COMP - Earnings call transcript Q4 2021

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Operator

00:05 Good day, ladies and gentlemen, and welcome to the Compass Fourth Quarter and Full Year 2021 Earnings Conference Call. My name is Berl and I'll be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. 00:23 [indiscernible] Vice President of Investor Relations, you may begin your conference.

Unidentified Company Representative

and quarter and conference and operator joining you call. you, fourth Compass’ full-year Thank good thank afternoon, for XX:XX XXXX earnings operations basis. Today's address items actual our presented of continuing are non-GAAP review certain Compass a financials on and of the will GAAP long-term measures for posted between the at back targets and are fourth both our as earnings non-GAAP our as website on on recently of we financials, included just year well and the release near-term reconciliations our quarter evening. The full guidance presentation, and and the this which uncertainties the the the Please Compass' performance, our pandemic posed XX:XX different by XX-Q for see disclosure also be Form market the we our the difficulty course and predicting may view on including from financial and its forward-looking impact future on future economy. that statements actual performance and in housing and reasons reflects of our other global materially filings current cite in which COVID-XX SEC XX:XX Joining Chief Compass' Robert Officer. Founder, us Chief Financial Kristen Compass' be Officer; and Executive today Ankerbrandt, will Chairman and Reffkin, brief of provide results a cover outlook financial discussion detail. then Kristen overview strategy will Compass' will the a quarter and more in of Robert our and and Robert to the now XX:XX I would like call Reffkin. over turn to Robert?

Robert Reffkin

outstanding I financial XX:XX of XXXX beyond. this for our couldn't more XX,XXX our everyone results call our to XXXX for of to outlook and is the world-class Compass more team and building excited Thank be you fourth and we everyone hope business sharing and the with earnings employees agents. or thankful today. safe Today, I welcome joining our are and full-year well. quarter,

I team real being in and growth drive want to success flow. explicit the the strong executing to management is grow recognize XX:XX creation. our and are of and plan financial free empowering on to best ultimate priorities. I are financial arbiter company We agents business. committed the by strong their cash EBITDA the free about Moreover, We our to and cash value plan world revenue our deliver estate executing that flow to be

profitability to beyond. increasing committed cash are flow We XXXX prioritizing and and in free

expect positive margin at reaching that in XXXX. are medium-term flow would XXXX, to XX% we adjusted goal XX:XX committed by in free EBITDA $X.X This by the than the we EBITDA to We XXXX adjusted imply IPO. be cash and billion set more

We will flow also be to free by expect cash of XXXX. X% X% revenue that

continue share. for and to We enhancing we most technology agents develop differentiated will our do market grow significantly this productivity as the to

Investor drivers. margin on through to insights model. added presentation KPIs did in Relations our drivers walks questions the business and We receive other provide and path about site We our and our have we that in more provide this new a margin detail model more on some transparency

point, our have this about seeing we the in I remarks our with EBITDA agents reference make are share share will long-term double vantage you Presentation to from to me XX:XX But financial that all our and respect first. will let But XX call. we Investor serve Page later expectations We results we we the and the unique through As today. own given in on constituents deliver term more walk before, Ankerbrandt, in I what XX:XX XXXX that discuss margins we a referenced. of CFO discussed the we markets also their see expect our level. We just We drivers to assumptions what have. rates. Kristen market XX% are want margin will medium than growth near-term path our

for XX:XX prices into a XXXX XX%. increased of market year We and continuing remained this prices where as evidenced in demand growth tight, increase has beyond XXXX home are rest year. While to strong by the foresee to inventories strong extremely above

perspective, XXXX moderation, XXXX do share have the they Compass saw XXXX, joined that today we see of reflect growth the annualized given for the XXXX dynamics, market that market also we XX% prudent, supply-demand impact already strong increase For digit are a One, we benefits productivity. strong and revenue prices modeled and of a gain some Compass; words, continued XXXX. improvement outperformed XXXX to and the the regardless home assume of if XX:XX visibility market even expect fast rest continue there to expectations impact in In XXXX. the being due prices three in recruits; see is agent suggests the factors. but agent we And recruits to we provided was the year, day prices team to actually are for of in in growth gains market to continuing every further two, the other level flat how continue of the As share three, momentum embedded rest of XX:XX even that the the of will the increase in low-single new that market market on see we agent the grows. significantly

multi-year their adding productivity. rapidly and have record agents of a increasing We track gaining by share

