All-Time High Net Income of $20.7 million
All-Time High Adjusted EBITDA of $77.4
million
Free Cash Flow Positive for 4 of the Last 5 Quarters
Increased Quarterly Market Share to 5.13%
NEW
YORK, July 31, 2024 /PRNewswire/ -- Compass,
Inc. (NYSE: COMP) ("Compass" or "the Company"), the largest
residential real estate brokerage in the
United States by sales volume1 for the third
year in a row, announced its financial results for the second
quarter ended June 30, 2024.
"In light of a quarter where the real estate market saw
historically low volume, I am particularly pleased that we achieved
all-time high net income, all-time high Adjusted EBITDA, and
generated positive free cash flow for the quarter, making the
Company free cash flow positive in 4 of the last 5 quarters," said
Robert Reffkin, Founder and Chief
Executive Officer of Compass. "Q2 revenue grew 14% year-over-year
and we significantly grew the Number of Principal
Agents2 with the addition of over 2,000 principal
agents from the acquisitions of Latter & Blum and Parks Real
Estate and over 500 principal agents organically."
Reffkin continued, "Capitalizing on the structural advantages
created by our end-to-end proprietary technology platform, national
scale, top agent network and exclusive inventory, we have
positioned Compass for what we believe will be significant upside
when the market begins to recover."
Kalani Reelitz, Chief Financial
Officer of Compass said, "Our cash balance increased to
$185.8 million at the end of Q2 and
includes reductions for the $28.75
million antitrust litigation settlement payment and cash
used in our strategic acquisitions of Latter & Blum and Parks
Real Estate. In Q2 2024, we generated positive operating cash flow
of $45.0 million and free cash
flow3 of $40.4
million. We reduced OPEX4 in the
second quarter to $217.4 million, an
improvement of $20.9 million from Q2
2023 OPEX of $238.3 million."
Q2 2024 Highlights:
- Revenue in Q2 2024 increased by 14% year-over-year
to $1.7 billion as transactions
increased 11.4%, while transactions declined by 3.3% for the entire
residential real estate market in the second quarter, as reported
by the National Association of Realtors ("NAR"). 9% of the revenue
increase was attributable to our organic agents and 5% was
attributable to M&A since the prior year period.
- GAAP Net income in Q2 2024 was $20.7 million, an improvement of $68.5 million from a net loss of $47.8 million in Q2 2023. The Net Income for Q2
2024 includes non-cash stock-based compensation expenses of
$30.9 million, and depreciation and
amortization of $21.4 million.
- Adjusted EBITDA5 (a non-GAAP measure)
was $77.4 million in Q2 2024 compared
to $30.1 million in Q2 2023. This is
an improvement of $47.3 million.
- Operating Cash Flow / Free Cash
Flow6 (a non-GAAP measure): During Q2
2024, operating cash flow was $45.0
million and free cash flow was $40.4
million. Operating free cash flow and free cash flow include
the impact of the $28.75 antitrust
litigation settlement payment.
- Cash and cash equivalents at the end of Q2 2024 was
$185.8 million, and there were no
outstanding draws on our revolving credit facility.
Q2 2024 Operational Highlights:
- National market share: In Q2 2024 quarterly market share
was 5.13%, an increase of 50 basis points compared to Q2 2023 and
an increase of 37 basis points sequentially from Q1 2024.
- Principal Agents7 8: At the end of
Q2 2024, the number of principal agents was 16,997 compared to
13,698 in Q2 2023, an increase of 3,299 or 24%
year-over-year. Sequentially, when comparing Q2 2024 to Q1
2024, we had an increase of 2,406 principal agents or 16.5% (which
includes principal agent separations). We added 543 principal
agents organically and approximately 2,375 principal agents from
the acquisitions of Latter & Blum and Parks Real Estate in Q2
2024. We also continued the trend of strong agent retention, with
97.3% quarterly principal agent retention in Q2 2024.
