COMP - Earnings call 4 2023

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Operator

Thank you for standing by, and welcome to the Compass Inc. Q4 2023 Earnings Call. I would now like to welcome Richard Simonelli, VP, Investor Relations, to begin the call. Richard, over to you.

Richard Simonelli

Thank you very much, Operator, and good afternoon, everybody, and thank you for joining the Compass Fourth Quarter and Full Year 2023 Earnings Call.

be Kalani our Officer. Reelitz, will Executive and today and Officer; our us Robert Founder Reffkin, Chief Joining Chief Financial

discussing today, non-GAAP performance our refer In some to we measures. will company's

of few You can directly GAAP minutes our that ago. in measures Investor GAAP release to fourth earnings posted the comparable quarter these our was find most measures Relations reconciliation the on website a

operational uncertainties. our These be related We and include XXXX involve statements current on expectations, as the for achievements. forward-looking based that of forecasts cash year making free for will risks to guidance of well are and statements our quarter for expenses the XXXX assumptions and our that as flow full our first operating comments and expectations

may statements. these results actual from materially differ Our

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

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

Robert So Reffkin, turn over the Robert? I will call our now to CEO.

Robert Reffkin

thank you, year fourth quarter XXXX us Thank and and you today Rich, full results joining for for our conference call.

investment of market Compass platform excited the billion to into our Before advantage about about XXXX we the what we with begin in have want I as and picture, our accomplish scale QX am big back. several I to I over I the years. incredibly our optimistic and get results, the technology $X.X can comes why am and take opportunity next

agents annually, of home that to hundreds the OpEx, with our inflationary level OpEx recovers normalized economics clear growth X% to want modestly sales. I to market mid-cycle expenses. not X%, continue as generate in cash free our $XXX annual of our to of for to home of hundreds maintain the temporary dollars more reduction Compass a agent sales or of savings million minimal that million be we millions cost reset will $X.X million we of of and flow and Assuming believe add EBITDA and is a keep improve XXXX target net $X.X

future our offerings new Importantly, new expanding is not success reliant product on markets. or into

to unrivaled built integrated services retains have We OpEx these technology us the with that Even new at and growth, agent to allowing an million market in we while our and levels, annual compared share, already $XXX technology expanding best continuing invest our attracts platform to increasing uniquely R&D advantage our agents competitors. scale continue in expansion. approximately

home the declines now and begins XX% Despite is navigated the year-over-year sales Compass We have XXXX. in for positioned upside market of industry-wide XX% XXXX. XX% since And transactions. these level larger U.S. lowest year-over-year U.S. dropped to headwinds, than declined the have massive population the recover. significant we when in in very in sales X resulting home in consecutive years XXXX XXXX, in of successfully large

below $XXX to announce $XX.X XXXX pleased million achieved ended midpoint financial negative range So adjusted and in I'm the of are we expenses. our target our at non-GAAP achieved let's we XXXX, of line EBITDA in the We of of year In our billion $XXX million. revenue operating with solid goal. results look results. $X.X guidance quarter to fourth million with that the

non-GAAP by of by we time, what operating this our could we XXXX. million rate annualized run on reducing nearly During $XXX a action expense from aggressive took control QX

XXXX. Overall, billion $XXX flow revenue [indiscernible] even improvement very in cash progress by achieve to to improvement declined pleased have flow, our on economics. I operating our as a a agent a and in compared $XXX free we we've with am XXXX, million As $X.X result, cash been in in the made million XXXX able

in basis our XXXX, points This to Our improvement XXXX basis impacted as in revenue from our XXXX. which improved by of adjusting had X actually XX M&A was revenue negatively lower Agent after activity XXXX splits year. and compared by business adjusting M&A base in activity points of when about in a improved in basis percentage commissions a Equity the therefore, percentage commissions Program XX prior as for the points for the

sales line. which improvement are for an improvement incentives Additionally, total cash of The the XXXX, points agent marketing in and agent points points reducing in improvement our the prioritized not total during agent the economics. of commissions in reduction and aggregate of line included to of we additional incentives, therefore, is cash basis basis an in P&L, economics, XX account for our improvement XX basis XX reflected

say OpEx now to to maintain on to in a a on I to million. And million full in $XXX and OpEx at at commitment a to $XXX rate, XXXX OpEx $XXX run the that have we we exit XXXX run million As XXXX in million $XXX on and be a reminder, we year million XXXX guiding our expect pleased OpEx that last as that committed are our our of call maintaining in we rate QX level. year we year outlined to QX midpoint coming am outperformed I path August, full expect targeted said at XXXX. level are $XXX XXXX outperform OpEx million are $XXX focused

or committed XXXX we maintaining to below. Importantly, still million OpEx $XXX at are