we and revenue XX:XX haircut Our markets, which years, years what in the arrive X.X% market we what to XX:XX Despite we gains, that will that a strong three our share we expectation averages we makes shows at XX% remains X.X% was the XXXX, today. over ago, than everyday from assumptions five market in share but our grow revenue have see optimistic market reflects an XXXX and for of X% small it and increase presented can here. share market model operated certain XX% achieve. our meaningfully we three-year more relatively which In XXXX, have in in X.X% summary, year-over-year CAGAR. In XX%, about growth, us

our committed managing goals. to long-term also and business are achieve our We EBITDA to XXXX

development As platform toward on lowering drive and Our serve our able improving the services to to which Compass aims in agents drive estate to cost productivity. entire product service by margin. the XX:XX summer, splits real are our our integrating adjacent be turn will attention agent the transaction we

spending. leverage We our to against expect get tech more

forward in discretion cost our margin on certain recruiting. manage focus are toward our five, efficiency and our do businesses. five expenses want driving key technology day, operating to going two, first, XX:XX I to have service are: get So goals. serve; on adjacent KPIs also four, so. we driving our that recruiting; also every improvements agent We KPIs three, agent which our specific related XX:XX to These growing and retention; agent agent lowering one, adoption; we'll to

by in with QX grew to We successful multiple agents. be total agents QX number X.X times in a of to XXXX continue the of XXXX. XX,XXX recruiting from We X,XXX

why us now XX:XX We agents at on agents in fourth are fewer similar points XX productivity told join prior splits we did XX% to In and the we months. our split to came consistent than previous annual reported XXXX, XXXX, XX% Compass. historical a who to QX period our fourth basis in commission Compass less number agents quarter a but and brokerage expect of firm. of recruited who add economics with payback is quarter the less Compass XXXX, in incentives Higher our did splits record the quarter XXXX, XX for of incentive In revenue so is XXXX. contract better average recruiting The that not with improving. agents of than they new as favorable

X reason use than down winding a we'll that of that X% of continue levels recruited average from agents are demonstrated away are at January, of that mix to equity. is the also XX:XX commission million which to than principal year Compass. higher recruit average all of to example, We the national the our from splits for why shift we We our equity and more XX% splits. make command XX% less at In of Compared comes agents key succeed our highest the agents. the can industry. agents have than market model received revenue a agent some

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principal number rates number. agent of and a our contracts is the their for and area industry are the reduced X% retention XX% want XX% rates have altogether, On adoption. people of York come oldest These to averages after burden agents let's the the more over initial XX% XX%, XX% of off agents is that New retention A Our very leave technology IPO. DC people our And strengthened XX% three, say are rearticulate including rates detail. for that, three contracts. percentage me And including integrity reflecting our the retention XX:XX the is See in agent to to And that markets to industries of to Washington technology The initial I adoption. their an above in Boston, XX:XX strong high City, in case respectively. stay asked had is consistently XXXX get people presentation retention. respectively. time of, or our XX% key agent X agent to focus XX% well and since XX% retention are off move retention. retire, XX%, that Page

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to million number $XXX serve our in XX:XX lowering to cost this expect agents. our Fourth, XXXX. We exceed

lowering else platform. will metrics efficiency one next serve The at ourselves with we services into adjacent to generated adjacent that year. whole No that At the which the increasing adjacent support to role clients five, billion key monetize is transaction navigating technology cost landscape. operational year is services attach. from the $XXX look few the our in the with services to results on Agents space are close you will clear serve in road to the The A $XXX tech real our technology the can our to We services. services adjacent integrate play whole market this agents, can and quarters than able commissions path leverage a more this transaction. our use to the even in this share in trying drive estate agents winner in best XX:XX being to the to is to map job annually, our Now cost is the using do finally, on and number industry own spending. to that And to company transaction our technology in flow. when achieve larger lower we industry be and next billion the their is forward the even opportunity the serve proving scale. platform helping each

example, only began. X% To clear, be mortgages all the U.S. of XXXX still revenue just the majority and For in results revenue from adjacent of referral. of is because agent nascent an XX:XX our we the

uptake Our $XX QX annualized margins. our But our importantly, very million, revenue has rates which helped initial run rate promising. more was are already

to It's & from seen in business attach QX already have Title for We for Escrow strong XXXX. in QX grew our KVS acquisition rates in Title XXXX services. XX% quickly average XX%

venture presentation investor business our just at can T&E our in see start & the now states of two We DC, Escrow existing of plan Washington detail. in more We XX:XX and XX Title for offer Page up You in plan to say markets XXXX. nine grow underwrote from business the our the rates. to in XXXX, and in joint to guaranteed with I Chicago launched mortgage market. happy in with additional that a we mortgage markets expand mortgage December in our into first am XXXX. in we Also

expect to majority end revenue, to technology flow, of platform tools, be and offer we more In mortgages in by in and agents giving the of summary, they growth our We to for and markets more are drive EBITDA the Compass. to need committed by XX:XX our XXXX. profitable cash revenue the driving productive

recent private for to developments should It and potential markets therefore particularly now real us, a hand in less have also advantage. technology with We significant to the is public and competitors not companies companies lead call on lost competitive Kristen. capital widening and capital over that moat. growth will innovation estate our XX:XX I the

Kristen Ankerbrandt

XX:XX Thank you, Robert.

