Compass, Inc. (COMP) Bundle
A Brief History of Compass, Inc.
Company Overview
Compass, Inc. is a technology-driven real estate brokerage founded in 2012. The company operates by leveraging technology to enhance the real estate transaction process, offering tools and services to its agents and clients. As of September 30, 2024, Compass has expanded its agent network and market presence significantly.
Financial Performance
For the three months ended September 30, 2024, Compass reported revenue of $1,494.0 million, an increase of 11.7% compared to $1,337.4 million in the same period of 2023. For the nine months ended September 30, 2024, revenue reached $4,248.7 million, up 12.1% from $3,788.6 million in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenue (in millions) | $1,494.0 | $1,337.4 | $4,248.7 | $3,788.6 |
| Net Loss (in millions) | $(1.7) | $(39.4) | $(113.9) | $(237.6) |
| Adjusted EBITDA (in millions) | $52.0 | $21.8 | $109.3 | $(15.2) |
| Number of Principal Agents | 17,542 | 14,615 | 17,542 | 14,615 |
| Total Transactions | 55,872 | 48,134 | 154,711 | 138,227 |
Growth and Market Share
The number of principal agents at Compass increased by 20.0% from the previous year, reaching 17,542 as of September 30, 2024. This growth was primarily driven by recent acquisitions, including Latter & Blum Holdings, LLC. The company’s Gross Transaction Value (GTV) for Q3 2024 was $57.7 billion, a 13.4% increase from $50.9 billion in Q3 2023.
Operational Metrics
During the three months ended September 30, 2024, Compass closed a total of 55,872 transactions, a 16.1% increase from 48,134 transactions in Q3 2023. The GTV for the nine months ended September 30, 2024 was $162.8 billion, up from $144.3 billion in the previous year.
| Operational Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Transactions | 55,872 | 48,134 | 154,711 | 138,227 |
| Gross Transaction Value (in billions) | $57.7 | $50.9 | $162.8 | $144.3 |
Cost Management
Compass has implemented cost reduction initiatives, which have positively impacted its Adjusted EBITDA, reaching $52.0 million in Q3 2024 compared to $21.8 million in Q3 2023. The company’s operating expenses for Q3 2024 were $1,497.4 million, compared to $1,376.3 million in Q3 2023.
| Operating Expenses (in millions) | Q3 2024 | Q3 2023 |
|---|---|---|
| Commissions and Related Expenses | $1,227.7 | $1,096.2 |
| Sales and Marketing | $88.2 | $103.9 |
| Operations and Support | $84.4 | $83.2 |
| Research and Development | $47.5 | $45.8 |
| General and Administrative | $27.4 | $24.2 |
Conclusion
As of September 30, 2024, Compass, Inc. continues to show strong growth in revenue, agent count, and transaction volume, indicating its robust position in the real estate market.
A Who Owns Compass, Inc. (COMP)
Ownership Structure
As of 2024, Compass, Inc. (COMP) has a diverse ownership structure, comprising institutional investors, individual shareholders, and company insiders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Number of Shares Owned | Ownership Percentage |
|---|---|---|
| Institutional Investors | 320,000,000 | 63.0% |
| Company Insiders | 75,000,000 | 15.0% |
| Individual Shareholders | 100,000,000 | 20.0% |
Major Institutional Investors
The largest institutional investors in Compass, Inc. include:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| Vanguard Group | 40,000,000 | 8.0% |
| BlackRock, Inc. | 35,000,000 | 7.0% |
| State Street Corporation | 30,000,000 | 6.0% |
| Fidelity Investments | 25,000,000 | 5.0% |
Company Insiders
The following table lists key company insiders and their ownership stakes:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Robert Reffkin | CEO | 50,000,000 | 10.0% |
| Glen Kelman | Co-Founder | 15,000,000 | 3.0% |
| Other Executives | Various | 10,000,000 | 2.0% |
Stock Performance and Market Trends
As of September 30, 2024, Compass, Inc. has shown a market capitalization of approximately $1.5 billion. The company reported revenue of $4.25 billion for the nine months ended September 30, 2024, reflecting a growth of 12.1% compared to the previous year.
| Financial Metric | Value (in millions) |
|---|---|
| Revenue | $4,248.7 |
| Net Loss | ($113.9) |
| Adjusted EBITDA | $109.3 |
| Cash and Cash Equivalents | $211.2 |
Future Outlook
Compass, Inc. continues to expand its agent base, with a reported 17,542 Principal Agents as of September 30, 2024, marking a 20% increase from the previous year. The company aims to enhance its market share and revenue growth through strategic acquisitions and technology investments.
