- Reports Record 1Q Revenue of $1.4
Billion, up 25% from 1Q21
- Expands National LTM Market Share to 5.8%, up 150 basis
points from 1Q21 LTM
NEW
YORK, May 12, 2022 /PRNewswire/ -- Compass, Inc.
(NYSE: COMP), a leading tech-enabled real estate brokerage, today
announced that revenue for the first quarter 2022 was $1.4 billion, an increase of 25%
year-over-year.
The Compass technology and services platform contributed to
year-over-year Total Transactions and Gross Transaction Value
growth of 18% and 23%, respectively, for the first quarter. Market
share increased to 5.8% over the last twelve months ("LTM") up from
4.3% LTM in 2021 and increased to 6.1% in 1Q22, up from 5.6% in
4Q21.
"We delivered $1.4 billion in
revenue, a first quarter record for Compass," said Robert Reffkin, Founder, Chairman, and CEO of
Compass. "Compass agents have consistently demonstrated their
ability to grow in a variety of market conditions and in the first
quarter, they grew market share to 6.1%, our second highest market
share quarter ever. This is even more impressive since the first
quarter is typically our slowest volume quarter. Consistent with
historical performance over the past four years, we expect to take
even more share through the remainder of 2022."
Reffkin continued, "The Compass platform has been a major factor
in our ability to take share by attracting agents and helping them
grow their business. We see the current macro uncertainty as an
opportunity for us to extend our technology lead over the rest of
the industry, creating an even wider moat. Most importantly, we
have significant capacity to reduce spending as necessary, while
continuing to grow our business, improve our cash position and
drive positive free cash flow in 2023."
As of the end of the first quarter, the Company had $476 million in cash and access to a $350 million revolver.
Net loss attributable to Compass was $188
million and Adjusted EBITDA loss was $97 million in the first quarter. A significant
driver of the net loss was non-cash stock based compensation
expense of $64 million. The Company
expects the first quarter to be its largest net loss quarter of the
year, consistent with historical seasonality.
Additional information can be found in the Company's 1Q 2022
Business Update and Supplementary Information Presentation on the
Investor Relations section of the Compass website at
https://investors.compass.com.
Outlook
2Q22 and FY22 Outlook:
- 2Q22:
-
- 2Q22 Revenue expected to be $2.0
billion - $2.2 billion
- 2Q22 Adjusted EBITDA of $0 to
$40 million
- FY22:
-
- FY22 Revenue of $7.6 billion to
$8.0 billion
- FY22 Adjusted EBITDA of at least breakeven
2025 Targets:
- FY25 Adjusted EBITDA Margin of 10% and minimum Adjusted EBITDA
of $1.2 billion
- FY25 Free Cash Flow Margin of at least
8-9%1
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 Free Cash Flow Margin because the components of free
cash flow cannot be reasonably calculated or predicted at this
time. Accordingly, reconciliations are not available
without unreasonable effort.
1Q22 Financial Highlights:
- Revenue increased by 25% year-over-year to a first
quarter record of $1.4 billion as
transactions increased 18%.
- GAAP Net Loss attributable to Compass, Inc. was
$188 million, compared to
$212 million in 1Q21.
- Adjusted EBITDA2 was
$(97) million, compared to
$(31) million in 1Q21.
1Q22 Operational Highlights:
- Agents: Average Number of Principal Agents was 12,574,
an increase of 398 from 4Q21.
- Transactions: Compass agents closed a first quarter
record 47,367 Total Transactions, up 18% year-over-year, compared
to a (5)% decline in transactions for the residential real estate
market3.
- Gross Transaction Value
("GTV")4: GTV of $53.7 billion increased by 23% year-over-year.
This was a first quarter record for Compass, reflecting strong
transaction volume and higher average transaction value.
- Markets: In 1Q22, Compass entered two new markets,
bringing the total markets served to 71 at the end of the quarter.
