Compass (COMP) 9 May 232023 Q1 Earnings call transcript

Good afternoon, my name is Rob and I'll be your conference operator today. At this time, I would like to welcome everyone to the Compass Inc.

First Quarter 2023 Earnings Conference Call. [Operator Instructions]

Richard Simonelli, Vice President of Investor Relations, you may begin your conference.

good first thank quarter and joining everyone, operator, Compass the XXXX you, afternoon you, and for Thank earnings call.

will Greg Operating today Chief our us be our Officer. Reffkin, Joining Founder Chief Executive Financial Officer; and Hart, Officer Chief our Kalani Reelitz, Robert and

you just measures in our and that to on earnings out directly GAAP performance, measures the website. first the free non-GAAP Company's reconciliation quarter case release the discussing Investor our the cash will refer most find In some and in flow of our Relations XXXX posted to presentation went we measures, can these non-GAAP of are each comparable in

be quarter continued operating expectations, include comments These will on statements our forward-looking assumptions of based related guidance to and are our forecasts the for XXXX uncertainties. We our current and second statements and making expenses. that and involve risks

Our actual results may statements. differ these from materially

risks, affect filed our other more XX-Q find and on factors SEC uncertainties filed can XX-K with Form website. on recent could that filed most all Relations quarterly the and information on You our available also report Form on results annual about and our Investor report

forward-looking You May expressly presentation undue any not on and obligation to today's reliance any this disclaim should information all X, information. in today any of place as We are statements date, XXXX. this update

over the without Robert Reffkin. to So turn Robert? ado, call I'll further now

conference you for Thank results first call. today for joining us quarter our

XXXX. for QX over Compass both just results and revenue financial than estimates. QX our EBITDA million strong achieved consensus better in $XXX and and We XXXX revenue adjusted guidance were was

quarterly very both real the share to and over prior the XX% In market midst each two have estate XX% market, the outpaced transactions of the for compared grown improved we Our market. quarters, industry share last of market splits. quarter. we down In difficult a the

was the percentage basis last impact points to XX.X%. as by from non-GAAP excluding improved QX of expense sunset When year for equity XXXX. which in $XX agent a also program We of Adjusted million QX our we revenue negative EBITDA of commissions the approximately XX XXXX.

$XX million XXXX down improvement This $XXX ended same quarter in nearly equivalents use first and QX. cash with the cash slowed cash $XXX is the and period. our of compared revenue an in despite We to million being significantly million in of QX

continue positive We expect cash full that XXXX for through to cost of the reset XXXX, moment, to of This into on Kalani three of a operating throughout aggressive our the as continue be will In plan. of we free discipline is remaining walk working. each flow XXXX our quarters stance the and in on expense year, you our financials. demonstrates and levels details the execute and

still to profit to we these market improve. focus significant At business levels, conditions able are generate future on the expect and of growth we the as

paying Compass examples, we August majority our signup QX are X,XXX our X% us, grow over more since grew no equity Here continue Compass have to agents of year-over-year they're in bonuses. their told agent XXXX brokerage. agents come to some base, have or these count The average cash previous for than agent and

Compass allowing ultimately profitable for strong and best they and them the to that the of network agents most the be. to referral This clients of can demonstrates the platform, culture come be technology benefit agents,

advantage, to the We that platform our having in in over ensure we platform to-date. the continue billion maintain invest technology $X to invested meaningfully significant

monetize estate to for those scalable transactions most the execute the we our technology real belief transactions. the agents only way offer industry. it that you other and the platform the As the know, industries end-to-end for best professionals to platforms way Similar and country digital empower end-to-end in are is proprietary to that

excited that transaction. experience of the profitability an that both platform industry-first we agents features take cannot directly per services adding know experience the inclined are agents platform, use our that Escrow successfully are to to to these in platform, announce more rate enhance the and are revenue transactions. integrated We into and when from to our find attach We our services rates directly anywhere. Compass increasing the I'm Title and they

agents Escrow can tools now Southern in seamlessly already directly use Our every from Compass they in our order California affiliates platform. day owned and Title from the the

