Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Compass Inc. Fourth Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

now Simonelli, turn Relations. Vice go It's to call Sir, pleasure ahead. Richard Mr. President my you. today's to over please Thank of Investor

Richard Simonelli

for Good operator. year full call. and appreciate you, earnings Compass it. Thank thank quarter We XXXX you joining and the fourth afternoon,

to Relations measures Joining will can In case measures find we Reelitz, year a Kalani to flow on our Reffkin, the reconciliation website. Financial Officer. A be non-GAAP our Investor presentation of our free Executive of performance, these and most non-GAAP Chief some and directly us and Operating fourth the comparable Greg you in refer release. Officer; our posted and today in discussing full and will company's Officer; quarter cash XXXX earnings Hart, each GAAP our Robert Founder our measures, Chief Chief

statements We first to forecasts involve expenses. assumptions that expectations, will based our our make for current uncertainties. include forward-looking on comments our related and XXXX statements and guidance and that risks operating are These quarter the

these actual differ may materially statements. results from Our

find results can recent also our information You Form on report other uncertainties with quarterly our SEC XX-Q on annual Relations and Form report on on XX-K most Investor affect could filed about factors that available and the more our risks, and website.

XX, All You undue February on we this and in information statements. information. is disclaim should presentation update any of any forward-looking this place date, XXXX, not any obligations expressly as today's reliance to

to Robert? Robert Reffkin. now I'll the call over turn

Robert Reffkin

success. times into transaction that real was beyond us residential was down Compass call. XXXX $X XXXX, declined allows by conference our in incredible the the for future and a a volume and strong joining for year our a quarter I pleased XXXX sharpest and XX% seeing thanking ever when team I in results over consider agents. employees of confidence transactions am and Compass industry foundation compared difficult very in to one basis. go you today for year-over-year. year Their the difficult year these volume want with we for start dedication which of fourth have to with Thank us the entire the year full billion, in on report to in X% the declines just estate, best a revenue was This that you is decades. industry-wide major industry revenue accomplishment best XXXX to

year-over-year when units in the number decline XXXX. bad was from XXXX Crisis Financial of Great industry XXXX by fell The the as to XX% as units

in to throughout steps base. the was tough a for our responded by taking XXXX the conditions XXXX year market, reset we the housing to We free took While cost starting reduce the initiative challenging particularly goal of fourth the second quarter, very market become XXXX, efficiencies business being to in a to with flow drive free for quarter specific XXXX. flow cash with positive expenses the and operating cash positive in decisive

a XXXX. the non-GAAP We we shared million. implement to to further plan and $XXX fourth our third of expenses to reduce basis intend annualized As $XXX an our the to the cost-cutting is expenses moved XXXX respond by reduced initiated quarter we to actions that second quarter quarter develop call operating that a of which to XX% million of on from our less quickly deteriorate $XXX non-GAAP and million, market fast, operating range on

by quarter the XXXX. make believe possible middle it fourth we the achieve in operating $XXX expenses of million January, below million the $XXX early our As of range annualized actions to reported we of to

strengthen invest As the technology the investments we downturn a market. years, to at this expenses, even prior of during to and in further result this company in in of level operating reduced growth continue

NAR. from XX.X% negative volume industry from for negative seeing from forecasts of XX.X% Mae, XX.X% Fannie are MBA negative We and

of We positive XXXX achieve free at levels. these expect flow our being each to goal of in cash

confident is operating right expenses. this We of that non-GAAP level the are

XXXX we than the have to to XXXX, we turn to as be throughout However, are markets and demonstrated expected. implement into out cost additional worse prepared move cuts if swiftly

reset worked goes have We the XX to cost base we and employees cost months. incredibly our and Our hard over last when if are levels to OpEx right it's the the committed our maintain base, believe market even up.

