Adjusted EBITDA Exceeds High-End of
Guidance
Reiterates Positive Free Cash Flow Guidance for
Full Year 2024
Transactions Increased 16.1% and Quarterly
Market Share Grew 49 Basis Points YoY to 4.80%
NEW
YORK, Oct. 30, 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 third
quarter ended September 30, 2024.
"In what remains a challenging environment for the real estate
market, we grew Adjusted EBITDA significantly year-over-year and
delivered a substantial improvement in free cash flow. Our results
this quarter put Compass in a position to deliver meaningful
Adjusted EBITDA for 2024 and to be free cash flow positive for the
full year despite a multi-decade low for existing home sales,
demonstrating our ability to generate significant free cash flow as
the market makes its way to mid-cycle levels," said
Robert Reffkin, Founder and Chief Executive Officer of
Compass. "We continue to grow faster than the market – third
quarter transactions increased 16.1% year-over-year versus a market
that declined 1.9% as we grew our Number of Principal
Agents2 20% year-over-year and increased our
quarterly market share to 4.80% in Q3 2024 from 4.31% in Q3 2023.
The third quarter was also our strongest quarter in the last four
quarters for quarterly principal agent retention at 97.8%."
Reffkin continued, "When the market recovers, we believe the
combination of our cost discipline and structural advantages, which
include our end-to-end proprietary technology platform, national
scale, network of top agents and depth of inventory, positions
Compass to capture significant upside at attractive unit
economics."
Kalani Reelitz, Chief Financial
Officer of Compass said, "We continue to fortify our balance sheet
and ended the quarter with a cash balance of $211.2 million. In Q3 2024, we generated positive
operating cash flow of $37.4 million
and free cash flow3 of $32.8
million. We reduced OPEX4 in the third
quarter to $215.0 million, an
improvement of $3.8 million from Q3
2023 OPEX of $218.8 million.
Excluding the impact from M&A of $9.6
million, year-over-year OPEX reduced by $13.4 million. OPEX was also down sequentially Q3
2024 to Q2 2024 by $2.4 million even
with Parks and Latter & Blum fully loaded into our operating
costs. These results exhibit our commitment to control costs as we
continue to outpace market growth."
Q3 2024 Highlights:
- Revenue in Q3 2024 increased by 11.7%
year-over-year to $1.5
billion as transactions increased 16.1%, while transactions
declined by 1.9% for the entire residential real estate market in
the third quarter, as reported by the National Association of
Realtors ("NAR"). Year-over-year organic revenue growth was 5.3%,
while revenue growth attributable to M&A was 6.4%.
- GAAP Net loss in Q3 2024 was $1.7
million, an improvement of $37.7
million from a net loss of $39.4
million in Q3 2023. The net loss for Q3 2024 includes
non-cash stock-based compensation expense of $32.5 million, and depreciation and amortization
of $20.5 million.
- Adjusted EBITDA5 (a non-GAAP measure)
was $52.0 million in Q3 2024 compared
to $21.8 million in Q3 2023, an
improvement of $30.2 million.
- Operating Cash Flow / Free Cash
Flow6 (a non-GAAP measure): During Q3 2024,
operating cash flow was $37.4 million
and free cash flow was $32.8
million.
- Cash and cash equivalents at the end of Q3 2024 was
$211.2 million, and there were no
outstanding draws on our revolving credit facility.
Q3 2024 Operational Highlights:
- National market share: In Q3 2024, quarterly market
share was 4.80%, an increase of 49 basis points compared to Q3 2023
and a decrease of 33 basis points sequentially from Q2 2024,
consistent with prior years' Q2 to Q3 trend due to geographic
mix.
- Principal Agents7 8: At the end of
Q3 2024, the number of principal agents was 17,542 compared to
14,615 in Q3 2023, an increase of 2,927 or 20.0% year-over-year.
Sequentially, when comparing Q3 2024 to Q2 2024, we had an increase
of 545 principal agents or 3.2% (net of principal agent
separations). We continued the trend of strong agent retention with
97.8% quarterly principal agent retention in Q3 2024, our best in
four quarters.
