A Deep Dive Into eXp World Holdings

Everyone knows that Zillow (NASDAQ:Z)(NASDAQ:ZG) and Redfin (NASDAQ:RDFN) are disruptors in the real estate world, but you may not have heard of eXp World Holdings (NASDAQ:EXPI). A real estate broker and provider of cloud-based platforms for agents, eXp is growing rapidly and plans to keep expanding its reach around the world. In this episode of Industry Focus: Financials, host Jason Moser and Fool contributor Matt Frankel, CFP, take a closer look at this interesting and innovative company. Plus, hear why Matt thinks bargain hunters should keep their eye on EPR Properties (NYSE:EPR) while Jason is watching PayPal (NASDAQ:PYPL) after the announcement of its Venmo-branded credit card.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on October 5, 2020.

Jason Moser: It’s Monday, October 5th. I’m your host Jason Moser. On this week’s Financial show, we’re going to take a recent listener question and we’re going to dig a little bit deeper into eXp World Holdings, a company that provides cloud-based real estate brokerage services for residential homeowners and homebuyers in the United States, Canada, the U.K., and Australia. And, of course, we’ve always got a couple of stocks for you to keep an eye on.

Joining me this week, as always, it’s Certified Financial Planner, Matt Frankel. Matt, how is everything going?

Matt Frankel: Just great. It’s finally Fall, and I was wearing long sleeves earlier but took the hoodie off for this show, but it’s good to finally break the hoodies out of the closet.

Moser: Yeah, I’m with you. I like all the seasons; I like the change in seasons. I got to say, you know, I do enjoy Fall, I like the leaves falling, I like football starting, you know, I like throwing a couple of bucks on a game here and there. It’s just enjoyable, right, it’s a nice way to wrap up the year.

Frankel: Yeah, I’d say Fall is definitely my favorite time of year, especially living in a place where the Summers are 150 degrees.

Moser: [laughs] Yeah, I’m very familiar, I grew up there. Very familiar indeed, moved up here from Georgia. So, yeah. I mean, I’d tell you, we have our stretches here in Virginia where it feels that way too, but they’re certainly more short-lived than further down South like that.

So, Matt, last week we fielded a question from a listener who was asking our opinion on a company called eXp World Holdings. And it’s one that we had seen, I mean we haven’t really done any serious work into, but given the focus of the business on the real estate market and as we’re seeing residential real estate and technology come together in this, sort of, newfangled world of real estate transactions, we thought it would be a great idea this week to dig more into this one particular business. Because it’s one that doesn’t really have a lot of coverage in our Foolish universe right now, it’s not one that I think gets much coverage on any of our shows. And we always like bringing new ideas to the forefront. And so, we felt like this week would be a good one to go ahead and dig deeper into eXp World Holdings, talk a little bit about the business, what they do and so forth.

And, Matt, I started digging into this company, and this is a really neat business from a lot of different angles. It’s one that does have some history, it’s not a brand-new IPO, I mean, they actually made a move, I think, from the pink sheets to the Nasdaq back in May 2018. So, it has traded on the public markets for a while, but is still a relatively small company with, you know, a $ 3 billion market cap. But the business, eXp World Holdings, is best known for the main part of the business, which is eXp Realty.

So, for our listeners, how about you give us an idea, what exactly is eXp World Holdings, what does this company do?

Frankel: Sure. Like you mentioned, it’s a holding company, it has a few different businesses, but most of the revenue comes from its realty, eXp Realty. It’s a full-service brokerage. And the idea is similar to a Redfin in the sense that they leverage technology to make real estate more efficient, and not only to save its customers’ money, but to put more money in its brokers’ pockets and to increase its own margins.

So, it’s a really interesting business, and they’re not a brand name as much as Redfin. They have a network of agents throughout the country. They have 32,000 agents on the platform. So, this isn’t a tiny operation. But, yeah, they actually claim to be the largest real estate brokerage by geographic reach in the world, especially now that they’re — we’ll get to it later, but they’re going to start expanding internationally in a pretty serious way. So, they have a big reach. Their model uses cloud technology, internet marketing, things like that, to really have a favorable cost structure over the traditional brokerage model and, like I said, save all parties involved money.

Moser: Yeah, it sounds like to me, it’s a business very focused on utilizing technology to wring out all of the inefficiencies that exist in the real estate market. And for anybody who has purchased a home, sold a home, rented a home, looked for a home, [laughs] applied for a loan, I mean, if you’ve done any of that stuff, you certainly get a closer look at a lot of the efficiencies that do exist. There’s a lot of money that goes into this market.