the Title to continue months. our to Escrow valuable the entire expect course We this area and across out of feature next over coverage roll XX

our rates sharing coming Escrow to additional best the integrations to attach and quarters. to industry Title over accelerate our metrics and financial expect forward We and look path performance

of Looking certainty the by from environment optimistic the and macroeconomic unpredictable more remain until actions cautiously we the Fed. XXXX, remainder for ahead we gain future

some seen would at mortgage likely transactions. offers, rates with more have open is have been see we the would multiple return houses low traffic Steady and foot pressure and signs positive there a upward we While rates remains inventory more on still in mean, future decline of prices. helpful,

generate QX cash for we performance free are XXXX. the OpEx adds Most in that in set QX confidence targets what market flow right our the to positive and to already importantly, seeing we have

as I want relates to to emphasize OpEx. two it important points

the in market beyond XX% the year down, Fannie XX.X% reset most NAR, recent Mae of MBA are should range worsen we to XX.X% the down steps the the are levels decline Keep OpEx a take lower. down. additional if from to estimates for in prepared First, to and mind, for

we Number of OpEx confident to range two, million. million that set $XXX right target as I $XXX previously the we've are said,

permanent taken not ones. have We temporary actions

within stay to three the to expect two We years. next range over this

We will million be annualized at just $XXX by year-end.

operating a OpEx over years, even actioning couple our to of next to team the And range as improves continued our market the normalized more of levels. with management of is midpoints efficiencies towards the goal committed

the for in market long-term improves future we a result, when profits. well-positioned be As significant will the generating

the by States, company years As in two a United have industry. agents retaining the number the real and the best sales volume for built the highly brokerage for estate in one we past desirable attracting

proprietary by our incredible In to where best the first agents supported to shine are delivered. The technology and powerful agents and employees their inspiring agents our business. people with technology unparalleled provide culture and grow quarter, We in markets. brand, able agents difficult an an are a platform

team are to be our can incredibly in foundation to to what and agents. to positive about remain in times future a end desire that difficult cash entire by and XXXX us confidence and historic with the thanking the we future XXXX. We Their achieve I the of on going Compass dedication have success. want flow employees excited these strong laser-focused diligent remain for we in free has continue incredible allowed I control

to over it turn now I'll Greg.

you, Thank Robert.

real this backdrop, Compass the past to XX Against two experienced just in estate outperform. have years. the We of worst in continued residential quarter

Our row. versus market and we second up up the QX QX sequentially XX XX,XXX in a XXXX share nearly X.X%, processed for the quarter, first transactions in XX% quarter as of In was from basis for first transactions market points estate year which a decline reported the NAR. quarter, XX% decline entire XXXX real residential in favorably to by a ago, for the compares the

Agents agents industry has are saw In lower lost XX,XXX October business, more the and leaving nearly altogether in and or XXXX. since agents this saw recruiting as the January February retiring industry well. the leaving volume environment, we

in March. improved performance our Happily,

to our QX of XX,XXX X% XXXX, principal up increased For principal agents average number year-over-year. agents,

XXXX QX agent for retention XX%. was principal Our

is we agency. the through another agents are of of number about Compass going really excited returning things, One the after to

that and Compass agents call they cannot these business them are platform and technology the integrated CRM it search, us live telling We tracker without provides. comprehensive the capabilities winbacks, marketing,

moving see clients. We love to Buyers, both in our real and the also agents hear clients how new their to is time agents automatically our that delivers able and and tool, see listings collaborate real-time. which the collections our sellers listings market are in the with newest

retaining pleased testament to which is attracting our as culture Compass key We are factor entire team. also a in with a agents, and

entering us In acquiring Launch March, footprint Real location is brokerage U.S. agents a strong market a key a and in top Launch approximately Arizona luxury we foundation Estate. expanded and gives for Compass our referral with XXX agents. premier by

were any potential network. Critically, grow equity Launch We to as or consideration. cash we add our enormous see and growth able for we synergies upfront without

the our to in to we that equity Going dilution. be while to structures our limit utilize adding deal upfront and forward, agent approach using allow minimum us via base to intent M&A opportunistic cash

culture, Compass? the Why brand are agents It's platform, coming and network. our referral power our our our of to

