COMP - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Compass First Quarter 2024 Financial Results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. would Simonelli, to Relations. Senior you.I over the Thank Richard to Vice Instructions] now turn like call [Operator President, Investor go ahead. Please

Richard Simonelli

Thank Thank all Compass good and Quarter you you. First you, the for Call. afternoon Earnings joining operator, of to

be Chief us our refer Founder and Kalani Officer. to we will In discussing some Reffkin, Chief Joining Robert our measures. Officer; Executive will and performance, non-GAAP today Financial Reelitz, our Company's

our of reconciliation website. comparable these non-GAAP quarter the posted to release directly in relations the measures GAAP most on measures find first Investor earnings XXXX You'll our

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

from may results statements. these actual differ Our materially

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

Robert statements. not Robert? we obligation as reliance undue should any information Reffkin. this information.I'll X on update is call to You this to in expressly the presentation of forward-looking over May place date, any today's All and disclaim turn now

Robert Reffkin

pleased In and year-over-year that We agents Compass conference for and decline the we market our Thank year favorably points entire XX say in is to our share a the XXXX. the working. from strong to first in technology with range, joining focus cost generated higher an generated reductions their results considerably. cash shared in base our of historically compares range transactions our quarter market while increased they enhanced call. I QX quarter X.X% the in XXXX, had a to navigating share in grew cash flow. QX year, market.We of market. continuing generation, have that on compared This sequential in adjusted We productivity, which and QX our slowest guidance considerably. experience for platform. We agent a the results Compass revenue increased basis quarter you In by us transactions our as and an exceeded XX platform our am outperform our This grow on the for ago. considerably. revenue quarterly I end grew to to repeatedly today our of first guidance XX% agent has in in are X.X% to that increase XXXX QX that testament XXXX, basis points is year-over-year best and EBITDA further growth market still proves are we proprietary basis This XXXX, investing quarter. with towards the first challenged this continue revenue positive free agents difficult proprietary technology skill a demonstrating in and the market agent our industry

join. nearly stark bonuses. since they equity XXX counts in has quarterly of which increase, is agents, the The we that vast contrast QX the sign X.X% to platform QX ] XXXX trends. principal XXXX. count us majority X,XXX the is to by ceased a QX agent come principal Our one and increased using XXXX, Originally, is [ in Compass we agents that industry recruited organically on This between number cash tell reason that we and highest agents

acquisition of Blum, in New South agents our added the accretive than more the largest principal with Orleans. Gulf we Just last month in & and agency Latter April, X,XXX

increased agents the and decrease market. than of X% two a the in of company total X,XXX are our of non-productive largest this competitors decreases total by reduction period. quarters. includes of the three faster We in last decreases count while agents agents X%, agent Compass, of over number reported X.X% X% growing year-over-year, At public same the Moreover,

numbers. & Latter reminder, Blum a is not As in these

Our balance in $XXX draws and We equivalents ended our no and cash sheet cash strong. with outstanding is QX facility. on credit million

OpEx continue to on These first to positively quarter We in and increase internally. $XXX million, free to reduced using We an focused cash also of of efficiencies costs $XX technology. $XXX million. drive flow. laser contributing OpEx XXXX from are cost remain improvements improvements driving We reducing our million QX the

million. from QX OpEx reduced $XXX We XXXX, of OpEx sequentially also

will As Financial always, financials this call. on Chief later Kalani, the Officer, our walk through you

the and to XXXX, on XXXX the rate, Homebuyers less ago, will we X% a believe be in mid-cycle have stock XX% nearly to percentage inventory or inventory to than the And than XXXX. be the buyers at XX% opinion mortgage years mortgage the will by One, that is Two, year X is eliminating still better more XXXX better in of rates from pent-up market. mortgages. leads X market, of of influenced is have of rates dropping high. X highest years X% the with below, over people estate we may on Moving up the in with home demand. level I real with are with My XX% below approximately all-time mid-cycle at four, reliant years from approaching XXXX XX% X now biggest is approximately over years more bottleneck following; or only all believe sellers nearing coming percentage cash Three, the At peak. after the still market sales. the this

last forcing a call. the they when up people than on market believe year just lasts, is in The bounce XXXX many come in be.As I We X this modestly homes being will stronger surge a Assuming downturn, the it rates this housing remain XXXX, create down in. will longer transactions. will don't end be massive live mentioned the back to to and better want that

add the a to cash OpEx as transactions we last flow budgeted homes. call, million mid-cycle to more minimal meantime, X% of continue modestly and home or believe our agents of formula as economics million to Assuming cost X.X is XXXX million X% and free agent improve market annual have year generating net in keep growth We in on normalized of to brought recovers the and conservatively to and EBITDA $XXX level. on maintain adjusted hundreds earnings our of millions level sales inflationary for flat that annually, savings have and a for dollars that we homes beyond. our X.X of annual in our hundreds with I mentioned But