When I say a lot of money, you know, there’s a data point there that the U.S. residential real estate market for existing homes accounted for approximately $ 1.5 trillion in transaction volume, with 5.3 million homes sold in 2019. That’s based on data from the National Association of Realtors this year in 2020. And so, when you think about that number there, $ 1.5 trillion, I mean, you see this massive market opportunity and you can understand why all of these different participants in the value chain look at that market opportunity and say, ooh, baby! I want to get my little piece of that. Because there’s a lot of stuff that goes into buying or selling a home.

First of all, let’s talk about how they make money, actually. Let’s talk about how this company actually makes money. This isn’t a subscription business as some might think, right. This is a business that’s more based on commissions right now.

Frankel: Right. Well, first of all, that $ 1.5 trillion figure that you just gave is just the U.S. It’s worth reiterating that because I mentioned they’re going to start expanding internationally. Currently they operate in the U.S., Canada, U.K., and Australia, they’re about to expand to Mexico, France, India, Portugal, and South Africa all by the end of this year. So, I don’t know what the markets are in those countries; [laughs] I didn’t actually dig into those. But I’d have to imagine the overall opportunity is several times that $ 1.5 trillion figure you just mentioned.

Moser: Well, yeah, I mean, everybody needs a roof over their head, right?

Frankel: Right. So, at the heart it is a commission-based business, like most real estate brokerages. And the commission split is very favorable to agents, which is how they’ve been able to attract so many of the top real estate professionals. The standard real estate brokerage, and anyone listening can feel free to chime in and correct me on this, but the standard split is roughly 60% to the agent and 40% to the brokerage. So, if you made $ 10,000 commission from selling a house, you would get $ 6,000 of that, the agency would get $ 4,000 of that. With eXp it’s an 80:20 split, but only for the first $ 80,000 of commission income you bring in, after that you keep 100%. So, that’s pretty favorable. So, as it works out, the maximum you’ll have to pay eXp, if you’re one of their agents, is $ 16,000 in commission in any given year, that’s 20% of $ 80,000. So, beyond that, every penny goes to the agent. So, when you think the industry standard of 60:40, that’s a pretty favorable split. And you can see how some of the savings are passed on to the customer and some of the savings are given to eXp and their agents in the form of more money. Because it’s a model that’s really catching on and a lot of agents are quick to jump ship from traditional brokers like, say, a Coldwell Banker or a Keller Williams, which is where their CEO actually came from.

Moser: Well, yeah. I mean, that makes a lot of sense there. Redfin, I feel like, is similar in nature. Redfin being an online brokerage as well, I feel like they saw this as an opportunity to jump in there and change the economics a bit to sort of prove their point, right, to prove the potential of that model, and how that money can be cut a little bit differently, so that it makes it a bit more attractive from the agent’s perspective to go work with them.

Frankel: Right. And Redfin really emphasizes how much they’re saving the customer. This is one key difference — you know, when I was kind of doing a dive into this earlier and comparing the two, Redfin’s materials really emphasize what they’re saving the customer, meaning a 1.5% listing fee as opposed to the 3% industry standard, things like that. eXp really prioritizes their agents, which is a really interesting thing. It seems like their commissions, kind of, vary by where the agents are and their operation, they kind of give the agents a little freedom, it sounds like. But they really emphasize how their commission structure benefits the agents as opposed to how they’re really undercutting the traditional model, which I’m pretty sure it was you and I, we were talking about Redfin one day and people kept commenting that their customer service isn’t great. And I’ve heard this from a lot of — I mean, being a pretty active real estate investor, I’ve tried to contact Redfin agents and not been able to get the agent on the phone, just because it’s …

So, this prioritizes recruiting the best agents in the business, incentivizing them to produce. Because like I said, the agency split goes away after $ 80,000 in a year. So, it’s really incentivizing their agents to produce, so it’s an interesting distinction. And I’d be curious [laughs] to be a fly on the wall in their marketing room when I find out why they’re emphasizing agent commission as opposed to their savings for customers. Because I looked at just one eXp agent, their ads are powered by eXp Realty, 1% listing fee, which is less even than Redfin, and a 33% buyer rebate at closing. So, it sounds like their agents are really trying to pass on the savings to the customers, leveraging the cloud-based platform and internet-based marketing savings.

But, yeah, eXp itself really is an employee-centric company, I’ll get to their stock plan in a minute, but they focus on their employees, believing that top talent is a competitive advantage.