XXXX, us they're told majority prior who than the Compass agents fact, using they've brokerage. joined split for their they lower of stopped we cash incentives August a when since In joining sign on equity from received or

us doing so The majority and efficiently depth it one integrated of by our help and their of the can technology agents transactions. reasons are them and is the more Compass run more coming are attracted of they them believe for platform technology help platform. also to primary These close the Compass's agents business tell breadth that

AI in agents the from well. interest now of lot a There's right as

in platform tech-enabled investing As in ago. years started the AI our leading brokerage, technology in we implementing

recommendations, we launched leverages XXXX. One of that ways back which key Likely-to-Sell AI in the through Compass is our

business million to last XXXX, This and tool we the incremental agent's Since predict engage to recommendations generate handed efficiently. of have allowing the right that with more more uses are launching homes which annual the XX to than contacts out in at agents in in people two right these more AI of over most next Compass revenue each database $XXX to their recommendations attributed be millions sell likely months the of an time years.

overlay search most to pages, generate the same quick similar to listing market suggest most to in the for video analysis Likely-to-Sell homes to comparative our properties the help relevant our image rooms analysis. in that the of for to addition type categorize market similar comparisons In and copy AI Compass top comparative listings leverages platform surface images suggestion on search of and select studio

marketing models listing outreach of team in our time possibility tremendous ever our most teams ChatGPT collaterals automating real evaluating currently technology see the embedding estate lot opportunities We've the we as transaction our own workflow. technology are operations the description our of productivity creating to agents, our and agents seen some coaching We agent improve had Similarly, clients. and AI interest has engineering a GPT-like from well-attended in staff in save tasks team, it this such to and focused with using to sessions writing from for more. on of

AI also build investments and integrated platform enhance. we'll an return see AI outsized believe upon that We tools on of because that can our our

into in of Title commenting are As use positively our Escrow Robert returns mentioned, how to and integration feedback California. this the technology rollout it for enjoying feature. of and agents platform Southern easy Anecdotally are from on agents is we positive our early

than the integration, first more launched time. XX% are one-third we're initiated than and been more customers the who platform Compass's through of we Escrow agents that of Escrow and that Since those Title using Title and new addressable seeing are for have the services orders

Escrow and in very this encouraged United the platform results are months. the wherever positive States offer by over We the out XX early roll to feature Title next plan we and

and of for proud future. the I'm excited team our

taken in have We environment. while strides operating unprecedented major of Compass, in the market an transformation

turn Kalani it over CFO, I will Reelitz. our now to

Thanks, Greg.

financial going to second Then an our I'm in update review our quarter. first quarter results I'll guidance more provide Today, expectations the for on detail.

of shared market, and and retain with on base in our can our the ability controlling you are best the our we Namely last quarter, call agents. investor what As attract cost low we historical I housing midst control. this to

Our QX cash to and base controlling our us show results expectations focus strong on our adjusted flow. exceed a on EBITDA allowed cost free

implemented cost additional our base. we further actions quarter, first the reduce that During

OpEx the our by taken, from OpEx actions expense middle our Through XXXX have of and range, reduced our rate of at reduced XXXX. the quarter will we $XXX second million run have we

base here are we committed to disciplined operating sit we we our and structure. Robert and on new primarily cost cost as QX and exit maintaining As with mentioned, a focused remain today, new we our expense

our results. to Turning financial

period, XX% $XXX price a transaction was of $XXX million in was $XXX a range in the reflecting as XX% revenue of the reduction selling prior-year billion revenue to in million. XX%. exceeding reduction of ago, well first a $XX.X decline about average This of value to decrease a Gross high in our revenue $X.X as a XX% year transactions year-on-year. from quarter, quarter First total million guidance compares the end of billion representing

on by points basis QX program XX excluding when Our of period. the non-GAAP last of the a commission XX.X% revenue expense equity approximately improved year-ago of as impact percent the year from to agent

