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Compass, Inc.

Compass, Inc.COMP決算レポート

NYSE · 不動産 · 不動産仲介・管理（他人用）

Compass, Inc. operates a residential real estate brokerage in the United States. It has approximately 33,000 agents, who are generally independent contractors, on its platform. It operates under many brand names including Compass, Better Homes and Gardens Real Estate, Century 21 Real Estate, Coldwell Banker, Corcoran Group, Sotheby's International Realty, and Christie's International Real Estate.

What changed in Compass, Inc.'s 10-K — 2024 vs 2025

Top changes in Compass, Inc.'s 2025 10-K

660 paragraphs added · 531 removed · 368 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

89 edited+44 added−22 removed18 unchanged
Antitrust litigation has been brought on behalf of homebuyers and homesellers against us (as described in more detail in Note 11 to our consolidated financial statements included elsewhere in this Annual Report) and other brokerages and real estate associations regarding the requirement to offer cooperating commissions, which already led to certain industry-wide changes and could lead to additional changes in the future.
Antitrust litigation has been brought on behalf of homebuyers and homesellers against us (as described in more detail in Note 11 to our consolidated financial statements included elsewhere in this Annual Report) and Anywhere and other brokerages and real estate associations regarding the requirement to offer cooperating commissions, which already led to certain industry-wide changes and could lead to additional changes in the future.
Some examples of the regulations we are required to comply with include without limitation, the California Consumer Privacy Act (“CCPA”), amended by the California Privacy Rights Act (“CPRA”), and other similar state regulations, portions of the GLBA, namely the Safeguards rule, which governs the disclosure and safeguarding of consumer financial information, and the Telephone Consumer Protection Act (“TCPA”), which restricts certain types of telemarketing calls and the use of auto-dialing systems and prerecorded messages and establishes a national Do-Not-Call registry.
Some examples of the regulations we are required to comply with include without limitation, the California Invasion of Privacy Act (“CIPA”), California Consumer Privacy Act (“CCPA”), amended by the California Privacy Rights Act (“CPRA”), and other similar state regulations, portions of the GLBA, namely the Safeguards rule, which governs the disclosure and safeguarding of consumer financial information, and the Telephone Consumer Protection Act (“TCPA”), which restricts certain types of telemarketing calls and the use of auto-dialing systems and prerecorded messages and establishes a national Do-Not-Call registry.
Our differentiated focus on the agent enables us to deliver a premier brokerage and technology-enabled agent experience at scale. Regulation Regulation of the Brokerage Industry State Regulation. Brokerage businesses are primarily regulated at the state level by agencies dedicated to real estate matters or professional services. Real estate brokerage licensing laws vary widely from state to state.
Our differentiated focus on the real estate professionals enables us to deliver a premier brokerage and technology-enabled experience at scale. Regulation Regulation of the Brokerage Industry State Regulation. Brokerage businesses are primarily regulated at the state level by agencies dedicated to real estate matters or professional services. Real estate brokerage licensing laws vary widely from state to state.
Regulation of the Mortgage Industry The mortgage industry is a heavily regulated industry and private mortgage lenders operating in the U.S. are required to comply with a wide array of federal, state and local laws and regulations that regulate, among other things, the manner in which mortgage companies, including our mortgage business, can operate their loan origination and servicing businesses, the fees such companies may charge, and the collection, use, retention, protection, disclosure, transfer and other processing of personal information.
Regulation of the Mortgage Industry The mortgage industry is a heavily regulated industry and private mortgage lenders operating in the U.S. are required to comply with a wide array of federal, state and local laws and regulations that regulate, among other things, the manner in which mortgage companies, including our mortgage joint ventures, can operate their loan origination and servicing businesses, the fees such companies may charge, and the collection, use, retention, protection, disclosure, transfer and other processing of personal information.
Generally, all individuals and entities acting as real estate brokers or salespersons must be licensed in each state where they operate. In all states, licensed agents must be affiliated with a broker of record, managing broker, designated broker or similar licensee (a “broker of record”) to engage in licensed real estate brokerage activities.
Generally, all individuals and entities acting as real estate brokers or salespersons must be licensed in each state where they operate. In all states, licensed real estate professionals must be affiliated with a broker of record, managing broker, designated broker or similar licensee (a “broker of record”) to engage in licensed real estate brokerage activities.
Competition The residential real estate and technology industries are highly competitive and fragmented. We compete to attract and retain top talent across the agent community, engineers and employees in all other functions in order to build the best tech-enabled real estate services company.
Competition The residential real estate and technology industries are highly competitive and fragmented. We compete to attract and retain top talent across the real estate professionals community, engineers and employees in all other functions in order to build the best tech-enabled real estate services company.
The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients.
The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of real estate professionals and deliver high-value recommendations and outcomes for their clients.
In January 2025, we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand under a trademark license agreement (the “License Agreement”) with Christie Manson & Woods Limited (“CMW”). The License Agreement has a 100-year term, which consists of an initial 50-year term ending in 2071 and two 25-year renewal options.
In January 2025, we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand under a trademark license agreement with Christie Manson & Woods Limited (“CMW”). Such license agreement has a 100-year term, which consists of an initial 50-year term ending in 2071 and two 25-year renewal options.
In addition, our mortgage business must comply with a number of federal, state and local consumer protection laws including, among others, the Truth in Lending Act (“TILA”), RESPA, the Equal Credit Opportunity Act (“ECOA”), the Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Gramm-Leach-Bliley Act (“GLBA”), the Electronic Fund Transfer Act, and the Homeowners Protection Act.
In addition, our mortgage joint ventures must comply with a number of federal, state and local consumer protection laws including, among others, the Truth in Lending Act (“TILA”), RESPA, the Equal Credit Opportunity Act (“ECOA”), the Fair Credit Reporting Act (“FCRA”), the Fair Housing Act, the Gramm-Leach-Bliley Act (“GLBA”), the Electronic Fund Transfer Act, and the Homeowners Protection Act.
We (and agents at our owned-brokerage and our affiliates) are also required to comply with state and local laws related to dual agency (such as where the same brokerage represents both the buyer and seller of a home) and increased regulation of dual agency representation may restrict or reduce the ability of impacted brokerages to participate in certain real estate transactions.
We (and real estate professionals at our owned-brokerage and our franchisees) are also required to comply with state and local laws related to dual agency (such as where the same brokerage represents both the buyer and seller of a home) and increased regulation of dual agency representation may restrict or reduce the ability of impacted brokerages to participate in certain real estate transactions.
Agents can set up very precise saved search alerts for their clients to notify them of new listings that match their criteria in near real-time in the mobile app and in email. • Listing Tour Scheduling and Coordination.
Real estate professionals can set up very precise saved search alerts for their clients to notify them of new listings that match their criteria in near real-time in the mobile app and in email. • Listing Tour Scheduling and Coordination.
Human Capital Management 7 Table of Contents At Compass, we believe that our long-term success is based on attracting, developing and retaining a diverse group of employees who espouse our entrepreneurship principles which define our culture: dream big; move fast; learn from reality; be solutions-driven; obsess about opportunity; collaborate without ego; maximize your strengths; and bounce back with passion.
Human Capital Management We believe that our long-term success is based on attracting, developing and retaining a diverse group of employees who espouse our entrepreneurship principles which define our culture: dream big; move fast; learn from reality; be solutions-driven; obsess about opportunity; collaborate without ego; maximize your strengths; and bounce back with passion.
AI further enhances the agent experience and their ability to quickly perform tasks, such as creating copy for listing brochures and descriptions, marketing materials, and even their agent profiles on our website. • Listing Search and Saved Search Notifications.
AI further enhances the real estate professionals’ experience and their ability to quickly perform tasks, such as creating copy for listing brochures and descriptions, marketing materials, and even their agent profiles on our website. • Listing Search and Saved Search Notifications.
In a number of states, insurance rates are either promulgated by the state directly or are required to be filed with each state by the agent or underwriter. Some states also promulgate the split of title insurance premiums between the agent and underwriter.
In a number of states, insurance rates are either promulgated by the state directly or are required to be filed with each state by the real estate professionals or underwriter. Some states also promulgate the split of title insurance premiums between the title agent and underwriter.
Two such examples are Team Collaboration, which allows agents to collaborate with any member of their team on any of their transactions, and Checklists, which enable agents to configure a set of tasks that get automatically applied to every transaction and can be assigned to specific members of their team, or their clients. • Marketing Content Creation and Management.
Two such examples are Team Collaboration, which allows real estate professionals to collaborate with any member of their team on any of their transactions, and Checklists, which enable real estate professionals to configure a set of tasks that get automatically applied to every transaction and can be assigned to specific members of their team, or their clients. • Marketing Content Creation and Management.
We provide agents with transaction closing and post-closing support to reduce the complexity for clients and efficiently advise through a transaction’s lifecycle. These features include forms, offers, and eSignature capabilities, as well as tools that assist with compliance review, and ultimately commission payments. • One Click Title & Escrow.
We provide real estate professionals with transaction closing and post-closing support to reduce the complexity for clients and efficiently advise through a transaction’s lifecycle. These features include forms, offers, and eSignature capabilities, as well as tools that assist with compliance review, and ultimately commission payments. • One Click Title & Escrow.
Our benefits package includes base pay, bonus programs for selected roles, long-term equity grants, health, dental and vision insurance plans, fertility benefits, life and disability insurance benefits, paid time off (including unlimited flexible time off, a community service day, and paid parental leave), as well as other benefits, such as access to mental health resources, an employee stock purchase plan and the ability to participate in a broad-base 401(k) plan with a company match.
Our benefits package includes base pay, bonus programs and long-term equity grants for selected roles, health, dental and vision insurance plans, fertility benefits, life and disability insurance benefits, paid time off (including unlimited flexible time off, a community service day, and paid parental leave), 8 Table of C ontents as well as other benefits, such as access to mental health resources, an employee stock purchase plan and the ability to participate in a broad-based 401(k) plan with a company match.
Video Generator allows agents to create short, customized, professional videos with added music and text using existing listing photos in seconds, simply by entering an address that can be shared on the listing page or social media. • AI-Driven Content. We recently integrated the OpenAI application programming interface into our Compass platform.
Video Generator allows real estate professionals to create short, customized, professional videos with added music and text using existing listing photos in seconds, simply by entering an address that can be shared on the listing page or social media. • AI-Driven Content. We integrated the OpenAI application programming interface into our Compass platform.
The Compass platform provides several resources and mobile app functionality to manage open houses and tours across both in-person and virtual formats, giving agents the ability to maintain a high level of service and follow up, in addition to growing their sphere of influence. • Listing Analytics.
The Compass platform provides several resources and mobile app functionality to manage open houses and tours across both in-person and virtual formats, giving real estate professionals the ability to maintain a high level of service and follow up, in addition to growing their sphere of influence. • Listing Analytics.
With a broad array of integrated features, elegant templates and design capabilities, our Marketing Center allows agents to rapidly create, advertise and promote their listings at scale through the channel of their choosing: digital, social, email, video, print or signage.
With a broad array of integrated features, elegant templates and design capabilities, our Marketing Center allows real estate professionals to rapidly create, advertise and promote their listings at scale through the channel of their choosing: digital, social, email, video, print or signage.
In each of the jurisdictions where our business operates, we have designated a properly licensed broker as the broker of record and, where required, we also hold a corporate real estate 8 Table of Contents broker’s license.
In each of the jurisdictions where our business operates, we have designated a properly licensed broker as the broker of record and, where required, we also hold a corporate real estate broker’s license.
Given Business Tracker’s deep integration with other Compass resources, such as Marketing Center, Collections, CMA, Tasks and Listing Insights, agents can serve the needs of every client - from first contact to closing - all from one place. Business Tracker includes multiple powerful capabilities that aim at boosting agent productivity.
Given Business Tracker’s deep integration with other resources, such as Marketing Center, Collections, CMA, Tasks and Listing Insights, real estate professionals can serve the needs of every client - from first contact to closing - all from one place. Business Tracker includes multiple powerful capabilities that aim at boosting agent productivity.
Compass Insights is a personalized dashboard that contains all the key data points an agent needs to craft a winning marketing strategy around audience and traffic information, uncover new lead-generation opportunities, and invest accordingly in the positioning of a listing. • Transaction Management. There are many burdensome steps involved in the closing of a transaction.
Compass Insights is a personalized dashboard that contains all the key data points a real estate professional needs to craft a winning marketing strategy around audience and traffic information, uncover new lead-generation opportunities, and invest accordingly in the positioning of a listing. • Transaction Management. There are many burdensome steps involved in the closing of a transaction.
The comprehensive body of federal, state, and local laws to which our mortgage business is subject is continually evolving and developing, including laws on advertising and privacy described in more detail in the section entitled “ – Cybersecurity and Data Privacy Regulations” below.
The comprehensive body of federal, state, and local laws to which our mortgage joint ventures are subject is continually evolving and developing, including laws on advertising and privacy described in more detail in the section entitled “ - Cybersecurity and Data Privacy Regulations” below.
Federal Regulation. Several federal laws and regulations govern the real estate brokerage business, including the federal Fair Housing Act and the Real Estate Settlement Procedures Act (“RESPA”). The Fair Housing Act prohibits discrimination in the purchase or sale of homes and applies to real estate brokers and agents, among others.
Federal Regulation. Several federal laws and regulations govern the real estate brokerage business, including the federal Fair Housing Act and the Real Estate Settlement Procedures Act (“RESPA”). The Fair Housing Act prohibits discrimination in the purchase, sale, or marketing of homes and applies to real estate professionals, among others.
A curated visual workspace that allows agents and their clients to collaborate in real time, with the ability to easily organize homes, centralize discussions and monitor the market by receiving immediate status and price updates. • Comparative Market Analysis ("CMA"). Pricing a home is a complex and nuanced exercise.
A curated visual workspace that allows real estate professionals and their clients to collaborate in real time, with the ability to easily organize homes, centralize discussions and monitor the market by receiving immediate status and price updates. • Comparative Market Analysis (“CMA”). Pricing a home is a complex and nuanced exercise.
Our AI technology recommends specific clients in an agent’s contact database that are more likely to sell their home, based on various data points like neighborhood sales trends, length of ownership, and local market appreciation. • One-Click Listing Video Creation.
Our AI technology recommends specific clients in real estate professionals’ contact database that are more likely to sell their home, based on various data points like neighborhood sales trends, length of ownership, and local market appreciation. • One-Click Listing Video Creation.
This feature allows agents to seamlessly access and initiate title and escrow services on the Compass platform with a single click. • Reverse Prospecting. This tool provides agents with exclusive insights into interested buyers looking at their listings among agents on the Compass platform across the country and the clients they represent.
This feature allows real estate professionals to seamlessly access and initiate certain title and escrow services on the Compass platform with a single click. • Reverse Prospecting. This tool provides real estate professionals with exclusive insights into interested buyers looking at their listings among real estate professionals on the Compass platform across the country and the clients they represent.
We primarily generate revenue from our owned-brokerage business when we collect a share of the gross sales commissions that the agents earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price.
We primarily generate revenue from our owned-brokerage business when we collect a share of the gross sales commissions that these real estate professionals earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Cyclicality" for additional discussion on the extent to which our business and financial results have been, or may continue to be, impacted by seasonality.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality and Cyclicality” for additional discussion on the extent to which our business and financial results have been, or may continue to be, impacted by seasonality.
For example, California adopted the Climate Corporate Data Accountability Act that will require annual disclosure of certain greenhouse gas emissions and the Climate-Related Financial Risk Act that will require disclosure of certain climate-related financial risks and mitigation measures beginning in 2026, subject to implementing regulations that may impact scope and timing.
For example, California adopted the Climate Corporate Data Accountability Act that will require annual disclosure of certain greenhouse gas emissions and the Climate-Related Financial Risk Act that will require disclosure of certain climate-related financial risks and mitigation measures, subject to implementing regulations and the outcome of ongoing litigation that may impact scope and timing.
Our proprietary search algorithm and database simplifies and enhances the ability for agents to find homes best suited for their clients’ needs using locally-relevant search filters.
Our proprietary search algorithm and database simplifies and enhances the ability for real estate professionals to find homes best suited for their clients’ needs using locally-relevant search filters.
Powered by AI, our CMA enhances agents’ market expertise by making recommendations and synthesizing complex data so agents can help their clients build the optimal pricing strategy for their homes based on comparable properties. • AI-Driven Client Prospecting Recommendations.
Powered by AI, our CMA enhances real estate professionals’ market expertise by making recommendations and synthesizing complex data so they can help their clients build the optimal pricing strategy for their homes based on comparable properties. • AI-Driven Client Prospecting Recommendations.
In many markets, clients typically look to either their attorneys or agents to refer them to the highest quality providers of these types of services after the purchase contract is signed. As of January 31, 2025, we provided title, escrow and settlement services under a multitude of local brands in eleven states and Washington D.C.
