QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
The |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
Page |
||||||
3 |
||||||
PART I. |
4 |
|||||
Item 1. |
4 |
|||||
4 |
||||||
5 |
||||||
6 |
||||||
8 |
||||||
9 |
||||||
Item 2. |
20 |
|||||
Item 3. |
31 |
|||||
Item 4. |
32 |
|||||
PART II. |
33 |
|||||
Item 1. |
33 |
|||||
Item 1A. |
33 |
|||||
Item 2. |
52 |
|||||
Item 6. |
53 |
|||||
i |
• |
our future financial performance, including our expectations regarding our revenue, rate of growth, operating expenses including changes in sales and marketing, research and development, and general and administrative expenses (including any components of the foregoing), and our ability to achieve and sustain future profitability; |
• |
any changes in macroeconomic conditions and in U.S. residential real estate market conditions, including changes in prevailing interest rates or monetary policies; |
• |
the effects of the ongoing COVID-19 coronavirus pandemic in the markets in which we operate; |
• |
our business plan and our ability to effectively manage our expenses or grow our revenue; |
• |
anticipated trends, growth rates, and challenges in our business and in the markets in which we operate; |
• |
our ability to drive ongoing usage of our platform by agents; |
• |
our market opportunity; |
• |
our ability to expand into new domestic and international markets; |
• |
our ability to successfully develop and market our adjacent services, including with respect to any joint ventures; |
• |
our expectations regarding anticipated benefits from our mortgage business and new mortgage joint venture with Guaranteed Rate; |
• |
our ability to attract and retain agents and expand their businesses; |
• |
beliefs and objectives for future operations; |
• |
the timing and market acceptance of our products and services for our agents and their clients; |
• |
the effects of seasonal and cyclical trends on our results of operations; |
• |
our expectations concerning relationships with third parties; |
• |
our ability to maintain, protect, and enhance our intellectual property; |
• |
the effects of increased competition in our markets and our ability to compete effectively; |
• |
our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and, if and as applicable, internationally; and |
• |
economic and industry trends, growth forecasts, or trend analysis. |
September 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net of allowance of $ |
||||||||
Compass Concierge receivables, net of allowance of $ |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit) |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Commissions payable |
||||||||
Accrued expenses and other current liabilities |
||||||||
Current lease liabilities |
||||||||
Concierge credit facility |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Non-current lease liabilities |
||||||||
Other non-current liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and contingencies (Note 6) |
||||||||
Convertible preferred stock, $ |
||||||||
Stockholders’ equity (deficit) |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Compass, Inc. stockholders’ equity (deficit) |
( |
) | ||||||
Non-controlling interest |
||||||||
|
|
|
|
|||||
Total stockholders’ equity (deficit) |
( |
) | ||||||
|
|
|
|
|||||
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ | $ | ||||||
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenue |
$ | $ | $ | $ | ||||||||||||
Operating expenses: |
||||||||||||||||
Commissions and other related expense |
||||||||||||||||
Sales and marketing |
||||||||||||||||
Operations and support |
||||||||||||||||
Research and development |
||||||||||||||||
General and administrative |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Investment income, net |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Benefit from income taxes |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Compass, Inc. Stockholders’ Equity (Deficit) |
Non-controlling interest |
Total Stockholders’ Equity (Deficit) |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2021: |
||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2021 |
— | $ | — | $ | — | $ | $ | — | $ | ( |
) | $ | $ | — | $ | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Capital contribution from non-controlling interest |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of stock for option exercises and RSU settlements |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of early exercised stock options |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balances at September 30, 2021 |
— | $ | — | $ | — | $ | $ | — | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
For the three months ended September 30, 2020: |
||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2020 |
$ | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | |||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Issuance of stock for option exercises |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balances at September 30, 2020 |
$ | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Compass, Inc. Stockholders’ Equity (Deficit) |
Non-controlling interest |
Total Stockholders’ Equity (Deficit) |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
For the nine months ended September 30, 2021: |
||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 |
$ | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | |||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Capital contribution from non-controlling interest |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of shares in connection with acquisitions |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Conversion of Series D convertible preferred stock |
( |
) | ( |
) | — | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of convertible preferred stock to common stock in connection with the initial public offering |
( |
) | ( |
) | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of common stock in connection with the initial public offering, net of issuance costs |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of stock for option exercises and RSU settlement s |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Early exercise of stock options |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Vesting of early exercised stock options |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balances at September 30, 2021 |
— | $ | — | $ | — | $ | $ | — | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||
For the nine months ended September 30, 2020: |
||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
$ | $ | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | ||||||||||||||||||||||||
Cumulative change in accounting principle (ASU 2016-13) |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Unrealized loss on investments |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Issuance of shares in connection with acquisitions |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of Series G convertible preferred stock, net of issuance costs |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of stock for option exercises |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balances at September 30, 2020 |
$ | $ | — | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | |||||||||||||||||||||||
Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
Operating Activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
||||||||
Stock-based compensation |
||||||||
Change in acquisition related contingent consideration |
( |
) | ||||||
Bad debt expense |
||||||||
Amortization of debt issuance costs |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Compass Concierge receivables |
( |
) | ||||||
Other current assets |
( |
) | ||||||
Other non-current assets |
( |
) | ( |
) | ||||
Operating lease right-of-use |
||||||||
Accounts payable |
( |
) | ( |
) | ||||
Commissions payable |
||||||||
Accrued expenses and other liabilities |
||||||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
( |
) | ||||||
|
|
|
|
|||||
Investing Activities |
||||||||
Proceeds from sales and maturities of marketable securities |
— | |||||||
Capital expenditures |
( |
) | ( |
) | ||||
Payments for acquisitions, net of cash acquired |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash (used in) provided by investing activities |
( |
) | ||||||
|
|
|
|
|||||
Financing Activities |
||||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs |
— | |||||||
Proceeds from exercise and early exercise of stock options |
||||||||
Proceeds from drawdowns on Concierge credit facility |
||||||||
Repayments of drawdowns on Concierge credit facility |
( |
) | — | |||||
Payments of contingent consideration related to acquisitions |
( |
) | ( |
) | ||||
Payments of debt issuance costs for credit facilities |
( |
) | — | |||||
Proceeds from capital contribution of non-controlling interest in OriginPoint, LLC joint venture |
— | |||||||
Proceeds from issuance of common stock upon initial public offering, net of offering costs |
— | |||||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for interest |
$ | $ | — | |||||
Supplemental non-cash information: |
||||||||
Issuance of common stock for acquisitions |
$ | $ | ||||||
|
|
|
|
|||||
Conversion of convertible preferred stock in connection with initial public offering |
$ | $ | — | |||||
|
|
|
|
|||||
Conversion of Series D convertible preferred stock |
$ | $ | — | |||||
|
|
|
|
1. |
Business and Basis of Presentation |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Opening balance |
$ | |
$ | |
$ | $ | |
|||||||||
Acquisitions |
— | — | ||||||||||||||
Payments and issuances |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Fair value (gains) losses included in net loss |
( |
) | ( |
) | ||||||||||||
Closing Balance |
$ | $ | $ | $ | ||||||||||||
September 30, 2021 |
December 31, 2020 |
|||||||
Accrued expenses and other current liabilities |
$ | |
$ | |
||||
Other non-current liabilities |
||||||||
Total contingent consideration |
$ | $ | ||||||
September 30, 2021 |
December 31, 2020 | |||
Discount rate |
||||
Weighted average discount rate |
||||
Earnings volatility |
||||
Weighted average earnings volatility |
September 30, 2021 |
||||||||||||
Shares Authorized |
Shares Issued |
Shares Outstanding |
||||||||||
Class A common stock |
||||||||||||
Class B common stock |
— | — | ||||||||||
Class C common stock |
||||||||||||
Total |
||||||||||||
|
|
|
|
|
|
December 31, 2020 |
||||||||||||
Shares Authorized |
Shares Issued |
Shares Outstanding |
||||||||||
Class A common stock |
||||||||||||
Class B common stock |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contract Term (in years) |
Aggregate Intrinsic Value |
|||||||||||||
Balances as of December 31, 2020 |
$ | $ | |
|||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Balances as of September 30, 2021 |
$ | $ | ||||||||||||||
|
|
|||||||||||||||
Exercisable and vested at September 30, 2021 |
$ | $ | ||||||||||||||
|
|
Number of S |
Weighted Average Grant Date Fair Value |
|||||||
Balances as of December 31, 2020 |
$ | |||||||
Granted |
||||||||
Vested and converted to common stock |
( |
) | ||||||
Forfeited |
( |
) | ||||||
|
|
|
|
|||||
Balances as of September 30, 2021 |
$ | |||||||
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Commissions and other related expense |
$ | |
$ | |
$ | $ | ||||||||||
Sales and marketing |
||||||||||||||||
Operations and support |
||||||||||||||||
Research and development |
||||||||||||||||
General and administrative |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation expense |
$ | $ | $ | |
$ | |
||||||||||
|
|
|
|
|
|
|
|
IPO Related Expense |
||||
Commissions and other related expense |
$ | |||
Sales and marketing |
||||
Operations and support |
||||
Research and development |
||||
General and administrative |
||||
|
|
|||
Total stock-based compensation expense |
$ | |
||
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Numerator: |
||||||||||||||||
Net loss attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Denominator: |
||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Convertible preferred stock |
— | — | ||||||||||||||
Outstanding stock options |
||||||||||||||||
Outstanding RSUs |
||||||||||||||||
Unvested early exercised options |
— | — | ||||||||||||||
Unvested common stock |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
• | No negative liens or judgements on the property; |
• | Seller’s available equity on the property; |
• | Loan to listing price ratio; |
• | FICO score (only for Concierge Capital program); and |
• | Macroeconomic conditions. |
Three Months Ended September 30, 2021 |
Nine Months Ended September 30, 2021 |
|||||||
Beginning of period |
$ | $ | ||||||
Allowances |
||||||||
Net write-offs and other |
( |
) | ( |
) | ||||
|
|
|
|
|||||
End of period |
$ | |
$ | |
||||
|
|
|
|
31-90 days |
Over 90 days |
Total Past Due |
Current |
Total |
||||||||||||||||
September 30, 2021 |
$ | |
$ | |
$ | |
$ | |
$ | |
Three Months Ended September 30, 2020 |
Nine Months Ended September 30, 2020 |
|||||||||||||||||||||||
Severance |
Lease Terminaion |
Total |
Severance |
Lease Terminaion |
Total |
|||||||||||||||||||
Sales and marketing |
$ | — | $ | $ | $ | $ | $ | |||||||||||||||||
Operations and support |
— | — | — | — | ||||||||||||||||||||
Research and development |
— | — | — | — | ||||||||||||||||||||
General and administrative |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | — | $ | |
$ | |
