(Dollars in Thousands, Except Per Share Amounts or Stated Otherwise) The following discussion should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Audited Consolidated Financial Statements as of and for the year ended December 31, 2025 and Notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), and our Condensed Consolidated Financial Statements and related Notes as of and for the three and six months ended June 30, 2026. Any forward-looking statements are not historical facts, but rather they are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Any forward-looking statements are subject to several important factors, including those factors discussed under “Risk Factors” in our 2025 Annual Report and this Quarterly Report and “Special Note Regarding Forward-Looking Statements,” that could cause our actual results to differ materially from those indicated in such forward-looking statements. References to “Douglas Elliman” or “Company” refer to Douglas Elliman Inc. Certain references to “Douglas Elliman Realty” refer to the Company’s residential real estate brokerage business, including the operations of Douglas Elliman Realty, LLC and Douglas Elliman of California Inc., unless otherwise specified. Overview Douglas Elliman Inc. is a holding company that, through its subsidiaries, is engaged in the real estate services business, and invests in additional real estate services businesses. We conduct residential real estate brokerage services through our subsidiary, Douglas Elliman Realty, which operates one of the largest residential brokerage companies in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Texas, Colorado, Nevada, Massachusetts, Connecticut, Maryland, Virginia, New Jersey, New Hampshire and Washington D.C. We also offer, including through our subsidiaries and ventures, development marketing services (“Development Marketing”) and ancillary services, such as mortgage, title and escrow services. In addition, we have also invested in PropTech opportunities through our DOUG Ventures subsidiary. 25 Key Business Metrics and Non-GAAP Financial Measures In addition to our financial results, prepared in accordance with U.S. GAAP, we use the following business metrics to evaluate our business and identify trends affecting our business. To evaluate our operating performance, we also use Adjusted EBITDA attributed to Douglas Elliman Inc., Adjusted EBITDA margin attributed to Douglas Elliman Inc. and financial measures for the last twelve months ended June 30, 2026 (“Non-GAAP Financial Measures”), which are financial measures not prepared in accordance with U.S. GAAP. Last twelve months ended Six months ended June 30, Year ended December 31, 2025 June 30, 2026 2026 2025 Total transactions (1) 21,078 10,178 10,438 21,338 Gross Transaction Value (in billions) (2) $ 39.1 $ 19.4 $ 20.1 $ 39.8 Average transaction value per transaction (in thousands) (3) $ 1,853.6 $ 1,904.2 $ 1,923.1 $ 1,863.4 Number of Principal Agents (4) 4,393 4,393 4,714 4,492 Annual Retention (5) 84 % N/A N/A 84 % Certain GAAP Financial Information Net income (loss) attributed to Douglas Elliman Inc. $ 24,867 $ (19,010) $ (28,658) $ 15,219 Net income (loss) margin 2.47 % (3.82) % (5.46) % 1.47 % Non-GAAP Financial Measures Adjusted EBITDA attributed to Douglas Elliman Inc. $ (20,957) $ (11,432) $ (4,465) $ (13,990) Adjusted EBITDA margin attributed to Douglas Elliman (2.08) % (2.30) % (0.85) % (1.35) % _____________________________ (1)We calculate total transactions by taking the sum of all transactions closed that our agent represented the buyer or seller in the purchase or sale of a home (excluding rental transactions). We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction. (2)Gross Transaction Value is the sum of all closing sale prices for homes transacted by our agents (excluding rental transactions). We include the value of a single transaction twice when our agents serve both the home buyer and home seller in the transaction. (3)Average transaction value per transaction is the quotient of (x) Gross Transaction Value divided by (y) total transactions. (4)The number of Principal Agents is determined as of the last day of the specified period. We use the number of Principal Agents, in combination with our other key business metrics such as total transactions and Gross Transaction Value, as a measure of agent productivity. (5)Annual Retention is the quotient of (x) the prior year revenue generated by agents retained divided by (y) the prior year revenue generated by all agents. We use Annual Retention as a measure of agent stability. Non-GAAP Financial Measures Adjusted EBITDA attributed to Douglas Elliman Inc. is a non-GAAP financial measure that represents net income (loss) attributed to Douglas Elliman Inc. adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, gain on disposal of the Douglas Elliman Property Management (“DEPM”) business (including the operations of DEPM and related corporate overhead prior to its disposal), impairment of fixed assets, litigation, settlement and related expenses, net, executive severance and separation expenses, restructuring and other items (interest expense, interest income, equity in earnings (losses) from equity-method investments, change in fair value of the derivative embedded within convertible debt, loss on extinguishment of liability and investment and other (losses) gains). Adjusted EBITDA margin attributed to Douglas Elliman Inc. is the quotient of (x) Adjusted EBITDA attributed to Douglas Elliman Inc. divided by (y) revenue. Last twelve months financial measures are non-GAAP financial measures that are calculated by reference to the trailing four-quarter performance for the relevant metric. We believe that Non-GAAP Financial Measures are important measures that supplement analysis of our results of operations and enhance an understanding of our operating performance. We believe Non-GAAP Financial Measures provide a useful measure of operating results unaffected by non-recurring items, differences in capital structures and ages of related assets among otherwise comparable companies. Management uses Non-GAAP Financial Measures as measures to review and assess the operating performance of our business, and management and investors should review both the overall performance (GAAP net income (loss)) and the operating performance (Non-GAAP Financial Measures) of our business. While management considers Non-GAAP Financial Measures to be important, they should be considered in addition to, but not as substitutes for or superior to, other measures of financial performance prepared in accordance with U.S. GAAP, such as operating income (loss), and net income (loss). In addition, Non-GAAP Financial Measures are susceptible to varying calculations and our measurement of Non-GAAP Financial Measures may not be comparable to those of other companies. 