Compass Inc

Previous wording

We had over 29,000 agents on our platform as of March 31, 2024. A subset of our agents are considered principal agents, which we define as either agents who are leaders of their respective agent teams or individual agents operating independently on our platform.

Current wording

We had over 33,000 agents on our platform as of June 30, 2024. A subset of our agents are considered principal agents, which we define as either agents who are leaders of their respective agent teams or individual agents operating independently on our platform.

Previous wording

During the three months ended March 31, 2024, our agents closed 38,449 Total Transactions, an increase of 7.1% when compared to the three months ended March 31, 2023. The increase was primarily driven by the increase in the number of agents on our platform. For more details surrounding the macroeconomic conditions that continue to impact the residential real estate market see the section entitled “Impact of the Macroeconomic Conditions on the U.S. Residential Real Estate Market and Our Business”.

Current wording

Our Gross Transaction Value for the three months ended June 30, 2024 was $65.0 billion, an increase of 14.5% when compared to the three months ended June 30, 2023. Gross Transaction Value is primarily driven by home values in the markets we serve and by changes in the number of our agents in those markets, as well as seasonality and the macroeconomic conditions impacting the U.S. residential real estate market. For more details surrounding the macroeconomic conditions that continue to impact the residential real estate market see the section entitled “Impact of the Macroeconomic Conditions on the U.S. Residential Real Estate Market and Our Business”.

Previous wording

For the three months ended March 31, 2024, our Gross Transaction Value represented 4.8% of residential real estate transacted in the U.S., compared to 4.5% for the three months ended March 31, 2023. We calculate our market share by dividing our Gross Transaction Value, or the total dollar value of transactions closed by agents on our platform, by two times (to account for the sell-side and buy-side of each transaction) the aggregate dollar value of U.S. existing home sales as reported by the National Association of Realtors ("NAR"). Gross Transaction Value includes a de minimis number of new development and commercial brokerage transactions.

Current wording

For the three months ended June 30, 2024, our Gross Transaction Value represented 5.1% of residential real estate transacted in the U.S., compared to 4.6% for the three months ended June 30, 2023. We calculate our market share by dividing our Gross Transaction Value, or the total dollar value of transactions closed by agents on our platform, by two times (to account for the sell-side and buy-side of each transaction) the aggregate dollar value of U.S. existing home sales as reported by the National Association of Realtors ("NAR"). Gross Transaction Value includes a de minimis number of new development and commercial brokerage transactions.

Previous wording

The residential real estate market is seasonal, which directly impacts our agents’ businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter. We experience the most significant financial effect from this seasonality in the first and fourth quarters of each year, when our revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.

Current wording

revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.

Previous wording

Throughout 2023 and through the first quarter of 2024, a number of macroeconomic conditions continued to contribute to the slowdown in the U.S. residential real estate market, impacting our business and financial results during the year ended December 31, 2023 and the three months ended March 31, 2024. These conditions include, but are not limited to, the conflict in Ukraine, volatility in the U.S. equity markets, rising inflation, rapidly rising mortgage interest rates, and the Federal Reserve Board increasing the federal funds rate by an aggregate of 5.25% through April 2024. These conditions have contributed toward slowed consumer demand and declining home affordability and began to have an impact on price appreciation. Any further slowdown or additional challenging conditions in the U.S. residential real estate market could have a significant impact on our business and financial results in 2024 and beyond. While we continue to assess the effects of the current slowdown on our 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 we have taken, or will take, to minimize any current and future impact.

Current wording

Throughout 2023 and through the first half of 2024, a number of macroeconomic conditions continued to contribute to the slowdown in the U.S. residential real estate market, impacting our business and financial results during the year ended December 31, 2023 and the six months ended June 30, 2024. These conditions include, but are not limited to, the conflict in Ukraine, volatility in the U.S. equity markets, rising inflation, rapidly rising mortgage interest rates, and the Federal Reserve Board increasing the federal funds rate by an aggregate of 5.25% through June 2024. These conditions have contributed toward slowed consumer demand and declining home affordability and began to have an impact on price appreciation. Any further slowdown or additional challenging conditions in the U.S. residential real estate market could have a significant impact on our business and financial results in 2024 and beyond. While we continue to assess the effects of the current slowdown on our 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 we have taken, or will take, to minimize any current and future impact.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

Revenue was $1,054.1 million during the three months ended March 31, 2024, an increase of $96.9 million, or 10.1%, compared to the prior year period. The increase for the three months ended March 31, 2024 was primarily driven by an increase in the number of agents that joined our platform during 2023 and 2024 and a higher volume of transactions. The Number of Principal Agents for the three months ended March 31, 2024 grew to 14,591, an increase of 7.3% from the year ago period.