settlement agreed be XXXX, payment in of and after litigation to related in positive What cash agreed expect expect is, as second the from is free the quarter.The flow facts having? we with our we We which you as cost number beliefs. the is to are having one 'XX, in in share -- to on this business? investors what five To me even which well five getting it April the help make the with effect to question, settlement, we first question, let

up training of than XXXX. which agreements buyer of One, are buyers an with in half which in ever. ago not from buyer new the is XX% use XXXX, now more are the agents buyers states agents for agreements our XX and using just already with agents facts; Two, in start and In XX% agent, are years Compass been are required Let's XXX been Compass sessions operates. XX% issue. we of representation no the national years trained prepared provided have have Since with the Three, XX of sessions. getting agents and verdict, for local signed training Thousands our of buyer rules. have

the not buyer more, to new included XX% are than the all of pay press settlement sensational efforts, than in offering to to initially confident. a earlier either for of just commission from to agents To XX% generating the a the XXXX. changes. March than sellers has are to are majority on commissions not agent. any percentage pay March rulebook actual the That of compares More XX% seen expect amount that see the paying these than the more X.X% seen noticeable We markets our MLS they in being the the XX hearing since offer and offers announcement change have reaction offers NAR here's agents more X% data from nor coming of of buyer I X.X% years or revenue to of X.X% NAR Furthermore, in numbers these agents in transition buyer's real Four, the the what included XXXX. we found. we significantly since our date, and agent. With were trends, average or the more listings what from pay we XX, commission believe more. We in listings now has are Five, down. review worried industry being that caused

that able they to Specifically, sellers agents conversations still a Two, March to agents the increasingly if result felt buyers buyer's referral country. settlement sell to repeat Compass the XX brokerage hundreds beliefs that and brokerages NAR will that to on a the proposition believe our more with the need of with interest impact value of full-time composed Compass than more provide is some be strong believe asking, communicate the time across in their headlines here full-time XX% firm. best be since of of very it conversations business. in buyers that commission proposition agents that their need little the to the agents.Now, was has are professional our we experienced One, to after to before. of agents, sellers any led And will of for ever pay is buyer there than those and we have agent value to

Exclusives Soon, in off-market inventory inventory a Coming and low particularly important Compass has access through Compass example, environment. For Private Compass which is to

technology dashboard a and home a real in XX% stagers, selling other painters, make buyer is to an and or on. year. so dozen Collections, where photographers, Sheets, and the Compass a agent not their CMA, be of parties, tools home will appraisers, different Three, use believe the the the displaced in on will discounted. can Compass we financial Compass a agents continue often coordinating home buyers We Tour are people believe over Buying we and highly client managing than being complex project do role between lifetime. example biggest they that officers, that title loan decision less like estate sellers side, Another Digital at important like will videographers, process, like the level. be believe most be this multi-month percentage officers, Four, agents launching inspectors,

for However, XXXX and we money not important is in of of XX% rise XX% sale countless disrupt the been business the these these If have the by sales attempts finally, on an a the the then Discounters that there will buyers sale XX of we decline offer real in as agent.In power to for buyers. using you market you people the XXXX. new all have have more there Yet, many out seller, commission have decades the for most saving value prefer have have And rates. percentage decades. estate we've to the and years, companies. then attempts declaring the sellers Internet, to firms a market agents would the has increased use years, know real In low gone home and owner. using vast are either the be believe the by so buyers to or discounters, since discount then operating of owner for And are and was over before. case. for XX and of that majority agent, majority agents the and be in been that the replace receiving of, a last the such then Many pay estate not than In to every of traction. sellers agent, have aggregators, commissions the buyers you the of agent thing ever from brokerages gained not Obviously, are the discount. of last buyers seen despite

and to in one of country majority the professional fact, to a residential for and offering firm public estate listing, This the other than seller have we visitors your on than for brokerage exposure combined our company real discounter, largest the decades. agents of commissions more month, with charge today X%. a only Internet every In go companies million is XX more in can salary we discounted every the say, country site

closing, professional they However, I point. discount. XX believe have sellers advice after and discounts, That offering proof that a an In speaking over years with they approaching is prefer only market X.X% of that inflection buyers the Compass their share. checkbooks are and is

work. We have done the hard

inventory inevitably to employees We want to incredible with United a to advantage. by their come a allowed have count us of to and The to the our real the the Compass for entire in will row, will rates, when Compass successful, be estate and the States now agent and and thank cuts brought see back thrive. dedication number team It making years I to X have we determination. will pass be and one in Fed market sales in it volume the future.I for I position grow and their brokerage strong foundation continue agents. expenses a down named commitment over Kalani. has to

Kalani Reelitz

Thank you, Robert.