- Transactions9: Compass agents closed
55,872 Total Transactions in Q3 2024, an increase of 16.1% compared
to Q3 2023 (48,134). Transactions for the entire U.S. residential
real estate market declined 1.9% for the same period, according to
NAR.
- Gross Transaction Value ("GTV")10: GTV
was $57.7 billion in Q3 2024, an
increase of 13.4% compared to Q3 2023 GTV of $50.9 billion, while the entire U.S. residential
real estate market GTV increased 1.9% 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. Highlights from Q3 2024
include:
- Completed all platform integrations for our wholly-owned Title
& Escrow businesses, helping to support our 700 basis point
increase in attach rates over the past three quarters;
- Development of the client dashboard (to be branded 'Compass
One') to facilitate collaboration between Compass agents and their
clients in the course of a transaction (launched beta version in
October 2024, with national launch
expected in early Q1 2025);
- Launched Compass Reverse Prospecting, which provides
homesellers with exclusive insights into interested buyers looking
at their listings among the 33,000+ Compass agents across the
country and the millions of clients they represent. It tracks
real-time updates on how often agents and their clients are looking
at the listing, commenting, favoriting it, or sharing it; and
- Driving adoption for Phase 1 of the Compass Make-Me-Sell tool
with the full launch expected in late Q1 2025 – we believe this
will help convert a portion of our 100+ million CRM contacts into
passive 'willing-to-sell' inventory that will only be available to
Compass agents.
Additional information can be found in the Company's Q3 2024
Earnings Presentation, which can be found in the Investor Relations
section of the Compass website at
https://investors.compass.com.
Q4 2024 and Full Year 2024 Outlook:
- Revenue of $1.225 billion to
$1.325 billion for Q4, or
$5.47 billion to $5.57 billion for the full year.
- Adjusted EBITDA of $0 to $10
million for Q4, or $109
million to $119 million for
the full year.
Full Year 2024 Outlook:
- Non-GAAP OPEX11 of $876
million to $896 million.
Consistent with the prior quarter, 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 the full year
2024.
We have not reconciled our guidance for Adjusted EBITDA to GAAP
Net loss because certain expenses excluded from GAAP Net 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 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 third quarter 2024 results as well
as outlook at 5:00 p.m. ET on Wednesday
October 30, 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. Q3 24 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 (formerly Twitter) 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 fourth quarter of 2024 and the full year 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 its 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; low 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 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.
Investor Contact:
Soham Bhonsle
soham.bhonsle@compass.com
Media Contact:
Rory Golod
rory@compass.com
1 Compass was ranked number one real
estate brokerage 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 third quarter of 2023 and 2024 and
the second 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)
|
|
|
|
|
|
September 30,
2024
|
|
December 31,
2023
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
211.2
|
|
$
166.9
|
Accounts receivable,
net of allowance
|
45.8
|
|
36.6
|
Compass Concierge
receivables, net of allowance
|
34.8
|
|
24.0
|
Other current
assets
|
38.7
|
|
54.5
|
Total current
assets
|
330.5
|
|
282.0
|
Property and equipment,
net
|
132.4
|
|
151.7
|
Operating lease
right-of-use assets
|
392.4
|
|
408.5
|
Intangible assets,
net
|
82.7
|
|
77.6
|
Goodwill
|
234.1
|
|
209.8
|
Other non-current
assets
|
27.7
|
|
30.7
|
Total assets
|
$
1,199.8
|
|
$
1,160.3
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
14.3
|
|
$
18.4
|
Commissions
payable
|
85.4
|
|
59.6
|
Accrued expenses and
other current liabilities
|
132.4
|
|
90.8
|
Current lease
liabilities
|
98.7
|
|
98.9
|
Concierge credit
facility
|
27.5
|
|
24.8
|
Total current
liabilities
|
358.3
|
|
292.5
|
Non-current lease
liabilities
|
382.3
|
|
410.2
|
Other non-current
liabilities
|
28.1
|
|
25.6
|
Total
liabilities
|
768.7
|
|
728.3
|
Stockholders'
equity
|
|
|
|
Common stock
|
—
|
|
—
|
Additional paid-in
capital
|
3,059.7
|
|
2,946.5
|
Accumulated
deficit
|
(2,631.7)
|
|
(2,517.8)
|
Total Compass, Inc.
