Slide 1: 1Q 2022 Business Update & Supplementary Information
1Q 2022 Business Update & Supplementary Information
Slide 2: Safe Harbor Statement
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
Slide 3: Compass is … Unrivaled, with tech-driven value proposition
Compass is … UNRIVALED, WITH TECH-DRIVEN VALUE PROPOSITION Industry leading brand and network in 71 markets and 29 states in 1Q22 27,275 $264B 1Q22 Agents 1Q22 LTM GTV(1) RAPIDLY GROWING MARKET SHARE 5.8% 61% From 1.1% U.S. Market Share in 2018 to 5.8% in 1Q22 LTM; still covers only 48% of the total
Slide 4: Growth in agent count and productivity have driven rapid market share gains
Growth in agent count and productivity have driven rapid market share gains Our agents become more and more productive … … driving rapid GTV growth and market share gains 1000 CAGRs 1Q19 – 1Q22: 30,000 $340 CAGRs 1Q19 – 1Q22: Total average agents: 42% 26,865 GTV: 82% 5.8% 900 Principal agents: 33% 2
Slide 5: Consistently growing share across large & small markets, price points & tenure
Consistently growing share across large & small markets, price points & tenure Compass Market Market Avg. Competitive (City Center) 2018 2019 2020 2021 Avg. Price Price Point(2) Rank Average City Center Market Share by Market Tenure Point Manhattan(1) 11.0% 17.4% 25.5% 33.3% $1,493 $736 1 Washington
Slide 6: Compass agents also grow their transactions faster than the market
Compass agents also grow their transactions faster than the market Growth in Transactions per Average Agent Transactions per Average Agent vs Industry(1) 19.3% CAGR 6.9% Growth NM 3.0x 2.1x 1.7x 23.8% faster faster faster faster 9.7 (+23.8%) (+11.4%) (+8.8%) (+3.3%) 8.3 9.3 8.7 17.0% 17.1% 7.1 5.7 8
Slide 7: GTV per average Compass agent is more than 3x the average NAR agent
GTV per average Compass agent is more than 3x the average NAR agent(1) Our agents have grown GTV per average agent from $6.8M to $10.6M – and now generate 3.5x the GTV of the average NAR agent (up from 2.8x in 1Q19) LTM GTV per LTM average Compass agent LTM GTV per LTM average NAR agent 1Q19 – 1Q22
Slide 8: We expect a more diversified agent mix to drive ~190 bps of margin improvement
We expect a more diversified agent mix to drive ~190 bps of margin improvement by FY 2025 (33% of the total long-term opportunity of 584 bps) FY21 Compass Full Market Delta to Market Agents with: % of Commission Revenue Above $1m in annual revenue 60% 14% 45% Below $150k in annual revenue 4% 34% (31
Slide 9: Consistently High Agent Net Promoter Scores…
Consistently High Agent Net Promoter Scores… Historical Compass Agent NPS Scores Top Reasons Why Agents Stay • Culture & excitement about long- 76 77 term vision 71 68 • Technology Platform • Network of other Compass agents that supports business growth (e.g., referral) • Support & coaching • Inerti
Slide 10: …Lead to Strong Principal Agent Retention in All Markets
…Lead to Strong Principal Agent Retention in All Markets 2021 City Center % of Principals off Market (City Center) Launch Date 2021 Principal Retention Market Share Initial Contract(1) Manhattan 2012 33.3% 77% 95% Washington DC 2014 28.1% 83% 95% Boston 2015 15.4% 75% 93% Los Angeles 2015 18.9% 65%
Slide 11: Agent economics by cohort have improved approximately 100 bps a year
Agent economics by cohort have improved approximately 100 bps a year As agent cohorts mature, the Commissions as a % of Revenue improves 20% 20% 19% 18% 18% • Commissions and Other as a % of 17% Revenue improved by 130 bps in 2021 16% 16% 16% • Prior to 2021, trends in Commissions and Other as a % o
Slide 12: Market share and Regional Contribution by market continues to improve over time
Market share and Regional Contribution by market continues to improve over time … Regional Contribution and City Center Market Share Our most mature markets are already generating 9.0% margins We expect smaller markets and lower Average Transaction Value markets to show similar profitability trends
Slide 13: Adjacent Services significantly increase the revenue and profit per transaction
