Financial Data and Key Metrics Changes - Revenue in Q1 increased by 28.7% year over year, reaching $1.36 billion, while adjusted EBITDA was a record $15.6 million, a significant improvement from a loss of $20.1 million in the previous year [4][20][25] - Total transactions increased by 27.8%, with organic transactions up 7.3%, contrasting with a 2.1% decline in the overall market [4][21] - The company generated $19.5 million in free cash flow, marking a new record for Q1 and an improvement from $5.9 million in the same quarter last year [26] Business Line Data and Key Metrics Changes - The title and escrow business saw strong momentum, with attach rates up 695 basis points year over year [6] - Principal agent retention grew to 96.6%, an increase of 30 basis points year over year, indicating strong agent loyalty [5] Market Data and Key Metrics Changes - Market share increased to 6%, up 125 basis points year over year and 95 basis points from Q4 [22] - Gross transaction value reached $52 billion, reflecting a 30.7% increase from the previous year [22] Company Strategy and Development Direction - The company aims to control organic operating expenses at a growth rate of 3% to 4% annually while expanding its agent base and enhancing agent productivity through its platform [14][15] - The acquisition of Christie's International Real Estate is expected to empower independent brokerages and enhance the company's market presence [6][24] Management's Comments on Operating Environment and Future Outlook - Management noted that the volatility in March was due to market uncertainty related to tariff discussions, but they expect a recovery in transactions as stability returns to the market [20][44] - The company believes that the demand for homes is merely deferred rather than eliminated, anticipating that full-year transactions will align with previous expectations if market stability is maintained [44] Other Important Information - The company completed the acquisition of Christie's International Real Estate on January 13, 2025, which is expected to positively impact financial metrics and operational synergies [24][27] - The weighted average share count for Q1 was 550 million, with an expected increase due to the acquisition-related share issuance [27] Q&A Session Summary Question: What was revenue growth tracking ahead of the disruption in March? - Management indicated that revenue was tracking close to the midpoint of guidance before the March volatility, with April tracking expectations [40] Question: What is the latest with NAR's clear cooperation policy? - Management confirmed that the three-phase marketing strategy complies with NAR's updated policies and emphasizes homeowner choice [50][52] Question: How is the company addressing agent recruitment post-NAR changes? - Management reported strong organic recruitment, with 700 new agents added in Q1, indicating continued demand for the company's value proposition [61] Question: What are the churn trends in the quarter? - Churn was in line with historical levels, with no significant changes noted, and the company added agents instead of experiencing churn from the Christie's acquisition [75] Question: What does success look like for the three-phase marketing strategy? - Success is defined by agents continuing to differentiate themselves, gaining more listings, and achieving better terms for sellers [73][74]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 increased by 28.7% year over year, reaching $1.36 billion, while adjusted EBITDA was a record $15.6 million, a significant improvement from a loss of $20.1 million in the previous year [20][25][26] - Total transactions increased by 27.8%, with organic transactions up 7.3%, significantly outperforming the overall market, which saw a decline of 2.1% [4][21] - The company generated $19.5 million in free cash flow, marking a new record for Q1 and an improvement from $5.9 million in Q1 2024 [26] Business Line Data and Key Metrics Changes - The title and escrow business showed strong momentum, with attach rates up 695 basis points year over year [6] - Principal agent retention grew to 96.6%, reflecting the company's ability to retain talent in a competitive market [5] Market Data and Key Metrics Changes - Compass' market share increased to 6%, up 125 basis points year over year, indicating a strong competitive position [21] - Gross transaction value reached $52 billion, a 30.7% increase from the previous year, driven by a combination of increased transactions and a slight rise in average selling price [21] Company Strategy and Development Direction - The company aims to control organic operating expenses at a growth rate of 3% to 4% annually while expanding its market share through organic growth and M&A activities [14][15] - The acquisition of Christie's International Real Estate is expected to enhance the company's market position and provide access to new segments [6][24] - The three-phase marketing strategy is designed to empower agents and provide homeowners with more marketing choices, which is