helps our integration come because to later technology It are are gives common more productive. the differentiate reason our share technology the we to platform asset monetize what they platform and In will XXXX, helps the they time. they and they Compass Compass retain ability ourselves are in an tell that escrow using to platform. at agents technology over will through the services, agents for attract platform most attach to it doing – We the we are of the The in also you Southern with the industry with platform. further stay more us demonstrate Compass. they Greg California. the and continue is common tell It value make more reason and us us and us title other most which continue them best and doing is

are We lot industry. the environment. and macroeconomic resulting unpredictable uncertainty woods from clearly in out XXXX a still as of is filled an of not the choppiness with

return what With rise signings and positive low weeks. more we can remains houses open one foot few have predict accurately year. offers, the rates at happen so revenue over with and mortgage much uncertainty, While inventory multiple last no continued seen on will with have this traffic some to

year for XXXX. As only a operating are the expense we result, today, guidance providing full non-GAAP

to We shareholders. we achieve future XXXX. excited the positive are employees remain to I remain incredibly laser-focused for and Compass and our agents, desire about our be free our cash diligent for can control in to in flow of for on what continue going

it turn to now Greg. I'll over

Greg Hart

over expense our our outperform the this operating as and our continue retention based with teams to throughout business recruiting The agents, our competition. believe headwinds efficiently further Thank you, residential our the industry has maintain reductions facing can core efficiencies we'll technology of history, ability XXXX. maintaining good still of economic strategy. the advantage build further principal grow technology accomplish continued and technology that is hold, Compass continue industry XX%. we estate improve stronger we to our today, our taking highly in of upon to We are add Robert. fourth business agent advantage real part the and everyday on as grew to more drive industry-leading while news The our challenging go-forward has our and capable to versus quarter But done our the agent business

unfortunately to for year XX-year out in residential in a actions from be the down of aggressive and drove X% X% Fed low After a high rates decades a all-time sharply. XXXX of turned great to worst months, about activity in an matter brokerages bringing of XXXX, as excess unexpectedly, transaction mortgage

result, had reductions to reduced the talk later. at September bit our that not a line to revenue and industry a the June, about this for in with of cost from headcount, of on rest Kalani actions standpoint. expected line of year had When challenging we a XXXX beginning taking of bring we the the in will reduce we materialize, these making the impact difficult structure operating revenue, year. January our to decision top expenses XXXX and the make growth As a personnel did

our growth strategy. agent to Turning

agent agents hiring and created grew top brand and sign-on strong and our now as we Before markets have independent years. with roster in brokerage agents Compass the bonuses. network the strategy and rapidly new in stock base through one was agent XX and by built excellent top the XX% We acquisitions, sales X,XXX This number cash successful volume a in that industry. features less the than an of XXXX,

XXXX And tool that the agent we strategy incentives business, be achieved markets challenged, activity. we scale When as revenue and that could paused we expansion growth agent has the became decreased. evolved Over halted use now into also all our has years, our early our of apparent new further. acquisition M&A an recruiting in in

driving As any stock more eliminated and profitable we bonuses approach agent cash the of sign-on growth. progressed, year to kind, a

are the we conditions XXXX existing than our without agents by been come gross number our willing who that reporting the to to perspective, now margins. are To economic would competitors incentives still to to pay we the deeper new times, improve midst to intended of Yet put in have NAR, competitors see in to agents leaving this Since This agents the time of some agents. with The is evolve attracting successful also markets. more X,XXX of is to over Compass have always in these for markets agents. to industry attract those fierce delaying large of according allow agencies. mix us top and these of attracting difficult the We that move agents agents Competition accelerated maybe XX% our bonuses. our into of in August, move. that sign-on cash in market stock some they're in the contracting or agents

of by QX agents. increased very XXX principal midst principal number industry, a XXXX the In quarter for of agents difficult of in our average the

XX,XXX, a XX% growth Our average number representing quarter. in fourth the agents principal of increased to year-over-year

to For by the XX% number average our agents compared full year, XXXX. of we principal grew

agents' is in to ability platform differentiator our their to agents. our technology and attract ability in a run Our business

our We deliver strategy for Compass. continue to believe platform in competitive advantage invest will continue and this to