$ | |
$ | |
$ | |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
• | Introduction. |
• | Results of Operations. |
• | Key Business Metrics and Non-GAAP Financial Measures. Non-GAAP financial measures we use to evaluate our business and measure our performance, in addition to the measures presented in our condensed consolidated financial statements. |
• | Liquidity and Capital Resources. |
• | Critical Accounting Estimates and Policies. |
• | Recent Accounting Pronouncements. |
(1) |
For the definitions of Average Number of Principal Agents, Total Transactions and Gross Transaction Value please refer to the section entitled “Key Business Metrics” included elsewhere in this Quarterly Report. |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Revenue |
$ | 1,743.6 | 100.0 | % | $ | 1,188.5 | 100.0 | % | $ | 4,808.9 | 100.0 | % | $ | 2,490.5 | 100.0 | % | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Commissions and other related expense (1) |
1,430.6 | 82.0 | 979.4 | 82.4 | 3,963.2 | 82.4 | 2,047.2 | 82.2 | ||||||||||||||||||||||||
Sales and marketing (1) |
130.6 | 7.5 | 99.7 | 8.4 | 366.2 | 7.6 | 297.0 | 11.9 | ||||||||||||||||||||||||
Operations and support (1) |
97.0 | 5.6 | 53.3 | 4.5 | 263.7 | 5.5 | 158.9 | 6.4 | ||||||||||||||||||||||||
Research and development (1) |
89.7 | 5.1 | 33.7 | 2.8 | 259.8 | 5.4 | 106.7 | 4.3 | ||||||||||||||||||||||||
General and administrative (1) |
79.5 | 4.6 | 22.7 | 1.9 | 231.8 | 4.8 | 75.7 | 3.0 | ||||||||||||||||||||||||
Depreciation and amortization |
16.7 | 1.0 | 13.0 | 1.1 | 45.1 | 0.9 | 38.1 | 1.5 | ||||||||||||||||||||||||
Total operating expenses |
1,844.1 | 105.8 | 1,201.8 | 101.1 | 5,129.8 | 106.7 | 2,723.6 | 109.4 | ||||||||||||||||||||||||
Loss from operations |
(100.5 | ) | (5.8 | ) | (13.3 | ) | (1.1 | ) | (320.9 | ) | (6.7 | ) | (233.1 | ) | (9.4 | ) | ||||||||||||||||
Investment income, net |
0.1 | 0.0 | — | — | 0.1 | 0.0 | 2.0 | 0.1 | ||||||||||||||||||||||||
Interest expense |
(0.7 | ) | (0.0 | ) | (0.2 | ) | (0.0 | ) | (1.8 | ) | (0.0 | ) | (0.2 | ) | (0.0 | ) | ||||||||||||||||
Loss before income taxes |
(101.1 | ) | (5.8 | ) | (13.5 | ) | (1.1 | ) | (322.6 | ) | (6.7 | ) | (231.3 | ) | (9.3 | ) | ||||||||||||||||
Benefit from income taxes |
1.3 | 0.1 | — | — | 3.3 | 0.1 | 0.9 | 0.0 | ||||||||||||||||||||||||
Net loss |
$ | (99.8 | ) | -5.7 | % | $ | (13.5 | ) | -1.1 | % | $ | (319.3 | ) | -6.6 | % | $ | (230.4 | ) | -9.3 | % | ||||||||||||
(1) | Includes stock-based compensation expense as follows: |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Commissions and other related expense |
$ | 26.3 | $ | 0.5 | $ | 82.6 | $ | 5.1 | ||||||||
Sales and marketing |
10.3 | 2.6 | 27.9 | 8.0 | ||||||||||||
Operations and support |
4.5 | 0.7 | 12.3 | 2.2 | ||||||||||||
Research and development |
13.2 | 0.3 | 76.2 | 1.1 | ||||||||||||
General and administrative |
16.8 | 2.0 | 93.9 | 13.8 | ||||||||||||
Total stock-based compensation expense |
$ | 71.1 | $ | 6.1 | $ | 292.9 | $ | 30.2 | ||||||||
IPO Related Expense |
||||
Commissions and other related expense |
$ | 41.7 | ||
Sales and marketing |
1.8 | |||
Operations and support |
3.1 | |||
Research and development |
46.9 | |||
General and administrative |
55.0 | |||
Total stock-based compensation expense |
$ | 148.5 | ||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Revenue |
$ | 1,743.6 | $ | 1,188.5 | $ | 555.1 | 46.7 | % | $ | 4,808.9 | $ | 2,490.5 | $ | 2,318.4 | 93.1 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Commissions and other related expense |
$ | 1,430.6 | $ | 979.4 | $ | 451.2 | 46.1 | % | $ | 3,963.2 | $ | 2,047.2 | $ | 1,916.0 | 93.6 | % | ||||||||||||||||
Percentage of revenue |
82.0 | % | 82.4 | % | 82.4 | % | 82.2 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Sales and marketing |
$ | 130.6 | $ | 99.7 | $ | 30.9 | 31.0 | % | $ | 366.2 | $ | 297.0 | $ | 69.2 | 23.3 | % | ||||||||||||||||
Percentage of revenue |
7.5 | % | 8.4 | % | 7.6 | % | 11.9 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Operations and support |
$ | 97.0 | $ | 53.3 | $ | 43.7 | 82.0 | % | $ | 263.7 | $ | 158.9 | $ | 104.8 | 66.0 | % | ||||||||||||||||
Percentage of revenue |
5.6 | % | 4.5 | % | 5.5 | % | 6.4 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Research and development |
$ | 89.7 | $ | 33.7 | $ | 56.0 | 166.2 | % | $ | 259.8 | $ | 106.7 | $ | 153.1 | 143.5 | % | ||||||||||||||||
Percentage of revenue |
5.1 | % | 2.8 | % | 5.4 | % | 4.3 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
General and administrative |
$ | 79.5 | $ | 22.7 | $ | 56.8 | 250.2 | % | $ | 231.8 | $ | 75.7 | $ | 156.1 | 206.2 | % | ||||||||||||||||
Percentage of revenue |
4.6 | % | 1.9 | % | 4.8 | % | 3.0 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Depreciation and amortization |
$ | 16.7 | $ | 13.0 | $ | 3.7 | 28.5 | % | $ | 45.1 | $ | 38.1 | $ | 7.0 | 18.4 | % | ||||||||||||||||
Percentage of revenue |
1.0 | % | 1.1 | % | 0.9 | % | 1.5 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Investment income, net |
$ | 0.1 | $ | — | $ | 0.1 | 100.0 | % | $ | 0.1 | $ | 2.0 | $ | (1.9 | ) | -95.0 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Interest expense |
$ | (0.7 | ) | $ | (0.2 | ) | $ | (0.5 | ) | 250.0 | % | $ | (1.8 | ) | $ | (0.2 | ) | $ | (1.6 | ) | 800.0 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2021 |
2020 |
$ Change |
% Change |
2021 |
2020 |
$ Change |
% Change |
|||||||||||||||||||||||||
(in millions, except percentages) |
||||||||||||||||||||||||||||||||
Benefit from income taxes |
$ | 1.3 | $ | — | $ | 1.3 | 100.0 | % | $ | 3.3 | $ | 0.9 | $ | 2.4 | 266.7 | % |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Total Transactions |
62,349 | 45,910 | 168,360 | 97,378 | ||||||||||||
Gross Transaction Value (in billions) |
$ | 69.1 | $ | 47.8 | $ | 189.9 | $ | 99.8 | ||||||||
Average Number of Principal Agents |
11,616 | 8,848 | 10,686 | 8,511 | ||||||||||||
Net Loss (in millions) |
$ | (99.8 | ) | $ | (13.5 | ) | $ | (319.3 | ) | $ | (230.4 | ) | ||||
Net Loss Margin |
-5.7 | % | -1.1 | % | -6.6 | % | -9.3 | % | ||||||||
Adjusted EBITDA (1) (in millions) |
$ | 12.2 | $ | 11.0 | $ | 52.9 | $ | (147.5 | ) | |||||||
Adjusted EBITDA Margin (1) |
0.7 | % | 0.9 | % | 1.1 | % | -5.9 | % |
(1) |
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of Net Loss to Adjusted EBITDA, see the section titled “—Non-GAAP Financial Measures” below. |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net loss |
$ | (99.8 | ) | $ | (13.5 | ) | $ | (319.3 | ) | $ | (230.4 | ) | ||||
Adjusted to exclude the following: |
||||||||||||||||
Depreciation and amortization |
16.7 | 13.0 | 45.1 | 38.1 | ||||||||||||
Investment income, net |
(0.1 | ) | — | (0.1 | ) | (2.0 | ) | |||||||||
Interest expense |
0.7 | 0.2 | 1.8 | 0.2 | ||||||||||||
Stock-based compensation |
71.1 | 6.1 | 292.9 | 30.2 | ||||||||||||
Benefit from income taxes |
(1.3 | ) | — | (3.3 | ) | (0.9 | ) | |||||||||
Restructuring charges (1) |
— | 1.2 | — | 10.2 | ||||||||||||
Acquisition-related expenses (2) |
3.6 | 4.0 | 14.5 | 7.1 | ||||||||||||
Litigation charge (3) |
21.3 | — | 21.3 | — | ||||||||||||
Adjusted EBITDA |
$ | 12.2 | $ | 11.0 | $ | 52.9 | $ | (147.5 | ) | |||||||
Net Loss Margin |
-5.7 | % | -1.1 | % | -6.6 | % | -9.3 | % | ||||||||
Adjusted EBITDA Margin |
0.7 | % | 0.9 | % | 1.1 | % | -5.9 | % | ||||||||
(1) |
Includes lease termination and severance costs. See Note 12 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. |
(2) |
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. See Note 3 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. |
(3) |
Represents a charge of $21.3 million in connection with the settlement in principle for the Litigation Matter. See Note 6 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. |
Three Months Ended September 30, 2021 |
||||||||||||||||||||
Commissions and other related expense |
Sales and marketing |
Operations and support |
Research and development |
General and administrative |
||||||||||||||||
GAAP Basis |
$ | 1,430.6 | $ | 130.6 | $ | 97.0 | $ | 89.7 | $ | 79.5 | ||||||||||
Adjusted to exclude the following: |
||||||||||||||||||||
Stock-based compensation |
(26.3 | ) | (10.3 | ) | (4.5 | ) | (13.2 | ) | (16.8 | ) | ||||||||||
Acquisition-related expenses |
— | — | (3.6 | ) | — | — | ||||||||||||||
Litigation charge |
— | — | — | — | (21.3 | ) | ||||||||||||||
Non-GAAP Basis |
$ | 1,404.3 | $ | 120.3 | $ | 88.9 | $ | 76.5 | $ | 41.4 | ||||||||||
Three Months Ended September 30, 2020 |
||||||||||||||||||||
Commissions and other related expense |
Sales and marketing |
Operations and support |
Research and development |
General and administrative |
||||||||||||||||
GAAP Basis |
$ | 979.4 | $ | 99.7 | $ | 53.3 | $ | 33.7 | $ | 22.7 | ||||||||||
Adjusted to exclude the following: |
||||||||||||||||||||
Stock-based compensation |
(0.5 | ) | (2.6 | ) | (0.7 | ) | (0.3 | ) | (2.0 | ) | ||||||||||
Restructuirng charges |
— | (1.2 | ) | — | — | — | ||||||||||||||
Acquisition-related expenses |
— | — | (4.0 | ) | — | — | ||||||||||||||
Non-GAAP Basis |
$ | 978.9 | $ | 95.9 | $ | 48.6 | $ | 33.4 | $ | 20.7 | ||||||||||
Nine Months Ended September 30, 2021 |
||||||||||||||||||||
Commissions and other related expense |
Sales and marketing |
Operations and support |
Research and development |
General and administrative |
||||||||||||||||
GAAP Basis |
$ | 3,963.2 | $ | 366.2 | $ | 263.7 | $ | 259.8 | $ | 231.8 | ||||||||||
Adjusted to exclude the following: |
||||||||||||||||||||
Stock-based compensation |
(82.6 | ) | (27.9 | ) | (12.3 | ) | (76.2 | ) | (93.9 | ) | ||||||||||
Acquisition-related expenses |
— | — | (14.5 | ) | — | — | ||||||||||||||
Litigation charge |
— | — | — | — | (21.3 | ) | ||||||||||||||
Non-GAAP Basis |
$ | 3,880.6 | $ | 338.3 | $ | 236.9 | $ | 183.6 | $ | 116.6 | ||||||||||
Nine Months Ended September 30, 2020 |
||||||||||||||||||||
Commissions and other related expense |
Sales and marketing |
Operations and support |
Research and development |
General and administrative |
||||||||||||||||
GAAP Basis |
$ | 2,047.2 | $ | 297.0 | $ | 158.9 | $ | 106.7 | $ | 75.7 | ||||||||||
Adjusted to exclude the following: |
||||||||||||||||||||
Stock-based compensation |
(5.1 | ) | (8.0 | ) | (2.2 | ) | (1.1 | ) | (13.8 | ) | ||||||||||
Restructuirng charges |
— | (5.7 | ) | (2.9 | ) | (0.7 | ) | (0.9 | ) | |||||||||||
Acquisition-related expenses |
— | — | (7.1 | ) | — | — | ||||||||||||||
Non-GAAP Basis |
$ | 2,042.1 | $ | 283.3 | $ | 146.7 | $ | 104.9 | $ | 61.0 | ||||||||||
Nine Months Ended September 30, |
||||||||
2021 |
2020 |
|||||||
(in millions) |
||||||||
Net cash provided by (used in) operating activities |
$ | 48.3 | $ | (88.1 | ) | |||
Net cash (used in) provided by investing activities |
(160.9 | ) | 19.9 | |||||
Net cash provided by financing activities |
463.9 | 12.8 | ||||||
Net increase (decrease) in cash and cash equivalents |
$ | 351.3 | $ | (55.4 | ) | |||
• | 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; |
• | If we do not provide our agents with solutions that they value, we may fail to attract new agents, retain current agents or increase agents’ utilization of our platform, which may adversely affect our business, financial condition and results of operations; |
• | We have experienced rapid growth since inception which may not be indicative of our future growth. We expect that, in the future, even if our revenue increases, our rate of growth may decline; |
• | We have incurred net losses on an annual basis since we were founded, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability; |
• | We may not be able to commence our new mortgage joint venture in a timely manner or at all and may not realize the expected benefits from the new venture; |
• | If we do not innovate and continuously improve and expand our platform to create value for Compass agents and clients, our business could be negatively impacted; |
• | The COVID-19 pandemic has had a material effect on our business, and could continue to do so; |
• | We operate in highly competitive markets and we may be unable to compete successfully against competitors; |
• | Monetary policies of the federal government and its agencies may have a material impact on our business, results of operations and financial condition; |
• | Any decrease in our gross commission income or the percentage of commissions that we collect may harm our business, results of operations and financial condition; |
• | Our efforts to expand our business and offer additional adjacent services may not be successful; |
• | Our quarterly results and other operating metrics may fluctuate from quarter to quarter, which makes these difficult to predict; |
• | The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business; |
• | Actions by our agents or employees could adversely affect our reputation and subject us to liability; |
• | If we pursue acquisitions that are not successfully completed or integrated into our existing operations, our business, financial condition or results of operations may be adversely affected; |
• | We are periodically subject to claims, lawsuits, government investigations and other proceedings that may adversely affect our business, financial condition and results of operations; |
• | Our agents are independent contractors, and if federal or state law mandates that they be classified as employees, our business, financial condition, and results of operations would be adversely impacted; |
• | Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand; and |
• | The multi-class structure of our common stock will have the effect of concentrating voting power with Robert Reffkin, our founder, Chairman and Chief Executive Officer, which will limit your ability to influence the outcome of matters submitted to our stockholders for approval, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions. |
• | a period of slow economic growth or recessionary conditions; |
• | weak credit markets; |
• | increasing mortgage rates and down payment requirements or constraints on the availability of mortgage financing; |
• | a low level of consumer confidence in the economy or the residential real estate market due to macroeconomic events domestically or internationally; |
• | high levels of unemployment resulting from the ongoing COVID-19 pandemic and the continued slow recovery of wages; |
• | instability of financial institutions; |
• | legislative or regulatory changes (including changes in regulatory interpretations or regulatory practices) that would adversely impact the residential real estate market as well as federal and/or state income tax changes and other tax reform affecting real estate and/or real estate transactions; |
• | insufficient or excessive regional home inventory levels; |
• | high levels of foreclosure activity, including but not limited to the release of homes already held for sale by financial institutions; |
• | adverse changes in local, regional, or national economic conditions; |
• | the inability or unwillingness of consumers to enter into sale transactions due to first-time homebuyer concerns about investing in a home and move-up buyers having limited or negative equity in their existing homes; |
• | a decrease in the affordability of homes including the impact of rising mortgage rates, home price appreciation and wage stagnation or wage increases that do not keep pace with inflation; |
• | decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership; and |
• | natural disasters, such as hurricanes, earthquakes and other events (including pandemics and epidemics) that disrupt local or regional real estate markets. |
• | attract high-performing agents in markets we currently serve; |
• | expand to new domestic markets; |
• | improve our software and develop additional functionality; |
• | develop a broader set of solutions; |
• | execute opportunistic mergers and acquisitions; and |
• | expand internationally. |
• | declines in U.S. residential real estate transaction volumes; |
• | our expansion into new markets, for which we typically incur more significant losses immediately following entry; |
• | increased competition in the U.S. residential real estate industry; |
• | increased costs to attract and retain agents; |
• | increased research and development costs to continue to advance the capabilities of our platform; |
• | changes in our fee structure or rates; |
• | our failure to realize anticipated efficiencies through our technology and business model; |
• | failure to execute our growth strategies; |
• | increased sales and marketing costs; |
• | hiring additional personnel to support our overall growth; and |
• | unforeseen expenses, difficulties, complications and delays, and other unknown factors. |
• | increased unemployment rates and stagnant or declining wages; |
• | decreased consumer confidence in the economy and recessionary conditions; |
• | lower yields on individuals’ investment portfolios or volatility and declines in the stock market; |
• | lower rental prices in certain markets reducing demand to purchase homes; and |
• | more stringent mortgage financing conditions, including increased down payment requirements. |
• | our ability to attract and retain agents; |
• | the timing and market acceptance of our products and services for Compass agents and their clients, including new products and services offered by us or our competitors; |
• | the attractiveness of our adjacent services for agents as well as their clients; |
• | our ability to attract top engineering talent to further develop and improve our technology to support our business model; and |
• | our brand strength relative to our competitors. |
• | our ability to attract and retain agents; |
• | our ability to develop new solutions and offer new services on our platform; |
• | changes in interest rates or mortgage underwriting standards; |
• | the actions of our competitors; |
• | costs and expenses related to the strategic acquisitions, partnerships and joint ventures; |
• | increases in and timing of operating expenses that we may incur to grow and expand our operations and to remain competitive; |
• | changes in the legislative or regulatory environment, including with respect to real estate commission rates and disclosures; |
• | system failures or outages, or actual or perceived breaches of security or privacy, and the costs associated with preventing, responding to, or remediating any such outages or breaches; |
• | adverse judgments, settlements, or other litigation-related costs and the fees associated with investigating and defending claims; |
• | the overall tax rate for our business and the impact of any changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period; |
• | the application of new or changing financial accounting standards or practices; and |
• | changes in regional or national business or macroeconomic conditions, including as a result of the ongoing COVID-19 pandemic, which may impact the other factors described above. |
• | the failure or significant disruption of our operations from various causes, including human error, computer malware, ransomware, insecure software and systems, zero-day vulnerabilities, threats to or disruption of third-party vendors who provide critical services, or other events related to our critical information technologies and systems; |
• | the increasing level and sophistication of cybersecurity attacks, including distributed denial of service attacks, data theft, fraud or malicious acts on the part of trusted insiders, social engineering (including phishing attempts), or other unlawful tactics aimed at compromising the systems and data of Compass agents and 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 Compass agents and clients), the transmission of computer malware, or the diversion of sale transaction closing funds. |
• | We did not maintain formal accounting policies and procedures, and did not design, document and maintain controls related to substantially all of our business processes to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over account reconciliations, segregation of duties and the preparation and review of journal entries; and |
• | We did not design and maintain effective controls over information technology, or IT, general controls or information systems and applications that are relevant to the preparation of the consolidated financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately that are relevant to the preparation of our financial statements, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate personnel, (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval of controls for program development to ensure that new software development is aligned with business and IT requirements. |
• | failure to identify, attract, reward and retain people in leadership positions in our organization who share and further our culture, values and mission; |
• | the increasing size and geographic diversity of our workforce; |
• | shelter-in-place |
• | the inability to achieve 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. |
• | 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 from time to time; |
• | 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; |
• | fluctuations in the trading volume of our shares or the size of our public float; |
• | sales of large blocks of our common stock; |
• | actual or anticipated changes or 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, including those related to privacy in the United States or globally; |
• | general economic conditions and trends; |
• | major catastrophic events in our markets; and |
• | departures of key employees. |
• | provide that our board of directors is classified into three classes of directors with staggered three-year terms; |
• | permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; |
• | require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws; |
• | authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; |
• | provide that only our chief executive officer, chairperson of our board of directors or a majority of our board of directors are authorized to call a special meeting of stockholders; |
• | eliminate the ability of our stockholders to call special meetings of stockholders; |
• | prohibit cumulative voting; |
• | provide that directors may only be removed “for cause” and only with the approval of the holders of at least two-thirds of the voting power of the then outstanding capital stock; |
• | prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; |
• | provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and |
• | establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. |
Exhibit Number |
Incorporated by Reference |
Filed or Furnished Herewith |
||||||||||||
Description |
Form |
File No. |
Exhibit |
Filing Date | ||||||||||
31.1 | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
31.2 | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
32.1* | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). | X | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | ||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | ||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | X |
* | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
COMPASS, INC. | ||
By: | /s/ Robert Reffkin | |
Robert Reffkin | ||
Chairman and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ Kristen Ankerbrandt | |
Kristen Ankerbrandt | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Reffkin, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Compass, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 12, 2021
By: | /s/ Robert Reffkin | |
Robert Reffkin | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kristen Ankerbrandt, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Compass, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: November 12, 2021
By: | /s/ Kristen Ankerbrandt | |
Kristen Ankerbrandt | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Reffkin, Chief Executive Officer of Compass, Inc. (the Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1. | the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2021 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company. |
Date: November 12, 2021
By: | /s/ Robert Reffkin | |
Robert Reffkin | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Kristen Ankerbrandt, Chief Financial Officer of Compass, Inc. (the Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1. | the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2021 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company. |
Date: | November 12, 2021 |
By: | /s/ Kristen Ankerbrandt | |
Kristen Ankerbrandt | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for credit loss on accounts receivable current | $ 7.8 | $ 8.1 |
Allowance for credit loss on financing receivable current | $ 20.0 | $ 17.2 |
Convertible preferred stock par or stated value per share | $ 0.00001 | $ 0.00001 |
Convertible preferred stock shares authorized | 0 | 246,430,170 |
Convertible preferred stock shares issued | 0 | 237,047,550 |
Convertible preferred stock shares outstanding | 0 | 237,047,550 |
Common stock par or stated value per share | $ 0.00001 | $ 0.00001 |
Common stock shares authorized | 13,850,000,000 | 700,754,910 |
Common stock shares issued | 399,082,563 | 125,221,900 |
Common stock shares outstanding | 399,082,563 | 122,971,900 |
Condensed Consolidated Statements of Operations - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Statement [Abstract] | ||||
Revenue | $ 1,743.6 | $ 1,188.5 | $ 4,808.9 | $ 2,490.5 |
Operating expenses | ||||
Commissions and other related expense | 1,430.6 | 979.4 | 3,963.2 | 2,047.2 |
Sales and marketing | 130.6 | 99.7 | 366.2 | 297.0 |
Operations and support | 97.0 | 53.3 | 263.7 | 158.9 |
Research and development | 89.7 | 33.7 | 259.8 | 106.7 |
General and administrative | 79.5 | 22.7 | 231.8 | 75.7 |
Depreciation and amortization | 16.7 | 13.0 | 45.1 | 38.1 |
Total operating expenses | 1,844.1 | 1,201.8 | 5,129.8 | 2,723.6 |
Loss from operations | (100.5) | (13.3) | (320.9) | (233.1) |
Investment income, net | 0.1 | 0.1 | 2.0 | |
Interest expense | (0.7) | (0.2) | (1.8) | (0.2) |
Loss before income taxes | (101.1) | (13.5) | (322.6) | (231.3) |
Benefit from income taxes | 1.3 | 3.3 | 0.9 | |
Net loss | $ (99.8) | $ (13.5) | $ (319.3) | $ (230.4) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.25) | $ (0.12) | $ (1.06) | $ (2.11) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 392,979,596 | 110,447,900 | 300,303,264 | 109,448,680 |
Business and Basis of Presentation |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2021 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Business and Basis of Presentation |
