On November 10, 2021 Compass, Inc. (NYSE: COMP) reported its consolidated financial and operational results for the three months ended September 30, 2021 (Press release, Compass Therapeutics, NOV 10, 2021, View Source [SID1234595150]). 3Q21 Revenue grew 47% year-over-year to $1.74 billion, with a GAAP Net Loss of $100 million and an Adjusted EBITDA of $12 million. Compass’ technology and services platform helped the company deliver 36% transaction growth compared to the prior year. The company remains confident in achieving Adjusted EBITDA profitability in full-year 2022.
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Complete results can be found in the company’s 3Q21 Shareholder Letter on the Investor Relations section of Compass’ website at View Source
"For the third consecutive quarter as a public company, Compass agents outperformed in a highly competitive market delivering $69.1 billion in Gross Transaction Value, a 45% increase year over year, and revenue of $1.74 billion, up 47% year over year," said Robert Reffkin, Founder, Chairman, and CEO of Compass. "The Compass platform, services and support continue to create business value and growth for our agents, who delivered a 36% increase in transactions, outperforming the industry where transactions decreased 1% during the same period. Our national market share was 5.4% in the quarter, up from 4.1% in the same quarter last year."
3Q21 Financial Highlights:
Revenue increased by 47% year-over-year to a third quarter record of $1.74 billion as transactions increased 36%.
GAAP Net Loss was $(100) million, compared to $(14) million in 3Q20.
GAAP Net Loss margin was (5.7%), compared to (1.1%) in 3Q20.
Adjusted EBITDA1 was $12 million, compared to $11 million in 3Q20.
Adjusted EBITDA margin was 0.7%, compared to 0.9% in 3Q20.
Adjusted EBITDA increased year-over-year even with continued planned investments in agents, the platform, market expansion, and the scaling of Adjacent Services.
3Q21 Operational Highlights:
Agents: Average Number of Principal Agents was 11,616, an increase of 987 from 2Q21.
Transactions: Compass agents closed a third quarter record 62,349 Total Transactions, up 36% year-over-year, compared to a 1% decline in transactions for the residential real estate market2. Each of our Principal Agents generated on average 5.4 transactions on our platform in the quarter, up 3% year-over-year.
Gross Transaction Value ("GTV")3: GTV of $69.1 billion increased by 45% year-over-year. This was a third quarter record for Compass, reflecting strong transaction volume and higher average transaction values. GTV per average principal agent was $5.9 million, up 10% year-over-year.
Markets: In 3Q21, Compass entered 5 new markets, bringing the total markets served to 67 at the end of the quarter. Compass’ national market share was 5.4%4 in 3Q21, up from 4.1% in 3Q20.
3Q21 Platform Highlights:
Compass is simplifying today’s complex, paper-driven, antiquated workflow to empower real estate agents to deliver an exceptional experience to every buyer and seller. Our platform is a combination of integrated software as well as value-added services, all tailored to the needs of the real estate industry.
Total sessions on the platform grew by 31% year-over-year.
Major feature enhancements during the quarter included an expansion of team collaboration capabilities, the introduction of a video messaging tool, and improved search.
Title and Escrow: Since the close of the second quarter, Compass expanded its Title & Escrow offering into 4 new states, increasing our coverage to approximately half of our Total Transaction volume, effectively giving us more opportunities to drive incremental revenue on each of our transactions. Compass’ Title & Escrow services were utilized on a mid-single digit percentage of our Total Transactions in 3Q21.
Mortgage: In 2Q21, Compass announced the formation of OriginPoint, a mortgage origination joint venture. OriginPoint has obtained the required licenses to provide mortgage services in 6 states to date, is hiring loan officers, and has set up its first warehouse line of credit. We are on track to originate our first mortgage in 4Q21 as planned.
Guidance for 4Q21 and FY2021:
FY2021 Revenue of $6.375 billion to $6.425 billion, compared to prior guidance of $6.15 billion to $6.35 billion.
FY2021 Adjusted EBITDA of $(25) million to $(5) million, compared to prior guidance of $(85) million to $(45) million.
4Q21 Revenue of $1.575 billion to $1.625 billion.
4Q21 Adjusted EBITDA of $(75) million to $(55) million.
We remain confident in achieving Adjusted EBITDA profitability in 2022.
We have not reconciled our guidance for Adjusted EBITDA to GAAP Net Loss because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
Conference Call Information
Management will conduct a conference call to discuss the third quarter results and outlook for 2021 at 4:30 p.m. ET on November 10, 2021. The conference call will be accessible via the Internet on the Compass Investor Relations website View Source You can also access the audio webcast via the following link: Compass Inc. 3Q21 Earnings Conference Call.
An audio recording of the conference call will be available for replay shortly after the call’s completion. To access the replay, visit the Events and Presentations section on the Compass Investor Relations website at View Source