exchange the allowed As XXXX for the agent commission program's the QX the additional Page equity. deck of portion last which equity we the XX commission a agents year impact program, was their previously line. of to on offered includes details investor cash equity our announced, on agent

of in in We QX differential each of continue see XXXX. will anniversary to program equity the we this through the agent XXXX, quarter sunset until

for million the commissions Our total quarter, expenses, were first non-GAAP or basis. on excluding million annualized operating an $XXX $XXX

expenses and of As as operating somewhat we've historically quarter-to-quarter talked about to in line opposed sequentially previously, in fixed from with non-commission-based increased varying revenue. have nature are many our

our to $XXX same a for period million quarter past million an in the the first reduction initiatives of $XXX due the However, year, reflects implemented reduction a OpEx over OpEx cost million ago. year $XXX from of the

point, support, G&A. exclude reference sales non-GAAP and and research referred expenses, expense adjusted include from included and categories the a that As expense the to we of expenses operations And other and stock-based marketing, development to compensation and operating EBITDA.

reconcile on XX included these our We've QX that tables amounts. in Pages XX investor and deck

Our range that was our of $XX $XX provided loss $XX.X February. a million, quarter a which million we for first exceeded guidance adjusted the to of EBITDA in loss of million favorably

direct with adjusted well. favorable a impact expectations, As our in a had result of to line expense in as QX the EBITDA revenue managing operating

the quarter in million amortization the the a year which depreciation for was $XXX noncash expense. quarter period and of stock-based loss compensation to of and are $XXX for net GAAP net $XX expense in compared $XX ago. Included million GAAP of non-cash first million million charges, loss same Our loss a the included

first $XX our the extent force related the a during employees operating exit from January prior severance a and termination related lesser quarter, primarily some and million, leases. reflects restructuring XXXX, to which in benefits charge to by with of reduction Additionally, certain in we impacted Consistent of costs quarters. announced previously incurred

the net first lower that press $XX EBITDA, EBITDA. adjusted loss in by was changes million expense is favorably the to free other cash quarter of which during capital. million, in the release year reconciles today, a compares driven capital Free negative in flow the Included negative cash and working $XXX adjusted flow improvement favorable to issued GAAP in schedule part ago,

the in drawdown cash which quarter. at the our this collapse made Silicon $XX our $XXX March, abundance million took given balance of of drawdown includes of We market at end of out facility of Valley conditions unprecedented cash the and additional an Signature sheet had equivalents million time. additional Bank and We we during March revolving the on caution credit from following Bank that of the an

Fed a collapse we've on Republic the avoid the additional While expansive week First seen banking of ago, the impact actions to system. seem an of

cost, back of the that back X% of April and additional unused we SVB, result QX of capital. drawdown of we expensive basis The proceeds last $XX initial relative in the an to drawdown level stability million a form have year. the As net since the from paid the drew on bill treasury $XXX million seen remain and the is approximately following in fallout primarily down interest in a minimize are which to this and invested we

expect free We once pay we down sufficient to have these generated flow. cash funds,

financial our Now turning to guidance.

Our operating our improvement. results creates discipline performance from QX that meaningful expense

risks. some signals in As we while look additional we've to seen we see improved, market also forward continue mixed have and trends some the to QX, market,

the million. agent XXXX, the For EBITDA impact billion to $X.X $X.XX and from expect QX year. lift We to positive revenue of a we range $XX additions million $XX the of expect last billion adjusted revenue net of of new do over in

this However, QX, similar offset particularly mix in experienced from year. we which to of largest California half a market first our be record last the will by which sales drag, is anticipate

the QX, in cost with given we line and for with year, remaining cash flow schedule for expected to on flow free flow transactions expectations all schedule discipline be year stay assuming in remain cash to quarters our are positive. be cash full on be positive we free the free Importantly, continued to positive industry

range our to be full-year of expenses expectation million million. reaffirming non-GAAP $XXX operating $XXX are for we the to our in Additionally,

high at this an and this June expect be to range end of annualized basis We midpoint the by of the on range the quarter at year-end. by

year, we've reduce to through that last results. base have our the For our proven and commitment about commitment spoken our cost

operating as of maintain next expense are we We cost discipline our committed even today our over the levels through years. more couple

our to team operator turn the would again and call to do you to Q&A. the members to begin now all you agents for Compass. for like over Thank I that

first Oppenheimer Your Instructions] line Jason Helfstein from the comes [Operator Company. question & from of

open. is line Your

Thanks.