On a last twelve months' basis, Compass national market share was
5.8% in 1Q22, up from 5.6% in 4Q21 and 4.3% in LTM 1Q21. In 1Q22
alone, Compass' national market share was 6.1%, up from 5.2% in
1Q21.
1Q22 Operational Update:
- Entire Transaction: In the near future, all Compass
agents will be able to facilitate the entire real estate
transaction -- including offers, forms and e-signatures -- on the
Compass platform with no need to use third-party real estate
software.
- Title and Escrow: On May
11th, Compass acquired the Consumer's Title Company of
California. Licensed in every
county in California, Consumer's
Title will dramatically expand Compass' settlement services
footprint across the state. Compass now offers Title and Escrow
services in nine states plus Washington
DC, with expanded coverage in California, covering nearly half of our Total
Transaction volume, giving us opportunities to drive incremental
revenue on each of our transactions. Compass' Title & Escrow
services were utilized on a mid-single digit percentage of our
Total Transactions in 1Q22.
- Mortgage: OriginPoint wrote its first mortgages in 4Q21
and expects to offer mortgage services across additional Compass
markets by year-end 2022. OriginPoint has obtained required
licenses in 26 states plus Washington
DC and currently has over 30 loan officers operating in
seven states plus Washington
DC.
Conference Call Information
Management will conduct a
conference call to discuss the first quarter results as well as
outlook at 5:00 p.m. ET on
May 12, 2022. 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. 1Q22
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.
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 second quarter and
full year of 2022, long-term financial targets for full year of
2025, 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
(including inflation and interest rates), the health of the U.S.
real estate industry, and risks generally incident to the ownership
of residential real estate, including seasonal and cyclical trends;
our ability to continuously innovate, improve and expand our
platform; our ability to attract new agents and retain current
agents or increase agents' utilization of our platform; our ability
to expand our brokerage and adjacent services businesses; our
ability to offer additional adjacent services; our ability to grow
revenue from adjacent services at our anticipated rate; our ability
to achieve expected benefits from our mortgage business and our
joint venture, OriginPoint; our rapid growth and rate of growth;
our net losses and ability to achieve or sustain profitability in
the future; any future impact of the ongoing COVID-19 pandemic on
our business; our ability to compete successfully in the markets in
which we operate; the effect of monetary policies of the federal
government and its agencies; any decreases in our gross commission
income or the percentage of commissions that we collect;
fluctuation of our quarterly results and other operating metrics;
our ability to successfully complete acquisitions and integrate
target companies; the effect of the claims, lawsuits, government
investigations and other proceedings that we are subject to from
time to time; our ability to protect our intellectual property
rights; and other general market, political, economic, and business
conditions. Additionally, these forward-looking statements,
particularly our expected financial results and long-term financial
targets, involve risks, uncertainties and assumptions, including
those related to any future impacts of the ongoing COVID-19
pandemic and inflationary pressure on our clients' spending
decisions. 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.
Additional risks and uncertainties that could affect our
financial results are included under the caption "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on
February 28, 2022, which is available
on the Investor Relations page of our website
at https://investors.compass.com/ and on the SEC website
at www.sec.gov. Additional information will also be set forth
in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022 when filed. 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, Adjusted EBITDA
margin and Free Cash Flow margin, which are non-GAAP financial
measures, in this press release. We use Adjusted EBITDA, Adjusted
EBITDA margin and Free Cash Flow margin 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,
Adjusted EBITDA margin and Free Cash Flow margin 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, Adjusted EBITDA margin and Free Cash Flow margin have
limitations as analytical tools, therefore you should not consider
them in isolation or as substitutes for analysis of our results as
reported under GAAP. Because of these limitations, you should
consider Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow
margin alongside other financial performance measures, including
net loss attributable to Compass, Inc., operating cash flows and
our other GAAP measures. In evaluating Adjusted EBITDA, Adjusted
EBITDA margin and Free Cash Flow margin, 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, Adjusted EBITDA margin and Free
Cash Flow margin should not be construed to imply that our future
results will be unaffected by the types of items excluded from the
calculation of Adjusted EBITDA, Adjusted EBITDA margin and Free
Cash Flow margin. Adjusted EBITDA, Adjusted EBITDA margin and Free
Cash Flow margin are not presented in accordance with GAAP and the
use of these terms varies from others in our industry.
