What changed in this filing

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Item 1. Business

2024-02-28 compared with 2023-03-01 · 67 added, 129 removed, 178 unchanged (52% of the section changed)

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to Compass, Inc.

The Company has been based in New York City since its incorporation.

Our Business and Business Model

We are a technology-enabled brokerage that provides an end-to-end platform of software, services, and support to empower our residential real estate agents to deliver exceptional service to seller and buyer clients.

Real estate agents are themselves business owners, and Compass agents utilize the platform to grow their respective businesses, save time and manage their businesses more effectively.

Our platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry and enabling our core brokerage services.

The platform also uses proprietary data, analytics, artificial intelligence, and machine learning to deliver high-value recommendations and outcomes for Compass agents and their clients.

We provide an end-to-end platform that empowers our residential real estate agents to deliver exceptional service to seller and buyer clients.

Our platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients.

Additionally, we provide integrated services, such as title and escrow and mortgage, both of which are available on our platform.

Compass agents utilize the platform to grow their businesses, save time and manage their businesses more effectively.

Our business model is directly aligned with the success of our agents.

We attract agents to our brokerage and partner with them as independent contractors that affiliate their real estate licenses with us, operating their businesses on our platform and under our brand.

We currently generate substantially all of our revenue from commissions paid to us by our agents' clients at the time that a home is transacted on our platform, which agents use to assist home sellers and buyers in listing, marketing, selling and finding homes as well as through the provision of services adjacent to the transaction, such as title, escrow and mortgage.

While adjacent services comprise a small portion of our revenue to date, we are well-positioned to capture meaningful revenue from adjacent services as we continue to diversify our offerings within the real estate ecosystem.

Through 2022, Compass agents have represented either sellers or buyers in more than 700,000 Total Transactions, totaling more than $780 billion in Gross Transaction Value.

With 4.6% 1 of the U.S.

market share in 2022, up from 4.5% in 2021, Compass remains the largest independent real estate brokerage by Gross Transaction Value.

Of the large cities we serve that have a multiple listing service ("MLS Cities"), our market share in our top three MLS Cities by sales volume was approximately 28% as of December 31, 2022.

For the ten MLS Cities launched in 2018, our average market share has grown to approximately 12% as of December 31, 2022.

We believe there remains significant opportunity for us to grow our transactions by continuing to add agents to our platform and for our agents to grow their respective market shares even as we reduce our new agent recruiting incentives to zero.

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 Annual Report.

Our agent-first strategy and differentiated platform have delivered strong results for Compass agents and their clients in 2022:

• our principal agents transact more than the average agent at 7.5 transactions per average principal agent versus the industry transactions per agent of 6.4;

• our principal agent retention rate continued to exceed 90% in 2022;

• our agents are strong advocates, giving Compass a Net Promoter Score of 65.5.

1 We calculate our national market share by dividing our Gross Transaction Value, or the total dollar value of transactions closed by agents on our platform, by two times (to account for the sell-side and buy-side of each transaction) the aggregate dollar value of U.S.

existing home sales as reported by the NAR.

Additionally, higher usage of our platform contributed to enhanced agent economics, productivity and retention.

A cohort study of platform usage among our agents 2 found that in 2022, the top 25% of agent teams who used the platform the most:

• represented 63% of all Compass transactions;

• grew their Gross Commission Income 6.5x, compared to the bottom 25% of agent teams;

• retained principal agents at an annual rate of 99% versus 91% for the bottom 25% of agent teams;

• used the platform consistently – top multi-agent teams spent an average of 4 hours and 18 minutes per day (assuming a five day work week) using the tools while single-agent teams used the platform more than 2 hours and 16 minutes per day.

Residential real estate is one of the largest industries in the world.

According to NAR, in 2022, 5.03 million homes were sold in the U.S., which is 9% lower than the average number of homes sold per year in 2015 to 2021.

Housing is the single largest consumer expenditure in the U.S., and homes are often a substantial source of household wealth.

Selling and buying a home is one of the most significant, and often one of the most complex, time consuming, and consequential financial events in an individual’s life.

