a spokesperson.
Though the pipeline is robust, Elliman isn’t yet seeing much of that business translate to earnings. Last quarter, commissions and other income from the new development sector were $14 million, down from $21 million in the first quarter of 2025.
Revenue from new developments is often uneven, as brokerages typically don’t earn commissions until a project begins closing sales, which can begin years after a firm has signed on. That means that the numbers reported in a given quarter aren’t necessarily indicative of the firm’s slate of business, but rather the life cycle of a given project.
Most of the firm’s new development revenue came from projects in New York City, where commissions for new builds rose to more than $9 million last quarter from roughly $8 million a year ago.
In the Southeast, which includes Elliman’s South Florida operation, commissions from new developments dropped from $12 million in the first quarter of 2025 to roughly $4 million.
The dip in earnings comes as the firm faces increased competition for projects in the region, as more recent entrants bolster their new development divisions.
Elliman lost out on some of the area’s more notable projects to its rising competitors.
After Nahla Capital bought the distressed Raleigh Rosewood Residences in Miami Beach, from Michael Shvo, the developer tapped Compass’ development marketing arm to head sales.
In February, Shvo ousted Elliman from his Mandarin Oriental Residences project in Midtown and replaced the firm with a team from Serhant. The move came as deals at the project lagged, with only about a third of its 65 condos sold since sales launched in 2021.
Elliman’s current book of business includes heading sales at the planned project on the site where the Surfside condos collapsed, though none of the development’s 37 units have found buyers since sales launched early last year. An executive with the developer, Dubai-based Damac Properties, told The Real Deal that the launch was “premature” due, in part, to delays in completing its sales gallery.
The firm is also slated to head sales at Ryback Development’s 660 Lexington Avenue in New York, the Ritz-Carlton Residences in both Fort Lauderdale Beach and West Palm Beach, as well as others in Texas, including The Residences at The Dallas Edition.
More of Elliman’s revenue last quarter came from resales, where agents take home a larger share of the commission compared to deals for new development properties, leaving the firm with thinner margins. Broker commissions as a percentage of revenue rose from $73.6 percent last year to more than 78 percent last quarter.
In New York City, Elliman reported $51 million in revenue from commissions from existing home sales, down from $66 million in the same period last year. In the Southeast, commission income rose last quarter, up from $69 million to $73 million.
Florida is among the markets with typically higher commission splits, meaning Elliman is forgoing more of its commission revenue to agents.
Investment platform Simply Wall St attached a warning to Elliman’s latest earnings results, flagging that the firm had a high level of non-cash earnings. The caution stems from signs that more of the company’s revenue has yet to be collected in cash, which is recorded on the balance sheet as an increase in contract assets and receivables.
The firm also used $19 million in operating cash flow during the period, indicating it burned more cash than its reported net income loss.
Elliman is also contending with a rise in litigation costs, up from $4.6 million in the first quarter of 2025 to $7.2 million. The increase is largely due to payments associated with a 2024 agreement to settle antitrust lawsuits over brokerage commissions.
Under the terms of the deal, Elliman paid an initial $7.75 million to dismiss claims that it colluded with other brokerages and industry trade groups to hike agents’ fees. The agreement also stipulated that the firm would be on the hook for two additional payments of $5 million each if it ended 2025 with more than $40 million in cash or if its cash stores exceeded $40 million at any time in 2027.
The company reported more than $115 million in cash in the fourth quarter, triggering the $5 million payment.
Much of the cost was associated with the antitrust settlement, but Elliman has been in the headlines for lawsuits, including pursuing the developers of Shvo’s Mandarin Oriental project in Manhattan for unpaid fees, and as a defendant in at least two suits from women accusing its former top-producing agents, Tal and Oren Alexander, of rape and sexual assault. The firm is accused in the lawsuits of enabling the brothers, who, along with Oren’s twin Alon, were convicted of sex trafficking and other related criminal charges in March.
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Douglas Elliman quietly posts $16M loss after last year’s rebound
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