Current wording

Revenue was $1,700.6 million and $2,754.7 million during the three and six months ended June 30, 2024, an increase of $206.6 million, or 13.8%, and $303.5 million, or 12.4%, compared to the prior year periods, respectively. The increase for the three and six months ended June 30, 2024 was primarily driven by an increase in the number of agents on our platform during 2023 and 2024 and a higher volume of transactions. The Number of Principal Agents as of June 30, 2024 grew to 16,997, an increase of 24.1% from the year ago period. For the three and six months ended June 30, 2024, 9.0% and 8.1% of the revenue increase was attributable to existing businesses and 4.8% and 4.3% was attributable to businesses acquired since the prior year periods, respectively.

Previous wording

Commissions and other related expense was $862.3 million during the three months ended March 31, 2024, an increase of $71.4 million, or 9.0%, compared to the prior year period. Included in Commissions and other related expense were non-cash expenses related to stock-based compensation of $11.6 million for the three months ended March 31, 2023. The decline in stock-based compensation expense for the three months ended March 31, 2024 when compared to the prior year period was due to the discontinuation of the Agent Equity Program in 2023. Commissions and other related expense excluding such non-cash stock-based compensation expense was $862.3 million, or 81.8% of revenue, for the three months ended March 31, 2024 and $779.3 million, or 81.4% of revenue, for the three months ended March 31, 2023. The increase in absolute dollars and as a percentage of revenue of Commission and other related expense, excluding non-cash stock-based compensation, for the three months ended March 31, 2024 when compared to the prior year period was primarily driven by our higher revenue, changes in mix of the commission arrangements we have with our agents and changes in geographic mix.

Current wording

Commissions and other related expense was $1,405.3 million and $2,267.6 million during the three and six months ended June 30, 2024, an increase of $181.3 million, or 14.8%, and $252.7 million, or 12.5%, compared to the prior year periods, respectively. Included in Commissions and other related expense were non-cash expenses related to stock-based compensation of $11.6 million for the six months ended June 30, 2023. The decline in stock-based compensation expense for the six months ended June 30, 2024 when compared to the prior year period was due to the discontinuation of the Agent Equity Program in 2023. Commissions and other related expense excluding such non-cash stock-based compensation expense was $1,405.3 million, or 82.6% of revenue, and $2,267.6 million, or 82.3% of revenue, for the three and six months ended June 30, 2024 and $1,224.0 million, or 81.9% of revenue, and $2,003.3 million, or 81.7% of revenue, for the three and six months ended June 30, 2023, respectively. The increase in absolute dollars and as a percentage of revenue of Commission and other related expense, excluding non-cash stock-based compensation, for the three and six months ended June 30, 2024 when compared to the prior year periods was primarily driven by increased revenue, changes in mix of the commission arrangements we have with our agents and changes in geographic mix.

Previous wording

Sales and marketing expense was $93.4 million during the three months ended March 31, 2024, a decrease of $21.9 million, or 19.0%, compared to the prior year period. Included in Sales and marketing expense were non-cash expenses related to stock-based compensation of $7.9 million for the three months ended March 31, 2024 and $8.6 million for the three months ended March 31, 2023. Sales and marketing expense, excluding non-cash stock-based compensation expense, was $85.5 million, or 8.1% of revenue, for the three months ended March 31, 2024 and $106.7 million, or 11.1% of revenue, for the three months ended March 31, 2023. The decrease in absolute dollars and as a percentage of revenue, excluding non-cash stock-based compensation expense, during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to a decrease in agent marketing costs and agent incentives.