stockholders' equity
|
428.0
|
|
428.7
|
Non-controlling
interest
|
3.1
|
|
3.3
|
Total stockholders'
equity
|
431.1
|
|
432.0
|
Total liabilities and
stockholders' equity
|
$
1,199.8
|
|
$
1,160.3
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Operations
|
(In millions,
except share and per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
$
1,494.0
|
|
$
1,337.4
|
|
$
4,248.7
|
|
$
3,788.6
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Commissions and other
related expense (1)
|
1,227.7
|
|
1,096.2
|
|
3,495.3
|
|
3,111.1
|
|
Sales and marketing
(1)
|
88.2
|
|
103.9
|
|
276.5
|
|
332.5
|
|
Operations and support
(1)
|
84.4
|
|
83.2
|
|
246.5
|
|
247.3
|
|
Research and
development (1)
|
47.5
|
|
45.8
|
|
141.9
|
|
140.1
|
|
General and
administrative (1)
|
27.4
|
|
24.2
|
|
132.5
|
|
93.3
|
|
Restructuring
costs
|
1.7
|
|
1.7
|
|
7.5
|
|
27.7
|
|
Depreciation and
amortization
|
20.5
|
|
21.3
|
|
62.7
|
|
68.5
|
|
Total
operating expenses
|
1,497.4
|
|
1,376.3
|
|
4,362.9
|
|
4,020.5
|
Loss from
operations
|
(3.4)
|
|
(38.9)
|
|
(114.2)
|
|
(231.9)
|
Investment income, net
|
2.2
|
|
1.5
|
|
4.7
|
|
6.9
|
Interest expense
|
(1.5)
|
|
(1.9)
|
|
(4.6)
|
|
(9.2)
|
Loss before income
taxes and equity in income (loss) of unconsolidated
entity
|
(2.7)
|
|
(39.3)
|
|
(114.1)
|
|
(234.2)
|
Income tax benefit
|
0.3
|
|
0.5
|
|
0.7
|
|
0.5
|
Equity in income (loss) of unconsolidated entity
|
0.5
|
|
(0.4)
|
|
(0.7)
|
|
(2.6)
|
Net loss
|
(1.9)
|
|
(39.2)
|
|
(114.1)
|
|
(236.3)
|
Net loss (income)
attributable to non-controlling interests
|
0.2
|
|
(0.2)
|
|
0.2
|
|
(1.3)
|
Net loss attributable
to Compass, Inc.
|
$
(1.7)
|
|
$
(39.4)
|
|
$
(113.9)
|
|
$
(237.6)
|
Net loss per share
attributable to Compass, Inc., basic and diluted
|
$
(0.00)
|
|
$
(0.08)
|
|
$
(0.23)
|
|
$
(0.52)
|
Weighted-average shares
used in computing net loss per share attributable to Compass, Inc.,
basic and diluted
|
505,993,014
|
|
470,945,736
|
|
498,247,783
|
|
460,730,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total stock-based
compensation expense included in the condensed consolidated
statements of operations is as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Commissions and other
related expense
|
$
—
|
|
$
—
|
|
$
—
|
|
$
11.6
|
|
Sales and
marketing
|
7.8
|
|
8.8
|
|
24.0
|
|
26.4
|
|
Operations and
support
|
4.2
|
|
4.5
|
|
12.3
|
|
11.6
|
|
Research and
development
|
14.6
|
|
11.4
|
|
44.7
|
|
34.4
|
|
General and
administrative
|
5.9
|
|
13.3
|
|
15.3
|
|
37.9
|
|
Total stock-based
compensation expense
|
$
32.5
|
|
$
38.0
|
|
$
96.3
|
|
$
121.9
|
Compass,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions,
unaudited)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
Operating
Activities
|
|
|
|
Net loss
|
$
(114.1)
|
|
$
(236.3)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
62.7
|
|
68.5
|
Stock-based
compensation
|
96.3
|
|
121.9
|
Equity in loss of
unconsolidated entity
|
0.7
|
|
2.6
|
Change in acquisition
related contingent consideration
|
1.3
|
|
1.1
|
Bad debt
expense
|
(0.1)
|
|
4.6
|
