What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-25 · 408 added, 256 removed, 872 unchanged (43% of the section changed)

28 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“CIRE”) from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired by the Company in a purchase business combination during 2025.

We have also excluded CIRE from our audit of internal control over financial reporting.

CIRE and its consolidated subsidiaries’ total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 3% and 8%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Commissions Revenue

As described in Note 2 to the consolidated financial statements, the Company generates revenue by assisting home sellers and buyers in listing, marketing, selling and finding homes.

The Company holds the real estate brokerage license that is necessary under relevant state laws and regulations to provide brokerage services and therefore controls those services that are necessary to legally transfer real estate between home sellers and buyers.

Management concluded that its brokerage revenue contains a single performance obligation that is satisfied upon the closing of a real estate services transaction, at which point the entire transaction price is earned.

Revenue is recognized upon the closing of a real estate transaction (i.e., purchase or sale of a home) since the Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided.

The Company operates exclusively in the United States and generated revenue of $5,629.1 million for the year ended December 31, 2024, of which substantially all was generated from commissions from home sellers and buyers.

The principal considerations for our determination that performing procedures relating to revenue recognition - commissions revenue is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to revenue recognition.

Acquisition of @properties Christie’s International Real Estate - Valuation of Intangible Assets Related to @properties Brokerage Business Agent Network, Franchise Network, and Technology

As described in Note 3 to the consolidated financial statements, on January 13, 2025, the Company completed the acquisition of CIRE.

The acquisition resulted in $58.0 million of @properties brokerage business agent network intangible asset, $42.3 million of franchise network intangible asset, and $29.2 million of technology intangible asset being recorded.

The fair values of the @properties brokerage business agent network and franchise network intangible assets were determined using the multi-period excess earnings method.

Determining the fair value of these intangible assets required management to use significant judgment, estimates, and assumptions, including the discount rates, revenue growth rates, and projected margins.

The fair value of the technology intangible asset was determined using the relief-from-royalty method.

Determining the fair value of this intangible asset required management to use significant judgment, estimates, and assumptions, including the royalty rate and the revenue growth rate.

The principal considerations for our determination that performing procedures relating to the valuation of the intangible assets related to @properties brokerage business agent network, franchise network, and technology acquired in the acquisition of CIRE is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the intangible assets related to @properties brokerage business agent network, franchise network, and technology;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) the discount rates, revenue growth rates, and projected margins for the @properties brokerage business agent network and franchise network intangible assets and (b) the royalty rate and revenue growth rate for the technology intangible asset;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the commissions revenue process.

These procedures also included, among others, testing the completeness, accuracy, and occurrence of revenue recognized for commissions revenues for a sample of revenue transactions by (i) obtaining and inspecting source documents, such as customer contracts and related closing documentation, (ii) recalculating the commissions revenue, and (iii) vouching to cash receipts, as applicable.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the intangible assets related to @properties brokerage business agent network, franchise network, and technology acquired.

These procedures also included, among others, (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the intangible assets related to @properties brokerage business agent network, franchise network, and technology acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings and relief-from-royalty methods used by management;

(iv) testing the completeness and accuracy of underlying data used in the multi-period excess earnings and relief-from-royalty methods;

and (v) evaluating the reasonableness of the significant assumptions used by management related to (a) the discount rates, revenue growth rates, and projected margins for the @properties brokerage business agent network and franchise network intangible assets and (b) the royalty rate and revenue growth rate for the technology intangible asset.

Evaluating management’s assumptions related to revenue growth rates and projected margins involved considering (i) the current and past performance of the @properties brokerage and CIRE businesses;

consistency with external industry and market data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings and relief-from-royalty methods and (ii) the reasonableness of the discount rates and royalty rate assumptions.

/s/ PricewaterhouseCoopers LLP

53 unchanged sentences

General and administrative 144.3 165.2 125.7

Anywhere merger transaction and integration expenses 18.1 — —

Restructuring costs 17.1 9.7 30.4

4 unchanged sentences

Interest expense ( 9.0 ) ( 6.4 ) ( 10.8 )

Loss before income taxes and equity in loss of unconsolidated entity ( 154.4 ) ( 317.2 ) ( 590.2 )

Loss before income taxes and equity in income (loss) of unconsolidated entities ( 66.9 ) ( 154.4 ) ( 317.2 )

Benefit from income taxes 1.1 0.5 0.4

Equity in loss of unconsolidated entity ( 0.6 ) ( 3.3 ) ( 12.2 )

Equity in income (loss) of unconsolidated entities 7.1 ( 0.6 ) ( 3.3 )

Net loss ( 58.7 ) ( 154.5 ) ( 320.1 )

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(In millions, except share amounts)

Common Stock Additional Paid-in

Common Stock Additional

Capital Accumulated

Deficit Total Compass, Inc.

Deficit Total

Compass, Inc.

Stockholders’

7 unchanged sentences

Other activity related to non-controlling interests — — — — — ( 1.5 ) ( 1.5 )

Issuance of shares in connection with acquisitions 1,033,340 — 3.6 — 3.6 — 3.6

Issuance of common stock in connection with acquisitions 5,737,060 — 17.9 — 17.9 — 17.9

Issuance of common stock upon exercise of stock options 2,963,701 — 4.5 — 4.5 — 4.5

3 unchanged sentences

Issuance of common stock under the ESPP 759,835 — 2.5 — 2.5 — 2.5

Issuance of common stock in connection with the Strategic Transaction 8,957,910 — 30.0 — 30.0 — 30.0

Stock-based compensation — — 147.6 — 147.6 — 147.6

3 unchanged sentences

Other activity related to non-controlling interests — — — — — ( 0.2 ) ( 0.2 )

Issuance of shares in connection with acquisitions 5,737,060 — 17.9 — 17.9 — 17.9

Issuance of common stock in connection with acquisitions 6,583,051 — 26.6 — 26.6 — 26.6

Issuance of common stock upon exercise of stock options 4,722,210 — 10.0 — 10.0 — 10.0

Issuance of common stock upon settlement of RSUs, net of taxes withheld 16,223,306 — ( 35.0 ) — ( 35.0 ) — ( 35.0 )

Vesting of early exercised stock options — — 0.6 — 0.6 — 0.6

Issuance of common stock in connection with the 2022 Agent Equity Program 14,147,480 — 53.3 — 53.3 — 53.3

Issuance of common stock under the ESPP 721,275 — 2.2 — 2.2 — 2.2

Issuance of common stock in connection with the Strategic Transaction 8,957,910 — 30.0 — 30.0 — 30.0

Stock-based compensation — — 131.3 — 131.3 — 131.3

3 unchanged sentences

Other activity related to non-controlling interests — — — — — 2.5 2.5

Issuance of shares in connection with acquisitions 6,583,051 — 26.6 — 26.6 — 26.6

Share Consideration issued and to be issued in connection with the acquisition of Christie’s International Real Estate (Note 3) 28,440,129 — 250.1 — 250.1 — 250.1

Issuance of common stock in connection with acquisitions 1,725,784 — 14.2 — 14.2 — 14.2

Issuance of common stock upon exercise of stock options 4,388,068 — 17.4 — 17.4 — 17.4