XXXX of them achieved aggressively we our grow successfully while add our through proud are profile. We margin agents, business and we shows help our exceeded platform, improving and results can that to profitability XX% at growth margins. year-over-year scale, path and our billion. expectations. adjacent This $X.X their our EBITDA We while revenue new EBITDA driving grew year XXXX, an flow basis prioritizing businesses, launch and our the and services all full free XX:XX on cash adjusted For new to

XX% at a at and grew market XX% Over CAGR. past revenue three years, CAGR a the we share

X.X% from X.X% market grew to up share years just in three ago. Our XXXX,

million a and in most by net public, was recognition increase time, take guidance for We XXXX the until RSUs. XXXX, did stock-based EBITDA. expect our a XXXX. non-cash XXXX. GAAP a a driven $X At we accounting the $XXX $XXX primarily In a of loss increased a the of GAAP adjusted million million. a net change not share. to $XXX to year $XXX continue expense recent exceeds year-over-year most to EBITDA that loss The compared Consistent This our we've to $XX of companies and loss ago. condition improved reach in due XX:XX RSUs improved when of million million with dramatically rapidly loss compensation GAAP they EBITDA million go a for to was for of our IPO. year our to same XXXX, the loss contained for adjusted for expense loss This of million allow $XXX positive million full adjusted incurred $X In

recording seasonality into quarters. with of XXXX QX continue grew XQ skewed pushed XX:XX because XX% of was business the more me million. guidance. a XXXX XXXX EBITDA to pause Thus, as for by ahead in of in Last to to that our the guidance XXX million the QX million occurs was the and to at a million the Commissions Turning let will $XX XX:XX brokerages $X.XXX of stock-based some we in Transactions and will of $XXX the million brief loss $XX our QX quarter revenue a compensation two-year IPO this Adjusted return an creating downturn place revenue transactions future. we the we in and basis our sheet harder As strong in business for into balance weaker year-over-year. by with growing was year as non-cash other improved in our cash XX:XX at ’XX. loss revolver. a a and QX with CAGR abnormal seasonally expand started to we trend first expectations. The range. turn market an XXXX will line our of expectations. percentage find line COVID comparing XX:XX years, at their XX% continue $XXX guidance end XXXX the and and generated compete. revenue the strong Our benefit result, is believe of point agents in over of ahead untapped five If time points comp look shows Now XX% quarter for fourth of a year’s a billion, midpoint the revenue XXXX, normalized fourth a for of to prior seasonality to $XX of of it the next

Robert’s want reiterate that foremost, expectations ‘XX free our and perspective flow. and and to beyond improving reflect our for cash focus on I First profitability

Robert industry, gain to a cycles. continue market to mentioned we As expect share we in earlier, operate while of market cyclical regardless

foresee share strong are Now can't growth ‘XX guidance guidance. the we control. market control and our we specifically longer-term XX:XX that can and is What about rest focused will talk and I market both. is our XXXX, this factor While for laser on spending we a of we managing our

in estimates growth to range ranging want I for have on First, the market, annual an to digits outlook XX%. for industry growth low-single real of a excess estate of real a residential XXXX spend estate experts from moment wide and the

As is that on price. likely slow is demand Robert and QX last to in the strong pressure is upward inventory mentioned, in transactions strong, but With tight inventory, of will there rate limited relative growth year.

points gains. XX% will time. is outlook growth of This will $X.X interest to end that these higher. interest through XX:XX demand market believe XXXX to we this rates, of in the aforementioned real a be model market that a including significant that higher XXXX view at and billion, driven is year-over-year. driving billion by what price operate the prices our unlock segment see continues unlikely. predict control to XX% that we that We ‘XX revenue share one to We a are the the grow outlook market. can't the could for upper will in in less scenario the in of that on offset mostly transactions For This XXX,XXX rates Our have to approach the These in the of highly in of higher XX% strong and mean inventory, decline behavior, consistently the current in estate inventory. Also in gains is that we limited prices that we market to XX:XX since $X,XXX or see ’XX, market to and we a growth conclude face benefits the would $X.X of revenue we independent and decline sensitive increases price we mind decide factors keep market, to date. drive that to taking share by measured Fed factors human but our initiatives executed

which in market of XXXX annualization year, and market our that some share in XX:XX We drivers will growth outlook. the Compass revenue joined join of for agents the have that assume agents already include The all the agents, revenue our last productivity from Robert of XXXX of discussed. uplift cohort also Compass components annual

our on increase market agent X,XXX our will indicator principal the Robert by that average of agents expect investor you demonstrate presentation count, a to X growing gain remarks, principal Now to we levels. which is XXXX best times. and his industry agents in refer ability outpace line to we agents to in XX:XX X I referenced our we of that times X,XXX X, continue agent with by Slides net particular, achieve and basis, to Regardless objective. the conditions, to are transactions significantly the in in per GTV share as the X.X X.X