I'm XXXX positive of lowest OpEx free of to are is, the expenses, want but be that Anyone do flow R&D. I is including these we growth at clear cash we in approximately full to positive you a do have note can that harming year a the would for XXXX. been not year able our that agent have One year cut so to and to of XXXX, agents EBITDA how OpEx transactions of the the in new OpEx to our this future OpEx without we important XXXX the invest million since million is experience. our generated right questions the know would target the have important If saw It's levels, us. asked still $XXX in level? level business, $XXX compromised

will And and it from stay the you agents technology agents to more platform is Compass and makes our as Compass Compass. following at highlights, the to reason to continue As allows cost. come see now productive to lower major

those We principal QX We XXXX without X,XXX XXXX. August number more have sign-on versus agents or in cash XXXX. agents than eliminating recruited grew QX in the since incentives of average equity X.X% incentives by principal

agent market executing XXXX Columbus declined XXXX. share compares both the trend transaction QX XXXX. U.S. and for We respectively. Compass X.X% quarterly strong market in retention residential by decline We retention, Compass realty had the favorably continued quarter-over-quarter agent a QX the grew QX of XX XX% the in On percentage agents QX transactions XXXX, basis, a and XXXX year year transactions. year-over-year points, entire in agents of and which transactions strong in basis achieving to principal the QX industry. outperformed XXXX full versus for in X X.X%

adding to attach continue XX.X% one-click transactions enhancements including which rates features For decline compared escrow down residential XXXX, business. XXXX, title entire and by increases to U.S. we for and our compared higher-margin grow Compass this for our advantage to the a and Tracker, the platform, Performance title XXX year technology escrow, XXXX XX.X% full Compass to market. In of of were AI

XXXX investments example to transactions the A of transaction Given we platform, XXX compared great by our person processing the in team sacrifice accuracy operations how made nearly transaction agent of XXXX, time didn't the side management XX% reduced the experience. brokerage our pay. our payments in of agent improving and while cost to

Compass We you His efficiencies, for and reason top to talk shareholders. We on bring the to and through later value operations been recruited me joining platform, Financial was, the we our what experience with year on which Officer operating about for world-class real-time Kalani us commercial all this will this But leadership Kalani's a productive. experience to new provides asked and walk and when moment disciplined want has to platform meaningful these XXXX finance over more as to to investments. Kalani XX% additional cost to running the day-to-day for at and Operations XX% financial side. Wakefield out Americas continue operating drive expect Reelitz, Officer, agents prior continue operations platforms in in point Chief expertise X,XXX helpful the call. Cushman brokerage in as more makes costs over space down take I principal build Compass real and & Chief maximize on further details Compass my exceptionally Financial the technology agents remain to estate them his team. our to Chief Officer both the contribution industry

have reason the join. estate real major technology that another is than to pointed there believe of in where don't to year XX% joined agents I as offering importantly, More the #X brokerage more the last

Beyond our agents, ability financial a retain and sustainable and advantage. the provides our platform is to incredibly recruit best scalable

title upcoming headwinds, existing from into after this will in providing high more XXXX, have clients. market our million businesses Title a To be escrow is Collections a destination rates high differentiation and forward our they represented home sales build that's for Attorneys because attach with ebb our in big as title significant successful foundation footprint Compass costs. and investment transactions about support Florida, this a as driven their firm's of us and everything in sellers. plan agents times, increase We that as such to before, the for we we XXXX, by between our support benefit Fort buyers recovery EBITDA in grow add are Client costs rates. continue virtually purchased during of consciously the their million clients as both our phase delivered a of will and costs, and you very nearly we to our a despite of and in offering thesis. Dashboard Compass a in range This focus and agents. Key agents them agent of is times, envision and demand and annual they Florida. The the with transaction product Adding recently build relationships they strong scale value mortgage Lauderdale, they mid-cycle and rapid highly advantage for massive buyers improvements buyer an for our those thousands year-over-year supply margins. a point drove platform giving In strong return the to deliver this further from single I back. costs eventual $X.X incremental XXXX. title continuing cut our to competitive in Compass, and their build and a high both insight way brokerage additional growing of and resale impact ongoing point bond of look When flow to our low. traditional This and million major count. the add and am agent to part touch a linearly upon distinction $X.X costs unfolds. At integrated can costs so X agents XXXX we service time. I and to and XXXX, people, our tool XX-year of tough for no calls. In on in and the to the X-year escrow combination of In on mortgage. add believe fact, don't agents in has escrow This first strong and new home a tech all-time Compass services In add in optimistic portfolio a minimal compression is because There sellers. for good strengthen market We're