Description of the Business Compass, Inc. (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc. On January 8, 2021, the board of directors of the Company approved a change to the Company’s name from Urban Compass, Inc. to Compass, Inc. The Company provides an end-to-end The Company’s agents are independent contractors who affiliate their real estate licenses with the Company, operating their businesses on the Company’s platform and under the Compass brand. The Company generates revenue from clients through its agents by assisting home sellers and buyers in listing, marketing, selling and finding homes as well as through the provision of services adjacent to the transaction, like title and escrow services, which comprise a smaller portion of the Company’s revenue to date. The Company currently generates substantially all of its revenue from commissions paid by clients at the time that a home is transacted. Stock Split In March 2021, the Company’s board of directors and the stockholders of the Company approved a ten-for-one ten-for-one Initial Public Offering On April 6, 2021, the Company completed its initial public offering (“IPO”) and the Company’s Class A common stock began trading on the New York Stock Exchange on April 1, 2021 under the symbol “COMP”. In connection with the IPO, the Company issued and sold 26,296,438 shares of its common stock at a public offering price of $18.00 per share. The Company received aggregate proceeds of $438.7 million from the IPO, net of the underwriting discount and offering costs of approximately $11.0 million (of which $0.9 million were paid in 2020). Offering costs, including the legal, accounting, printing and other IPO-related costs have been recorded in Additional paid-in capital against the proceeds from the offering. During April 2021, also in connection with the IPO, all series of the Company’s convertible preferred stock then outstanding were converted into 223,033,725 shares of common stock and the Company reclassified $1.4 billion of convertible preferred stock to Additional paid-in-capital. On March 31, 2021, in connection with the effectiveness of the Company’s IPO registration statement, the Company recognized $148.5 million in stock-based compensation expense for (i) certain RSUs that contained both service-based and liquidity event-based vesting conditions as the liquidity event-based vesting condition was satisfied upon effectiveness of the registration statement and (ii) certain stock options and RSU awards with service, performance and market-based vesting conditions that include stock price targets to be met after the listing of the Company’s stock on a public exchange. In April 2021, the Company adopted a restated certificate of incorporation and changed its authorized capital stock to consist of 12,500,000,000 shares of Class A common stock, 1,250,000,000 shares of Class B common stock, 100,000,000 shares of Class C common stock and 25,000,000 shares of undesignated preferred stock. On March 31, 2021, in connection with the effectiveness of the Company’s IPO registration statement, 15,244,490 shares of Class A common stock held by the Company’s founder and Chief Executive Officer were exchanged for an equivalent number of shares of Class C common stock. In addition, any Class A common stock issued to the Company’s Chief Executive Officer from RSU awards granted prior to February 2021 are able to be exchanged for Class C common stock once the RSUs have been settled for the underlying Class A common stock. Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The activities of OriginPoint LLC (“OriginPoint”), a mortgage origination company and joint venture formed in July 2021 between the Company and Guaranteed Rate, Inc. (“Guaranteed Rate”), are consolidated within the accompanying condensed consolidated financial statements. OriginPoint is owned 49.9% by the Company and 50.1% by Guaranteed Rate and the activities of OriginPoint are consolidated since the Company has the power to direct those activities that will significantly affect the economic performance of the joint venture. The economic interests related to Guaranteed Rates’ 50.1% ownership interest are reflected as non-controlling interest in the accompanying financial statements. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. The condensed consolidated statements of operations include the results of entities acquired from the date of each respective acquisition. The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the interim periods presented. |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the consolidated financial statements and accompanying notes. These judgments, estimates and assumptions are used for, but not limited to (i) valuation of the Company’s common stock and stock awards, (ii) fair value of acquired intangible assets and goodwill, (iii) contingent considerations in connection with business combinations, (iv) incremental borrowing rate used for the Company’s operating leases, (v) useful lives of long-lived assets, (vi) impairment of intangible assets and goodwill, (vii) allowance for Compass Concierge receivables and (viii) income taxes and certain deferred tax assets. The Company determines its estimates and judgments based on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates and these differences may be material. There are many uncertainties regarding the ongoing coronavirus (“COVID-19”) pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it has impacted and may continue to impact the Company’s operations and its customers for an indefinite period of time. The extent and duration of the COVID-19 pandemic over the longer term and the extent to which it will impact the global economy, U.S. residential market and the Company’s financial condition, results of operations, or cash flows remain uncertain and depend on future developments that cannot be accurately predicted at this time. Such developments include, but are not limited to, the emergence of new variants, severity and transmission rate of the virus, the extent and effectiveness of containment actions taken, the timing, availability, and effectiveness of vaccines and the vaccination rates, as well as the impact of these and other factors on residential real estate values, real estate transaction behavior in general, and on the Company’s business in particular. The Company will continue to assess the impacts of the COVID-19 pandemic and will adjust its operations as necessary. Business Combinations Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the condensed consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred. Stock-Based Compensation The Company measures compensation expense for all stock-based awards based on the estimated fair value of the awards on the date of grant. Compensation expense is generally recognized as expense on a straight-line basis over the service period based on the vesting requirements. The Company recognizes forfeitures as they occur. For stock options, which the Company issues to employees and affiliated agents, the Company generally estimates the fair value using the Black- Scholes option pricing model, which requires the input of subjective assumptions, including (1) the fair value of common stock, (2) the expected stock price volatility, (3) the expected term of the award, (4) the risk-free interest rate and (5) expected dividends. The Company also issues RSUs to employees and affiliated agents. In addition to the issuance of RSUs to agents as equity compensation for the provision of services, the Company offers RSUs to affiliated agents through its Agent Equity Program. The Agent Equity Program offers affiliated agents the ability to elect to have a portion of their commissions earned during a calendar year to be paid in the form of RSUs. RSUs issued in connection with the Agent Equity Program are granted at the beginning of the year following the calendar year in which the commissions were earned and are subject to the terms and conditions of the 2012 Stock Incentive Plan and the 2021 Equity Incentive Plan, as applicable. The Company’s RSUs granted prior to December 2020 generally vest based upon the satisfaction of both a service-based condition and a liquidity event-based condition. The service-based vesting condition for these awards is generally satisfied over four years, except for the RSUs associated with the 2020 Agent Equity Program which vested immediately on the date of issuance. The liquidity event-based vesting condition is satisfied on the occurrence of a qualifying event, generally defined as a change in control or the effective date of the registration statement for the Company’s IPO. The fair value of these RSUs is measured based on the fair value of the Company’s common stock on the grant date and will begin to be recognized as expense when both the required service-based vesting condition and the liquidity event-based vesting condition has been achieved using the accelerated attribution method. The liquidity event-based vesting requirement was met on March 31, 2021, the effective date of the Company’s registration statement, see Note 1—“Business and Basis of Presentation—Initial Public Offering.” Beginning in December 2020, the Company began issuing RSUs that vest upon the satisfaction of only a service-based vesting condition that is generally ranging from to five years. The fair value of these RSUs is measured based on the fair value of the Company’s common stock on the grant date and will be recognized as expense on a straight-line basis as the required service-based vesting condition is satisfied. Any vested RSUs that require only a service-based vesting condition will convert to common stock following vesting and their prescribed delayed settlement periods. For RSUs to be granted in connection with the 2021 Agent Equity Program, the Company determines the value of the stock-based compensation expense at the time the underlying commission is earned and begins to recognize the associated expense on a straight-line basis over the requisite service periods beginning on the closing date of the underlying real estate commission transactions. The stock-based compensation expense is recorded as a liability and will be reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs are issued. For the nine months ended September 30, 2021, the Company recognized stock-based compensation expense and an associated liability of $40.1 million in connection with RSUs earned as a part of the 2021 Agent Equity Program. The associated liability is recorded within Accrued expenses and other current liabilities in the condensed consolidated balance sheet. On a limited basis, the Company has issued stock options and RSUs that contain service, performance and market-based vesting conditions that include stock price targets to be met after the listing of the Company’s stock on a public exchange. Such awards are valued using a Monte Carlo simulation and the underlying expense will be recognized as the associated vesting conditions are met. Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and other fees and costs relating to the IPO, are capitalized and recorded on the condensed consolidated balance sheets. As of December 31, 2020, $1.8 million of deferred offering costs were capitalized in Other non-current assets on the condensed consolidated balance sheet. During the nine months ended September 30, 2021, $11.0 million of deferred offering costs were recorded against the proceeds from the initial public offering in Additional paid-in capital on the condensed consolidated balance sheet and as of September 30, 2021 there were no remaining deferred offering costs included on the condensed consolidated balance sheet. New Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes step-up in the tax basis of goodwill. The new standard became effective for public companies with fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance on January 1, 2021 and the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . An update was also issued expanding the scope of this guidance. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance became effective starting March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Acquisitions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | 3. Acquisitions During the nine months ended September 30, 2021, the Company completed several business acquisitions including the acquisition of 100% of the ownership interests in KVS Title, LLC, a title insurance and escrow settlement services company, Glide Labs, Inc., a real estate technology company, Randall Family of Companies, a group of Southern Coastal New England residential real-estate brokerage entities, four additional small real estate brokerages and one additional small title insurance and escrow settlement services company. The purpose of these acquisitions was to expand the Company’s title and escrow offerings, to grow the Company’s transaction management tools included in its end-to-end Total Consideration The total consideration for acquisitions completed during the nine months ended September 30, 2021 comprised $148.5 million of cash, net of cash acquired, $5.8 million in Class A Common Stock of the Company and up to $5.4 million of additional cash that may be paid contingent on certain earnings-based targets being met through 2023. During the nine months ended September 30, 2021, $127.3 million in cash was paid in connection with these acquisitions, net of cash acquired, and up to an aggregate of $21.2 million will be paid once certain indemnification matters and pre-acquisition contingencies are resolved. These future cash payments were recorded as Accrued expenses and other current liabilities in the condensed consolidated balance sheet. The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of: broker relationships of $82.7 million; trademark intangible assets of $11.4 million; acquired technology of $5.5 million; operating lease right-of-use non-current assets; lease liabilities of $9.7 million; and $9.7 million of other current and non-current liabilities. The excess of the purchase price over the fair value of the acquired net assets was recorded as goodwill of $62.7 million. Acquired intangible assets are being amortized over their estimated useful lives of approximately 2 to 9 years. Approximately $22.0 million of the goodwill recorded during the nine months ended September 30, 2021 is deductible for tax purposes. The amount of tax-deductible goodwill may increase in the future to approximately $61.7 million dependent on the payment of certain holdbacks and acquisition related compensation arrangements. These amounts are not expected to have an impact on the income tax provision while the Company maintains a full valuation allowance on its domestic deferred tax assets. The Company has recorded the preliminary purchase price allocation as of the acquisition dates and expects to finalize its analysis within the measurement period (up to one year from the acquisition date) of the respective transaction. Any adjustments during the measurement period would have a corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the consolidated statements of operations. Pro forma revenue and earnings for 2021 acquisitions have not been presented because they are not material to the Company’s consolidated revenue and results of operations, either individually or in the aggregate. Contingent Consideration Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired busin e sses in the event that certain targets and milestones are met. Approximately $13.0 million of the obligations as of September 30, 2021 are fixed in value. As of September 30, 2021, the undiscounted maximum payment under these arrangements was$28.2 million. Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions):
Other Acquisition Related Compensation In connection with the Company’s acquisitions, certain amounts paid or to be paid to selling shareholders are subject to clawback and forfeiture dependent on certain employees and agents providing continued service to the Company. These retention-based payments are accounted for as compensation for future services and the Company recognizes the expenses over the service period. As of September 30, 2021, the maximum future compensation to such selling shareholders in connection with these arrangements was $ For the three months ended September 30, 2021 and 2020, the Company recognized $7.5 million and $0.4 million, respectively, and for the nine months ended September 30, 2021 and 2020, the Company recognized $18.9 million and $1.6 million, respectively, in compensation expense within Operations and support in the accompanying condensed consolidated statements of operations related to these arrangements. 57.7 million.During the nine months ended September 30, 2021, the Company granted 277,776 shares of common stock to sellers in accordance with arrangements where vesting of the shares is contingent on such sellers providing continued service to the Company. Accordingly, these share-based payments will be accounted for as stock-based compensation expense over the underlying retention periods. As a result, the Company recognized $0.7 million stock-based compensation expense related to these compensation arrangements during the three and nine months ended September 30, 2021. |
Fair Value of Financial Assets and Liabilities |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | 4. Fair Value of Financial Assets and Liabilities The Company’s cash and cash equivalents of $789.6 million and $440.1 million as of September 30, 2021 and December 31, 2020, respectively, are held in cash and money market funds which are classified as Level 1 within the fair value hierarchy because they are valued using quoted prices in active markets. These are the Company’s only Level 1 financial instruments. The Company does not hold any Level 2 financial instruments. The Company’s contingent consideration liabilities of $27.1 million and $39.8 million as of September 30, 2021 and December 31, 2020, respectively, are the Company’s only Level 3 financial instruments. See Note 3 – “Acquisitions” for changes in contingent consideration for the three and nine months ended September 30, 2021 and 2020. The following table presents the balances of contingent consideration (in millions):
There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented. Level 3 Financial Liabilities The Company’s Level 3 financial liabilities relate to acquisition-related contingent consideration arrangements. Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired entities in the event that certain targets and milestones are met. The Company estimated the fair value of the contingent consideration using a Monte Carlo simulation, which is based on significant inputs, primarily forecasted future results of the acquired businesses, not observable in the market, discount rates and earnings volatility measures. The changes in the fair value of Level 3 financial liabilities are included within Operations and support in the accompanying condensed consolidated statements of operations (see Note 3 – “Acquisitions”). The following tables present quantitative information regarding the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 liabilities, consisting of different contingent consideration agreements, measured at fair value on a recurring basis:
|
Debt |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Concierge Credit Facility In July 2020, the Company entered into a Revolving Credit and Security Agreement (the “Concierge Facility”) with Barclays Bank PLC, as administrative agent, and the several lenders party thereto. The Concierge Facility provides for a $75.0 million revolving credit facility and is solely used to finance, in part, the Company’s Compass Concierge Program. The Concierge Facility is secured primarily by the Concierge Receivables and cash of the Compass Concierge Program. Prior to July 29, 2021 borrowings under the Concierge Facility accrued interest at rates equal to the adjusted London interbank offered rate (“LIBOR”) plus a margin of 3.00 % as adjusted, or an alternate rate of interest upon the occurrence of certain changes in LIBOR. Additionally, prior to July 29, 2021, the Company was required to pay an annual commitment fee of 0.50% on a quarterly basis based on the unused portion of the Concierge Facility irrespective of the Company’s utilization rate. On July 29, 2021, the Company amended and restated the Concierge Facility (the “A&R Concierge Facility”), extending the revolving period for another twelve months, lowering the interest rate to LIBOR plus a margin of 1.85%, which may be adjusted, and lowering the annual commitment fee to 0.35% if the Concierge Facility is utilized greater than 50% (the annual commitment fee remained the same, at 0.50%, if the Concierge Facility is utilized less than 50%). Pursuant to the A&R Concierge Facility, the principal amount, if any, is payable in full in January 2023, unless earlier terminated or extended. The interest rate on the Concierge Facility was 3.15% as of September 30, 2021. The Company has the option to repay the borrowings under the Concierge Facility without premium or penalty prior to maturity. The Concierge Facility contains customary affirmative covenants, such as financial statement reporting requirements, as well as covenants that restrict its ability to, among other things, incur additional indebtedness, sell certain receivables, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions. Additionally, in the event that the Company fails to comply with certain financial covenants that require the Company to meet certain liquidity-based measures, the commitments under the Concierge Facility will automatically be reduced to zero and the Company will be required to repay any outstanding loans under the Concierge Facility. As of September 30, 2021, the Company was in compliance with the covenants under the Concierge Facility. Revolving Credit Facility In March 2021, the Company entered into a Revolving Credit and Guaranty Agreement (the “Revolving Credit Facility”) with several lenders and issuing banks and Barclays Bank PLC, as administrative agent and as collateral agent. The Revolving Credit Facility provides for a $350.0 million revolving credit facility, which may be increased by the greater of $250.0 million and 18.5% of the Company’s consolidated total assets, plus such additional amount so long as the Company’s total net leverage ratio does not exceed 4.50:1.00 on a pro forma basis as of the most recent test period, subject to the terms 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 Company’s obligations under the Revolving Credit Facility are guaranteed by certain of the Company’s subsidiaries and are secured by a first priority security interest in substantially all of the Company’s assets and the Company’s subsidiary guarantors. Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of 0.50% or (ii) a floating rate per annum equal to the rate at which dollar deposits are offered in the London interbank market plus a margin of 1.50%. In the Revolving Credit Facility, the base rate is defined as 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 rate at which dollar deposits are offered in the London interbank market for a one-month interest period plus 1.00% and (d) 1.00%. During an event of default under the Revolving Credit Facility, the applicable interest rates are increased by 2.0% per annum. The Company is also obligated to pay other customary fees for a credit facility of this size and 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 and fees associated with letters of credit. The principal amount, if any, is payable in full in March 2026, unless earlier terminated or extended. The Company has the option to repay the Company’s borrowings, and to permanently reduce the loan commitments whole or in part, under the Revolving Credit Facility without premium or penalty prior to maturity. As of September 30, 2021, there were no borrowings outstanding under the Revolving Credit Facility and outstanding letters of credit under the Revolving Credit Facility totaled approximately $16.3 million. The Revolving Credit Facility contains customary representations, warranties, financial covenants applicable to the Company and to the Company’s restricted subsidiaries, affirmative covenants, such as financial statement reporting requirements, and negative covenant 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 financial covenants require that the Company maintain certain liquidity-based measures and total revenue requirements. As of September 30, 2021, the Company was in compliance with the covenants under the Revolving Credit Facility. The Revolving Credit Facility includes customary events of default that include, among other things, nonpayment of principal, interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain material ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the Revolving Credit Facility. The Company incurred debt issuance costs of $1.4 million in connection with the Revolving Credit Facility, which are included in Other current assets and Other
non-current assets in the condensed consolidated balance sheet. The unamortized debt issuance costs will be amortized within Interest expense in the consolidated statements of operations over the remaining term on a straight-line basis. |