EBITDA cash we reflects XXXX, are flow expectation free while spend leverage priorities. For be going economics least our and against clear, at to and To forward. EBITDA this agents tech million. EBITDA the adjusted expect benefits $XX with our improving XXX% be of top financial our

We also to million of higher. expenses, which of we do number said, scenarios manage That this be number in certain discretion a could $XX we which $XX will see deliver to EBITDA. million have

of market. our first the quarter will have ‘XX unfolds, the Turning insight XXXX into believe more to XX:XX direction we As we guidance.

the models keep the industry, weakest mind quarterly QX As listed QX as than seasonality that holiday in ‘XX entire is the about highest revenue. quarterly plays are factor quarters. your of and our fewer for higher revenue the are you QX think QX our quarter big guidance, distribution December for always QX, homes in a the updating during and is season.

are the normalizing see and quarterly XXXX XXXX, the we XXXX. in While altered pandemic as of QX patterns QX typical COVID to patterns started in and the seasonality

below XX.XX% revenue and the follows XX:XX users, While through of the quarterly the as reason distribution to in NAR basis revenue year QX main growth average should our expect a that throughout three XXX in the XX.XX% full quarter years. NAR, add approximate result As year Compass’ the platform. our last of sales we revenue percentage basis points reported to pattern you Compass’ points, to is revenue agents continue XXX The our a our revenue. see volume as first between

this of soften industry. and for distribution the the further industry in the seasonality trends reducing you compared of Compass refer the some first the has to Please typically to revenue will Now, normal see effect quarter Page XX of sync details. deck for quarterly in of expense the quarterly move distribution with distribution our expect expenses, line investor As XX:XX more for the of you revenue. should our the to closely commissions

However, the scale other operating expense upward base year as and lines will grow. our agent throughout of our trend the offerings sequentially and service the size

in expenses represents seasonality should XXXX albeit XX expansion quarter X,XXX shows the investments leverage investor committed that can outperformance quarterly trend operating fiscal EBITDA. support, million quarterly which business. and seasonal non-GAAP more EBITDA and table trend year of ‘XX to While estate see the a with drives this quick return services. to adjusted XXXX upward XXXX. very our marketing of MSA prior adjacent more fluctuations Compass’ revenue. promised in the a earnings hiring we the of profitability We've of include margin into deck real do during of should in $XX XXXX move the included of to normal sales see this this new to You as million high you gets agents of expect expenses increase, loss expenses QX the to of our ‘XX Slide and above, supporting G&A line in XX drive ops R&D, As in many made on non-GAAP within remain continue in markets we This the the rest the our you not launching to in XXXX. business an expect to least at combined modest for operating level expect adjusted versus $XXX with should efficient, trend, on industry, this for operating and see relative million. continued XXXX profitability. sequential post-COVID industry XXXX QX and the XX:XX Using you XX:XX and with to in at XXXX assumptions included QX of QX in sequential the the Based call, guidance and throughout expect strategic These EBITDA long-term new $XXX XX:XX year, at platform, investment our we reference.

as EBITDA for an moderated. tech substantial seasonality see margin XXXX, targets. and X% is minimum a XX% and positive returns Based a investment to free EBITDA on billion to margins cash cash adjusted free flow the margin remainder to at year adoption on to expect $X.X curves, long-term splits adjusted are XX:XX flow to our and view for normal EBITDA comfortable trends the maturity We For adjusted providing of to we of grow to of EBITDA expect least and X%. grow margin we

what Page in deck of outline illustrative XXXX. We our our and operating shows structure in have achieve an a XX:XX done. comprehensive XX margins leverage investor XX% to our improvements plan with already deliver consistent EBITDA to we've achieve these to margins by cost plan continuing of

present could to vary path While the we XX% exact here. what somewhat from

XXXX to our optimistic and that to be and necessary EBITDA R&D. will prospects, cash As the marketing XXXX can we and also and our you our as specific XX:XX deliver remain other, growth We are confident clear about commissions and can our to want prepared in are flow goal. revenue on largest goals. see, that levers sales we manage achieve I while we be expenses