Current wording

Sales and marketing expense was $94.9 million and $188.3 million during the three and six months ended June 30, 2024, a decrease of $18.4 million, or 16.2%, and $40.3 million, or 17.6%, compared to the prior year periods, respectively. Included in Sales and marketing expense were non-cash expenses related to stock-based compensation of $8.3 million and $16.2 million for the three and six months ended June 30, 2024 and $9.0 million and $17.6 million for the three and six months ended June 30, 2023, respectively. Sales and marketing expense, excluding non-cash stock-based compensation expense, was $86.6 million, or 5.1% of revenue, and $172.1 million, or 6.2% of revenue, for the three and six months ended June 30, 2024 and $104.3 million, or 7.0% of revenue, and $211.0 million, or 8.6% of revenue, for the three and six months ended June 30, 2023, respectively. The decrease in absolute dollars and as a percentage of revenue, excluding non-cash stock-based compensation expense, during the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily due to a decrease in agent marketing costs and agent incentives.

Previous wording

Research and development expense was $47.0 million during the three months ended March 31, 2024, a decrease of $1.9 million, or 3.9%, compared to the prior year period. Included in Research and development expense were non-cash expenses related to stock-based compensation of $14.9 million for the three months ended March 31, 2024 and $10.4 million for the three months ended March 31, 2023. The increase in stock-based compensation expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by forfeitures incurred due to the workforce reductions taken in connection with our restructuring activities in the prior year with no comparable activity in the current year. Research and development expense, excluding such non-cash stock-based compensation expense, was $32.1 million, or 3.0% of revenue, for the three months ended March 31, 2024 and $38.5 million, or 4.0% of revenue, for the three months ended March 31, 2023. The decrease in Research and development expense, excluding non-cash stock-based compensation expense, in absolute dollars and as a percentage of revenue during the three months ended March 31, 2024 was primarily driven by lower research and development related headcount resulting from our cost reduction initiatives.

Current wording

Research and development expense was $47.4 million and $94.4 million during the three and six months ended June 30, 2024, an increase of $2.0 million, or 4.4%, and $0.1 million, or 0.1%, compared to the prior year periods, respectively. Included in Research and development expense were non-cash expenses related to stock-based compensation of $15.2 million and $30.1 million for the three and six months ended June 30, 2024 and $12.6 million and $23.0 million for the three and six months ended June 30, 2023, respectively. The increase in stock-based compensation expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily driven by forfeitures incurred due to the workforce reductions taken in connection with our restructuring activities in the prior year with no comparable activity in the current year. Research and development expense, excluding such non-cash stock-based compensation expense, was $32.2 million, or 1.9% of revenue, and $64.3 million, or 2.3% of revenue, for the three and six months ended June 30, 2024 and $32.8 million, or 2.2% of revenue, and $71.3 million, or 2.9% of revenue, for the three and six months ended June 30, 2023, respectively. The decrease in Research and development expense, excluding non-cash stock-based compensation expense, in absolute dollars and as a percentage of revenue during the three and six months ended June 30, 2024 was primarily driven by lower research and development related headcount resulting from our cost reduction initiatives.

Previous wording

General and administrative expense was $82.2 million during the three months ended March 31, 2024, an increase of $47.8 million, or 139.0%, compared to the prior year period. General and administrative expense includes a charge of $57.5 million in connection with the Antitrust Lawsuits, which is discussed in Note 6 - "Commitments and Contingencies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report. Also included in General and administrative expense were non-cash expenses related to stock-based compensation of $6.4 million for the three months ended March 31, 2024 and $11.3 million for the three months ended March 31, 2023. General and administrative expense, excluding such non-cash stock-based compensation expense and the aforementioned litigation charge, was $18.3 million, or 1.7% of revenue, for the three months ended March 31, 2024 and $23.1 million, or 2.4% of revenue, for the three months ended March 31, 2023. The decrease in absolute dollars and as a percentage of revenue, excluding such non-cash stock-based compensation expense and the litigation charge, during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by our cost reduction initiatives.