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

since Our XXXX end across each any market with QX as principal logic as XX at share for using each reflects agent an average was average sometimes and was average which points counts principal quarter QX, our end disclosed that quarter, of the for of versus quarter. the the basis the specific year-over-year been points the from we of up quarter. that the count sequentially and to in given Historically, consistent a of months our as a result choppiness basis XXXX. XX up an the of occur the agent three the We've date of can avoid IPO, X.XX%,

a many metric. However, was and we've confusing feedback the received analysts from is investors this that

a XXXX, XX,XXX agents, as As an principal XX, a agent basis, this XX,XXX X.X%. compared quarter. the we of forward March to basis, year-over-year of XXX principal the increase we'll last go of disclose March of count on day result, our On of XXXX, or as had XX, as

the Our XXX recruiting team first again quarter, higher-than-average Historically, for was strong quarter to attrition, quarter principal we saw tends first this in and agents that a QX. the recruited us. a which be quarter for

impact turn to QX, me Our quarter absence for in agent therefore XXX quarter. our who financials.Let but shows count agents will have net of the a than number had the results net decline principal principal exited XX guidance production and this in their prior no more financial that and includes first no on our second XX-months now our

transaction a ago, the of of an Our first $X.XXX of revenue the with Gross an was X.X% in in quarter, X.X% period, higher first selling quarter which of was $X.XX combined increase to a increase ago $XXX end billion, total increase XX% slight guidance range from a increase the was billion year $XX.X in million year our towards average reflecting from price. value transactions billion.

or majority acquisitions XX.X%, to year-ago closed Our how management class very quarters March. some total the beginning for an expenses part for basis revenue cost become acquisition as it's end we non-GAAP expenses, of the cycle assumed a acquisition we've for April, our last and it organization with the margin was of amortization this non-GAAP points, to The percent QX expenses XX% figure ago. particular and of other additional our period agent this, year. is and the the each related that litigation this expenses markets XX operating as the related basis OpEx effect reconcile $XXX commission expense seasonal from operate splits OpEx than million quarter.As GAAP note seen year watermark completed reminder, and of QX team This & is said in the increase million as to our operating our QX reflects refer $XX.X anticipated first of since certain there of in culture XX quarter. about charge from million typically related operating we and attributable out inflation we from Latter overall across on discipline the past consider and performance title second OpEx that that is points including the XX our were Even expense these after annual expenses XX a of of a made in or the of compensation considering, exclude that the of settlement. added brokerage.Our acquisitions the our in for lower were in XXXX to that commissions in excluding the we We've a average company. quarter, of reduction and deck exclude from depreciation to at related That EBITDA, that of January. expenses. stock in I'm the pleased a non-GAAP closed Florida The important XX place QX a in XXXX the $XX low in in Pages amounts included assumed continued three-brokerage to committed increases it's and Blum coming investor to the staff compensation, to the action to we the increase calculation we in the expenses QX as adjusted tables of

to the ago. first favorable the adjusted range guidance was year end better Our and of million over quarter negative an the improvement $XX for adjusted which slightly of loss XX% our a $XX.X negative a of than of $XX million, $XX was million EBITDA million, negative EBITDA a

GAAP million the class charge full million, that for lawsuit which charge took previously was disclosed.We reflects $XX.X for the of QX. net we the P&L action $XXX the loss quarter settlement full Our first during the

XXXX quarter to cash favorably compares have generate X in be us rewarding million, free seasonally results the flow that positive year-ago in will Free paid QX in the cash to $X.X which XXXX. the the the our quarter amount that very million first was flow However, half extremely past of negative the QX this brokerage in cash $XX allowed efforts first of half in quarter. positive free of which a for flow the we see other expect for is weak and of It's quarter, to years industry. over cash in

our agents billed in of to the due cash flow fees calendar that when performance, is of offsetting year, couple in aided later of will of important is effect part year year.First, a occur the to timing items are flow of the As year. the positive that the have have fees the beginning so will full-year that effects consider offsetting and are QX an partially in the note we many it's in to early our the at our it the by timing paid later cash

true tend working when quarters. for the each opposite can higher capital when QX of the first year, seasonality a of two see we the two way. These individual the these from negative quarters especially to beginning quarters the generally the to timing is be but The cash of of compared in impacts and seasonal collections create brokerage to items these impacts quarters favorable are commissions in for year, choppiness neutral our the QX working in Second, are end should capital at that year. in within

