Growth stocks have been hammered this year. So have real estate stocks. eXp World Holdings (EXPI 4.78%) is both. As you can imagine, the stock has been decimated over the last year. However, its second-quarter earnings report revealed head-turning numbers that have defied real estate bears. Here's what the company had to say.

Defying the odds

Real estate naysayers can easily point to mortgage rates that could price some potential homebuyers out of a new home and cool off the U.S. real estate market. Indeed, mortgage rates have more than doubled from 2.77% a year ago to their high of 5.81% in mid-June. But eXp doesn't seem to mind what mortgage rates do.

For Sale sign in front of a house with a sold sticker on it.

Image source: Getty Images.

While rates have risen, so have eXp's financial results. The company's second-quarter earnings report revealed that it grew closed real estate transactions by 30% to  150,032. Those transactions resulted in a volume of $57.9 billion, up 44% from last year. Accordingly, eXp's revenue grew an eye-popping 42% over last year to $1.4 billion. The reason for the company's outperformance is simple -- its platform.

The company has created a unique digital real estate platform for its residential and commercial agents. Unlike traditional real estate brokers that lease office space in their territories for their agents, eXp has none. This, of course, eliminates a huge expense compared to traditional brokers. The company uses the excess savings to offer its real estate agents a generous commission split and other incentives.

For instance, old-school brokers charge around 40% of real estate commissions for support and office space. In contrast, eXp charges only 20%. After an agent relinquishes $16,000 in commissions to eXp during a calendar year, they make 100% of their commissions for the rest of the year. That's a compelling proposition for any agent, especially high-producing agents who have their own offices anyway.

In the second quarter, eXp grew its agent count by 42% to  82,856. The company was founded in 2009, after the collapse of real estate during the financial crisis. Since then, eXp's agent count has seen explosive exponential growth.

Chart showing eXp's agent count growth.

Data source: Company presentation.

Is eXp World Holdings a buy right now?

After a momentous year in 2020, growth stocks like eXp were hit by rising interest rates. Rising interest rates translated into rising mortgage rates, which also hit eXp. Over the last year, about two-thirds of its shares' market value has been wiped out. The shares' precipitous fall could offer long-term value to investors as the company shows no signs of slowing down, even if mortgage rates climb further.

For example, eXp has extended its growth strategy to international markets over the last few years and now operates in several countries, including Canada, the U.K., Australia, and India. Management told investors it opened up shop in New Zealand during the second quarter. At their depressed price, long-term investors should seriously consider adding eXp World Holdings shares to their portfolios.