Moser: Yeah. And let’s talk about that competitive advantage for a little bit here, because I feel like there are a number of different ways you can look at this. And I mean, that’s an interesting way to look at it. Maybe they feel like, you know, putting that focus on their agents, incentivizes the agents to then do right by their customers, provide excellent service. You know, in a lot of cases, I mean, let’s face it as consumers, you know the old adage, you get what you pay for. In a lot of cases, I mean, it’s OK to pay more for something particularly if you know you’re getting great service. I mean, customer service is hard. Like, good customer service is hard. I know a lot of people think, oh, you know, you’re just a person dealing with another person, it’s really hard. That’s why you have just these scattered experiences wherever you go.

And certainly, good consistent customer service can be an advantage over time. I mean, if you look at the business itself, looking at the most recent quarterly results here, clearly agents are coming over to the platform. I mean, the number of agents and brokers on the eXp Realty platform grew 54% from a year ago to 31,091, and that was up from 20,162 from a year ago. And then if you look at the residential transaction volume for the second quarter of 2020, that was up 26% of $ 13 billion. So, I mean, something they’re doing is working. And clearly, it’s bringing agents over to that model. I wonder if, I mean, beyond just that focus on the employees, I mean, it’s nice to work for a company where they really focus on you, the employee. I feel like we work, frankly, at a company where they focus a lot on us, which is great. And in turn, we focus on our members, because it just, kind of, it just works, right. We have that incentive, we see that behavior, we want to continue that behavior. We see how powerful it can become. So, perhaps that’s one advantage to this business.

Another thing that struck me about this business, though, particularly on the tech front; and this was especially interesting to me, given my focus with augmented and virtual reality in our services here at The Fool. This is a company that really is using immersive technology. I’ve seen where they have, like, a fully immersive cloud office with virtual conference rooms, [laughs] avatars, using immersive technology for training. In 2018, they actually acquired a company called VirBELA, which is a virtual reality software platform. And we were talking a little bit before taping, my wife and I have, we’ve gone through and actually purchased homes based on virtual tours, that really initiated our search, right? I mean, we found a house, you could go through a virtual tour and really learn everything that you needed to know about that house from the virtual tours that exist all the way back to 2005. And here we are 15 years later, technology has gotten considerably better, so I feel like you’ve got a business here that not only, I think, […] advantage on the front where they focus on the customers, but also maybe an advantage that they’re really focusing on forward-looking technology as well.

Frankel: Yeah. And just kind of going back to where they’re prioritizing their employees and, you know, you mentioned the platform you’re talking about saves [laughs] a ton of money. I mean, you’re the AR guy here, but this seems like, kind of, a similar thing to where a mobile banking transaction costs about one-tenth of a teller assisted transaction, it seems like the same kind of logic applies here, where doing this stuff through their platform is a lot cheaper than calling up a professional, having them come to an office, things like that.

So, one thing I really wanted to mention, and this, just from doing a dive into this, struck me as really unusual, is that they want all of their agents to be owners in the company. From an investor’s point-of-view, that’s a real — seeing not only their management, we’re used to seeing CEOs and management teams with a lot of skin in the game, would you say that’s fair? I mean, I’ve seen a lot of —

Moser: Oh, yeah, yeah, absolutely.

Frankel: Yeah. But we’re not used to seeing where every employee has a lot of ownership in the company. So, eXp agents get $ 200 of company stock on their first closing, another $ 400 when they meet that $ 80,000 commission threshold, another $ 400 when any agent they refer closes their first sale, and top agents get prices in stock constantly. And agents can receive up to 5% of their commission in the form of company stock at a 10% discount to whatever the market price is. That’s a pretty generous employee stock plan if you ask me. And, I mean, am I alone, I think that’s a pretty good catalyst for motivation there.

Moser: I don’t think you’re alone at all, I firmly agree with that. And I think ownership is an extremely powerful concept that Charlie Munger says all the time, be aware of the power of incentives, right? Incentives can work all sorts of funny ways. And ownership is one that can really encourage specific behaviors that that leadership would be looking for. I can understand that. Certainly, I’m very familiar with that concept. Here at The Fool, you know, it’s very much the same idea. I mean, we’re owners of the business, and it’s something that we take a lot of pride in. And I think it does incentivize our behavior, it helps us think about things from a different perspective. I mean, that ownership can be very powerful.