In many markets, clients typically look to either their attorneys or real estate professionals to refer them to the highest quality providers of these types of services after the purchase contract is signed. As of January 31, 2026, we provided title, escrow and settlement services under a multitude of local brands in 44 states and Washington D.C.
With a simple interface, agents can quickly schedule, coordinate and create routes for home tours, saving agents significant time. • Open House Management.
With a simple interface, real estate professionals can quickly schedule, coordinate and create routes for home tours, saving real estate professionals significant time. • Open House Management.
We pay royalties to CMW based on a percent of (i) the royalties that we collect from our affiliates (the "affiliate royalties") and (ii) the gross sales commissions attributable to a certain limited number of our owned-brokerage offices that use the Christie’s International Real Estate brand (the "owned-brokerage royalties"). The owned-brokerage royalties are significantly lower than the affiliate royalties.
We pay royalties to CMW based on a percent of (i) the royalties that we collect from our Christie’s International Real Estate franchisees and (ii) the gross sales commissions attributable to a certain limited number of our owned-brokerage offices that use the Christie’s International Real Estate brand.
We therefore encourage investors and 11 Table of Contents others interested in our Company to review the information that we make available on our website.
We therefore encourage investors and others interested in our Company to review the information that we make available on our website.
Generally, our affiliates partner with us as a franchisee or a licensee under a franchise or license agreement, with a minimum term of ten years and pay us monthly royalties, which are based on the percentage of the affiliate’s gross sales commissions, and certain other fees, such as marketing and technology fees.
Generally, our domestic franchisees are a franchisee or a licensee under a franchise or license agreement, with a minimum term of ten years and pay us monthly royalties, which are based on the percentage of the franchisee’s gross sales commissions, and certain other fees, depending on the brand, such as marketing and technology fees.
Our end-to-end proprietary technology platform (the "Compass platform") allows real estate agents to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform.
Our Technology Offerings Our end-to-end proprietary technology platform (the “Compass platform”) allows real estate professionals to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform.
All-in-one client dashboard, launched in February 2025, provides a client-facing version of the Compass platform to consumers, allowing agents’ clients to have a differentiated experience where they can access the tools, services and advantages we offer to manage their homeownership journey.
The industry’s premier all-in-one client dashboard provides a client-facing version of the Compass platform to consumers, allowing real estate professionals’ clients to have a differentiated experience where they can access the tools, services and advantages we offer to manage their homeownership journey.
Agents can easily build, book, target and run digital ads all in one place with a simple yet powerful suite of content creation solutions. 5 Table of Contents • Collections.
Real estate professionals can easily build, book, target and run digital ads all in one place with a simple yet powerful suite of content creation solutions. 5 Table of C ontents • Collections.
Intellectual Property The protection of our technology and intellectual property is an important aspect of our business. We rely upon a combination of trademarks, trade secrets, copyrights, confidentiality procedures, contractual commitments, licenses, domain names, and other legal rights to establish and protect our intellectual property.
We rely upon a combination of trademarks, trade secrets, copyrights, confidentiality procedures, contractual commitments, licenses, domain names, and other legal rights to establish and protect our intellectual property.
Our mortgage business is required to be licensed in all relevant jurisdictions in which it operates and to comply with the respective laws and regulations of each such jurisdiction, as well as with applicable judicial and administrative decisions.
Our mortgage joint ventures are required to be licensed in all relevant jurisdictions in which they operate and to comply with the respective laws and regulations of each such jurisdiction, as well as with applicable judicial and administrative decisions.
Title, Escrow and Settlement Services Our title, escrow and settlement businesses provide full-service title, escrow and settlement services to the clients of our agents at our owned-brokerage, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans.
Title, Escrow and Settlement Services and Title Insurance Underwriter Joint Venture Our title, escrow and settlement businesses provide full-service title, escrow and settlement services to the clients of real estate professionals, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans.
RESPA compliance is of significant importance to us and our integrated services business. Regulation of the Title & Escrow Industry Title insurance and escrow/settlement services typically require licensure and are heavily regulated, often through a state’s insurance regulator or other regulatory body.
RESPA also has been invoked by plaintiffs in private litigation for various purposes. RESPA compliance is of significant importance to us and our integrated services business. Regulation of the Title & Escrow Industry Title insurance and escrow/settlement services typically require licensure and are heavily regulated, often through a state’s insurance regulator or other regulatory body.
We believe the program has successfully unlocked incremental transactions for our agents, delivered higher sale prices and reduced selling times for our agents' seller clients and also helped us attract high-performing agents to our platform.
We believe the program has successfully unlocked incremental transactions for real estate professionals at our owned-brokerage, delivered higher sale prices and reduced selling times for their clients and also helped us attract high-performing real estate professionals to our platform.
Since inception and through December 31, 2024, we partnered with our agents and sellers on Compass Concierge projects totaling approximately $1.29 billion, with an average project size of approximately $28,900.
Since inception and through December 31, 2025, we partnered with our real estate professionals and sellers on Compass Concierge projects totaling approximately $1.45 billion, with an average project size of approximately $29,000.
We believe we compete favorably based on multiple factors, including the strength and quality of our business, and our ability to retain our agents, our integrated suite of differentiated technology offerings that empower agents, our platform functionality and innovative product and service offerings that facilitate real estate transactions for both buyers and sellers, our growing scale, and our luxury brands.
We believe we compete favorably based on multiple factors, including the strength and quality of our business, and our ability to retain our real estate professionals at our owned-brokerage business, our ability to retain our franchisees, our integrated suite of differentiated technology offerings that empower real estate professionals, our technology offerings that facilitate real estate transactions for both buyers and sellers, our growing scale, and our most recognized and iconic brands.
At a federal level, federal laws under the jurisdiction of the FTC generally require franchisors to make extensive disclosure to prospective franchisees in connection with franchise offers and sales but do not require registration. At a state level, a number of states require both disclosure and registration.
Regulation of Our Franchise Business We operate our franchise business in the U.S. as a franchise and are subject to franchise state and federal laws. At a federal level, federal laws under the jurisdiction of the FTC generally require franchisors to make extensive disclosure to prospective franchisees in connection with franchise offers and sales but do not require registration.
Additionally, title and escrow and mortgage services are integrated and are available on the Compass platform. Currently, the Compass platform is only available to the agents at our owned-brokerage and is not yet available to our affiliates or their agents.
Additionally, certain title and escrow and mortgage services are integrated and are available on the Compass platform. Currently, the Compass platform is only available to real estate professionals at our owned-brokerage operating under the Compass brand and is not yet available to other real estate professionals or our franchisees and their real estate professionals.
We generate revenue from our affiliate business when we collect royalties from our affiliates, which are based on the percentage of the affiliate’s gross sales commissions, as well as certain other fees, such as marketing and technology fees. We currently generate substantially all of our revenue and earnings from our owned-brokerage business.
We generate revenue from our franchise business when we collect royalties from our franchisees, which are based on a percentage of the franchisee’s gross sales commissions, as well as certain other fees, such as marketing and technology fees.
Under the Dodd-Frank Act, the CFPB is authorized to engage in rulemaking and examination activity with respect to consumer financial products and services (including mortgage finance) and to enforce compliance with federal consumer financial laws, including TILA and RESPA.
Under the Dodd-Frank Act, the CFPB is authorized to engage in rulemaking and examination activity with respect to consumer financial products and services (including mortgage finance) and to enforce compliance with federal consumer financial laws, including TILA and RESPA. The CFPB has issued myriad rules, including TILA-RESPA Integrated Disclosure rules, which impose significant obligations on our mortgage joint ventures.
Business Tracker provides agents with a centralized view of their entire business. It enables agents to organize and manage their active leads, buyers, renters and listings, as well as view potential revenue at each stage of the transaction.
It enables real estate professionals to organize and manage their active leads, buyers, renters and listings, as well as view potential revenue at each stage of the transaction.
Home sellers can access funds to prepare their home for sale through Compass’ partnership with an independent third-party lender. In addition, since early 2023, we have maintained alternative home improvement programs with several third-party service providers to help our agents' clients prepare their homes for listing and sale.
In addition, since early 2023, we have maintained alternative home improvement programs with several third-party service providers to help our real estate professionals’ clients prepare their homes for listing and sale.
From time to time, we also intend to announce material information to the public through the investor relations page on our website, press releases, public conference calls, public webcasts, and our X (formerly Twitter) feed (@Compass), our Facebook page, our LinkedIn page, our Instagram account, our YouTube channel, and Robert Reffkin’s X feed (@RobReffkin) and Instagram account (@robreffkin).
The SEC maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information that we file electronically with the SEC. 12 Table of C ontents From time to time, we also intend to announce material information to the public through the investor relations page on our website, press releases, public conference calls, public webcasts, and our X (formerly Twitter) feed (@Compass), our Facebook page, our LinkedIn page, our Instagram account, our YouTube channel, and Robert Reffkin’s X feed (@RobReffkin) and Instagram account (@robreffkin).
Regulation of Settlement Services (RESPA and Related State Law) RESPA and analogous state anti-kickback statutes generally prohibit the provision of things of value such as cash rebates, gifts and other inducements if doing so is part of an agreement or understanding that settlement services business be referred.
We may also be subject to the American with Disabilities Act. 9 Table of C ontents Regulation of Settlement Services (RESPA and Related State and International Law) RESPA and analogous state anti-kickback statutes and similar laws in countries where we do business generally prohibit the provision of things of value such as cash rebates, gifts and other inducements if doing so is part of an agreement or understanding that settlement services business be referred.
Item 1. Business. Our Company Compass, Inc. (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc. The Company has been based in New York City since its incorporation.
Item 1. Business. Our Company Compass, Inc., d/b/a Compass International Holdings (the “Company”), was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc. The Company has been based in New York City since its incorporation. On January 9, 2026, the Company completed its previously announced acquisition of Anywhere Real Estate Inc.
RESPA is a federal law intended to provide consumers with improved disclosures of settlement costs and to reduce the costs of settlement services (e.g., real estate brokerage services, mortgage loan origination, title insurance, escrow and closing services) by eliminating referral fees and kickbacks. It applies to real estate brokerage services among other real estate settlement services.
RESPA is a federal law intended to provide consumers obtaining federally funded mortgages to receive improved disclosures of settlement costs and to protect against kickbacks and unearned referral fees as part of the costs of settlement services (e.g., real estate brokerage services, mortgage loan origination, title insurance, escrow and closing services).
Additionally, beginning in January 2025, we attract independently operated brokerages that affiliate with us as a franchisee or a licensee under a long-term franchise or license agreement.
We also attract independently owned and operated brokerages that affiliate with us as franchisees or licensees under a long-term franchise or license agreement.
All mortgage loans are funded by separate warehouse lines that are not maintained by us, and all mortgage loans are collateralized by the underlying mortgages available for sale and are non-recourse to us.
Our partnership is structured as a non-exclusive joint venture, where we hold a 49.9% equity interest. All mortgage loans are funded by separate warehouse lines that are not maintained by us, and all mortgage loans are collateralized by the underlying mortgages available for sale and are non-recourse to us.
Selling and buying a home is one of the most significant, and often one of the most complex, time consuming, and consequential financial events in an individual’s life. Given the unique nature of each property, location, buyer, seller, negotiation, title and financing, a real estate agent’s role as the driver of the majority of the workflow is indispensable.
Given the unique nature of each property, location, buyer, seller, negotiation, title and financing, a real estate agent’s role as the driver of the majority of the workflow is indispensable.
Our business model is directly aligned with the success of the agents at our owned-brokerage and affiliates. Agents at our owned-brokerage business are independent contractors that associate their real estate license with us and choose to operate their businesses on our platform.
Real estate professionals at our owned-brokerage business are independent contractors that associate their real estate licenses with us and choose to operate their businesses on our platform and/or utilize our technology offerings.
As part of the Christie’s International Real Estate acquisition, we acquired ProperRate, a mortgage joint venture with Guaranteed Rate that is similar to our existing mortgage joint venture. We consolidated ProperRate with our mortgage joint venture in February 2025. As of January 31, 2025, our mortgage business was licensed in 42 states and Washington D.C.
As part of the Christie’s International Real Estate acquisition, we acquired ProperRate and, as part of the Anywhere Merger, we acquired Guaranteed Rate Affinity, each of which are minority-held mortgage joint ventures with Guaranteed Rate that are similar to our existing mortgage joint venture. We consolidated ProperRate with our mortgage joint venture in February 2025.
We have launched this tool in certain markets and anticipate a full launch in the first quarter of 2025. • Private Exclusives. This tool allows agents to list their client’s property on Compass.com only to test price, gain critical insights and generate early demand before listing it on an MLS. • Compass One.
This tool allows real estate professionals to list their client’s property on Compass.com only to test price, gain critical insights and generate early demand before listing it on an MLS. • Compass One.
See the section entitled “ – Regulation of Settlement Services (RESPA and Related State Law)” below for additional details. We may also be subject to the American with Disabilities Act.
It applies to real estate brokerage services among other real estate settlement services. See the section entitled “ - Regulation of Settlement Services (RESPA and Related State Law)” below for additional details.
Seasonality The residential real estate market is seasonal, which directly impacts our agents’ businesses and has affected and will continue to affect our business and financial results.
Our license agreement is terminable by Meredith Ops prior to the end of the license term if certain conditions occur. Seasonality The residential real estate market is seasonal, which directly impacts us, our franchisees and real estate professionals and has affected and will continue to affect our business and financial results.
As part of the Christie’s International Real Estate acquisition, we acquired a proprietary multi-tenant technology platform (the "CIRE platform") that is offered to our affiliates and their agents. It allows us to scale our affiliate business efficiently and without a substantial technology investment as we continue to grow that business.
As part of the Christie’s International Real Estate acquisition, we acquired a proprietary multi-tenant technology platform (the “CIRE platform”) that is offered to our franchisees operating under Christie’s International Real Estate brand and their real estate professionals.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our officers, employees, agents, contractors, and business partners to control access to, and clarify ownership of, our proprietary information. As of December 31, 2024, we had more than 30 unique trademark registrations and applications in the United States, including registrations for “Compass” and the Compass logo.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our officers, employees, real estate professionals, contractors, and business partners to control access to, and clarify ownership of, our proprietary information.
Our Compass Platform Capabilities Our Compass platform aims to digitize, integrate and simplify all real estate workflows for agents and their clients. It is built on the premise that integration and ease of use are foundational to enabling agents to more effectively run their businesses and serve their clients.
It is built on the premise that integration and ease of use are foundational to enabling real estate professionals to more effectively run their independent businesses and serve their clients. Our Compass platform is a proprietary end-to-end cloud-native software service with mobile applications that allow real estate professionals to manage their business anytime and anywhere.
We also had 5 unique trademark registrations and applications in certain foreign jurisdictions. Additionally, we are the registered holder of a number of domain names, including “compass.com.” We continually review our development efforts to assess the existence and patentability of new intellectual property.
Additionally, we are the registered holder of a number of domain names, including “compass.com.” We continually review our development efforts to assess the existence and patentability of new intellectual property. We intend to continue to evaluate the benefit of patent protection with respect to our technology, and will file additional applications when we believe it will be beneficial.
The aggregate amount of royalties that we are obligated to pay to CMW is subject to a minimum annual fee, which increases over time.
The royalties we receive from such owned-brokerage offices are significantly lower than the franchisee royalties. The aggregate amount of royalties that we are obligated to pay to CMW is subject to a minimum annual fee, which increases over time. The license agreement is terminable by CMW prior to the end of the license term if certain conditions occur.
Our CRM provides agents with an easy-to-use interface that is both powerful and automated, enabling agents to cultivate their sphere, nurture and grow relationships and close more sales. It also leverages AI to provide recommendations and insights, and integrates with other aspects of the Compass platform such as Marketing Center to create engaging content. • Business Tracker.
It also leverages AI to provide recommendations and insights, and integrates with other aspects of the Compass platform such as Marketing Center to create engaging content. • Business Tracker. Business Tracker provides real estate professionals with a centralized view of their entire business.
Our technology offerings provide a strong foundation for agents at our owned-brokerage, as well as our affiliates and their agents, and empower them to deliver exceptional service to their clients. Agents at our owned-brokerage and our affiliates utilize our technology offerings to grow their businesses, save time and manage their businesses more effectively.
Our technology offerings provide a strong foundation for real estate professionals and empower them to deliver exceptional service to their clients, grow their businesses, save time, and manage their businesses more effectively. We are simplifying today’s complex, paper-driven, antiquated workflow to empower real estate professionals to deliver an exceptional experience to every buyer and seller.
Integrated Services Our integrated services, spanning title, escrow and mortgage, support the needs of home buyers and sellers, as well as homeowners seeking refinancing. The synergies between these integrated services and our brokerage business increase transparency and deliver a more integrated closing process for agents and their clients.