I'll ask questions. two Just

you you for positively about? if And we in you are about -- basically think system-wide, expectations how Thanks. model? the on multi-calls that you do your First, are year we're the have we've as just previously what second which in -- you multi-tasking, that kind But macro out remarks. question, they're all the underlines within, and impacting macro, think that the Title talked I Or is I rolling do CNO are apologize unchanged so your I and think margins? meaningfully then changing prepared Escrow full of mean

start we're volume to and range. I'll to be Kalani. to then of not expect year still I'll on call we this Hello. XX% in changing our pass it that down what for No, view it XX%

of woods road In out choppy terms of volatility macro, ahead yet. the The we're likely. market demonstrate its can and still the not

market more back, we of foot in But are all early buyers in almost open our multiple spring sellers traffic at offers saw houses, and markets. more

not quite Buyers steadily mortgage We've speaking. pretty the is demand time, have new issue. normal. relatively a as accepted been there So X% a for some mid-XXs in rate

reason don't X% consider further of you that mortgage to in of you X% just terms XX% have, X% X% if up to three not of last rate, a are in there's And at mortgage spring price. down locked asset The country financial mortgage months, X% want have XX% been homeowners The over around you the inventory. and it. the but sequentially enough each homeowners in rates agent if why below, lose Price In market. a or are rates prices is locked you locked it's the the issue of any year-over-year, or month. generally or are talk of XX% below. below, And increased we homeowners in mortgage at in rates are is

that instead to home, it out. of selling move their some So have you see actually renting people they're

And were will to the mortgage curve result optimistic, I down so, transaction somewhere change we cautiously the between to real when but rates come in think X.X%. X%

range, more through that's just that with we'll until that and low importantly even our get of a that it then, our period forward that we moment In lot industry looking more delta share and not we for amount inventory. EBITDA will the even keep can And we're will unlock we're to the demand, to but costs our tremendous investors. and them a will continuing keep be low only

But in pass terms rates, Kalani. to it of I'll attach your second question around on

Jason, Yes. businesses. question. we're thanks about for excited mean, the overall, really I think ancillary our I

XX% the about we by expect those lift, maturity. think impact probably points margin of And we businesses those to XX% XXX scale As to basis to we at margins. as at T&E, cetera primarily about et really about do kind businesses, it's mortgage operating driven margin XXX

So grow and our obviously are margins. as the they channel scale lift

excited what does also really on our we're about So for but the margin it line. agents,

And just clarify that. to

mortgage T&E revenue, in as is that down going below show but going up sell show to will is correct? where to -- in -- revenue So

up the Jason. we overall Correct, about I on show profit will all show below, Yes, the ultimately mortgage correct. focused T&E Overall, but kind will though, line, increase margin on get we're kind as up us margin. to of relentlessly commission and operating think think of

you. Thank

Company. Bernie And Needham from question and next McTernan line the comes your from

open. line is Your

Maybe is obviously, AI, to or to in large for on relative you relative rest building I start the spent taking questions. narrow tools of view of do versus you industry? AI generally time following going to for generally think Compass You've on before, lot just How you Greg's a and your start your that thank commented rest the money increase comments and AI Great, gap view? technology to that positioning agents. the head the of the industry lead or a up

great Thank you, It's question. Bernie.