26 Reconciliations of these non-GAAP measures have been provided in the table below (in thousands). Computation of Adjusted EBITDA attributed to Douglas Elliman Inc. Last twelve months ended Six months ended June 30, Year ended December 31, 2025 June 30, 2026 2026 2025 Net income (loss) attributed to Douglas Elliman Inc. $ 24,867 $ (19,010) $ (28,658) $ 15,219 Interest expense 1,999 5 3,075 5,069 Interest income (3,889) (1,609) (2,620) (4,900) Income tax expense 3,560 — — 3,560 Net loss attributed to non-controlling interest (658) — (251) (909) Depreciation and amortization 8,246 3,988 4,119 8,377 EBITDA 34,125 (16,626) (24,335) 26,416 Results from operations of disposed business (a) (1,897) — (4,724) (6,621) Stock-based compensation (b) 7,240 2,822 4,159 8,577 Equity in earnings from equity-method investments (c) (365) (379) (201) (187) Gain on disposal of business (82,063) (408) — (81,655) Change in fair value of the derivative embedded within convertible debt 10,767 — 17,715 28,482 Loss on extinguishment of liability 466 — — 466 Litigation, settlement and related expenses, net (d) 7,588 2,909 2,958 7,637 Executive severance and separation expense (benefit) (e) 194 — (493) (299) Impairment of fixed assets 2,275 — — 2,275 Restructuring 1,531 193 298 1,636 Investment and other (losses) gains (1,320) 57 59 (1,318) Adjusted EBITDA (21,459) (11,432) (4,564) (14,591) Adjusted EBITDA attributed to non-controlling interest 502 — 99 601 Adjusted EBITDA attributed to Douglas Elliman $ (20,957) $ (11,432) $ (4,465) $ (13,990) _____________________________ (a)Includes results from operations of Residential Management Group, LLC, which conducts business as DEPM, which was disposed on October 24, 2025. This adjustment also includes the corporate allocation to Douglas Elliman Realty, LLC (“DER”) from DEPM. The expenses associated with the corporate allocation to DEPM have continued at DER after the disposal. (b)Represents amortization of stock-based compensation. For the last twelve months ended June 30, 2026, $6,594 of stock-based compensation is included within General and administrative expenses and $646 is included within Operations and support expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2026, $2,682 of stock-based compensation is included within General and administrative expenses and $140 is included within Operations and support expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2025, $3,626 of stock-based compensation is included within General and administrative expenses and $533 is included within Operations and support expenses on the condensed consolidated statements of operations. For the year ended December 31, 2025, $7,538 of stock-based compensation is included within General and administrative expenses and $1,039 is included within Operations and support expenses on the consolidated statements of operations. (c)Represents equity in earnings recognized from equity-method investments that are accounted for under the equity method and are not consolidated in our financial results. (d)Represents unusual litigation, settlement and related expenses, net, incurred in connection with industry-wide antitrust class action lawsuits and other matters related to employees and agents. For the last twelve months ended June 30, 2026, we incurred such expenses of $7,588, net of amounts recovered from insurance, of which $2,041 is included in Antitrust litigation settlement expense and $5,547 is included within General and administrative expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2026, we incurred such expenses of $2,909, net of amounts recovered from insurance, of which $2,041 is included in Antitrust litigation settlement expense and $868 is included within General and administrative expenses on the condensed consolidated statements of operations. For the six months ended June 30, 2025, we incurred such expenses of $2,958, which were included within General and administrative expenses on the condensed consolidated statements of operations. For the year ended December 31, 2025, we incurred such expenses of $7,637, which were included within General and administrative expenses on the consolidated statements of operations. (e) For the last twelve months ended June 30, 2026, expense of $194 is included within General and administrative expenses on the condensed consolidated statement of operations. For the six months ended June 30, 2025, benefit of $493, net of amounts recovered from insurance, is included within General and administrative expenses on the condensed consolidated statements of operations. For the year ended December 31, 2025, the benefit of $299 includes insurance proceeds received and is included within General and administrative expenses on the consolidated statement of operations. 