year-over-year. While for conservatively most for XXXX, flat to agree are real for [ estate buzzing purposes, analysts we planning we transactions increase with, in ] transactions calling which are

we signs are the We seeing as year. enter new some positive

with their XXXX, more transactions in favorably example, approximately increase homes and January a home the us the can revenue prior in agents existing sellers compared more year. adjusting January sellers sale seller-related We to see Compass number agent same was up January in in sitting was when were this year. also can X.X% sales This sidelines, X.X%, for far XX% we defined seeing our X.X% organized by sellers up selling up in in our extra the buyers more our but On January during activity home platform, to home of January. increasing For on price to XXXX same to Compass' for declining compared compares tours, volume XXXX X% more XX% period, was business so period and XX% reflecting increase see against this XX% transaction buyers, leads conclude compared the in we the the revenue. XXXX January which in to XXXX. are existing medium evaluating a day

facing you have in there number others been a As industry. the Compass know, of lawsuits and

monitor the future I to continue am residential or goals. comment in respond related on estate all complaints real this to the We industry accordingly will against closely the to things us. cases not to call going and filed

has While still these early process, a how operates how lawsuits of forward. the as lot been will going there industry in affect speculation the to

We with value their are demonstrate buyer helping actively engaged our agents agents. as

their It brokerage us Compass we thank to to people our position period sharing strong confidence and we it from supportive brand specialize want agents each and operating success I have while inspiration. In our relative the closing, future of our with It who buyers inspiring Compass and success. The success. making see team been of for able industry commitment uncertainty, in company for strong in practices Compass X and reducing excellent foundation employees agents. proposition times field, culture our volume entire and the we for dedication at this years. me in sales of competitors these We proud illustration extremely agents determination. technology as best have through and of very to the incredible is of positive representing to support with to difficult our have cutting-edge last and allowed as strengthening amazing has the to to the the the continue network, make referral a I am with invest future the fact expenses a to growth to platform, been midst is and by their that Compass unprecedented #X financial value that

it strengthen as full We levels. I now focused our the will of on returns to over continuing advantage take existing will Kalani. eventually and turn stay normal business it to market more to

Kalani Reelitz

the you, to team I am proud with be great agents the of a in best Thank of extremely Robert. a working part industry. people

Before Association I of in as compares we to from details a getting X.X% X.X% decline the to the by in fourth year the X,XXX transactions for operations. residential the give the on estate financials, fourth transactions, the which processed you decline into In our reported wanted of favorably quarter, some quarter market entire a real ago, National Realtors.

QX QX X.XX%, for basis X Our points and points market up XXXX QX share versus up sequentially XX basis XXXX year-over-year XXXX. was from

agents X.X% X.X% QX XX,XXX, of For XXXX, to which increase increased our average an and up number quarter-over-quarter. of year-over-year principal is

approximately agents. In the additional total agents, had less up benefit with XXX managed which than fourth the $XX,XXX, resources GCI and quarter, for an of the average rest of freeing each we agents producing out XX our principal of

retention in a than high since elimination remains bringing consistently As Robert produce on sign-on we in retention April Agent focused equity XX%, XXXX, mentioned, and that XXXX. successful agents. number are principal agent recruited becoming incentives public was have a Since we in the company quarterly results. agents reached our August more X,XXX have cash of we of as

rates Our and businesses in and increase, platform Title launch the integration from to in generated EBITDA Escrow T&E XXXX Southern continue the California. adjusted positive successful in benefiting of attach Compass

roll planned. and newest feature of By We the as escrow in of and in Virginia including area, the currently including title title escrow completed the markets Philadelphia, to we this to T&E and all Southern Jersey Maryland market, and out plan rollout D.C. QX, Washington, services, offer the New the integration our where we have Florida. integration end

and be EBITDA escrow the ways will services business the integrated mortgage. as look and to will such in One through grow margin of title we

in We recent continue like for look Key acquisition opportunities of our Title Attorneys to Florida. will

turn me and our Let guidance the financial first quarter. quarter now to fourth for year and our full results

we since which billion, billion the reflecting QX end rates Our of fourth quarter mortgage our $X.X time back out put of our November. the revenue in $X.X guidance $X.X low continued at from range was pressure guidance to was billion,