our number a in of agents So the been in AI and for investments years. as the U.S., number the benefiting leading technology-enabled brokerage have one from brokerage our

think it's So that's can that I don't competitors our new for something many of not area us, a say. that

performance AI is that critical think, is to on is nature really really I AI. Second, data point the of that dependent drive a its

in our can that integrated because more to, agents that to it's use. and enhance in our models. us end-to-end agents see it data and so, our end-to-end help integrated turn to those improve the delivers AI more as AI And which generates points turn touch more platform the better And of provides to tools, usage drives we performance apply data more improve tools result that

regard. I offer Other end-to-end that And from think, don't platform not benefit going their brokerages agents virtuous so, we're cycle. pretty integrated in an are this that to unique

competitive with has enhance believe over differentiation Likely-to-Sell. and we're we our will certainly what time So doing that with already

the thoughts how And going bit Got any for it. gross guidance the Kalani, I Understood maybe a terms that year? the trend gross just rate margins think implies are the margin step and or -- little in very down commission should should sequentially, helpful. to but of throughout

Thanks Yes, the question. for Bernie.

I think some going we working basis our burning some on had the about by driven we're generally incentives XX We're mix speaking the on up an apples-to-apples, off. go points. apples-to-apples basis of see through, that obviously commissions improvement to shift an of in first quarter, continue

we agent an to is apples-to-apples, going of the margin it drag So to on program. talked What equity like-for-like is about we increase. the business and kind expect

as made the an for the is overhang that kind year to of stop XXXX. so year we at going the us this And end be that of to decision

the expansion. margin but overhang, continue like-for-like to a on we So see that's will basis

view? looking Got net growth, agent been trending then principal at we there's lastly think for down, of it. look agent ways adds, we'll agent do just know do I net think when at you adds in low And just agent different on point count, hit you the for your if -- me average they've

Bernie. just in agents, the that great I that I'll one, remarks. scripted year-over-year the A things mentioned X% of lots to seeing grow up we're despite couple Number industry. of QX, reiterate a continue the fact principal leave in that question, So we agents

agents as are that more are also impacting trends the impacting of well. our agents Some broadly

an seen at what two rate QX past. happen to so, the relative trends accelerated in we've And seen we've in

join First, our other to are principal agents teams deciding at solo Compass Compass. of at here more

So longer when Compass, we principal in the do we business leading isn't our no that. them count but agent count

agents and principal more directors becoming Compass. retiring seeing we're referral at Second,

And Compass. these be and transactions closing here But are agent at Compass to business want count. continue who clients are who themselves longer agents to generate no to no included in so, actively going are our refer other to agents for longer principal

And so, those we are saw than in two more we've that historically. of things seen QX

to Couple QX. other saw well. points of I our in that retention as want agent XX% highlight we principal One

I from businesses most think would their kill for customers. that loyalty level of

Second, the principal Compass agents in of left under in terms QX left of who year. that of leave majority last commission who income agent majority the did Compass, -- agents $XXX,XXX gross the in made

agents And these much less agents. our productive so are than average

so, the downturn. given And

think to of I the altogether. likely them leaving are industry many

we your as And went continue saw since on. recruiting we've to the the perhaps a that momentum seen and Third of pickup trend QX. question, quarter end

added And growth strategic in managers. to additional agents provide QX our a principal context for little

recruit that join folks to Compass. the are agents those So

on productivity that measure equity That was that QX the QX we organization. the and XXXX, still though XXXX. effectively level in cash sign it's using in at So it on same and for sign incentives was incentives. were Even

we on course in about XXXX our ago. so But equity managers the even strategic of we're cash And a cost though of year we reductions the we over that had then that and implement had incentives. or the growth half was the have productivity using currently January not XXXX, same, with sign to number

that and which And to now. we're add recognize back so, more we recruiters doing build up, to team we need that

guidance my this seeing. don't We And point the on quarter hope count, our so, forward-looking what that my hope low based we're for is on but formal have a is that. that is agent

really Total for best these compare for in the estate and in in over add. real worst challenging estate a is in and that would of quarters, the most market challenging agents market our share, years, best years in I market the And market business challenging business. best lead Yes. share proxy matter two quarters agents but agents sequentially number And upon a agents. just our saying the that I were company both market, real share market, the a grew two the a proved gain a share agents last there's we're the think and

And your Bouley from next of the comes Barclays. Matthew line from question

is Your line open.