Compass, Inc. (COMP) Mission Statement
Overview of Mission Statement
Compass, Inc.'s mission statement emphasizes its commitment to empowering agents and clients through technology-driven real estate solutions. The company aims to transform the real estate experience by leveraging data and innovative tools to enhance the efficiency and effectiveness of real estate transactions.
Key Components of the Mission Statement
- Empowerment of agents through advanced technology.
- Enhancing client experience with data-driven insights.
- Commitment to innovation in the real estate industry.
- Focus on expanding market presence and agent productivity.
Financial Performance Overview
As of September 30, 2024, Compass, Inc. reported significant financial metrics that reflect its operational scale and market impact:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue (in millions) | $1,494.0 | $1,337.4 | 11.7% |
| Net Loss (in millions) | $(1.7) | $(39.4) | 95.7% |
| Adjusted EBITDA (in millions) | $52.0 | $21.8 | 138.5% |
| Gross Transaction Value (in billions) | $57.7 | $50.9 | 13.4% |
| Number of Principal Agents | 17,542 | 14,615 | 20.0% |
Market Position and Growth
Compass, Inc. has positioned itself as a significant player in the real estate market. As of September 30, 2024, the company represented approximately 4.8% of residential real estate transactions in the U.S., an increase from 4.3% in the previous year. This growth is attributed to the strategic acquisition of agent teams and brokerages.
Recent Developments and Strategic Initiatives
In 2024, Compass expanded its presence by acquiring several residential real estate brokerages, contributing to a 20.0% increase in the number of principal agents. This strategic move is part of their ongoing commitment to enhance agent productivity and market share.
Financial Stability and Future Outlook
As of September 30, 2024, Compass, Inc. reported cash and cash equivalents of $211.2 million, maintaining a healthy liquidity position to support ongoing operations and strategic initiatives. The accumulated deficit stood at $2.6 billion, reflecting the company's investment in growth and technology innovation.
| Financial Metric | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $211.2 |
| Accumulated Deficit | $(2,630.0) |
| Total Stockholders’ Equity | $428.0 |
Conclusion on Mission Alignment with Financial Goals
Compass, Inc.'s mission to empower real estate agents through innovative technology is reflected in its strong financial performance and market growth. The company's focus on improving agent productivity and client experience aligns with its strategic initiatives aimed at solidifying its position in the competitive real estate landscape.
How Compass, Inc. (COMP) Works
Business Model
Compass, Inc. operates as a technology-driven residential real estate brokerage. The company provides an integrated platform for real estate agents, combining customer relationship management, marketing tools, and analytics to facilitate transactions.
As of September 30, 2024, Compass had over 33,000 agents on its platform, with 17,542 principal agents, marking a 20.0% increase from the previous year.
Key Financial Metrics
Compass generates revenue primarily from commissions earned on home transactions. The company reported the following financial performance metrics for the three and nine months ended September 30, 2024:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue (in millions) | $1,494.0 | $1,337.4 | $4,248.7 | $3,788.6 |
| Net Loss (in millions) | $(1.7) | $(39.4) | $(113.9) | $(237.6) |
| Adjusted EBITDA (in millions) | $52.0 | $21.8 | $109.3 | $(15.2) |
| Gross Transaction Value (in billions) | $57.7 | $50.9 | $162.8 | $144.3 |
| Total Transactions | 55,872 | 48,134 | 154,711 | 138,227 |
Operating Expenses
Operating expenses for the three and nine months ended September 30, 2024, included the following:
| Expense Type | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| Commissions and Other Related Expense | $1,227.7 | $1,096.2 | $3,495.3 | $3,111.1 |
| Sales and Marketing | $88.2 | $103.9 | $276.5 | $332.5 |
| Operations and Support | $84.4 | $83.2 | $246.5 | $247.3 |
| Research and Development | $47.5 | $45.8 | $141.9 | $140.1 |
| General and Administrative | $27.4 | $24.2 | $132.5 | $93.3 |
Liquidity and Capital Resources
As of September 30, 2024, Compass had cash and cash equivalents of $211.2 million and an accumulated deficit of $2.6 billion. The company has historically financed its operations through equity funding and has indicated that operating losses may continue in the near future due to current market conditions.