will from that expect agent basis other rate XXX of points coming more see XXX points commissions points and agents improvement XXX have economics, We and a XXX basis also per the at come improving to and lines, of historically. done recruiting up basis points in year of we basis which

is our path growth financial expect improvement finally, adjusted the come the And by leverage our margins will trend the drive capture XX:XX This this also cash several to discount past and from in to in with expect over acquisition had three quarters, generating launch and In We and year as forward reflects is basis position best the improving our retain in come XXX to have the record basis paired that adjusted the sales out And attract marketing as business We our not years. top XXXX This improvement of XX:XX strength strong in come profitability we've flow relative quarter, seen in EBITDA will are line EBITDA costs, accelerated in profitability line. we a to the economics over Our leverage to in points the least execution to market We've but a will low continued with grown expect are historically IPO. see made to believe line, are and we is the investment we've customer business ever points beyond. committed in profile Another our record tech the with XXX XXX and a fourth line basis XX% quarter investment business. borne R&D continue to of we share. the XXXX. just seen agents, very been. going in services. efforts. markets into past we We free new million XXXX it's adjusted we our we cross more ahead and and XXXX. since a steep EBITDA the points $XX in we into expectations at recent and adjacent recruiting operating in an additional continue the this XX:XX recruiting pleased

to opportunity but transaction. services a businesses significant drive adjacent profitability nascent per Our present are

XXXX targets. to the of the industry, let at gainer platform With call. power the it the back EBITDA the free scale the and portion the the sustainable long-term most Most that, conviction flow turn we agents financial We have commitment Q&A harnessing are the in we have and advantage. productive importantly, cash start a leading drive to me operator market a to our of share achieve XX:XX to because

Operator

XX:XX Thank you first you, Goldman Instructions] very with with we'll Mike Ng that, much, go and to (ph). Brent [Operator Sachs. thank And

Mike Ng

Thank the detail That of commission all for about just additional less path and the Good Hey. in question very the revenue I several much the XX:XX had question margin improvement thank afternoon. the next was a very today. you over for slides you years. helpful.

those less drivers mix markets tier little Thank really I helping because more agent able split a out better color the are like if improvement of your it provide and you recognition on wondering you. and You that drive expansion contracts each And bit Is could improvements. just a initial into was that guys competitive items. platform you called simply better there? of and what's to of of

Robert Reffkin

XX:XX Yeah.

So there is two agents maturing. One just the cohort things. is

where When revenue. at delta hiring at the are And over each only for XXX,XXX above folks if million $X the XX%, agents agent And million revenue, last industry, every you as then hires you basis not the us, generating higher Compass attractive in look $XXX,XXX is but XX:XX Page -- XX just for XX, at So XXX split mix Page points. you aggressive at have is we each in in that a are well generating can industry basis deck, market in massive which X% XX% that the then expected year that secondly, Page more XX it's overall is see -- cohorts. specifically, for for the very of that -- we the between that look we've X historically for for points respective the in split, year, the annual below not and XXX at agents, reflects you it then are mix XX%. highlights a improvement. cohort higher improved in margin agents of agents agents look week Compass If on you

did opportunity but look third improvement, get we we at basis only term. markets XXX the we the if that when a is that reflect we're so margin of of over that assuming And the medium points full

but XX another mix under of basis cohort points event points plus XX the is the again agent agent if basis assuming which third improvement, so just And maturing. existing

Mike Ng

business Great. you have it. a you. follow-up XX:XX Title That's can to DC, about flow helpful. for rates pre-deal for that rates? it acquired the really and how once the that acquired since drive Robert. Title just changed talk you a And Maybe Thanks, pickup if on bit or the in strong in attach I attach that really could guys go-to-market Thank was able you little

Kristen Ankerbrandt

XX:XX take Hi, one. I'll Kristen. that It's Mike.

them. rates. in in a utilizing of XXXX. first very attach quite love We're service KVS obviously bit, platform can the the see as on really agents It were excited we to quarter already our So a our bring was that you to

more KVS referral enjoying then into And service. were the team a our integrating both our short together, talking themselves with time. market will really of strong of just formed we very working agents attach we KVS, powerhouse more also as Team to effort and see been and I you KVS quite the benefits a the platform, at about our help operators they're the increase quality of set of had period simply As concentrated market, we agents. some that to very in of rates talking the have KVS, about broader we've in say, can them effectively a that I in in think