Commitments and Contingencies |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Legal Proceedings From time to time, the Company may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the Company’s business taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal costs related to the defense of loss contingencies are expensed as incurred. Claims or regulatory actions against the Company, whether meritorious or not, could have an adverse impact on the Company due to legal costs, diversion of management resources and other elements. Except as identified with respect to the matters below, the Company does not believe that the outcome of any individual existing legal or regulatory proceeding to which it is a party will have a material adverse effect on its results of operations, financial condition or overall business in each case, taken as a whole. Avi Dorfman v. Robert Reffkin and Urban Compass, Inc. In July 2014, Avi Dorfman (“Dorfman”) and RentJolt, Inc. (“RentJolt”) (collectively, “Plaintiffs”) filed suit against the Company and Robert Reffkin (“Defendants”), seeking compensation for certain services, trade secrets and other contributions allegedly provided in the formation of the Company. After miscellaneous motion practice, in June 2018, Defendants moved for summary judgment, the court held oral argument in October 2018 and ultimately denied the Defendants’ motion for summary judgment in October 2019. In November 2019, Defendants appealed portions of the court’s summary judgment ruling. In February 2020, the appellate court granted in part and denied in part Defendants’ appeal resulting in one plaintiff (RentJolt) voluntarily discontinuing its only remaining claim and leaving the case. Defendants have one motion in limine pending. A trial date has been set for January 2022. On October 25, 2021, the parties agreed to a settlement in principle. Once the settlement is finalized , the case will be dismissed with prejudice. The Company recorded an expense of$ 21.3million during the three and nine months ended September 30, 2021 in connection with the settlement within General and administrative expense in the accompanying condensed consolidated statements of operations. Realogy Holdings Corp., et al v. Urban Compass, Inc. and Compass Inc. In July 2019, Realogy Holdings Corp., NRT New York LLC (“Corcoran”) and many of its related entities (collectively, “Plaintiffs”) filed a complaint against the Company in the New York Supreme Court. The complaint alleges various violations of New York and California state law related to claims of unfair competition and seeks unspecified damages. The Company filed a Motion to Dismiss in September 2019. In September 2019, Plaintiffs filed an amended complaint, removing one claim and adding a claim for defamation. In November 2019, the Company moved to compel arbitration related to claims asserted by Corcoran and moved to dismiss all of the counts. In June 2020, the Court denied the motion to dismiss and denied the motion to compel arbitration as moot, granting Plaintiffs leave to amend the complaint as to claims asserted by Corcoran without prejudice to Defendants’ ability to move to compel or dismiss the Second Amended Complaint. On July 3, 2020, Plaintiffs filed their Second Amended Complaint. On December 18, 2020, the Court denied the Company’s motion to compel arbitration on Plaintiffs’ second amended complaint without prejudice. Defendants’ Answer to the Second Amended Complaint and Counterclaims were filed on January 28, 2021. Additionally, the Company filed its appeal of the lower Court’s denial of the Company’s motion to dismiss and motion to compel arbitration on February 1, 2021. On June 1, 2021, the First Department affirmed the lower Court’s denial of the Company’s motion to compel arbitration. Discovery is proceeding, with an end date set for October 3, 2022. The Company is unable to predict the outcome of this action or to reasonably estimate the possible loss or range of loss, if any, arising from the claims asserted therein. Letter of Credit Agreements The Company has irrevocable letters of credit with various financial institutions, primarily related to security deposits for leased facilities. As of September 30, 2021 and December 31, 2020, the Company was contingently liable for $51.7 million and $50.7 million, respectively, under these letters of credit. As of September 30, 2021, $16.3 million and $35.4 million of these letters of credit were collateralized by the Company’s Revolving Credit Facility and cash and cash equivalents, respectively. As of December 31, 2020, all letters of credit were collateralized by the Company’s cash and cash equivalents. Escrow and Trust Deposits As a service to its home buyers and home sellers, the Company administers escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. The escrow and trust deposits totaled $205.7 million and $46.1 million, respectively as of September 30, 2021 and December 31, 2020. These deposits are not assets of the Company and therefore are excluded from the accompanying condensed consolidated balance sheets. However, the Company remains contingently liable for the disposition of these deposits. |
Preferred Stock and Common stock |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock and Common stock | 7. Preferred Stock and Common Stock Convertible Preferred Stock In March 2020, the Company issued an additional 64,820 shares of its Series G convertible preferred stock for proceeds of $1.0 million. In March 2021, the holders of 15,920,450 shares of the Company’s Series D convertible preferred stock elected to convert such shares into an equal number of shares of Class A common stock. During April 2021, in connection with the IPO, all series of the Company’s convertible preferred stock then outstanding were converted into 223,033,725 shares of Class A common stock and the Company reclassified $1.4 billion of Convertible preferred stock to Additional paid-in-capital. Undesignated Preferred Stock In April 2021, the Company adopted a restated certificate of incorporation which provides for authorized undesignated preferred stock to 25,000,000. As of September 30, 2021, there are no shares of the Company’s preferred stock issued and outstanding. Common Stock In February 2021, the Company approved the establishment of Class C common stock and an agreement with the Company’s CEO to exchange his Class A common stock for Class C common stock. On March 31, 2021, in connection with the effectiveness of the registration statement for the Company’s IPO, 15,244,490 shares of Class A common stock held by the Company’s founder and CEO were automatically exchanged for an equivalent number of shares of Class C common stock. In addition, any Class A common stock issued to the Company’s Chief Executive Officer from RSU awards granted prior to February 2021 are able to be exchanged for Class C common stock. Each share of Class C common stock is entitled to twenty votes per share and will be convertible at any time into one share of Class A common stock and will automatically convert into Class A common stock under certain “sunset” provisions. Other than certain permitted transfers for estate planning purposes, upon a transfer of Class C common stock, the Class C common stock will convert into Class A common stock. In April 2021, the Company adopted a restated certificate of incorporation and changed its authorized capital stock to consist of 12,500,000,000 shares of Class A common stock, 1,250,000,000 shares of Class B common stock and 100,000,000 shares of Class C common stock. As of September 30, 2021, the Company had three classes of common stock: Class A common stock, Class B common stock and Class C common stock. Each class has par value of $0.00001.
As of December 31, 2020, the Company had two classes of common stock: Class A common stock and Class B common stock. Each class has a par value of $0.00001.
Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are not entitled to vote. Holders of Class C common stock are entitled to twenty votes per share. Each share of Class C common stock is convertible at any time of the option of the holder into one share of Class A common stock. Each share of Class C common stock will automatically convert into a share of Class A common stock upon sale or transfer, except for certain permitted transfers. On July 1, 2021, the board of directors of the Company approved the conversion of all outstanding shares of the Company’s Class B common stock into the same number of shares of the Company’s Class A common stock effective on that date. A description of all other rights, preferences and privileges of the holders of the Company’s common stock are included in the Company’s IPO prospectus on Form S-1 filed with the Securities and Exchange Commission. As of December 31, 2020, the Company had 2,250,000 shares of Class A common stock issued and held as treasury stock which were subsequently retired on July 1, 2021. |
Stock-Based Compensation |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | 8. Stock-Based Compensation 2012 Stock Incentive Plan In October 2012, the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan, employees and non-employees could be granted options on common stock, RSUs and other stock-based awards, including awards earned in connection with the Agent Equity Program. Generally, these awards were based on stock agreements with ten-year contractional terms for stock options, and seven-year contractual terms for RSUs, subject to board approval. 2021 Equity Incentive Plan In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Equity Incentive Plan (the “2021 Plan”), with an initial pool of 29,666,480 shares of common stock available for granting stock-based awards plus any reserved shares of common stock not issued or subject to outstanding awards granted under the Company’s 2012 Plan. In addition, on January 1st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the 2021 Plan shall be increased automatically by the number of shares equal to five percent (5%) of the total number of outstanding shares of all classes of common stock on the immediately preceding December 31st, although the Company’s board of directors or one of its committees may reduce the amount of such increase in any particular year. The 2021 Plan became effective on March 30, 2021 and as of that date, the Company ceased granting new awards under the 2012 Plan and all remaining shares available under the 2012 Plan were transferred to the 2021 Plan. As of September 30, 2021, there were 27,437,628 shares available for future grants under the 2021 Plan, inclusive of those shares transferred from the 2012 Plan. 2021 Employee Stock Purchase Plan In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP authorizes the issuance of 7,416,620 shares of common stock to purchase rights granted to the Company’s employees or to employees of its designated affiliates. In addition, on January 1st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the ESPP shall be increased automatically by the number of shares equal to one percent (1%) of the total number of outstanding shares of common stock and shares of preferred stock of the Company outstanding (on an as converted to common stock basis) on the immediately preceding December 31st, although the Company’s board of directors or one of its committees may reduce the amount of the increase in any particular year. No more than 150,000,000 shares of common stock may be issued over the term of the ESPP, subject to certain exceptions set forth in the ESPP. As of the date of this filing, no shares have been granted under the ESPP. Stock Options A summary of stock option activity under the 2012 Plan and the 2021 Plan, including 1,061,250 stock options that were granted outside of the 2012 Plan in 2019, is presented below (in millions, except share and per share amounts):
During the nine months ended September 30, 2021 and 2020, the intrinsic value of options exercised was $97.6 million and $4.8 million, respectively. Restricted Stock Units A summary of RSU activity under the 2012 Plan and the 2021 Plan is presented below:
Included in the table above are 8,611,810 RSUs granted to an executive employee during the three months ended March 31, 2021. These RSUs have service, performance and market-based vesting conditions that include stock price targets to be met after the listing of the Company’s stock on a public exchange. During the nine months ended September 30, 2021 and 2020, the fair value of restricted stock units that vested and converted to common stock was $51.1 million and $0, respectively. During October and November 2021, the Company net settled all RSUs that had vested as of October 31, 2021. In connection with these settlements, the Company issued an aggregate of 6.8 million shares of Class A common stock and withheld an aggregate of 4.7 million shares of Class A common stock to satisfy $60.3 million of tax withholding obligations on behalf of the Company’s employees. Stock-Based Compensation Expense Total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 is as follows (in millions):
As more fully described in Note 1 – “Business and Basis of Presentation”, the Company recognized $ 148.5 million in stock-based compensation expense in connection with the effectiveness of the Company’s IPO registration statement on March 31, 2021. Stock-based compensation expense for the nine months ended September 30, 2021 includes the following amounts related to a one-time acceleration of stock-based compensation expense in connection with the IPO (in millions):
As of September 30, 2021, unrecognized stock-based compensation expense totaled $598.0 million and is expected to be recognized over a weighted-average period of 3.2 years. The Company has not recognized any tax benefits from stock-based compensation as a result of the full valuation allowance maintained on its deferred tax assets. Early Exercise of Stock Options A majority of the stock options granted under the 2012 Plan provide option holders the right to elect to exercise unvested options in exchange for restricted common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s termination of service until the stock options are fully vested at the lesser of the original issuance price or the fair value the Company’s common stock. During the nine months ended September 30, 2021, 818,590 stock options were early exercised for total proceeds of $5.0 million. As of September 30, 2021, 1,181,720 shares of common stock received by holders from an early exercise were subject to repurchase. The cash proceeds received for unvested shares of common stock recorded within Accrued expenses and other current liabilities and Other
non-current liabilities in the condensed consolidated balance sheet was $6.8 million as of September 30, 2021. Amounts recorded are transferred into Common stock and Additional paid-in capital within the condensed consolidated balance sheets as the shares vest. |