should at and draws our quarter each more first focus, more of relentless assume no and flow, that the since I equivalents flow our to cash quarters have on and well focused results a becoming sheet, continued listening have the For of cash I flow will similar started to for turning finance the we We We on are that $XXX over and balance the believe we delivering are operations are positioned financial maintained for of we cash six and quarter. Compass, With credit. modeling line to remaining quarters last are outstanding revolving the react our guidance. cash million teams on free our said, with adjusted free here those EBITDA that market XXXX. challenges.Now, cash to not year, conversion and the on of call that you ended to evident be

to billion $XX with be million expect expect OpEx XXXX, in For targeting the million. midpoint a a of range the billion, Last QX $X.X of of that stated EBITDA to for million quarter $XXX in million. the and we XXXX range to $XXX million of level to are of $X.X between we full non-GAAP $XXX we we revenue adjusted year $XX

equates for two total a the the in are we $XX the $XXX plus for the on $XX high to As core in of current acquisitions consider OpEx Blum XXXX.We XXXX range additional OpEx OpEx the but million range, the Company's just April. to reminder, business, midpoint the from we that for million the maintaining are balance assumed both end of by this the of the low increasing that additional September we range for range closed closed million Latter & acquisition and that

We accretive considered. XXXX, expect to in the this adjusted be to OpEx additional EBITDA acquisition needs be but to

Compass, cash agents for Additionally, turn full the call operator you for would to we our you to I'll the Q&A. all for expectation now begin free positive reiterating thank are end our to do again to over to the flow like be I of saying, and by team XXXX. year and that members

Operator

you. Thank

comes go We will [Operator and the Instructions] the Jason now Your Oppenheimer. question answer Please ahead. from of Helfstein first question of line session. begin

Jason Helfstein

questions. Two Thanks, everybody.

on half. first, second your So thoughts give Robert maybe us just

combination to Just both? quarter. you. kind in this raw of seemed from secondly, like of trying in or or agent a factors, Thank agents, the or models. all productive our through productivity other work it improvements as less thoughts we're culling And Was improved then workflow

Robert Reffkin

So wasn't key transactions on inventory. last was of It lack constraint the it first the year. demand, question, to buyer

there was than so more more the time the to call, inventory we And years. than X this inventory year It weeks today like in have, me year. the time in last is positive year this inventory. last looks last making XX% in about any mentioned is may what Like there's market more coming I than the more ahead,

half. And so me that to about second leaves positive feeling the me

stay go rates course, A, to mortgage second the the Do plus? they an they assuming rates, that A they That the mortgage inventory.But as of they to impact expect are? sixes? as than do have Do year stay be will I better right they of big year. now, last are where to Of would where go half

Let's in rates. second year remember, mind, half last was X% also keep of mortgage

lower had inventory. you So

X% the the in front well right in market. for of and You rates fall time over had a came mortgage first decade it

that hard another than it's it see to so last worse the way it are to it year.In circumstances we've It's could to more was agents as along productive, better with we resources ways hard say That, limited was mentioned not being or we lead this And with it our technology we from last than to on to agents, year call away take not producing agents way on because productive. well, producing. separating coaching that to -- training, mentioned want being have more them it believe another is. that and and call, other been agents makes and last see we that terms give are of and are we resources they why

a the the I we first the in or something where were call -- in to every contributing that in-person back different Compass connections. called referral we challenge is had national challenge. of we most And do of in awards before, would And had the developed in actually interaction believe to for last awards, their local total. was log categories to we think for also through the It the called agents outperformance. mentioned we they recommended there days business the basics There XXX call awards how ways in-person we XXX-day year, and that, are and hundreds in they repeat platform. that the had

Operator

you. Thank

Soham go Your Please with next question comes the BTIG. of from Bhonsle ahead. line

Soham Bhonsle

side, market could you certain give you price think first, were of Good and unit There from wondering count Robert, markets color. share some if today? think the guess do you on maybe sort points more share took on you're us more taking guys. you who evening. share Hey, the I where or

Robert Reffkin

Yes.

and gain we best So I forever. brokerages best in of who are agent country. The top than market start share that share. way the a average market more the me been down we the agents so in average And gain let the think It's markets, Okay, agent are sells with, comes agents. taking? company

And the gaining think harder that so the are harder say, industry in having think they're gaining also time, a time boutique I I the share. And level, having competing. the balance At lower market would entities are from share, brokerages. the that I company we market are producers are on

I it firm think is years -- ago. offer than years, it's firm coaching be in required X X of last brokerage for small over terms harder and they to were competitive. a more agents of is a the terms and training, to in more technology, More to able stay

Soham Bhonsle

it. then you so think And side, get but you core, I at million million Kalani acquisitions the OpEx Got the from to on acquisitions. $XXX then $XXX said the XXXX

Now you're raising that midpoint, I guess, by $XX million.