And speaking of ownership, let’s talk about management here for a second, because Glenn Sanford, the CEO of the business, founded the company back in 2007. He owns, from what I saw, 30% of this business, which is …

Frankel: [laughs] And his wife owns another 27%, they have a majority.

Moser: Yeah. And I think actually, technically, it’s his ex-wife, believe it or not, but you’re right either way, yeah, 20%. So, you look at, that’s 50% ownership right there from two parties who, I mean, clearly they have a lot of interest in watching this business succeed. [laughs]

Frankel: Yeah, they literally have billions of reasons to deliver for investors. [laughs] And from what I see, they’re really building a nice culture here. On Glassdoor, I haven’t checked recently, but about a month ago, he had a 93% approval rating from his employees on Glassdoor. That’s pretty high. About 9 out of 10 eXp agents say they would recommend the company to a friend. I mean, that’s pretty impressive. We check employee reviews, because that’s another big competitive advantage in being able to attract and retain talent, is a good corporate culture. So, we check that. And those are some of the higher numbers that we’ve seen.

And I mean, when you consider the growth, the last time I wrote anything about eXp was in November 2019, so not quite a year ago. And they had just over 20,000 agents at that point. When you consider it’s about 32,000 now, to get 12,000 agents to join your platform over less than 12 months, you’re doing something right when it comes to recruiting talent and building a good culture and keeping them happy. So, I mean, my hat’s off to Sanford. I mean, even though him and his ex-wife seem to have a majority, like I said, it’s not just that they have a majority, all their employees are encouraged to be stockholders.

It’s worth pointing out also, there’s a separate CEO of eXp Realty. We mentioned, eXp itself is a holding company. Even though the realty is the bulk of the business, Jason Gesing is CEO of eXp Realty and has about a 3% stake in the company, which is a fair amount of money. I mean, it’s a $ 3 billion company right now, give or take, I think, based on today’s price. So, 3% of that is about $ 90 million; just doing the math real quick.

Moser: Not insignificant at all.

Frankel: So, he’s got a pretty decent stake too. And I’d imagine a lot of longtime agents, especially, you got to take advantage of that 5% of your commission in discounted stock. [laughs] I hope a lot of the agents have taken advantage of that. I mean, the stock is up about 5X over the past year.

Moser: Yeah, obviously, it’s had a very good run. And when you look at it today, and the competitive landscape, the business that first came to mind in looking through this was Redfin, of course; the other one is Zillow. Zillow is making a bit of a pivot from what they used to be to something a little bit more akin to the markets that Redfin and eXp pursue. But eXp is still smaller even than Redfin. The one thing I noticed on their financials, it is, albeit very modestly, a profitable business. And they do have positive cash flow numbers. So, it does feel like they’ve been around long enough. I mean, they understand how economics work, and the power of good financials.

When you look at the competitive landscape for this market, clearly, as we stated earlier on, just based on the domestic opportunity, and that $ 1.5 trillion number that we lobbed out there, this is a massive market opportunity. And real estate is always going to be a really massive market opportunity, it’s one of those constants. But we’re seeing these companies that are coming in here and really changing things around. I mean, taking us out of this, sort of, old-school way of doing things and utilizing technology to make it better, faster, cheaper.

What do you feel like, as far as the competitive landscape, is this something where they can all coexist? Do you feel like there’s going to be consolidation in this industry or do you feel like, you know, of Zillow, Redfin, and eXp, do you have one where you feel like there’s a stronger business than the other two?

Frankel: Well, I think all of them should be worried that Zillow is trying to get into the brokerage game. That’s new, Zillow is not a broker, for the most part, at this point. I mean, they have their iBuying program where they buy and sell houses themselves. But for the most part, they’re not a Redfin, or eXp, or a Century 21 or any of the other ones. So, I’d be worried about Zillow getting into the game. I do see a lot of consolidation ahead in the space, especially when it comes to the old-school brokerages. They really don’t have any major cost advantages right now; they have an antiquated commission model. I can see some of the big players absorbing some of — you know, Realogy is the one that owns a few of the old-school brokers. I can see them being bought out at some point by a more tech-focused innovator. I mean, eXp could be a takeover target, who knows? I mean, Zillow could conceivably buy them. [laughs]

Moser: Absolutely, that was one of the things I thought of, you know, given the size that the business is today. I mean, it really — a $ 3 billion market cap, that’s nothing to sneer at, but by the same token, you look at something like a Redfin that’s sitting there at $ 5.11 billion, $ 6 billion at some point, then you’ve got Zillow is $ 25 billion company. I mean, Zillow has a history of acquiring, right? They bought Trulia, and a number of other smaller, sort of, bolt-on acquisitions. I mean, it would be well within their means to be able to bring something like an eXp into their fold if they really wanted to.