expected to drive future growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outpace the market despite recent volatility due to external factors such as tariff discussions [20][36] - The company anticipates continued growth in transactions and market share, driven by its strong agent recruitment and retention strategies [5][60] Other Important Information - The company ended Q1 with $127 million in cash and cash equivalents, with $50 million drawn on its revolver to fund acquisitions [27] - The guidance for Q2 2025 includes expected revenue in the range of $2 billion to $2.15 billion and adjusted EBITDA between $115 million and $135 million [28] Q&A Session Summary Question: What was revenue growth tracking ahead of the disruption in March? - Management indicated that revenue growth was tracking close to the midpoint of guidance before the March volatility, with April tracking expectations [40][41] Question: What is the latest with NAR's clear cooperation policy? - Management confirmed that the three-phase marketing strategy remains intact under the current rules, emphasizing homeowner choice [48][50] Question: How is the company addressing agent recruitment post-NAR changes? - Management noted that the demand for the three-phase marketing strategy continues to resonate with agents, particularly in the luxury segment [56][60] Question: What are the churn trends in the quarter? - Churn was in line with historical levels, with no significant changes noted, and the company added agents instead of experiencing churn [72][73] Question: How is the private exclusive listings strategy performing? - The majority of transactions that close as private exclusives are co-brokered with agents from other firms, indicating a collaborative approach [77][78] Question: How is the company thinking about market share in the context of M&A? - Management expressed optimism about continued market share gains through both organic growth and acquisitions, with a focus on top-performing agents [91][92]

1Q 2025 Business Update & Supplementary Information | 1 | | --- | Safe Harbor Statement This presentation 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 second quarter of 2025, planned non-GAAP OPEX and free cash flow expectations for the full year of 2025, and our expectations for ...

Financial Performance - Revenue in Q1 2025 increased by 28.7% year-over-year to $1.4 billion, with organic revenue growth of 14.6%[5] - GAAP net loss for Q1 2025 was $50.7 million, an improvement of $82.2 million from a net loss of $132.9 million in Q1 2024[5] - Net loss attributable to Compass, Inc. for Q1 2025 was $50.7 million, compared to a net loss of $132.9 million in Q1 2024, indicating improved financial performance[29] - Net loss for Q1 2025 was $50.8 million, a significant improvement from a net loss of $133.0 million in Q1 2024, representing a reduction of approximately 62%[31] - Adjusted EBITDA for Q1 2025 was $15.6 million, a significant improvement from a loss of $20.1 million in Q1 2024[5] - Adjusted EBITDA for Q1 2025 was $15.6 million, compared to a negative $20.1 million in Q1 2024, indicating a turnaround in operational performance[33] Cash Flow and Expenses - Operating cash flow grew 169% year-over-year to a record $23.1 million, marking the fifth consecutive quarter of positive free cash flow at $19.5 million[1][5] - Free cash flow for Q1 2025 was $19.5 million, up from $5.9 million in Q1 2024, reflecting improved cash generation from operations[35] - Cash and cash equivalents at the end of Q1 2025 were $127.0 million, down from $165.9 million at the end of Q1 2024, showing a decrease of approximately 23%[31] - Operating expenses totaled $1,409.9 million in Q1 2025, up from $1,186.2 million in Q1 2024, reflecting a significant increase in commissions and related expenses[29] - Non-GAAP operations and support expenses increased to $92.0 million in Q1 2025 from $75.3 million in Q1 2024, highlighting a focus on operational efficiency[37] - The company incurred restructuring costs of $9.2 million in Q1 2025, compared to $1.5 million in Q1 2024, indicating ongoing adjustments to improve business structure[33] Growth and Market Position - Total transactions closed by Compass agents in Q1 2025 reached 49,121, an increase of 27.8% compared to Q1 2024, while organic transactions grew by 7.3%[9] - Quarterly market share rose to 6.0%, an increase of 125 basis points year-over-year, with organic market share growing by 82 basis points[9] - The number of principal agents increased by 41.6% year-over-year to 20,656, with a strong retention rate of 96.6%[9] - Gross Transaction Value (GTV) was $52.4 billion in Q1 2025, up 31% from $40.1 billion in Q1 2024[9] - The Christie's International Real Estate acquisition contributed 9.2% to revenue growth in the quarter[5] - Payments for acquisitions in Q1 2025 totaled $160.9 million, a substantial increase from $0.4 million in Q1 2024, reflecting aggressive growth through acquisitions[31] Future Projections - Q2 2025 revenue guidance is projected between $2.0 billion and $2.15 