27 Results of Operations The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q. The primary components of our operating expenses are summarized below: •Sales and marketing. Sales and marketing expenses consist primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs and agent acquisition incentives. •Operations and support. Operations and support expenses consist primarily of compensation and other personnel-related costs for employees supporting agents, third-party consulting and professional services costs (not included in general and administrative or technology), commissions related to escrow transactions, fair value adjustments to contingent consideration for our acquisitions and other related expenses. •General and administrative. General and administrative expenses consist primarily of compensation, stock-based compensation expense and other personnel-related costs for administrative employees, including executives, finance and accounting, legal, human resources and communications, property management (prior to October 25, 2025) and escrow services as well as the occupancy costs for our headquarters and other offices supporting our administrative functions. •Technology. Technology expenses consist primarily of compensation and other personnel-related costs for employees in the product, engineering and technology functions, website hosting expenses, software licenses and equipment, third-party consulting costs, technology data licenses and other related expenses associated with the implementation of our technology initiatives. The presentation of our business’s financial information for the three and six months ended June 30, 2026 and 2025 is reported as one segment. For more information, see Note 11, “Segment Information” to our condensed consolidated financial statements. 28 Three months ended June 30, 2026 Compared to the Three months ended June 30, 2025 The following table sets forth our revenues and operating loss for the three months ended June 30, 2026 compared to the three months ended June 30, 2025: % of Total Revenue Three Months Ended June 30, 2025 to 2026 Three Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 (Dollars in thousands) Revenues $ 283,449 $ 271,366 $ 12,083 4 % 100 % 100 % Operating expenses: Real estate agent commissions $ 224,259 $ 204,594 $ 19,665 10 % 79 % 75 % Sales and marketing 19,731 20,069 (338) (2) % 7 % 7 % Operations and support 17,771 17,775 (4) — % 6 % 7 % General and administrative 17,795 26,177 (8,382) (32) % 6 % 10 % Technology 5,591 5,766 (175) (3) % 2 % 2 % Depreciation and amortization 1,989 2,219 (230) (10) % 1 % 1 % Restructuring 146 298 (152) (51) % — % — % Gain on disposal of business (408) — (408) — % — % — % Operating loss (3,425) (5,532) 2,107 (38) % (1) % (2) % Other income (expenses), net 691 (17,093) 17,784 (104) % — % (6) % Loss before provision for income taxes (2,734) (22,625) 19,891 (88) % (1) % (8) % Income tax expense — — — — % — % — % Net loss (2,734) (22,625) 19,891 (88) % (1) % (8) % Net income attributed to non-controlling interest — (48) 48 (100) % — % — % Net loss attributed to Douglas Elliman Inc. $ (2,734) $ (22,673) $ 19,939 (88) % (1) % (8) % Revenues. Our revenues for the three months ended June 30, 2026 and 2025, respectively, were as follows: Three Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Revenues $ 283,449 $ 271,366 $ 12,083 4.5 % Revenues from property management business — 10,465 (10,465) Revenues excluding revenues from property management business $ 283,449 $ 260,901 $ 22,548 8.6 % The increase in revenues, excluding revenues from the property management business, was primarily due to an increase in commissions and other brokerage income of $22,187, which was driven by an increase in revenues from existing home sales in Florida of $28,223, and $3,405 in the Northeast region, which excludes New York City. Additionally, revenues from Development Marketing increased by $4,179 and the increase was from our Florida and Texas markets. These increases were partially offset by declines from the sales of existing homes in the West region of $7,172, which were associated with Colorado and California, and New York City of $6,523 for the 2026 period compared to the 2025 period. 29 Operating expenses. Our operating expenses for the three months ended June 30, 2026 and 2025, respectively, were as follows: Three Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating expenses $ 286,874 $ 276,898 $ 9,976 3.6 % Gain on disposal of property management business (408) — (408) Operating expenses from property management business — 7,889 (7,889) Operating expenses excluding property management business $ 287,282 $ 269,009 $ 18,273 6.8 % The increase in operating expenses was due primarily to an increase in real estate brokerage commissions expense of $19,665 arising from the increase in revenues from commissions and other brokerage income, which was offset by the absence of expenses of our property management business, which was disposed in October 2025. Real Estate Agent Commissions. As a result of an increase in our commissions and other brokerage income, our real estate agent commissions expense was $224,259 for the three months ended June 30, 2026 compared to $204,594 for the three months ended June 30, 2025, representing an increase of $19,665. Real estate agent commissions expense, as a percentage of revenues, increased to 79.1% for the three months ended June 30, 2026 compared to 75.4% (78.4% excluding property management revenues) for the three months ended June 30, 2025. The increase in real estate agent commissions expense as a percentage of revenues in the 2026 period was primarily driven by a higher percentage of our revenues from existing home sales generated from markets (primarily Florida) which customarily pay higher commission rates. Gross profit. We define gross profit as the remaining portion after real estate agent commissions are subtracted from our revenues. Our gross profit for the three months ended June 30, 2026 and 2025, respectively, was as follows: Three Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Revenues $ 283,449 $ 271,366 $ 12,083 Real estate agent commission expense 224,259 204,594 19,665 Gross profit 59,190 66,772 (7,582) (11.4) % Gross profit from property management business — 10,465 (10,465) Gross profit excluding property management business $ 59,190 $ 56,307 $ 2,883 5.1 % Gross profit as a percentage of revenues 20.9 % 24.6 % (3.7) % Gross profit, excluding property management business, as a percentage of revenues 20.9 % 21.6 % (0.7) % Our gross profit, as a percentage of revenues, declined due to the absence of property management revenues as well as a higher percentage of our revenues from existing home sales generated from markets (primarily Florida) which customarily pay higher commission rates. 