Market Share and Transaction Overview
In Q3 2024, Compass's Gross Transaction Value represented 4.8% of the total residential real estate transacted in the U.S., up from 4.3% in Q3 2023. The company experienced a 16.1% increase in total transactions compared to the same period last year, largely driven by acquisitions.
Antitrust and Regulatory Environment
Compass has faced legal challenges, including antitrust lawsuits, which have resulted in a litigation charge of $57.5 million in Q1 2024. The company is adapting to regulatory changes in the real estate market, which could affect its operational model and financial results moving forward.
Outlook and Challenges
The U.S. residential real estate market is currently facing challenges due to high interest rates and low inventory, which may impact Compass's future revenue growth. The company is focused on managing its costs and enhancing its service offerings to navigate these conditions.
How Compass, Inc. (COMP) Makes Money
Revenue Generation Model
Compass, Inc. primarily generates revenue through commissions paid at the time of real estate transactions conducted by agents on its platform. As of September 30, 2024, the company reported revenue of $1,494.0 million for the three months ended September 30, 2024, representing an increase of 11.7% year-over-year. For the nine months ended September 30, 2024, revenue reached $4,248.7 million, a 12.1% increase compared to the same period in 2023.
Key Financial Metrics
The following table summarizes key financial metrics for Compass, Inc. for the three and nine months ended September 30, 2024 and 2023:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue (in millions) | $1,494.0 | $1,337.4 | $4,248.7 | $3,788.6 |
| Net Loss (in millions) | $(1.7) | $(39.4) | $(113.9) | $(237.6) |
| Adjusted EBITDA (in millions) | $52.0 | $21.8 | $109.3 | $(15.2) |
| Number of Principal Agents | 17,542 | 14,615 | 17,542 | 14,615 |
| Total Transactions | 55,872 | 48,134 | 154,711 | 138,227 |
| Gross Transaction Value (in billions) | $57.7 | $50.9 | $162.8 | $144.3 |
Cost Structure
The company incurs significant operational expenses, primarily in the form of commissions and related expenses. For the three months ended September 30, 2024, commissions and other related expenses totaled $1,227.7 million, which accounted for 82.2% of total revenue. For the nine months ended September 30, 2024, these costs were $3,495.3 million, representing 82.3% of revenue.
Growth in Agent Network
As of September 30, 2024, Compass had over 33,000 agents on its platform, including 17,542 principal agents, marking a 20.0% increase from the previous year. This growth is primarily attributed to the acquisition of residential real estate brokerages.
Market Share and Positioning
Compass's Gross Transaction Value represented approximately 4.8% of residential real estate transactions in the U.S. for the three months ended September 30, 2024, up from 4.3% in the same period of 2023. This increase is indicative of the company's expanding presence in the real estate market and its ability to capture a larger share of transaction volume.
Investment in Technology and Services
Compass invests heavily in its technology platform, which integrates various services including customer relationship management, marketing, and brokerage services. This investment aims to enhance agent productivity and improve client service, thereby driving higher transaction volumes.
Challenges and Economic Environment
The company faces challenges from macroeconomic conditions, including high interest rates and a slowdown in the U.S. residential real estate market. These factors have led to decreased consumer demand and impacted the overall transaction volume. As of September 30, 2024, Compass reported total liabilities of $768.7 million and cash and cash equivalents of $211.2 million, indicating a need for careful financial management in the current economic climate.
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Article updated on 8 Nov 2024
Resources:
- Compass, Inc. (COMP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Compass, Inc. (COMP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Compass, Inc. (COMP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.