billion, with Adjusted EBITDA expected to be between $115 million and $135 million[12] - Non-GAAP OPEX is projected to be between $1.017 billion and $1.042 billion for 2025, including a 3-4% increase in OPEX from 2024[19] - Free cash flow is expected to be positive for the full year 2025[19] Assets and Goodwill - Total assets increased to $1,542.6 million as of March 31, 2025, up from $1,178.0 million at the end of 2024[27] - Goodwill rose to $472.3 million as of March 31, 2025, compared to $233.6 million at the end of 2024, reflecting recent acquisitions[27] Operational Efficiency - Compass aims to continuously innovate and expand its platform to enhance value for agents and improve operational efficiency[20] - GAAP sales and marketing expenses for Q1 2025 were $91.7 million, slightly down from $93.4 million in Q1 2024, reflecting cost management efforts[37] - Total capital expenditures for Q1 2025 were $3.6 million, compared to $2.7 million in Q1 2024, indicating increased investment in growth initiatives[35]

Core Insights - Compass, Inc. reported a revenue increase of 28.7% year-over-year in Q1 2025, reaching $1.4 billion, driven by a 27.8% increase in total transactions, while the overall market saw a decline of 2.1% [5][2][21] - The company achieved a record operating cash flow of $23.1 million, marking a 169% year-over-year growth, and free cash flow of $19.5 million, making it the fifth consecutive quarter of positive free cash flow [2][5][36] - Compass's quarterly market share grew to 6.0%, an increase of 125 basis points year-over-year, with organic market share up 82 basis points [2][5][21] Financial Performance - The net loss for Q1 2025 was $50.7 million, an improvement from a net loss of $132.9 million in Q1 2024, with non-cash stock-based compensation expenses of $30.4 million and depreciation and amortization of $28.8 million included in the loss [5][32][35] - Adjusted EBITDA for Q1 2025 was $15.6 million, a significant improvement from a loss of $20.1 million in Q1 2024 [5][35] - Operating expenses grew by 11.5% year-over-year, while revenue grew by 28.7%, indicating effective cost control [2][5] Operational Highlights - The number of principal agents increased by 41.6% year-over-year to 20,656, with a strong retention rate of 96.6% [5][2][25] - Total transactions closed by Compass agents reached 49,121 in Q1 2025, reflecting a 27.8% increase compared to the previous year [5][27] - Gross Transaction Value (GTV) was $52.4 billion, up 31% from $40.1 billion in Q1 2024, with organic GTV at $47.3 billion [5][28] Strategic Initiatives - The Compass 3-Phased Price Discovery and Marketing Strategy saw adoption by 48.2% of homeowners listing their homes, leading to faster sales and fewer price drops compared to non-pre-marketed listings [9][6][30] - The company launched several technology features, including Compass One and One-Click Title & Escrow Integration, aimed at enhancing agent efficiency and client engagement [9][6][20] - The outlook for Q2 2025 anticipates revenue between $2.0 billion and $2.15 billion, with Adjusted EBITDA projected at $115 million to $135 million [9][10]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Company Analysis - Compass, Inc. (COMP) - Compass, Inc. (COMP) has shown a price increase of 1.7% over the past four weeks, indicating growing investor interest [4] - The stock has gained 4% over the past 12 weeks, with a beta of 2.8, suggesting it moves 180% higher than the market in either direction [5] - COMP has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - An upward trend in earnings estimate revisions has led to a Zacks Rank 2 (Buy) for COMP, which is associated with strong momentum effects [7] - COMP is trading at a Price-to-Sales ratio of 0.71, suggesting it is undervalued at 71 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides COMP, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - The market anticipates Compass, Inc. (COMP) to report a year-over-year increase in earnings driven by higher revenues in its upcoming earnings report for the quarter ended March 2025 [1][2]. Earnings Expectations - The earnings report is expected to be released on May 8, 2025, with a consensus estimate of a quarterly loss of $0.06 per share, reflecting a year-over-year improvement of +77.8% [3][12]. - Revenues are projected to reach $1.42 billion, representing a 34.2% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 15.63% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Compass is higher than the Zacks Consensus Estimate, leading to an Earnings ESP of +21.05% [10][11]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Compass currently holds a Zacks Rank of 2, suggesting a high likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Compass was expected to post a loss of $0.09 per share but actually reported a loss of $0.08, resulting in a surprise of +11.11% [12]. - Over the past four quarters, Compass has exceeded consensus EPS estimates three times [13]. Conclusion - Compass is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [16].