30 Operating expenses, excluding real estate agent commissions expense. Our operating expenses, excluding real estate agent commissions expense, for the three months ended June 30, 2026 and 2025, respectively, were as follows: Three Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating expenses $ 286,874 $ 276,898 $ 9,976 3.6 % Real estate agent commission expense 224,259 204,594 19,665 9.6 % Operating expenses, excluding real estate agent commissions expense 62,615 72,304 (9,689) (13.4) % Gain on disposal of property management business (408) — (408) Operating expenses from property management business — 7,889 (7,889) Operating expenses, excluding real estate agent commissions expense and property management business $ 63,023 $ 64,415 $ (1,392) (2.2) % Sales and Marketing. Sales and marketing expenses were $19,731 for the three months ended June 30, 2026 compared to $20,069, which included $280 associated with our property management business, for the three months ended June 30, 2025. Operations and support. Operations and support expenses were $17,771 for the three months ended June 30, 2026 compared to $17,775, which included $795 associated with our property management business, for the three months ended June 30, 2025. General and administrative. General and administrative expenses were $17,795 for the three months ended June 30, 2026 compared to $26,177 for the three months ended June 30, 2025, representing a decrease of $8,382, of which $6,209 was associated with our property management business, for the six months ended June 30, 2025 and also reflects a decline in expenses associated with professional services in the 2026 period. Technology. Technology expenses were $5,591 for the three months ended June 30, 2026 compared to $5,766, which included $535 associated with our property management business, for the three months ended June 30, 2025. Operating loss. Our operating loss for the three months ended June 30, 2026 and 2025, respectively, was as follows: Three Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating loss $ (3,425) $ (5,532) $ 2,107 Gain on disposal of property management business (408) — (408) Operating income from property management business — 2,576 (2,576) Operating loss excluding property management business $ (3,833) $ (8,108) $ (4,275) (52.7) % The decline in operating loss was primarily due to the increase in gross profit, after excluding our property management business as well as lower operating expenses in the 2026 period and was partially offset by the absence of operating income from our property management business in the 2026 period. Other income (expenses). Other income was $691 for the three months ended June 30, 2026 compared to other expense of $17,093 for the three months ended June 30, 2025. For the three months ended June 30, 2026, other income consisted primarily of interest income of $719. For the three months ended June 30, 2025, other expense primarily consisted of a $16,969 loss from the change in fair value of the derivative embedded within convertible debt and interest expense of $1,545, partially offset by interest income of $1,259. Loss before provision for income taxes. Loss before income taxes was $2,734 and $22,625 for the three months ended June 30, 2026 and 2025, respectively. Income tax expense. There was no income tax expense for the three months ended June 30, 2026 and 2025. We calculate our provision for income taxes for interim reporting periods based upon our estimate of the annual effective income tax rate based on full year projections, which does not include the impact of discrete items. We then apply the annual effective income tax rate against year-to-date pretax income to record income tax expense and then adjust our provision for income tax expense for any discrete items, if any. We did not record a provision for income taxes during the three months ended June 30, 2026 and 2025, respectively, because we had established a valuation allowance for the full amount of our deferred tax assets. 31 Six months ended June 30, 2026 Compared to Six months ended June 30, 2025 The following table sets forth our revenues and operating loss for the six months ended June 30, 2026 compared to the six months ended June 30, 2025: % of Total Revenue Six Months Ended June 30, 2025 to 2026 Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 (Dollars in thousands) Revenues $ 497,782 $ 524,769 $ (26,987) (5) % 100 % 100 % Operating expenses: Real estate agent commissions $ 391,650 $ 391,119 $ 531 — % 79 % 75 % Sales and marketing 37,468 39,808 (2,340) (6) % 8 % 8 % Operations and support 34,011 35,503 (1,492) (4) % 7 % 7 % General and administrative 38,946 53,502 (14,556) (27) % 8 % 10 % Technology 10,829 11,301 (472) (4) % 2 % 2 % Depreciation and amortization 3,988 4,119 (131) (3) % 1 % 1 % Antitrust litigation settlement expense 2,041 — 2,041 100 % — % — % Restructuring 193 298 (105) (35) % — % — % Gain on disposal of business (408) — (408) 100 % — % — % Operating loss (20,936) (10,881) (10,055) 92 % (4) % (2) % Other income (expenses), net 1,926 (18,028) 19,954 (111) % — % (3) % Loss before provision for income taxes (19,010) (28,909) 9,899 (34) % (4) % (6) % Income tax expense — — — — % — % — % Net loss (19,010) (28,909) 9,899 (34) % (4) % (6) % Net loss attributed to non-controlling interest — 251 (251) (100) % — % — % Net loss attributed to Douglas Elliman Inc. $ (19,010) $ (28,658) $ 9,648 (34) % (4) % (5) % Revenues. Our revenues for the six months ended June 30, 2026 and 2025, respectively, were as follows: Six Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Revenues $ 497,782 $ 524,769 $ (26,987) (5.1) % Revenues from property management business — 19,957 (19,957) Revenues excluding revenues from property management business $ 497,782 $ 504,812 $ (7,030) (1.4) % The decline in revenues, excluding revenues from our property management business, was primarily due to lower revenues from commissions and other brokerage income. For the six months ended June 30, 2026, our commissions and other brokerage income from existing homes sales decreased by $21,248 in New York City, $14,782 in the West region, and $339 in the Northeast region (excluding New York City). Additionally, our revenues from Development Marketing decreased by $2,942, primarily related to the Florida and New York City markets, during the 2026 period compared to 2025. However, these declines were partially offset by an increase in commissions and other brokerage income from existing home sales in the Florida market of $32,087 during the six months ended June 30, 2026 compared to the 2025 period. 32 Operating expenses. Our operating expenses for the six months ended June 30, 2026 and 2025, respectively, were as follows: Six Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating expenses $ 518,718 $ 535,650 $ (16,932) (3.2) % Gain on disposal of property management business (408) — (408) Operating expenses from property management business — 15,500 (15,500) Operating expenses excluding property management business $ 519,126 $ 520,150 $ (1,024) (0.2) % The decrease was primarily due to the absence of expenses of our property management business, as well as a decline in expenses from professional services. Real Estate Agent Commissions. Our real estate agent commissions expense was $391,650 for the six months ended June 30, 2026, compared to $391,119 for the six months ended June 30, 2025, representing an increase of $531. Real estate agent commissions expense, as a percentage of revenues, increased to 78.7% for the six months ended June 30, 2026, compared to 74.5% (77.5% excluding property management revenues) for the six months ended June 30, 2025. This increase in real estate agent commissions expense as a percentage of revenues in 2026 period was primarily driven by a higher percentage of our revenues from existing home sales generated from markets (primarily Florida) which customarily pay higher commission rates. Gross profit. We define gross profit as the remaining portion after real estate agent commissions are subtracted from our revenues. Our gross profit for the six months ended June 30, 2026 and 2025, respectively, was as follows: Six Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Revenues $ 497,782 $ 524,769 $ (26,987) Real estate agent commission expense 391,650 391,119 531 Gross profit 106,132 133,650 (27,518) (20.6) % Gross profit from property management business — 19,957 (19,957) Gross profit excluding property management business $ 106,132 $ 113,693 $ (7,561) (6.7) % Gross profit as a percentage of revenues 21.3 % 25.5 % (4.2) % Gross profit, excluding property management business, as a percentage of revenues 21.3 % 22.5 % (1.2) % Our gross profit, as a percentage of revenues, declined due to the absence of property management revenues and was also attributable to a shift in the revenue mix, driven by a higher percentage of our revenues from existing home sales generated from markets (primarily Florida) which had a lower gross margin during the period. Operating expenses, excluding real estate agent commissions expense. Our operating expenses, excluding real estate agent commissions expense, for the six months ended June 30, 2026 and 2025, respectively, were as follows: Six Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating expenses $ 518,718 $ 535,650 $ (16,932) (3.2) % Real estate agent commission expense 391,650 391,119 531 0.1 % Operating expenses, excluding real estate agent commissions expense 127,068 144,531 (17,463) (12.1) % Gain on disposal of property management business (408) — (408) Operating expenses from property management business — 15,500 (15,500) Operating expenses, excluding real estate agent commissions expense and property management business $ 127,476 $ 129,031 $ (1,555) (1.2) % Sales and Marketing. Sales and marketing expenses were $37,468 for the six months ended June 30, 2026, compared to $39,808, which included $555 associated with our property management business, for the six months ended June 30, 2025. The decline in expenses is attributable to expense rationalization efforts to streamline our sales and marketing process. Operations and support. Operations and support expenses were $34,011 for the six months ended June 30, 2026, compared to $35,503, which included $1,736 associated with our property management business, for the six months ended June 30, 2025. 33 General and administrative. General and administrative expenses were $38,946 for the six months ended June 30, 2026, compared to $53,502 for the six months ended June 30, 2025, representing a decline of $14,556, of which $11,945 was associated with our property management business, for the six months ended June 30, 2025 and also reflects a decline in expenses associated with professional services in the 2026 period. Technology. Technology expenses were $10,829 for the six months ended June 30, 2026, compared to $11,301, which included $1,124 associated with our property management business, for the six months ended June 30, 2025. Operating loss. Our operating loss for the six months ended June 30, 2026 and 2025, respectively, was as follows: Six Months Ended June 30, 2025 to 2026 2026 2025 $ Change % Change Operating loss $ (20,936) $ (10,881) $ (10,055) Gain on disposal of property management business (408) — (408) Operating income from property management business — 4,457 (4,457) Operating loss excluding property management business $ (21,344) $ (15,338) $ 6,006 39.2 % The increase in operating loss was primarily due to the decline in gross profit, after excluding our property management