Income Taxes |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Company recognized a benefit from income taxes of $1.3 The Company continues to maintain a full valuation allowance on all domestic net deferred tax assets based on numerous factors including estimated future taxable income and historic profitability. The Company does not have any amount recorded related to uncertain tax positions as of the period ended September 30, 2021 nor does it expect a substantial increase in the next 12 months. If applicable, the Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. The United States is the Company’s only material tax jurisdiction and as a result of net operating loss carryforwards, the Company is subject to audit for all years for US federal income tax purposes. |
Net Loss Per Share Attributable to Common Stockholders |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share Attributable to Common Stockholders | 10. Net Loss Per Share Attributable to Common Stockholders The Company computes net loss per share under the two-class method required for multiple classes of common stock and participating securities (convertible preferred stock). The rights, including the liquidation and dividend rights, of the Class A common stock, Class B common stock and Class C common stock are substantially identical, other than voting rights. Accordingly, the net loss per share attributable to common stockholders will be the same for Class A common stock, Class B common stock and Class C common stock on an individual or combined basis. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in millions, except share and per share amounts):
The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive:
|
Compass Concierge Receivables and Allowance for Credit Losses |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compass Concierge Receivables and Allowance for Credit Losses | 11. Compass Concierge Receivables and Allowance for Credit Losses In 2018, the Company launched the Compass Concierge Program for home sellers who have engaged Compass as their exclusive listing agent. The program, initially launched by the Company, is based on a services model (“Concierge Classic”) provided by Compass Concierge, LLC (“Compass Concierge”), which includes items such as consultation on suggested cosmetic updates or modifications to a specific property or guidance on securing licensed contractors or vendors to perform non-structural property improvements. The Concierge Classic program provides for the payment of the up-front costs of specified home improvement services provided by unrelated vendors. In 2019, the Compass Concierge Program was expanded to include a loan program underwritten by an independent third-party lender (the “Lender”) through a commercial arrangement with Compass Concierge (“Concierge Capital”). Under the Concierge Capital program, the Lender originates and services unsecured consumer loans to home sellers following its independent underwriting process pursuant to program-level criteria provided by the Company. Pursuant to the Company’s agreement with the Lender, the consumer loans are unsecured, interest-free and have no associated fees except for late fees that the Lender may charge in its sole discretion. The Company has no right or obligation with respect to any individual consumer loan originated by the Lender. Under the agreement with the Lender, the Company has repayment rights against the Lender in connection with a corporate loan. Payment to the Company for these services under the Concierge Classic model or repayment of the loan funds under the Concierge Capital model is due upon the earlier of a successful home sale, the termination of the listing agreement, or one year from the date in which costs were originally funded. Compass Concierge receivables (“Concierge Receivables”) are stated at the amount advanced to the home sellers, net of an estimated allowance for credit losses (“ACL”). The Company does not recognize any revenue or earn any fees from the Compass Concierge Program. The Company incurs service fees payable to the Lender and incurs bad debt expense in connection with the Compass Concierge Program. The Company manages its credit risk by establishing a comprehensive credit policy for the approval of projects under the Concierge Classic program and new loans under the Concierge Capital program, while monitoring and reviewing the performance of its existing Concierge Receivables. Factors considered include but not limited to:
Credit Quality The Company monitors credit quality by evaluating various attributes and utilizes such information in its evaluation of the appropriateness of the ACL. Based on the Company’s experience, the key credit quality indicator is whether the underlying properties associated with the Concierge Receivables will be sold or not. Concierge Receivables associated with properties that are eventually sold have a lower credit risk than those that are associated with properties that are not sold. For Concierge Receivables where repayments have not been triggered (i.e., earlier of (i) sale of the pr o perty, (ii) termination of a listing agreement or (iii) 12 months from the date costs were originally funded), the Company establishes an estimate as to the percentage of underlying properties that will be sold based on historical data. This estimate is updated quarterly and on an annual basis. As of September 30, 2021 and December 31, 2020, the amount of outstanding Concierge Receivables related to unsold properties was approximately 97% and 93%, respectively. Allowance for credit losses The Company maintains an ACL for the expected credit losses over the contractual life of the Concierge Receivables. The amount of ACL is based on ongoing, quarterly assessments by management. Historical loss experience is generally the starting point when the Company estimates the expected credit losses. The Company then considers whether (i) current conditions, such as the impact of COVID-19 and related economic uncertainty surrounding the pandemic, (ii) future economic conditions and (iii) any potential changes in the Compass Concierge Program that are reasonable and supportable would impact on its ACL. The following table summarizes the activity of the ACL for Concierge Receivables for the three and nine months ended September 30, 2021 (in millions):
Aging Status The Company generally considers Concierge Receivables to be past due after being outstanding for over 30 days after initial billing. Changes in the Company’s estimate to the ACL is recorded through bad debt expense as Sales and marketing expense in the condensed consolidated statements of operations and individual accounts are charged against the allowance when all reasonable collection efforts are exhausted. The following tables present the aging analysis of Concierge Receivables as of September 30, 2021 (in millions):
|
Restructuring Activities and COVID-19 Update |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Activities and COVID-19 Update | 12. Restructuring Activities and COVID-19 Update Beginning in March 2020, the onset of the COVID-19 pandemic resulted in a negative impact on the Company’s business in the second quarter of 2020 due to shelter-in-place stay-at-home in-person residential real estate showings and the related impact on customer demand and housing inventory, as well as deteriorating economic conditions, such as increased unemployment rates. In light of the uncertain and rapidly evolving situation relating to COVID-19, the Company took a range of measures to address the uncertainties related to the COVID-19 pandemic including, but not limited to, reducing the size of its workforce, terminating certain lease obligations and reducing certain discretionary expenses during the first half of 2020. As a result of these cost-saving measures, the Company reduced its workforce by approximately 15%. Although the demand in the Company’s services had recovered starting in the second half of 2020, the duration of the pandemic and any impacts on consumer behavior are unknown, and the amount of that demand which will persist after the reversal of the stay-at-home The expenses resulting from these cost-saving measures were included in the consolidated statement of operations for the three and nine months ended September 30, 2020, as follows (in millions):
The Company did not recognize any restructuring expenses during the nine months ended September 30, 2021. As of September 30, 2021 and December 31, 2020, the Company did not have any material remaining liabilities related to restructuring costs. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The activities of OriginPoint LLC (“OriginPoint”), a mortgage origination company and joint venture formed in July 2021 between the Company and Guaranteed Rate, Inc. (“Guaranteed Rate”), are consolidated within the accompanying condensed consolidated financial statements. OriginPoint is owned 49.9% by the Company and 50.1% by Guaranteed Rate and the activities of OriginPoint are consolidated since the Company has the power to direct those activities that will significantly affect the economic performance of the joint venture. The economic interests related to Guaranteed Rates’ 50.1% ownership interest are reflected as non-controlling interest in the accompanying financial statements. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. The condensed consolidated statements of operations include the results of entities acquired from the date of each respective acquisition. The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the interim periods presented. The results of the interim periods presented are not necessarily indicative of the results expected for the full year. Certain information and notes normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted under the Securities and Exchange Commission’s rules and regulations. Accordingly, the unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2020, included in the final prospectus that forms a part of the Company’s IPO registration statement, dated as of March 31, 2021 and filed with the Securities and Exchange Commission on April 1, 2021 pursuant to Rule 424(b) under the Securities Act of 1933, as amended. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the consolidated financial statements and accompanying notes. These judgments, estimates and assumptions are used for, but not limited to (i) valuation of the Company’s common stock and stock awards, (ii) fair value of acquired intangible assets and goodwill, (iii) contingent considerations in connection with business combinations, (iv) incremental borrowing rate used for the Company’s operating leases, (v) useful lives of long-lived assets, (vi) impairment of intangible assets and goodwill, (vii) allowance for Compass Concierge receivables and (viii) income taxes and certain deferred tax assets. The Company determines its estimates and judgments based on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates and these differences may be material. There are many uncertainties regarding the ongoing coronavirus
(“COVID-19”) pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it has impacted and may continue to impact the Company’s operations and its customers for an indefinite period of time. The extent and duration of the COVID-19 pandemic over the longer term and the extent to which it will impact the global economy, U.S. residential market and the Company’s financial condition, results of operations, or cash flows remain uncertain and depend on future developments that cannot be accurately predicted at this time. Such developments include, but are not limited to, the emergence of new variants, severity and transmission rate of the virus, the extent and effectiveness of containment actions taken, the timing, availability, and effectiveness of vaccines and the vaccination rates, as well as the impact of these and other factors on residential real estate values, real estate transaction behavior in general, and on the Company’s business in particular. The Company will continue to assess the impacts of the COVID-19 pandemic and will adjust its operations as necessary. |