Southern which into of Our California. functionality, priorities platform, the for in integration XXXX include has launched escrow improved been beta team title in and the

their plan continue client improve give search them not dashboard, to to Compass will which platform excellent collections. but least, interact for and with also We last, our an agent like And features popular to agents. Compass consumers

retire that quartile in more full the principal XX% transactions, one that lower for the account an the retention a Our now productive. year-over-year. leave those which rate of annualized teams greater agents rate Keep transaction than of platform of these We title for represents transactions, the by volume that most in X% XX%. altogether. XXXX, retention year to have a the our use more spite top basis, The decline on know success. XXX,XXX technology our agent, or In mind continues industry accounts of and including processed agents make every for we who have of industry teams platform

this the reported down by which However, saw better nearly industry, than was transactions NAR. for the year full Xx XX% as

in X.X. the X.X the average full an transactions for quarter, had by a the more XX% outdistanced which in industry. principal agent of of industry compares the agents favorably XXXX, agents X.X per transactions the fourth to year residential quarter Compass than Compass real per averaged estate from In for entire which reported for basis, a of decline the XX% decline year, fourth of agent, XX,XXX market processed versus fourth as ago, In quarter the agent the transactions average On principal a per transactions, NAR. we agent per XX.X

in value and While the a transactions entire we market saw industry maintained our XXXX, in decline share.

Our XXXX, principal average X.X% QX market XX% XXXX XX-month year for on full a is grew has as both was at number steady the for trailing and agents and with basis XXXX year-over-year XXXX. of in all share of consistent which remained the for principal QX QX XX%, XXXX. our agent retention it We

we for integration technology Recently, of California. escrow our in agents beta of Southern into rolled a and out title group platform the

to We positively to a friction how way it Anecdotally, the existing brokerage feature. rate use are services. commenting agents services agents offer these to attach is are creating increasing transaction, of low this adjacent an on for easy our

on this more be get sharing we more data. will We as

well to of expenses, as as we're focus operating our going low-cost ongoing our part on labor technology. continue reducing to harness As

leading a to talent. We for We us a process of into potential are more tap lower-cost using Genpact, talent. lowering offshore there with pool outsourcing operating even is expenses believe working business global help provider our

the of team for our excited and proud future. I'm

the of in an in operating while We have strides transformation taken environment. unprecedented Compass market major

to now turn our Reelitz. it will Kalani I over CFO,

Kalani Reelitz

and to Thanks, in Greg. our going first our results guidance hello, update expectations I'll fourth review on on us call. detail, provide quarter the an quarter. the then everyone And to for financial I'm joining more

I into more of Compass, I the excited passed to be and getting future want three-month Before numbers, about quickly the not the Compass. market could say it that

that the a they have truly be very seen to enables I technology is agents best offering be. early have differentiated on we our What can world-class that

In and the our we market, of midst what historical and ability we are retain base controlling to agents. can this attract control, our best cost housing our low namely

normalized We flow in position XXXX. put setting a a and believe we Compass of words, other the the free plans XXXX revenue the run expect expenses end rate We have we by can when in quarter $XXX market on action of have much deliver works. an as returns. profitability the million as In math reduced by have implemented already our will second cash from that that

Turning $X.XX to our to $X.XX $X.XX below financial of results, our fourth guidance billion quarter coming billion, billion. in revenue revenue was range

revenue compares XX% $X.XX of result prior billion seen in a lower year-over-year. As industry-wide, a of the to year transactions reduction representing period, this

billion a reduction Gross a selling in quarter, the from transaction reflecting price total fourth XX% ago, of XX% well in in was average XX%. as year about decrease transactions $XX.X value decline a as of a

commission year in the calls, expense as revenue XXXX. from to we relative XX.X%. what increase percent program our XX past the to year-over-year basis with of last few QX by non-GAAP participation by driven primarily Our discussed approximately of equity reduced analyst increased a points was in the XXXX agent Consistent

programs improvement QX the on business. the basis impact investor XX Excluding program XX on agent commission includes participation, details equity reduced the year-over-year in point deck additional line. we of saw the of a impact core Page the

the was offered last we XXXX reminder, equity a year the program. agent As

for within provided to within $XX million million guidance than to was $XX.X EBITDA guidance more our reduce adjusted $XX revenue adjusted the shortfall fourth expenses partially stay a which EBITDA. able November. the We planned, in our range for and we which quarter range us offset loss allowed of quickly Our to was were million, in originally

were total million Our the for quarter. fourth $XXX excluding expenses, operating commissions, non-GAAP

operating talked opposed sequentially varying increased line and fixed nature our quarter-to-quarter we historically from previously, about revenue. as noncommission-based As many of to are expenses somewhat have with in in