business, as well as the absence of operating income from our property management business in the 2026 period, which was offset by a decline of operating expenses, after excluding real estate agent commissions expense and our property management business, in the 2026 period. Other income (expenses). Other income was $1,926 for the six months ended June 30, 2026, compared to other expense of $18,028 for the six months ended June 30, 2025. For the six months ended June 30, 2026, other income primarily consisted of interest income of $1,609. For the six months ended June 30, 2025, other expense primarily consisted of the $17,715 loss from the change in fair value of the derivative embedded within convertible debt and interest expense of $3,075, partially offset by interest income of $2,620. Loss before provision for income taxes. Loss before income taxes was $19,010 and $28,909 for the six months ended June 30, 2026 and 2025, respectively. Income tax expense. There was no income tax expense for the six months ended June 30, 2026 and 2025. We calculate our provision for income taxes for interim reporting periods based upon our estimate of the annual effective income tax rate based on full year projections, which does not include the impact of discrete items. We then apply the annual effective income tax rate against year-to-date pretax income to record income tax expense and then adjust our provision for income tax expense for any discrete items, if any. We did not record a provision for income taxes during the six months ended June 30, 2026 and 2025, respectively, because we had established a valuation allowance for the full amount of our deferred tax assets. Liquidity and Capital Resources Cash, cash equivalents and restricted cash declined by $8,840 to $113,869, which included $8,644 of restricted cash, during the six months ended June 30, 2026. This compares to an increase of $2,488, to $144,709, which included restricted cash of $8,375, during the six months ended June 30, 2025. Cash used in operations was $7,739 for the six months ended June 30, 2026, compared to $4,974 for the six months ended June 30, 2025. The increase in the cash used in operations in the 2026 period was attributable to an increase in operating loss as well as increased payments of accrued compensation in 2026 and income tax liabilities, which were attributable to the gain on the October 2025 disposal of our property management business, in the 2026 period. These amounts were offset by an increase to the net changes in contract liabilities and related contract assets, which was associated with increased progress payments from our development marketing business, as well as the receipt of a portion of the settlement related to the Strougo litigation for the six months ended June 30, 2026. Cash used in investing activities was $1,071 for the six months ended June 30, 2026, compared to cash provided by investing activities of $7,548 for the six months ended June 30, 2025. For the six months ended June 30, 2026, cash used in investing activities was comprised primarily of capital expenditures of $943 and the purchase of subsidiaries of $100 due to the acquisition of the non-controlling interest of Real Estate Associates of Houston LLC. For the six months ended June 30, 2025, cash provided by investing activities was comprised of proceeds from the sale of short-term investments of $97,677 and was partially offset by the purchase of short-term investments of $87,873 and capital expenditures of $2,251. Cash used in financing activities was $30 for the six months ended June 30, 2026, compared to $86 for the six months ended June 30, 2025, which was comprised of withholding of shares as payment of payroll tax liabilities. 34 We continue to evaluate our capital structure and current market conditions related to our capital structure. We regularly review and evaluate potential acquisitions, joint ventures, divestitures and other strategic transactions. For example, we may acquire, or seek to acquire, additional operating businesses through a merger, purchase of assets, stock acquisition or other means, or to make other revisions to our capital structure, including, if authorized by our Board of Directors, the repurchase of our common stock in open market transactions. These initiatives may limit liquidity otherwise available to us. We had cash and cash equivalents of approximately $105,225 as of June 30, 2026 and, in addition to any cash provided from operations, such cash is available to be used to fund such liquidity requirements as well as other anticipated liquidity needs in the normal course of business. Management currently anticipates that these amounts, as well as expected cash flows from our operations and proceeds from any financings to the extent available, should be sufficient to meet our liquidity needs over the next twelve months. Real Estate Brokerage Antitrust Litigation Settlements. On April 26, 2024, we entered into a settlement agreement to resolve all claims on a nationwide basis in the pending seller class action litigations, Gibson v. NAR, No. 4:23-cv-00788-SRB (W.D. Mo.) and Umpa v. NAR, 4:23-cv-00945-SRB (W.D. Mo.) alleging claims on behalf of sellers against Douglas Elliman Inc. and our subsidiaries. That settlement agreement is currently being challenged on appeal in the U.S. Court of Appeals for the Eighth Circuit. Under the settlement agreement, we paid $7,750 and $5,000 into an escrow fund on June 12, 2024 and December 29, 2025, respectively, and have also agreed to pay $5,000 contingent payment subject to certain financial contingencies on or before December 31, 2027. The remaining contingent payment may be accelerated under certain circumstances. In April 2026, the Company opted into a settlement agreement with the purported class of home buyers in Tuccori v. At World Properties, LLC, et al. (N.D. Ill.), a case that consolidated certain purported class actions lawsuits filed by home buyers. This settlement is structured to resolve the claims