Business Combinations | Business Combinations Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the condensed consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company measures compensation expense for all stock-based awards based on the estimated fair value of the awards on the date of grant. Compensation expense is generally recognized as expense on a straight-line basis over the service period based on the vesting requirements. The Company recognizes forfeitures as they occur. For stock options, which the Company issues to employees and affiliated agents, the Company generally estimates the fair value using the Black- Scholes option pricing model, which requires the input of subjective assumptions, including (1) the fair value of common stock, (2) the expected stock price volatility, (3) the expected term of the award, (4) the risk-free interest rate and (5) expected dividends. The Company also issues RSUs to employees and affiliated agents. In addition to the issuance of RSUs to agents as equity compensation for the provision of services, the Company offers RSUs to affiliated agents through its Agent Equity Program. The Agent Equity Program offers affiliated agents the ability to elect to have a portion of their commissions earned during a calendar year to be paid in the form of RSUs. RSUs issued in connection with the Agent Equity Program are granted at the beginning of the year following the calendar year in which the commissions were earned and are subject to the terms and conditions of the 2012 Stock Incentive Plan and the 2021 Equity Incentive Plan, as applicable. The Company’s RSUs granted prior to December 2020 generally vest based upon the satisfaction of both a service-based condition and a liquidity event-based condition. The service-based vesting condition for these awards is generally satisfied over four years, except for the RSUs associated with the 2020 Agent Equity Program which vested immediately on the date of issuance. The liquidity event-based vesting condition is satisfied on the occurrence of a qualifying event, generally defined as a change in control or the effective date of the registration statement for the Company’s IPO. The fair value of these RSUs is measured based on the fair value of the Company’s common stock on the grant date and will begin to be recognized as expense when both the required service-based vesting condition and the liquidity event-based vesting condition has been achieved using the accelerated attribution method. The liquidity event-based vesting requirement was met on March 31, 2021, the effective date of the Company’s registration statement, see Note 1—“Business and Basis of Presentation—Initial Public Offering.” Beginning in December 2020, the Company began issuing RSUs that vest upon the satisfaction of only a service-based vesting condition that is generally ranging from to five years. The fair value of these RSUs is measured based on the fair value of the Company’s common stock on the grant date and will be recognized as expense on a straight-line basis as the required service-based vesting condition is satisfied. Any vested RSUs that require only a service-based vesting condition will convert to common stock following vesting and their prescribed delayed settlement periods. For RSUs to be granted in connection with the 2021 Agent Equity Program, the Company determines the value of the stock-based compensation expense at the time the underlying commission is earned and begins to recognize the associated expense on a straight-line basis over the requisite service periods beginning on the closing date of the underlying real estate commission transactions. The stock-based compensation expense is recorded as a liability and will be reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs are issued. For the nine months ended September 30, 2021, the Company recognized stock-based compensation expense and an associated liability of $40.1 million in connection with RSUs earned as a part of the 2021 Agent Equity Program. The associated liability is recorded within Accrued expenses and other current liabilities in the condensed consolidated balance sheet. On a limited basis, the Company has issued stock options and RSUs that contain service, performance and market-based vesting conditions that include stock price targets to be met after the listing of the Company’s stock on a public exchange. Such awards are valued using a Monte Carlo simulation and the underlying expense will be recognized as the associated vesting conditions are met. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and other fees and costs relating to the IPO, are capitalized and recorded on the condensed consolidated balance sheets. As of December 31, 2020, $1.8 million of deferred offering costs were capitalized in Other
non-current assets on the condensed consolidated balance sheet. During the nine months ended September 30, 2021, $11.0 million of deferred offering costs were recorded against the proceeds from the initial public offering in Additional paid-in capital on the condensed consolidated balance sheet and as of September 30, 2021 there were no remaining deferred offering costs included on the condensed consolidated balance sheet. |
New Accounting Pronouncements | New Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes step-up in the tax basis of goodwill. The new standard became effective for public companies with fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance on January 1, 2021 and the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . An update was also issued expanding the scope of this guidance. The guidance provides optional expedients and exceptions for applying GAAP to contracts or other transactions affected by reference rate reform if certain criteria are met. The guidance became effective starting March 12, 2020 and may be applied prospectively through December 31, 2022. The Company is evaluating applicable contracts and transactions to determine whether to elect the optional guidance. The adoption of this standard is not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Contingent Consideration Measured at Fair Value on a Recurring Basis | Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions):
|
Fair Value of Financial Assets and Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Measurements of Our Financial Instruments | See Note 3 – “Acquisitions” for changes in contingent consideration for the three and nine months ended September 30, 2021 and 2020. The following table presents the balances of contingent consideration (in millions):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Measurement Inputs and Valuation Techniques | The following tables present quantitative information regarding the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 liabilities, consisting of different contingent consideration agreements, measured at fair value on a recurring basis:
|
Preferred Stock and Common stock (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock by Class | As of September 30, 2021, the Company had three classes of common stock: Class A common stock, Class B common stock and Class C common stock. Each class has par value of $0.00001.
As of December 31, 2020, the Company had two classes of common stock: Class A common stock and Class B common stock. Each class has a par value of $0.00001.
|
Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity under the 2012 Plan and the 2021 Plan, including 1,061,250 stock options that were granted outside of the 2012 Plan in 2019, is presented below (in millions, except share and per share amounts):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Units Activity | A summary of RSU activity under the 2012 Plan and the 2021 Plan is presented below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 is as follows (in millions):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IPO [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense for the nine months ended September 30, 2021 includes the following amounts related to a one-time acceleration of stock-based compensation expense in connection with the IPO (in millions):
|
Net Loss Per Share Attributable to Common Stockholders (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in millions, except share and per share amounts):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Computation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive:
|
Compass Concierge Receivables and Allowance for Credit Losses (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of ACL for Concierge Receivables | The following table summarizes the activity of the ACL for Concierge Receivables for the three and nine months ended September 30, 2021 (in millions):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Aging Analysis of Concierge Receivables | The following tables present the aging analysis of Concierge Receivables as of September 30, 2021 (in millions):
|
Restructuring Activities and COVID-19 Update (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restructuring costs | The expenses resulting from these cost-saving measures were included in the consolidated statement of operations for the three and nine months ended September 30, 2020, as follows (in millions):
|
Acquisitions - Summary of Changes in Contingent Consideration Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Business Combinations [Abstract] | ||||
Opening balance | $ 33.0 | $ 15.3 | $ 39.8 | $ 16.4 |
Acquisitions | 0.7 | 5.4 | ||
Payments and issuances | (2.7) | (2.4) | (13.7) | (5.4) |
Fair value (gains) losses included in net loss | (3.9) | 3.6 | (4.4) | 5.5 |
Closing Balance | $ 27.1 | $ 16.5 | $ 27.1 | $ 16.5 |
Fair Value of Financial Assets and Liabilities - Summary of Fair Value Measurements of Our Financial Instruments (Detail) - USD ($) $ in Millions |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|---|
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||||
Accrued expenses and other current liabilities | $ 12.1 | $ 19.1 | ||||
Other non-current liabilities | 15.0 | 20.7 | ||||
Total contingent consideration | $ 27.1 | $ 33.0 | $ 39.8 | $ 16.5 | $ 15.3 | $ 16.4 |
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value, Inputs, Level 3 [Member] | ||
Business combination contingent consideration fair value disclosure | $ 27.1 | $ 39.8 |
Cash And Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Cash and cash equivalents fair value disclosure | $ 789.6 | $ 440.1 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Escrow and trust deposits | $ 205.7 | $ 205.7 | $ 46.1 |
Letters of credit | 51.7 | 51.7 | $ 50.7 |
Revolving Credit Facility [Member] | |||
Letters of credit outstanding | 16.3 | ||
Cash and Cash Equivalents [Member] | |||
Letters of credit outstanding | 35.4 | ||
General and Administrative Expense [Member] | |||
Litigation settlement, expense | $ 21.3 | $ 21.3 |
Preferred Stock and Common stock - Schedule of Stock by Class (Detail) - shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Class of Stock [Line Items] | ||
Shares Authorized | 13,850,000,000 | 700,754,910 |
Shares Issued | 399,082,563 | 125,221,900 |
Shares Outstanding | 399,082,563 | 122,971,900 |
Class A common stock [Member] | ||
Class of Stock [Line Items] | ||
Shares Authorized | 12,500,000,000 | 530,136,050 |
Shares Issued | 383,838,073 | 118,549,390 |
Shares Outstanding | 383,838,073 | 116,299,390 |
Class B common stock [Member] | ||
Class of Stock [Line Items] | ||
Shares Authorized | 1,250,000,000 | 170,618,860 |
Shares Issued | 6,672,510 | |
Shares Outstanding | 6,672,510 | |
Class C common stock [Member] | ||
Class of Stock [Line Items] | ||
Shares Authorized | 100,000,000 | |
Shares Issued | 15,244,490 | |
Shares Outstanding | 15,244,490 |
Stock-Based Compensation - Summary of Restricted Stock Units Activity (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
shares
| |
Share-based Payment Arrangement [Abstract] | |
Number of Shares, Opening Balance | shares | 32,556,160 |
Number of Shares, Granted | shares | 32,872,347 |
Number of Shares, Vested and converted to common stock | shares | (3,786,513) |
Number of Shares, Forfeited | shares | (2,159,492) |
Number of Shares, Ending Balance | shares | 59,482,502 |
Weighted Average Grant Date Fair Value, Opening Balance | $ / shares | $ 6.75 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 14.09 |
Weighted Average Grant Date Fair Value, Vested and converted to common stock | $ / shares | 16.71 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 13.06 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 9.94 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Benefit from income taxes | $ 1.3 | $ 3.3 | $ 0.9 |
Net Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Numerator: | ||||
Net loss attributable to common stockholders | $ (99.8) | $ (13.5) | $ (319.3) | $ (230.4) |
Denominator: | ||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | 392,979,596 | 110,447,900 | 300,303,264 | 109,448,680 |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.25) | $ (0.12) | $ (1.06) | $ (2.11) |
Compass Concierge Receivables and Allowance for Credit Losses - Additional Information (Detail) |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Receivables [Abstract] | ||
Percentage of financing receivables related to unsold properties | 97.00% | 93.00% |
Compass Concierge Receivables and Allowance for Credit Losses - Summary of ACL for Concierge Receivables (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
|
Accounting Policies [Abstract] | ||
Beginning of period | $ 19.3 | $ 17.2 |
Allowances | 2.5 | 7.2 |
Net write-offs and other | (1.8) | (4.4) |
End of period | $ 20.0 | $ 20.0 |
Compass Concierge Receivables and Allowance for Credit Losses - Summary of Aging Analysis of Concierge Receivables (Detail) $ in Millions |
Sep. 30, 2021
USD ($)
|
---|---|
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, before Allowance for Credit Loss | $ 69.4 |
Financing Receivables Overdue Up to Thirty One Days And Less Than Ninety Days [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, before Allowance for Credit Loss | 0.6 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, before Allowance for Credit Loss | 12.6 |
Financial Asset, Past Due [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, before Allowance for Credit Loss | 13.2 |
Financial Asset, Not Past Due [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, before Allowance for Credit Loss | $ 56.2 |
Restructuring Activities and COVID -19 Update - Additional Information (Detail) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Restructuring and Related Activities [Abstract] | ||
Restructuring and Related Cost, Number of Positions Eliminated, Percent | 15.00% | |
Liabilities related to restructuring costs | $ 0 | $ 0 |
0KR4VA/.H2_IN G9XO9![#LHL8P9.2:1)S#2^/
M&GZ@'K1"G' :51M(\O\_-?U886;/&DK#YN>.%B(0_8]$BI]>937I9O3>-