Achieves Positive Free Cash Flow In Second
Quarter
NEW
YORK, Aug. 7, 2023 /PRNewswire/ -- Compass, Inc.
(NYSE: COMP) ("Compass" or "the Company"), the largest residential
real estate brokerage in the United
States by transaction volume1, announced its
financial results for the second quarter ended June 30, 2023.
"I am pleased to say we are free cash flow positive in the
second quarter of 2023," said Robert
Reffkin, Founder and Chief Executive Officer of Compass.
"Additionally, national market share in Q2 2023 was 4.6% which
marks the third consecutive quarter of market share gains,
increasing 45 basis points over the period."
"Compass continued to enhance its proprietary end-to-end
platform with the launch of new features like Performance Tracker,
Compass GPT integration as well as 1-click Title & Escrow. The
non-GAAP Commissions expense as a percentage of revenue improved by
approximately 38 basis points from the second quarter of last year
when excluding the impact of the Agent Equity Program on the year
ago period. High levels of principal agent retention continued with
over 90% annualized retention in Q2 2023. Every month in the first
half of the year, the number of principal agents the Company lost
was less than the month before," said Reffkin.
"We had operating cash flow of $53
million and free cash flow of $51
million in Q2 2023. We have made up most of the free cash
flow deficit from Q1 2023 and we believe we are in position to
achieve our goal of being free cash flow positive for 2023," said
Kalani Reelitz, Chief Financial
Officer. "We ended the second quarter with $335 million in cash and cash equivalents
including a $150 million draw from
our revolving credit facility. Given our conviction on being
free cash flow positive, in July we repaid the entire $150 million balance outstanding on the
facility."
In the last four quarters, Compass significantly improved its
non-GAAP operating expenses with a reduction in the annualized run
rate of more than $500 million. It
expects to achieve its goal of a $900
million annualized operating expense run rate in Q4 2023.
Compass remains committed to the path to maintain its operating
expenses at $900 million in 2024 and
is focused on maintaining that level through 2025.
Q2 2023 Financial Highlights:
- Revenue decreased by 26% year-over-year to $1.5 billion as transactions declined 19% driven
by macroeconomic factors, combined with a decrease in the price of
the average Compass transaction which was in part attributable to a
shift in mix involving fewer sales in high-end markets like
California.
- Q2 2023 GAAP Net loss was $48
million, an improvement of 53% from a Net loss of
$101 million in Q2 2022. The Net loss
for Q2 2023 includes non-cash stock-based compensation expenses of
$39 million, depreciation and
amortization of $22 million, and a
$16 million restructuring charge
related to continued efficiency improvements.
- Adjusted EBITDA2 (a non-GAAP
measure) was $30 million in Q2
2023, compared to $4 million in Q2
2022. This is an improvement of $26
million while revenue declined by 26% due to macroeconomic
factors.
- Operating Cash Flow / Free Cash
Flow3 (a non-GAAP measure):
During Q2 2023, we delivered operating cash flow of $53 million and free cash flow of $51 million when considering capital
expenditures.
- Cash and cash equivalents at the end of Q2 2023 was
$335 million, which includes
$150 million of cash resulting from a
draw of our revolving credit facility in Q4 2022. The
$150 million draw was repaid in July
2023.
Q2 2023 Operational Highlights:
- Platform: The Compass end-to-end technology platform
provides real estate agents with the ability to perform their
primary workflows, from first contact to close, with a single
log-in and without leaving the Compass platform. Compass continued
the roll out of its title and escrow business integration into the
technology platform in Southern
California by expanding the offering to San Diego. We expect to complete our expansion
of this integration in Philadelphia, Washington DC, Maryland and Virginia by the end of 2023, and eventually
roll out this integration feature to all the markets where we offer
title and escrow services.
- National market share in Q2 2023 was 4.6%, up 13 basis
points sequentially from Q1 2023. This marks the third consecutive
quarter of market share gains, increasing 45 basis points over the
period.