15 unchanged sentences

Stock-based compensation 202.7 127.5 158.2

Equity in loss of unconsolidated entity 0.6 3.3 12.2

Equity in (income) loss of unconsolidated entities ( 7.1 ) 0.6 3.3

Change in acquisition-related contingent consideration ( 0.2 ) 6.0 2.6

Bad debt allowance ( 2.1 ) 4.4 7.3

Bad debt expense ( 0.6 ) ( 2.1 ) 4.4

Amortization of debt issuance costs 1.0 0.7 0.7

10 unchanged sentences

Investing Activities

Investment in unconsolidated entity ( 2.0 ) ( 1.2 ) ( 15.0 )

Investment in unconsolidated entities ( 3.9 ) ( 2.0 ) ( 1.2 )

Capital expenditures ( 13.4 ) ( 15.7 ) ( 11.2 )

5 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 61.1 ) ( 35.0 ) ( 23.5 )

Proceeds from drawdowns on Concierge credit facility 48.7 55.4 59.0

Repayments of drawdowns on Concierge credit facility ( 49.9 ) ( 62.5 ) ( 43.3 )

Proceeds from drawdowns on Concierge Facility 47.9 48.7 55.4

Repayments of drawdowns on Concierge Facility ( 48.8 ) ( 49.9 ) ( 62.5 )

Proceeds from drawdowns on Revolving Credit Facility 70.0 — 75.0

Repayments of drawdowns on Revolving Credit Facility ( 70.0 ) — ( 225.0 )

Payments of issuance costs related to Credit Facilities ( 4.1 ) — —

Proceeds from issuance of common stock in connection with the Strategic Transaction — — 32.3

1 unchanged sentence

Other 2.6 ( 0.1 ) ( 1.5 )

Net cash (used in) provided by financing activities ( 28.0 ) ( 157.4 ) 135.4

Net increase (decrease) in cash and cash equivalents 56.9 ( 195.0 ) ( 256.4 )

Net cash used in financing activities ( 50.2 ) ( 28.0 ) ( 157.4 )

Net (decrease) increase in cash and cash equivalents ( 24.8 ) 56.9 ( 195.0 )

Cash and cash equivalents at beginning of period 223.8 166.9 361.9

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Description of the Business

Compass, Inc.

(the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc.

Compass, Inc., d/b/a Compass International Holdings (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc.

The Company provides an end-to-end platform that empowers its residential real estate agents to deliver exceptional service to seller and buyer clients.

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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.

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.

The Company’s agents are independent contractors who affiliate their real estate licenses with the Company and operate their businesses on the Company’s platform under the Compass brand.

The Company generates revenue by assisting home sellers and buyers through its agents with listing, marketing, selling, and finding homes, as well as through transaction-adjacent services such as title and escrow and royalties and fees from third-party franchisees.

Substantially all of the Company’s revenue is currently derived from commissions paid by clients at the time a home sale is transacted.

Summary of Significant Accounting Policies

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The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Prior to conversion in connection with the IPO, the Company’s convertible preferred stock contractually entitled the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in the Company’s losses.

For periods in which the Company reports net losses, diluted net loss per common share attributable to Compass, Inc.

4 unchanged sentences

treasury securities .

The Company’s accounts, at times, may exceed federally insured limits.

Accounts Receivable and Allowance for Credit Losses

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Major improvements are capitalized.

Compass, Inc.

Notes to Consolidated Financial Statements

The Company capitalizes costs associated with developing software systems that are in the application development stage.

Software development costs that are incurred in the preliminary project stage and post-implementation stage are expensed as incurred.

Compass, Inc.

Notes to Consolidated Financial Statements

The useful lives of property and equipment are as follows:

12 unchanged sentences

After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations.

Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred.

Acquisition costs, consisting primarily of third-party legal, advisory and consulting fees, are expensed as incurred.

Intangible Assets

12 unchanged sentences

The Company has one reporting unit and tests goodwill for impairment at the reporting unit level.

As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether

As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary.

If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the Company’s reporting unit is less than its carrying amount, a two-step impairment test is required.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment and the fair value of the reporting unit is determined by analyzing the expected present value of

Compass, Inc.

Notes to Consolidated Financial Statements

further impairment testing is necessary.

future cash flows.

If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.

22 unchanged sentences

As principal, the Company recognizes revenue in the gross amount of consideration to which the Company expects to receive in exchange for those services.

Compass, Inc.

Notes to Consolidated Financial Statements

The Company concluded that its brokerage revenue contains a single performance obligation that is satisfied upon the closing of a real estate services transaction, at which point the entire transaction price is earned.

1 unchanged sentence

purchase or sale of a home) since the Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided.

The Company operates exclusively in the United States and generates substantially all of its revenue from commissions from home sellers and buyers.

In addition to commission revenue, the Company generates revenue through integrated services related to the home transaction such as title and escrow services which comprised an insignificant amount of the consolidated revenue for the years ended December 31, 2024, 2023 and 2022.

The Company operates primarily in the United States and generates the majority of its revenue from commissions from home sellers and buyers.

In addition to commission revenue, the Company generates

Compass, Inc.

Notes to Consolidated Financial Statements

revenue through royalties and fees from third-party franchisees and integrated services related to the home transaction such as title and escrow services which comprised an insignificant amount of the consolidated revenue for the years ended December 31, 2025, 2024 and 2023.

Management evaluated and determined that no disaggregation of revenue is necessary or appropriate.

3 unchanged sentences

Commissions and other related expense primarily consist of commissions paid to the Company’s agents, who are independent contractors to the Company, upon the closing of a real estate transaction (i.e., purchase or sale of a home), as well as stock-based compensation expense related to the Company’s Agent Equity Program (see Note 2 — “Summary of Significant Accounting Policies — Stock-Based Compensation”) and fees paid to external brokerages for client referrals, which are recognized and paid upon the closing of a real estate transaction.

The Company also charges fees to affiliated agents.

The Company also charges fees to independent sales agents.

These fees are either transaction based, where amounts are collected at the closing of a brokerage transaction, or in the form of periodic fixed fees over a defined period of time.

Fees charged to affiliated agents are recognized as a reduction to Commissions and other related expense as the reimbursements do not constitute a form of revenue nor do they constitute a reimbursement for a specific, incremental, identifiable cost for the Company.

Fees charged to the Company’s independent sales agents are recognized as a reduction to Commissions and other related expense as the reimbursements do not constitute a form of revenue nor do they constitute a reimbursement for a specific, incremental, identifiable cost for the Company.

Sales and Marketing

Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs for the Company’s regional offices, agent incentives and costs related to administering the Compass Concierge Program, including associated bad debt expenses.

Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs for the Company’s regional offices, agent recruitment and marketing incentives and costs related to administering the Compass Concierge Program, including associated bad debt expenses.

Advertising expense primarily includes the cost of marketing activities such as print advertising, online advertising and promotional items, which are expensed as incurred.

2 unchanged sentences

Operations and Support

Operations and support expenses include compensation and other personnel related expenses for employees supporting agents, third-party consulting and professional services costs, fair value adjustments to contingent consideration for the Company’s acquisitions and other related expenses.

Operations and support expenses include compensation and other personnel related expenses for employees supporting agents, affiliated franchises, transaction-adjacent services such as title and escrow, third-party consulting and professional services costs, fair value adjustments to contingent consideration for the Company’s acquisitions and other related expenses.