the low-end right? sort I low kept So that's guess what guide, that Because end the is still, open. you to midpoint. of of $XXX question gets But at the million the you've

that just more high-end, what I So guess, then, I'm here? guess, M&A wondering And there. the just $XXX I million, is gets you from

Kalani Reelitz

Soham. Yes,

think, think deliver million. importantly, two the we to at we track additive that. acquisitions. on pieces, and I about think I in So right. And $XXX then The accretive core are And OpEx those

a I your what directly, discipline I think, cost question low seen for is us gets to to core us now. It ongoing think diligence, right. is answer an the and competency. end? muscle continued Cost we've

And ways efficient. continuously looking quite to cut frankly, costs, save to costs, be more so are we at to just, new

our focus kind drive efficiencies. ability more and it's think end, So as to the just lower about of I the continued

everything to the Sigma that folks bottom Those working back from us marketing, team, on at You robotics know, of are actively. right. our office, They looking in lean can Six AI we a have range. drive

probably a we pop I of of market more some think if back bit expenses either the more. variable and little a small agent marketing see the top acquisitions comes end some expenses, is the or

Soham Bhonsle

squeeze Okay. in. more if could on one Robert wanted get your environment just thoughts I M&A to And the there. out

You touched the challenges and boutiques there. on the

Thank you. are sort maybe, develop could what's from in your to consolidate? them of going forward? you hearing concern appetite So to more And what continue

Robert Reffkin

there margin. pass I'll with I and a ever to on brokerage owners, than Compass by in But Yes, selling before, huge as more firm speak to interest is Kalani.

Of I'm coming this course, when for -- this. dynamics, they're market owners, us think there's don't the the to say, speaking now, to agents technology. took coming is or hearing the what I'm -- industry they're the natural earlier. driver I I to that addressed ones But build for say broader dynamics, the when from I are it remember, difficult $X.X whether of believe them billion brokerage saying And Compass is of by -- it'll top that, brokerage cash the incentives of on equity actually for discontinuing for consequences They the owner one would that When came the And owners is always came they agents just we and well, say, stopped unintended didn't firm. better that, the had brokerage left, Compass. money. before -- to brokerage all an be to must from agent hire there another didn't at consequence, be unforeseen then money. built this and something of

that now, platform, agents is firm. eye to agents terms their conviction I in owners, we of we the going value agents. we promise the a they brokerage the real it's can are We for -- now the the they secondly, can going And They the to is in realizing years, care to And will with agent say, trust eye to think of market they That do. this that interest cannot. of impact or merge really of then now and is that going on they can't isn't owners. that more their But have the want in look the really really the of But lot brokerage and to all me, of this what that owners with the do technology a broadly, look better. brokerage, competitive don't value so all be be But of you. the on -- around understanding brokerage say, you, advantage life built. they that an almost better financial, X a And from sell market I provide of I'll just changes brokerage about Kalani. pass level

Kalani Reelitz

our organically, few a not that from add once, just highest M&A, quarters. also our seeing as of the -- but we're things Yes, we -- only one we're just seeing advantage excitement I -- would growth mentioned

advantage -- move new M&A, markets. believe do us M&A quickly is think inorganic, that from so I organic into we to And allows

also in inventory. You presence It in markets & and that top Blum. Latter to our grow allows expand saw us that

last the accretive that I favorable you think value think, pleased ability drive we, And that that you across XX I think extremely will us see know, XX to know, expansion the over on we're brought review further we our margin look, terms lead going ability amortize continue I firmly to to in agents, more continuing forward. with for us, believe our inventory and you'll creation. deals growth our Compass months. to to partners we've And platform that are

Soham Bhonsle

you. guys, right, thank All

Operator

question Matthew next from Please Bouley line comes Your of the from go ahead. Barclays.

Unknown Analyst

Dholakia Good evening. questions. Anika my on Matt. taking for for Thanks

be think off, assume this and ahead way kind just this looking level. know, prepared it's in first where we changes that displayed may that that trend. remarks, that will X.X% Thanks. some you commissions the can curious, same, stays or you risks So, you and I'm communicated is see there that to further just it's of compression? the your you Do spoke at

Robert Reffkin

We Yes. we to on on of the we're nature it given call beyond topic, earlier. not just going the expand said what sensitive the

Unknown Analyst

you like, could on OpEx Is Thanks. there And that on maybe speak some some might of to the guys you then and persists? cost second question, that my target? macro risk And you of efforts sluggish taking? maybe if been have efforts backdrop your pause risk Okay. these this,

Kalani Reelitz

Thanks XX kind ago the last started XX cost, the mentioned of months I a think out question, take to from programs organization. run OpEx and know, to you of think in Anika we from our question. need I with Look, Yes. cost I that for cost