Current wording

General and administrative expense was $22.9 million and $105.1 million during the three and six months ended June 30, 2024, a decrease of $11.8 million, or 34.0%, and an increase of $36.0 million, or 52.1%, compared to the prior year periods, respectively. General and administrative expense includes a charge of $57.5 million for the six months ended June 30, 2024 in connection with the Antitrust Lawsuits, which is discussed in Note 6 - "Commitments and Contingencies" to our condensed consolidated financial statements included elsewhere in this Quarterly Report. Also included in General and administrative expense were non-cash expenses related to stock-based compensation of $3.0 million and $9.4 million for the three and six months ended June 30, 2024 and $13.3 million and $24.6 million for the three and six months ended June 30, 2023, respectively. The decrease in stock-based compensation expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily driven by the modification of the Company's Chief Executive Officer's performance-based RSUs at the end of 2023. General and administrative expense, excluding such non-cash stock-based compensation expense and the aforementioned litigation charge, was $19.9 million, or 1.2% of revenue, and $38.2 million, or 1.4% of revenue, for the three and six months ended June 30, 2024 and $21.4 million, or 1.4% of revenue, and $44.5 million, or 1.8% of revenue, for the three and six months ended June 30, 2023, respectively. The decrease in absolute dollars and as a percentage of revenue, excluding such non-cash stock-based compensation expense and the litigation charge, during the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily driven by our cost reduction initiatives.

Previous wording

Restructuring costs in the three months ended March 31, 2024 primarily consisted of costs associated with continued lease terminations. Restructuring costs in the three months ended March 31, 2023 primarily consisted of costs associated with workforce reduction actions and lease terminations. See Note 12 - "Restructuring Activities" in our condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information.

Current wording

Restructuring costs in the three and six months ended June 30, 2024 primarily consisted of costs associated with continued lease terminations. Restructuring costs in the three and six months ended June 30, 2023 primarily consisted of costs associated with workforce reduction actions and lease terminations. See Note 12 - "Restructuring Activities" in our condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information.

Previous wording

Depreciation and amortization expense decreased $4.1 million, or 16.5%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease for the three months ended March 31, 2024 was primarily driven by $3.9 million in accelerated depreciation for fixed assets, including leasehold improvements, furniture and fixtures related to office leases we exited during the three months ended March 31, 2023 compared to $0.9 million in the current period. See Note 12 - "Restructuring Activities" in our condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information.

Current wording

Depreciation and amortization expense decreased $0.9 million, or 4.0%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased $5.0 million, or 10.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease for the six months ended June 30, 2024 was primarily driven by $5.3 million in accelerated depreciation for fixed assets, including leasehold improvements, furniture and fixtures related to office leases we exited during the six months ended June 30, 2023 compared to $1.8 million in the current period. See Note 12 - "Restructuring Activities" in our condensed consolidated financial statements included elsewhere in this Quarterly Report, for more information.

Previous wording

Investment income, net decreased during the three months ended March 31, 2024 as a result of a decrease in our average short-term interest-bearing investments as compared to the year ago period.

Current wording

Investment income, net decreased during the three and six months ended June 30, 2024 as a result of a decrease in our average short-term interest-bearing investments as compared to the year ago periods.

Previous wording

Interest expense was $1.5 million for the three months ended March 31, 2024. The decrease from the prior year period was primarily driven by the interest expense incurred on our Revolving Credit Facility as a result of a balance outstanding in the prior year on this credit facility with no comparable balance outstanding during the three months ended March 31, 2024.

Current wording

Interest expense was $1.6 million and $3.1 million for the three and six months ended June 30, 2024, respectively. The decrease from the prior year periods was primarily driven by the interest expense incurred on our Revolving Credit Facility as a result of a balance outstanding in the prior year on the credit facility with no comparable balance outstanding during the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2024, Income tax benefit increased by $0.3 million when compared to the three months ended March 31, 2023. The changes primarily resulted from partial reductions in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions netted with state income tax expense.

Current wording

For the three and six months ended June 30, 2024, Income tax benefit increased by $0.1 million and $0.4 million when compared to the three and six months ended June 30, 2023, respectively. The changes primarily resulted from partial reductions in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions netted with state income tax expense.

Previous wording

During the three months ended March 31, 2024, Equity in losses of unconsolidated entity was $0.8 million primarily from our mortgage joint venture, which was formed in July 2021.

Current wording

During the three and six months ended June 30, 2024, Equity in losses of unconsolidated entity was $0.4 million and $1.2 million, respectively, primarily from our mortgage joint venture, which was formed in July 2021.

