NEW
YORK, Jan. 15, 2025 /PRNewswire/ -- Compass,
Inc. (NYSE: COMP) ("Compass" or "the Company"), the largest
residential real estate brokerage in the
United States by sales volume1,
announces an update to its Q4 2024 and full-year 2024 outlook ahead
of its participation at the Needham Growth Conference this
morning.
"In a year where resale transactions are expected to approach a
29 year-low, Compass is on track to deliver record Adjusted EBITDA
and free cash flow for the full-year 2024, and expects to be above
the high-end of its previously announced Q4 2024 outlook. In the
quarter, Compass recruited over 650 principal agents organically,
which is a 50% improvement from the year-ago period. These results
highlight Compass' ability to continue to outperform the market,
while still maintaining OPEX discipline," said Compass Founder
& CEO Robert Reffkin.
Kalani Reelitz, CFO of Compass,
commented, "Our teams executed well in the fourth quarter, allowing
us to raise our Q4 2024 and full-year 2024 outlook provided during
our third quarter earnings call. Furthermore, our focus on OPEX
discipline has put us in a position to generate positive free cash
flow in every quarter this year including the fourth quarter, which
has historically been a negative free cash flow quarter for
us."
The Company is raising its Q4 2024 and full-year 2024 outlook
for revenue and Adjusted EBITDA and expects to be slightly below
the low-end of its previously stated full-year 2024 non-GAAP OPEX
range. Lastly, Compass is reiterating its free cash flow outlook
for full-year 2024.
Updated Q4 2024 and Full-Year 2024 Outlook:
- Q4 revenue of $1.36 billion to
$1.39 billion vs. $1.225 billion to $1.325
billion previously.
- Full-year 2024 revenue of $5.61
billion to $5.64 billion vs.
$5.47 billion to $5.57 billion previously.
- Q4 Adjusted EBITDA of $15 to
$18 million vs. $0 to $10 million
previously.
- Full-year 2024 Adjusted EBITDA of $124
million to $127 million vs.
$109 million to $119 million previously.
- The Company believes total 2024 non-GAAP OPEX will be slightly
below the low-end of its previously announced non-GAAP OPEX range
of $876 million to $896 million.
- The Company reiterates its expectation to be free cash flow
positive for the full-year 2024.
We have not reconciled our guidance for Adjusted EBITDA to GAAP
Net loss because certain expenses excluded from GAAP Net loss when
calculating Adjusted EBITDA cannot be reasonably calculated or
predicted at this time. Additionally, we have not reconciled our
guidance for non-GAAP OPEX to GAAP OPEX because certain expenses
excluded from GAAP OPEX cannot be reasonably calculated or
predicted at this time. Accordingly, reconciliations are not
available without unreasonable effort.
For a reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures on a historical basis, see
"Reconciliation of Net Loss Attributable to Compass, Inc. to
Adjusted EBITDA," "Reconciliation of GAAP OPEX to non-GAAP OPEX"
and "Reconciliation of GAAP Operating Cash Flow to Free Cash Flow"
in the financial statement tables included within our third quarter
earnings press release, dated October 30,
2024.
Disclosure Channels
Compass uses its Investor
Relations website, https://investors.compass.com, as a means of
disclosing information which may be of interest or material to its
investors and for complying with disclosure obligations under
Regulation FD. We intend to announce material information to the
public through filings with the Securities and Exchange Commission,
or the SEC, the investor relations page on our website
(www.compass.com), press releases, public conference calls, public
webcasts, our X (formerly Twitter) feed (@Compass), our Facebook
page, our LinkedIn page, our Instagram account, our YouTube
channel, and Robert Reffkin's X
(formerly Twitter) feed (@RobReffkin) and Instagram account
(@robreffkin). Accordingly, investors should monitor each of these
disclosure channels.
Preliminary Financial Information
This press release
includes statements related to our preliminary financial results
for the quarter and year ended December 31,
2024. As of the date of this press release, we have not yet
completed our financial closing procedures for the quarter and year
ended December 31, 2024 and the
Company's audited consolidated financial statements for the year
ended December 31, 2024 are not yet
available. Additionally, our independent registered public
accounting firm has not audited, reviewed, compiled or performed
any procedures with respect to the preliminary financial
information and does not express an opinion or provide any other
form of assurance with respect to this preliminary financial
information. Any statements related to the preliminary financial
information included herein may materially differ from the actual
results that will be reflected in the Company's audited
consolidated financial statements and should not be considered a
substitute for the financial information the Company will file with
the SEC in its annual report on Form 10-K for the fiscal year ended
December 31, 2024.
Safe Harbor Statement
This press release includes
forward-looking statements, which are statements other than
statements of historical facts, and statements in the future tense.
These statements include, but are not limited to, statements
regarding our future performance, including expected financial
results for the fourth quarter of 2024 and the full year of 2024,
non-GAAP OPEX and free cash flow expectations for the full year of
2024, and our expectations for operational achievements.