Frankel: You know, they’re talking about getting into the brokerage business. That would get them in a pretty meaningful way really quickly. And I would think it would give them a lot of cross-selling potential to really leverage its online platform that it has now, its Premier Agent services, things like that. You know, it has its rental services right now, and even the iBuyer program, that would be a great way to boost that and source deals in a cost-effective way. So, it could make sense as an acquisition for Zillow or for Redfin for that matter. I think Redfin could conceivably buy eXp if it really wanted to.

Moser: Oh, sure. And to your point about Zillow. I mean, I’m not necessarily saying that the cultures overlap. I mean, I guess they could, I don’t know. But you do have two businesses there that place a very high priority on culture. And we see through the years, as you mentioned earlier on, that really is something that can result in a competitive advantage over time.

Frankel: Yeah. And I mean, all three of these tech-focused real estate companies we’re talking about, forget Realogy, I don’t really see Century 21 and others’ competitive advantages over time, which is why the stock is priced the way it is. But when it comes to eXp, when it comes to Redfin, when it comes to Zillow, all of them have their own competitive advantages. They’re all really good at one thing or another. I mean, Zillow’s listing services are in a league of its own.

Moser: Everybody loves to say Zestimate, right?

Frankel: Right. I mean, I’ve heard people use Zillow as a verb in real estate transactions. You know, I’m going to go do some Zillow-ing [laughs] to try to find a good property. And that’s something that no one else can touch. When it comes to just the cheap, straightforward commission structure, Redfin is the winner. I mean, if I ask you where you can save over the traditional brokerage commission, sure, you could call a local realtor, try to negotiate something, you could try to find an eXp agent or you can just go to Redfin, because you know it’s going to be cheaper than the traditional business model.

Exp, I mean, they’re recruiting some talented agents and they’re building a cloud-based platform that seems to be a pretty big competitive advantage so far. And their corporate culture seems to be a really big competitive advantage so far, just based on the growth numbers. I mean, you can’t really argue with that. [laughs] Something has to be a good advantage there.

Moser: Yeah. Like you said, it seems like they’re doing something right. I’m very interested to see how this market shapes up in the coming years. It does feel like eXp is going to be a big part of it. I mean, I personally would be very interested to follow along the immersive technology side of the business, the investments they’re making in that side of the business, because I do feel like that really has the potential to shape this entire space in the coming years and decades.

It just seems to make such a difference, I mean, you don’t have to sit there and call a real estate agent at all hours of the day to go see a home. I mean, that’s the worst thing in the world, where you get to spend, like, a weekend going and looking at six, seven, eight different houses. If there’s an immersive technology platform where you can go on virtual tours and really get the same feedback, that certainly could be tremendous.

Frankel: Yeah, for sure. It’s a rapidly evolving space. And I don’t think I was alone in this, but I know I’ve been saying this for years, real estate was one of the last industries that’s just like begging to be disrupted. I think Bill actually said that, at the beginning of talking to him today, it’s just the space is begging to be disrupted. I mean, the 6% commission structure, like you said, for sale by owner, it seems kind of tempting when you consider what 6% of your home value is.

Moser: Well, yeah, but I can understand too why it’s been slow to disrupt. And that’s partly because it’s just such a — so many nuts and bolts to it, right, so many things going on, so many participants within that value chain. But also, like you noted with the [laughs] incentive structure there. I mean, if you’re a part of that old-school model, you’re probably guarding that thing like a rottweiler, right? I mean, [laughs] you don’t want to give up that kind of condition if you’ve been living off that 4%, 5%, 6% gift for so long.

So, I certainly understand why it was so resilient, but I also think it’s inevitable and I think we’re starting to see it, and certainly it seems like eXp is one of the businesses leading the way. So, Matt, I feel like you and I probably walk away from this with the same sorts of feelings here. I mean, it’s a very competitive industry, but this is certainly a very intriguing business with a lot of positive qualities.

Frankel: Yeah, for sure. It’s a really interesting one to dive into, especially since, like I said, last time I wrote about it was November last year, I actually didn’t remember that last time when we decided to do a dive, but it’s really cool to compare that with how the business has evolved in less than a year. And it’s pretty impressive, I can see why their stock is up 400% over the past year or something like that. With those kinds of growth numbers, that makes sense.