I think core is us for continuous competency improvement. has both and built cost what it around a

remaining about to talked is OpEx, XX% million think XXXX. The timing just our We we have of OpEx that's items, activity of the needed contracts. $XXX really executed about that achieve in core

move what's quo hard continuous starting market and improvement, to the efforts that our from exciting kind on cost think right. early status of in more our I we're is to cuts were about efficiency the needed

back -- our a standpoint, and actually we're looking AI. have have office. From have a some at, implemented automation marketing robotics are in So at and looking we

We have really a lean team Six improvement. that's Sigma driving process

a continue thing. regular to And this as do kind so we'll of

it market one, us I it we agile. be think, stop. slows to If think or turns, the don't allows down I us

actually are these both that improvements. process things make think I cut and costs also

fund we're allows So own fuel in good and making our our bad own but us it easier growth to for growth. also, everybody, and times, it

things we faster. if continue move to those types And have -- so harder, with we if of have to we'll

be every about proven our think something almost and agile, we've day. we I it's to ability think

Unknown Analyst

Good both. you Thank Great. luck.

Operator

Zelman. Instructions] comes Ryan of the from Please McKeveny of question [Operator ahead. go next Your line

Ryan McKeveny

back strong leadership Nice great & Hi. on to quarter. team. brokerage, wanted the Blum. Thank you. Obviously, go history, to I job Latter great

So some deal. of be of the just is gave settlements, would noise all of a I lower maybe congrats make talk acquisitions to more obviously lower the as lot guess there question kind of color of my about now what out how your on are litigation, aspect markets one. cetera, than I forward. right thinking kind going you're on geographies. the and maybe the is, it, well that confidence now, part much think interesting you that considering acquisition us about Gulf et second ASP And what rather significantly is priced, the That risk-reward deal to the

you. the lower-price of Are a we So terms like existing would differences be helpful. same there market about Any markets? think way Compass things in the should for degree, Thank platform to opportunity as there the thinking some in thoughts be could we of within operating productivity?

Robert Reffkin

The The market. every and other every that there, we'll other their will every me and difference serve will the we like platform just way, is and the agents ASP, better and great and them help have question. that -- on second workflows business like are operate the so and just with as And same work same the market other their platform start there let in success create sellers, -- buyers market. the tools offerings but be programs

about So that. we feel good

incredible say, transaction join the prepared question, with -- have confidence? former very I'm culture. the a an much most opportunity it the With On as confident. together. creates what as to view and -- proud -- it's much and Look, creates Compass together feel with I gave names leadership, let's don't one other respected them family. highly supporting being as as of us the coach deal make aren't happening is there train the well. we With my what to option incredible that agent, them with the creates them, shared come remarks, space in them, And our facts brokerage that success let's the in accretive opportunity firms, consistent it's hey, headlines. to And it create

in say, And so tremendous see entire for as believe a were if opportunity well, environment. challenge this that than more back look an we came I now positives year out And sure there this a I it. from of and

Ryan McKeveny

That's very helpful. if one. I apologies missed And this

last I quarter in Thank the that to expecting regard. any in updates Compass client you of think launch you. talked about first dashboard phase 'XX,

Robert Reffkin

Yes.

give them be all their not clients too be problem the their you're will company, I the so to great much to agents for a we is excited. There's and it'll edge, public almost as will can't first They the going the you as we're So pain, something a huge for it. trying go transformational from be good asking them QX, we're agents launching able that It's XX% in very believe built, going are This at on. see going buyer and because hide sure. for for thing, Thanks It compass.com to job. clients. to and agents. for or the for about stress that's be be our consumer a seller, -- see. pre-release test what of to solved, out. because will The moment because it's it's

open make houses many them they different houses end text, How And late to the with? seller, came How many had, buyer, remember valuation the negotiated they how appointments many night? had the took on? they How e-mails, they quickly agent how Do how schedule a early many performed? those has to negotiate really at the tours how they don't the even behalf.They reports had trying of all all on -- remember the the done the to time to many phone people they morning, many remember How for Compass CMAs their it remember all so all them they Collections transaction, how they on created? many they the people them?Do open that people happen. tell does they that negotiated for they things do all in at with? negotiating, they Do agent respond, how they're calls,

three and But has the it done -- buyers, first will all There do call tasks. One majority dashboard the will of for be that different one a them. be beautiful this what entire client so this of for agent the like -- a buckets. will for that put second sellers. it'll And visible visual for the timelines and in is, those events almost we receipt bucket,

managing The Gantt process in a a entire project -- upwards form. dozen to highly people. entire timeline. agents the So managers, up we talked a different are will multiple actually process be chart of about complex earlier there across Remember process months, across

banking, had with Just meet and When merger they chart, with second like when the accountants. would Gantt the all and tasks visual process, be I entire and will was investment place are the who people. That and the we documents. all lawyers does coordinate bankers in the investment the this what.The

the beginning, the in all middle, So living from place. transaction, the of one the documents to end there

the Collections, the listing kind helping really that tour sheets, it their will more. it the huge communicate will the things and end them buyers is in at be there. them that more to thing in be will believe their thing and Lastly, when the will our Again, agents compass insights, transaction, I of that house of them, open it's by edge the to for agents to refer even e-mail that of a that kind encourage the And give friends. the value. sending be all sellers, living it And the But currently digital excited feedback, CMAs, by all report, be much would the Compass the believe agent the and to we're will that.