Given the unique nature of each property, location, buyer, seller, negotiation, title and financing, a real estate agent’s role as the driver of the majority of the workflow is indispensable.

According to NAR’s 2022 Profile of Home Buyers and Sellers, 86% of home sellers and 86% of home buyers use a real estate agent or broker - levels that have remained consistent over the last 10 years, with 2012 levels at 88% and 89%, respectively.

When advising the seller, agents typically help price the property, help determine which renovations would be most beneficial for the sale, organize staging and photography, provide the seller with a full-service marketing program, list the property on a variety of portals, advertise it digitally and in print, show the property to prospective buyers, advise on sale negotiations, and prepare for and coordinate the closing of the transaction.

When advising the buyer, agents typically locate specific properties that meet the buyer’s personal and financial parameters, tour properties with the buyer, help evaluate the pros and cons of each property, assist in preparing the bid and negotiating, refer adjacent service providers such as title and escrow agencies, mortgage brokers, real estate lawyers, home inspectors, movers, contractors and painters, and prepare for closing the transaction.

Regardless of whether advising the seller or the buyer, the workflow of real estate agents is complex.

Real estate agents are CEOs of their businesses, positioned at the center of a highly-specialized, multi-party workflow which involves complexity generally unseen by the buyer or seller.

Agents serve as the liaison among the client, the counterparty and many other stakeholders related to the transaction.

In addition to serving their clients directly, agents recommend, as appropriate, adjacent service providers from pre-sale to post-close.

Real estate agents are also at the center of a broad array of industries, including residential construction, real estate brokerage, mortgage lending, title insurance and other adjacent services that drive a massive amount of economic spend – NAR estimates that the average residential real estate transaction leads to roughly $503,100 of economic impact.

As the CEOs of businesses at the center of a massive ecosystem with a multitude of stakeholders, agents have a unique position of influence and enable a large market opportunity.

We believe the best agents are dynamic business owners, responsible for every function from attracting and retaining clients to managing finances and operations.

We believe these entrepreneurs are needlessly constrained by a plethora of disconnected technology solutions, manual processes and antiquated systems.

The real estate industry has lagged in technological innovation, and what innovation has occurred has not addressed agents’ core challenges.

The vast majority of technology products built for agents require them to manually transport data among various tools.

These inefficiencies not only frustrate agents, but also limit their ability to effectively serve clients.

We believe that real estate agents are an underserved group of business owners, and by providing them with a seamless, end-to-end platform, we can unlock enormous untapped economic potential.

2 The data in this analysis represents agent teams accounting for approximately 85% of total company transactions in 2022.

The remaining 15% of transactions were excluded from the analysis because data was incomplete or unavailable, in part due to agent teams who came to us via acquisitions within 24 months prior to December 31, 2022.

When measuring gross commission income growth, the analysis required that agent teams had been with Compass for at least 24 months in order to have a complete data set.

We have built an integrated software platform that helps agents operate with the sophisticated capabilities of a modern technology company and the personal attention and service of a dedicated advisor.

Using proprietary data, analytics, artificial intelligence and machine learning, our platform delivers a broad set of industry-specific capabilities for Compass agents and their clients.

Additionally, certain of our Glide tools, which include completion of various real estate forms and offer preparation as well as eSignature and collaboration capabilities, are offered to non-Compass agents and their clients.

We are simplifying today’s complex, paper-driven, antiquated workflow to empower real estate agents to deliver an exceptional experience to every buyer and seller.

Our platform is tailored to the real estate industry and combines integrated software with, in certain markets, value-added services, such as title and escrow and mortgage origination.

We designed our platform for simplicity and flexibility.

Given a significant amount of an agent’s time is spent away from their desk, our powerful iOS and Android mobile apps allow agents to take advantage of our platform, no matter where they are.

The efficiencies that agents gain from adoption of our technology give them the opportunity to spend more time with clients.

With beautifully designed, consumer-grade user interfaces and an integrated set of workflows backed by powerful AI-driven analytics and insights, we provide our agents with a combination of ease-of-use and comprehensive, enterprise-grade software.

This type of integrated platform, at scale, is unique in the real estate industry.