Research and Development

1 unchanged sentence

General and Administrative

General and administrative expense primarily consists of compensation costs for executive management and administrative employees, including finance and accounting, legal, human resources and communications, the occupancy costs for the Company’s New York headquarters and other offices supporting administrative functions, litigation charges, professional services fees, insurance expenses and talent acquisition expenses.

Compass, Inc.

Notes to Consolidated Financial Statements

Company’s New York headquarters and other offices supporting administrative functions, litigation charges, professional services fees, insurance expenses and talent acquisition expenses.

Anywhere merger transaction and integration expenses

Anywhere merger transaction and integration expenses consists of transaction costs, such as legal or investment banking fees, incurred in connection with the Company’s entry into the Anywhere Merger Agreement and costs related to preliminary integration activities.

See Note 18 — “Subsequent Events” for more information.

Restructuring

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Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 Unobservable inputs that are supported by little or no market activity, requiring the Company to develop its own assumptions.

Compass, Inc.

Notes to Consolidated Financial Statements

Level 3 Unobservable inputs that are supported by little or no market activity, requiring the Company to develop its own assumptions.

The carrying amount of the Company’s financial instruments including Cash and cash equivalents, Accounts receivable, Compass Concierge receivables, Accounts payable and Commissions payable approximate their respective fair values because of their short maturities.

4 unchanged sentences

The Company’s CODM is its Chief Executive Officer, who evaluates financial information on a consolidated basis.

Accordingly, the Company has one operating and reportable segment.

Accordingly, the Company has one operating and reportable segment, inclusive of the businesses acquired during the year, which are in the process of being integrated into the Company’s core business.

Substantially all long-lived assets and revenue are based in the United States.

6 unchanged sentences

The Company recognizes forfeitures as they occur.

The Company issues RSUs to employees, and to affiliated agents and in certain cases in connection with business combinations.

In addition to the issuance of RSUs to agents as equity compensation for the provision of services, the Company previously offered RSUs to affiliated agents through its Agent Equity Program.

The Agent Equity Program offered 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 were 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 issues Restricted Stock Units (“RSUs”) to employees, and to independent sales agents and in certain cases in connection with business combinations.

In addition to the issuance of RSUs to agents as equity compensation for the provision of services, the Company previously offered RSUs to independent sales agents through its Agent Equity Program.

The Agent Equity Program offered independent sales 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.

The Company discontinued the Agent Equity Program following the issuance of RSUs during the first quarter of 2023 related to the 2022 Agent Equity Program.

For RSUs granted in connection with the 2021 and 2022 Agent Equity Programs the Company determined the value of the stock-based compensation expense at the time the underlying commission was earned and recognized 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.

For RSUs granted in connection with the 2022 Agent Equity Programs the Company determined the value of the stock-based compensation expense at the time the underlying commission was earned and recognized 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 was recorded as a liability throughout the service periods and was reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were issued.

On a limited basis, the Company has issued stock options and RSUs that contain service, performance and market-based vesting conditions.

Such awards were valued using a Monte Carlo simulation and the underlying expense will be recognized as the associated vesting conditions are met.

For stock options, which the Company issues to employees, affiliated agents and in certain cases in connection with business combinations, 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.

For stock options, which the Company issues to employees, independent sales agents and in certain cases in connection with business combinations, 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.

During the years ended December 31, 2025, 2024 and 2023, the number of stock options granted was immaterial.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis.

The Company adopted ASU 2023-07 retrospectively as of January 1, 2024.

Refer to our significant accounting policies above for the impact of adoption.

Compass, Inc.

Notes to Consolidated Financial Statements

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures .

1 unchanged sentence

The amendments in this update are effective for public companies with fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

The Company adopted the standard on a prospective basis for the year ended December 31, 2025.

As the Company maintains a valuation allowance against its U.S.

deferred tax assets, the adoption of this standard did not have a material impact on the Company’s income tax disclosures.

New Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

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The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software.

The new guidance eliminates project stages and requires capitalizing software costs to begin when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

Assets acquired and liabilities assumed in business combinations are recognized at their acquisition date fair values.

2 unchanged sentences

Goodwill generated from all business combinations completed was primarily attributable to expected synergies from future growth and potential monetization opportunities.

Christie’s International Real Estate

On January 13, 2025, the Company closed the merger transaction (the “CIRE Merger”) contemplated by the Agreement and Plan of Merger (the “CIRE Merger Agreement”), dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate” or “CIRE”), At World Properties Principals Blocker, Inc.

(“Principals Blocker”), At World Properties IX Blocker, Inc.

(“IX Blocker”), Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative.

Pursuant to the CIRE Merger Agreement, on January 13, 2025 (the “Closing Date”), the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and CIRE and each of Principals Blocker, IX Blocker and CIRE became a wholly owned subsidiary of the Company.

The Company entered into this transaction to expand its existing brokerage and integrated services businesses in key domestic markets and to establish a presence in the high-margin franchise sector through the Christie’s International Real Estate brand.

The aggregate consideration (“Purchase Consideration”) payable pursuant to the CIRE Merger Agreement consisted of (i) $ 153.0 million (the “Cash Consideration”);

and (ii) 44.1 million shares of the Company’s Class A common stock (the “Share Consideration”).

The Share Consideration was subject to further adjustment (the “Share Consideration Adjustment”) if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Company’s Class A common stock for the 10 -trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), was (i) greater than

Compass, Inc.

Notes to Consolidated Financial Statements

$ 344.0 million, in which case the Share Consideration was to be reduced by a number of shares in an aggregate amount of up to $ 50.0 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares, or (ii) less than $ 344.0 million, in which case the Share Consideration was to be increased by a number of shares in an aggregate amount of up to $ 50.0 million (determined using the greater of $ 6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares.

In May 2025, the Company and certain sellers of the CIRE entities (the “Early Payees”) amended the terms of the Share Consideration (the “May 2025 Amendment”).

Under the May 2025 Amendment, if the Company’s stock price reached the value that would trigger the minimum number of shares to be issued under the original collar structure, the Early Payees would be paid at that time rather than at the end of the original one-year collar period (the “Early Release Collar”).

This accelerated payment could occur only (1) after the six-month anniversary and before the one-year anniversary of the Closing Date, and (2) if the spot price of the Company’s stock equals or exceeds the volume-weighted average price used to measure achievement of the target value.

If these conditions were not met, payment would occur as originally provided in the CIRE Merger Agreement.

In August 2025, the Early Release Collar was triggered and the Company delivered 28.4 million shares (the “Accelerated Share Consideration”) to the Early Payees.

Certain sellers representing approximately 26 % of the Share Consideration (the “Non-Accelerated Sellers”) chose to be excluded from the Early Release Collar and their portion of the Share Consideration was finalized on the 366th day following the closing of the CIRE Merger in January 2026.

In January 2026, the Share Consideration was finalized and the Company will deliver a total of 10.5 million shares in three equal installments in January 2026, 2027, and 2028 to the Non-Accelerated Sellers.

The total consideration transferred included $ 153.0 million in cash paid.

The total consideration transferred also included the fair value of the Share Consideration, estimated at $ 250.1 million as of the acquisition date.

The final number of shares released in connection with the Share Consideration was dependent on the Company’s share price on the 366th day following the Closing Date.

The Company utilized a Monte-Carlo simulation model to estimate the fair value of the Share Consideration as of the acquisition date.

Significant inputs to the model included the term of the Share Consideration adjustment period, the Company’s historical equity volatility, and the target share price.