quarter million However, an our fourth the the QX, due the implemented reduction OpEx of since reflects this million to for reduction cost from initiatives year. $XXX second $XX quarter of

last an reduction announced additional month, implement to efforts. these part as expense we And our of in cost force reduction actions. continue continuing We

decrease range $XXX of annualized reflects million $XXX million XXXX. an we QX a in non-GAAP which the achieve to $XXX to incurred the reduction XXXX, midpoint, from expect expense percentage XX%. of We range operating of in million expenses a At reflects of approaching the

to and development, expense Page sales the investor compensation expenses our include reference excludes these included tables XX adjusted that categories reconcile We've and other and from and refer on amounts. expense operations G&A operating and non-GAAP the As a point, marketing, that expenses, we and deck of support, in research and excluded are QX stock-based EBITDA. XX

Our the loss loss a for charges, which Consistent in the stock-based are expense. in depreciation is million included loss includes $XXX quarter ago. to non-cash, compared compensation today a noncash $XXX $XX press GAAP schedule $XX reconciles and release period net for million net Included adjusted the was of quarters, quarter same the loss million GAAP year million of GAAP of that a issued amortization expense in and to with prior net EBITDA. the

and approximately during flow which than prior announced due million higher payments from related negative well our fourth cash EBITDA in litigation as higher was loss Free the severance adjusted to year to quarter was quarter. $XX reduction million as of the force $XX.X $XXX last million, settlements

at the of million equivalents balance We December. sheet had $XXX cash and end our on cash of

this saw facility. and ahead caution of half the industry. second the conditions market of our During we unprecedented $XXX credit in out from XXXX the down of the did unknowns given We quarter, fourth the drew continued million revolving we of abundance an

we under market We fund operations. revolver have expect fund the use not not our utilized and do to revolver current operations, to to our assumptions,

we've Importantly, which the inexpensive form a and capital. the basis less a bill therefore, proceeds into to interest of treasury on is invested than net an minimize X% cost

we once funds return expect have free flow. We these cash to generated sufficient

weeks to market. last Now And some turning see seen the in to monitoring. have we improved, we've metrics the over are mixed financial trends while key pressure guidance, additional continue that our signals we also few in

$XXX $XX million $XX million. EBITDA million million, revenue in For range of adjusted and negative expect of of QX to $XXX to negative the XXXX, we

volumes net the do down year. transaction QX. expect at the impact expect lift last We XX% the agent to least in revenue We from over be of new additions

drag, this we However, of is mix and particularly California, anticipate will which record by in experienced be market last our from largest year. sales offset QX

providing conditions, adjusted As full full guidance are XXXX. Robert we uncertain earlier, market for the not guidance or given year EBITDA stated year

in our reaffirming operating non-GAAP are of year expenses million $XXX expectations million. we $XXX our to for the to However, full range be

high on midpoint end annualized and be the basis of to the quarter year-end. of this by expect at the by this second at range range We an

expense in current to XXXX, Through flow initiatives, flow to second the challenging expect environment reduction of management quarter of operating for our with cash be full year starting continued the focus being committed entire and The business free the free we beyond. positive on through remains macroeconomic cash positive managing the XXXX. this team expense

three that demonstrated past we've actions results achieved. the commitment taken For through quarters, and

operator I turn over call like begin to to back would now to Q&A. our the the

Operator

with the Instructions] line Holstein from Jason of [Operator first comes question Oppenheimer. Your

line Your is open.

Jason Holstein

the Thanks for questions. taking

you do to record how of think going related below margins margins obviously first, levels So we're productivity? below is probably obviously, normal but well bulk Obviously, impact time about through periods. on agent where that productivity their is agent of an of is compensation the there you just productivity think agent even given period variable? kind a on And do

can transactions just it the closing? And widely an of as how are business? update more And us becomes give it then used, you you. think online you percent second, transforms on Thank the using that

Robert Reffkin

as determined off the of gross with their year first start because that income. I'll again, or agent are productivity between the actually let their compensated historically, the and agents way company I'll Kalani income, margins declines, commission the agent increase the answer the and prior split Yes, is is question, way second, based

normalized And XXXX. year relative last a more year to was

All based firms so which record in that productivity normalizes between year and record in to the performance for off And agents normalizes. of agent. was favor relation led splits industry XXXX, brokerage of XXXX in agent the a economic the the as of