Built on Amazon Web Services, the Compass platform uses a cloud native microservices architecture that is engineered for high scalability, reliability, performance and security.

Our engineering development uses modern agile practices such as continuous integration and continuous delivery ("CI/CD").

We prioritize security and have detective, preventive, and automated corrective controls for network and web traffic, infrastructure auditing, software analysis, phishing prevention, email security gateway, secure remote gateways, software static code analysis, and secure configuration management.

We have also broadened our usage of user access controls, including two-factor authentication and endpoint management, to reduce the risk of security incidents.

We continue to innovate and enhance our software platform with the goal of digitizing and automating all real estate workflows that empower agents to acquire and serve their clients.

In 2022, we launched a series of new features across our agents’ workflow, including the ability to take a transaction from contract to payment via forms, offers, and e-signature functionality.

We have made significant investments in research and development to improve and maintain our platform and to support our technology infrastructure.

As we look forward, we will continue to scale our technological innovation through the lens of cash flow positivity.

See section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Comparison of the Years Ended December 31, 2022 and 2021 – Operating Expenses – Research and Development” for more information.

The caliber and pedigree of our technology leadership helps us attract and retain top-tier technology talent globally.

We have a team of highly experienced product and engineering professionals based out of our innovation hubs in New York and Seattle, as well as other locations throughout the U.S.

and internationally.

Our integrated platform supports agents to win more clients and more effectively serve both sellers and buyers.

Attracting and Retaining Clients

We currently generate substantially all of our revenue from commissions paid to us by our agents' clients at the time that a home is transacted on our platform.

While integrated services comprise a small portion of our revenue to date, we believe we are well-positioned to capture meaningful revenue from integrated services as we continue to diversify our offerings within the real estate ecosystem.

Our platform provides a strong foundation for agents to create and foster client relationships.

Our powerful customer relationship management (“CRM”) platform enables agents to develop automated yet customizable “drip campaigns” to stay in touch with their contacts at key moments over time.

Our powerful customer relationship management, or CRM, tool enables agents to develop automated yet customizable “drip campaigns” to stay in touch with their contacts at key moments over time.

Through our Marketing Center, agents can market their own personal brands by creating marketing collateral – digital ads, videos, listing presentations, email newsletters, print advertising and signage – as well as execute marketing campaigns, with mere minutes of effort.

Our agents designed over two million different pieces of marketing content through our platform in 2022.

Advising Sellers

Our platform enables agents to sell more homes in less time for a better price.

Our platform also enables agents to sell more homes in less time for a better price.

We believe we provide agents with the solutions and data they need to effectively list and market properties and run the sale process more efficiently utilizing our tools.

For example, Compass Concierge, which provides home sellers access to interest-free capital to front the cost of home improvement services, is designed to increase the sale value of the home and decrease the time on market.

Marketing Center provides agents a powerful suite of tools they can use to easily create tailored marketing materials and execute marketing campaigns for any listing, seamlessly connecting to a multimedia repository containing a listing description, photos and floorplan, across digital, social, email, video and print channels, helping them attract buyers.

Our AI-powered comparative market analysis (“CMA”) tool enables agents to optimize pricing strategies for clients, leveraging data on past sales and current listings to suggest representative comparable properties.

For example, Compass Concierge, which provides home sellers access to capital to front the cost of home improvement services, is designed to increase the sale value of the home and decrease the time on market.

Marketing Center provides agents a powerful suite of tools they can use to easily create tailored marketing materials and execute marketing campaigns for any listing, seamlessly connecting to a multimedia repository containing a listing description, photos and floor plan, across digital, social, email, video and print channels, helping them attract buyers.

Our AI-powered comparative market analysis, or CMA tool enables agents to optimize pricing strategies for clients, leveraging data on past sales and current listings to suggest representative comparable properties.

Agents can also use our platform to conduct virtual tours and livestream open houses through our Open House app to ensure listings receive ample attention.

When advising a seller, our services to the agent extend beyond the sale of the home.

In preparing for and closing the transaction, our agents can use our platform to recommend adjacent services to clients such as title, escrow and mortgage services in certain markets and referrals to service providers post-closing.