- Agents: Average Number of Principal Agents was 13,633
for Q2 2023, an increase of 429 principal agents from Q2 2022 and
up sequentially from Q1 2023.4 Compass continued to
experience high levels of retention of principal agents with over
90%+ annual retention rate. Every month in the first half of the
year, the number of principal agents we lost was less than the
month before. July, while not yet closed, looks to continue the
trend. The number of NAR agents is down from its peak of 1.6
million in October 2022.
- Transactions: Compass agents closed 54,207 Total
Transactions in Q2 2023, a decline of 19% compared to Q2 2022.
Transactions for the entire U.S. residential real estate market
declined 21% for the same period.5
- Gross Transaction Value ("GTV")6 was
$56.8 billion in Q2 2023, a decline
of 26% compared to Q2 2022.
Additional information can be found in the Company's Q2 2023
Earnings Presentation, which can be found in the Investor Relations
section of the Compass website at
https://investors.compass.com.
Outlook
Q3 2023 Outlook:
- Revenue of $1.3 billion to
$1.4 billion
- Adjusted EBITDA of $15
million to $35 million
- Free cash flow positive
FY 2023 Outlook:
- Non-GAAP Operating expense range of $850-$950
million.7
- Free cash flow positive
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 Operating expense after commissions and other
related expenses to GAAP Operating expenses because certain
expenses excluded from GAAP Operating expenses 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 Operating Expenses to
Non-GAAP Operating Expenses" and "Reconciliation of GAAP Operating
Cash Flow to Free Cash Flow" in the financial statement tables
included within this press release.
Conference Call Information
Management will conduct a
conference call to discuss the second quarter 2023 results as well
as outlook at 5:00 p.m. ET on Monday,
August 7, 2023. The conference call will be accessible via
the Internet on the Compass Investor Relations website
https://investors.compass.com. You can also access the audio
webcast via the following link: Compass Inc. Q2 2023 Earnings
Conference Call.
An audio recording of the conference call will be available for
replay shortly after the call's completion. To access the replay,
visit the Events and Presentations section on the Compass Investor
Relations website at https://investors.compass.com.
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 Twitter feed (@Compass), our Facebook page, our
LinkedIn page, our Instagram account, our YouTube channel, and
Robert Reffkin's Twitter feed
(@RobReffkin) and Instagram account (@robreffkin). Accordingly,
investors should monitor each of these disclosure channels.
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 third quarter and full year of 2023, planned
operating expense and cash flow levels for the third quarter and
full year of 2023, 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 macroeconomic
conditions in the U.S. and globally (e.g., inflation), economic and
industry downturns, the health of the U.S. real estate industry,
and risks generally incident to the ownership of residential real
estate, including seasonal and cyclical trends (e.g., increases in
mortgage interest rates, continued limited inventory, slowed
consumer demand, reduced home affordability and declines in price
appreciation and home prices); current interest rates and changes
in prevailing interest rates; our ability to continuously innovate,
improve and expand our platform; the dependability of our platform
and software; our ability to attract new agents and retain current
agents or increase agents' utilization of our platform; our ability
to expand our brokerage and adjacent services businesses; our
ability to grow revenue from adjacent services at our anticipated
rate; our ability to achieve expected benefits from our mortgage
and title and escrow businesses, including our joint ventures; our
rapid growth and rate of growth; our ability to carefully manage
our expense structure; our net losses and ability to achieve or
sustain profitability in the future; covenants in our debt
agreements that may restrict our borrowing capacity or operating
activities; our ability to compete successfully in the markets in
which we operate; the effect of monetary policies of the federal
government and its agencies; any decreases in our gross commission
income or the percentage of commissions that we collect;
fluctuation of our quarterly results and other operating metrics;
our ability to successfully pursue acquisitions and integrate
target companies; the loss of key personnel; our ability to attract
and retain highly qualified personnel and to recruit agents;
reliability of our information security systems; the impact of
cybersecurity incidents and the potential loss of critical and
confidential information; identification of material weaknesses in
our internal control over financial reporting and our ability to
remediate such material weaknesses; compliance with privacy laws;
the effect of the claims, lawsuits, government investigations and
other proceedings that we are subject to from time to time; our
ability to protect our intellectual property rights; impact of
having a multi-class structure of common stock; natural disasters
and catastrophic events; and other general market, political,
economic, and business conditions. 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
results of operations, financial condition and prospects, 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
Operating expenses, and Free Cash Flow, which are non-GAAP
financial measures, in this press release. We use Adjusted EBITDA,
Non-GAAP Operating expenses 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 Operating expenses 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 Operating expenses 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 Operating expenses and Free Cash
Flow alongside other financial performance measures, including net
loss attributable to Compass, Inc., GAAP Operating expenses,
operating cash flows and our other GAAP measures. In evaluating
Adjusted EBITDA, Non-GAAP Operating expenses 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
Operating expenses 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
Operating expenses and Free Cash Flow. Adjusted EBITDA, Non-GAAP
Operating expenses and Free Cash Flow are not presented in
accordance with GAAP and the use of these terms vary from others in
our industry. Reconciliations of these non-GAAP measures have been
provided in the financial statement tables included within this
press release, and investors are encouraged to review these
reconciliations.