But take the of second Kalani, about part the you question. how

Kalani Reelitz

mix really we impacts reiterate, just was agents. And said. you as What impacted this year, by saw what XXXX. Yes. our margin Robert, the record years I XXXX of would is

at that expect to we volumes. We bit a reset as XXXX in XXXX look

Jason Holstein

the I product guess I on was asking more side.

a how the that and new agents being for I'm by just – you impact rolled feature that have out closing used worldwide online the curious just widely it is So business used? software it's becomes can the platform. that relatively Thanks. think kind of you the as of how that,

Greg Hart

the the agent to our an go the of is the This out within we California. we in enables last That differentiator of from of to we've also Thanks us, year, in agents feedback That culminating unique functionality believe course vast literally will positive it's Greg. used from rollout platform, to for year, our and in rolled for as all feature of continue sure. industry. first over is the set QX by heard massive last while majority In Yes, Jason. feedback agents. well. It contact close on look improve to that's And the and a it. very facing question,

Jason Holstein

Thank you.

Operator

& is Your the next McTernan Company. of Needham from question with Bernie line

is open. line Your

Bernie McTernan

To get Great, from quarterly up thank count the about XQ to in in taking thinking for XXXX. was to XXXX? about We average right terms the think would in principal guys about are saw for a you of start, additions the to XXX,XXX agent just agent sense agents you questions. love I Is how that way XQ. ads

Greg Hart

for Bernie, Yes, you the thank question.

has I start X.X number believe. the given million, the market agents, given industry conditions historically of of agents and million to scripted total forecasts we the from haven't particularly mentioned call X.X seen intend the for forward-looking We that to don't nor decline the in on principal doing that, we portion

to light appropriate so And would forecasts time forward-looking don't think agents. I principal of for be that, that giving in out start the

Bernie McTernan

different way. question to Maybe a ask a Understood. in

of your gross maybe terms agent there's even expect industry ramp how a Just on own or the for if cyclicality side seasonality count in agents, add would the in the or you the of – up a to we terms leading looking with I'm growth what's or industry is Is growth? trying just sense get indicator that it for? industry agent should it be growth? in at

Robert Reffkin

beyond of the agent regardless net – be of share. intend count think that's to quarter-over-quarter. that we we But I a the grower would guidance industry,

Bernie McTernan

for pieces just thinking then line And EBITDA that mean lastly, free guys And fair. positive. about two that that's between you highlighting positive flow be those what No, are we this to items? moving Does year? should the cash are Yes.

Kalani Reelitz

EBITDA I with Yes, thanks, is track free Bernie. think, in that part. It's Look, cash flow Kalani. main our focus, for most line the will positive, obviously

track we So I there general, cash would EBITDA some other outside free But EBITDA. and that say, of flow. are items fall cash the in we'll

be expected the for those in historically. most to So line part are

Bernie McTernan

Understood, thank you.

Operator

is from the next with Zelman Associates. & Ryan line question Your of McKeveny

line Your open. is

Ryan McKeveny

side in you very thank confidence obviously, of you've so Hey, much. you put expense targets the out One on the there. have that things,

end high-end like Has expense driver? if about toward about the that lower-end movement should is itself? once thinking of talk it we which but OpEx what lower heavy range Thank that over implemented, to be? the the kind categories trying we footprint like you. case, over like related it potentially already Or As been more technology? us of think Is time – to of from think time can we effectively could it of towards you range, wanted progress the those about? what anything the be that's Is think incremental qualitatively to the to range; becomes office the the Just categories to that lifting operations? related through support about the

Robert Reffkin

question, Ryan. Yes. for Thanks the

low-cost but us. us. we opportunities. There the mentioned, But behind opportunities. is behind are is in definitely heavy you As heavy Like management have some some vendor mentioned, lifting ongoing opportunities the lifting occupancy we there's labor,