Robert Reffkin

years, there that of realize XX% and that the buy the thing driven only and rates, date the have faster of focused excludes we been team over future platform information, the to why in I because business that to industry-leading the The realized after agents why have to last XX:XX large our take that's would course the year on the the success through retention over further. that our why have are and are But year to we and experience adjacent see the even the a implement recommendation can score. continue cost to XX% spend many integrated also high number moving very that's to and the focus going of shares pace the and but it agents, serve to services on a course at that in of by lowering deck and R&D we into investor we're drive a the our NPS price than we is year, agent you that next which we'll agent so we our grow is driving year add of excluding agents excluding should five if R&D the market, hire it benefits benefit has how productivity of now after that's in platform you continue out success

Mike Ng

Thank much. very very helpful. are you XX:XX Great. Those

Operator

you. to Tandon next now with Thank Mayank go XX:XX Needham. We'll

Mayank Tandon

Congrats you. Kristen XX:XX I and Robert the just Robert start goals. Thank quarter. market on wanted share to with evening. Good

are the expectations? in expansion goals sort you today where those identified of Are you are about had talk targeting opportunities. to launching where during XXXX? that back you share to think what markets running able versus the you market identify relative were IPO, for I you your then Could like really you're

Robert Reffkin

Yeah. XX:XX

look, exceeded share lines. from our past share along those original year So market and less went X.X% our five than to X% market market we goals this years ago share

of market some market. in share city I We is or suburbs think market ASP market help small disclosure it's goal by I detail that market lower share consistently see we're and Philadelphia you that on by And the high highway after the like market had, $XXX,XXX you share market market price point some sub gain and today is lot a our or have launch. or the point a or you markets market there think and price -- gain a regard that gaining in question market the of were markets whether that people may have suburb a cohort can big across can a in share

year about other is I I good really we IPO and we that where more than only had feel are our model. point we original last think we so launch mentioned markets And in

markets seeing, on just by more we're share market -- but market, so not And success the launched. also more

Mayank Tandon

into planning be adjacent then transaction services back side launch on similar identified to and to several scale question were timeline that during and to able M&A that adjacent fit how on IPO, Robert. the the And when XX:XX sort a services, those you over services get just wanted I services a to sense again does think time? I the post helpful, I look of That's you'd on

Robert Reffkin

are side. highlight highlight the and timeline then, we Kristen on the M&A on can I'll where Maybe XX:XX

the we originally -- XXXX. launch we're to going we IPO, mortgage So in said in

accelerated of we've actually end that accelerate by that the markets. mortgage we one albeit should market, launch, we're and but only the did we in So proud year, majority have of it this our

the exploring is Speakers] service launch The haven't major made are year, of and We a opportunity this but adjacent to [Multiple Title mortgage. commitment we another that.

we're next exploring. really want we so that, which is focus opportunity best on the And but to there

Kristen Ankerbrandt

as adjacent mortgage services XX:XX we All think at in Escrow that the And $XX Escrow mortgage right. were terms our billion, of where expand ahead & opportunities at Title largest $XX I Title billion. full and business scope look could and of & we the

saw Title we some have focus our expansion dual-pronged strategies and in where we wanted results have we Washington acquisition Escrow, So of use we to & the that organic the those done to done are start we efforts some the places, where right. and different that did and for you strategy M&A a DC.

guaranteed form very mortgage For is mortgage, rate, provider and joint to off venture good with leading a start we decided that so to a a far.

for that of if we to different to partnership services, you suited to think ahead, don't necessarily services several be look some of adjacent for strategy the saw that that plan next I that but need I good we As to all years. some surprised over we is M&A think out are there services look adjacent the wouldn't launch JV we'll utilize those I opportunities well, look us own utilize will each as to are form we there or another best the know strategy. that particular

Mayank Tandon

helpful. Congrats you taking very a the on Thank question. again That's much my XX:XX for quarter. so

Robert Reffkin

Thank you. XX:XX

Operator

Stanley. We XX:XX Thank to out you. go Brian Morgan next Nowak at

Brian Nowak

question. taking Thank XX:XX you my

look Robert entire just – your a processes us of you of the with two give you ancillary where see of really example Can about of of and one agents Asking company you services. your areas way as area drive guided integration improve or interaction across do all than you really maybe improve execute where agent to see to -- to growth agent you you what like for the maybe structurally to maybe here? to faster attach, it's lot it's execution sort the you've of learning