Advising Buyers

Our platform enables agents to locate desirable properties at attractive prices for buyers.

In preparing for and closing the transaction, our agents can, with one click, use our platform to recommend integrated services to clients such as title and escrow and mortgage in certain markets and referrals to service providers post-closing.

Our platform also enables agents to locate desirable properties at attractive prices for buyers.

Our agents provide clients with access to comprehensive inventory, including private listings, help them understand local market dynamics, tour properties, prepare and close offers, and better manage the overall home buying process.

With Compass Collections, a curated visual workspace, Compass agents and their clients can easily find and organize homes of interest and then tag and discuss specific properties through an integrated chat feature.

With near real-time search alerts and notifications, clients can monitor new listings and gain an edge in securing properties of interest.

With near real-time search alerts and notifications, clients can monitor new listings.

Once properties of interest are identified, our solutions enable agents to conduct virtual and in-person tours for clients.

Using our CMA, agents can better understand the pricing dynamics of specific markets, neighborhoods and home features, ultimately providing informed advice regarding potential offers.

We also provide our agents with access to services associated with closing a home purchase, such as title, escrow and mortgage services in certain markets.

Selling and buying a home is one of the most significant, and often one of the most complex, time consuming, and consequential financial events in an individual’s life.

Given the unique nature of each property, location, buyer, seller,

negotiation, title and financing, a real estate agent’s role as the driver of the majority of the workflow is indispensable.

According to NAR’s 2023 Profile of Home Buyers and Sellers, 89% of home sellers and 89% of home buyers used a real estate agent or broker - levels that have remained consistent since our inception, with 2012 levels at 88% and 89%, respectively.

Using proprietary data, analytics, AI and machine learning, our platform delivers a broad set of industry-specific capabilities for Compass agents and their clients.

We are simplifying today’s complex, paper-driven, antiquated workflow to empower real estate agents to deliver an exceptional experience to every buyer and seller.

Our platform is tailored to the real estate industry and combines integrated software with, in certain markets, value-added services, such as title and escrow and mortgage.

We designed our platform for simplicity and flexibility.

Given a significant amount of an agent’s time is spent away from their desk, our powerful iOS and Android mobile apps allow agents to take advantage of our platform, no matter their location.

The efficiencies that agents gain from adoption of our technology give them the opportunity to spend more time with clients.

We continue to innovate and enhance our platform with the goal of digitizing and automating all real estate workflows that empower agents to acquire and serve their clients.

In 2023, we enhanced our platform by adding 103 features, including Performance Tracker, Compass AI and '1-Click Title & Escrow'.

We have made significant investments in research and development to improve and maintain our platform and to support our technology infrastructure.

As we look forward, we will continue to scale our technological innovation through the lens of cash flow positivity.

See section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Comparison of the Years Ended December 31, 2023 and 2022 – Operating Expenses – Research and Development” for more information.

Our Platform Capabilities

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Our platform is a proprietary cloud-native software service with mobile apps that allow agents to manage their business anytime and anywhere.

We build beautifully designed consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports backed by artificial intelligence and integrated data assets.

We empower our agents with capabilities such as:

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Our CRM provides agents with an easy-to-use interface that is both powerful and automated, enabling agents to cultivate their sphere, nurture and grow relationships and close more sales.

It also leverages artificial intelligence to provide recommendations and insights, and integrates with other parts of our platform such as Marketing Center to create engaging content.

It also leverages AI to provide recommendations and insights, and integrates with other parts of our platform such as Marketing Center to create engaging content.

• Business Tracker.

Released in January 2021, Business Tracker provides agents with a centralized view of their entire business.

Business Tracker provides agents with a centralized view of their entire business.

It enables agents to organize and manage their active leads, buyers, renters and listings, as well as view potential revenue at each stage of the transaction.

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• Marketing Content Creation and Management.

With a broad array of integrated features, elegant templates and design capabilities, our Marketing Center allows agents to rapidly create, advertise and

promote their listings at scale through the channel of their choosing:

With a broad array of integrated features, elegant templates and design capabilities, our Marketing Center allows agents to rapidly create, advertise and promote their listings at scale through the channel of their choosing:

digital, social, email, video, print or signage.