asserted against us in, or arising from the same factual predicates as, the Lutz vs. HomeServices of America, Inc. et al lawsuit, pending in the U.S. District Court for the Southern District of Florida, No. 4:24-cv-10040 (KMM). Although we were not a defendant in Tuccori, the opt‑in settlement releases us, our subsidiaries and affiliated agents from the claims against us in Lutz. Under the Tuccori settlement agreement, we paid $100 into an escrow fund on June 23, 2026 and agreed to make three additional $647 payments within one, two and three years of the effective date of the settlement, respectively. The amount payable by us under the Tuccori settlement agreement was recorded as a noncurrent liability at June 30, 2026. The Tuccori settlement agreement is subject to court approval, and a final approval hearing is scheduled for November 2, 2026. Derivative Litigation Settlement. On November 14, 2025, a Verified Stockholder Derivative Complaint, Barbara Strougo derivatively on behalf of Douglas Elliman, Inc. vs. Howard M. Lorber, et al., also known as the Strougo Litigation, was filed in the Court of Chancery of the State of Delaware on behalf of Douglas Elliman Inc., as nominal defendant, against certain of its current and former directors and officers. The parties to the Strougo Litigation reached an agreement to settle it on the terms and conditions set forth in a Stipulation and Agreement of Compromise, Settlement, and Release that was filed with the Chancery Court on February 19, 2026. The Strougo settlement agreement provides for the final dismissal of the Strougo Litigation in exchange for (i) a settlement payment to us of $17,500, subject to reductions for attorneys’ fees and expenses, and (ii) the implementation by us of certain corporate-governance enhancements and reforms. Certain of our insurers agreed to fund the settlement. The Chancery Court held a settlement fairness hearing related to the Strougo settlement agreement on June 29, 2026 and, on July 7, 2026, entered a Final Order and Judgment approving the Strougo settlement agreement and awarding plaintiff’s counsel attorneys’ fees and expenses in the amount of $1,870, to be deducted from the $17,500 settlement payment. We received $2,500 of the settlement payment in June 2026 and we recorded and deferred within other current liabilities as of June 30, 2026 because the Strougo settlement agreement had not been approved by the Chancery Court on June 30, 2026. The additional $15,000 was received in July 2026. Other litigation. Litigation is subject to uncertainties and it is possible that there could be adverse developments in the Gibson/Umpa appeals, the buyer-side class action Lutz lawsuit, the Strougo lawsuit and other pending cases. These cases include cases related to two real estate sales persons formerly associated with us, who have been accused of sexual assault and related wrongdoing, where Douglas Elliman Inc., DER and our former Chief Executive Officer have been named as defendants (Koste et al vs. Alexander et al in the Supreme Court of the State of New York and Rodriguez vs. Alexander et al in the U.S. District Court for the Southern District of Florida). We deny liability and are vigorously defending claims made against us in the Koste and Rodriguez cases. For more information, see Note 8, “Commitments and Contingencies,” to our condensed consolidated financial statements. 35 Management cannot predict the cash requirements related to any future settlements or judgments, including cash required to bond any appeals, and there is a risk that those requirements will not be able to be met. Except as otherwise discussed above, management is unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome of the cases pending against us or our subsidiaries as well as the costs of defending such cases. It is possible that our consolidated financial position, results of operations or cash flows in any future period could be materially adversely affected by an unfavorable outcome in any such brokerage-related litigation. For more information, see Note 8, “Commitments and Contingencies” to our condensed consolidated financial statements. Technology Adoption and Implementation. In June 2026, we executed an agreement to purchase technology licenses, products related to our workspace platform and certain cloud computing services. As part of the agreement, we have received various credits, which may offset or reduce the commitment, as well as other discounts. We may elect to cancel the remaining commitment in return for a cancellation fee of 35% of total remaining commitment amount and loss of any discounts, remaining credits or other incentives provided under the agreement. For additional information regarding our purchase obligations, see Note 8 “Commitments and Contingencies” to our condensed consolidated financial statements. Off-Balance Sheet Arrangements We have various agreements in which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification clauses are included in contracts arising in the normal course of business under which we customarily agree to hold the other party harmless against losses arising from a breach of representations related to such matters as title to assets sold and licensed or certain intellectual property rights and, in connection with the sale of our property management division, certain known liabilities as of October 24, 2025. Payment by us under such indemnification clauses is generally conditioned on the other party making a claim that is subject to challenge by us and dispute resolution procedures specified in the particular contract. Further, our obligations under these arrangements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential number of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, payments made by us under these agreements have not been material. As of June 30, 2026, we were not aware of any indemnification agreements that would or are reasonably expected to have a current or future material adverse impact on