$XX.X reflecting a was from increase QX X.X% by year-ago the down the X% reduction transaction average quarter, offset total decline ago, and of transactions, in year an gross fourth revenue in a Our price. billion value partly period X.X% for a in selling was

percent Our basis Program Equity from QX on of revenue points expense Agent of of XX.X%, of period. when year a an X commission as was impact non-GAAP excluding ago increase the year last the

see of of As a our year we XX their for reminder, the quarter, equity. Page XXXX we Equity of Program, investor the lapsed the XXXX have last was sunset the details Equity the commission this last QX you differential on period. the the on exchange a Equity QX the commission year the prior offered portion will Agent deck allowed Agent includes additional to agents impact Program. line in as now is which Agent cash Program's

our full in XXXX which commission of basis a was lower split. rate brokerage our revenue brokerage year due markets of by acquisitions with points percent improved the as to XX that compared For a XXXX, drag basis average XXXX than splits X made points about were masked by overall to

So improvement by true our -- adjusting basis improved commission points. drag, this rate M&A for XX

aggregate and in improved year economics demonstrate As OpEx, included points agent we sales improvement as economics. in overall XXXX we Robert for these XX are economics. accounted meaningful have points agent of agent incentives incentives in component additional And XX mentioned the to line XXXX, basis and as have earlier, marketing improving we compared XXXX expenses. prioritized progress a an extracted full such marketing reducing Since for cash the made they of basis them to an of of or during

fourth an the basis. million for operating Our expenses $XXX or on commissions related and non-GAAP expense, annualized quarter excluding million were total other $XXX

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

our for this implemented reduction our OpEx began $XXX to cost of reduction reflects due XX past over of million of on and an OpEx the However, last was $XXX a reduction million the million basis. the of we second a fourth months, cost million initiatives, quarter from the initiatives over quarter the reflects quarter year, annualized $XXX which in decline $XXX

Our And operating are our focused maintaining base. allows mentioned, focused that operating discipline to sustain us as on disciplined cost new Robert management expenses. our on remains team and we

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

EBITDA quarter to negative million. our negative negative the adjusted was million $XX of Our million, a range within for fourth $XX.X guidance $XX

noncash and of were in new expansion capital. improvement particular, flow and GAAP the capital charges expenditures markets $XXX $XX.X quarter free primarily to million, and such million slowing to of loss adjusted the and $XX our of of $XX in expense ago, favorably compared cost-cutting flow compares lower expenditures quarter just cash In compensation year negative fourth $X a quarter to working cash amortization million the the and current a intentional $XXX.X for in quarter Free year million offices. changes stock-based $XX the $XX favorable capital of by noncash by period a expense. million measures million million year was EBITDA, during Our fourth the and net the negative as ago to was include which in driven ago compared same loss depreciation million driven new in other

improved year-ago cash less full on billion the of position cash free meaningfully last flow have $X.X the year. comparing improved revenue. When our compared We by $XXX year period, free million flow to to XXXX our

revolving flow cash from can Our the is by timing year of of transactions to in be in collections relation cash past to vendors the end, impacted improvement directly any we the flow and over of the market and attributable to the agents, in employees quarter magnitude $XXX million our of we each of are free payments our period cash to timing our balances believe line on and outstanding have and on our no discipline. We at cash the of cash credit. sheet positioned impact December, cost well the balance had react We of end continued to equivalents challenges.

guidance. Now turning financial our to

Our that discipline results operating from improvement. expense XXXX meaningful performance creates confirm our

approach assuming modestly increase managing business and market XXXX. We compared flat will to cost to our expected although level levels, be we at of this continue in the is XXXX, a transactions our will