About Compass
Compass is the largest residential real
estate brokerage in the United
States by transaction volume. 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.
1 Compass was ranked number one in sales volume
for 2022 by Real Trends in March 2023
for the second year in a row.
2 A reconciliation of GAAP to Non-GAAP measures can
be found within the financial statement tables included within this
press release.
3 A reconciliation of GAAP to Non-GAAP measures can
be found within the financial statement tables included within this
press release.
4 During the first quarter of 2023, we began to
utilize an updated methodology for tracking and reporting our agent
statistics. The Average Number of Principal Agents and year over
year growth reported in this press release is based on the updated
methodology.
5 We calculate Total Transactions by taking the sum
of all transactions closed on the Compass platform in which our
agent represents the buyer or seller in the purchase or sale of a
home (excluding rental transactions). We include a single
transaction twice when one or more Compass agents represent both
the buyer and seller in any given transaction.
6 Gross Transaction Value includes a de minimis
number of new development and commercial brokerage
transactions.
7 Non-GAAP Operating expenses exclude Commissions
and other related expenses, Depreciation and amortization,
Stock-based compensation and other expenses excluded from the
Company's calculation of Adjusted EBITDA. We calculate non-GAAP
Operating expense annualized run rate by taking the sum of the
quarter's non-GAAP sales and marketing, operations and support,
research and development, and general and administration expenses
and multiplying it by four.
Compass, Inc.
|
Condensed Consolidated Balance
Sheets
|
(In millions, unaudited)
|
|
|
|
|
|
June 30, 2023
|
|
December 31, 2022
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
335.4
|
|
$
361.9
|
Accounts receivable,
net of allowance
|
58.4
|
|
36.6
|
Compass Concierge
receivables, net of allowance
|
36.4
|
|
42.9
|
Other current
assets
|
63.7
|
|
76.5
|
Total current
assets
|
493.9
|
|
517.9
|
Property and equipment,
net
|
171.0
|
|
192.5
|
Operating lease
right-of-use assets
|
439.2
|
|
483.2
|
Intangible assets,
net
|
86.4
|
|
99.3
|
Goodwill
|
203.8
|
|
198.4
|
Other non-current
assets
|
30.3
|
|
41.8
|
Total assets
|
$
1,424.6
|
|
$
1,533.1
|
Liabilities and Stockholders'
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
23.3
|
|
$
28.1
|
Commissions
payable
|
97.0
|
|
48.0
|
Accrued expenses and
other current liabilities
|
108.6
|
|
164.9
|
Current lease
liabilities
|
101.4
|
|
94.6
|
Concierge credit
facility
|
30.4
|
|
31.9
|
Revolving credit
facility
|
150.0
|
|
150.0
|
Total current
liabilities
|
510.7
|
|
517.5
|
Non-current lease
liabilities
|
448.1
|
|
486.5
|
Other non-current
liabilities
|
14.1
|
|
8.4
|
Total
liabilities
|
972.9
|
|
1,012.4
|
Stockholders'
equity
|
|
|
|
Common stock
|
—
|
|
—
|
Additional paid-in
capital
|
2,842.3
|
|
2,713.6
|
Accumulated
deficit
|
(2,394.7)
|
|
(2,196.5)
|
Total Compass, Inc.