our financial position, results of operations or cash flows. As of June 30, 2026 and December 31, 2025, we had outstanding approximately $2,811 and $2,645, respectively, of letters of credit, collateralized by certificates of deposit. The letters of credit have been issued as security deposits for leases of office space. As a service to its customers, Portfolio Escrow Inc., a subsidiary of Douglas Elliman, administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250. Portfolio Escrow Inc. had escrow funds on deposit of $36,283 as of each of June 30, 2026 and December 31, 2025, respectively, and corresponding escrow funds in holding of the same amount. While these deposits are not assets of Portfolio Escrow Inc., the subsidiary of Douglas Elliman (and, therefore, are excluded from the accompanying condensed consolidated balance sheets), the subsidiary of ours remains contingently liable for the disposition of these deposits. Critical Accounting Estimates and Policies Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates and therefore, if material, our future financial statements will be affected. There have been no material changes to our critical accounting policies and estimates disclosed in our 2025 Form 10-K. For additional information about our critical accounting policies and estimates, see the disclosure included in our 2025 Form 10-K, as well as Note 1 to our condensed consolidated financial statements included in this Quarterly Report. Market Risk We are exposed to market risks principally from fluctuations in interest rates and could be exposed to market risks from foreign currency exchange rates and equity prices in the future. We seek to minimize these risks through our regular operating and financing activities and our long-term investment strategy. Our market risk management procedures cover material market risks for our market risk sensitive financial instruments. 36 New Accounting Pronouncements Refer to Note 1, “Summary of Significant Accounting Policies” to our condensed consolidated financial statements for further information on New Accounting Pronouncements. Legislation, Regulation, Taxation and Litigation There are no material changes from the Legislation, Regulation, Taxation and Litigation section set forth in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our 2025 Annual Report. See Item 1A. “Risk Factors,” which describes risks associated with litigation and Note 8, “Commitments and Contingencies,” to our condensed consolidated financial statements, which contain a description of litigation. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information, this Form 10-Q contains “forward-looking statements” within the meaning of the federal securities law. Forward-looking statements include information relating to our intent, belief or current expectations, primarily with respect to, but not limited to, economic outlook, capital expenditures, cost reduction, cash flows, operating performance, growth expectations, competition, legislation and regulations, litigation, and related industry developments (including trends affecting our business, financial condition and results of operations). We identify forward-looking statements in this report by using words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may be,” “objective,” “opportunistically,” “plan,” “potential,” “predict,” “project,” “prospects,” “seek,” and “will be” and similar words or phrases or their negatives. Forward-looking statements involve important risks and uncertainties that could cause our actual results, performance or achievements to differ materially from our anticipated results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, without limitation, the following: •general economic and market conditions and any changes therein, including due to macroeconomic conditions, interest rate fluctuations, inflation, geopolitical instability, acts of war and terrorism or otherwise; •governmental regulations and policies, including with respect to regulation of the real estate market or monetary and fiscal policy and its effect on overall economic activity, in particular, mortgage interest rates; •the impact of enacted and proposed tariffs and other trade policies, and related uncertainties in the global economy resulting from such policies; •the ability of the Company to effectively develop and integrate artificial intelligence (“AI”) technologies into our business and expectations regarding the timing, cost and productivity improvements to be obtained by such initiatives; •the impacts of banks not honoring the escrow and trust deposits held by our subsidiaries; •litigation risks, the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in, conduct business with or acquire; •adverse changes in global, national, regional and local economic and market conditions, •the impacts of the One Big Beautiful Bill Act of 2025 and the Inflation Reduction Act of 2022, including the continued impact on the markets of our business; •effects of industry competition and consolidation; •severe weather events or natural or man-made disasters, including the increasing severity or frequency of such events due to climate change or otherwise, or other catastrophic events that may disrupt our business and have an unfavorable impact on home sale activity; and •the additional factors described under Item 1A, “Risk Factors,” in our 2025 Annual Report as updated in our quarterly report. Further information on the risks and uncertainties to our business includes the risk factors discussed above in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under Item 1A, “Risk Factors” of our 2025 Annual Report, as updated in our quarterly report. 37 Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. The forward-looking statements speak only as of the date they are made and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this quarterly report. New factors may emerge, and it is not possible to predict all factors that may affect our business and operations.