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Our agents can use our platform to create paid digital ad campaigns on platforms such as Facebook and Instagram, with videos and engaging ad copy, in a matter of minutes.

• AI-Driven Content.

We have recently integrated the ChatGPT API into our platform.

By drawing on our vast database of proprietary data, AI further enhances the agent experience and their ability to quickly perform tasks, such as creating listing brochures and descriptions, marketing materials, and even their agent profiles on our website.

• Listing Search and Saved Search Notifications.

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We provide agents with transaction closing and post-closing support to reduce the complexity for clients and efficiently advise through a transaction’s lifecycle.

• Agent Training.

We offer training, including our self-service Compass Academy program and coaching, sales management, listing and transaction coordination, commission processing, and marketing design and consulting so that our agents can achieve their full potential.

To nurture our agent talent, our self-service Compass Academy program allows for shared learning from among the highest performing Compass agents.

As Compass agents and their clients use the Compass platform to consolidate their activities for buying, selling, marketing and transacting real estate, they demonstrate high engagement with our platform.

As we continue to build everything agents need in a single, integrated platform, we believe more great agents will continue to come to Compass.

As more great agents join us, we believe our platform will help them provide great experiences to more of their buyer and seller clients.

The ability to create great client experiences drives continued business for agents with repeat and referral clients.

As we continue to build everything agents need in a single, integrated platform, we believe more high-performing agents will continue to come to Compass.

As more high-performing agents join us, we believe our platform will help them provide great experiences to more of their buyer and seller clients.

The ability to create great client experiences drives continued business for agents with repeat and referral

This ultimately generates more revenue for the agent, and in turn, for Compass, which enables us to invest more into enhancing the platform.

These investments further empower agents to grow their businesses efficiently and effectively.

Adjacent Services

We complement our technology platform with adjacent services that make our agents more successful and give them more tools to better serve their clients.

Integrated Services

We complement our technology platform with integrated services that make our agents more successful and give them more tools to better serve their clients.

These additional services support and service the needs of home buyers and sellers at various touch points of the residential real estate purchase process.

We entered into the adjacent services market in 2018.

Beginning in 2020, we expanded our title and escrow offerings to provide our agents’ clients with a more integrated, service-oriented solution and, in 2021, we launched OriginPoint, our residential mortgage origination joint venture with Guaranteed Rate, to provide an integrated service-oriented mortgage offering to our agents’ clients.

In 2022, we acquired a title and escrow company and as of December 31, 2022, our title and escrow services were available for approximately half of our agents’ transactions.

We entered into the integrated services market in 2018.

Beginning in 2020, we expanded our title and escrow offerings to provide our agents’ clients with a more integrated, service-oriented solution and, in 2021, we launched OriginPoint, our residential mortgage origination joint venture with Guaranteed Rate, to provide a service-oriented mortgage offering to our agents’ clients.

As of December 31, 2023, we provided title and escrow services in 7 states and Washington D.C.

Additionally, OriginPoint is fully operational in 30 states and Washington D.C.

and licensed in 6 other states.

The synergies between these adjacent services and our brokerage business increase transparency and deliver a more integrated closing process for agents and their clients.

Adjacent services represent a $132 billion addressable market in the U.S.

Our prior expansion into adjacent services and our future plans reaffirm our commitment to span the full transaction cycle and create more monetization opportunities for our business.

We believe that we are well-positioned to capture meaningful revenue and EBITDA from the title and escrow services and mortgage origination as we continue to expand and diversify our offerings within the real estate ecosystem.

The synergies between these integrated services and our brokerage business increase transparency and deliver a more integrated closing process for agents and their clients.

Title and Escrow Services

Our title and escrow businesses provide – through a growing network of agents – full-service title and escrow/settlement services to real estate agents’ clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans.

Our title and escrow businesses provide full-service title and escrow/settlement services to real estate agents’ clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans.

In many markets, clients typically look to their agents to refer them to the highest quality providers of these types of services after the purchase contract is signed.