- Transactions9: Compass agents closed
60,390 Total Transactions in Q2 2024, an increase of 11.4% compared
to Q2 2023 (54,207). Transactions for the entire U.S. residential
real estate market declined 3.3% for the same period, according to
NAR.
- Gross Transaction Value ("GTV")10:
GTV was $65.0 billion in Q2
2024, an increase of 14.5% compared to Q2 2023 GTV of $56.8 billion, while the entire U.S. residential
real estate market GTV increased 3.2% for the same period,
according to NAR.
- Platform: The Compass end-to-end proprietary technology
platform allows real estate agents to perform their primary
workflows, from first contact to close, with a single log-in and
without leaving the Compass platform. We are focused on:
- Ongoing platform integration of our Title & Escrow business
(expecting all T&E markets to be integrated by the end of Q3
2024);
- Development of a client dashboard to facilitate collaboration
between Compass agents and their clients in the course of a
transaction (launching beta version in October 2024, with full delivery expected in
early Q1 2025, before the Spring market);
- Building Compass Make-Me-Move tool, which we believe will help
convert some of our 100+ million CRM contacts into passive
willing-to-sell inventory (launching in August 2024);
- Rollout of team collaboration functionality to further increase
the efficiency and productivity of our agent teams (expecting in
second half of 2024);
- Continued investment and deployment of Compass AI, including
recent integration into our email and marketing tools; and
- Driving internal cost efficiencies using technology, reducing
costs in transactions operations and with external vendors.
Additional information can be found in the Company's Q2 2024
Earnings Presentation, which can be found in the Investor Relations
section of the Compass website at
https://investors.compass.com.
Outlook
Q3 2024 Outlook:
- Revenue of $1.425 billion to
$1.525 billion
- Adjusted EBITDA of $30
million to $50 million
FY 2024 Outlook:
- Non-GAAP OPEX11 of $876
million to $896 million,
reflecting an increase in both the low and high ends of the range
of $9.0 million as a result of the
Parks Real Estate acquisition that closed in May 2024. The midpoint of this range equates to
$850 million for the Company's "core"
OPEX plus $15 million for 2023
accretive M&A, plus $21 million
for 2024 accretive M&A.
- Expects to be free cash flow positive for full year 2024
We have not reconciled our guidance for Adjusted EBITDA to GAAP
Net income (loss) because certain expenses excluded from GAAP Net
income (loss) when calculating Adjusted EBITDA cannot be reasonably
calculated or predicted at this time. Additionally, we have not
reconciled our guidance for non-GAAP OPEX to GAAP OPEX because
certain expenses excluded from GAAP OPEX cannot be reasonably
calculated or predicted at this time. Accordingly, reconciliations
are not available without unreasonable effort.
For a reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures on a historical basis, see
"Reconciliation of Net Income (Loss) Attributable to Compass, Inc.
to Adjusted EBITDA", "Reconciliation of GAAP OPEX to non-GAAP OPEX"
and "Reconciliation of GAAP Operating Cash Flow to Free Cash Flow"
in the financial statement tables included within this press
release.
Conference Call Information
Management will conduct a
conference call to discuss the second quarter 2024 results as well
as outlook at 5:00 p.m. ET on Wednesday
July 31, 2024. The conference call will be accessible via
the Internet on the Compass Investor Relations website
https://investors.compass.com. You can also access the audio
webcast via the following link: Compass, Inc. 2Q24 Earnings
Conference Call.
An audio recording of the conference call will be available for
replay shortly after the call's completion. To access the replay,
visit the Events and Presentations section on the Compass Investor
Relations website at https://investors.compass.com.
