2024 Q4 Form 10-Q Financial Statement

#000156319024000178 Filed on November 01, 2024

View on sec.gov

Income Statement

Concept 2024 Q4 2024 Q3
Revenue $1.494B
YoY Change 11.71%
Cost Of Revenue $1.228B
YoY Change 12.0%
Gross Profit $266.3M
YoY Change 10.41%
Gross Profit Margin 17.82%
Selling, General & Admin $200.0M
YoY Change -5.21%
% of Gross Profit 75.1%
Research & Development $47.50M
YoY Change 3.71%
% of Gross Profit 17.84%
Depreciation & Amortization $20.50M
YoY Change -3.76%
% of Gross Profit 7.7%
Operating Expenses $1.497B
YoY Change 8.8%
Operating Profit -$3.400M
YoY Change -91.26%
Interest Expense $700.0K
YoY Change -63.16%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$2.700M
YoY Change -93.13%
Income Tax -$300.0K
% Of Pretax Income
Net Earnings -$1.700M
YoY Change -95.69%
Net Earnings / Revenue -0.11%
Basic Earnings Per Share $0.00
Diluted Earnings Per Share $0.00
COMMON SHARES
Basic Shares Outstanding 510.3M shares 505.2M shares
Diluted Shares Outstanding 506.0M shares

Balance Sheet

Concept 2024 Q4 2024 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $211.2M
YoY Change -4.0%
Cash & Equivalents $211.2M
Short-Term Investments
Other Short-Term Assets $38.70M
YoY Change -38.08%
Inventory
Prepaid Expenses
Receivables $45.80M
Other Receivables $0.00
Total Short-Term Assets $330.5M
YoY Change -7.63%
LONG-TERM ASSETS
Property, Plant & Equipment $132.4M
YoY Change -18.12%
Goodwill $234.1M
YoY Change 12.12%
Intangibles $82.70M
YoY Change -3.95%
Long-Term Investments
YoY Change
Other Assets $27.70M
YoY Change -0.36%
Total Long-Term Assets $869.3M
YoY Change -4.03%
TOTAL ASSETS
Total Short-Term Assets $330.5M
Total Long-Term Assets $869.3M
Total Assets $1.200B
YoY Change -5.05%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $14.30M
YoY Change -36.73%
Accrued Expenses $231.1M
YoY Change 10.05%
Deferred Revenue
YoY Change
Short-Term Debt $27.50M
YoY Change -1.43%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $358.3M
YoY Change 6.13%
LONG-TERM LIABILITIES
Long-Term Debt $0.00
YoY Change
Other Long-Term Liabilities $28.10M
YoY Change 24.89%
Total Long-Term Liabilities $28.10M
YoY Change 24.89%
TOTAL LIABILITIES
Total Short-Term Liabilities $358.3M
Total Long-Term Liabilities $28.10M
Total Liabilities $768.7M
YoY Change -2.23%
SHAREHOLDERS EQUITY
Retained Earnings -$2.632B
YoY Change 8.12%
Common Stock $3.060B
YoY Change 5.21%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $428.0M
YoY Change
Total Liabilities & Shareholders Equity $1.200B
YoY Change -5.05%

Cashflow Statement

Concept 2024 Q4 2024 Q3
OPERATING ACTIVITIES
Net Income -$1.700M
YoY Change -95.69%
Depreciation, Depletion And Amortization $20.50M
YoY Change -3.76%
Cash From Operating Activities $37.40M
YoY Change 149.33%
INVESTING ACTIVITIES
Capital Expenditures $4.600M
YoY Change 64.29%
Acquisitions
YoY Change
Other Investing Activities -$1.700M
YoY Change -342.86%
Cash From Investing Activities -$6.300M
YoY Change 200.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -5.700M
YoY Change -95.56%
NET CHANGE
Cash From Operating Activities 37.40M
Cash From Investing Activities -6.300M
Cash From Financing Activities -5.700M
Net Change In Cash 25.40M
YoY Change -122.01%
FREE CASH FLOW
Cash From Operating Activities $37.40M
Capital Expenditures $4.600M
Free Cash Flow $32.80M
YoY Change 168.85%