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

targeting million the the $XXX the we year the $XXX non-GAAP a the we assumed million, and OpEx in of completed $XXX are QX. Escrow full acquisition of a September level acquisitions Florida-based to includes OpEx completed by For which XXXX, million of additional with Title between & midpoint recently at end brokerage

in cash mentioned, cost Robert compared flow our free committed period As discipline results driven XXXX our remain has cost beyond. last to to and improvement continue discipline commitment our to significant in favorable We year. drive the same to

result, free begin I a to like to you expect operator the to XXXX. Thank agents team over for you for our to As full and Q&A. positive call the members cash to do turn back Compass. all for we flow now the would again be year

Operator

the of line Our BTIG. Instructions] from comes first Bhonsle with Soham question [Operator

Soham Bhonsle

of pay broader of of willing is concerns you these seller sort How the like as items, to of communication rollout side. this the sort -- assuage what And around to to of do broader concessions being they thoughts think I a sort what then allow be the use to in wanted one first maybe idea way of offer out on core of commission X the this upfront Specifically, the on of are there which the buyers maybe interest, do is on agreements, right? clear other buyer Robert, their agent right, some concern for what your the get able which one negotiate today? you. of right, their the to is some could sort upfront? is help this thoughts secondly, seller here statement own, seems your

Robert Reffkin

noting agents only worked all buyer worth before So it's income [ compensation. that with only I biz buyers buyers we ], clearly think had outlines with agreements that with worked that many representation this, they

As what is of they seller the paid works would is it to the those negotiate has the make whatever And becoming agents cover training program an agents We, and buyer I doesn't you training largest our ever with And example, this implemented portion way Compass going as that, help had a would and the extent through that coaching we that any percentage difference. buyer, arm, practice is get of it where the independently. representation outline internal the we you executed, the training agreements. for our over now the XX,XXX go forward. of standard on agents up

Soham Bhonsle

you think the to alleviate may enough guys of that concerns these DOJ the of or Do sort that is have? some

Robert Reffkin

not just seen the have Compass, seen what way is topic. the of and would use have would not coming -- I on coming related us know I concern of to the and -- market to not risk agreements successful within know complaining, has have From that be way I those to financial my agents I would you any happened. it alleviates the on complaining the

Soham Bhonsle

back the here first non-GAAP up, just kind half of look the I level, there? at little is to puts sort sort provide there -- some competition Can being and maybe color was offer I there's a and of number that the a half commission agents at versus a on half Or then, just line. that the But is there the year, you of first keep to wondering, the So split high half was right? bit requiring know And there takes here if just second down, Kalani, on increased for are required agents of bit are platform? just any sort incentives more? other I'm of

Kalani Reelitz

the Soham, Yes, sure. thanks Thanks question. for

think related few to things profit. gross a overall I

have seen to we the they and produce, I First, we is market continue economics and think to industry in to favorable the do them. of creates kind the worst, the best know when continue best have more and the

I think one that's piece.

other the folks mix brought just think looking at I piece is the as of more. we

add kind more takes better folks to level, that XX% time which is economics, We are of bringing on at but it the on.

So more X% -- think the had half, it's timing it. of I Keep in rates. mind, a I we it's think second not of

think was so in I There to production half, more to more of mix. there more as well And compared was mix production think mix. a the I but it geo of that little mix half and

Soham Bhonsle

$XX a to but And Or one any think quick sort. what it, guide. incremental to time, as you increasing way million there, hey, OpEx acquisitions really Is million is on expense look, sort is fair communicated the staying or then just so to and that last the about million of is $XXX core $XXX all the there get that's like there well? we're

Kalani Reelitz

Yes. Yes.

our in $XXX bridge. That's the as of half, we've purely million and M&A Florida delta not organic -- closed to and The of heavy $XXX the worked, heavy in as is to the well last all So Attorneys we SG&A lifting QX. did There's lot Title if have year, really September proud we OpEx that down in million that has a the get I'm team. second and most, of $XXX lifting that occurred. the million. the in done We've Key