Ryan McKeveny

to Thank Robert. hear. you. Great

Operator

from of Deutsche Bank. Your next question ahead. Ben line of Black go comes Please the

Unknown Analyst

the tape? question. you update immediate an to Hi, maybe principle recent how like and Ben. the Thanks term? impact coming thinking know, then increased the that's about some You of training needs you the my not pipe Jeff kind -- forward. NAR with of on growth what's given or commission just over the broker going splits to may front that regulatory maybe any sort increased know, Can parts, you commission an kind for give moving the or how of the have Seiner and on of red is could, long settlement, know, trends this down may for acquisitions, agent on you're extent, of talked split the taking you Just sort on increased thoughts

Robert Reffkin

blah for all that valuation, broadly, myself. believe I'm stuff but because I banker. And with and What do almost has company the here's agent blah, Kalani why into you be agents process a company here's in seller, me. What presentation. where let when can and presentation in timeline, do Again, I'm meet settlement every I'm say, for than the the an all years. I the has investment firms I been the to you answer this XX you do blah, more to everywhere. -- company. your listing do neighborhood. with for pitching can listing then you and pitching international and that the they and go relationships you? I'll brokerage I've before NAR with Historically, business of have work The want valuable agents more a the every go I network, here's will why. you? a

-- more more a we for other Here's my in international we have one for seller, the -- as exposure.At the Compass, a you have the in we insights. team. have any we brokerage And settler, brokerage. top number listing Then country. have brokerage markers go to we than are they And firm

We give have open feedback. house to you app

for evaluations CMAs, collections and tools. different have We and all the

to Compass so They the them will drop ready, and staging people to things, Dallas to to that they can go want like. home have York, also We in in. load move today And the that. their see what New your bags look want space Concierge. they need make homes. We of don't have from pick because want They up vision cost don't renovate to front

sell And it'll less for time. stage it, it it looks elegant. so so in money more you then So looks --

is, less national so those when historically, it the believe tools as than well of money include representation examples talk agreements. of agreement buyers. buyers and agents presentation because to is. with company these And as that as it where a asking some network. the sellers, the about why But that is X% historically, in presentation.How upfront X% that's weren't were than agents, the less, less compensation the and with much comes compensation you were, are much the those reason where course, words sign Compass I to moving in of -- agreement, listing to for now all Concierge the they buyer for say and buyers of will buyers I'd But to agents buyers, that's have

and really it'll want We in or to sheets dad look be for with time. where recorded -- also of going feel know, be your the phone. by well, your at the you Compass that you and company. like for that daughter so It's different here's me very here's like your it is send to it's be be Soon be and same if want can agents on other complicated it, that's Everything other any for Dashboard company can other they're text is you of work brokerage or message or and to earlier, course, to presentation -- you're a comment. could will highly it's making work listings brokerage -- I WhatsApp, are And Compass everyone It'll and buyer the help And that more Compass you your they way, company my you where Exclusives. spouse coming says, low than process well, sites. on why know a me, of mom and Collections. some a you. need you have my Coming of And, almost After on my here. has have to lot on Pinterest like exact gone, make your environment simple all is complicated Compass the to almost where you've the digital access from And tour soon. all with Client It'll tour board with links a and buyer referenced and unique just process. because, of inventory to you firm in So buyer tools sheet you, I digital all want work Private firms, going the the because inventory

them just say all will buyer to that you'll to that, good valuable a And have think value And for the brokerages proposition to because will fair a so forward, to because the empower agents for of more buyers. will seller I conversation, that pass highlight to conversation. it empower charge It need be I'll split. brokerages not on but Kalani. I them, that going

Kalani Reelitz

Robert. said Well Yes.

more for the reasons said, agents. will and Robert I as to do I all provide think, long-term think we more brokerage, value a

as think services to escrow time as expect our all the recruit Robert agents there. We opportunity grow. title as plus for tremendous and reasons should. think I mix, our we mentioned, and And there's to margin integrated do continue the and we of overall well to over set portfolio, the balance you continue right increase that a

long think of we tailwinds. see I term So lots

to from kind the headwinds perspective a and cross in other think M&A. tailwinds, I little of a to each we're right.The term, see think 'XX out term, as bit short headwinds short going about we in rate for be know, pretty you going us is

& So the including have Blum will September some acquisitions Latter it that impact. and we in did

think If do M&A headwinds then some continue. about see it will that we this geographic just And was you two-thirds of quarter, I on the think decline mix.