Facts In Submission

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Business and Basis of Presentation <div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Description of the Business </span></div><div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Compass, Inc. (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc. On January 8, 2021, the board of directors approved a change to the Company’s name from Urban Compass, Inc. to Compass, Inc. On April 6, 2021, the Company completed its initial public offering (“IPO”) and the Company’s Class A common stock began trading on the New York Stock Exchange on April 1, 2021 under the symbol “COMP”.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company provides an end-to-end platform that empowers its residential real estate agents to deliver exceptional service to seller and buyer clients. The Company’s platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service and other critical functionality, all custom-built for the real estate industry, which enables the Company’s core brokerage services. The platform also uses proprietary data, analytics, artificial intelligence, and machine learning to deliver high value recommendations and outcomes for Compass agents and their clients. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s agents are independent contractors who affiliate their real estate licenses with the Company, operating their businesses on the Company’s platform and under the Compass brand. The Company generates revenue from clients through its agents by assisting home sellers and buyers in listing, marketing, selling and finding homes as well as through the provision of services adjacent to the transaction, like title and escrow services, which comprise a smaller portion of the Company’s revenue to date. The Company currently generates substantially all of its revenue from commissions paid by clients at the time that a home is transacted. </span></div><div style="margin-top:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Basis of Presentation </span></div><div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. The condensed consolidated statements of operations include the results of entities acquired from the date of each respective acquisition. Interests held by third parties in consolidated subsidiaries are presented as non-controlling interests, which represents the non-controlling stockholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity method. The Company applies the equity method of accounting when it has the ability to exercise significant influence over the operating and financial policies of an investee. The Company measures all other investments at fair value with changes in fair value recognized in net income or in the case that an equity investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the interim periods presented. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The results of the interim periods presented are not necessarily indicative of the results expected for the full year. Certain information and notes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. Accordingly, the unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2023 included in the 2023 Form 10-K.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Liquidity</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Throughout 2023 and through the first nine months of 2024, a number of macroeconomic conditions contributed to a slowdown in the U.S. residential real estate market. In response to these conditions, the Company enacted various restructuring actions designed to improve the alignment between the Company’s organizational structure and its long-term </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">business strategy, drive cost efficiencies enabled by the Company’s technology and other competitive advantages and continue to drive toward profitability and positive free cash flow. Additionally, as part of its nationwide class action settlement of the antitrust claims, NAR agreed to implement certain industry-wide practice changes, including, but not limited to, prohibiting buyer brokers' offers of compensation from being included in listings on Multiple Listing Services and requiring a buyer to enter into a written agreement with their agent that would set forth the buyer broker's fee before showing the buyer a property. These changes went into effect in mid-August. While the Company continues to assess the effects of the ongoing slowdown and the recent industry-wide changes on its business and financial results, the ultimate impact will depend on future developments, which are highly uncertain and difficult to predict, as well as the actions that the Company has taken, or will take, to minimize any current and future impact on its revenue, profitability, or liquidity.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As of September 30, 2024 and December 31, 2023, the Company held cash and cash equivalents of approximately $211.2 million and $166.9 million, respectively. Additionally, the Company has a Revolving Credit Facility that matures in March 2026, which it can draw upon provided it maintains continued compliance with certain financial and non-financial covenants. As of September 30, 2024, the Company had $295.1 million available to be drawn under the Revolving Credit Facility. Further, the Company is in compliance with each of the financial and non-financial covenants under the Revolving Credit Facility. See Note 5 — "Debt" for further details. The Company's operating cash flows vary depending on the seasonality of the real estate business. The Company believes that it will have sufficient liquidity from cash on hand, its Revolving Credit Facility and future operations to sustain its business operations for the next twelve months and beyond.</span></div>
dei Entity Incorporation Date Of Incorporation