Previous wording

For the three months ended March 31, 2024, the Number of Principal Agents was 14,591, an increase of 990, or 7.3%, from the three months ended March 31, 2023. The principal agent additions came in both new and existing markets. During the first quarter of 2024, the Company began to report its agent statistics as of the period end. The Company's Number of Principal Agents and year over year growth reported in this Form 10-Q is based on the quarter end count.

Current wording

(1)During the first quarter of 2024, the Company began to report its agent statistics as of the period end. The Company's Number of Principal Agents and year over year growth reported in this Form 10-Q is based on the quarter end count.

Previous wording

(2)Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA, see the section titled “—Non-GAAP Financial Measures” below.

Current wording

(3)Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA, see the section titled “—Non-GAAP Financial Measures” below.

Previous wording

Our Gross Transaction Value for the three months ended March 31, 2024 was $40.1 billion, representing an increase of 9.6% from the year ago period. The increase for the three months ended March 31, 2024 were primarily driven by an increase in the number of agents on our platform.

Current wording

Our Gross Transaction Value for the three and six months ended June 30, 2024 was $65.0 billion and $105.1 billion, representing an increase of 14.5% and 12.5% from the year ago periods, respectively. The increase for the three and six months

Previous wording

Our Number of Principal Agents for the three months ended March 31, 2024 was 14,591, representing an increase of 7.3% from the year ago period. Our principal agents generate revenue across a diverse set of real estate markets in the U.S.

Current wording

Our Number of Principal Agents for the three and six months ended June 30, 2024 was 16,997, representing an increase of 24.1% from the year ago period. Our principal agents generate revenue across a diverse set of real estate markets in the U.S.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure that represents our Net loss attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, net, interest expense, stock-based compensation expense, income tax (expense) benefit and other items. During the periods presented, other items included (i) restructuring charges associated with lease termination and severance costs, (ii) acquisition-related expenses related to adjustments to the fair value of contingent consideration and other forms of acquisition consideration and (iii) a litigation charge in connection with the Antitrust Lawsuits. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.

Current wording

Adjusted EBITDA is a non-GAAP financial measure that represents our Net income (loss) attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, net, interest expense, stock-based compensation expense, income tax (expense) benefit and other items. During the periods presented, other items included (i) restructuring charges associated with lease termination and severance costs, (ii) acquisition-related expenses related to adjustments to the fair value of contingent consideration and other forms of acquisition consideration and (iii) a litigation charge in connection with the Antitrust Lawsuits. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.

Previous wording

We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe Adjusted EBITDA and Adjusted EBITDA margin are also helpful to investors, analysts and other interested parties because these measures can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, however, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including Net loss attributable to Compass, Inc. and our other GAAP results. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are not presented in accordance with GAAP and the use of these terms varies from others in our industry.

Current wording

We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe Adjusted EBITDA and Adjusted EBITDA margin are also helpful to investors, analysts and other interested parties because these measures can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, however, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including Net income (loss) attributable to Compass, Inc. and our other GAAP results. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are not presented in accordance with GAAP and the use of these terms varies from others in our industry.

Previous wording

The following table provides a reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA (in millions):

Current wording

The following table provides a reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA (in millions):

Previous wording

Adjusted EBITDA was a loss of $20.1 million and $67.1 million during the three months ended March 31, 2024 and 2023, respectively. The improvement in Adjusted EBITDA during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily a result of the impact of our workforce reductions, cost reduction initiatives and an increase in our revenue which was driven by an increase in the number of agents that joined our platform during 2023 and 2024.

Current wording

Adjusted EBITDA was income of $77.4 million and $30.1 million during the three months ended June 30, 2024 and 2023, respectively. Adjusted EBITDA was income of $57.3 million and a loss of $37.0 million during the six months ended June 30, 2024 and 2023, respectively. The improvement in Adjusted EBITDA during the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily a result of the impact of our cost reduction initiatives and an increase in revenue which was driven by an increase in the number of agents that joined our platform during 2023 and 2024.