Core Insights - Compass, Inc. is a leading tech-enabled real estate services company and the largest residential real estate brokerage in the U.S. by sales volume, participating in the 53rd Annual J.P. Morgan TMC Conference on May 14, 2025 [1][4] Company Overview - Founded in 2012 and based in New York City, Compass provides an end-to-end platform for residential real estate agents, enhancing their service delivery to clients [3] - The platform includes a suite of cloud-based software for customer relationship management, marketing, client service, and brokerage services, specifically tailored for the real estate industry [3] - Compass has been ranked as the number one real estate brokerage by sales volume for 2024 by Real Trends, marking its fourth consecutive year in this position [4] Event Participation - CEO Robert Reffkin will participate in a fireside chat at 3:00 p.m. ET, with CFO Kalani Reelitz conducting one-on-one meetings with investors throughout the day [2] - The fireside chat will be publicly accessible via a webcast, available for replay for 30 days on the Compass Investor Relations website [2][3]

Core Insights - The stock market has rebounded significantly from early-April lows, driven by optimism regarding potential trade war resolutions and strong first-quarter earnings results [1] Group 1: Market Trends - Investors are encouraged to maintain exposure to the stock market, particularly by considering cheap stocks priced at $10 or less [2] - Stocks trading under $10 are gaining attention from Wall Street, especially those with strong earnings outlooks and favorable Zacks Ranks [3] Group 2: Penny Stocks - The SEC has redefined penny stocks to include those trading under $5, which are often viewed as speculative and carry high volatility [4][5] - Stocks priced between $5 and $10 are generally considered less risky than penny stocks, yet they still possess speculative characteristics [6] Group 3: Investment Criteria - A selective approach is necessary to identify winning stocks under $10, with specific screening parameters including broker ratings and earnings estimate revisions [7][9] Group 4: Company Spotlight - Compass, Inc. - Compass, Inc. is highlighted as a leading U.S. real estate technology company, experiencing significant growth with a 26% revenue increase in Q4 and a projected revenue of $8.15 billion by 2026 [10][12] - The company is expected to transition from an adjusted loss of -$0.31 per share to a profit of +$0.09 in 2025, with a remarkable projected growth of 194% in 2026 [12] - Compass has achieved a Zacks Rank of 2 (Buy) and has consistently exceeded EPS estimates in recent quarters, supported by positive free cash flow generation [14] - The stock trades at 0.5X forward 12-month sales, indicating significant value compared to its industry average of 4.8X [16] - Despite challenges such as high mortgage rates and a sluggish housing market, Compass is positioned to gain market share, as stated by CEO Robert Reffkin [13]

Core Viewpoint - Compass (COMP) has significantly outperformed its peers and the broader market, with a 60.2% increase in share price over the past three months, contrasting with declines in the Zacks Computer and Technology sector and the Internet - Software industry [1] Group 1: Financial Performance - Revenues for Compass rose by 25.9% in the fourth quarter of 2024, driven by increased transactions and market share expansion [2] - For the first quarter of 2025, Compass expects total revenues between $1.350 billion and $1.475 billion, with a Zacks Consensus Estimate of $1.42 billion, indicating a year-over-year growth of 34.2% [7] - The Zacks Consensus Estimate for 2025 revenues is projected at $7.02 billion, reflecting a year-over-year growth of 24.72% [8] Group 2: Product and Platform Development - Compass's proprietary cloud-native platform enhances real estate transactions by digitizing workflows, improving agent efficiency and client interactions [3] - The One-click Title and Escrow integration has improved attach rates by over 800 basis points in the past four quarters, indicating strong adoption and increased agent productivity [4] - The all-in-one client dashboard, launched in February 2025, has seen early adoption with 14,950 invitations sent in the first week and a 43% increase in client engagement [5] Group 3: Strategic Initiatives - The Make-Me-Sell feature allows homeowners to set target prices to encourage selling, with 9,500 entries to date, aiming to convert CRM contacts into exclusive agent-only listings [6] - Compass's Zacks Rank is currently 2 (Buy), suggesting that investors should consider accumulating the stock [9]