NEW YORK - Compass, Inc. (NYSE: COMP), a leading residential real estate brokerage, reported a stronger-than-expected performance for the first quarter of 2024, with revenue climbing 10% YoY to $1.05 billion, surpassing the analyst consensus of $1.03 billion.
The company's adjusted loss per share for the quarter was -$0.27, slightly missing the analyst estimate of -$0.22. Following the release of these results and positive guidance, Compass' stock jumped by 7%.
The company's first-quarter achievements were underscored by a significant reduction in operating expenses and an increase in market share, contributing to the generation of positive free cash flow for the first time in a traditionally slow quarter.
Compass' adjusted EBITDA improved by 70%, reaching -$20.1 million, compared to -$67.1 million in the same quarter last year. This improvement was attributed to a $32.1 million reduction in non-GAAP operating expenses, down to $211.2 million from $243.3 million YoY.
Robert Reffkin, CEO of Compass, highlighted the company's growth in market share and the addition of over 990 principal agents, marking the largest organic increase since the company stopped offering cash and equity sign-on incentives.
Reelitz, the CFO, emphasized the company's readiness for margin expansion when market conditions improve, noting the positive operating cash flow of $8.6 million and free cash flow of $5.9 million, marking a substantial improvement from the previous year.
Looking ahead, Compass provided guidance for the second quarter of 2024, projecting revenue between $1.6 billion and $1.7 billion, with the midpoint above the consensus estimate of $1.63 billion. For the full year, Compass anticipates being free cash flow positive and forecasts non-GAAP operating expenses between $867 million and $887 million, including the impact of the recent Latter & Blum acquisition.
Investors have responded positively to the solid results and optimistic outlook, as reflected in the 7% uptick in Compass' stock price. The company's strategic focus on agent growth, technology investment, and market share expansion, coupled with cost efficiency improvements, positions Compass favorably for the anticipated market recovery.
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