Previous wording

The following tables provide supplemental information to the Reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA presented above. These tables identify how certain Operating expenses related financial statement line items contained within the condensed consolidated statements of operations elsewhere in this Quarterly Report are impacted by the items excluded from Adjusted EBITDA (in millions):

Current wording

The following tables provide supplemental information to the Reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA presented above. These tables identify how certain Operating expenses related financial statement line items contained within the condensed consolidated statements of operations elsewhere in this Quarterly Report are impacted by the items excluded from Adjusted EBITDA (in millions):

Previous wording

Since inception, we have generated negative cash flows from operations and have primarily financed our operations from net proceeds from the sale of convertible preferred stock and common stock. As of March 31, 2024, we had cash and cash equivalents of $165.9 million and an accumulated deficit of $2.7 billion.

Current wording

Since inception, we have generated negative cash flows from operations and have primarily financed our operations from net proceeds from the sale of convertible preferred stock and common stock. As of June 30, 2024, we had cash and cash equivalents of $185.8 million and an accumulated deficit of $2.6 billion.

Previous wording

For the three months ended March 31, 2024, net cash provided by operating activities was $8.6 million. The inflow was primarily due to a $133.0 million Net loss adjusted for $55.9 million of non-cash charges and cash inflows due to changes in assets and liabilities of $85.7 million.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities was $53.6 million. The inflow was primarily due to a $112.2 million Net loss adjusted for $109.4 million of non-cash charges and cash inflows due to changes in assets and liabilities of $56.4 million.

Previous wording

For the three months ended March 31, 2023, net cash used in operating activities was $55.5 million. The outflow was primarily due to a $150.2 million Net loss adjusted for $72.5 million of non-cash charges partially offset by cash inflows due to changes in assets and liabilities of $22.2 million.

Current wording

For the six months ended June 30, 2023, net cash used in operating activities was $2.2 million. The outflow was primarily due to a $197.1 million Net loss adjusted for $137.1 million of non-cash charges partially offset by cash inflows due to changes in assets and liabilities of $57.8 million.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $3.5 million consisting of $2.7 million of capital expenditures and $1.2 million for an investment in an unconsolidated entity partially offset by $0.4 million of cash acquired, net of payments for acquisitions.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $26.5 million consisting of $18.0 million in payments for acquisitions, net of cash acquired, $7.3 million of capital expenditures and $1.2 million for investments in an unconsolidated entity.

Previous wording

During the three months ended March 31, 2023, net cash used in investing activities was $3.5 million consisting of $3.5 million in capital expenditures.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities was $6.1 million consisting of $6.1 million in capital expenditures.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities was $6.1 million primarily consisting of $7.4 million in taxes paid related to the net share settlement of equity awards, $1.9 million in payments related to acquisitions, including contingent consideration payments, and $1.3 million in net repayments of the Concierge Facility, partially offset by $3.4 million in proceeds from the exercise of stock options and $1.1 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.

Current wording

During the six months ended June 30, 2024, net cash used in financing activities was $8.2 million primarily consisting of $14.1 million in taxes paid related to the net share settlement of equity awards and $2.5 million in payments related to acquisitions, including contingent consideration payments, partially offset by $4.8 million in proceeds from the exercise of stock options, $2.5 million in net proceeds from drawdowns and repayments on the Concierge Facility and $1.1 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities was $60.7 million, primarily consisting of $75.0 million in proceeds from drawdowns on the Revolving Credit Facility, $1.0 million in proceeds from the exercise of stock options and $1.4 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan, partially offset by $7.9 million in payments related to acquisitions, including contingent consideration, $6.0 million in taxes paid related to net share settlement of equity awards and $2.6 million in net proceeds from drawdowns and repayments on the Concierge Facility.

Current wording

During the six months ended June 30, 2023, net cash used in financing activities was $18.2 million, primarily consisting of $10.3 million in taxes paid related to net share settlement of equity awards, $10.2 million in payments related to acquisitions, including contingent consideration and $1.5 million in net outflows from drawdowns and repayments on the Concierge Facility partially offset by $2.9 million in proceeds from the exercise of stock options and $1.4 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.

Previous wording

We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. We are contingently liable for these escrow and trust deposits totaling $213.1 million and $120.0 million as of March 31, 2024 and December 31, 2023, respectively. We did not have any other off-balance sheet arrangements as of or during the periods presented.

Current wording

We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. We are contingently liable for these escrow and trust deposits totaling $270.0 million and $120.0 million as of June 30, 2024 and December 31, 2023, respectively. We did not have any other off-balance sheet arrangements as of or during the periods presented.