Ryan McKeveny

as a how And maybe about expansion from geographic idea been terms some incremental it's than through could maybe do share for Anything about a Perfect. opportunity different the it of expansion I what think we longer over can being of Okay. here again you're being is. context the expansion? or what licensing way, it the longer-term going as been obviously in the past of longer-term a think geographic the in franchising in in past, think But form you be term, you has bit the the floated paused forward, today macro opportunity. with franchising in thinking maybe through

Robert Reffkin

growth incentives expanding Yes. our profitable in the used without level, it's still in – on focused space Like given the financial up, that definitely as build to people set infrastructure we franchising hiring it's profitable it. growth of are now the in high to but current already markets, particularly and we cover a profitable mentioned of But and is At means a agents is more to new instead a advance of you it past. an profitable out having grow. hire revenue to markets, when comes having bunch office way the we're

that are of and focus is be we So putting something work way. mind heavy as a important the lot OpEx keep we where now experience for franchising. in is more exploring to way will the agents not lifting impair that our us, would on getting any the to we we But point existing a it's behind is in that that where a in do

something not example do franchise we within an of as that we not geographies of would so our the would And same operations. is owned

Ryan McKeveny

it. very Got That's you, helpful. Robert. Thank

Operator

Your the UBS. Walmsley of question from Lloyd is with line next

open. is line Your

Lloyd Walmsley

can. I if Thanks. questions, Two

special incentives you've joining? not with the are growth. you're like about the that you recognizing provided principal do from math add period going conversations of in Just end the you're you reception guess trying providing ex kind in first about XQ. prospects disclosure, end Is Can I good to some looks based period not a average. which just the formal principal back on many from past? of broadly of like feel that right? It just getting And end might you on looking, on guidance more kind the end agents period talk agent Do XQ even to is how

And few for one, then you've now months. for the been the maybe business Kalani, second a in

You've potential further non-commission just base kind see Thanks. areas new generally of business? you efficiency lot improve the or had focusing efficiencies. that experience any reduce kind there of a historical to of in OpEx where Are on

Robert Reffkin

them a the conversations start to and was first then the on reduce think on So expenses help for business, to I question, their and on Look, had people. we've the their question time of to ability I'll I past, and Compass in software, come think platform its in pass agents the Greg. just and third-party grow third-party I’ll there

market come, agents that statement think – they right? the without without bonuses to would equity, I it's now I think we've X,XXX hired a else clear signing why

coming are. when they hour They because that recruiter. and they they believe them help that – They're would their business. the him two-hour a conversation growth grow just believe strategic meet agent stay Otherwise, Compass platform they will manager where with

really happy point eliminate question of see to people and the as otherwise. for kind market we're the to that proof a would So come of

But Greg with the question. that, first on I'll pass to for

I'm we hear you. sure not Greg. if

Greg Hart

Apologies for that, Robert.

with, for our Just building value Robert the we've believe platform agents. the what was always to and believed continue in of on saying

market harder. need things they However third-party spend It any down that their costs quickly it's reduce other cetera. a in the platform for of In a sell booming might get possibly provides save helps easy for can them to that's platform. they assistance, whether agents. agent every It market, the and them much the a benefit money. house save technology without et on advantage helps time. it's or It them helps Agents

our platform think current provides actually And so to the we market conditions. agents benefit even in the more

beginning data, agents and but QX from our specifics In sequentially. out break we QX of to the we grow did question, terms don't your of

of it part And the think I'll for your pass to question. Kalani, same I

Kalani Reelitz

Sure. I'd of for really to Yes. months a Thanks by question. of really have we've million $XXX hard work our start the nine quo acknowledging done guess I done cost. last and up drive the to actually status just to ton teams that

opportunities at operating I to leverage. to drive next, move I continue as to look we think think we what's

some those. talked of we've think I about

the I look we to at continue model that labor think there and operating low-cost to drive leverage.

do possible. vendors. value of and understand exactly as learning how what's sure think as productive leverage we looking make spend, And what's our at we'll have we that vendor continued to look can still footprint the our we I think needed, with footprint at continue then really make from I

of And kind think platform. and continue then question at to with leveraging the say, is, to our goes Robert to it the last last thing I'd look I we need

going growth. we're or and both get So looking by our driving out job high-margin to building markets. really incredible in the we've potentially our done platform, talked about also licensing. technology it's at We franchise also leverage an operating And

remiss opportunity attach part operating – really mortgage. also of if tons leverage There's be to the kind would our maybe We I of of third that's drive with didn't T&A and push business, our opportunity. think I [ph] I high-margin

Lloyd Walmsley

you. Thank Okay.