Because the settlement amount was based on the future trading price of the Company’s common stock, which represents an unobservable input, the fair value measurement was classified within Level 3 of the fair value hierarchy.

The Company determined that the Share Consideration should be classified as equity as the monetary value of the obligation is not predominantly fixed and the variability in the settlement amount is based solely on changes in the Company’s own stock price.

The May 2025 Amendment provided mutual economic benefit to the Company and participating sellers, affecting only the timing of settlement within the original arrangement’s terms.

As a result, the equity classification of the Share Consideration remains unchanged, and the accounting impact was recorded entirely in Additional Paid-In Capital, with no effect on the income statement or purchase accounting.

The following table summarizes the individual elements within the calculation of total consideration transferred (in millions):

Cash Consideration $ 153.0

Share Consideration 250.1

Total consideration transferred

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the net assets acquired by the Company as of the acquisition date (in millions):

Compass, Inc.

Notes to Consolidated Financial Statements

Cash and cash equivalents $ 3.5

Accounts receivable 14.6

Other current assets 5.3

Property and equipment 11.9

Operating lease right-of-use assets 20.2

Other non-current assets 8.3

Goodwill 229.7

Intangible assets 164.1

Total assets 457.6

Accounts payable ( 2.0 )

Commissions payable ( 6.3 )

Accrued expenses and other current liabilities ( 21.4 )

Current lease liabilities ( 4.9 )

Non-current lease liabilities ( 15.4 )

Other non-current liabilities ( 4.5 )

Total liabilities ( 54.5 )

Net assets $ 403.1

The fair value of identified intangible assets and their respective useful lives as at the time of acquisition were as follows (in millions):

Trademarks $ 20.3 2 - 6 years

Acquired technology 29.2 2 years

Agent network - @properties brokerage business 58.0 7 years

Agent network - Other 14.3 7 years

Franchise network 42.3 6 years

Total intangible assets $ 164.1

The intangible assets above were accounted for using the acquisition method based on the Company’s estimate of the fair value of assets received.

The fair values of the @properties brokerage business agent network and franchise network intangible assets were determined using the multi-period excess earnings method.

Determining the fair value of these intangible assets required the Company to use significant judgment, estimates, and assumptions, including the discount rates, revenue growth rates, and projected margins.

The fair value of the technology intangible asset was determined using the relief from royalty method.

Determining the fair value of this intangible asset required the Company to use significant judgment, estimates, and assumptions, including the royalty rate and the revenue growth rate.

Intangible assets are amortized over the estimated useful lives in a pattern that most closely matches the timing of their economic benefits.

The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the monetization opportunities from the CIRE Merger’s current and future offerings and the value of the assembled workforce.

The Company has recorded the preliminary purchase price allocation as of the acquisition date and finalized the purchase accounting in January 2026.

There were no material adjustments during the measurement period that had a corresponding offset to goodwill.

Any subsequent adjustments will be recorded to the consolidated statements of operations.

Due to the delivery of the Accelerated Share Consideration, $ 145.3 million of the goodwill recorded for this acquisition is deductible for tax purposes.

Once the remaining Share Consideration is issued, the amount of tax-deductible goodwill may increase to approximately $ 211.0 million.

These amounts are not expected to have an impact on the income tax provision while the Company maintains a full valuation allowance on its U.S.

deferred tax assets.

Compass, Inc.

Notes to Consolidated Financial Statements

In connection with the CIRE Merger, the Company incurred approximately $ 5.4 million in transaction-related costs, of which $ 3.4 million are legal fees and $ 2.0 million are professional and general consulting fees, which were expensed as incurred.

$ 4.3 million of these transaction-related expenses were incurred during the year ended December 31, 2024 and $ 1.1 million were incurred during the year ended December 31, 2025.

These expenses have been presented within the General and administrative line of the consolidated statements of operations.

Pro Forma Information

The acquired entity’s results have been included in the Company’s consolidated financial statements from the CIRE Merger date onward.

The first column in the table below reflects the acquired entity’s actual results post-acquisition, while the second and third columns present the Company’s pro forma results as if the CIRE Merger had occurred on January 1, 2024 (in millions):

Actuals Pro Forma

January 13, 2025 through

December 31, 2025 Year Ended December 31, 2025 Year Ended December 31, 2024

Revenue $ 567.1 $ 6,969.8 $ 6,143.3

Net income (loss) 20.8 ( 68.9 ) ( 157.8 )

The pro forma information depicted in the second and third columns above does not purport to represent what the actual results of operations of the Company would have been had the CIRE Merger actually occurred on January 1, 2024, nor does it purport to predict the results of operations for future periods.

The unaudited pro forma results include adjustments for additional amortization of acquired finite-lived intangible assets and the related tax effects assuming the CIRE Merger occurred on January 1, 2024.

Other Acquisitions

During the year ended December 31, 2025, the Company completed the acquisitions of 100 % ownership in a residential real estate brokerage and a title insurance and escrow settlement business.

In addition, the Company purchased the assets of three smaller residential real estate brokerages and a separate title insurance and escrow settlement business.

The purpose of these acquisitions was to expand the Company’s brokerage and title and escrow footprint in key domestic markets.

The Company has accounted for these acquisitions as business combinations.

The consideration for the acquisitions completed during the year ended December 31, 2025 is comprised of $ 29.5 million of cash paid at or near closing, net of cash acquired, $ 10.5 million in the Company’s Class A common stock, and additional amounts contingent on achieving earnings-based targets through 2027.

The future consideration amounts were recorded within Accrued expenses and other current liabilities and Other non-current liabilities in the consolidated balance sheet.

The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of $ 16.4 million of goodwill and $ 24.8 million of customer relationships, which is being amortized over the estimated useful life of approximately 4 years to 6 years.

The Company has recorded preliminary purchase price allocations as of each acquisition date and expects to finalize them within each acquisition’s applicable one-year measurement period.

Adjustments during the measurement periods will be offset against goodwill.

After the applicable measurement periods end, any further adjustments will be reflected in the consolidated statements of operations.

Approximately $ 5.1 million of the goodwill recorded during the year ended December 31, 2025 is deductible for tax purposes.

The amount of tax-deductible goodwill may increase in the future to approximately $ 20.1 million dependent on the payment of certain contingent consideration 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 U.S.

deferred tax assets.

Pro forma revenue and earnings for these acquisitions has not been presented because they are not material to the Company’s consolidated revenue and results of operations.

Compass, Inc.

Notes to Consolidated Financial Statements

2024 Acquisitions

2 unchanged sentences

The Company has accounted for these acquisitions as business combinations.

The consideration for the acquisitions completed during the year ended December 31, 2024 is comprised of $ 26.1 million in the Company's Class A common stock, $ 21.3 million of cash paid at or near closing, net of cash acquired, an additional $ 2.7 million to be paid in cash and the Company's Class A common stock at a later date and an estimated $ 7.1 million of additional Class A common stock or cash that may be paid contingent on certain earnings-based targets being met at various payment dates through 2027.

The consideration for the acquisitions completed during the year ended December 31, 2024 is comprised of $ 26.1 million in the Company’s Class A common stock, $ 21.3 million of cash paid at or near closing, net of cash acquired, an additional $ 2.7 million paid in cash and the Company’s Class A common stock at a later date and an estimated $ 7.1 million of additional Class A common stock or cash that may be paid contingent on certain earnings-based targets being met at various payment dates through 2027.