evening, the everyone. for questions. good taking Hi, Thanks

back maintain years that OpEx just the about, there So range the over variable expenses could you there even think the how $XXX comment are I'm you with to think you better implication how the the would market Thank And be, inflation? you range recovers. do cost cost have as make additional fixed of any would to million if and to fixed would a have in what recovers? results to curious in the you. what's next the million of come that in $XXX maintain degree to reductions, to in that sort about couple market order would market

done right. just We've I over not work the that year, it's -- the temporary, Look, our operating new hard structure. think Matthew, built last Kalani. incredibly it's team has Yes, the it's

set I as and in think, range. I million range in think to right we're mentioning to stay confident that the $XXX that that target $XXX we've expect million we we're

actions continue know to opportunities. of types to talked we've I as are models taking and to operating we management about look efficiencies. at and to think team at committed labor I other low-cost a labor look

we'll think I to continue look efficiency. for

I to are every think we year driving growth. our make sure fuel our part that really to of job efficiency is

have variable hopefully from help we're and to in continued offset at is we real at and vendors operating estate, to the should talking we'll that there to our a the continue efficiencies how And looking operate growth -- to that feel look looking continue so, systems about.

so really in for be that just So that's set couple target right range I going where are years of value think years and the drive pretty we tremendous us. over out the we're that that to confident the next space

Got it.

you into guess that's I then the for helpful. that. Okay, Thank near-term. And zooming

in expect cash be next it's that you think the any positive be three of if QX correct is me quarters. flow made tougher The free numbers seasonally other you wrong, comment to to flow would you get please And free these cash positive. obviously, I of

you by QX something comment million free like that $XXX OpEx a I the million a tailwind maybe a you'd on XXXX. think million think made I be had you'd rate based in $XX $XXX QX, of have year-over-year run usage cash you and at

to not throw there So flow free QX? in confidence of on positive out cash too on but gives numbers kind bridge many help in just around, the the what any

I Matthew, stay with Colonic. Yes, will

I we all, million. part I $XX think EBITDA first is, guiding QX right million of it think in to around of $XX are

us, QX we guess that year. And cash base. be free so quarters and the cost I'd QX for full improving flow best a positive as our result, remind I are all expect an of of to on kind

and expect as think kind sequentially as QX and And mentioned, at improving we see think look we also, that the market going were -- our controlling to in XX%. we of lastly total, quarter-by-quarter. as the at variable. it I you are then that now be So think I is markets step recovers QX, focused and really we on the back there OpEx OpEx higher I to we speed And revenue right the than XX%

free so, decline that And positive. flow cash we'll be further even actually level at still

the when think you you cost think I revenue think about coming about the down.

well bit of of lot a longer last are year as that a M&A kind and are bridge be well. side going also the offering the we on are a We as as no cash incentives to flow things year between of this doing

All and right, guys. thanks, Got Kalani, it. good luck, Makes sense.

from McKechnie the next of question Ryan Zelman your Associates. from And line comes

Your line open. is

on you estate. Thank to in and and progress. launch wanted on dig results real I the congrats

deal So, without referenced the structure consideration. you upfront

unique over or of dig just little business just from Or flow to in all? from alter that. aside the of deal the guess And does will else? So it's maybe a way volume through I same existing I earn-out more or compare flows like Does structure more launch at structure, P&L in a that way time agreement ultimately an model, that different imply that as the a on the or that something business? franchise-type wanted the

are question, for of upfront. the Well, the I'll first and were companies entrepreneurs second. get start Kalani that upside pass that I'll some in all the the half the there's running want to to on

nothing to the a an upfront multiple multiple This have to be have structure and typical years, upfront want is be years. to have and earn-out applied. Some is there's where where structure an companies there out spread agreed-upon earn-out in over

already applied at time have at will be valuation. agreed consideration be and They've years future that EBITDA upfront that to using on will

way to Kalani? parties. win-win of so, expense years differs kind entrepreneur a of gives it for the upside. for both It more for the us And it's a couple and

