comp-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________

FORM 10-Q

___________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40291

___________________________

COMPASS, INC.

(Exact Name of Registrant as Specified in its Charter)

___________________________


Delaware			30-0751604
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

110 Fifth Avenue, 4th Floor New York, New York			10011
(Address of Principal Executive Offices)			(Zip Code)

(212) 913-9058

(Registrant’s telephone number, including area code)

___________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Class A Common Stock, $0.00001 par value per share

COMP

The New York Stock Exchange

___________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of October 28, 2024, there were 510,307,191 shares of the registrant’s common stock outstanding.

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Compass, Inc.

Table of Contents


		Page
Special Note Regarding Forward-Looking Statements		3
PART I.	FINANCIAL INFORMATION	6
Item 1.	Financial Statements (unaudited)	6
	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	6
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	7
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023	8
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds Securities	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signatures

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Unless otherwise expressly stated or the context otherwise requires, references in this Quarterly Report on Form 10-Q, which we refer to as this Quarterly Report, to “Compass,” “Company,” “our,” “us,” and “we” and similar references refer to Compass, Inc. and its consolidated subsidiaries.

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we may announce material business and financial information to our investors using our investor relations page on our website (www.compass.com), filings we make with the Securities and Exchange Commission, or the SEC, webcasts, press releases and conference calls. We use these mediums, including our website, to communicate with our stockholders and the public about our company, our product candidates and other matters. It is possible that the information we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.

From time to time, we intend to announce material information to the public through filings with 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, Robert Reffkin’s X feed (@RobReffkin) and Robert Reffkin’s Instagram account (@robreffkin). We use these mediums, including our website, to communicate with our stockholders and the public about our company and other matters. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website and all other streaming tools. Further, corporate governance information, including our governance guidelines, board committee charters and code of ethics, is also available on our investor relations page on our website under the heading “Governance.”

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

The information contained on, or that can be accessed through, the website referenced in this Quarterly Report is not incorporated by reference into this filing, and the website address is provided only as an inactive textual reference.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the federal Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations are forward-looking statements. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “expects,” “could,” “would,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

•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 the Antitrust 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, or AI;

•Our ability to expand our operations and to offer additional integrated services;

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•Our ability to realize the expected benefits from 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;

•Use of cash to satisfy tax withholding obligations that arise in connection with settlements of RSU awards;

•Fluctuations in our quarterly results and other operating metrics;

•The loss of one or more of our 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 ability 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;

•Compliance with applicable laws and regulations and changes to applicable laws and regulations;

•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

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SEC Form 10-Q filed by Compass Inc.