Payments in excess of the original estimate may impact the Company’s statement of operations in future periods.

12 unchanged sentences

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 transactions.

Any adjustments during the measurement period would have a corresponding offset to goodwill.

Upon conclusion of the

Compass, Inc.

Notes to Consolidated Financial Statements

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 2024 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.

14 unchanged sentences

The amount of tax-deductible goodwill may increase in the future to approximately $ 20.7 million dependent on the payment of certain contingent consideration, holdback 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 U.S.

deferred tax assets.

Pro forma revenue and earnings for 2023 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.

2022 Acquisitions

During the year ended December 31, 2022, the Company completed the acquisition of 100 % of the ownership interests in a title insurance and escrow settlement services company and acquired the assets of a small real estate brokerage.

The purpose of these acquisitions was to expand the Company’s title and escrow offerings and to expand its existing brokerage business in key domestic markets.

The Company has accounted for these acquisitions as business combinations.

The total consideration for acquisitions completed during the year ended December 31, 2022 comprised $ 12.1 million of cash, net of cash acquired, $ 0.8 million in Class A common stock of the Company and an estimated $ 3.6 million of additional cash that may be paid contingent on certain earnings-based targets being met through 2029.

Future cash payments were recorded as Accrued expenses and other current liabilities and Other non-current liabilities in the consolidated balance sheets.

The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of:

customer relationships of $ 8.1 million;

trademark intangible assets of $ 1.1 million;

$ 1.0 million of other current and non-current assets;

and $ 2.5 million of 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 $ 8.8 million.

Acquired intangible assets are being amortized over their estimated useful lives of approximately 3 to 5 years.

Compass, Inc.

Notes to Consolidated Financial Statements

Approximately $ 0.3 million of the goodwill recorded during the year ended December 31, 2022 is deductible for tax purposes.

The amount of tax-deductible goodwill may increase in the future to approximately $ 1.6 million dependent on the payment of certain contingent consideration 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 U.S.

amounts are not expected to have an impact on the income tax provision while the Company maintains a full valuation allowance on its U.S.

deferred tax assets.

7 unchanged sentences

Opening balance $ 31.0 $ 20.9 $ 14.0

Acquisitions 7.1 14.0 3.6

Fair value losses (gains) included in net loss 6.0 2.6 ( 2.2 )

Acquisitions and measurement period adjustments 5.5 7.1 14.0

Changes in fair value included in net loss ( 0.2 ) 6.0 2.6

Payments ( 4.9 ) ( 3.0 ) ( 9.7 )

Closing balance $ 31.4 $ 31.0 $ 20.9

Other Acquisition Related Compensation

In connection with the Company’s acquisitions, a portion of the cash and equity consideration amounts paid or to be paid to the selling shareholders are subject to clawback and forfeiture dependent on certain employees and agents providing continued service to the Company.

Accordingly, this consideration is accounted for as compensation for future services and the Company recognizes the expenses over the underlying retention periods.

Other Acquisition-Related Arrangements

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 periods.

For the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 1.6 million, $ 0.2 million and $ 0.6 million, respectively, in compensation expense within Operations and support in the accompanying consolidated statements of operations related to these arrangements.

As of December 31, 2024, the Company does not expect to make any further material payments under these arrangements.

Joint Venture

In July 2021, the Company and Guaranteed Rate, Inc.

(“Guaranteed Rate”) formed a joint venture, OriginPoint, LLC (“OriginPoint”).

Equity Method Investments

The Company and Guaranteed Rate, Inc.

(“Guaranteed Rate”) maintain a joint venture, OriginPoint, LLC (“OriginPoint”).

OriginPoint was formed for the purpose of conducting a mortgage origination and lending business and providing related services for the Company’s real estate brokerage clients, as well as the clients of any other brokerage 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 broad consumer audience.

2 unchanged sentences

The Company made capital contributions to OriginPoint of $ 3.0 million and $ 2.0 million, respectively, during the years ended December 31, 2025 and 2024.

The Company accounts for OriginPoint as an equity method investment and records its equity earnings or losses related to OriginPoint within Equity in loss of unconsolidated entity in the consolidated statements of operations.

The Company accounts for OriginPoint as an equity method investment and records its equity earnings or losses related to OriginPoint within Equity in income (loss) of unconsolidated entities in the consolidated statements of operations.

The Company’s investment in OriginPoint had a balance of $ 14.4 million at December 31, 2025 and is included within Other non-current assets on the accompanying consolidated balance sheet.

The Company recorded equity losses of $ 0.6 million, $ 3.3 million and $ 12.2 million during the years ended December 31, 2024, 2023 and 2022, respectively.

No dividends were received by the Company during the years ended December 31, 2024 and 2023.

Compass, Inc.

Notes to Consolidated Financial Statements

The Company recorded equity income of $ 5.7 million during the year ended December 31, 2025, and equity loss $ 0.6 million and $ 3.3 million during the years ended 2024 and 2023, respectively.

No dividends were received by the Company from OriginPoint during the years ended December 31, 2025 and 2024.

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.

Compass, Inc.

Notes to Consolidated Financial Statements

The Company’s other equity method investments had a balance of $ 2.8 million at December 31, 2025, which is included within Other non-current assets on the accompanying consolidated balance sheet.

During the year ended December 31, 2025, the Company made capital contributions to other equity method investments of $ 0.9 million and recognized equity income of $ 1.4 million.

The Company additionally received $ 3.6 million of dividends from these other equity method investments during the year ended December 31, 2025.

Fair Value of Financial Assets and Liabilities

The Company’s cash and cash equivalents of $ 223.8 million and $ 166.9 million as of December 31, 2024 and 2023, respectively, are held in cash, money market funds and U.S.

treasury securities which are classified as Level 1 within the fair value hierarchy because they are valued using quoted prices in active markets.

The Company’s cash and cash equivalents of $ 199.0 million and $ 223.8 million as of December 31, 2025 and 2024, 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.

12 unchanged sentences

The Company has not presented certain quantitative information regarding the unobservable inputs utilized to measure contingent consideration liabilities given changes in these assumptions have not and are not expected to materially impact the Company’s operating results during 2025 or in future periods.

Changes in the fair value of Level 3 financial liabilities are included within Operations and support in the consolidated statements of operations (see Note 3 – “Acquisitions”).

Changes in the fair value of Level 3 financial liabilities are included within Operations and support expense in the consolidated statements of operations (see Note 3 – “Acquisitions”).

Compass, Inc.

Notes to Consolidated Financial Statements

Property and Equipment, Net

6 unchanged sentences

Property and equipment, net $ 113.8 $ 125.5

Compass, Inc.

Notes to Consolidated Financial Statements

The Company recorded depreciation expense related to property and equipment of $ 40.2 million, $ 47.5 million and $ 57.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, which includes $ 8.5 million, $ 11.6 million and $ 12.3 million, respectively, related to internally–developed software.

4 unchanged sentences

Acquisitions 24.4

Measurement period adjustments ( 0.6 )

Balance at December 31, 2024

17 unchanged sentences

Total $ 401.5 $ ( 208.2 ) $ 193.3

Compass, Inc.