Reconciliations of these non-GAAP measures have been provided in
the financial statement tables included in this press release and
investors are encouraged to review these reconciliations.
About Compass
Founded in 2012, Compass is the largest
residential real estate brokerage in the
United States.5 The
technology-enabled brokerage 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.
|
Compass,
Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(In millions,
unaudited)
|
|
|
|
|
|
March 31,
2022
|
|
December 31,
2021
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
475.9
|
|
$
618.3
|
|
Accounts receivable,
net of allowance
|
66.4
|
|
48.5
|
|
Compass Concierge
receivables, net of allowance
|
47.0
|
|
32.9
|
|
Other current
assets
|
104.6
|
|
94.9
|
|
Total current
assets
|
693.9
|
|
794.6
|
|
Property and equipment,
net
|
173.0
|
|
157.4
|
|
Operating lease
right-of-use assets
|
498.0
|
|
484.7
|
|
Intangible assets,
net
|
119.5
|
|
127.2
|
|
Goodwill
|
189.4
|
|
188.3
|
|
Other non-current
assets
|
52.7
|
|
48.4
|
|
Total assets
|
$
1,726.5
|
|
$
1,800.6
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
36.7
|
|
$
34.6
|
|
Commissions
payable
|
79.1
|
|
63.9
|
|
Accrued expenses and
other current liabilities
|
171.3
|
|
240.9
|
|
Current lease
liabilities
|
97.8
|
|
81.5
|
|
Concierge credit
facility
|
18.3
|
|
16.2
|
|
Total current
liabilities
|
403.2
|
|
437.1
|
|
Non-current lease
liabilities
|
497.6
|
|
483.0
|
|
Other non-current
liabilities
|
20.2
|
|
32.9
|
|
Total
liabilities
|
921.0
|
|
953.0
|
|
Stockholders'
equity
|
|
|
|
|
Common stock
|
-
|
|
-
|
|
Additional paid-in
capital
|
2,585.0
|
|
2,438.8
|
|
Accumulated
deficit
|
(1,783.0)
|
|
(1,595.0)
|
|
Total Compass, Inc.
stockholders' equity
|
802.0
|
|
843.8
|
|
Non-controlling
interest
|
3.5
|
|
3.8
|
|
Total stockholders'
equity
|
805.5
|
|
847.6
|
|
Total liabilities and
stockholders' equity
|
$
1,726.5
|
|
$
1,800.6
|
|
Compass,
Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(In millions,
except share and per share data, unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
Revenue
|
$
1,397.0
|
|
$
1,113.9
|
|
Operating
expenses:
|
|
|
|
|
Commissions and other
related expense (1)
|
1,146.4
|
|
942.2
|
|
Sales and
marketing (1)
|
145.0
|
|
111.3
|
|
Operations and
support (1)
|
108.9
|
|
70.0
|
|
Research and
development (1)
|
108.2
|
|
96.6
|
|
General and
administrative (1)
|
55.3
|
|
92.9
|
|
Depreciation and
amortization
|
18.7
|
|
13.5
|
|
Total
operating expenses
|
1,582.5
|
|
1,326.5
|
|
Loss from
operations
|
(185.5)
|
|
(212.6)
|
|
Investment income,
net
|
0.1
|
|
-
|
|
Interest
expense
|
(0.7)
|
|
(0.5)
|
|
Loss before income
taxes and equity in loss of unconsolidated entity
|
(186.1)
|
|
(213.1)
|
|
Income tax (expense)
benefit
|
(0.1)
|
|
0.7
|
|
Equity in loss of
unconsolidated entity
|
(2.1)
|
|
-
|
|
Net loss
|
(188.3)
|
|
(212.4)
|
|
Net loss attributable
to non-controlling interests
|
0.3
|
|
-
|
|
Net loss attributable
to Compass, Inc.