The synergies between these integrated services and our owned-brokerage and franchise business increase transparency and deliver a more integrated closing process for real estate professionals and their clients.
Affiliate Business We entered the affiliate business in January 2025 when we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand.
(“Anywhere”) pursuant to the Agreement and Plan of Merger, dated as of September 22, 2025 (the “Anywhere Merger Agreement”), with Anywhere surviving the merger as a wholly owned subsidiary of the Company (the “Anywhere Merger”). In January 2025, the Company acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand.
Our employees use our principles to help guide their work experience and align with our mission of helping everyone find their place in the world. As of December 31, 2024, we had 2,566 employees across the U.S. and internationally. None of our employees are represented by a labor organization or are party to a collective bargaining arrangement.
As of December 31, 2025, we had 3,200 employees across the U.S. and internationally and none of our employees were represented by a labor organization or are party to a collective bargaining arrangement. Following the Anywhere Merger, our number of employees across the U.S. and internationally more than tripled and none of our employees were represented by a labor organization.
Additionally, certain of our Glide tools, which include completion of various real estate forms and offer preparation as well as eSignature and collaboration capabilities, are offered to non-Compass agents and their clients. We refer to the Compass platform, the CIRE platform and all other technology products and services that we offer as our "technology offerings".
We refer to the Compass platform, the CIRE platform, the Anywhere tools and services and all other technology products and services that we offer as our “technology offerings.” Our Compass Platform Capabilities Our Compass platform aims to digitize, integrate and simplify all real estate workflows for real estate professionals and their clients.
We do not exercise control over our affiliates and their agents and affiliates operate their brokerage businesses independently. Compass Concierge Compass Concierge is a program in which we provide home sellers access to capital to front the cost of home improvement services.
Compass Concierge Compass Concierge is a program in which we provide home sellers access to capital to front the cost of home improvement services. Home sellers can access funds to prepare their home for sale through our partnership with an independent third-party lender.
We offer market-competitive compensation and benefits to our employees. We strive to offer a comprehensive benefit package and evaluate and supplement our benefits periodically.
Employment relationships in Brazil (where we had approximately 20 employees at January 31, 2026) are governed by rules set forth under collective bargaining agreements. We offer market-competitive compensation and benefits to our employees. We strive to offer a comprehensive benefit package and evaluate and supplement our benefits periodically.
The international portion of our affiliate business might also be subject to the General Data Protection Regulation (“GDPR”), which is a privacy and security regulation for the European Union. Environmental Regulation Our technology platform operates in a cloud-based model, which gives us an insignificant physical geographical footprint.
In certain jurisdictions, these operations may also be subject to the General Data Protection Regulation (“GDPR”), which is a privacy and security regulation for the European Union.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our platform is highly complex and the software and code underlying our platform is interconnected and may contain undetected errors, bugs, or vulnerabilities, some of which may only be discovered after the code or software has been released.
Our platform is highly complex and our software may contain undetected errors. Our platform is highly complex and the software and code underlying our platform is interconnected and may contain undetected errors, bugs, or vulnerabilities, some of which may only be discovered after the code or software has been released.
We cannot guarantee that our internally developed or acquired systems, technologies and content do not and will not infringe the intellectual property rights of others. In addition, we rely on products, content, software, technology, and other intellectual property that we license from third parties for use in our platform, its features, and technology offerings.
We cannot guarantee that our internally developed or acquired systems, technologies and content do not and will not infringe the intellectual property rights of others. In addition, we rely on products, content, software, technology, and other intellectual property that we license from third parties for use in our platform, its features, and our technology offerings.
Accordingly, the trading price of our Class A common stock has historically and may in the future fluctuate substantially, due to factors including: loss of investor confidence in, or significant volatility in the market price and trading volume of, technology companies in general and of companies in the real estate technology industry in particular; changes in mortgage interest rates; variations in the housing market, including seasonal trends and fluctuations; announcements of new solutions, commercial relationships, acquisitions, or other events by us or our competitors; price and volume fluctuations in the overall stock market; changes in how agents perceive the benefits of our platform and future offerings; the public’s reaction to our press releases, other public announcements, and filings with the SEC, or those of other companies in the industries in which we compete; fluctuations in the trading volume of our shares or the size of our public float; sales of large blocks of our common stock; sales, or the anticipated sale, of a substantial amount of our Class A common stock, particularly sales by our directors, executive officers, or principal stockholders; fluctuations in our results of operations or financial projections; changes in actual or future expectations of investors or securities analysts; litigation involving us, our industry, or both; governmental or regulatory actions or audits; regulatory developments applicable to our business; real estate market conditions; general economic conditions and trends; major catastrophic events; and departures of key employees.
Accordingly, the trading price of our Class A common stock has historically and may in the future fluctuate substantially, due to factors including: loss of investor confidence in, or significant volatility in the market price and trading volume of, technology companies in general and of companies in the real estate technology industry in particular; changes in mortgage interest rates; variations in the housing market, including seasonal trends and fluctuations; announcements of new solutions, commercial relationships, acquisitions, or other events by us or our competitors; price and volume fluctuations in the overall stock market; changes in how real estate professionals perceive the benefits of our platform and future offerings; the public’s reaction to our press releases, other public announcements, and filings with the SEC, or those of other companies in the industries in which we compete; fluctuations in the trading volume of our shares or the size of our public float; sales of large blocks of our common stock; sales, or the anticipated sale, of a substantial amount of our Class A common stock, particularly sales by our directors, executive officers, or principal stockholders; fluctuations in our results of operations or financial projections; changes in actual or future expectations of investors or securities analysts; litigation involving us, our industry, or both; governmental or regulatory actions or audits; regulatory developments applicable to our business; real estate market conditions; general economic conditions and trends; major catastrophic events; and departures of key employees.
Despite our efforts to protect our proprietary rights, there can be no assurance our intellectual property rights will be sufficient to protect against others offering products or services that are substantially similar to ours and compete with our business or that unauthorized parties may attempt to copy aspects of our technology and use information that we consider proprietary.
Despite our efforts to protect our proprietary rights, there can be no assurance our intellectual property rights will be sufficient to protect against others offering products or services that are substantially similar to ours and compete with our business or that unauthorized parties may not attempt to copy aspects of our technology and use information that we consider proprietary.
Ongoing industry antitrust class action litigation (including the Antitrust Lawsuits filed against us) or any related regulatory activities could result in additional meaningful industry-wide changes and the recent changes and/or any additional meaningful changes could have a materially adverse effect on our business, operations, financial condition and results of operations .
Ongoing industry antitrust class action litigation (including the antitrust lawsuits filed against us and Anywhere) or any related regulatory activities could result in additional meaningful industry-wide changes, and the recent changes and/or any additional meaningful changes could have a materially adverse effect on our business, operations, financial condition and results of operations.
Risks Related to Our Business and Operations Our success depends on general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, and our business may be negatively impacted by economic and industry downturns, including seasonal and cyclical trends, and volatility in the residential real estate market .
Risks Related to U.S. Real Estate Industry Our success depends on general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, and our business may be negatively impacted by economic and industry downturns, including seasonal and cyclical trends, and volatility in the residential real estate market.
In light of our reliance on Amazon Web Services and other third-party cloud service providers, coupled with the complexity of obtaining replacement services, any disruption of or interference with our use of these third-party services could adversely impact our operations and business.
In light of our reliance on Amazon Web Services and other third-party service providers, coupled with the complexity of obtaining replacement services, any disruption of or interference with our use of these third-party services could adversely impact our operations and business.
We may be subject to claims, lawsuits, arbitration proceedings, government investigations, and other legal and regulatory proceedings in the ordinary course of business, including those involving labor and employment, anti-discrimination, commercial disputes, competition, professional liability, consumer complaints, personal injury, wrongful death, intellectual property disputes, compliance with regulatory requirements, antitrust and anti-competition claims (including claims related to NAR or MLS rules regarding buyer brokers' offers of commissions and other listing and marketing practices), securities laws, and other matters, and we may become subject to additional types of claims, lawsuits, government investigations and legal or regulatory proceedings if the regulatory landscape changes or as our business grows and as we deploy new offerings, including proceedings related to our acquisitions, integrated services business lines, securities issuances or business practices.
We are or may be subject to claims, lawsuits, arbitration proceedings, government investigations, and other legal and regulatory proceedings in the ordinary course of business, including those involving labor and employment, anti-discrimination, commercial disputes, competition, professional liability, consumer complaints, personal injury, wrongful death, intellectual property disputes, compliance with regulatory requirements, antitrust and anti-competition claims (including claims related to NAR or MLS rules regarding buyer brokers’ offers of commissions and other listing and marketing practices), securities laws, and other matters, and we may become subject to additional types of claims, lawsuits, government investigations and legal or regulatory proceedings if the regulatory landscape changes or as our business grows and as we deploy new offerings, including proceedings related to the Anywhere Merger or our other acquisitions, integrated services business lines, securities issuances or business practices.
Additionally, due to the interoperative nature of the software and the systems underlying our platform, modifications to certain parts of our code, including changes to our mobile application, website, systems, or third-party application programming interfaces on which our platform rely, or resulting from integration of acquired technologies, could have an unintended impact on other sections of our software or system, which may result in errors, bugs, or vulnerabilities to our platform.
Additionally, due to the interoperative nature of the software and the systems underlying our platform, modifications to certain parts of our code, including changes to our mobile application, website, systems, or third-party application programming interfaces on which our platform relies, or resulting from integration of acquired technologies, could have an unintended impact on other sections of our software or system, which may result in errors, bugs, or vulnerabilities to our platform.
There are numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, sharing, and disclosure and protection of personal information, which are continually evolving, subject to differing interpretations, and may be inconsistent between state and federal governments and across countries or conflict with other rules.
There are numerous global data privacy laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, sharing, and disclosure and protection of personal information, which are continually evolving, subject to differing interpretations, and may be inconsistent between state and federal governments and across countries or conflict with other rules.
While overall the U.S. real estate market could be performing well, a downturn in a geographic area where we have a material presence could result in a decline in our revenue and could have a material adverse effect on our operating results. Additionally, a material portion of our real estate transactions takes place in high-end markets.
While overall the U.S. real estate market could be performing well, a downturn in a geographic area where we have a material presence could result in a decline in our revenue and could have a material adverse effect on our operating results. Additionally, a material portion of our real estate transactions takes place in high-end geographies.
Item 1A. Risk Factors. A description of the risks and uncertainties associated with our business is set forth below.
Item 1A. Risk Factors. A description of the material risks and uncertainties associated with our business is set forth below.
Moreover, Section 203 of the Delaware General Corporation Law (“DGCL") may discourage, delay, or prevent a change in control of our company by imposing certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.
Moreover, Section 203 of the Delaware General Corporation Law (“DGCL”) may discourage, delay, or prevent a change in control of our company by imposing certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.
Numerous states have enacted, or are in the process of enacting, state level data privacy laws and regulations aimed at creating and enhancing individual privacy rights by governing the collection, use, sharing, disclosure, selling, and retention of state residents’ personal information.
Numerous U.S. states have enacted, or are in the process of enacting, state level data privacy laws and regulations aimed at creating and enhancing individual privacy rights by governing the collection, use, sharing, disclosure, selling, and retention of state residents’ personal information.
RESPA and comparable state statutes prohibit providing or receiving payments, or other things of value, for the referral of business to settlement service providers in connection with the closing of certain real estate transactions. Such laws may to some extent impose limitations on arrangements involving our real estate brokerage, escrow services, title agency and mortgage origination services.
RESPA and comparable state statutes prohibit providing or receiving payments, or other things of value, for the referral of business to settlement service providers in connection with the closing of certain real estate transactions. Such laws may to some extent impose limitations on arrangements involving our real estate brokerage, escrow services, title agency, lead generation, relocation and mortgage origination services.
RESPA compliance may become a greater challenge under certain administrations for most industry participants offering title and escrow services and mortgage origination services, including brokerages, because of expansive interpretations of RESPA or similar state statutes by certain courts and regulators.
RESPA compliance may become a greater challenge for most industry participants offering title and escrow services and mortgage origination services, including brokerages, because of expansive interpretations of RESPA or similar state statutes by certain courts and regulators.
Changes in the Federal Reserve Board’s policies and other macroeconomic factors affecting mortgage rates are beyond our control, difficult to predict, and 12 Table of Contents could negatively impact the residential real estate market, which in turn could have a material adverse effect on our business, financial condition and results of operations.
Changes in the Federal Reserve Board’s policies and other macroeconomic factors affecting mortgage rates are beyond our control, difficult to predict, and could negatively impact the residential real estate market, which in turn could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2024, Robert Reffkin, our founder, Chairman, and Chief Executive Officer, together with his financial planning vehicles and affiliated trusts (for purposes of this risk factor discussion, “Mr.
As of December 31, 2025, Robert Reffkin, our founder, Chairman, and Chief Executive Officer, together with his financial planning vehicles and affiliated trusts (for purposes of this risk factor discussion, “Mr.
In addition, improper actions taking place at our mortgage business may lead to direct claims against us based on theories of vicarious liability, negligence, joint operations and joint employer liability, which, if determined adversely, could increase costs, negatively impact our reputation and subject us to liability for their actions.
In addition, improper actions taking place at our joint ventures may lead to direct claims against us based on theories of vicarious liability, negligence, joint operations and joint employer liability, which, if determined adversely, could increase costs, negatively impact our reputation and subject us to liability for their actions.
Furthermore, our ability to terminate or refuse renewal/transfer of franchise agreements may be restricted by state-specific “franchise relationship” or “business opportunity” laws. Compliance with, and monitoring of, the foregoing laws and regulations is complicated and costly and may inhibit our ability to innovate or grow.
Furthermore, our ability to terminate or refuse renewal/transfer of franchise agreements may be restricted by state-specific “franchise relationship” or “business opportunity” laws. Compliance with, and monitoring of, the foregoing laws and regulations and other laws and regulations impacting our businesses is complicated and costly and may inhibit our ability to innovate or grow.
Reffkin is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally, and this concentrated voting power may have the effect of delaying, preventing, or 30 Table of Contents deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of our Class A common stock.
Reffkin is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally, and this concentrated voting power may have the effect of delaying, preventing, or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for 34 Table of C ontents their capital stock as part of a sale of our company, and might ultimately affect the market price of our Class A common stock.
Moreover, since we were founded, we have incurred net losses and have had an accumulated deficit, and may continue to do so, for a number of reasons, including: declines in U.S. residential real estate transaction volumes; changes in general economic conditions; changes in real estate market conditions; expansion into new markets for which we typically incur significant losses immediately following entry; increased competition; increased costs to attract and retain agents at our owned-brokerage; increased costs related to the expansion of our affiliate business; increased costs to hire additional personnel to support our overall growth, for research and development, and for sales and marketing; changes to the customary commission rates; changes in our fee structure or rates; inefficiencies in our technology and business model; failure to execute our growth strategies; and unforeseen expenses, difficulties, complications and delays.
Moreover, since we were founded, we have incurred net losses and have had an accumulated deficit, and may continue to do so, for a number of reasons, including: declines in U.S. residential real estate transaction volumes; changes in general economic conditions; changes in real estate market conditions; expansion into new markets for which we typically incur significant losses immediately following entry; increased competition; increased costs to attract and retain real estate professionals at our owned-brokerage; increased costs related to the expansion of our franchise business; increased costs to 18 Table of C ontents hire additional personnel to support our overall growth, for research and development, and for sales and marketing; changes to the customary commission rates; changes in our fee structure or rates; inefficiencies in our technology and business model; failure to execute our growth strategies; and unforeseen expenses, difficulties, complications and delays.
In addition, strategic acquisitions may require us to issue additional equity securities, spend a substantial portion of our available cash, or incur debt or liabilities, amortize expenses related to intangible assets, or incur write-offs of goodwill, which could adversely affect our business, financial condition, and results of operations and could result in dilution to our stockholders.
In addition, strategic acquisitions may require us to issue additional equity securities, spend a substantial portion of our available cash, or incur debt and liabilities, amortize expenses related to intangible assets, or incur write-offs of goodwill. Any of the foregoing could adversely affect our business, financial condition, and results of operations and could result in dilution to our stockholders.
More stringent mortgage underwriting standards could adversely affect the ability and willingness of prospective buyers to finance home purchases or to sell their existing homes in order to purchase new homes, which may decrease the number of real estate transactions that our agents execute and that our title and escrow businesses close, and may decrease the number of mortgages that our mortgage business originates.
More stringent mortgage underwriting standards generally adversely affect the ability and willingness of prospective buyers to finance home purchases or to sell their existing homes in order to purchase new homes, which may decrease the number of real estate transactions that real estate professionals execute and that our title and escrow businesses close, and may decrease the number of mortgages that our mortgage business originates.
