• 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, NY - July 31, 2024 - Compass, Inc. (NYSE: COMP) (“Compass” or “the Company”), the largest residential real estate brokerage in the United States by sales volume 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 Agents 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 flow of $40.4 million. We reduced OPEX 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 EBITDA (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 Flow (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 Agents: 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.

  • Transactions: 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”): 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 OPEX 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.

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.