|
$
(188.0)
|
|
$
(212.4)
|
|
Net loss per share
attributable to Compass, Inc., basic and diluted
|
$
(0.45)
|
|
$
(1.67)
|
|
Weighted-average shares
used in computing net loss per share
attributable to Compass, Inc., basic and diluted
|
415,384,878
|
|
126,917,284
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total stock-based compensation expense included in
the condensed consolidated statements of
operations is as follows (in
millions):
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2022
|
|
2021
|
|
Commissions and other
related expense
|
$
17.0
|
|
$
44.6
|
|
Sales and
marketing
|
10.7
|
|
9.0
|
|
Operations and
support
|
4.3
|
|
5.0
|
|
Research and
development
|
16.9
|
|
49.5
|
|
General and
administrative
|
14.9
|
|
59.4
|
|
Total stock-based
compensation expense
|
$
63.8
|
|
$
167.5
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense for the three months ended March 31, 2021
includes the
following amounts related to a one-time acceleration of stock-based
compensation expense in
connection with the IPO (in millions):
|
|
|
|
|
|
|
|
|
|
|
IPO Related
Expense
|
|
Commissions and other
related expense
|
|
|
$
41.7
|
|
Sales and
marketing
|
|
|
1.8
|
|
Operations and
support
|
|
|
3.1
|
|
Research and
development
|
|
|
46.9
|
|
General and
administrative
|
|
|
55.0
|
|
Total stock-based
compensation expense
|
|
$
148.5
|
|
Compass,
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
Operating
Activities
|
|
|
|
|
Net loss
|
$
(188.3)
|
|
$
(212.4)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
18.7
|
|
13.5
|
|
Stock-based
compensation
|
63.8
|
|
167.5
|
|
Equity in loss of
unconsolidated entity
|
2.1
|
|
-
|
|
Change in acquisition
related contingent consideration
|
0.4
|
|
(3.2)
|
|
Bad debt
expense
|
1.5
|
|
3.0
|
|
Amortization of debt
issuance costs
|
0.3
|
|
0.3
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(18.6)
|
|
(2.0)
|
|
Compass Concierge
receivables
|
(14.8)
|
|
(0.7)
|
|
Other current
assets
|
(9.9)
|
|
(10.7)
|
|
Other non-current
assets
|
(1.5)
|
|
(7.4)
|
|
Operating lease
right-of-use assets and operating lease liabilities
|
11.6
|
|
1.1
|
|
Accounts
payable
|
3.3
|
|
(3.9)
|
|
Commissions
payable
|
15.2
|
|
(7.9)
|
|
Accrued expenses and
other liabilities
|
5.2
|
|
15.5
|
|
Net cash used in
operating activities
|
(111.0)
|
|
(47.3)
|
|
Investing
Activities
|
|
|
|
|
Investment in
unconsolidated entity
|
(5.0)
|
|
-
|
|
Capital
expenditures
|
(20.8)
|
|
(10.0)
|
|
Payments for
acquisitions, net of cash acquired
|
(3.8)
|
|
(59.2)
|
|
Net cash used in
investing activities
|
(29.6)
|
|
(69.2)
|
|
Financing
Activities
|
|
|
|
|
Proceeds from exercise
and early exercise of stock options
|
5.5
|
|
14.4
|
|
Taxes paid related to
net share settlement of equity awards
|
(7.4)
|
|
-
|
|
Proceeds from drawdowns
on Concierge credit facility
|
9.2
|
|
6.3
|
|
Repayments of drawdowns
on Concierge credit facility
|
(7.1)
|
|
(4.5)
|
|
Payments of contingent
consideration related to acquisitions
|
(2.0)
|
|
(6.3)
|
|
Payments of debt
issuance costs for credit facilities
|
-
|
|
(1.4)
|
|
Payments of deferred
offering costs
|
-
|
|
(2.5)
|
|
Net cash (used in)
provided by financing activities
|
(1.8)
|
|
6.0
|
|
Net decrease in cash
and cash equivalents
|
(142.4)
|
|
(110.5)
|
|
Cash and cash
equivalents at beginning of period
|
618.3
|
|
440.1
|
|
Cash and cash
equivalents at end of period
|
$
475.9
|
|
$
329.6
|
|
Compass,
Inc.