Disclosure Channels
Compass uses its Investor
Relations website, https://investors.compass.com, as a means of
disclosing information which may be of interest or material to its
investors and for complying with disclosure obligations under
Regulation FD. We intend to announce material information to the
public through filings with the Securities and Exchange Commission,
or the SEC, the investor relations page on our website
(www.compass.com), press releases, public conference calls, public
webcasts, our X (formerlyTwitter) feed (@Compass), our Facebook
page, our LinkedIn page, our Instagram account, our YouTube
channel, and Robert Reffkin's X
(formerly Twitter) feed (@RobReffkin) and Instagram account
(@robreffkin). Accordingly, investors should monitor each of these
disclosure channels.
Safe Harbor Statement
This press release includes
forward-looking statements, which are statements other than
statements of historical facts, and statements in the future tense.
These statements include, but are not limited to, statements
regarding our future performance, including expected financial
results for the third quarter of 2024, planned non-GAAP OPEX and
free cash flow expectations for the full year of 2024, and our
expectations for operational achievements. Forward-looking
statements are based upon various estimates and assumptions, as
well as information known to us as of the date of this press
release, and are subject to risks and uncertainties, including but
not limited to: general economic conditions, economic and industry
downturns, the health of the U.S. real estate industry, and risks
generally incident to the ownership of residential real estate; the
effect of monetary policies of the federal government and it's
agencies; high interest rates; ongoing industry antitrust class
action litigation (including lawsuits filed against us) or any
related regulatory activities; any decreases in our gross
commission income or the percentage of commissions that we collect;
declining home inventory levels; our ability to carefully manage
our expense structure; adverse economic, real estate or business
conditions in geographic areas where our business is concentrated
and/or impacting high-end markets; our ability to continuously
innovate, improve and expand our platform, including tools and
features integrating machine learning and artificial intelligence;
our ability to expand our operations and to offer additional
integrated services; our ability to realize expected benefits from
our joint ventures; our ability to compete successfully; our
ability to attract and retain highly qualified personnel and to
recruit agents; our ability to re-accelerate our business growth
given our current expense structure; fluctuation in our quarterly
results and other operating metrics; the loss of one or more key
personnel; actions by our agents or employees that could adversely
affect our reputation and subject us to liability; our ability to
pursue acquisitions that are successful and can be integrated into
our existing operations; changes in mortgage underwriting
standards; our ability to maintain or establish relationships with
third-party service providers; the impact of cybersecurity
incidents and the potential loss of critical and confidential
information; the reliability of our fraud detection
processes and information security systems; depository banks not
honoring our escrow and trust deposits; adoption of alternatives to
full-service agents by consumers; our ability to develop and
maintain an effective system of disclosure controls and internal
control over financial reporting; covenants in our debt agreements
that may restrict our borrowing capacity or operating activities;
our abilities to use net operating losses and other tax attributes;
changes in, and our reliance on, accounting standards, assumptions,
estimates and business data; the dependability of our platform and
software; our ability to maintain our company culture; our ability
to obtain or maintain adequate insurance coverage; processing,
storage, and use of personal information and other data, and
compliance with privacy laws and regulations; natural disasters and
catastrophic events; the effect of the claims, lawsuits, government
investigations and other proceedings; changes in federal or state
laws that would require our agents to be classified as employees;
our ability to protect our intellectual property rights and our
reliance on the intellectual property rights of third parties; the
impact of having a multi-class structure of common stock; and other
risks set forth in our annual report on Form 10-K and our
subsequent quarterly reports on Form 10-Q. Significant variation
from the assumptions underlying our forward-looking statements
could cause our actual results to vary, and the impact could be
significant. Accordingly, actual results could differ materially
from those predicted or implied or such uncertainties could cause
adverse effects on our results. Reported results should not be
considered as an indication of future performance.
More information about factors that could adversely affect our
business, financial condition and results of operations, or that
could cause actual results to differ from those expressed or
implied in our forward-looking statements is included under the
captions "Risk Factors," "Legal Proceedings" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in our most recent annual report on Form 10-K and our
subsequent quarterly reports on Form 10-Q, copies of which are
available on the Investor Relations page of our website
at https://investors.compass.com/ and on the SEC website
at www.sec.gov. All information herein speaks as of the
date hereof and all forward-looking statements contained herein are
based on information available to us as of the date hereof, and we
do not assume any obligation to update these statements as a result
of new information or future events. Undue reliance should not be
placed on the forward-looking statements in this press release.