Notes to Consolidated Financial Statements

December 31, 2024

13 unchanged sentences

Amortization expense was $ 72.5 million, $ 34.9 million and $ 32.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Compass, Inc.

Notes to Consolidated Financial Statements

Estimated future amortization expense for finite-lived intangible assets as of December 31, 2025 is as follows (in millions):

Thereafter 11.7

Other Current Assets and Accrued Expenses and Other Current Liabilities

Other current assets consisted of the following (in millions):

Prepaid agent incentives $ 9.4 $ 22.2

Other 23.8 32.3

Other current assets $ 33.2 $ 54.5

Total $ 193.0

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in millions):

Accrued compensation $ 61.0 $ 51.1

Accrued Litigation Charge 28.8 —

Accrued antitrust-related litigation charge (Note 11) — 28.8

Other 77.0 60.4

1 unchanged sentence

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, which was subsequently amended on July 29, 2021, August 5, 2022 and August 4, 2023.

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 a portion of the Company’s Compass Concierge Program.

2 unchanged sentences

The two year commitment fee is 0.35 % if the Concierge Facility is utilized greater than 50 % and 0.50 %, if the Concierge Facility is utilized less than 50 %.

On August 4, 2023, the revolving period under the Concierge Facility was extended to August 3, 2025.

On August 1, 2025, the revolving period under the Concierge Facility was extended to July 31,

Compass, Inc.

Notes to Consolidated Financial Statements

The interest rate on the drawn down balance of the Concierge Facility was 6.57 % as of December 31, 2025.

2 unchanged sentences

The Concierge Facility contains customary affirmative covenants, such as financial statement reporting requirements, as well as covenants that restrict the Company’s 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.

Compass, Inc.

Notes to Consolidated Financial Statements

reduced to zero and the Company will be required to repay any outstanding loans under the Concierge Facility.

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 December 31, 2025, the Company was in compliance with the covenants under the Concierge Facility.

2 unchanged sentences

2021 Revolving Credit Facility

In March 2021, the Company entered into a Revolving Credit and Guaranty Agreement (the “Revolving Credit Facility”) with Barclays Bank PLC, as administrative agent and as collateral agent (the "Administrative Agent"), and certain other lenders, which was subsequently amended on May 1, 2023.

The Revolving Credit Facility provides for a $ 350.0 million revolving credit facility, subject to the terms and conditions of the Revolving Credit Facility.

The Revolving Credit Facility also includes a letter of credit sublimit which is the lesser of (i) $ 125.0 million and (ii) the aggregate unused amount of the revolving commitments then in effect under the Revolving Credit Facility.

The 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 assets of the Company and the Company’s subsidiary guarantors.

In March 2021, the Company entered into a Revolving Credit and Guaranty Agreement (the “2021 Revolving Credit Facility”) with Barclays Bank PLC, as administrative agent and as collateral agent, and certain other lenders, which was subsequently amended on May 1, 2023.

The 2021 Revolving Credit Facility provided for a $ 350.0 million revolving credit facility, subject to the terms and conditions of the Revolving Credit Facility.

The 2021 Revolving Credit Facility also included a letter of credit sublimit which is the lesser of (i) $ 125.0 million and (ii) the aggregate unused amount of the revolving commitments then in effect under the 2021 Revolving Credit Facility.

The Company’s obligations under the 2021 Revolving Credit Facility were guaranteed by certain of the Company’s subsidiaries and were secured by a first priority security interest in substantially all of the assets of the Company and the Company’s subsidiary guarantors.

Borrowings under the 2021 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 rate per annum equal to the secured overnight financing rate (“SOFR”) plus a margin of 1.50 %.

The base rate is equal to the highest of (a) the prime rate as quoted by The Wall Street Journal, (b) the federal funds effective rate plus 0.50 %, (c) the SOFR term rate for a one-month interest period plus 1.00 % and (d) 1.00 %.

The SOFR term rate is determined by the Administrative Agent as the forward-looking term rate plus a 0.10 % adjustment.

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 type, including a commitment fee on a quarterly basis based on amounts committed but unused under the Revolving Credit Facility of 0.175 % per annum, fees associated with letters of credit and administrative and arrangement fees.

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 in whole or in part, under the Revolving Credit Facility without premium or penalty prior to maturity.

As of December 31, 2024, there were no borrowings outstanding under the Revolving Credit Facility and outstanding letters of credit under the Revolving Credit Facility totaled approximately $ 53.8 million.

The Revolving Credit Facility contains customary representations, warranties, financial covenants applicable to the Company and its restricted subsidiaries, affirmative covenants, such as financial statement reporting requirements, and negative covenants which restrict their 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 (i) the Company maintains liquidity of at least $ 150.0 million as of the last day of each fiscal quarter and each date of a credit extension and (ii) the Company’s consolidated total revenue as of the last day of each fiscal quarter be equal to or greater than the specified amount corresponding to such period.

Minimum liquidity is defined as unused amounts under the $ 350.0 million Revolving Credit Facility plus the unrestricted cash of Compass and its restricted subsidiaries.

The minimum required consolidated revenue threshold for the trailing four fiscal quarters is $ 4,668.0 million during 2024 and thereafter.

As of December 31, 2024, the Company was in compliance with the financial 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 base rate was equal to the highest of (a) the prime rate as quoted by The Wall Street Journal, (b) the federal funds effective rate plus 0.50 %, (c) the SOFR term rate for a one-month interest period plus 1.00 % and (d) 1.00 %.

The SOFR term rate was determined as the forward-looking term rate plus a 0.10 % adjustment.

The Company was also obligated to pay other customary fees for a credit facility of this type, including a commitment fee on a quarterly basis based on amounts committed but unused under the 2021 Revolving Credit Facility of 0.175 % per annum, fees associated with letters of credit and administrative and arrangement fees.

The principal amount, if any, was payable in full in March 2026, unless earlier terminated or extended.

In November 2025, the Company terminated the 2021 Revolving Credit Facility.

Prior the termination of the 2021 Revolving Credit Facility, the Company was in compliance with all related financial covenants.

2025 Revolving Credit Facility

In November 2025, the Company entered into a Revolving Credit and Guaranty Agreement (the “2025 Revolving Credit Facility”) with Morgan Stanley Senior Funding, Inc., as administrative agent and as collateral agent and a syndicate of other lenders.

Under the 2025 Revolving Credit Facility, the Company obtained revolving commitments from lenders in an initial amount of $ 250 million.

The lenders’ commitments under the 2025 Revolving Credit Facility automatically increased by $ 250 million to an aggregate amount of $ 500 million upon the completion of the merger with Anywhere Real Estate Inc.

in January 2026 (the “Anywhere Merger”).

The 2025 Revolving Credit Facility also includes a letter of credit sublimit of $ 100 million (which automatically increased to $ 170 million to the extent the Anywhere Merger is consummated).

The Company’s obligations under the 2025 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 assets of the Company

Compass, Inc.

Notes to Consolidated Financial Statements

and the Company’s subsidiary guarantors, subject to customary exceptions.

See Note 18 — “Subsequent Events” for further information regarding the Anywhere Merger.

Borrowings under the 2025 Revolving Credit Facility bear interest at Term SOFR plus an applicable rate between 1.50 % and 2.25 % per annum, based on a pricing grid in which the levels are set based on the Company’s Total Net Leverage Ratio (as defined in the underlying agreement).