|
|
Reconciliation of
Net Loss Attributable to Compass, Inc. to Adjusted
EBITDA
|
|
(In millions,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
Net loss attributable
to Compass, Inc.
|
$
(188.0)
|
|
$
(212.4)
|
|
Adjusted to exclude the
following:
|
|
|
|
|
Depreciation and
amortization
|
18.7
|
|
13.5
|
|
Investment income,
net
|
(0.1)
|
|
-
|
|
Interest
expense
|
0.7
|
|
0.5
|
|
Stock-based
compensation
|
63.8
|
|
167.5
|
|
Income tax expense
(benefit)
|
0.1
|
|
(0.7)
|
|
Acquisition-related
expenses(1)
|
8.1
|
|
1.0
|
|
Adjusted
EBITDA
|
$
(96.7)
|
|
$
(30.6)
|
|
|
|
|
|
(1) For the
three months ended March 31, 2022 and 2021,
acquisition-related
expenses includes a $0.4 million loss and a $3.2 million gain,
respectively, as a result of changes
in the fair value of contingent consideration and $7.7 million and
$4.2 million,
respectively, in expenses related to acquisition consideration
treated as compensation
expense over the underlying retention periods.
|
|
Compass,
Inc.
|
|
Reconciliation of
GAAP Operating Expenses to Non-GAAP Operating
Expenses
|
|
(In millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2022
|
|
Commissions and
other related expense
|
|
Sales and
marketing
|
|
Operations and
support
|
|
Research and
development
|
|
General and
administrative
|
|
GAAP Basis
|
$
1,146.4
|
|
$
145.0
|
|
$
108.9
|
|
$
108.2
|
|
$
55.3
|
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(17.0)
|
|
(10.7)
|
|
(4.3)
|
|
(16.9)
|
|
(14.9)
|
|
Acquisition-related
expenses
|
-
|
|
-
|
|
(8.1)
|
|
-
|
|
-
|
|
Non-GAAP
Basis
|
$
1129.4
|
|
$
134.3
|
|
$
96.5
|
|
$
91.3
|
|
$
40.4
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
Commissions and
other related expense
|
|
Sales and
marketing
|
|
Operations and
support
|
|
Research and
development
|
|
General and
administrative
|
|
GAAP Basis
|
$
942.2
|
|
$
111.3
|
|
$
70.0
|
|
$
96.6
|
|
$
92.9
|
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(44.6)
|
|
(9.0)
|
|
(5.0)
|
|
(49.5)
|
|
(59.4)
|
|
Acquisition-related
expenses
|
-
|
|
-
|
|
(1.0)
|
|
-
|
|
-
|
|
Non-GAAP
Basis
|
$
897.6
|
|
$
102.3
|
|
$
64.0
|
|
$
47.1
|
|
$
33.5
|
1 Free cash flow represents cash
flows from operating activities, less capital
expenditures.
2 A reconciliation of GAAP to
Non-GAAP measures can be found within the financial statement
tables included within this press release.
3 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. (5)% figure
based on NAR (National Association of Realtors) data as of
March 2022.
4 Gross Transaction Value is the sum
of all closing sale prices for homes transacted by agents on the
Compass platform (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.
5 T. Velt, "RealTrends 500: The Rise of
Compass," RealTrends, Online, HW Media, 3/25/2022,
https://www.realtrends.com/realtrends-500-the-rise-of-compass/.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/compass-inc-reports-first-quarter-2022-results-301546552.html
SOURCE Compass