stockholders' equity
|
447.6
|
|
517.1
|
Non-controlling
interest
|
4.1
|
|
3.6
|
Total stockholders'
equity
|
451.7
|
|
520.7
|
Total liabilities and
stockholders' equity
|
$
1,424.6
|
|
$
1,533.1
|
Compass, Inc.
|
Condensed Consolidated Statements of
Operations
|
(In millions, except share and per share data,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$ 1,494.0
|
|
$ 2,020.1
|
|
$ 2,451.2
|
|
$ 3,417.1
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Commissions and other
related expense (1)
|
1,224.0
|
|
1,652.9
|
|
2,014.9
|
|
2,799.3
|
|
Sales and
marketing (1)
|
113.3
|
|
154.9
|
|
228.6
|
|
299.9
|
|
Operations and
support (1)
|
83.0
|
|
104.9
|
|
164.1
|
|
213.8
|
|
Research and
development (1)
|
45.4
|
|
107.2
|
|
94.3
|
|
215.4
|
|
General and
administrative (1)
|
34.7
|
|
55.2
|
|
69.1
|
|
110.5
|
|
Restructuring
costs
|
15.9
|
|
18.9
|
|
26.0
|
|
18.9
|
|
Depreciation and
amortization
|
22.3
|
|
25.4
|
|
47.2
|
|
44.1
|
|
Total
operating expenses
|
1,538.6
|
|
2,119.4
|
|
2,644.2
|
|
3,701.9
|
Loss from
operations
|
(44.6)
|
|
(99.3)
|
|
(193.0)
|
|
(284.8)
|
Investment income,
net
|
2.5
|
|
0.3
|
|
5.4
|
|
0.4
|
Interest
expense
|
(4.1)
|
|
(0.7)
|
|
(7.3)
|
|
(1.4)
|
Loss before income
taxes and equity in loss of unconsolidated entity
|
(46.2)
|
|
(99.7)
|
|
(194.9)
|
|
(285.8)
|
Income tax
benefit
|
—
|
|
1.5
|
|
—
|
|
1.4
|
Equity in loss of
unconsolidated entity
|
(0.7)
|
|
(2.9)
|
|
(2.2)
|
|
(5.0)
|
Net loss
|
(46.9)
|
|
(101.1)
|
|
(197.1)
|
|
(289.4)
|
Net (income) loss
attributable to non-controlling interests
|
(0.9)
|
|
(0.1)
|
|
(1.1)
|
|
0.2
|
Net loss attributable
to Compass, Inc.
|
$
(47.8)
|
|
$
(101.2)
|
|
$
(198.2)
|
|
$
(289.2)
|
Net loss per share
attributable to Compass, Inc., basic and diluted
|
$
(0.10)
|
|
$
(0.24)
|
|
$
(0.44)
|
|
$
(0.69)
|
Weighted-average shares
used in computing net loss per share attributable to Compass, Inc.,
basic and diluted
|
460,960,349
|
|
427,987,083
|
|
455,538,666
|
|
421,719,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total stock-based
compensation expense included in the condensed consolidated
statements of operations is as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Commissions and other
related expense
|
$
—
|
|
$
6.4
|
|
$
11.6
|
|
$
23.4
|
|
Sales and
marketing
|
9.0
|
|
11.2
|
|
17.6
|
|
21.9
|
|
Operations and
support
|
4.1
|
|
4.1
|
|
7.1
|
|
8.4
|
|
Research and
development
|
12.6
|
|
18.9
|
|
23.0
|
|
35.8
|
|
General and
administrative
|
13.3
|
|
18.6
|
|
24.6
|
|
33.5
|
|
Total stock-based
compensation expense
|
$
39.0
|
|
$
59.2
|
|
$
83.9
|
|
$
123.0
|
Compass, Inc.