Robert Reffkin

we twice places client transparency let where productive provide do over all should day. XX:XX value more to and can by and the do of the be a -- they'll compliant It the go key Compass that also them give the drive ROAs, the but pay me attach to amazing is for process, year. in an will of will multiple those roles, high for and that pay to we we because almost currently payment make other will accurately. that platform. lot roles. are help entire don't around forms, will that completely we of it believe the specifically payment have agents XXX opportunity, And So happiness to to -- there as drives them one go it automate for the it one XXX that example. more discussing process where are be are -- the because be employees example can will Titles the transaction There to place into clear eSignature What parts for than Yeah. able in of can We the And agents payment that the drive more those specific look roles forward of automate simpler future one which some single to integrating also there process employee of every the will agent significant of XXX because same disclosures, the can XX:XX it in agents with more quarters transaction help There that's and the have the [indiscernible]. and faster ways happier allow also you people the the that for them. everything to make happiness next And course consistently agents work. they management NPS they transaction paying

Brian Nowak

Thanks. Okay. XX:XX

Robert Reffkin

back -- taking where close for take something the called portion also we they the files, process launched Here pay and XX:XX responsibility of and a the we're -- off you agents we've it. contract of transaction to of

And to ago, the increased center, call over center with we can was that center. now it's expense revenue we a across entire the we from if this is a into years, believe growth relative years And a revenue. turn a actually faster few course much the so profit a adoption or next call have functions contract close -- a rate country three of can, the as only this to just at

Operator

you. Thank XX:XX

now Jason next Oppenheimer. with to go will We Helfstein

Jason Helfstein

the what you just additional months, XX:XX like help, you the you over for over to want about So, might you're have you XX want XXXX next so you do XX a to -- be should I kind the might just XX over need balance about second, on you deployment understand, this can questions, Thank to a XXX thinking of down should cash improved assuming if and just kind step next you. investors the relative of maybe a what rate them get months, sense but number material you're mean, range position of rates adjacency. attach to to I the necessary the are do the by were sheet, type kind you've XX of flow earn-outs, of gotten cash give guidance, relative to a Thanks. target? next a cash How there to buyback honor months, of of like few some there cash And guiding Can investors capital deployment? product, for we've got us as number the break that attach million or I think months? think you in of very acquisitions obviously, maybe year. commitments additional acquisition what, that position over to because years how

Kristen Ankerbrandt

talk Hey, XX:XX Nice Jason. you. to to

transaction. we that from addressable look rates, we at expect we would In that attach XXX XX% services achievable rates be range the points the terms XX% expect in come is when to that of attach with of improvement and and so that basis the so the or think we adjacent margin to

plan, would a the of to the business got those this of improvement. attached we able to even here, study, as side, mix XXXX deliver part at adjacent our order Title this and be but bulk KVS ability will of of some -- time can kind to attached to to -- of short path part is nice of in We've grown attach alluded some just our by total our about important easily expect confident margin kind and essentially half because develop I to some be our deliver of is sell-side be XX-XX. of We that Now, attach bulk transactions the there so launch sell this really So there talked looking the study for in this to T&E. is, what to a track Robert of is that as those be can as XX:XX good having side, the to buy-side a growth case earlier, likely alone. or we rates Washington develop good in note additional easily period rates & to achievable I driven XX about DC XX: case Escrow of it's our record services, buy about feel below and as very think also really those really

level we'll per related we I adjacent return in that Compass and deployment that lot of eight adoption think the CapEx deployed XX:XX beyond a our able think we're past. we've a do our sauce market of Escrow we'll of have XXXX terms And where and at year. XXXX, in normalized of you We secret to be forward, to services number that's to shows you think MSA we Title the able to of to We'll & cash market here our we mortgage. in taken able expansion at, services. in MSAs. ongoing course to terms did data to that look We being that give a of agents able have more forward, of tools be Now We really going translate really shortly. if capital drive and expansions. on XX to more across our going among have XX markets

of of that we makes remain outflow from strategy & time for that's to into million as a question, So cash than down on opportunities and a ongoing very and portion $XX slightly. related business around been in course several you earn-out with to look but course the when probably time you Title sense, on M&A, a less comes I great to it of be disciplined our price, know our M&A to the commitments real total solid amount We agents. an see focus our Escrow turn opportunity should late utilize there of specifically today business, attach see just we'll where based for M&A continue ability take us, do next come is it it drive had can XX:XX to what the to outsized the and over outstanding a years. we

So to hopefully a helps that bit you. dimensionalize for that

Jason Helfstein

you. Thank XX:XX

Kristen Ankerbrandt

Sure. XX:XX

Operator

Trevor go XX:XX next We Thank to Young now at you. Barclays.