Operator

comes Oppenheimer. Our Helfstein of next Jason question from the with line

Jason Helfstein

full you 'XX. I there was. ask kind like last a still positive, that to you more want just the Or to you're year into the where is just shook now $XX expense for lean question you on giving just I That but seeing you're something flow kind cash like give positive out updated kind mean on the said that Is you have that's guiding us it of you to update, kind it didn't know visibility guide. confidence don't that before, means we of of of expenses? million more free you've only that of what from expenses. this is [indiscernible]

business. to what just the in that back broadly So you're maybe tie just seeing

Robert Reffkin

stay, and turn Kalani I'll quarter we as to we Look, we on And in saw bring continue retention we the they're continue happy in them highest mentioned, as And company. answer and let they consistently benefits expenses we company. of and agent public second platform it. down Maybe Yes. the the agents a to brought $XXX QX, million. see the by for and

agents think of strong. the vis-a-vis that the company And we've very I is the so realized strength

I here. think it's you OpEx. what's Kalani, given But of us the take I'll on confidence to this continue it -- path

Kalani Reelitz

Yes.

hit overall, continuing there, a our reasons. and market see free last -- we Robert. proven We've we're do I guide. One, improving. few I the think we cash you market, year costs for big I flat down at kind roughs with mean to think flow kind of looking bring the of modestly ability our affirming to

as Our our Robert flow OpEx last cash this mentioned positive. us in prepared be free would for year EBITDA remarks, guide, and to allow his revenue year's positive on guide

so a as about free the market Jason, result. Robert adjusted and of good remarks, at. it not We've mentioned cutting to our as already. that We're ton a it's think made, where the made are investments we conviction feel seeing we we And a And we're is I our We've just cost, bone. think I is. cash where that of in driving I we've think think flow

we're and some we've good of just we where that. have if to, need at, taking about more scalable built we we we're a really feel model, so and And think but advantage I

Operator

comes question the next with Bernie line Needham McTernan Company. & of Our from

Bernard McTernan

year? on contemplating any Is OpEx. should here? $XXX flat million follow-up pretty is like Maybe do we there the OpEx a be in from the Or throughout pretty just you're math right, it's seems seasonality to you the close think for XQ. If it

Robert Reffkin

linear the with I We're model Bernie, right, we're seasonality right? a of pretty built, revenue, stairstep. we've because think Yes. not

million the a work. at Soham's pretty the a seasonality, we with done obviously on. ton ton being of shouldn't as of level M&A I much question. heavy there So see $XXX the organically mentioned added with We're We've

been is you're think seeing about what the right, which I is So activity that's taken.

And not expect ton I it small there you think part, should being might should of so seasonality. with you the -- don't sequentially but a big it normally as seasonality. is most be very as Obviously, for about QX amounts,

Bernard McTernan

additional and anything seller technology share activity you or leads? up are that And year. then the early comments of seller to side doing how of Is market purely the gains driven was drive on the much that in guys maybe product

Robert Reffkin

and I the are is think happening. there are things is one market X that us. One

and the side, had XX% going more more X% X% into and February, contract. in inventory -- we On homes the January the than are under driving more and homes In inventory year prior had similar X% were contract. what's market we inventory, market under

what's homes. continued. the So that market side, of believe is people But what reducing selling on their it's amount that rates the I low It's out of -- from isn't It's trends and X.X are are We trend driving locked years the the they it moving XDs just of divorce, that they're call diamonds, on. their and over of delayed just deferred people diplomas, the tired been death diapers, waiting. life are waiting. where tired mortgage

to -- year, to about demand the One, time and the year, buyer pent-up last been way was another here life that been to aren't last last with there rates compare extra are the Mortgage both because unlike year, an this seller, year higher. but this year. differences. just actually on So points wasn't than your at of year it's basis there's in much it's last that higher XX it year move

selling locked less their of homes. out You have people

XX% Going homeowners had at X% of into mortgage or year, you last below. rates

had this below. X% or you to mortgage rates homeowners Going at year, XX% of

effect. the have less you with lock-in people So

cash. so we're And have new much the move high rate people And in And of So those cash. all and was can care their course, sell a some low of think all market, course, market right? they different I not mortgage about seeing in can because the market. as all-time more to of you home, are use stock

activity, is big is their a contest more driving new it connects person with last in what to allowed nationally outperform. believe #X January, Basics will like what a Challenge, to to at XXX-day but which earnings to specifically, XXX Compass Back all that believe call, most days this -- I us by launched with is we their locally, we outperform continue and this And us in to meeting we connecting; types say. awards. there's clients in a whoever the most, the is of first For of for about and person. allow And and talked that little has challenge we this is seller business agents more grows bit your is the meet year, believe The way the we of clients I the more think speak to grow