Non-GAAP Financial Measures
To supplement our
condensed consolidated financial statements, which are prepared in
accordance with GAAP, we present Adjusted EBITDA, non-GAAP OPEX,
and free cash flow, which are non-GAAP financial measures, in this
press release. We use Adjusted EBITDA, non-GAAP OPEX and free cash
flow in conjunction with GAAP measures as part of our overall
assessment of our performance, including the preparation of our
annual operating budget and quarterly forecasts, to evaluate the
effectiveness of our business strategies and to communicate with
our board of directors concerning our financial performance. We
believe Adjusted EBITDA, non-GAAP OPEX and free cash flow are also
helpful to investors, analysts and other interested parties because
they can assist in providing a more consistent and comparable
overview of our operations across our historical financial periods.
Adjusted EBITDA, non-GAAP OPEX and free cash flow have limitations
as analytical tools. Therefore, you should not consider them in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because of these limitations, you should
consider Adjusted EBITDA, non-GAAP OPEX and free cash flow
alongside other financial performance measures, including net
income (loss) attributable to Compass, Inc., GAAP OPEX, operating
cash flows and our other GAAP measures. In evaluating Adjusted
EBITDA, non-GAAP OPEX and free cash flow, you should be aware that
in the future we may incur expenses that are the same as or similar
to some of the adjustments reflected in this press release. Our
presentation of Adjusted EBITDA, non-GAAP OPEX and free cash flow
should not be construed to imply that our future results will be
unaffected by the types of items excluded from these calculations
of Adjusted EBITDA, non-GAAP OPEX and free cash flow. Adjusted
EBITDA, non-GAAP OPEX and free cash flow are not presented in
accordance with GAAP and the use of these terms vary from others in
our industry. Reconciliations of these non-GAAP measures have been
provided in the financial statement tables included within this
press release, and investors are encouraged to review these
reconciliations.
About Compass
Compass is the largest residential real
estate brokerage in the United
States by sales volume. Founded in 2012 and based in
New York City, Compass provides an
end-to-end platform that empowers its residential real estate
agents to deliver exceptional service to seller and buyer clients.
The platform includes an integrated suite of cloud-based software
for customer relationship management, marketing, client service,
brokerage services and other critical functionality, all
custom-built for the real estate industry. Compass agents utilize
the platform to grow their business, save time and manage their
business more effectively. For more information on how Compass
empowers real estate agents, one of the largest groups of small
business owners in the country, please visit www.compass.com.
1 Compass was ranked number one in sales volume
for 2023 by Real Trends in March 2024
for the third year in a row.
2 Excludes approximately 1,200 principal agents
located in Texas who joined
Compass during the second quarter of 2024 as part of the Latter
& Blum Holdings, LLC acquisition. These agents operate with a
flat fee / transaction fee based model, which is different from the
Company's standard commission model.
3 A reconciliation of GAAP to Non-GAAP measures can
be found within the financial statement tables included within this
press release.
4 Non-GAAP OPEX excludes Commissions and other
related expenses, Depreciation and amortization, Stock-based
compensation and other expenses excluded from the Company's
calculation of Adjusted EBITDA. We calculate non-GAAP OPEX
annualized run rate by taking the sum of the quarter's non-GAAP
sales and marketing, operations and support, research and
development, and general and administration expenses and
multiplying it by four.
5 A reconciliation of GAAP to Non-GAAP measures can
be found within the financial statement tables included within this
press release.
6 A reconciliation of GAAP to Non-GAAP measures can
be found within the financial statement tables included within this
press release.