Any downturn in high-end markets could result in a decline in our revenue and could have a material adverse effect on our operating results.
Any downturn in high-end geographies could result in a decline in our revenue and could have a material adverse effect on our operating results.
If any of our depository banks were to become unable to honor any portion of our deposits due to a bank failure or otherwise, our agents’ clients could seek to hold us responsible for such amounts and, if our agents’ clients prevailed in their claims, we could be subject to significant losses.
If any of our depository banks were to become unable to honor any portion of our deposits due to a bank failure or otherwise, real estate professionals’ clients could seek to hold us responsible for such amounts and, if real estate professionals’ clients prevailed in their claims, we could be subject to significant losses.
Their failure to perform as expected or as required by contract could result in significant disruptions and costs to our operations.
Their failure to perform as expected or as required by contract could result in significant disruptions and costs to our operations and damage to our reputation.
Our ability to attract agents at our owned-brokerage and to appeal to their clients depends upon our ability to provide a robust number of listings. To provide these listings in our services, in addition to the information provided by our agents, we maintain relationships with MLSs and other third-party listing providers.
Our ability to attract real estate professionals at our owned-brokerage and to appeal to their clients depends upon our ability to provide a robust number of listings. To provide these listings in our services, in addition to the information provided by real estate professionals at our owned-brokerage, we maintain relationships with MLSs and other third-party listing providers.
The increasing prevalence and sophistication of cyber-attacks as well as the evolution of cyber-attacks and other efforts to breach or disrupt our systems or those of our employees, agents, agents’ clients, and third-party service providers, has led and will likely continue to lead to increased costs to us with respect to identifying, protecting, detecting, containing, responding, recovering, mitigating, insuring against, and remediating these risks, as well as any related attempted or actual fraud.
The increasing prevalence and sophistication of cyber-attacks as well as the evolution of cyber-attacks and other efforts to breach or disrupt our systems or those of our employees, real estate professionals, real estate professionals’ clients, and third-party service providers, has led and will likely continue to lead to increased costs to us with respect to identifying, protecting, detecting, containing, responding, recovering, mitigating, insuring against, and remediating these risks, as well as any related attempted or actual fraud.
We face growing risks and costs related to cybersecurity threats to our operations and our data (including agent and client data) including: ◦ the failure or significant disruption of our operations from various causes, such as human error, computer malware, ransomware, insecure software and systems, zero-day vulnerabilities, threats to or disruption of third-party service providers who provide critical services, or other events related to our critical information technologies and systems; ◦ the increasing level and sophistication of cybersecurity attacks, such as distributed denial of service attacks, data theft, fraud or malicious acts on the part of trusted insiders, social engineering (including phishing attempts or the creation of copycat websites), or other unlawful tactics aimed at compromising the systems and data of our agents and their clients (including through systems not directly controlled by us, such as those maintained by our agents and third-party service providers); and ◦ the reputational and financial risks associated with a loss of data or material data breach (including unauthorized access to our proprietary business information or personal information of our agents and their clients), the transmission of computer malware, or the diversion of sale transaction closing funds.
We face growing risks and costs related to cybersecurity threats to our operations and our data (and real estate professional, franchisee, employee and client data) including: • the failure or significant disruption of our operations from various causes, such as human error, computer malware, ransomware, insecure software and systems, zero-day vulnerabilities, threats to or disruption of third-party service providers who provide critical services, or other events related to our critical information technologies and systems; • the increasing level and sophistication of cybersecurity attacks, such as distributed denial of service attacks, data theft, fraud or malicious acts on the part of trusted insiders, social engineering (including phishing attempts or the creation of copycat websites), or other unlawful tactics aimed at compromising the systems and data of real estate professionals and their clients (including through systems not directly controlled by us, such as those maintained by real estate professionals, franchisees, joint venture partners, and third-party service providers); and • the reputational and financial risks associated with a loss of data or material data breach (including unauthorized access to our proprietary business information or personal information of real estate professionals and their clients), the transmission of computer malware, or the diversion of sale transaction closing funds.
Changes in accounting standards, subjective assumptions and estimates used by management related to complex accounting matters could have an adverse effect on our business, financial condition, and results of operations. Generally accepted accounting principles in the U.S.
Changes in accounting standards, subjective assumptions and estimates used by management related to complex accounting matters could have an adverse effect on our business, financial condition, and results of operations. 26 Table of C ontents Generally accepted accounting principles in the U.S.
The secure processing, maintenance, and transmission of this information is critical to our operations and, with respect to information collected and stored by our third-party service providers, we are reliant upon their security procedures, controls, and adherence to our agreements.
The secure processing, maintenance, and transmission of this information is critical to our operations and, with respect to information collected and stored by our third-party service 23 Table of C ontents providers, we are reliant upon their security procedures, controls, and adherence to our agreements.
Moreover, under the U.S. franchise law, we are subject to federal regulations enforced by the FTC governing franchise offers and sales, as well as various regulations in states in which we operate, which may impose additional registration and 27 Table of Contents disclosure requirements.
Moreover, under U.S. franchise law, we are subject to federal regulations enforced by the FTC governing franchise offers and sales, as well as various regulations in states in which we operate, which may impose additional registration and disclosure requirements.
We have not performed an analysis to determine whether our past issuances of stock 22 Table of Contents and other changes in our stock ownership may have resulted in one or more ownership changes.
We have not performed an analysis to determine whether our past issuances of stock and other changes in our stock ownership may have resulted in one or more ownership changes.
Our brand, reputation and ability to attract customers and real estate partners and deliver quality products and services depend on the reliable performance of our network infrastructure and content delivery processes.
Our brand, reputation and ability to attract real estate professionals and deliver quality products and services depend on the reliable performance of our network infrastructure and content delivery processes.
Any inefficiencies, errors, bugs, system misconfiguration, technical problems, or vulnerabilities arising in our technology offerings after their release could reduce the quality of our products, system performance, or interfere with our agents’ access to and use of our technology and offerings.
Any inefficiencies, errors, bugs, system misconfiguration, technical problems, or vulnerabilities arising in our technology offerings after their release could reduce the quality of our products, system performance, or interfere with real estate professionals’ access to and use of our technology offerings.
The continued proliferation of privacy laws in the jurisdictions in which we operate is likely to result in a disparate array of privacy rules with unaligned or conflicting provisions, accountability requirements, individual rights, and enforcement powers, which may require us to further modify our data processing 24 Table of Contents practices and policies, and may subject us to increased regulatory scrutiny and business costs, and lead to unintended confusion among our agents’ and our agents’ clients.
The continued proliferation of privacy laws in the jurisdictions in which we operate is likely to result in a disparate array of privacy rules with unaligned or conflicting provisions, accountability requirements, individual rights, and enforcement powers, which may require us to further modify our data processing practices and policies, and may subject us to increased regulatory scrutiny and business costs, and lead to unintended confusion among our real estate professionals’ and real estate professionals’ clients.
Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; instability of financial institutions; legislative, regulatory or industry changes; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation and wage stagnation or wage increases that do not keep pace with inflation; and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership.
Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or other constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; actual or perceived instability of financial institutions; legislative, regulatory or industry changes; changes in, or uncertainty regarding, trade policy; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation, the cost and availability of home insurance, changes in tax law, and wage stagnation or wage increases that do not keep pace with inflation; population decline or growth (including in connection with immigration policy); and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership.
In addition, if agents at our owned-brokerage make fraudulent claims about properties they show, their transactions lead to allegations of errors or omissions, they violate certain regulations, including employment laws applicable to the management of their own employees, or they engage in self-dealing or do not disclose conflicts of interest to their clients, we could be subject to litigation and regulatory claims which, if adversely determined, could adversely affect our business, financial condition and results of operations.
In addition, if real estate professionals at our owned-brokerage make fraudulent claims about properties they show, their transactions lead to allegations of errors or omissions, they violate certain regulations, including, among others, the TCPA, RESPA, and employment laws applicable to the management of their own employees, or they engage in self-dealing or do not disclose conflicts of interest to their clients, we could be subject to litigation and regulatory claims which, if adversely determined, could adversely affect our business, financial condition and results of operations.
The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and to a lesser degree, international privacy law, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the products and services we provide to our agents and our agents’ clients, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), any of which in turn could have a material adverse effect on our competitiveness and business, financial condition, and results of operations.
The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and international privacy law, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the products and services we provide to real estate professionals and their clients, and increased cybersecurity protection and remediation costs (which may include liability for stolen assets or information), any of which in turn could have a material adverse effect on our competitiveness and business, financial condition, and results of operations.
Any failure or perceived failure by us to comply with our privacy policies, terms of service, privacy-related obligations to agents, our agents’ clients or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other agent or client data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others.
Any failure or perceived failure by us to comply with our privacy policies, terms of service, privacy-related obligations to real estate professionals, real estate professionals’ clients or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other real estate professionals or client data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others.
Natural disasters or other catastrophic events, such as fires, hurricanes, earthquakes, windstorms, tornados, floods, power loss, telecommunications failure, cyber-attacks, war, civil unrest, terrorist attacks, or pandemics or epidemics may cause damage or disruption to our operations, real estate commerce, and the global economy, and thus, could adversely affect our 25 Table of Contents business, financial condition and results of operations.
Natural disasters or other catastrophic events, such as fires, hurricanes, earthquakes, windstorms, tornados, floods, power loss, telecommunications failure, cyber-attacks, war and military action, civil unrest, international instability, terrorist attacks, or pandemics or epidemics may cause damage or disruption to our operations, real estate commerce, and the global economy, and thus, could adversely affect our business, financial condition and results of operations.
Various factors may pose a threat to our intellectual property rights, as well as to our platform and technology offerings. For example, we may fail to obtain effective intellectual property protection or effective intellectual property protection may not be available in every country in which our products and services are available.
Various factors may pose a threat 32 Table of C ontents to our intellectual property rights, as well as to our platform and technology offerings. For example, we may fail to obtain effective intellectual property protection or effective intellectual property protection may not be available in every country in which our products and services are available.
However, as we grow, we may face challenges that may affect our ability to sustain our culture, including: failure to identify, attract, reward, and retain people in leadership positions in our organization who share and further our culture, values, and mission; increasing size and geographic diversity of our workforce; inability to achieve consistent adherence to our internal policies and core values; the continued challenges of a rapidly-evolving industry; the increasing need to develop expertise in new areas of business that affect us; negative perception of our treatment of employees or our response to employee sentiment related to political or social causes or actions of management; and the integration of new personnel and businesses from acquisitions. 23 Table of Contents In addition, many of our employees continue to work remotely, which may adversely affect our efficiency and morale.
However, as we grow, we may face challenges that may affect our ability to sustain our culture, including: failure to identify, attract, reward, and retain people in leadership positions in our organization who share and further our culture, values, and mission; increasing size and geographic diversity of our workforce; inability to achieve consistent adherence to our internal policies and core values; the continued challenges of a rapidly-evolving industry; the increasing need to develop expertise in new areas of business that affect us; negative perception of our treatment of employees or our response to employee sentiment related to political or social causes or actions of management; and the integration of new personnel and businesses from acquisitions.
Cyber-attacks could give rise to the loss of significant amounts of data and other sensitive information and possibly disable our information technology systems which are used to service our agents.
Cyber-attacks could give rise to the loss of significant amounts of data and other sensitive information and possibly disable our information technology systems which are used to service real estate professionals.
These strategic acquisitions could be material to our financial condition and results of operations, but there can be no guarantee that they will result in the intended benefits to our business, and we may not successfully evaluate or utilize the acquired agents, businesses, products, or technology, or accurately forecast the financial impact of a strategic acquisition.
Any of the foregoing strategic acquisitions could be material to our financial condition and results of operations, but there can be no guarantee that they will result in the intended benefits to our business, and we may not successfully evaluate or utilize the acquired real estate professionals, businesses, products, or technology, or accurately forecast the financial impact of a strategic acquisition.
We believe that we have developed a strong reputation for helping agents and affiliates succeed on the basis of the technological sophistication of our technology offerings and our ability to offer a wide range of high-quality services.
We believe that we have developed a strong reputation for helping real estate professionals succeed on the basis of the technological sophistication of our technology offerings and our ability to offer a wide range of high-quality services.
We have been, and may be, subject to claims that we or our agents have infringed the copyrights, trademarks, or other intellectual property rights of a third party. Any intellectual property-related infringement or misappropriation claims, whether or not meritorious, could result in costly litigation and divert management resources and attention.
We have been, and may be, subject to claims that we or real estate professionals at our owned-brokerage have infringed the copyrights, trademarks, or other intellectual property rights of a third party. Any intellectual property-related infringement or misappropriation claims, whether or not meritorious, could result in costly litigation and divert management resources and attention.
Such threats may be beyond our control as our employees and agents at our owned-brokerage and their clients, as well as our affiliates and their agents, and other third-party service providers may use e-mail, computers, smartphones, and other devices and systems that are outside of our security control environment.
Such threats may be beyond our control as our employees and real estate professionals at our owned-brokerage and their clients, as well as our franchisees and their real estate professionals, and other third-party service providers may use e-mail, computers, smartphones, and other devices and systems that are outside of our security control environment.
To the extent these claims against unrelated companies are successful and we or our agents cannot distinguish our or their practices (or our industry’s practices), we could face significant liability and could be required to modify certain business practices or relationships, either of which could materially and adversely impact our business, financial condition, and results of operations.
To the extent these claims against unrelated companies are successful and we or real estate professionals at our owned-brokerage cannot distinguish our or their practices (or our industry’s practices), we could face significant liability and could be required to modify certain business practices or relationships, either of which could materially and adversely impact our business, financial condition, and results of operations.
If we are unsuccessful in expanding these services into other markets, then we may not realize the expected benefits (including anticipated revenue), which could adversely affect our business, financial condition and results of operations.
However, currently, our integrated services are available only in certain markets. If we are unsuccessful in expanding these services into other markets, then we may not realize the expected benefits (including anticipated revenue), which could adversely affect our business, financial condition and results of operations.
The negative covenants include restrictions that, among other things, restrict our and our subsidiaries’ ability to incur liens and indebtedness, make certain investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions.
The negative covenants include restrictions that, among other things, restrict our and our subsidiaries’ ability to incur liens and indebtedness, make loans, advances or other investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases, repay junior or contractually subordinated debt and consummate certain other matters, all subject to certain exceptions.
As our revenue is primarily driven by sales commissions and transaction fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by agents at our owned-brokerage and our affiliates could adversely affect our business, financial condition and results of operations.
As our revenue is primarily driven by sales commissions, transaction fees and royalty fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by real estate professionals could adversely affect our business, financial condition and results of operations.
However, if an agent on our platform were to be subject to a claim for breach of data privacy laws, we could be found liable for their claims due to our relationship, which may require us to take more costly data security and compliance measures or to develop more complex systems.
However, if a real estate professional on our platform or using our technology offerings were to be subject to a claim for breach of data privacy laws, we could be found liable for their claims due to our relationship, which may require us to take more costly data security and compliance measures or to develop more complex systems.
Risks Related to Our Intellectual Property Our intellectual property rights are valuable to us, and any inability to protect them could reduce the value of our products, services, and brand . 28 Table of Contents Our trade secrets, trademarks, copyrights and other intellectual property rights are important assets to us, and litigation to defend intellectual property can be expensive and lengthy.
Risks Related to Our Intellectual Property Our intellectual property rights are valuable to us, and any inability to protect them could reduce the value of our products, services, and brands. Our trade secrets, trade names, domain names, trademarks, copyrights and other intellectual property rights are important assets to us, and litigation to defend intellectual property can be expensive and lengthy.
We cannot predict the effect our multi-class structure may have on the market price of our Class A common stock . We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A common stock, adverse publicity, or other adverse consequences.
We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A common stock, adverse publicity, or other adverse consequences.
Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of our agents or our agents’ clients, loss of revenue or liability for damages, any of which could adversely affect our growth prospects and our business, financial condition, and results of operations.
Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of real estate professionals, franchisees or real estate professionals’ clients, loss of revenue or liability for damages, any of which could adversely affect our growth prospects and our business, financial condition, and results of operations.
Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the TCPA (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, GLBA, GDPR and similar state consumer protection laws.
Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the TCPA (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, GLBA, GDPR, tracking technologies, cookie consent mechanisms, targeted advertising practices and similar consumer protection laws.
Our agents’ use of our platform to access and store data presents us with uncertainties and risks, as they may accidentally or deliberately cause private information to be transmitted through unsecure channels, which may lead to breaches or other leaks of such information.
Real estate professionals’ use of our technology offerings to access and store data presents us with uncertainties and risks, as they may accidentally or deliberately cause private information to be transmitted through unsecure channels, which may lead to breaches or other leaks of such information.