Operator

[Operator from Matthew next Bouley question with is Your Barclays. Instructions]

line Your open. is

Matthew Bouley

Hey. kind for the Thanks everyone. mentioned just improved overall taking on begin the question. this know seeing I Maybe Good one some market; you trends evening of year.

data. some that we've housing in overall the think of seen I

get you curious Obviously, if have what much on year-to-date I kind seeing up to how don't be but market detail the us helpful? you weeks. you week-by-week know basis, moved around you Just a would markets? this you your kind in evolving of can is couple mentioned can of a Thank anything are of you. little, give rates how past elaborate kind want of

Robert Reffkin

Yes. Yes.

say, look is There challenging. to nine than so market, signs bad better and signs. And at are a been. the signs it it's still a there good science there of to has would relative good are ever I – bad the last ratio months,

sellers. our offers, across We clear it's vast open more foot markets, at early the have more multiple an majority traffic that of spring balance, buyers there than are market, houses. On

They six; have the side, the have from a of good basis you weeks. and accepting real it's X.X the On XXX market, has the up current increased in that as it points from X% to almost down so the But normal. mentioned rates went great. buy moved was not X in-contract couple volume, so about And merge these down which buyers mortgage feel are last since now new rates slowed as that. we rate almost clear

rates asset. And are mortgage in financial mortgage below X%. sell they're a considering their homeowners cases, In terms have the XX% of of rate side, as many there

to And holdback think the going that of to an And contributing think to the – if have Owners It's move. And X%, a there's below be mortgage definitely going I have homes are of people holding be even sell them. don't we to back still industry. to not buyers be sellers. about said, as long more that so as rates yes, inventory. going this are we issue X%, about is to of grew I it's year,

only have never and but kid, they get life move. can on you divorced, they, pass God so You for married, back they they a to and events wishes people long. hold away have – anyone, so get People

inventory still so in environment. this through And coming is even

were last was want lot And that I down of seen And environment, as prices think going it was so that versus contracts estimating don't listing they at prior were realizing more down. are. The December, dramatically. go into of year-over-year. there's which because the XX% bottom market of that's to market were and the the inventory. least bringing quarter up price example, to in to in in-contract contributing date that on go people where went prices the a market, buyers that I And than a side, has And prices go buyers could prices Even miss not that's more X% to lot think an year. such also this down up risk there's they because back

Matthew Bouley

Robert, today. there, what's helpful happening a that's Super great overview Got it. of

sort split the just you the of because to expense. in How kind some that are about expecting one, speak this you with, split, guys saw of given are you another the the to higher lower agents you life something commission higher agents Second on that the competitor of you maybe your kind not thinking We similar? pressure year? productive towards mix begin ahead. day Are other have don't Do cycle? where have one

Robert Reffkin

Yes.

highlight you I part the story. think of

perspective only of we tailwinds and tailwinds. while tailwinds I combinations and that competitors have think on from some have headwinds more headwinds our or

XX%, that in And side, not agents, just hiring to the We're much say, XX% top then bottom tailwind to the unproductive, the now secondly, part not more the mentioned XX% But top agents. you were came On those I'd agents. there's incentive, the top full if you – normalize amount. as there's split, splits with X% of policy. the company weighted average hiring the do people category, we're benefit that

Matthew Bouley

Robert. everyone. luck Got it. Alright. Thank Good you,

Robert Reffkin

Thank you.

Operator

will I Robert the to the There now back no time. are call at questions turn CEO, Reffkin. Mr. further this

Robert Reffkin

work call. that through this want a company thank to also not to Compass I does and unnoticed. employees truly hard hard want your everyone of for the historic say joining to XXXX So today's worked help in give agents time, thank But a just so to again, navigate you, specific and all I you go

Thank that everything appreciate We and you have to you. continue do. done

Operator

today's participating. for thank Ladies call. conference This and concludes gentlemen, you

disconnect. may You now

Compass (COMP) 28 Feb 232022 Q4 Earnings call transcript