7 During the first quarter of 2024, the Company
began to report its agent statistics as of the quarter end. The
Company's Number of Principal Agents and year-over-year and
sequential change reported in this press release is based on the
quarter end count for the second quarter of 2023 and 2024 and the
first quarter of 2024.
8 Excludes approximately 1,200 principal agents
located in Texas who joined
Compass during the second quarter of 2024 as part of the Latter
& Blum Holdings, LLC acquisition. These agents operate with a
flat fee / transaction fee based model, which is different from the
Company's standard commission model.
9 We calculate Total Transactions by taking the sum
of all transactions closed on the Compass platform in which our
agent represents 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 Compass agents represent both
the buyer and seller in any given transaction.
10 Gross Transaction Value includes a de minimis
number of new development and commercial brokerage
transactions.
11 Non-GAAP OPEX excludes Commissions and other
related expenses, Depreciation and amortization, Stock-based
compensation and other expenses excluded from the Company's
calculation of Adjusted EBITDA, including the expense related to
the proposed antitrust settlement. We calculate non-GAAP OPEX
annualized run rate by taking the sum of the quarter's non-GAAP
sales and marketing, operations and support, research and
development, and general and administration expenses and
multiplying it by four. For a reconciliation of GAAP OPEX to
non-GAAP OPEX on a historical basis see the financial statement
tables included within this press release.
Compass,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(In millions,
unaudited)
|
|
|
|
|
|
June 30,
2024
|
|
December 31,
2023
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
185.8
|
|
$
166.9
|
Accounts receivable,
net of allowance
|
56.8
|
|
36.6
|
Compass Concierge
receivables, net of allowance
|
33.2
|
|
24.0
|
Other current
assets
|
44.7
|
|
54.5
|
Total current
assets
|
320.5
|
|
282.0
|
Property and equipment,
net
|
137.7
|
|
151.7
|
Operating lease
right-of-use assets
|
404.1
|
|
408.5
|
Intangible assets,
net
|
91.7
|
|
77.6
|
Goodwill
|
234.6
|
|
209.8
|
Other non-current
assets
|
26.6
|
|
30.7
|
Total assets
|
$
1,215.2
|
|
$
1,160.3
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
17.8
|
|
$
18.4
|
Commissions
payable
|
106.5
|
|
59.6
|
Accrued expenses and
other current liabilities
|
134.0
|
|
90.8
|
Current lease
liabilities
|
100.2
|
|
98.9
|
Concierge credit
facility
|
27.3
|
|
24.8
|
Total current
liabilities
|
385.8
|
|
292.5
|
Non-current lease
liabilities
|
397.4
|
|
410.2
|
Other non-current
liabilities
|
30.3
|
|
25.6
|
Total
liabilities
|
813.5
|
|
728.3
|
Stockholders'
equity
|
|
|
|
Common stock
|
—
|
|
—
|
Additional paid-in
capital
|
3,028.4
|
|
2,946.5
|
Accumulated
deficit
|
(2,630.0)
|
|
(2,517.8)
|
Total Compass, Inc.