For other is margins remaining smaller geographic really -- offsetting East becoming third slightly the majority Coast, drag of a York the and our of on portfolio mix example, our year-over-year there. some the the part New favorable of

reasons think over time over us time, but margin headwinds other short-term, think be we expect and I more value to our of tailwinds expect for for drive out, those all definitely agents. across accretive of and to I So as kind we for can

Unknown Analyst

drive agents this given guys Great. in That the you I all this the helping maybe the succeed -- was that a almost the in benefits, industry landscape. the of and forward know regulation -- sort new you have be capabilities recent really around, have vein, going maybe times. think highlighted in under the of all given helpful. or the Maybe like Do quickly a And the and regulatory navigate brokers that been agents platform offer obviously ability you who and Robert, consolidation kind acquisitive similar to just could recent to for rules? of provide

Robert Reffkin

for a scenario hard in levels the years consolidation. to there's of record see not industry near It's Yes. where come, me to

Unknown Analyst

Got it. Really Thank helpful. you.

Operator

question Soham of up follow BTIG. ahead. a from have we go And Bhonsle Please

Soham Bhonsle

touched go listing, a it end been to the if term, of less to idea that, go the had would you I'm maybe your have get that. right. out But in shift sits a the put I'm of maybe value and of But forward, they listing around and Will question, debatable, is sort services what's curious don't there? and MLS the to Hey you long listing trying more historically that brokers, that. then view decide thoughts thinking a you think brokerage the day, private would of things guys they and the about, we then with as power the right, -- MLS there. guys, the this is sort know, I on, continue when And there something of just can go where the you it's just Robert, on we've and on syndicated the around, power because the want at portals there. agents sort about here look, off-market like to listings just

you an see in a an where So different monetize here than you question. maybe some going? to you do that That's did of curious. open-ended Is So ever opportunity just the way for before? there I'm even like listings curious,

Robert Reffkin

Yes.

valuable start well as some Private let as by Exclusives for look, sharing Soon. Coming me sellers are So why

not domain. So searchable Private they're the off-market, Exclusives public mean that in

the you the and if One value, seller, days forcing reasons it why market on you're that buyers list Because then wanted drop for aren't of a is aspirationally the to -- there. history show killer killer the to is of of you sellers value. have is number is a price

come drop, price price do there drop, then are the the You a doing buyers sharks out.

privately sellers, And publicly. responsibility fiduciary as maximize allow help so value. Exclusives to we have Private test to our market opposed the them a And you to to

-- agents can You you where you test your parties the and pricing. you in sell shouldn't your you test and pricing them have sell your have privacy bring then market home. Also, can to to can with

sell good certain want sell see to Soon are reasons others. But a less tension. you should your to lot If is sellers.Coming for of markets, What them your those the why -- they you home, do in Soon some have Coming are Private create Exclusives privacy. in so we

estate plan. a sophisticated create it's to people floor hey, what is a Coming real that lot before a trailer. say, before look right, line one add first but Movie houses. developers, open available first get photo, fully add -- do get a real showing not a a the of sell before Then more then And content, two block block attention a strategy you estate with then Soon trailers that in month a here's the floor launched month the around for people trailer with if do add you movie descriptions, you with week they the trailer, around open the trailer months Coming before They to off of at people a -- then about some think more also for then they So don't and a photo, maybe they home three the days home movie. house.It XX-second launch trailer. their trailer, a can yet, you first line plans. like later have minute a more a XX-second Soon -- the can most

months. it going to can in going now, I can. want It to live. to completely you It's offer two in. to want It's be You an come tension. you. if But show live creates put you to to go in

sales -- for marketers And sellers. to we to so a value professional these the fiduciary responsibility. as agents listing are home be That's maximize have

And appreciate wanted just I look, the question. yes to So share that. I

Soham Bhonsle

All you. right. Thank

Operator

Reffkin further conference questions. back the over I are to There turn no now will closing Robert for remarks.

Robert Reffkin

can passionate day the control have a and to put about our to you one at what starting as agents will aggressively normal what we Thank call. financial Compass control Thank even and we see, we for in we were residential lead made can is Compass will to stronger ever. than results. estate as over show today's this difficult the hard hopefully, return and we doing. And success. real you taken you. work midst market, market, greater I'm employees of very joining have It In in

Operator

Ladies for call. and that joining. gentlemen, concludes Thank today's you all

may now You disconnect.

Compass (COMP) 8 May 242024 Q1 Earnings call transcript