Reffkin”) (and including his shares of Class A common stock subject to outstanding RSUs for which the service condition has been satisfied or would be satisfied within 60 days of December 31, 2024), held 10,828,116 shares of Class A common stock and all of the issued and outstanding shares of Class C common stock. As of December 31, 2024, Mr.
Reffkin”) (and including his shares of Class A common stock subject to outstanding RSUs for which the service condition has been satisfied or would be satisfied within 60 days of December 31, 2025), held 8,982,709 shares of Class A common stock and all of the issued and outstanding shares of Class C common stock. As of December 31, 2025, Mr.
Through our affiliate business, we have expanded, and may continue to expand in the future, into international markets, which will expose us to significant risks . A component of our growth strategy involves the further expansion of our operations and establishment of an agent and affiliate base internationally.
Through our franchise and relocation business, we have expanded, and may continue to expand in the future, into international markets, which will expose us to significant risks. A component of our growth strategy involves the further expansion of our operations and establishment of real estate professional and franchise base internationally.
Our continued growth depends on our ability to attract highly-qualified agents at our owned-brokerage and expand our network of affiliates, to retain them and to help them expand their businesses by utilizing our technology offerings.
Our continued growth depends on our ability to attract highly-qualified real estate professionals at our owned-brokerage and expand our network of franchises, to retain them and to help them expand their businesses by utilizing our technology offerings.
We must conservatively manage our cash and expenses in light of these and other negative changes in market conditions. To date, we have done so through reductions in force, changes to our spending approval processes, adjustments to our sales incentives and sales teams, and otherwise by pivoting our focus from growth to profitability and cash flow.
To date, we have managed our cash and expenses in light of these and other challenging market conditions through reductions in force, changes to our spending approval processes, adjustments to our sales incentives and sales teams, and otherwise by pivoting our focus from growth to profitability and cash flow.
While we plan to continue to expand our integrated services to other offerings, there is no guarantee that we will do so or be successful, and even if we do, the expansions might be at a slower pace than we anticipate. We may not realize the expected benefits from our mortgage business .
While we plan to continue to expand our integrated services to other offerings, there is no guarantee that we will do so or be successful, and even if we do, the expansions might be at a slower pace than we anticipate.
Any future determination to pay dividends will be at the discretion of our board of directors, and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant. 32 Table of Contents Item 1B. Unresolved Staff Comments. None.
Any future determination to pay dividends will be at the discretion of our board of directors, and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.
The loss of our existing relationships with these parties, changes to our rights to use listing data, or an inability to continue to add new listing providers may cause our listing data to omit information important to our agents or their clients.
The loss of our existing relationships with these parties, changes to our rights to use listing data, or an inability to continue to add new listing providers may cause our listing data to omit information important to real estate professionals at our owned-brokerage or their clients.
There can be no guarantee that we can continue to launch new products and services in a timely manner, or at all, and even if we do, they might not be utilized by agents at our owned-brokerage or our affiliates at the rate we expect.
There can be no guarantee that we can continue to launch new products and services in a timely manner, or at all, and even if we do, they might not be utilized by the real estate professionals at the rate we expect.
Further, if legal standards for classification of our agents as independent contractors change or appear to be changing, it may be necessary to modify the compensation structure for our agents, including by paying additional compensation and benefits or reimbursing expenses.
Further, if legal standards for classification of real estate professionals at our owned-brokerage as independent contractors change or appear to be changing, it may be necessary to modify the compensation structure for such real estate professionals, including by paying additional compensation and benefits or reimbursing expenses.
Reffkin held approximately 33.5% of the voting power of our outstanding capital stock. As a result, Mr.
Reffkin held approximately 28.0% of the voting power of our outstanding capital stock. As a result, Mr.
Persistent or pervasive fraudulent activity may cause our agents or our agents’ clients to lose trust in us and decrease or terminate their usage of our platform, which could materially harm our operations, business, results, and financial condition.
Persistent or pervasive fraudulent activity may cause real estate professionals or their clients to lose trust in us and decrease or terminate their usage of our technology offerings, which could materially harm our operations, business, results, and financial condition.
A failure of our third-party cloud service providers systems could result in reduced capabilities or a total failure of our systems, which could cause our mobile app or website to be inaccessible, impairing our agents’ ability to use our platform.
A failure of our third-party cloud service providers systems could result in reduced capabilities or a total failure of our systems, which could cause our mobile app, technology offerings or website to be inaccessible, impairing our real estate professionals’ and franchisees’ ability to use our platform and technology offerings.
General awareness and the perceived quality and differentiation of our technology offerings, including our Compass platform, are important aspects of our efforts to attract and retain agents at our owned-brokerage and expand our network of affiliates.
General awareness and the perceived quality and differentiation of our technology offerings, including our platform, are important aspects of our efforts to attract and retain real estate professionals at our owned-brokerage and retain and expand our network of franchisees.
We expect that our international activities will continue to grow in the future as we pursue opportunities in international markets, which may require significant dedication of management attention and will require significant upfront investment. 21 Table of Contents Our current and future international business and operations involve a variety of risks, including the need to adapt and localize our platform for specific countries; unexpected changes in trade relations, regulations, or laws; new, evolving, and more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and Canada; adverse changes to political and economic climates of foreign countries, or in their relations with the U.S.; difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; fluctuations in foreign currency exchange rates; regulations, adverse tax burdens, and foreign exchange controls that could make it difficult to repatriate earnings and cash; and increased costs and difficulty associated with overseeing affiliates operating outside of the U.S.
Our current and future international business and operations involve a variety of risks, including the need to adapt and localize our platforms for specific countries; unexpected changes in trade relations, regulations, or laws; new, evolving, and more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information; adverse changes to political and economic climates of foreign countries, or in their relations with the U.S.; difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; fluctuations in foreign currency exchange rates; regulations, adverse tax burdens, and foreign exchange controls that could make it difficult to repatriate earnings and cash; and increased costs and difficulty associated with overseeing affiliates operating outside of the U.S.
The Federal Reserve Board’s summary of economic projections suggests even fewer rate cuts in 2025 than in 2024, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates if inflation persists.
The 13 Table of C ontents Federal Reserve Board’s summary of economic projections suggests fewer rate cuts in 2026 than in 2025, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates.
Similarly, if our agents do not recommend our integrated services to their clients, then our revenue from integrated services will not grow as quickly as we expect.
Similarly, if real estate professionals and franchisees do not recommend our integrated services to their clients, then our revenue from integrated services will not grow as quickly as we expect.
Any of these events could negatively impact our reputation and agent and client confidence in the listing data we provide and reduce our ability to attract and retain agents, which could harm our business, financial condition, and results of operations.
Any of these events could negatively impact our reputation and real estate professional and client confidence in the listing data we provide and reduce our ability to attract and retain real estate professionals at our owned-brokerage, which could harm our business, financial condition, and results of operations.
We regularly release or update software code, which may result in more frequent introduction of errors, bugs, or vulnerabilities into the software underlying our platform, potentially impacting agents' and their clients' experience on the Compass platform.
We regularly release or update software code, which may result in more frequent introduction of errors, bugs, or vulnerabilities into the software underlying our platform, potentially impacting real estate professionals’, franchisees and real estate professionals’ clients’ experience on the Compass platform and our other technology offerings.
If cash on hand, cash generated from operations, and cash equivalents and investment balances are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital and we may not be able to raise the necessary cash on terms acceptable to us, or at all.
If cash on hand, cash generated from operations, supplemented by funds available under our 2025 Revolving Credit Facility and securitization facilities, and cash equivalents and investment balances are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital, and we may not be able to raise the necessary cash on terms acceptable to us, or at all.
Further, if there is a downturn in high-end markets, agents at our owned-brokerage and our affiliates may shift to transactions involving middle and lower range market prices, which, absent a sufficient increase in the number of transactions, could result in a decline in our revenue and could have a material adverse effect on our operating results.
Further, if there is a downturn in high-end geographies, real estate professionals may shift to transactions involving middle and lower range home prices, which, absent a sufficient increase in the number of transactions, could result in a decline in our revenue and could have a material adverse effect on our operating results.
Additionally, if the MLSs cease to be the predominant source of listing data, we might not be able to provide comprehensive listing data to our agents and their clients.
Additionally, if the MLSs cease to be the predominant source of listing data, we might not be able to provide comprehensive listing data to real estate professionals at our owned-brokerage and their clients.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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In addition to the monthly communications at the Committee level, our Information Security team collaborates with senior leadership across our organization on a regular basis as part of the Company’s overall enterprise risk management program. In 2024, we hired a new Chief Information Security Officer to oversee the cybersecurity program and lead the Information Security team.
In addition to the monthly communications at the Committee level, our Information Security team collaborates with senior leadership across our organization on a regular basis as part of the Company’s overall enterprise risk management program. In 2026, we hired a new Chief Information Security Officer to oversee the cybersecurity program and lead the Information Security team.
Please refer to the “Risk Factors” section of this Annual Report for additional information related to the cybersecurity risks that could potentially impact our business. Cybersecurity Governance 33 Table of Contents Our Information Security team oversees our cybersecurity program, which is described in more detail above.
Please refer to the “Risk Factors” section of this Annual Report for additional information related to the cybersecurity risks that could potentially impact our business. Cybersecurity Governance Our Information Security team oversees our cybersecurity program, which is described in more detail above.
Further, our cybersecurity risk management program includes a third-party risk management program to assess and manage cybersecurity risks associated with our use of third-party services providers that have access to our information systems and/or employee, agent or agent client confidential information.
Further, our cybersecurity risk management program includes a third-party risk management program to assess and manage cybersecurity risks associated with our use of third-party services providers that have access to our information systems 38 Table of C ontents and/or employee, agent or agent client confidential information.
Guided by industry best practices, including the National Institute of Standards and Technology's Cybersecurity Framework ("NIST CSF") and the Center for Internet Security ("CIS") Critical Controls, we focus on continuous improvement to address emerging threats and vulnerabilities. We recognize the evolving nature of cybersecurity threats and regularly enhance our security controls, processes, and policies to adapt to these risks.
Guided by industry best practices, including the National Institute of Standards and Technology’s Cybersecurity Framework (“NIST CSF”) and the Center for Internet Security (“CIS”) Critical Controls, we focus on continuous improvement to address emerging threats and vulnerabilities. We recognize the evolving nature of cybersecurity threats and regularly enhance our security controls, processes, and policies to adapt to these risks.
Removed
Our CISO has over 17 years of experience building security teams and driving security initiatives for public, high-growth, and regulated companies. He is a Certified Information Systems Security Professional and reports to our Senior Vice President and Head of Engineering.
Added
Given the data-driven nature of our business and the prevalent use of technology in operating our business, we face cybersecurity risks inherent to our normal course of operation that, if realized, are reasonably likely to materially affect our business strategy, results of operations and financial condition.
Added
The CISO’s experience includes more than 20 years in the security and fraud profession in multiple high-risk industries, including the critical infrastructure sector, and encompasses various cybersecurity leadership roles and almost seven years as a CISO. She is a Certified Information Systems Security Professional (CISSP) and has a Master’s Degree in Information Systems Management.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. We are headquartered in New York, New York, where we occupy approximately 32,500 square feet of office space pursuant to a lease that is expected to expire in June 2030 subject to the terms thereof. We also lease operating and sales offices throughout the United States. Item 3. Legal Proceedings.
Item 2. Properties. We are headquartered in New York, New York, where we occupy approximately 32,500 square feet of office space pursuant to a lease that is expected to expire in November 2033 subject to the terms thereof. We also lease operating and sales offices throughout the United States.
Removed
The information relating to legal proceedings contained in Note 11 to the consolidated financial statements included in Part II, Item 8 of this Annual Report is incorporated herein by this reference. Item 4. Mine Safety Disclosures. None. 34 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Stock Performance Graph The stock performance graph set forth below shall not be deemed “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of the Exchange Act and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing. 35 Table of Contents The following graph compares the performance of our common stock to the Standard & Poor’s (“S&P”) 500 Index and Peer Group Index by assuming $100 was invested in each investment option as of April 1, 2021, which represents the day our common stock began trading on the NYSE.
Stock Performance Graph The stock performance graph set forth below shall not be deemed “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of the Exchange Act and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing. 43 Table of C ontents The following graph compares the performance of our common stock to the Standard & Poor’s (“S&P”) 500 Index and Peer Group Index by assuming $100 was invested in each investment option as of April 1, 2021, which represents the day our common stock began trading on the NYSE.
(2) Peer Group Index consists of Zillow Group, Inc. (ZG), Redfin Corp (RDFN), Opendoor Technologies Inc. (OPEN), EXP World Holdings, Inc. (EXPI) and Anywhere Real Estate Inc. (HOUS).
(2) Peer Group Index consists of Zillow Group, Inc. (ZG), Opendoor Technologies Inc. (OPEN), EXP World Holdings, Inc (EXPI) and Anywhere Real Estate Inc. (HOUS).
Stockholders As of February 20, 2025, there were 205 holders of record of our common stock. The actual number of stockholders is greater than this number of holders of record, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Stockholders As of February 23, 2026, there were 261 holders of record of our common stock. The actual number of stockholders is greater than this number of holders of record, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with the view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. Issuer Purchases of Equity Securities None. Item 6. Reserved.
The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with the view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. 44 Table of C ontents Issuer Purchases of Equity Securities None.
Year 4/1/21 12/31/21 12/31/22 12/31/23 12/31/24 COMP $ 100.00 $ 45.11 $ 11.56 $ 18.66 $ 29.03 S&P 500 Index (1) $ 100.00 $ 118.57 $ 95.51 $ 118.66 $ 146.31 Peer Group Index (2) $ 100.00 $ 67.17 $ 23.05 $ 35.64 $ 20.99 ____________ (1) S&P 500 Index is a capitalization-weighted index of domestic equities of the largest companies traded on the NYSE and NASDAQ.
Year 4/1/21 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 COMP $ 100.00 $ 45.11 $ 11.56 $ 18.66 $ 29.03 $ 52.46 S&P 500 Index (1) $ 100.00 $ 118.57 $ 95.51 $ 118.66 $ 146.31 $ 170.29 Peer Group Index (2) $ 100.00 $ 70.89 $ 24.08 $ 38.76 $ 23.93 $ 38.59 ____________ (1) S&P 500 Index is a capitalization-weighted index of domestic equities of the largest companies traded on the NYSE and NASDAQ.
Removed
Sales of Unregistered Securities From October 1, 2024 through February 25, 2025, we offered, sold and issued the following unregistered securities: (1) As previously disclosed in Form 4s filed with the SEC, Robert Reffkin, our founder and Chief Executive Officer, exchanged an aggregate of 5,636,354 shares of Class C common stock for an equivalent number of shares of Class A common stock pursuant to an Equity Exchange Right Agreement on November 6, 2024, December 18, 2024 and February 19, 2025; and (2) As previously disclosed in Form 8-K filed with the SEC, we entered into an agreement to issue 44,136,191 shares of Class A common stock (the "Share Consideration") related to an acquisition that closed on January 13, 2025 (the "Closing Date"); the Share Consideration is subject to further adjustment (the “Share Consideration Adjustment”) if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Company’s Class A common stock for the 10-trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), is (i) greater than $344 million, in which case the Share Consideration will be reduced by a number of shares in an aggregate amount of up to $50 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares or (ii) less than $344 million, in which case the Share Consideration will be increased by a number of shares in an aggregate amount of up to $50 million (determined using the greater of $6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares. 36 Table of Contents The offer, sale and issuance of the securities described above were exempt from registration under the Securities Act in reliance upon Section 3(a)(9) and Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering.
Added
Sales of Unregistered Securities From October 1, 2025 through February 27, 2026, we offered, sold and issued the following unregistered securities: (1) As previously disclosed in the Quarterly Report on Form 10-Q for the period ended on September 30, 2025, on October 2, 2025, we issued 60,087 shares of our Class A common stock as an earnout consideration in connection with a prior acquisition.
Added
(2) On November 13, 2025, we issued 31,921 shares of our Class A common stock as an earnout consideration in connection with a prior acquisition.
Added
(3) As previously disclosed in the Current Report on Form 8-K filed on September 3, 2025, on January 15, 2026, we issued 3,724,147 shares of our Class A common stock as an original consideration for a prior acquisition.
Added
The offer, sale and issuance of the securities described above were exempt from registration under the Securities Act in reliance upon Section 3(a)(9) and Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

94 edited+98 added−62 removed41 unchanged
Financing Activities During 2024, net cash used in financing activities was $28.0 million, primarily consisting of $35.0 million in taxes paid related to net share settlement of equity awards, $3.4 million in payments related to acquisitions, including payments of contingent consideration, and $1.2 million in net payments on drawdowns and repayments on the Concierge Facility, partially offset by $9.5 million in proceeds from the exercise of stock options and $2.2 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
During 2024, net cash used in financing activities was $28.0 million, primarily consisting of $35.0 million in taxes paid related to net share settlement of equity awards, $3.4 million in payments related to acquisitions, including payments of contingent consideration, and $1.2 million in net payments on drawdowns and repayments on the Concierge Facility, partially offset by $9.5 million in proceeds from the exercise of stock options and $2.2 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Our Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients.