In 2022, our title and escrow businesses were involved in a number of transactions involving our agents and also saw significant business from non-Compass brokerages, consumers, and outside sources.

We provide title and escrow/closing services under a multitude of local brands.

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These businesses have a combined presence across seven states (California, Colorado, Texas, Maryland, Virginia, New Jersey, and Pennsylvania) and Washington, D.C.

In June 2022, we announced the wind-down of Modus Technologies, Inc, a wholly owned title and escrow software company, which was part of a broader plan to improve the alignment between our organizational structure and long-term business strategy, drive cost efficiencies and continue to drive toward profitability and positive free cash flow.

In 2023, we plan to deepen our presence in our existing markets.

In 2024, we plan to remain opportunistic about adding additional title and escrow agencies and expanding our title and escrow operations in, and beyond, our current geographies.

Mortgage Joint Venture

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OriginPoint is structured as a non-exclusive joint venture, where we hold a 49.9% equity interest and certain governance rights related to the joint venture, including representation on the management committee.

OriginPoint originates mortgages for Compass agents’ clients, as well as the clients of any other brokerage, among others, in the context of a new purchase or other customers not working with a brokerage in the context of a refinancing in order to make loans available to a broader consumer audience.

OriginPoint currently offers a growing product suite including:

Conforming/HB Fixed, Conforming/HB ARM, Jumbo Fixed, Jumbo Arm, FHA, and VA loans.

OriginPoint originates mortgages for Compass agents’ clients, as well as the clients of any other brokerage, in connection with purchase transactions and with other customers not working with a brokerage in refinancing situations.

OriginPoint has established and maintains its own warehouse lines of credit, and it funds its own mortgage loan transactions from these independent sources.

The warehouse lines maintained by OriginPoint are collateralized by the underlying mortgages available for sale and are non-recourse to Compass.

As of December 31, 2022, OriginPoint has received license approval in 33 states.

As of December 31, 2023, OriginPoint has received license approval in 36 states and Washington D.C.

Compass Concierge

Compass Concierge is a program in which we provide home sellers access to interest-free capital to front the cost of home improvement services.

Compass Concierge is a program in which we provide home sellers access to capital to front the cost of home improvement services.

Home sellers can access funds to prepare their home for sale through Compass’ partnership with an independent third-party lender.

In addition, in early 2023, we also initiated pilots with several alternative third-party

service providers to help our agents' clients prepare their homes for listing and sale.

Through December 31, 2022, we had partnered with our agents and sellers on Compass Concierge projects totaling approximately $978 million with an average project size of approximately $29,400.

Compass Concierge homes have accounted for over $42 billion in Gross Transaction Value for Compass.

The program has successfully unlocked incremental transactions for our agents, delivered higher sale prices and reduced selling times for our agents' seller clients and also helped us attract high-performing agents to our platform.

In addition, since early 2023, we have maintained alternative home improvement programs with several third-party service providers to help our agents' clients prepare their homes for listing and sale.

Since inception and through December 31, 2023, we had partnered with our agents and sellers on Compass Concierge projects totaling approximately $1.14 billion, with an average project size of approximately $28,800.

We believe the program has successfully unlocked incremental transactions for our agents, delivered higher sale prices and reduced selling times for our agents' seller clients and also helped us attract high-performing agents to our platform.

Human Capital Management

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and bounce back with passion.

Our employees and agents use our principles to help guide their work experience and align with our mission of helping everyone find their place in the world.

As of December 31, 2022, we had 3,191 employees across our innovation hubs in New York and Seattle, as well as other locations throughout the U.S.

Our employees use our principles to help guide their work experience and align with our mission of helping everyone find their place in the world.

As of December 31, 2023, we had 2,549 employees across the U.S.

and internationally.

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We strive to offer a comprehensive benefit package and evaluate and supplement our benefits periodically.

Our benefits package includes base pay, bonus programs for selected roles, long-term equity grants, health, dental and vision insurance plans, fertility benefits, life and disability insurance benefits, paid time off (including vacation, a community service day, and paid parental leave), as well as other benefits, such as access to mental health resources, and the ability to participate in a broad-base 401K plan.