|
Condensed Consolidated Statements of Cash
Flows
|
(In millions, unaudited)
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
Operating Activities
|
|
|
|
Net loss
|
$(197.1)
|
|
$(289.4)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
47.2
|
|
44.1
|
Stock-based
compensation
|
83.9
|
|
123.0
|
Equity in loss of
unconsolidated entity
|
2.2
|
|
5.0
|
Change in acquisition
related contingent consideration
|
0.6
|
|
(0.3)
|
Bad debt
expense
|
2.8
|
|
3.4
|
Amortization of debt
issuance costs
|
0.4
|
|
0.5
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(24.1)
|
|
(14.5)
|
Compass Concierge
receivables
|
5.9
|
|
(26.9)
|
Other current
assets
|
12.4
|
|
(15.0)
|
Other non-current
assets
|
9.4
|
|
(3.3)
|
Operating lease
right-of-use assets and operating lease liabilities
|
9.5
|
|
3.9
|
Accounts
payable
|
(4.9)
|
|
10.6
|
Commissions
payable
|
49.0
|
|
31.9
|
Accrued expenses and
other liabilities
|
0.6
|
|
6.7
|
Net cash used in
operating activities
|
(2.2)
|
|
(120.3)
|
|
|
|
|
Investing Activities
|
|
|
|
Investment in
unconsolidated entity
|
—
|
|
(12.5)
|
Capital
expenditures
|
(6.1)
|
|
(41.4)
|
Payments for
acquisitions, net of cash acquired
|
—
|
|
(15.0)
|
Net cash used in
investing activities
|
(6.1)
|
|
(68.9)
|
|
|
|
|
Financing Activities
|
|
|
|
Proceeds from exercise
of stock options
|
2.9
|
|
7.7
|
Proceeds from issuance
of common stock under Employee Stock Purchase Plan
|
1.4
|
|
—
|
Taxes paid related to
net share settlement of equity awards
|
(10.3)
|
|
(13.8)
|
Proceeds from drawdowns
on Concierge credit facility
|
29.3
|
|
26.7
|
Repayments of drawdowns
on Concierge credit facility
|
(30.8)
|
|
(12.5)
|
Proceeds from drawdowns
on Revolving credit facility
|
75.0
|
|
—
|
Repayments of drawdowns
on Revolving credit facility
|
(75.0)
|
|
—
|
Payments related to
acquisitions, including contingent consideration
|
(10.2)
|
|
(6.7)
|
Other
|
(0.5)
|
|
—
|
Net cash (used in)
provided by financing activities
|
(18.2)
|
|
1.4
|
Net decrease in cash
and cash equivalents
|
(26.5)
|
|
(187.8)
|
Cash and cash
equivalents at beginning of period
|
361.9
|
|
618.3
|
Cash and cash
equivalents at end of period
|
$
335.4
|
|
$
430.5
|
Compass, Inc.
|
Reconciliation of Net Loss Attributable to Compass,
Inc. to Adjusted EBITDA
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss attributable
to Compass, Inc.
|
$(47.8)
|
|
$(101.2)
|
|
$(198.2)
|
|
$(289.2)
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
22.3
|
|
25.4
|
|
47.2
|
|
44.1
|
Investment income,
net
|
(2.5)
|
|
(0.3)
|
|
(5.4)
|
|
(0.4)
|
Interest
expense
|
4.1
|
|
0.7
|
|
7.3
|
|
1.4
|
Stock-based
compensation
|
39.0
|
|
59.2
|
|
83.9
|
|
123.0
|
Income tax
benefit
|
—
|
|
(1.5)
|
|
—
|
|
(1.4)
|
Restructuring
costs
|
15.9
|
|
18.9
|
|
26.0
|
|
18.9
|
Acquisition-related expenses(1)
|
(0.9)
|
|
3.0
|
|
2.2
|
|
11.1
|
Adjusted
EBITDA
|
$ 30.1
|
|
$ 4.2
|
|
$
(37.0)
|
|
$
(92.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For the three months ended
June 30, 2023 and 2022, acquisition-related expenses includes
a $0.2 million loss and a $0.7
million gain, respectively, as a
result of changes in the fair value of contingent consideration and
a $1.1 million gain and a $3.7
million expense, respectively, related to acquisition
consideration treated as compensation expense over the underlying
retention periods. For the six months ended June 30, 2023 and
2022, acquisition-related expenses includes a $0.2 million loss
and a $0.3 million
gain, respectively, as a result of
changes in the fair value of contingent consideration and expense
of $2.0 million
and $11.4
million,
respectively, related to acquisition consideration treated as
compensation expense over the underlying retention
periods.