The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients.
Our commissions and other related expense as a percentage of revenue is expected to fluctuate from period-to-period based on the mix of the commission arrangements we have with our agents, the fees we collect and any changes in integrated services revenue.
Our commissions and other related expense as a percentage of revenue is expected to fluctuate from period-to-period based on the mix of the commission arrangements we have with our agents, the fees we collect and any changes in integrated services and franchise revenue.
Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) a floating rate per annum equal to the base rate plus a margin of 0.50% or (ii) a rate per annum equal to the secured overnight financing rate, or SOFR, plus a margin of 1.50%.
Borrowings under the 2021 Revolving Credit Facility bear interest, at our option, at either (i) a floating rate per annum equal to the base rate plus a margin of 0.50% or (ii) a rate per annum equal to the secured overnight financing rate, or SOFR, plus a margin of 1.50%.
An analysis of the significant line items on our statements of operations, as well as other information that we deem meaningful to understand our results of operations on a consolidated basis for the year ended December 31, 2023 compared to the year ended December 31, 2022 is included in our Form 10-K for the year ended December 31, 2023. • Key Business Metrics and Non-GAAP Financial Measures.
An analysis of the significant line items on our statements of operations, as well as other information that we deem meaningful to understand our results of operations on a consolidated basis for the year ended December 31, 2024 compared to the year ended December 31, 2023 is included in our Form 10-K for the year ended December 31, 2024. • Key Business Metrics and Non-GAAP Financial Measures.
While we continue to assess the effects of the ongoing slowdown and the recent industry-wide changes 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 on our revenue, profitability, or liquidity.
While we continue to assess the effects of the recent industry-wide changes 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 on our revenue, profitability, or liquidity.
During 2023, net cash used in financing activities was $157.4 million, primarily consisting of $150.0 million in net repayments of drawdowns on the Revolving Credit Facility, $23.5 million in taxes paid related to net share settlement of equity awards, $14.6 million in payments related to acquisitions, including payments of contingent consideration, and $7.1 million in net payments on drawdowns and repayments on the Concierge Facility, partially offset by $32.3 million in proceeds from the issuance of common stock in connection with the Strategic Transaction (see Note 12 - "Preferred Stock and Common Stock" to our consolidated financial statements included elsewhere in this Annual Report for more information ) , $4.5 million in proceeds from the exercise of stock options and $2.5 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
During 2023, net cash used in financing activities was $157.4 million, primarily consisting of $150.0 million in net repayments of drawdowns on the 2021 Revolving Credit Facility, $23.5 million in taxes paid related to net share settlement of equity awards, $14.6 million in payments related to acquisitions, including payments of contingent consideration, and $7.1 million in net payments on drawdowns and repayments on the Concierge Facility, partially offset by $32.3 million in proceeds from the issuance of common stock in connection with the Strategic Transaction (see Note 12 - “Preferred Stock and Common Stock” to our consolidated financial statements included elsewhere in this Annual Report for more information ) , $4.5 million in proceeds from the exercise of stock options and $2.5 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Operational Highlights for the year ended December 31, 2024 We continue to attract and retain the most talented agents to our platform, which is critical to our long-term success. We grow our revenue by attracting high-performing agents looking to grow their business and increasing the productivity of our agents.
Operational Highlights for the year ended December 31, 2025 We continue to attract and retain the most talented agents to our platform, which is critical to our long-term success. We grow our revenue by attracting high-performing agents looking to grow their business and increasing the productivity of our agents.
This section provides our analysis and outlook for the significant line items on our statements of operations, as well as other information that we deem meaningful to understand our results of operations on a consolidated basis for the year ended December 31, 2024 compared to the year ended December 31, 2023.
This section provides our analysis and outlook for the significant line items on our statements of operations, as well as other information that we deem meaningful to understand our results of operations on a consolidated basis for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Sales and marketing Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs for our regional offices, agent acquisition incentives and costs related to administering the Compass Concierge Program, including associated bad debt expenses.
Sales and marketing Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs for our regional offices, agent recruitment and marketing incentives and costs related to administering the Compass Concierge Program, including associated bad debt expenses.
The non-cash charges are primarily related to $158.2 million of stock-based compensation expense, $90.0 million of depreciation and amortization expense, $4.4 million of bad debt expense and $3.3 million of equity in loss of unconsolidated entity.
The non-cash charges are primarily related to $158.2 million of stock-based compensation expense, $90.0 million of depreciation and amortization expense, $4.4 million of bad debt expense and $3.3 million of equity in loss of unconsolidated entities.
During the year ended December 31, 2024, General and administrative expense includes a charge of $57.5 million in connection with the Antitrust Lawsuits, which is discussed in Note 11 - "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report.
During the year ended December 31, 2024, General and administrative expense includes a charge of $57.5 million in connection with the Antitrust Lawsuits, which is discussed in Note 11 - “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this Annual Report.
We define Total Transactions as the sum of all transactions closed on our platform in which our agent represented the buyer or seller in the purchase or sale of a home. We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction.
We define Total Transactions as the sum of all transactions closed on our platform in which our agent represented the buyer or seller in the purchase or sale of a home. We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction. This metric excludes rental transactions.
Additionally, in the event that we fail to comply with certain financial covenants that require us to meet certain liquidity- 49 Table of Contents based measures, the commitments under the Concierge Facility will automatically be reduced to zero and we will be required to repay any outstanding loans under the Concierge Facility.
Additionally, in the event that we fail to comply with certain financial covenants that require us to meet certain liquidity-based measures, the commitments under the Concierge Facility will automatically be reduced to zero and we will be required to repay any outstanding loans under the Concierge Facility.
Our obligations under the Revolving Credit Facility are guaranteed by certain of our subsidiaries and are secured by a first priority security interest in substantially all of our assets and subsidiary guarantors.
Our obligations under the 2021 Revolving Credit Facility were guaranteed by certain of our subsidiaries and were secured by a first priority security interest in substantially all of our assets and subsidiary guarantors.
Additionally, as part of its nationwide class action settlement of antitrust claims, NAR agreed to implement certain industry-wide practice changes, including, but not limited to, prohibiting buyer brokers' offers of compensation from being included in listings on Multiple Listing Services and requiring a buyer to enter into a written agreement with their agent that would set forth the buyer broker's fee before showing the buyer a property.
Residential Real Estate Market and Our Business As part of its nationwide class action settlement of antitrust claims, NAR agreed to implement certain industry-wide practice changes, including, but not limited to, prohibiting buyer brokers’ offers of compensation from being included in listings on Multiple Listing Services and requiring a buyer to enter into a written agreement with their agent that would set forth the buyer broker’s fee before showing the buyer a property.
Accordingly, real estate commissions are recorded as revenue at the point in time real estate transactions are closed (i.e., sale or purchase of a home). We also recognize revenue from other integrated services related to the home transaction such as title and escrow services.
Accordingly, real estate commissions are recorded as revenue at the point in time real estate transactions are closed (i.e., sale or purchase of a home). We also recognize revenue from other integrated services related to the home transaction such as title and escrow services and royalties and fees from third-party franchisees.
The period-over-period increase was primarily driven by the increase in the number of agents on our platform. Number of Principal Agents The Number of Principal Agents represents the number of agents who are leaders of their respective agent teams or individual agents operating independently on our platform.
The period-over-period increase was primarily driven by the increase in the number of agents on our platform. 56 Table of C ontents Number of Principal Agents The Number of Principal Agents represents the number of agents who are leaders of their respective agent teams or individual agents operating independently on our platform.
Concierge Facility In July 2020, we entered into a Revolving Credit and Security Agreement, or the Concierge Facility, with Barclays Bank PLC, as administrative agent, and the several lenders party thereto, which was subsequently amended on July 29, 2021, August 5, 2022 and August 4, 2023.
Indebtedness Concierge Facility In July 2020, we entered into a Revolving Credit and Security Agreement (the “Concierge Facility”) with Barclays Bank PLC, as administrative agent, and the several lenders party thereto, which was subsequently amended on July 29, 2021, August 5, 2022, August 4, 2023 and August 1, 2025.
In the meantime, the significant cost reduction actions that we have taken since 2022 have reduced our operating expense levels to the point that we are able to consistently generate positive operating cash flow, aside from a limited number of seasonally slower transaction volume months during the year.
During this time, we have taken significant cost reduction actions that have reduced our operating expense levels to the point that we are able to consistently generate positive operating cash flow, aside from a limited number of seasonally slower transaction volume months during the year.
These changes went into effect in August of 2024. Early in the spring of 2024, the Company entered into its own class action antitrust settlement and agreed to implement certain other practice changes. See Note 11 - "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report for more information.
These changes went into effect in August of 2024. Early in the spring of 2024, we entered into our own class action antitrust settlement and agreed to implement certain other practice changes. See Note 11 — “Commitments and Contingencies” to our consolidated financial statements included elsewhere in this Annual Report for more information.
The Concierge Facility provides for a $75.0 million revolving credit facility and is solely used to finance a portion of our Compass Concierge Program. The Concierge Facility is secured primarily by the Concierge Receivables and cash of the Compass Concierge Program. The interest rate on the drawn down portion of the Concierge Facility was 7.49% as of December 31, 2024.
The Concierge Facility provides for a $75.0 million revolving credit facility and is solely used to finance a portion of our Compass Concierge Program. The Concierge Facility is secured primarily by the Concierge Receivables and cash of the Compass Concierge Program. The interest rate on the drawn down balance of the Concierge Facility was 6.57% as of December 31, 2025.
The base rate is equal to the highest of (a) the prime rate as quoted by The Wall Street Journal, (b) the federal funds effective rate plus 0.50%, (c) the SOFR term rate for a one-month interest period plus 1.00%, and (d) 1.00%.
The base rate was equal to the highest of (a) the prime rate as quoted by The Wall Street Journal, (b) the federal funds effective rate plus 0.50%, (c) the SOFR term rate for a one-month interest period plus 1.00%, and (d) 1.00%. The SOFR term rate was determined as the forward-looking term rate plus a 0.10% adjustment.
Research and development Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Research and development $ 188.8 $ 184.5 $ 4.3 2.3 % Percentage of revenue 3.4 % 3.8 % Research and development expense increased by $4.3 million, or 2.3%, for 2024 compared to 2023.
Research and development Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Research and development $ 245.8 $ 188.8 $ 57.0 30.2 % Percentage of revenue 3.5 % 3.4 % Research and development expense increased by $57.0 million, or 30.2%, for 2025 compared to 2024.
During 2023, net cash used by investing activities was $11.7 million, consisting of $11.2 million in capital expenditures and $1.2 million for investment in an unconsolidated entity, partially offset by $0.7 million in net cash acquired from acquisitions. 51 Table of Contents During 2022, net cash used by investing activities was $100.1 million, consisting of $70.1 million in capital expenditures, $15.0 million in payments for acquisitions, net of cash acquired, and $15.0 million for investment in an unconsolidated entity.
During 2023, net cash used by investing activities was $11.7 million, consisting of $11.2 million in capital expenditures and $1.2 million for investment in an unconsolidated entity, partially offset by $0.7 million in net cash acquired from acquisitions.
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 macroeconomic factors. Our Gross Transaction Value for the year ended December 31, 2024 was $216.8 billion, an increase of 16.5% from the year ended December 31, 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 macroeconomic factors. Our Gross Transaction Value for the year ended December 31, 2025 was $267.0 billion, an increase of 23.2% from the year ended December 31, 2024.
Investment income, net Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Investment income, net $ 6.8 $ 8.5 $ (1.7) (20.0 %) During the year ended December 31, 2024, investment income was $6.8 million and during year ended December 31, 2023, investment income was $8.5 million.
Investment income, net Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Investment income, net $ 5.5 $ 6.8 $ (1.3) (19.1 %) During the year ended December 31, 2025, investment income was $5.5 million and during year ended December 31, 2024, investment income was $6.8 million.
Revolving Credit and Guaranty Agreement In March 2021, we entered into a Revolving Credit and Guaranty Agreement, or the Revolving Credit Facility, with Barclays Bank PLC, as administrative agent and as collateral agent, or the Administrative Agent, and certain other lenders, which was subsequently amended on May 1, 2023.
As of December 31, 2025, we were in compliance with the covenants under the Concierge Facility. 2021 Revolving Credit Facility In March 2021, we entered into a Revolving Credit and Guaranty Agreement (the “2021 Revolving Credit Facility”), with Barclays Bank PLC, as administrative agent and as collateral agent, or the Administrative Agent, and certain other lenders, which was subsequently amended on May 1, 2023.
Depreciation and amortization Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Depreciation and amortization $ 82.4 $ 90.0 $ (7.6) (8.4 %) Percentage of revenue 1.5 % 1.8 % Depreciation and amortization expense decreased by $7.6 million, or 8.4%, for 2024 compared to 2023.
Depreciation and amortization Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Depreciation and amortization $ 112.7 $ 82.4 $ 30.3 36.8 % Percentage of revenue 1.6 % 1.5 % Depreciation and amortization expense increased by $30.3 million, or 36.8%, for 2025 compared to 2024.
Investing Activities During 2024, net cash used by investing activities was $36.6 million, consisting of $18.9 million in payments for acquisitions, net of cash acquired, $15.7 million in capital expenditures and $2.0 million for investments in an unconsolidated entity.
Investing Activities During 2025, net cash used by investing activities was $191.3 million, consisting of $174.0 million in payments for acquisitions, net of cash acquired, $13.4 million in capital expenditures and $3.9 million for investments in unconsolidated entities. 60 Table of C ontents During 2024, net cash used by investing activities was $36.6 million, consisting of $18.9 million in payments for acquisitions, net of cash acquired, $15.7 million in capital expenditures and $2.0 million for investments in an unconsolidated entity.
Pursuant to the Concierge Facility, the principal amount, if any, is payable in full in January 2026, unless earlier terminated or extended. As of December 31, 2024 and 2023, there were $23.6 million and $24.8 million, respectively, in borrowings outstanding under the Concierge Facility.
Pursuant to the Concierge Facility, the principal 61 Table of C ontents amount, if any, is payable in full in January 2028, unless earlier terminated or extended. As of December 31, 2025 and 2024, there were $22.7 million and $23.6 million, respectively, in borrowings outstanding under the Concierge Facility.
Operating Expenses Commissions and other related expense Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Commissions and other related expense $ 4,634.6 $ 4,007.0 $ 627.6 15.7 % Percentage of revenue 82.3 % 82.0 % Commissions and other related expense increased by $627.6 million, or 15.7%, for 2024 compared to 2023.
Operating Expenses Commissions and other related expense Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Commissions and other related expense $ 5,679.7 $ 4,634.6 $ 1,045.1 22.5 % Percentage of revenue 81.6 % 82.3 % Commissions and other related expense increased by $1,045.1 million, or 22.5%, for 2025 compared to 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. 38 Table of Contents As of December 31, 2024, 2023 and 2022, the Number of Principal Agents 1,2,3 was 17,752, 14,683 and 13,649, respectively.
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. As of December 31, 2025, 2024 and 2023, the Number of Principal Agents 4 was 21,190 5 , 17,752 and 14,683, respectively.
Sales and marketing Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Sales and marketing $ 368.7 $ 435.4 $ (66.7) (15.3 %) Percentage of revenue 6.5 % 8.9 % Sales and marketing expense decreased by $66.7 million, or 15.3%, for 2024 compared to 2023.
Sales and marketing Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Sales and marketing $ 377.9 $ 368.7 $ 9.2 2.5 % Percentage of revenue 5.4 % 6.5 % Sales and marketing expense increased by $9.2 million, or 2.5%, for 2025 compared to 2024.
The Revolving Credit Facility provides for a $350.0 million revolving credit facility, subject to the terms and conditions of the Revolving Credit Facility. The Revolving Credit Facility also includes a letter of credit sublimit which is the lesser of (i) $125.0 million and (ii) the aggregate unused amount of the revolving commitments then in effect under the Revolving Credit Facility.
The 2021 Revolving Credit Facility also included a letter of credit sublimit which is the lesser of (i) $125.0 million and (ii) the aggregate unused amount of the revolving commitments then in effect under the 2021 Revolving Credit Facility.
Year Ended December 31, 2024 2023 2022 Total Transactions 205,122 178,848 211,538 Gross Transaction Value (in billions) $ 216.8 $ 186.1 $ 230.3 Number of Principal Agents (1)(2) 17,752 14,683 13,649 Net loss attributable to Compass, Inc.