stockholders' equity
|
398.4
|
|
428.7
|
Non-controlling
interest
|
3.3
|
|
3.3
|
Total stockholders'
equity
|
401.7
|
|
432.0
|
Total liabilities and
stockholders' equity
|
$
1,215.2
|
|
$
1,160.3
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(In millions,
except share and per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
$
1,700.6
|
|
$
1,494.0
|
|
$
2,754.7
|
|
$
2,451.2
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Commissions and other
related expense (1)
|
1,405.3
|
|
1,224.0
|
|
2,267.6
|
|
2,014.9
|
|
Sales and marketing
(1)
|
94.9
|
|
113.3
|
|
188.3
|
|
228.6
|
|
Operations and support
(1)
|
83.1
|
|
83.0
|
|
162.1
|
|
164.1
|
|
Research and
development (1)
|
47.4
|
|
45.4
|
|
94.4
|
|
94.3
|
|
General and
administrative (1)
|
22.9
|
|
34.7
|
|
105.1
|
|
69.1
|
|
Restructuring
costs
|
4.3
|
|
15.9
|
|
5.8
|
|
26.0
|
|
Depreciation and
amortization
|
21.4
|
|
22.3
|
|
42.2
|
|
47.2
|
|
Total
operating expenses
|
1,679.3
|
|
1,538.6
|
|
2,865.5
|
|
2,644.2
|
Income (loss) from
operations
|
21.3
|
|
(44.6)
|
|
(110.8)
|
|
(193.0)
|
Investment income,
net
|
1.4
|
|
2.5
|
|
2.5
|
|
5.4
|
Interest
expense
|
(1.6)
|
|
(4.1)
|
|
(3.1)
|
|
(7.3)
|
Income (loss) before
income taxes and equity in loss of
unconsolidated entity
|
21.1
|
|
(46.2)
|
|
(111.4)
|
|
(194.9)
|
Income tax
benefit
|
0.1
|
|
—
|
|
0.4
|
|
—
|
Equity in loss of
unconsolidated entity
|
(0.4)
|
|
(0.7)
|
|
(1.2)
|
|
(2.2)
|
Net income
(loss)
|
20.8
|
|
(46.9)
|
|
(112.2)
|
|
(197.1)
|
Net income attributable
to non-controlling interests
|
(0.1)
|
|
(0.9)
|
|
—
|
|
(1.1)
|
Net income (loss)
attributable to Compass, Inc.
|
$
20.7
|
|
$
(47.8)
|
|
$
(112.2)
|
|
$
(198.2)
|
Net income (loss) per
share attributable to Compass, Inc., basic
|
$
0.04
|
|
$
(0.10)
|
|
$
(0.23)
|
|
$
(0.44)
|
Net income (loss) per
share attributable to Compass, Inc., diluted
|
$
0.04
|
|
$
(0.10)
|
|
$
(0.23)
|
|
$
(0.44)
|
Weighted-average shares
used in computing net income (loss) per
share attributable to Compass, Inc., basic
|
498,664,877
|
|
460,960,349
|
|
494,332,571
|
|
455,538,666
|
Weighted-average shares
used in computing net income (loss) per
share attributable to Compass, Inc., diluted
|
509,884,022
|
|
460,960,349
|
|
494,332,571
|
|
455,538,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total stock-based
compensation expense included in the condensed consolidated
statements of operations is as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Commissions and other
related expense
|
$
—
|
|
$
—
|
|
$
—
|
|
$
11.6
|
|
Sales and
marketing
|
8.3
|
|
9.0
|
|
16.2
|
|
17.6
|
|
Operations and
support
|
4.4
|
|
4.1
|
|
8.1
|
|
7.1
|
|
Research and
development
|
15.2
|
|
12.6
|
|
30.1
|
|
23.0
|
|
General and
administrative
|
3.0
|
|
13.3
|
|
9.4
|
|
24.6
|
|
Total stock-based
compensation expense
|
$
30.9
|
|
$
39.0
|
|
$
63.8
|
|
$
83.9
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions,
unaudited)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
Net loss
|
$
(112.2)
|
|
$
(197.1)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
42.2
|
|
47.2
|
Stock-based
compensation
|
63.8
|
|
83.9
|
Equity in loss of
unconsolidated entity
|
1.2
|
|
2.2
|
Change in acquisition
related contingent consideration
|
0.9
|
|
0.6
|
Bad debt
expense
|
0.9
|
|
2.8
|
Amortization of debt
issuance costs
|
0.4
|
|
0.4