Trevor Young

R&D as XX:XX kind using agents of OpEx. as summer see Great. OpEx Thanks. we support noted potentially reducing software R&D you to Compass returning to do when pivot a that towards already and on on more given entire go is Robert, leverage? be I kind Compass think summer or third-party pivot we that overall in when pivot transaction of more R&D the to brokerage deleverage, of can of seeing improvement point that by is still time kind that an that at Just cycle everything some can done sense or get software the there When from without investment well there? trying

Robert Reffkin

Yeah. XX:XX

the of plus I world that the on focus be the goal completing to and platform service of successful our serve of on there a think ever we the transaction year, will year, will and the completing are on I It stuff attach. lowering would full it’s if we some to work goal the effort we really point serve on It service outstanding through, I the cost couple over reducing but we're half it bit really we first are XX% attach. agent early as of serve like would our items really as allows start could couple us, drives that time XX% key is to of adjacent think to factors and where the the target I summer, calling desk. the cost XX:XX well agent say And focus is The we lowering markets, say and little be mentioned earlier, year as of on definitely, starts cost platform, adjacent this flow on the the was last the can service primarily as was again the serve, the will outcomes because that to little also agent say year of it's of the year, the in year half as opposed that it's of it. be core And the as that. transaction XX% on some the their management this start I'd productivity next remaining not next more the platform expect so and brand functionality marketing, cost team seeing agent the agent. year, this search the marketing, would deliver marketing that, entering in and of on a -- agent but platform around year. course is bit a payments, would at platform one onerous. ways -- note whether focused is through services one Compass lowering this the to the Again, doing important on key lifting of as

Trevor Young

helpful. ability Compass really update there And and XX:XX That's Thanks. any just monetize just to your on then quickly that? Concierge

Robert Reffkin

be focus. yet, as just but we but haven’t the monetization it's look number our the a continue participation at area hasn't Concierge compensate would changed haven't around we to program, We who happy vendors of to something philosophy been in XX:XX of for are there

Trevor Young

you. Thank XX:XX Great.

Operator

you. Thank XX:XX

Capital Ages question take will this last Berenberg afternoon Justin our from We Markets. with

Justin Ages

The XX:XX agent and Hi. two quarter. for nice on Thanks taking the or productivity. the question question

that uplift the from using you've in platform. related the when get So you you things your agents, one that of more report the shown production

of that just seems talk the number about actually the of Compass that, that increase you can way it easy to any boost like So teams profile? overall steps are an to using you're kind it taking

Robert Reffkin

Absolutely. XX:XX

focus to think key is to and hundreds platform that so of to and and don't a key of [indiscernible], -- just just a so overall everyone company build lenders that's the productivity, but bands number agent year for of dollars and partners have have as our and the focus doing and of because far the we mine R&D a Salesforce take they platform. been this The a So we've company, is help XX% drive invested you really millions of lot massive CRM. been the we CRM this adoption has in get the like implementation drives for it's

externally others Buffini Steve estate several -- with some way. is and best also them And and doing learn intimidating. Tom for gas can like lot to the with And coaches agents are coaching our that what decades Ferry, that a [indiscernible] real country's and launched we so and been we there it sales this Brian be is the are we partnering -- Shull coaches, Yeah, through we is, coaching platform. of in have have coaching internal managers we're are

bulk to of endures likely from prospecting you platform, of amount do should sell calls, make of X day every so go sell is X to that in if it going with that amount a tells And are how open-ended every the Compass button plans. a an X likely to instead of so plan -- XX:XX that to you Yeah. and action what sell plan you way. client then emails, It's likely amount or XX service email Compass your more you're on in click to an to should action the see month renewals to, where your will that a -- month do create

And cohesive future very connects driver in in history. it to us seen And that company's very so way. estate successful most positive a been that the have of it's the the from business we has probably of NPS been and very, very, the real technology really

half So same genius way, the a at is that's we bar -- Apple. half have in there of the is, other it,

going it's tools managers, experienced busy this and who changes. period a agents the to some these and those beyond enough period where called just of behavior unique time of spring group have the helping market, an time agent train on and have before of are January and at We and of re-onboard slow February in time adopt and incredible to learn things on to because the tools and people in board above they're are where

Justin Ages

comprehensive. the really taking That's Thanks, Robert. question. Thanks Great. for XX:XX

Robert Reffkin

you. Thank XX:XX

Operator

is XX:XX back Ankerbrandt, all hand additional closing for Mrs. that conference And this any gentlemen, the time for afternoon or have and ladies we comments. the questions you I'll to

Kristen Ankerbrandt

to the number the coming to everyone of thanks and who operator you, Thank right. joined Thank today. over you. call All to XX:XX weeks. forward speaking We look you a

Operator

you. XXXX great today's all fourth Compass you all thank gentlemen, Incorporated. XX:XX And you Ladies earnings for wish bye. to will and afternoon. that joining year us I'd like conclude Good quarter and a and conference thank call for

Compass (COMP) 17 Feb 222021 Q4 Earnings call transcript