KW reported its Q1 2016 financial results
Keller Williams’ growth hasn’t slowed in the first quarter of 2016, building on significant strides made by the company in 2015.
At the end of last year, the franchisor reported that its total number of associates grew to 133,000 by the end of 2015 — a 19 percent year-over-year growth.
That trend seems to be continuing, if not picking up momentum, so far during 2016. The franchisor reported that it surpassed 139,000 associates in Q1 2016, a net gain of 4,989 agents. That’s a 36 percent increase over Q1 2015, according to Keller Williams.
The associates count includes agents, office leadership, staff and coaches.
John Davis
“By focusing on the activities that generate results, our associates are expanding their market share and building momentum during months when real estate traditionally goes backward,” said John Davis, president at Keller Williams, in a statement. “They’re turning winter into summer and creating new opportunities for themselves and their families.”
Not surprisingly, Keller Williams agents also closed more transactions in Q1 2016 than Q1 2015. The total transactions closed numbered 182,676 — up 19 percent year-over-year, according to the franchisor, accounting for $49.1 billion in sales volume, a 24 percent year-over-year increase.
Those are both smaller increases than the bump in the overall number of associates, meaning that closed transactions and sales volume — production, in other words — are not increasing at the same rate as the number of associates.
“Our increasing number of new agents certainly have lower production than experienced agents,” said Davis later via email. “Yet, even with all the new talent we’re adding, our closed units per agent is actually holding steady and both closed volume per agent and GCI [gross commission income] per agent are increasing.
“We attract far more new agents than any other franchise because we provide the best models, systems and training to help them succeed,” he added. “And, we’re an education-based company.
“Our agents took more listings in March than in any month in our company’s history. We’re extending our lead as the world’s largest real estate franchise by agent count. And we’re closing in on becoming the worldwide leader in transactions and volume.”
Profit-sharing results
As a franchisor, Keller Williams is unique in that it distributes profits earned by Keller Williams brokerages are distributed to associates, based on the number of agents that the associate has recruited and how productive those agents are.
Owner profit and profit share both increased 30 percent year-over-year in Q1 2015 — owner profit to $28.7 million and profit share to $23.7 million. (The former is the profit earned by brokerage owners, and the latter is the amount that will be distributed to associates.)
Keller Williams spokesman Darryl Frost said that this first quarter indicates a “very strong second quarter, past what we did even last year.”
He added that Davis’s growth initiative involved “sitting down with our three key leaders in each market center to make sure they’re working on their business plans, having those calls every week. That productivity is showing up in our numbers. The leaders are focused on the activities that are generating the results.”
Chris Heller
“As a company built by and for agents, we’re thrilled that our teams are out-performing the high expectations they’ve set,” said Chris Heller, CEO, Keller Williams, in a statement. “Our agents are leveraging our training and innovation to provide an exceptional customer experience. And with record listings taken and contracts written, we’re confident our best days are to come.”
“It’s only been five years since we launched our Growth Initiative,” said Davis via email. “We feel we’re just getting started.
“At Keller Williams, we truly believe the highest level is the local level. Our agents are growing their businesses. Our market centers are adding market share. We’re not only outpacing the industry — we’re shattering our own records every month.”