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(19.3)
|
|
(24.1)
|
Compass Concierge
receivables
|
(9.4)
|
|
5.9
|
Other current
assets
|
12.4
|
|
12.4
|
Other non-current
assets
|
4.3
|
|
9.4
|
Operating lease
right-of-use assets and operating lease liabilities
|
(8.1)
|
|
9.5
|
Accounts
payable
|
(1.2)
|
|
(4.9)
|
Commissions
payable
|
46.2
|
|
49.0
|
Accrued expenses and
other liabilities
|
31.5
|
|
0.6
|
Net cash provided by
(used in) operating activities
|
53.6
|
|
(2.2)
|
|
|
|
|
Investing
Activities
|
|
|
|
Investment in
unconsolidated entity
|
(1.2)
|
|
—
|
Capital
expenditures
|
(7.3)
|
|
(6.1)
|
Payments for
acquisitions, net of cash acquired
|
(18.0)
|
|
—
|
Net cash used in
investing activities
|
(26.5)
|
|
(6.1)
|
|
|
|
|
Financing
Activities
|
|
|
|
Proceeds from exercise
of stock options
|
4.8
|
|
2.9
|
Proceeds from issuance
of common stock under Employee Stock Purchase Plan
|
1.1
|
|
1.4
|
Taxes paid related to
net share settlement of equity awards
|
(14.1)
|
|
(10.3)
|
Proceeds from drawdowns
on Concierge credit facility
|
23.6
|
|
29.3
|
Repayments of drawdowns
on Concierge credit facility
|
(21.1)
|
|
(30.8)
|
Proceeds from drawdowns
on Revolving credit facility
|
—
|
|
75.0
|
Repayments of drawdowns
on Revolving credit facility
|
—
|
|
(75.0)
|
Payments related to
acquisitions, including contingent consideration
|
(2.5)
|
|
(10.2)
|
Other
|
—
|
|
(0.5)
|
Net cash used in
financing activities
|
(8.2)
|
|
(18.2)
|
Net increase (decrease)
in cash and cash equivalents
|
18.9
|
|
(26.5)
|
Cash and cash
equivalents at beginning of period
|
166.9
|
|
361.9
|
Cash and cash
equivalents at end of period
|
$
185.8
|
|
$
335.4
|
Compass,
Inc.
|
Reconciliation of
Net Income (Loss) Attributable to Compass, Inc. to Adjusted
EBITDA
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income (loss)
attributable to Compass, Inc.
|
$
20.7
|
|
$
(47.8)
|
|
$
(112.2)
|
|
$
(198.2)
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
21.4
|
|
22.3
|
|
42.2
|
|
47.2
|
Investment income,
net
|
(1.4)
|
|
(2.5)
|
|
(2.5)
|
|
(5.4)
|
Interest
expense
|
1.6
|
|
4.1
|
|
3.1
|
|
7.3
|
Stock-based
compensation
|
30.9
|
|
39.0
|
|
63.8
|
|
83.9
|
Income tax
benefit
|
(0.1)
|
|
—
|
|
(0.4)
|
|
—
|
Restructuring
costs
|
4.3
|
|
15.9
|
|
5.8
|
|
26.0
|
Acquisition-related
expenses(1)
|
—
|
|
(0.9)
|
|
—
|
|
2.2
|
Litigation
charge(2)
|
—
|
|
—
|
|
57.5
|
|
—
|
Adjusted
EBITDA
|
$
77.4
|
|
$
30.1
|
|
$
57.3
|
|
$
(37.0)
|
|
(1) For the
three months ended June 30, 2023, acquisition-related expenses
include a $0.2 million loss as a result of changes in the fair
value of contingent consideration and a $1.1 million gain related
to acquisition consideration treated as compensation expense over
the underlying retention periods. For the six months ended June 30,
2023, acquisition-related expenses include a $0.2 million loss as a
result of changes in the fair value of contingent consideration and
expense of $2.0 million related to acquisition consideration
treated as compensation expense over the underlying retention
periods.
|
|
(2)
Represents a charge of $57.5 million incurred during the three
months ended March 31, 2024 in connection with the Antitrust
Lawsuits. 50% of the settlement was paid during the three months
ended June 30, 2024, and the remaining 50% is expected to be paid
during the three months ended June 30, 2025.