Year Ended December 31, 2025 2024 2023 Total Transactions 250,360 205,122 178,848 Gross Transaction Value (in billions) $ 267.0 $ 216.8 $ 186.1 Number of Principal Agents (1)(2) 21,190 17,752 14,683 Net loss attributable to Compass, Inc.
(in millions) $ (154.4) $ (321.3) $ (601.5) Net loss attributable to Compass, Inc. margin (2.7) % (6.6) % (10.0) % Adjusted EBITDA (3) (in millions) $ 126.0 $ (38.9) $ (210.0) Adjusted EBITDA margin (3) 2.2 % (0.8) % (3.5) % (1) During the year ended December 31, 2024, the Company began to report its agent statistics as of the period end.
(in millions) $ (58.5) $ (154.4) $ (321.3) Net loss attributable to Compass, Inc. margin (0.8) % (2.7) % (6.6) % Adjusted EBITDA (3) (in millions) $ 293.4 $ 126.0 $ (38.9) Adjusted EBITDA margin (3) 4.2 % 2.2 % (0.8) % (1) During the first quarter of 2024, we began to report agent statistics as of the period end.
We maintain a full valuation allowance against our U.S. deferred tax assets for income tax purposes because we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Additionally, we incurred current income tax expense from states and our foreign operations in India and the UK. We maintain a full valuation allowance against our U.S. deferred tax assets for income tax purposes because we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Gross Transaction Value includes a de minimis number of new development and commercial brokerage transactions. Seasonality and Cyclicality 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.
Seasonality and Cyclicality The residential real estate market is seasonal, which directly impacts our businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter.
Interest Expense Interest expense consists primarily of expense related to the interest expenses, including commitment fees for available borrowing capacities, and amortization of debt issuance costs associated with our Concierge Facility and Revolving Credit Facility.
Investment Income, net Investment income, net consists primarily of interest, dividends and realized gains and losses earned on our cash and cash equivalents. Interest Expense Interest expense consists primarily of expense related to the interest expenses, including commitment fees for available borrowing capacities, and amortization of debt issuance costs associated with our Concierge Facility and revolving credit facilities.
Equity in loss of unconsolidated entity Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Equity in loss of unconsolidated entity $ 0.6 $ 3.3 $ (2.7) (81.8 %) During the year ended December 31, 2024, equity in loss of unconsolidated entity was $0.6 million, and during the year ended December 31, 2023, equity in loss of unconsolidated entity was $3.3 million.
Equity in income (loss) of unconsolidated entities Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Equity in income (loss) of unconsolidated entities $ 7.1 $ (0.6) $ 7.7 (1,283.3 %) During the year ended December 31, 2025, Equity in income of unconsolidated entities was $7.1 million, and during the year ended December 31, 2024, Equity in loss of unconsolidated entities was $0.6 million.
See Note 3 - "Acquisitions" to the consolidated financial statements included elsewhere in this Annual Report for more information. (2) For year ended December 31, 2024, Litigation charges represents an expense of $57.5 million incurred during the three months ended March 31, 2024 in connection with the Antitrust Lawsuits.
(3) Represents a charge of $57.5 million incurred during the three months ended March 31, 2024 in connection with the Antitrust Lawsuits. See Note 11 – “Commitments and Contingencies” to the consolidated financials statements included elsewhere in this Annual Report for more information.
Equity in Loss of Unconsolidated Entity Equity in loss of unconsolidated entity includes the results of our share of losses from our mortgage joint venture with Guaranteed Rate, Inc. 41 Table of Contents RESULTS OF OPERATIONS The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended December 31, 2024 2023 2022 (in millions, except percentages) Revenue $ 5,629.1 100.0 % $ 4,885.0 100.0 % $ 6,018.0 100.0 % Operating expenses: Commissions and other related expense (1) 4,634.6 82.3 4,007.0 82.0 4,936.1 82.0 Sales and marketing (1) 368.7 6.5 435.4 8.9 575.1 9.6 Operations and support (1) 334.5 5.9 326.9 6.7 392.4 6.5 Research and development (1) 188.8 3.4 184.5 3.8 360.3 6.0 General and administrative (1) 165.2 2.9 125.7 2.6 208.1 3.5 Restructuring costs 9.7 0.2 30.4 0.6 49.1 0.8 Depreciation and amortization 82.4 1.5 90.0 1.8 86.3 1.4 Total operating expenses 5,783.9 102.7 5,199.9 106.4 6,607.4 109.8 Loss from operations (154.8) (2.7) (314.9) (6.4) (589.4) (9.8) Investment income, net 6.8 0.1 8.5 0.2 2.8 — Interest expense (6.4) (0.1) (10.8) (0.2) (3.6) (0.1) Loss before income taxes and equity in loss of unconsolidated entity (154.4) (2.7) (317.2) (6.5) (590.2) (9.8) Benefit from income taxes 0.5 — 0.4 — 0.9 — Equity in loss of unconsolidated entity (0.6) — (3.3) (0.1) (12.2) (0.2) Net loss (154.5) (2.7) (320.1) (6.6) (601.5) (10.0) Net loss (income) attributable to non-controlling interests 0.1 — (1.2) — — — Net loss attributable to Compass, Inc. $ (154.4) (2.7 %) $ (321.3) (6.6 %) $ (601.5) (10.0 %) (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 Commissions and other related expense $ — $ 11.6 $ 59.0 Sales and marketing 31.5 35.0 42.0 Operations and support 16.5 16.1 15.6 Research and development 58.0 45.7 57.5 General and administrative 21.5 49.8 60.4 Total stock-based compensation expense $ 127.5 $ 158.2 $ 234.5 Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Revenue $ 5,629.1 $ 4,885.0 $ 744.1 15.2 % Revenue increased by $744.1 million, or 15.2%, for 2024 compared to 2023.
Equity in Income (Loss) of Unconsolidated Entities Equity in income (loss) of unconsolidated entities includes the results of our share of earnings and losses from our equity method investments. 50 Table of C ontents RESULTS OF OPERATIONS The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended December 31, 2025 2024 2023 (in millions, except percentages) Revenue $ 6,961.6 100.0 % $ 5,629.1 100.0 % $ 4,885.0 100.0 % Operating expenses: Commissions and other related expense (1) 5,679.7 81.6 4,634.6 82.3 4,007.0 82.0 Sales and marketing (1) 377.9 5.4 368.7 6.5 435.4 8.9 Operations and support (1) 429.4 6.2 334.5 5.9 326.9 6.7 Research and development (1) 245.8 3.5 188.8 3.4 184.5 3.8 General and administrative (1) 144.3 2.1 165.2 2.9 125.7 2.6 Anywhere merger transaction and integration expenses 18.1 0.3 — — — — Restructuring costs 17.1 0.2 9.7 0.2 30.4 0.6 Depreciation and amortization 112.7 1.6 82.4 1.5 90.0 1.8 Total operating expenses 7,025.0 100.9 5,783.9 102.7 5,199.9 106.4 Loss from operations (63.4) (0.9) (154.8) (2.7) (314.9) (6.4) Investment income, net 5.5 0.1 6.8 0.1 8.5 0.2 Interest expense (9.0) (0.1) (6.4) (0.1) (10.8) (0.2) Loss before income taxes and equity in income (loss) of unconsolidated entities (66.9) (1.0) (154.4) (2.7) (317.2) (6.5) Benefit from income taxes 1.1 — 0.5 — 0.4 — Equity in income (loss) of unconsolidated entities 7.1 0.1 (0.6) — (3.3) (0.1) Net loss (58.7) (0.8) (154.5) (2.7) (320.1) (6.6) Net loss (income) attributable to non-controlling interests 0.2 — 0.1 — (1.2) — Net loss attributable to Compass, Inc. $ (58.5) (0.8 %) $ (154.4) (2.7 %) $ (321.3) (6.6 %) (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 2023 Commissions and other related expense $ 0.9 $ — $ 11.6 Sales and marketing 32.6 31.5 35.0 Operations and support 37.4 16.5 16.1 Research and development 92.4 58.0 45.7 General and administrative 39.4 21.5 49.8 Total stock-based compensation expense $ 202.7 $ 127.5 $ 158.2 51 Table of C ontents Comparison of the Years Ended December 31, 2025 and 2024 Revenue Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Revenue $ 6,961.6 $ 5,629.1 $ 1,332.5 23.7 % Revenue increased by $1,332.5 million, or 23.7%, for 2025 compared to 2024.
General and administrative Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) General and administrative $ 165.2 $ 125.7 $ 39.5 31.4 % Percentage of revenue 2.9 % 2.6 % General and administrative expense increased by $39.5 million, or 31.4%, for 2024 compared to 2023.
General and administrative Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) General and administrative $ 144.3 $ 165.2 $ (20.9) (12.7 %) Percentage of revenue 2.1 % 2.9 % General and administrative expense decreased by $20.9 million, or 12.7%, for 2025 compared to 2024.
These tables identify how each of the Operating expenses related financial statement line items contained within the accompanying consolidated statements of operations elsewhere in this Annual Report are impacted by the items excluded from Adjusted EBITDA (in millions): Year Ended December 31, 2024 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 4,634.6 $ 368.7 $ 334.5 $ 188.8 $ 165.2 Adjusted to exclude the following: Stock-based compensation — (31.5) (16.5) (58.0) (21.5) Acquisition-related expenses — — (4.2) — — Litigation charge — — — — (57.5) Non-GAAP Basis $ 4,634.6 $ 337.2 $ 313.8 $ 130.8 $ 86.2 48 Table of Contents Year Ended December 31, 2023 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 4,007.0 $ 435.4 $ 326.9 $ 184.5 $ 125.7 Adjusted to exclude the following: Stock-based compensation (11.6) (35.0) (16.1) (45.7) (49.8) Acquisition-related expenses — — (1.9) — — Non-GAAP Basis $ 3,995.4 $ 400.4 $ 308.9 $ 138.8 $ 75.9 Year Ended December 31, 2022 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 4,936.1 $ 575.1 $ 392.4 $ 360.3 $ 208.1 Adjusted to exclude the following: Stock-based compensation (59.0) (42.0) (15.6) (57.5) (60.4) Acquisition-related expenses — — (11.2) — — Litigation charge — — — — (10.5) Non-GAAP Basis $ 4,877.1 $ 533.1 $ 365.6 $ 302.8 $ 137.2 LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity and capital resources are cash flows from operations and the net proceeds from the sale of common stock in connection with our initial public offering.
These tables identify how each of the Operating expenses related financial statement line items contained within the accompanying consolidated statements of operations elsewhere in this Annual Report are impacted by the items excluded from Adjusted EBITDA (in millions): Year Ended December 31, 2025 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 5,679.7 $ 377.9 $ 429.4 $ 245.8 $ 144.3 Adjusted to exclude the following: Stock-based compensation (0.9) (32.6) (37.4) (92.4) (39.4) Other acquisition-related expenses — — 1.1 — — Non-GAAP Basis $ 5,678.8 $ 345.3 $ 393.1 $ 153.4 $ 104.9 58 Table of C ontents Year Ended December 31, 2024 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 4,634.6 $ 368.7 $ 334.5 $ 188.8 $ 165.2 Adjusted to exclude the following: Stock-based compensation — (31.5) (16.5) (58.0) (21.5) Other acquisition-related expenses — — (4.2) — — Litigation charge — — — — (57.5) Non-GAAP Basis $ 4,634.6 $ 337.2 $ 313.8 $ 130.8 $ 86.2 Year Ended December 31, 2023 Commissions and other related expense Sales and marketing Operations and support Research and development General and administrative GAAP Basis $ 4,007.0 $ 435.4 $ 326.9 $ 184.5 $ 125.7 Adjusted to exclude the following: Stock-based compensation (11.6) (35.0) (16.1) (45.7) (49.8) Other acquisition-related expenses — — (1.9) — — Non-GAAP Basis $ 3,995.4 $ 400.4 $ 308.9 $ 138.8 $ 75.9 LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2025, we had cash and cash equivalents of $199.0 million and an accumulated deficit of $2.7 billion.
The increase in absolute dollars and as a percentage of revenue of Commission and other related expense, excluding the non-cash stock-based compensation, was primarily driven by increased revenue and the impact of recent acquisitions, which operate in markets with higher average agent commissions splits compared to our core brokerage.
The increase in absolute dollars was primarily driven by increased revenue. As a percentage of revenue, Commissions and other related expense decreased from 82.3% to 81.6%. This decrease as a percentage of revenue was driven by the impact of recent acquisitions which operate with more favorable average agent commissions splits compared to our core brokerage.
Included in Research and development expense were non-cash expenses related to stock-based compensation of $58.0 million for the year ended December 31, 2024 and $45.7 million for the year ended December 31, 2023.
Included in Research and development expense were non-cash expenses related to stock-based compensation of $92.4 million for the year ended December 31, 2025 and $58.0 million for the year ended December 31, 2024. Research and development expense excluding non-cash stock-based compensation expense was $153.4 million, or 2.2% of revenue for 2025, and $130.8 million, or 2.3% for 2024.
General and administrative expense excluding non-cash stock-based compensation expense and the aforementioned litigation charge was $86.2 million, or 1.5% of revenue for 2024, and $75.9 million, or 1.6% of revenue for 2023.
Also included in General and administrative expense were non-cash expenses related to stock-based compensation of $39.4 million for 2025 and $21.5 million for 2024. General and administrative expense excluding non-cash stock-based compensation expense and the aforementioned litigation charge was $104.9 million, or 1.5% of revenue for 2025, and $86.2 million, or 1.5% of revenue for 2024.
The Revolving Credit Facility contains customary representations, warranties, financial covenants applicable to us and our restricted subsidiaries, affirmative covenants, such as financial statement reporting requirements, and negative covenants which restrict its ability, among other things, to incur liens and indebtedness, make certain investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions.
The negative covenants restrict us and our restricted subsidiaries’ ability, among other things, incur liens and indebtedness, make certain investments, declare and pay dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions.
Benefit from Income Taxes Benefit from income taxes consists of a partial reduction in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions netted with the recognition of deferred tax assets in India. Additionally, the Company incurred current income tax expense from states and its operations in India.
We expect interest expense to increase as a result of the Anywhere Merger. Benefit from Income Taxes Benefit from income taxes consists of a partial reduction in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions netted with the recognition of deferred tax assets in India.
As of December 31, 2024, we were contingently liable for $53.8 million, under these letters of credit which are collateralized by our Revolving Credit Facility. Off-Balance Sheet Arrangements We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions.
Off-Balance Sheet Arrangements 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 $294.4 million and $147.1 million as of December 31, 2025 and 2024, respectively.
The decrease of Operations and support expense, excluding such non-cash stock-based compensation expense, as a percentage of revenue was primarily related to the increase in revenue compared to the prior year period.
The increase in absolute dollars, excluding such non-cash stock-based compensation expense, was primarily driven by increase in headcount from our acquisitions during the year and core brokerage operations. As a percentage of revenue, Operations and support expense, excluding such non-cash stock-based compensation expense, remained generally consistent compared to the prior-year period.
Our Number of Principal Agents as of December 31, 2024 was 17,752, representing an increase of 20.9% from the year ago period primarily driven by the agents we acquired in 2024 from Latter & Blum Holdings, LLC and Parks Village Nashville, LLC. Our principal agents generate revenue across a diverse set of real estate markets in the U.S.
Our Number of Principal Agents as of December 31, 2025 was 21,190 6 , representing an increase of 19.4% from the year ago period. The increase in the Number of Principal Agents was primarily driven by the agents from businesses acquired during the year. Our principal agents generate revenue across a diverse set of real estate markets in the U.S.
This section provides a summary of the most recent authoritative accounting standards and guidance that have either been recently adopted by our company or may be adopted in the future. INTRODUCTION 37 Table of Contents We are a leading tech-enabled real estate services company that includes the largest real estate brokerage in the United States by sales volume.
This section provides a summary of the most recent authoritative accounting standards and guidance that have either been recently adopted by our company or may be adopted in the future.
We invest in our proprietary, integrated platform designed for real estate agents, to enable them to grow their business and save them time and money. This value proposition allows us to recruit more agents, help them grow their business and retain them on our platform at industry leading retention rates.
We invest in our proprietary, integrated platform designed for real estate agents, to enable them to grow their business and save them time and money.
During 2022, net cash provided by financing activities was $135.4 million, primarily consisting of $150.0 million in proceeds from drawdowns on the Revolving Credit Facility, $15.7 million in net proceeds from drawdowns and repayments on the Concierge Facility and $9.0 million in proceeds from the exercise of stock options, partially offset by $23.5 million in taxes paid related to net share settlement of equity awards and $17.5 million in payments for acquisitions, including payments of contingent consideration.