The Company is also obligated to pay other customary fees under the 2025 Revolving Credit Facility, including (i) a commitment fee to the lenders on amounts they have committed, which are unused, of between 0.175 % and 0.35 % per annum, based on a pricing grid in which the levels are set based on the Company’s Total Net Leverage Ratio, (ii) fees associated with the issuance of letters of credit, (iii) administrative agent fees, and (iv) upfront fees.

The maturity date of the 2025 Revolving Credit Facility is November 17, 2030.

In the event there is an aggregate principal amount outstanding on certain of Anywhere’s second lien and unsecured notes that exceeds $ 50 million on the date that is 91 days prior to the respective final stated maturity dates of such notes, the 2025 Revolving Credit Facility is subject to an earlier springing maturity on such 91st day.

The Company does not expect such early maturity to occur as the Company currently intends to repay or refinance such notes.

The Company has the option to repay the Company’s borrowings, and to permanently reduce the commitments in whole or in part, under the 2025 Revolving Credit Facility without premium or penalty.

As of December 31, 2025, there were no borrowings outstanding under the 2025 Revolving Credit Facility and outstanding letters of credit under the 2025 Revolving Credit Facility totaled $ 30.9 million.

The 2025 Revolving Credit Facility contains customary representations, warranties, affirmative covenants, and negative covenants.

The negative covenants restrict the Company’s and its restricted subsidiaries’ ability to, among other things, incur liens and indebtedness, make certain investments, declare and pay dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions.

The financial covenant under the 2025 Revolving Credit Facility requires that following the consummation of the Anywhere Merger, the Company maintains a Total Net Leverage Ratio level of no greater than 5.00 to 1.00, stepping down to 4.50 to 1.00 on December 31, 2027 and 4.25 to 1.00 and December 31, 2028 (with no requirement to maintain a minimum Liquidity level or a minimum Consolidated Total Revenue level).

As of December 31, 2025, the Company was in compliance with the covenants under the 2025 Revolving Credit Facility.

The Company incurred debt issuance costs of $ 2.2 million in connection with the 2025 Revolving Credit Facility, which are included in Other non-current assets in the 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.

The components of lease costs for operating leases for the years ended December 31, 2025, 2024 and 2023 was as follows (in millions):

9 unchanged sentences

For the years ended December 31, 2025, 2024 and 2023, the Company recognized lease costs, net of sublease income, of $ 139.7 million, $ 131.4 million and $ 138.5 million, respectively, in Sales and marketing expenses and $ 3.5 million, $ 3.8 million and $ 7.3 million, respectively, in General and administrative expenses in the consolidated statements of operations.

Compass, Inc.

Notes to Consolidated Financial Statements

Supplemental cash flow information related to leases was as follows (in millions):

8 unchanged sentences

Weighted average discount rate 6.1 % 5.7 %

Compass, Inc.

Notes to Consolidated Financial Statements

Future undiscounted lease payments for the Company’s operating lease liabilities are as follows as of December 31, 2025 (in millions):

12 unchanged sentences

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.

Real Estate Commission Antitrust Litigation

On March 21, 2024, the Company entered into a settlement agreement to resolve the Gibson and Umpa cases on a nationwide basis.

The settlement resolves all claims in these cases and similar claims in other lawsuits alleging claims on behalf of sellers on a nationwide basis against the Company and its subsidiaries (collectively, the “Claims”) and releases the Company, its subsidiaries and affiliated agents from the Claims.

Under the settlement agreement, the Company agreed to pay $ 57.5 million and make certain changes to its business practices.

The Company’s motion for final approval of the settlement agreement was granted on October 31, 2024 and the settlement agreement is now effective.

The final approval ruling was appealed by certain class members that objected to the settlement, including but not limited to plaintiffs in the March and Friedman matters, referenced below, which are now pending before the United States Circuit Court of Appeals for the Eighth Circuit.

The objecting parties must file their briefs by March 20, 2025.

Responses, including those by the Company, are due by April 21, 2025.

The objecting parties may file any replies by May 12, 2025.

Two of the putative class action lawsuits, March v.

Compass, Inc.

Notes to Consolidated Financial Statements

Real Estate Commission Sell-Side Antitrust Litigation

The Company and its subsidiaries have been named as defendants in lawsuits that allege, among other things, violations of Section 1 of the Sherman Act, 15 U.S.C.

§ 1 (the “Antitrust Lawsuits”).

Four of the putative class action lawsuits, captioned Gibson, et al.

National Association of Realtors, et al., No.

4:23-cv-00788-FJG (W.D.

Mo.) (“Gibson”), filed on October 31, 2023, Grace v.

National Association of Realtors, et al., No.

3:23-cv-06352 (N.D.

Cal.) (“Grace”), filed on December 8, 2023, Fierro, et al.

National Association of Realtors, et al., Case No.

2:24-cv-00449 (C.D.

Cal.) (“Fierro”), filed on January 17, 2024, and Whaley v.

Arizona Association of Realtors, Case No.

2:24-cv-00105 (D.

Nev.) (“Whaley”), filed on January 15, 2024, name the Company as a defendant and allege, among other things, that certain trade associations, including the National Association of Realtors, multiple listing services, and real estate brokerages engaged in a continuing contract, combination, or conspiracy to unreasonably restrain interstate trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C.

§ 1 by entering into a continuing agreement to require sellers of residential property to make inflated payments to brokers representing buyers.

National Association of Realtors, et al., 4:23-cv-00945 (W.D.

Mo.) (“Umpa”), filed on December 27, 2023, was consolidated into the Gibson matter on April 23, 2024.

National Association of Realtors, et al., No.

2:24-cv-00340 (D.

Nev.) (“Boykin”), filed on February 16, 2024, was terminated and consolidated into the Whaley matter on March 20, 2024.

The plaintiffs in the Gibson and Umpa matters allege a nationwide scope, while the Grace and Fierro matters are limited in scope to Northern California and Southern California, respectively and the Whaley matter is limited in scope to Nevada.

Two putative class action lawsuits, March v.

Real Estate Board of New York, et al., No.

4 unchanged sentences

The Friedman and March matters also allege violations of the Donnelly Act, N.Y.

Compass, Inc.

Notes to Consolidated Financial Statements

§ 340, and the March matter further seeks injunctive relief pursuant to Section 16 of the Clayton Act, 15 U.S.C.

The Friedman and March matters are limited in scope to the New York City boroughs of Brooklyn, and Manhattan, respectively.

The March and Friedman matters are stayed pending the appeal of the final approval of the settlement agreement.

One putative class action lawsuit, QJ Team, LLC, et al.

7 unchanged sentences

Tx.) (“Martin”), filed on December 14, 2023, was consolidated into the QJ Team matter on March 21, 2024.

The QJ Team matter is stayed pending the appeal of the final approval of the settlement agreement.

One putative class action lawsuit, Peiffer v.

4 unchanged sentences

On April 3, 2024, the Company announced that it had entered into an agreement to acquire Latter & Blum.

The Peiffer matter is stayed pending the appeal of the final approval of the settlement agreement.

National Ass’n of Realtors et al., Case No.

1:24-cv-02371 (S.D.N.Y.) (“Wang”), an individual lawsuit filed on March 28, 2024, named the Company as a defendant and alleges, among other things, that certain trade associations, including the National Association of Realtors and the Real Estate Board of New York, and a number of real estate brokerages engaged in a continuing contract, combination, or conspiracy to unreasonably restrain interstate trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C.