Forward-looking statements are based upon various estimates and
assumptions, as well as information known to us as of the date of
this press release, and are subject to risks and uncertainties,
including but not limited to: general economic conditions, economic
and industry downturns, the health of the U.S. real estate
industry, and risks generally incident to the ownership of
residential real estate; the effect of monetary policies of the
federal government and its agencies; high interest rates; ongoing
industry antitrust class action litigation (including lawsuits
filed against us) or any related regulatory activities; any
decreases in our gross commission income or the percentage of
commissions that we collect; low home inventory levels; our ability
to carefully manage our expense structure; adverse economic, real
estate or business conditions in geographic areas where our
business is concentrated and/or impacting high-end markets; our
ability to continuously innovate, improve and expand our platform,
including tools and features integrating machine learning and
artificial intelligence; our ability to expand our operations and
to offer additional integrated services; our ability to realize
expected benefits from our joint ventures; our ability to compete
successfully; our ability to attract and retain highly qualified
personnel and to recruit agents; our ability to re-accelerate our
business growth given our current expense structure; fluctuation in
our quarterly results and other operating metrics; the loss of one
or more key personnel; actions by our agents or employees that
could adversely affect our reputation and subject us to liability;
our ability to pursue acquisitions that are successful and can be
integrated into our existing operations; changes in mortgage
underwriting standards; our ability to maintain or establish
relationships with third-party service providers; the impact of
cybersecurity incidents and the potential loss of critical and
confidential information; the reliability of our fraud
detection processes and information security systems; depository
banks not honoring our escrow and trust deposits; adoption of
alternatives to full-service agents by consumers; our ability to
develop and maintain an effective system of disclosure controls and
internal control over financial reporting; covenants in our debt
agreements that may restrict our borrowing capacity or operating
activities; our abilities to use net operating losses and other tax
attributes; changes in, and our reliance on, accounting standards,
assumptions, estimates and business data; the dependability of our
platform and software; our ability to maintain our company culture;
our ability to obtain or maintain adequate insurance coverage;
processing, storage, and use of personal information and other
data, and compliance with privacy laws and regulations; natural
disasters and catastrophic events; the effect of the claims,
lawsuits, government investigations and other proceedings; changes
in federal or state laws that would require our agents to be
classified as employees; our ability to protect our intellectual
property rights and our reliance on the intellectual property
rights of third parties; the impact of having a multi-class
structure of common stock; and other risks set forth in our annual
report on Form 10-K and our subsequent quarterly reports on Form
10-Q. Significant variation from the assumptions underlying our
forward-looking statements could cause our actual results to vary,
and the impact could be significant. Accordingly, actual results
could differ materially from those predicted or implied or such
uncertainties could cause adverse effects on our results. Reported
results should not be considered as an indication of future
performance.
More information about factors that could adversely affect our
business, financial condition and results of operations, or that
could cause actual results to differ from those expressed or
implied in our forward-looking statements is included under the
captions "Risk Factors," "Legal Proceedings" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in our most recent annual report on Form 10-K and our
subsequent quarterly reports on Form 10-Q, copies of which are
available on the Investor Relations page of our website
at https://investors.compass.com/ and on the SEC website at
www.sec.gov. All information herein speaks as of the date
hereof and all forward-looking statements contained herein are
based on information available to us as of the date hereof, and we
do not assume any obligation to update these statements as a result
of new information or future events. Undue reliance should not be
placed on the forward-looking statements in this press release.
Non-GAAP Financial Measures
To supplement our
condensed consolidated financial statements, which are prepared in
accordance with GAAP, we present Adjusted EBITDA, non-GAAP OPEX,
and free cash flow, which are non-GAAP financial measures, in this
press release. We use Adjusted EBITDA, non-GAAP OPEX and free cash
flow in conjunction with GAAP measures as part of our overall
assessment of our performance, including the preparation of our
annual operating budget and quarterly forecasts, to evaluate the
effectiveness of our business strategies and to communicate with
our board of directors concerning our financial performance. We
believe Adjusted EBITDA, non-GAAP OPEX and free cash flow are also
helpful to investors, analysts and other interested parties because
they can assist in providing a more consistent and comparable
overview of our operations across our historical financial periods.
Adjusted EBITDA, non-GAAP OPEX and free cash flow have limitations
as analytical tools. Therefore, you should not consider them in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because of these limitations, you should
consider Adjusted EBITDA, non-GAAP OPEX and free cash flow
alongside other financial performance measures, including net loss
attributable to Compass, Inc., GAAP OPEX, operating cash flows and
our other GAAP measures. In evaluating Adjusted EBITDA, non-GAAP
OPEX and free cash flow, you should be aware that in the future we
may incur expenses that are the same as or similar to some of the
adjustments reflected in this press release. Our presentation of
Adjusted EBITDA, non-GAAP OPEX and free cash flow should not be
construed to imply that our future results will be unaffected by
the types of items excluded from these calculations of Adjusted
EBITDA, non-GAAP OPEX and free cash flow. Adjusted EBITDA, non-GAAP
OPEX and free cash flow are not presented in accordance with GAAP
and the use of these terms vary from others in our industry.
About Compass
Compass is the largest residential real
estate brokerage in the United
States by sales volume1. Founded in 2012 and
based in New York City, Compass
provides an end-to-end platform that empowers its residential real
estate agents to deliver exceptional service to seller and buyer
clients. The platform includes an integrated suite of cloud-based
software for customer relationship management, marketing, client
service, brokerage services and other critical functionality, all
custom-built for the real estate industry. Compass agents utilize
the platform to grow their business, save time and manage their
business more effectively. For more information on how Compass
empowers real estate agents, one of the largest groups of small
business owners in the country, please visit www.compass.com.
Investor Contact
Soham
Bhonsle
soham.bhonsle@compass.com
Media Contact
Rory
Golod
rory@compass.com
1 Compass was ranked number one real
estate brokerage in sales volume for 2023 by Real Trends in
March 2024 for the third year in a
row.
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SOURCE COMPASS