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Mar 31, 2023
Compass Q1 2023 Earnings Report
Compass reported first quarter 2023 results, exceeding guidance and consensus on Revenue and Adjusted EBITDA.
Key Takeaways
Compass's Q1 2023 revenue decreased by 31% year-over-year to $957 million, while achieving a GAAP Net loss of $150 million, an improvement from Q1 2022. The company's national market share increased to 4.5%, and it expects to be free cash flow positive in Q2 2023 and for the full year.
Revenue decreased by 31% year-over-year to $957 million due to a 24% decline in transactions.
GAAP Net loss was $150 million, an improvement from $188 million in Q1 2022.
Adjusted EBITDA was $(67) million, compared to $(97) million in Q1 2022, an improvement of $30 million.
National market share in Q1 2023 was 4.5%, up 17 basis points sequentially from Q4 2022.
Forward Guidance
Compass anticipates revenue between $1.45 billion and $1.6 billion and Adjusted EBITDA between $30 million and $50 million for Q2 2023, with expectations of being free cash flow positive for the full year. Non-GAAP Operating expense range of $850-$950 million.
Positive Outlook
- Revenue of $1.45 billion to $1.6 billion
- Adjusted EBITDA of $30 million to $50 million
- Free cash flow positive
- Expense reduction initiatives
- Digitizing the real estate transaction process
Challenges Ahead
- General macroeconomic conditions in the U.S. and globally (e.g., inflation)
- Economic and industry downturns
- The health of the U.S. real estate industry
- Risks generally incident to the ownership of residential real estate, including seasonal and cyclical trends (e.g., increases in mortgage interest rates, continued limited inventory, slowed consumer demand, reduced home affordability and declines in price appreciation and home prices)
Historical Earnings Impact
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Avg. Return Before/After Earnings
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