Financing Activities During 2025, net cash used in financing activities was $50.2 million, primarily consisting of $61.1 million in taxes paid related to net share settlement of equity awards, $7.4 million in payments related to acquisitions, including payments of contingent consideration and $4.1 million in payments of issuance costs related to the new Revolving Credit Facility, partially offset by $17.8 million in proceeds from the exercise of stock options and $2.9 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Included in Operations and support expense were non-cash expenses related to stock-based compensation of $16.5 million for the year ended December 31, 2024 and $16.1 million for the year ended December 31, 2023, which remained relatively flat.
Included in Operations and support expense were non-cash expenses related to stock-based compensation of $37.4 million for the year ended December 31, 2025 and $16.5 million for the year ended December 31, 2024. Operations and support expense excluding such non-cash stock-based compensation expense was $392.0 million, or 5.6% of revenue for 2025, and $318.0 million, or 5.6% for 2024.
This section provides an analysis of our liquidity and cash flows, as well as a discussion of our commitments that existed as of December 31, 2024. • Critical Accounting Estimates and Policies.
This section provides a discussion of key business metrics and non-GAAP financial measures we use to evaluate our business and measure our performance. • Liquidity and Capital Resources. This section provides an analysis of our liquidity and cash flows, as well as a discussion of our commitments that existed as of December 31, 2025. • Critical Accounting Estimates and Policies.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2024: Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years (in millions) Operating lease obligations (1) $ 560.9 $ 117.7 $ 197.1 $ 145.0 $ 101.1 Estimated undiscounted contingent consideration payments 35.4 3.3 20.4 7.9 3.8 Acquisition related payables 3.0 3.0 — — — Purchase obligations 70.2 36.9 26.3 7.0 — Total $ 669.5 $ 160.9 $ 243.8 $ 159.9 $ 104.9 _________ (1) As of December 31, 2024, we have additional operating leases for real estate that have not yet commenced of $15.3 million payable through 2035, which have been excluded from above.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2025: Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years (in millions) Operating lease obligations (1) $ 533.3 $ 124.0 $ 207.4 $ 130.8 $ 71.1 Estimated undiscounted contingent consideration payments 46.3 6.9 25.4 2.0 12.0 Purchase obligations 122.6 69.0 39.3 14.3 — Total $ 702.2 $ 199.9 $ 272.1 $ 147.1 $ 83.1 _________ (1) As of December 31, 2025, we have additional operating leases for real estate that have not yet commenced of $25.8 million payable through 2038, which have been excluded from above.
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. The increase for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily attributable to the increase of the number of agents on our platform.
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.
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. 47 Table of Contents The following table provides a reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA (in millions, except percentages): Year Ended December 31, 2024 2023 2022 Net loss attributable to Compass, Inc. $ (154.4) $ (321.3) $ (601.5) Adjusted to exclude the following: Depreciation and amortization 82.4 90.0 86.3 Investment income, net (6.8) (8.5) (2.8) Interest expense 6.4 10.8 3.6 Stock-based compensation 127.5 158.2 234.5 Benefit from income taxes (0.5) (0.4) (0.9) Restructuring costs 9.7 30.4 49.1 Acquisition-related expenses (1) 4.2 1.9 11.2 Litigation charges (2) 57.5 — 10.5 Adjusted EBITDA $ 126.0 $ (38.9) $ (210.0) Net loss attributable to Compass, Inc. margin (2.7) % (6.6) % (10.0) % Adjusted EBITDA margin 2.2 % (0.8) % (3.5) % (1) Includes adjustments related to the change in fair value of contingent consideration and adjustments related to acquisition consideration treated as compensation expense over the underlying retention periods.
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. 6 Number of Principal Agents as of December 31, 2025 reflects the impact from a prior-period correction of 493 non-producing Principal Agents that had been incorrectly included as Principal Agents in connection with acquisitions completed during the second quarter of 2024. 57 Table of C ontents The following table provides a reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA (in millions, except percentages): Year Ended December 31, 2025 2024 2023 Net loss attributable to Compass, Inc. $ (58.5) $ (154.4) $ (321.3) Adjusted to exclude the following: Depreciation and amortization 112.7 82.4 90.0 Investment income, net (5.5) (6.8) (8.5) Interest expense 9.0 6.4 10.8 Stock-based compensation 202.7 127.5 158.2 Benefit from income taxes (1.1) (0.5) (0.4) Anywhere merger transaction and integration expenses (1) 18.1 — — Restructuring costs 17.1 9.7 30.4 Other acquisition-related expenses (2) (1.1) 4.2 1.9 Litigation charges (3) — 57.5 — Adjusted EBITDA 293.4 126.0 (38.9) Net loss attributable to Compass, Inc. margin (0.8) % (2.7) % (6.6) % Adjusted EBITDA margin 4.2 % 2.2 % (0.8) % (1) Represents transaction expenses incurred in connection with the Anywhere Merger.
We believe that the critical accounting policies listed below are the most difficult management decisions as they involve the use of significant estimates and assumptions as described above. See Note 2 - " Summary of Significant Accounting Policies" to our consolidated financial statements included elsewhere in this Annual Report for more information.
A thorough understanding of our critical accounting policies is essential when reviewing our consolidated financial statements. We believe that the critical accounting policies listed below are the most difficult management decisions as they involve the use of significant estimates and assumptions as described above.
The principal amount, if any, is payable in full in March 2026, unless earlier terminated or extended. We have the option to repay our borrowings, and to permanently reduce the loan commitments in whole or in part, under the Revolving Credit Facility without premium or penalty prior to maturity.
We have the option to repay our borrowings, and to permanently reduce the commitments in whole or in part, under the 2025 Revolving Credit Facility without premium or penalty.
The improvement in Adjusted EBITDA during the year ended December 31, 2024 as compared to the year ended December 31, 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 on our platform during 2023 and 2024.
Adjusted EBITDA was $293.4 million and $126.0 million during the years ended December 31, 2025 and 2024, respectively. The improvement in Adjusted EBITDA during the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily driven by higher revenue resulting from an increased number of agents on our platform.
During the years ended December 31, 2024, 2023 and 2022, the number of stock options granted was immaterial. RECENT ACCOUNTING PRONOUNCEMENTS For a description of our recently adopted accounting pronouncements and accounting pronouncements issued but not yet adopted, see Note 2 - "Summary of Significant Accounting Policies" to our consolidated financial statements included in this Annual Report.
RECENT ACCOUNTING PRONOUNCEMENTS For a description of our recently adopted accounting pronouncements and accounting pronouncements issued but not yet adopted, see Note 2 - “Summary of Significant Accounting Policies” to our consolidated financial statements included in this Annual Report. 65 Table of Contents
Sales and marketing expense excluding such non-cash stock-based compensation expense was $337.2 million, or 6.0% of revenue for 2024, and $400.4 million, or 8.2% for 2023, respectively.
Included in Sales and marketing expense were non-cash expenses related to stock-based compensation of $32.6 million for the year ended December 31, 2025 and $31.5 million for the year ended December 31, 2024. Sales and marketing expense excluding such non-cash stock-based compensation expense was $345.3 million, or 5.0% of revenue for 2025, and $337.2 million, or 6.0% for 2024, respectively.
This metric excludes rental transactions. 46 Table of Contents Our Total Transactions for the year ended December 31, 2024 were 205,122, an increase of 14.7% from the year ended December 31, 2023. The increase in Total Transactions was primarily attributable to the brokerages acquired since the same period a year ago.
Our Total Transactions for the year ended December 31, 2025 were 250,360, an increase of 22.1% from the year ended December 31, 2024. The increase in Total Transactions was primarily attributable to the brokerages acquired since the prior-year period.
The occurrence of an event of default could result in the acceleration of the obligations under the Revolving Credit Facility. 50 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 2022 (in millions) Net cash provided by (used in) operating activities $ 121.5 $ (25.9) $ (291.7) Net cash used in investing activities (36.6) (11.7) (100.1) Net cash (used in) provided by financing activities (28.0) (157.4) 135.4 Net increase (decrease) in cash and cash equivalents $ 56.9 $ (195.0) $ (256.4) Operating Activities For 2024, net cash provided by operating activities was $121.5 million.
For more information regarding our indebtedness including the senior notes assumed from Anywhere, see the section titled “—Contractual Obligations and Commitments.” Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2025 2024 2023 (in millions) Net cash provided by (used in) operating activities $ 216.7 $ 121.5 $ (25.9) Net cash used in investing activities (191.3) (36.6) (11.7) Net cash used in financing activities (50.2) (28.0) (157.4) Net (decrease) increase in cash and cash equivalents $ (24.8) $ 56.9 $ (195.0) Operating Activities For 2025, net cash provided by operating activities was $216.7 million.
The increase for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily attributable to the increase in the number of agents on our platform. Our Gross Transaction Value 1 for the years ended December 31, 2024, 2023 and 2022 was $216.8 billion, $186.1 billion and $230.3 billion, respectively.
The increase for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily attributable to the residential real estate brokerages acquired since the prior-year period and organic recruitment efforts. Our Gross Transaction Value 4 for the years ended December 31, 2025, 2024 and 2023 was $267.0 billion, $216.8 billion and $186.1 billion, respectively.
We are also obligated to pay other customary fees for a credit facility of this type, including a commitment fee on a quarterly basis based on amounts committed but unused under the Revolving Credit Facility of 0.175% per annum, fees associated with letters of credit and administrative and arrangement fees.
We are also obligated to pay other customary fees under the 2025 Revolving Credit Facility, including (i) a commitment fee to the lenders on amounts they have committed, which are unused, of between 0.175% and 0.35% per annum, based on a pricing grid in which the levels are set based on our Total Net Leverage Ratio, (ii) fees associated with the issuance of letters of credit, (iii) administrative agent fees and (iv) upfront fees.
The cash outflow from operations was partially offset by a decrease of $17.6 million in other currents assets, a decrease of $9.8 million in other non-current assets, a decrease of $6.5 million in accounts receivable due to timing of receipts and a $5.8 million inflow from net operating lease right-of-use assets and operating lease liabilities.
The cash outflow from changes in assets and liabilities was partially offset by a inflow of $7.1 million in accounts receivable due to timing of receipts and a $5.3 million inflow from Commissions payable. For 2024, net cash provided by operating activities was $121.5 million.
The increase 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 42 Table of Contents Number of Principal Agents for 2024 was 17,752 compared to 14,683 for 2023. Total Transactions for 2024 increased to 205,122, an increase of 14.7% from 2023.
The increase was primarily driven by an increase in the number of agents that joined our platform during 2024 and 2025, including those agents attributable to the businesses acquired since the prior-year period. The Number of Principal Agents for 2025 was 21,190 compared to 17,752 for 2024. Total Transactions for 2025 increased to 250,360, an increase of 22.1% from 2024.
Operations and support Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Operations and support $ 334.5 $ 326.9 $ 7.6 2.3 % Percentage of revenue 5.9 % 6.7 % Operations and support expense increased by $7.6 million, or 2.3%, for 2024 compared to 2023.
The decrease in Sales and marketing expense as a percentage of revenue, excluding stock-based compensation expense, was primarily driven by the increases in revenue outpacing the year-over-year increases in Sales and marketing expense. 52 Table of C ontents Operations and support Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Operations and support $ 429.4 $ 334.5 $ 94.9 28.4 % Percentage of revenue 6.2 % 5.9 % Operations and support expense increased by $94.9 million, or 28.4%, for 2025 compared to 2024.
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) litigation charges in connection with the Antitrust Lawsuits and the Realogy Holdings Corp. matter.
During the periods presented, other items included (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits and (iii) transaction and integration expenses associated with the Anywhere Merger. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.
The decrease from the prior year period was primarily driven by the interest expense incurred on our Revolving Credit Facility as a result of balances outstanding in the prior year on the credit facility with no comparable balance outstanding during the year ended December 31, 2024. 45 Table of Contents Benefit from income taxes Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Benefit from income taxes $ 0.5 $ 0.4 $ 0.1 25.0 % Benefit from income taxes increased by $0.1 million, or 25.0%, for 2024 compared to 2023.
The increase from the prior year period was primarily driven by the interest expense incurred as a result of balances outstanding during the year on the 2021 Revolving Credit Facility, with no comparable balance outstanding in the prior year.
Investment income, net decreased during the year ended December 31, 2024 as a result of the Company holding less short-term interest-bearing investments throughout the year.
Investment income, net decreased during the year ended December 31, 2025 as a result of holding less short-term interest-bearing investments throughout the year. 54 Table of C ontents Interest expense Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Interest expense $ 9.0 $ 6.4 $ 2.6 40.6 % Interest expense increased by $2.6 million, or 40.6%, for 2025 compared to 2024.
For 2022, net cash used in operating activities was $291.7 million. The outflow was primarily due to a $601.5 million net loss adjusted for $339.0 million of non-cash charges and cash outflow due to changes in assets and liabilities of $29.2 million.
The inflow was primarily due to a $58.7 million net loss adjusted for $308.5 million of non-cash charges and a net cash outflow due to changes in assets and liabilities of $33.1 million. The non-cash charges are primarily related to $202.7 million of stock-based compensation expense and $112.7 million of depreciation and amortization expense.
The decrease in sales and marketing expense in absolute dollars and on a percentage of revenue, excluding non-cash stock-based compensation expense, was primarily due to a decrease in agent marketing costs and a reduction in cash-based agent incentives.
The increase in Sales and marketing expense in absolute dollars, excluding non-cash stock-based compensation expense, was primarily due to increased occupancy and personnel-related costs resulting from recent acquisitions, partially offset by lower agent marketing costs and reduced cash-based incentives for agents.
Interest expense Year Ended December 31, 2024 2023 $ Change % Change (in millions, except percentages) Interest expense $ 6.4 $ 10.8 $ (4.4) (40.7 %) Interest expense decreased by $4.4 million, or 40.7%, for 2024 compared to 2023.
Benefit from income taxes Year Ended December 31, 2025 2024 $ Change % Change (in millions, except percentages) Benefit from income taxes $ 1.1 $ 0.5 $ 0.6 120.0 % Benefit from income taxes increased by $0.6 million, or 120.0%, for 2025 compared to 2024.
As of December 31, 2024, we were in compliance with the financial covenants under the Revolving Credit Facility.
As of December 31, 2025, we were in compliance with the covenants under the 2025 Revolving Credit Facility. We have $30.9 million of irrevocable letters of credit with various financial institutions, primarily related to security deposits for leased facilities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+3 added−1 removed1 unchanged
As of December 31, 2024, we had a total outstanding balance of $23.6 million under the Concierge Facility. Our Revolving Credit Facility bears interest equal to SOFR plus a margin of 1.50%. As of December 31, 2024, we had no borrowings outstanding under the Revolving Credit Facility.
As of December 31, 2025, we had a total outstanding balance of $22.7 million under the Concierge Facility. Our 2025 Revolving Credit Facility bears interest equal to SOFR plus a margin of 1.50%. As of December 31, 2025, we had no borrowings outstanding under the 2025 Revolving Credit Facility.
Interest Rate Risk Our cash and cash equivalents as of December 31, 2024 consisted of $223.8 million. Certain of our cash and cash equivalents are interest-earning instruments that carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation.
Interest Rate Risk Our cash and cash equivalents as of December 31, 2025 were $199.0 million. Certain of our cash and cash equivalents are interest-earning instruments that carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation.
Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our Concierge Facility bears interest equal to the term SOFR rate plus a margin of 2.75%.
We are also subject to interest rate exposure on our Concierge Facility and 2025 Revolving Credit Facility. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our Concierge Facility bears interest equal to the term SOFR rate plus a margin of 2.50%.
Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would not result in a material change to our interest expense. 54 Table of Contents Foreign Currency Exchange Risk As our operations in India have been limited and we do not maintain a significant balance of foreign currency, we do not currently face significant risk with respect to foreign currency exchange rates. 55 Table of Contents
Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would not result in a material change in interest expense.
We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure.
We do not enter into investments for trading or speculative purposes and we do not use derivative financial instruments to manage interest rate risk. Due to the short-term nature of these instruments, changes in interest rates would not have a material impact on their fair value.
Removed
We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents. We are also subject to interest rate exposure on our Concierge Facility and Revolving Credit Facility.
Added
The Anywhere Secured Notes, Anywhere Unsecured Notes and Convertible Notes assumed or issued in connection with the Anywhere Merger do not expose us to material interest rate risk because the interest rates are fixed.
Added
We also do not believe the securitization obligations assumed from Anywhere expose us to material interest rate risk, as the variable rates earned on relocation receivables and advances are highly correlated with the rates incurred on the related borrowings, which largely offsets the exposure.
Added
Foreign Currency Exchange Risk We do not have significant exposure to foreign currency risk, nor do we expect to have significant exposure to foreign currency risk in the foreseeable future. 66 Table of Contents

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