Kalani Reelitz

as add Compass of is we what really is and is proud Yes. third it which to Bernie, We've to I team. have of through -- going job. just -- good piece to which what goes is added growth well. the if I'm a new could doing, done our agents, coming net

are our 'XX wraparound kind then our early So 'XX. to Basics mentioned the that adds the just same-store improvement X and Robert of agent new through and parts market Back sales of those in

Operator

[Operator Instructions] the Associates. from Our line comes of & Zelman next with McKeveny Ryan question

Ryan McKeveny

with So Robert, about debates but buy-side a the percolating general homebuyers how brokerages agents investors is to and the been one and differentiate. of different the industry innovate also of bit that's value in

provide talk value So home-buying to Compass doing us I your was are to maybe guys a you hoping what to could you help strong proposition about agents at customers.

like think past. I you've things the Collections about in talked

just from its differentiate it how equation? when is the others, of maybe comes buy So to on what's the again, side helping Compass big picture the agents

Robert Reffkin

Well, take back. let's a step look,

not a our presentation proposition. buyer an industry, sellers, the presentations buyers. value of a think value buyer listing we are, for place did to that the the we fall not presentations but as go we and outline past result, an are for we One buyers as can in that industry created is I buyers And reasons understand this we where all create as that created the agents

matters. majority we that their to the side, of comes a to go sell -- we network, On buyer how hey, have seller, have. we Internet. a The many agent, have the the the time, a you That's when not here's from why agents national

on, the to in Concierge, listing examples the have on home have we cost and some and on help make We now. on. of the in Compass presentation where staging, ready, front-load move of your Those are we

largest is access our have you for great inventory, we off-market off-market in of as a to databases buyer. presentation, On the listing which country, for one access the buyer

place. is which our Collections, can other, real clients, or have your all for you site. and -- like your updates, We and you forth, that you're all or buyer your significant collaborate in flagship interested spouse, tool our with Pinterest mother, which the technology a of can back It's board estate add tool of could one we comment is real-time daughter for in a status your your any and

have the We to and the digital go you tours, looked buyer back comment make and which on on persists at on on you've value. them things could can -- we and and notes on, and so always

our other platform, loan, but So buyers sure. of nothing company certain I'm any for we Collections -- if and agents confident because value of for our brokerage because we Collections, than inventory provide our were more off-market with

Compass, will And so and in that, now sharing be have is a communicating for we thing start to it just agents, all buyers for way industry for decades and which the same a thing great thing value agents a great to we're for sellers. the their outlining great ultimately as

that those as out there addition mentioned the there are charge. that, people there, what as people they negotiate are independently where, to launched those as say could buyer In buyers. out But earlier, agreements we representation increase again, independently commissions there

negotiating; only was one there they were sellers. historically, Now person

agents. Now you and have buyer agents seller

twice the have So negotiation. you

nothing only I've so time about there's but makes worry tell, that this. me seen will And

dramatic trend headlines more seem bigger think the be and than I the to lines.

Ryan McKeveny

And second question.

lot of I rollout on a terms kind on just the side just that in things? and Click updates the stand talk on mortgage Title side, of or T&E on One So expansion. things guess point the where any of origin of

Robert Reffkin

officers. continue We loan to can we that hire more share

We important of over continue which one our in X that have next indication different something of and And future we this do most and mortgage than of yes, of be company, in we're in terms the month recent has it more title an most is But demand record it of as successful months. markets X we in coverage that to was locks, months to to rate markets. more in. mortgage on terms the continued to is converts the escrow be

Operator

further turn for the am call now time. this over to no Robert I closing would remarks. questions Reffkin I showing at to like

Robert Reffkin

real all Compass estate Compass of our X sales the row. #X market, you difficult thank for call. their work brokerage and agents outperform continued States in today's and employees thank I all by in making the to for commitment years to a market. In to the joining Well, the want a for volume hard United agents

for for As expenses the market XXXX when navigate mid-cycle. the that the I'm estate XXXX. Thank transactions we will to manage this to down you. of the it Compass and prepared levels success. get are is successfully confident positioned was and unprecedented XXXX, downturn, bottom enter does, we our And market. better well that continue in Eventually, more we believe We real a of constantly

Operator

call. today's concludes This

disconnect. now You may

Compass (COMP) 27 Feb 242023 Q4 Earnings call transcript