|
Compass, Inc.
|
Reconciliation of Operating Cash Flows to Free Cash
Flow
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
(used in) operating activities
|
$53.3
|
|
$
(9.3)
|
|
$(2.2)
|
|
$(120.3)
|
Less:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(2.6)
|
|
(20.6)
|
|
(6.1)
|
|
(41.4)
|
Free cash
flow
|
$50.7
|
|
$(29.9)
|
|
$(8.3)
|
|
$(161.7)
|
Compass, Inc.
|
Reconciliation of GAAP Operating Expenses to Non-GAAP
Operating Expenses
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP Commissions and
other related expense
|
$1,224.0
|
|
$1,652.9
|
|
$2,014.9
|
|
$2,799.3
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
—
|
|
(6.4)
|
|
(11.6)
|
|
(23.4)
|
Non-GAAP Commissions
and other related expense
|
$1,224.0
|
|
$1,646.5
|
|
$2,003.3
|
|
$2,775.9
|
|
|
|
|
|
|
|
|
GAAP Sales and
marketing
|
$
113.3
|
|
$
154.9
|
|
$
228.6
|
|
$
299.9
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(9.0)
|
|
(11.2)
|
|
(17.6)
|
|
(21.9)
|
Non-GAAP Sales and
marketing
|
$
104.3
|
|
$
143.7
|
|
$
211.0
|
|
$
278.0
|
|
|
|
|
|
|
|
|
GAAP Operations and
support
|
$ 83.0
|
|
$
104.9
|
|
$
164.1
|
|
$
213.8
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(4.1)
|
|
(4.1)
|
|
(7.1)
|
|
(8.4)
|
Acquisition-related
expenses
|
0.9
|
|
(3.0)
|
|
(2.2)
|
|
(11.1)
|
Non-GAAP Operations and
support
|
$ 79.8
|
|
$ 97.8
|
|
$
154.8
|
|
$
194.3
|
|
|
|
|
|
|
|
|
GAAP Research and
development
|
$ 45.4
|
|
$
107.2
|
|
$ 94.3
|
|
$
215.4
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(12.6)
|
|
(18.9)
|
|
(23.0)
|
|
(35.8)
|
Non-GAAP Research and
development
|
$ 32.8
|
|
$ 88.3
|
|
$ 71.3
|
|
$
179.6
|
|
|
|
|
|
|
|
|
GAAP General and
administrative
|
$ 34.7
|
|
$ 55.2
|
|
$ 69.1
|
|
$
110.5
|
Adjusted to exclude the
following:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
(13.3)
|
|
(18.6)
|
|
(24.6)
|
|
(33.5)
|
Non-GAAP General and
administrative
|
$ 21.4
|
|
$ 36.6
|
|
$ 44.5
|
|
$ 77.0
|
Compass, Inc.
|
Non-GAAP Operating Expenses Excluding Commissions and
Other Related Expense
|
(In millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
2022
|
|
June 30,
2022
|
|
September 30,
2022
|
|
December 31,
2022
|
|
March 31,
2023
|
|
June 30,
2023
|
Sales and
marketing
|
$
134.3
|
|
$
143.7
|
|
$
133.6
|
|
$
121.5
|
|
$
106.7
|
|
$
104.3
|
Operations and
support
|
96.5
|
|
97.8
|
|
89.6
|
|
81.7
|
|
75.0
|
|
79.8
|
Research and
development
|
91.3
|
|
88.3
|
|
72.1
|
|
51.1
|
|
38.5
|
|
32.8
|
General and
administrative
|
40.4
|
|
36.6
|
|
32.7
|
|
27.5
|
|
23.1
|
|
21.4
|
Total non-GAAP
operating expenses excluding
commissions and other related expense
|
$
362.5
|
|
$
366.4
|
|
$
328.0
|
|
$
281.8
|
|
$
243.3
|
|
$
238.3
|
View original
content:https://www.prnewswire.com/news-releases/compass-inc-reports-second-quarter-2023-results-301895001.html
SOURCE Compass