Adjacent Services significantly increase the revenue and profit per transaction Illustrative Adjacent Services Unit Economics Mortgage Update Using $1M Home with Compass Revenue less Commissions $5K 2.5% Commission rate Title & Escrow Mortgage JV(1) ▪ Our mortgage strategy is to provide a value-add
Slide 14: 1Q 2022 Highlights
1Q 2022 Highlights FINANCIAL(1) OPERATIONAL $1.4B | +25% 12,574 | +28% 1Q22 Revenue & Y-o-Y Growth 1Q22 Average Number of Principal Agents & Y-o-Y Growth 80.8% | +20 BPS 26,865 | +32% 1Q22 Non-GAAP Commission & Other Related 1Q22 Total Avg Agents & Y-o-Y Growth Expenses as a % of Revenue & Y-o-Y Inc
Slide 15: Strong Execution Over Several Years
Strong Execution Over Several Years Non-GAAP Operating Expenses (1) Total Revenue ($M) Adjusted EBITDA(2) ($M) as a % of Revenue $66M decline 370 bps increase $2 25% y-o-y growth $6,421 $1,397 25.9% 40.5% $1,114 22.2% 33.2% ($31) $3,721 22.2% 19.3% $2,386 ($168) ($155) $885 ($325) ($97) 2018 2019 20
Slide 16: 2022 Guidance
2022 Guidance 2Q 2022 Full Year 2022 Revenue $2.0B - $2.2B Revenue $7.6B - $8.0B EBITDA $0M - $40M EBITDA At least breakeven Weighted- Weighted- Average Share 427M – 428M Average Share 425M – 430M Count Count 16
Slide 17: Reiterating a minimum of $1.2bn of Adjusted EBITDA, for an Adjusted EBITDA Margin of at least 10% in 2025
Reiterating a minimum of $1.2bn of Adjusted EBITDA, for an Adjusted EBITDA Margin of at least 10% in 2025 P&L 2019 2020 2021 Improvement 2025 Assumptions Revenue 100% 100% 100% 100% • Commissions & Other as % of revenue improves by 450 (450) bps with bps due to improving agent economics and growing
Slide 18: Appendix
COMPASS Appendix
Slide 19: Compass & Industry Historical Transactions and Sales Volume Seasonality
Compass & Industry Historical Transactions and Sales Volume Seasonality NAR Historical Sales Volume Seasonality Q1 Q2 Q3 Q4 2016 18% 30% 29% 24% 2017 19% 30% 28% 24% 2018 19% 30% 28% 23% 2019 18% 29% 29% 24% 2020 18% 22% 31% 29% 2021 19% 27% 28% 25% 2016 - 2019 18% 30% 28% 24% Compass Historical GTV
Slide 20: Revenue Build and EBITDA in 2019 to 2021
Revenue Build and EBITDA in 2019 to 2021 Model Math Key Drivers 2019 2020 2021 Average Principal Agents 6,787 8,686 11,058 x Transactions per Average Principal Agent 12.8 16.7 20.4 = Total Transactions 87,158 144,784 225,272 x Average Transaction Value $1.12m $1.05m $1.13m = Gross Transaction Value
Slide 21: Our penetration is still low; we have a massive addressable market
Our penetration is still low; we have a massive addressable market Compass brokerage covers only 48% of the U.S. population, but we plan to cover the entire country; our adjacent services business is nascent U.S. TAM $240B • Real Estate Marketing ($30b) Adjacent Services • Title Insurance & Escrow (
Slide 22: We expect Revenue less Commissions as a % of Revenue to improve from 19.3% in 2021 to 23.8% in 2025
We expect Revenue less Commissions as a % of Revenue to improve from 19.3% in 2021 to 23.8% in 2025 driven by improving agent economics and growth in adjacent services Revenue less Commissions as a % of Revenue Margin Bridge 3.9% 27.7% 2.0% 23.8% 0.6% 1.9% 19.3% 2021 Revenue less Medium Term Medium
Slide 23: Financial Tables
COMPASS Financial Tables
Slide 24: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (in millions, unaudited) 24
Slide 25: Condensed Consolidated Statements Of Operations
Condensed Consolidated Statements Of Operations (in millions, except share and per share data, unaudited) 25
Slide 26: Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Cash Flows (in millions, unaudited) 26
Slide 27: Net Loss to Adjusted EBITDA Reconciliation
Net Loss to Adjusted EBITDA Reconciliation (in millions, unaudited) 27
Slide 28: Reconciliation of Operating Cash Flows to Free Cash Flow
Reconciliation of Operating Cash Flows to Free Cash Flow (in millions, unaudited) 28
Slide 29: Reconciliation of GAAP to Non-GAAP Operating Expenses
Reconciliation of GAAP to Non-GAAP Operating Expenses (in millions, unaudited) 29
Slide 30: Key Business Metrics and Non-GAAP Financial Measures
Key Business Metrics and Non-GAAP Financial Measures (unaudited) 30
Slide 31: Investor Contact / Media Contact
Investor Contact Richard Simonelli 973-896-8184 richard.simonelli@compass.com Media Contact Chris O'Brien 917-626-2345 chris.obrien@compass.com