The different consideration Robert. timing more out, is Ryan, course will the flow I'd it thing as in normal P&L only way P&L it impact of mentioned -- our used should just than through the when to. the goes just our I it but shouldn't Yes, add, of Robert a of answer, we're

achieved I'm if just been guess if within dynamics are level the or Okay, some perfect. milestones have I commentary origin but for there's consumer turmoil. either you've or activity ancillaries, encouraging within any has the towards? agents been you also has Super you. any on in updates seeing it helpful. banking I'm Thank sure, any been curious sounds some mortgage the also the kind the or some the the your of with of or pushing buyer jumbo industry going And been that impact integration are commentary T&E some the on? curious that on then given that, you're market, point, banking of tightening side, impact status seeing seller And if there there at on mortgage from

guaranteed We're excited well of to end be going and of year. by expect potential And of mortgage again, of very the a by Compass covering markets they're our rates, form joint our far. majority venture launch this the business the so in it's and OriginPoint, we the between

biggest from In some from jumbo was pulling in they're and assets mortgage clients are reasons, out First rates deposits opportunity on that for exchange of of other discounts getting again this giving back that banks an the is mortgages, terms for creating Republic the obvious there. for and

competitive a Republic the was the it was rates, is better as for opportunity conventional kind because gives providing in OriginPoint First the at of fairly to mortgages -- market biggest that it that more still in really an race bottom, perspective. -- -- scene discounts than and attractive because We're That makes us for to the said, attractive not easier it's they're First it be discounts but Republic. OriginPoint giving to context it in

you. thank helpful, Very it. Got

And of question the line your next from comes UBS. from Lloyd Walmsley

line Your open. is

see of more about longer medium where kind Launch, guess structure term asset-light we in do it's something pure you a with the contemplating I working might something now, you're earn-out do sounds on deals. like to light truly deal more near-term? just Or of longer that? think how more term to Scottsdale now, than licensing -- that like asset and that Thanks, for potential the referral-type is Is just

good to not down the But thinking bringing profit now asset-light to expand. the obvious been per at looking after all that has we this agents areas, an support their types transaction the at of more creating on we feel priority have they services need are ensuring about ways there to other ways asset-light time, do those focus and will top that. cost more for it. our We're adjacent reasons, right be grow to Then have The different business. structure. with our Yes. It's ways

I any And into since in into you've further fall. the further platform just rolled peak as of we new finishing out and this then performing Okay. progress dashboard things kind and how the of think more kind season? you on up Like head the move as that's update stuff

Yes. It's performing quite well.

bunch on end-to-end as we tracker ago. focused agents. a though usage based You increasing are on as even our a it other improve nearly areas management was our continue year feedback any, never also with business we're market done seeing so But is busy transaction to the from and not of

real hearing run scripted a Compass the their spend doing that agents also more real the doesn't them portion value help sign We're that's doing them. and that grow more don't mentioned of that time the are effectively more agents given anything remarks is to so businesses for we to everything coming we're And providing as technology. that and in

from on points. those seeing and all feedback usage we're really really good agents good so, And

on be survey agents And the any that when back. think it's number in we stay shocked as them well came of number why agents I the of just that called that our leave, and anything agents reason ask technology I'd of Yes, XX% than as that and and for want six anyone reason far reason the last number away set to they technology. one they if come one months wasn't the less said they they reason the validate and economy came, they one number the came

you. All thank right,

industry it's believe we above will attach have mortgage forward attach. right of Title because in ahead we and terms And the sharing we ultimately of detail on integration that we And adjacent rate Escrow to that how have sharing to the forward now, more services look signs its in platform. look average attach, to of we quarters driving positive

And this back our at CEO, closing time. I there will questions no are further turn some over call to now Robert Reffkin remarks. final the for

is And that want future I Compass golden for joining employees believe estate care. look the want Bye. the all challenging call. us. to agents been I age It's building everyone. Take to behind the Again, XX thank real ahead us forward a just of the I at months thank I everyone and and with to But of Compass.

for conference This call. participation. your concludes you Thank today's

disconnect. may You now