Amortization of debt
issuance costs
|
0.5
|
|
0.6
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(6.9)
|
|
(8.3)
|
Compass Concierge
receivables
|
(11.1)
|
|
7.9
|
Other current
assets
|
16.0
|
|
13.6
|
Other non-current
assets
|
4.6
|
|
11.5
|
Operating lease
right-of-use assets and operating lease liabilities
|
(13.1)
|
|
7.6
|
Accounts
payable
|
(5.6)
|
|
(5.8)
|
Commissions
payable
|
25.0
|
|
29.0
|
Accrued expenses and
other liabilities
|
34.8
|
|
(5.7)
|
Net cash provided by operating
activities
|
91.0
|
|
12.8
|
|
|
|
|
Investing
Activities
|
|
|
|
Investment in
unconsolidated entity
|
(2.0)
|
|
—
|
Capital
expenditures
|
(11.9)
|
|
(8.9)
|
Payments for
acquisitions, net of cash acquired
|
(18.9)
|
|
0.7
|
Net cash used in investing
activities
|
(32.8)
|
|
(8.2)
|
|
|
|
|
Financing
Activities
|
|
|
|
Proceeds from exercise
of stock options
|
5.9
|
|
4.2
|
Proceeds from issuance
of common stock under Employee Stock Purchase Plan
|
2.2
|
|
2.5
|
Taxes paid related to
net share settlement of equity awards
|
(21.8)
|
|
(17.9)
|
Proceeds from drawdowns
on Concierge credit facility
|
38.0
|
|
44.7
|
Repayments of drawdowns
on Concierge credit facility
|
(35.3)
|
|
(48.7)
|
Proceeds from drawdowns
on Revolving credit facility
|
—
|
|
75.0
|
Repayments of drawdowns
on Revolving credit facility
|
—
|
|
(225.0)
|
Proceeds from issuance
of common stock in connection with the Strategic
Transaction
|
—
|
|
32.3
|
Payments related to
acquisitions, including contingent consideration
|
(2.9)
|
|
(12.1)
|
Other
|
—
|
|
(1.5)
|
Net cash used in financing
activities
|
(13.9)
|
|
(146.5)
|
Net increase (decrease)
in cash and cash equivalents
|
44.3
|
|
(141.9)
|
Cash and cash
equivalents at beginning of period
|
166.9
|
|
361.9
|
Cash and cash
equivalents at end of period
|
$
211.2
|
|
$
220.0
|
Compass,
Inc.
|
Reconciliation of
Net Loss Attributable to Compass, Inc. to Adjusted
EBITDA
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net loss attributable
to Compass, Inc.
|
$
(1.7)
|
|
$
(39.4)
|
|
$
(113.9)
|
|
$
(237.6)
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
20.5
|
|
21.3
|
|
62.7
|
|
68.5
|
Investment income,
net
|
(2.2)
|
|
(1.5)
|
|
(4.7)
|
|
(6.9)
|
Interest
expense
|
1.5
|
|
1.9
|
|
4.6
|
|
9.2
|
Stock-based
compensation
|
32.5
|
|
38.0
|
|
96.3
|
|
121.9
|
Income tax
benefit
|
(0.3)
|
|
(0.5)
|
|
(0.7)
|
|
(0.5)
|
Restructuring
costs
|
1.7
|
|
1.7
|
|
7.5
|
|
27.7
|
Acquisition-related
expenses(1)
|
—
|
|
0.3
|
|
—
|
|
2.5
|
Litigation
charge(2)
|
—
|
|
—
|
|
57.5
|
|
—
|
Adjusted
EBITDA
|
$
52.0
|
|
$
21.8
|
|
$
109.3
|
|
$
(15.2)
|
|
|
|
|
|
|
|
|
(1)
|
For the three and nine
months ended September 30, 2023, acquisition-related expenses
includes $0.1 million and $2.1 million in expenses, respectively,
related to acquisition consideration treated as compensation
expense over the underlying retention periods. Acquisition-related
expenses also includes $0.2 million and $0.4 million in losses for
the three and nine months ended September 30, 2023 related to
changes in the fair value of contingent consideration.