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<div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Use of Estimates </span></div><div style="margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the condensed consolidated financial statements and accompanying notes. These judgments, estimates and assumptions are used for, but not limited to (i) valuation of the Company’s common stock and stock awards, (ii) fair value of acquired intangible assets and goodwill, (iii) fair value of contingent consideration arrangements in connection with business combinations, (iv) incremental borrowing rate used for the Company’s operating leases, (v) useful lives of long-lived assets, (vi) impairment of intangible assets and goodwill, (vii) allowance for Compass Concierge receivables and (viii) income taxes and certain deferred tax assets. The Company determines its estimates and judgments based on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates and these differences may be material.</span></div>
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CY2023Q4 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Intrinsic Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue
20200000 usd
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Gross
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
0 shares
us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
0
us-gaap Stock Issued During Period Shares Stock Options Exercised
StockIssuedDuringPeriodSharesStockOptionsExercised
3258748 shares
us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Exercises In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice
1.83
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures In Period
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod
1904614 shares
us-gaap Share Based Compensation Arrangements By Share Based Payment Award Options Forfeitures In Period Weighted Average Exercise Price
ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice
6.62
CY2024Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
35364486 shares
CY2024Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted Average Exercise Price
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
5.89
us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Outstanding Weighted Average Remaining Contractual Term2
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2
P4Y7M6D
CY2024Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Intrinsic Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue
38800000 usd
CY2024Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Vested And Expected To Vest Exercisable Number
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber
32751775 shares
CY2024Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercisable Weighted Average Exercise Price
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
5.64
us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Exercisable Weighted Average Remaining Contractual Term1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1
P4Y6M
CY2024Q3 us-gaap Sharebased Compensation Arrangement By Sharebased Payment Award Options Exercisable Intrinsic Value1
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1
38300000 usd
CY2024Q3 us-gaap Share Price
SharePrice
6110000
CY2023Q4 us-gaap Share Price
SharePrice
3760000
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue
7300000 usd
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue
5900000 usd
CY2024Q3 us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
32500000 usd
CY2023Q3 us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
38000000.0 usd
us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
96300000 usd
us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
121900000 usd
CY2024Q3 us-gaap Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized
EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized
138000000.0 usd
us-gaap Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized Period For Recognition1
EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1
P2Y
CY2024Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-300000 usd
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-700000 usd
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-500000 usd
CY2023Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-500000 usd
CY2024Q3 us-gaap Net Income Loss
NetIncomeLoss
-1700000 usd
CY2023Q3 us-gaap Net Income Loss
NetIncomeLoss
-39400000 usd
us-gaap Net Income Loss
NetIncomeLoss
-113900000 usd
us-gaap Net Income Loss
NetIncomeLoss
-237600000 usd
CY2024Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
505993014 shares
CY2024Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
505993014 shares
CY2023Q3 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
470945736 shares
CY2023Q3 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
470945736 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
498247783 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
498247783 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
460730792 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
460730792 shares
CY2024Q3 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.00
CY2024Q3 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.00
us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
-0.23
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-0.23
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-0.52
us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
-0.52
CY2024Q3 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
68684681 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
68684681 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
92428190 shares
us-gaap Provision For Loan Losses Expensed
ProvisionForLoanLossesExpensed
300000 usd
CY2024Q3 us-gaap Financing Receivable Allowance For Credit Losses
FinancingReceivableAllowanceForCreditLosses
10400000 usd
CY2024Q3 us-gaap Financing Receivable Allowance For Credit Losses
FinancingReceivableAllowanceForCreditLosses
10400000 usd
CY2024Q3 us-gaap Notes Receivable Gross
NotesReceivableGross
45200000 usd
CY2024Q3 ecd Non Rule10b51 Arr Adopted Flag
NonRule10b51ArrAdoptedFlag
false
CY2024Q3 ecd Rule10b51 Arr Adopted Flag
Rule10b51ArrAdoptedFlag
false
CY2024Q3 ecd Rule10b51 Arr Trmntd Flag
Rule10b51ArrTrmntdFlag
false
CY2024Q3 ecd Non Rule10b51 Arr Trmntd Flag
NonRule10b51ArrTrmntdFlag
false

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