Our benefits package includes base pay, bonus programs for selected roles, long-term equity grants, health, dental and vision insurance plans, fertility benefits, life and disability insurance benefits, paid time off (including vacation, a community service day, and paid parental leave), as well as other benefits, such as access to mental health resources, an employee stock purchase plan and the ability to participate in a broad-base 401K plan.

The residential real estate and technology industries are highly competitive and fragmented.

We compete to attract and retain top talent across the agent community, engineers, and employees in all other functions in order to build the best real estate transaction platform in fulfillment of our mission.

Our business faces competition nationally and in each of the markets we serve from other technology companies and real estate brokerage firms, including a growing number of internet-based brokerages and others who operate with a variety of business models.

Our business faces competition nationally and in each of the markets we serve from other real estate brokerage firms, including a growing number of internet-based brokerages and others who operate with a variety of business models.

Some of these competitors provide similar services or products to us, including:

• providing software and technological innovation for agents, including marketing and CRM tools;

• brokering transactions for home buyers and sellers;

• providing tools to agents associated with real estate data aggregation;

• providing adjacent products associated with residential real estate transactions, such as title and escrow and mortgage origination.

• providing integrated services products associated with residential real estate transactions, such as title and escrow and mortgage origination.

Some companies may attempt to assemble various aspects of solutions that overlap with our offering, including:

• real estate brokerage firms;

• vertical SaaS technology companies;

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• real estate financial services.

• real estate brokerage firms.

We believe we compete favorably based on multiple factors, including the strength and quality of our business, and our ability to retain our agents, our integrated suite of differentiated software and product solutions that empowers agents, our platform functionality and innovative product and service offerings that facilitate real estate transactions for both buyers and sellers, our growing scale, and our premier brand.

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We (and independent sales agents affiliated with us) are also required to comply with state and local laws related to dual agency (such as where the same brokerage represents both the buyer and seller of a home) and increased regulation of dual agency representation may restrict or reduce the ability of impacted brokerages to participate in certain real estate transactions.

Antitrust litigation has been brought against other brokerages and real estate associations regarding the requirement to offer set buy–side commissions.

Antitrust litigation has been brought against us (as described in more detail in Note 11 to our consolidated financial statements included elsewhere in this Annual Report) and other brokerages and real estate associations regarding the requirement to offer set buy-side commissions.

If these cases are successful, that could affect the amount of buy-side commissions we are required to offer on listings, and how much we are able to earn on transactions where our agents represent the buyer.

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Other Real Estate Industry Rules

Aside from federal, state and local regulations, we are subject to a variety of rules promulgated by trade organizations including the NAR, state and local associations of REALTORS, and Multiple Listing Services (“MLSs”).

Aside from federal, state and local regulations, we are subject to a variety of rules promulgated by trade organizations including the NAR, state and local associations of REALTORS, and MLSs.

Generally, as members of these organizations, we are subject to their policies, bylaws, codes of ethics, and fees and rules, which govern our dealings with other members, the public, and clients as well as the manner in which we use and display the organization’s brand and services.

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Available Information

We make available free of charge on our investor relations page on our website, www.compass.com, filings we make with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and our Proxy Statements, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

We make available free of charge on our investor relations page on our website, www.compass.com, filings we make with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and our Proxy Statements, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

The SEC maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information that we file electronically with the SEC.

From time to time, we intend to announce material information to the public also through the investor relations page on our website, press releases, public conference calls, public webcasts, and our Twitter feed (@Compass), our Facebook page, our LinkedIn page, our Instagram account, our YouTube channel, and Robert Reffkin’s Twitter feed (@RobReffkin) and Instagram account (@robreffkin).

From time to time, we intend to announce material information to the public also through the investor relations page on our website, press releases, public conference calls, public webcasts, and our X (formerly Twitter) feed (@Compass), our Facebook page, our LinkedIn page, our Instagram account, our YouTube channel, and Robert Reffkin’s X feed (@RobReffkin) and Instagram account (@robreffkin).

We use these mediums, including our website, to communicate with our stockholders and the public about our company, our product candidates and other matters.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business