|
|
|
(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% within one year of the court's preliminary
approval.
|
Compass,
Inc.
|
Reconciliation of
Operating Cash Flows to Free Cash Flow
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
$
37.4
|
|
$
15.0
|
|
$
91.0
|
|
$
12.8
|
Less:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(4.6)
|
|
(2.8)
|
|
(11.9)
|
|
(8.9)
|
Free cash
flow
|
$
32.8
|
|
$
12.2
|
|
$
79.1
|
|
$
3.9
|
Compass,
Inc.
|
Reconciliation of
GAAP Operating Expenses to Non-GAAP Operating
Expenses
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
GAAP Commissions and
other related expense
|
$
1,227.7
|
|
$
1,096.2
|
|
$
3,495.3
|
|
$
3,111.1
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
—
|
|
—
|
|
—
|
|
(11.6)
|
Non-GAAP Commissions
and other related expense
|
$
1,227.7
|
|
$
1,096.2
|
|
$
3,495.3
|
|
$
3,099.5
|
|
|
|
|
|
|
|
|
GAAP Sales and
marketing
|
$
88.2
|
|
$
103.9
|
|
$
276.5
|
|
$
332.5
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(7.8)
|
|
(8.8)
|
|
(24.0)
|
|
(26.4)
|
Non-GAAP Sales and
marketing
|
$
80.4
|
|
$
95.1
|
|
$
252.5
|
|
$
306.1
|
|
|
|
|
|
|
|
|
GAAP Operations and
support
|
$
84.4
|
|
$
83.2
|
|
$
246.5
|
|
$
247.3
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(4.2)
|
|
(4.5)
|
|
(12.3)
|
|
(11.6)
|
Acquisition-related
expenses
|
—
|
|
(0.3)
|
|
—
|
|
(2.5)
|
Non-GAAP Operations and
support
|
$
80.2
|
|
$
78.4
|
|
$
234.2
|
|
$
233.2
|
|
|
|
|
|
|
|
|
GAAP Research and
development
|
$
47.5
|
|
$
45.8
|
|
$
141.9
|
|
$
140.1
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(14.6)
|
|
(11.4)
|
|
(44.7)
|
|
(34.4)
|
Non-GAAP Research and
development
|
$
32.9
|
|
$
34.4
|
|
$
97.2
|
|
$
105.7
|
|
|
|
|
|
|
|
|
GAAP General and
administrative
|
$
27.4
|
|
$
24.2
|
|
$
132.5
|
|
$
93.3
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(5.9)
|
|
(13.3)
|
|
(15.3)
|
|
(37.9)
|
Litigation
charge
|
—
|
|
—
|
|
(57.5)
|
|
—
|
Non-GAAP General and
administrative
|
$
21.5
|
|
$
10.9
|
|
$
59.7
|
|
$
55.4
|
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
|
|
September
30,
2024
|
Sales and
marketing
|
$
106.7
|
|
$
104.3
|
|
$
95.1
|
|
$
94.3
|
|
$
85.5
|
|
$
86.6
|
|
$
80.4
|
Operations and
support
|
75.0
|
|
79.8
|
|
78.4
|
|
75.7
|
|
75.3
|
|
78.7
|
|
80.2
|
Research and
development
|
38.5
|
|
32.8
|
|
34.4
|
|
33.1
|
|
32.1
|
|
32.2
|
|
32.9
|
General and
administrative
|
23.1
|
|
21.4
|
|
10.9
|
|
20.5
|
|
18.3
|
|
19.9
|
|
21.5
|
Total non-GAAP
operating expenses excluding commissions and other related
expense
|
$
243.3
|
|
$
238.3
|
|
$
218.8
|
|
$
223.6
|
|
$
211.2
|
|
$
217.4
|
|
$
215.0
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/compass-inc-reports-third-quarter-2024-results-302292044.html
SOURCE COMPASS