|
Compass,
Inc.
|
Reconciliation of
Operating Cash Flows to Free Cash Flow
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net cash provided by
(used in) operating activities
|
$
45.0
|
|
$
53.3
|
|
$
53.6
|
|
$
(2.2)
|
Less:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(4.6)
|
|
(2.6)
|
|
(7.3)
|
|
(6.1)
|
Free cash
flow
|
$
40.4
|
|
$
50.7
|
|
$
46.3
|
|
$
(8.3)
|
Compass,
Inc.
|
Reconciliation of
GAAP Operating Expenses to Non-GAAP Operating
Expenses
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
GAAP Commissions and
other related expense
|
$
1,405.3
|
|
$
1,224.0
|
|
$
2,267.6
|
|
$
2,014.9
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
—
|
|
—
|
|
—
|
|
(11.6)
|
Non-GAAP Commissions
and other related expense
|
$
1,405.3
|
|
$
1,224.0
|
|
$
2,267.6
|
|
$
2,003.3
|
|
|
|
|
|
|
|
|
GAAP Sales and
marketing
|
$
94.9
|
|
$
113.3
|
|
$
188.3
|
|
$
228.6
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(8.3)
|
|
(9.0)
|
|
(16.2)
|
|
(17.6)
|
Non-GAAP Sales and
marketing
|
$
86.6
|
|
$
104.3
|
|
$
172.1
|
|
$
211.0
|
|
|
|
|
|
|
|
|
GAAP Operations and
support
|
$
83.1
|
|
$
83.0
|
|
$
162.1
|
|
$
164.1
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(4.4)
|
|
(4.1)
|
|
(8.1)
|
|
(7.1)
|
Acquisition-related
expenses
|
—
|
|
0.9
|
|
—
|
|
(2.2)
|
Non-GAAP Operations and
support
|
$
78.7
|
|
$
79.8
|
|
$
154.0
|
|
$
154.8
|
|
|
|
|
|
|
|
|
GAAP Research and
development
|
$
47.4
|
|
$
45.4
|
|
$
94.4
|
|
$
94.3
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(15.2)
|
|
(12.6)
|
|
(30.1)
|
|
(23.0)
|
Non-GAAP Research and
development
|
$
32.2
|
|
$
32.8
|
|
$
64.3
|
|
$
71.3
|
|
|
|
|
|
|
|
|
GAAP General and
administrative
|
$
22.9
|
|
$
34.7
|
|
$
105.1
|
|
$
69.1
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(3.0)
|
|
(13.3)
|
|
(9.4)
|
|
(24.6)
|
Litigation
charge
|
—
|
|
—
|
|
(57.5)
|
|
—
|
Non-GAAP General and
administrative
|
$
19.9
|
|
$
21.4
|
|
$
38.2
|
|
$
44.5
|
Compass,
Inc.
|
Non-GAAP Operating
Expenses Excluding Commissions and Other Related
Expense
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2023
|
|
June 30,
2023
|
|
September
30,
2023
|
|
December 31,
2023
|
|
March 31,
2024
|
|
June 30,
2024
|
Sales and
marketing
|
$
106.7
|
|
$
104.3
|
|
$
95.1
|
|
$
94.3
|
|
$
85.5
|
|
$
86.6
|
Operations and
support
|
75.0
|
|
79.8
|
|
78.4
|
|
75.7
|
|
75.3
|
|
78.7
|
Research and
development
|
38.5
|
|
32.8
|
|
34.4
|
|
33.1
|
|
32.1
|
|
32.2
|
General and
administrative
|
23.1
|
|
21.4
|
|
10.9
|
|
20.5
|
|
18.3
|
|
19.9
|
Total non-GAAP
operating expenses excluding
commissions and other related expense
|
$
243.3
|
|
$
238.3
|
|
$
218.8
|
|
$
223.6
|
|
$
211.2
|
|
$
217.4
|
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SOURCE COMPASS