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Sep 30, 2022
Compass Q3 2022 Earnings Report
Compass reported Q3 2022 results with revenue down 14% year-over-year, driven by lower market volumes, but made progress on cost reductions and platform rollout.
Key Takeaways
Compass, Inc. announced its Q3 2022 financial results, reporting a revenue of $1.49 billion, a 14% decrease compared to Q3 2021. The company's GAAP Net Loss was $154 million, and Adjusted EBITDA was a loss of $42 million. Despite challenges in the housing market, Compass continued to roll out its national end-to-end workflow platform and achieved cost reductions in technology, engineering, and general & administrative expenses.
Revenue decreased by 14% year-over-year to $1.49 billion due to a 12% decline in transactions.
GAAP Net Loss was $154 million, compared to a loss of $100 million in Q3 2021, including non-cash and restructuring charges.
Adjusted EBITDA was $(42) million, compared to $12 million in 3Q21.
Average Number of Principal Agents was 13,314, an increase of 15% from 3Q21.
Compass
Compass
Forward Guidance
Compass anticipates a challenging housing market in 2023 before a return to stability and growth. The company is focused on providing tools and support for agents while implementing cost productivity measures to achieve future profitability.
Positive Outlook
- Successfully rolled out the Compass national agent platform in all markets.
- Achieved significant cost reductions in technology, engineering and general and administrative expenses.
- Actions taken in the third quarter and in progress are expected to deliver targeted non-GAAP operating expenses after commissions and other related expenses of between $1.05 billion and $1.15 billion exiting 2022.
- Compass team remains laser focused on providing agents with technology, workflow tools, and marketing support to be successful in the market.
- Driving to implement fundamental cost productivity measures that will deliver profitability in the future.
Challenges Ahead
- Housing market will remain challenged during 2023.
- Revenue of $1.15 billion to $1.30 billion is expected for Q4 2022.
- Adjusted EBITDA of negative $50 million to negative $80 million is expected for Q4 2022.
- Revenue of $6.05 billion to $6.20 billion is expected for FY22.
- Adjusted EBITDA of negative $185 million to negative $215 million is expected for FY22.