Moser: Yeah, absolutely. Well, before we wrap up for the week here, Matt, let’s jump into one to watch, give our listeners a stock that we have got on our radar for this week for one reason or another. What is your one to watch this week, Matt?

Frankel: If you’re a bargain hunter, I would put EPR Properties on your radar, ticker symbol is EPR. They are a Real Estate Investment Trust, they focus on what they call experiential real estate; Topgolf, for example, is a big tenant. They have a bunch of waterparks, they have a lot of golf resorts, they have a lot of ski resorts. They also have about 45% of their portfolio in movie theaters, which is why they’re getting beaten up. If you saw today’s news, Regal Cinemas is shutting down all 500 of the U.S. theaters. Regal is one of their big tenants, AMC is their biggest one by far. AMC has not decided to shut down its theaters, but the way Regal, their parent company, their CEO came out and said, we’re like a grocery store that doesn’t have fruit, vegetables, meat, or bread. Like, how long can you stay open if you don’t have a product to sell? Because they keep pushing all these movies back.

So, the movie businesses — I mean, it could have done without this latest punch in the face when they delayed the new James Bond movie ’till April, because these companies don’t run high margin businesses, they don’t have that much liquidity to deal with a long shutdown. So, I think it’s going to be fine long-term, I think it’s going to be pretty down to the wire when it comes to [laughs] vaccine versus when these companies run out of money. The next big movie release is scheduled for Christmas Day, the new Wonder Woman movie, that’s the next blockbuster that’s supposed to come out. If that doesn’t get delayed, I think you’ll see the movie industry really breathe a sigh of relief.

And EPR is down, I think, 10% today on the news that Regal is shutting down its theaters, and it’s pulled back considerably recently. So, if you’re a bargain hunter and you believe in the movie business long-term, like I do, check that one out. Rant over.

Moser: Yeah, we talked about that movie business earlier on MarketFoolery today. I mean, they’re facing a really difficult situation on both fronts. They have a supply problem and a demand problem. I mean, the movie theaters keep pushing these movies out for understandable reasons. And with no movies, then you don’t have the people wanting to come to your theater to see them. And that results in just a vortex of problems that …

Frankel: It’s a store without a product.

Moser: Yeah, difficult to escape. Well, you may have seen the news today, Matt, that PayPal is launching a new credit card under its Venmo brand. It’s a Venmo Credit Card, it’s going to be backed by Synchrony Bank, longtime partner of PayPal, and backed by Visa. You know, this was just interesting news. I mean, it’s not something that you should expect to play out on PayPal’s bottom-line in any massive way. Management noted it would be incremental, but I think it’s one more notch in their belt in growing out the engagement of this Venmo brand and helping to spur daily use of Venmo, whether it’s through your phone or through the card, they’re really incorporating technology with things like the QR code, so that you can just scan. That partnership with CVS we saw earlier this year where they’re rolling out that QR code with CVS stores everywhere, has a lot of potential certainly.

I think it’s really interesting the reward structure they’ve established with this card, this Venmo Credit Card. A little bit different than what we see normally, but the reward structure, you get 3% cashback on the category in which you spend the most. And then you get 2% cashback on the second highest category, and then 1% back on all other purchases. So, it’s not something that’s trying to influence or encourage certain behavior, they’re just rewarding you for using it. And I think that resonates with younger spenders, younger consumers, and it’s a different way of looking at it. So, I’ll be interested to see how consumers, you know, how they find that, if that’s something that they value over other reward structures.

But regardless, I think it’s just neat to see PayPal continuing to grow out that Venmo brand, they’re really learning how to monetize it and create more engagement and use for the product. So, that’s something to keep an eye on as well for folks.

But I think that’s going to do it for us this week, Matt. Hey, listen, as every week, I really appreciate you taking the time out to jump on the show and chat. I always enjoy talking with you.

Frankel: Of course. And we’ll have to talk more about the Venmo Credit Card next week when we have a little more time.

Moser: I think that’s a good plan. Well, that’s going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@Fool.com. Hey, let us know what stocks you’re buying, what stocks you’re selling, if you have stocks that you want us to dive into on this show. Throw them out there, we’re always looking for new ideas, especially if they’re ideas that we haven’t touched on before.

But as always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don’t buy or sell stocks based solely on what you hear.

Thanks, as always, to Tim Sparks for putting the show together for us. For Matt Frankel, I’m Jason Moser, thanks for listening, and we’ll see you next week.