From left: Compass’ Kalani Reelitz and Robert Reffkin (Getty, Compass)
Compass posted a net loss of $158 million in the fourth quarter, slightly up from $154 million lost in the third quarter.
The net loss figure includes non-cash expenses like stock-based compensation and depreciation, which accounted for a combined $82 million last quarter. That puts Compass’ fourth-quarter cash burn at $76 million, the same as the previous period.
But a Compass executive had an optimistic outlook during a phone interview Tuesday afternoon, saying the company still plans on being free cash flow positive by the second quarter of this year.
“We’re not losing money because the business model doesn’t work,” said the executive.
We all know the business model of brokerage works and we feel good about that. We are not losing money where linearly over the course of the next year or two we’re worried about the viability of the business.”
Compass posted a net loss of $602 million in 2022, up from $494 million in 2021. The brokerage said cash expenses accounted for $281 million, along with $49 million of that loss attributed to one-time restructuring costs and $11 million to litigation fees. About $321 million was incurred in non-cash stock-based compensation expenses and depreciation.
Quarterly revenue fell to $1.1 billion, a 31 percent decrease compared to the fourth quarter of 2021, which Compass attributed to the slowdown in the market. Its quarterly adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — was a loss of $75 million, up from a loss of $51 million a year ago.
Annual transactions and revenue fell by 6 percent, with the company earning $6 billion over the course of the year. Its annual adjusted EBITDA was a loss of $210 million, compared to $2 million income the year prior.
Compass finished the quarter with a cash balance of $362 million, which includes a $150 million draw on its revolver loan.
The brokerage was able to cut $338 million from its budget last year, the result of an aggressive $320 million cost-cutting plan announced during its second quarter earnings report. That includes two rounds of layoffs that affected 800 tech employees, but does not include savings from the most recent round of layoffs executed in January.
“The impact of our op-ex reductions, it’ll really start manifesting itself in quarter two,” said the executive.
Compass will not be announcing new lines of business during today’s earnings call, the executive said, a possibility that was teased during the company’s second-quarter earnings.
Principal agent retention in the fourth quarter was 98 percent, the same from the previous quarter and period in 2021.
This is a breaking story. Check back for updates.
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Compass posted a net loss of $158 million in the fourth quarter, slightly up from $154 million lost in the third quarter. The net loss figure includes non-cash expenses like stock-based compensation and depreciation, which accounted for a combined $82 million last quarter. That puts Compass’ fourth-quarter cash burn at $76 million, the same as
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Lead by real estate veteran Robert Khodadadian, Skyline Properties has been instrumental in many multi-million dollar commercial developments, including a $12 million contract for the White House Hotel, a 99-year ground lease of a four-story commercial site in Harlem, and a retail co-op on Prince St. for $50 million.
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