§ 1 by entering into a continuing agreement to require sellers of residential property to make inflated payments to brokers representing buyers.

The Company entered an agreement with the plaintiff in Wang to settle the matter on December 27, 2024 and the parties filed a stipulation of dismissal with prejudice on December 31, 2024.

The Company does not expect the terms of the proposed settlement of the Gibson and Umpa cases, as well as the resolution of any of the stated matters or the process of moving to enforce the settlement nationwide to have a material impact on its future operations.

The Company and its subsidiaries have been named as defendants in eight putative class action lawsuits and one individual lawsuit (the "Antitrust Lawsuits") that allege, among other things, violations of Section 1 of the Sherman Act, 15 U.S.C.

Four of the putative class action lawsuits, captioned Gibson, et al.

National Association of Realtors, et al., No.

4:23-cv-00788-FJG (W.D.

Mo.) (“Gibson”), filed on October 31, 2023, Grace v.

National Association of Realtors, et al., No.

3:23-cv-06352 (N.D.

Cal.) (“Grace”), filed on December 8, 2023, Fierro, et al.

National Association of Realtors, et al., Case No.

2:24-cv-00449 (C.D.

Cal.) (“Fierro”), filed on January 17, 2024, and Whaley v.

Arizona Association of Realtors, Case No.

2:24-cv-00105 (D.

§ 1 by entering into a continuing agreement to require sellers of residential property to make inflated payments to brokers representing buyers.

National Association of Realtors, et al., 4:23-cv-00945 (W.D.

Mo.) (“Umpa”), filed on December 27, 2023, was consolidated into the Gibson matter on April 23, 2024.

National Association of Realtors, et al., No.

2:24-cv-00340 (D.

Nev.) (“Boykin”), filed on February 16, 2024, was terminated and consolidated into the Whaley matter on March 20, 2024.

The Grace, Fierro and Whaley matters are stayed pending the appeal of the final approval of the settlement agreement.

During the three months ended March 31, 2024, the Company recognized an expense of $ 57.5 million within General and administrative expense in the consolidated statements of operations in connection with the settlement agreement.

On March 21, 2024, the Company entered into a settlement agreement to resolve the Gibson and Umpa cases on a nationwide basis.

Under the settlement agreement, the Company agreed to pay $ 57.5 million and make certain changes to its business practices.

The Company’s motion for final approval of the settlement agreement was granted on October 31, 2024 and the settlement agreement is now effective.

The final approval ruling was appealed by certain class members that objected to the settlement, including but not limited to plaintiffs in the March and Friedman matters, referenced above, which are now pending before the United States Circuit Court of Appeals

Compass, Inc.

Notes to Consolidated Financial Statements

the settlement was paid during the three months ended June 30, 2024.

The remaining 50 % is expected to be paid during the second quarter of 2025.

for the Eighth Circuit.

The objecting parties filed their briefs on April 21, 2025.

Responses, including those by the Company, were filed on July 28, 2025.

The objecting parties may file any replies thereafter.

The Gibson, Grace, Fierro, Whaley, Umpa, March, Friedman, QJ, and Peiffer cases are stayed pending the appeal of the final approval of the settlement agreement.

The Company does not expect the terms of the proposed settlement of the Gibson and Umpa cases or the process of moving to enforce the settlement nationwide to have a material impact on its future operations.

50 % of the settlement was paid during the three months ended June 30, 2024 and the remaining 50 % was paid during the three months ended June 30, 2025.

Batton, et al.

5 unchanged sentences

§ 1 and state law antitrust statutes, violated state consumer protection statutes, and were unjustly enriched by industry rules that set the manner by which buyer’s brokers are compensated.

The allegations in Batton are substantially similar to those contained in the case captioned Batton, et al.

The allegations in Batton II are substantially similar to those contained in the case captioned Batton, et al.

National Association of Realtors, et al., No.

4 unchanged sentences

The motion to dismiss remains pending before the Court.

The Court also granted the Company’s motion to file supplemental authority on recent favorable rulings in similar cases.

The Company is unable to predict the outcome of Batton II or to reasonably estimate the possible loss or range of loss, if any, arising from the claim asserted therein.

2 unchanged sentences

The Company has irrevocable letters of credit with various financial institutions, primarily related to security deposits for leased facilities.

As of December 31, 2024 and 2023, the Company was contingently liable for $ 53.8 million and $ 44.4 million, respectively, under these letters of credit.

As of December 31, 2024, $ 53.8 million of these letters of credit were collateralized by the Revolving Credit Facility.

As of December 31, 2023, $ 43.8 million and $ 0.6 million of these letters of credit were collateralized by the Revolving Credit Facility and the Company's cash and cash equivalents, respectively.

As of December 31, 2025 the Company was contingently liable for $ 30.9 million under irrevocable letters of credit issued under the 2025 Revolving Credit Facility.

As of December 31, 2024 the Company was contingently liable for $ 53.8 million under irrevocable letters of credit issued under the 2021 Revolving Credit Facility.

These letters of credit are primarily related to security deposits for leased facilities

Escrow and Trust Deposits

7 unchanged sentences

As of December 31, 2025 and 2024, there are no shares of the Company’s preferred stock issued and outstanding.

Compass, Inc.

Notes to Consolidated Financial Statements

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.

2 unchanged sentences

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.

Compass, Inc.

Notes to Consolidated Financial Statements

In April 2021, the Company adopted a restated certificate of incorporation and changed its authorized capital stock to consist of 12.5 billion shares of Class A common stock, 1.25 billion shares of Class B common stock and 100 million shares of Class C common stock.

22 unchanged sentences

The liquidation rights of the holders of Class A and Class B common stock are subject to and qualified by the rights and preferences of the holders of convertible preferred stock.

Compass, Inc.

Notes to Consolidated Financial Statements

Each share of Class A common stock may be converted to one share of Class B common stock at the option of the holder.

4 unchanged sentences

such conversion shall be deemed to have been made immediately prior to the closing date of the public offering.

Compass, Inc.

Notes to Consolidated Financial Statements

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.

15 unchanged sentences

Effective January 1, 2026, the number of shares available for future grants was increased by an additional 28.2 million shares as a result of the annual increase provision described above.

In connection with the Anywhere Merger, the Realogy Holdings Corp.

Amended and Restated 2012 Long-Term Incentive Plan (the “Former Anywhere Plan”), the Anywhere Real Estate Inc.

Third Amended and Restated 2018 Long-Term Incentive Plan (the “Anywhere Plan”) and the Realogy Holdings Corp.

Non-Plan Inducement Stock Option Agreement (the “Inducement Stock Option Agreement”), as well as certain equity awards that were granted and outstanding under the Former Anywhere Plan, the Anywhere Plan and Inducement Stock Option Agreement were assumed by the Company (such awards, the “Assumed Awards”) and converted into equity awards in respect of 14.2 million shares of the

Compass, Inc.

Notes to Consolidated Financial Statements

Company’s Class A common stock, par value $ 0.00001 per share.

In addition, 9.8 million shares remaining available for future issuance under the Anywhere Plan were assumed by the Registrant and added to the number of shares of Common Stock available for issuance under the Compass, Inc.

2021 Equity Incentive Plan, which was amended on January 9, 2026 (as amended, the “Registrant Stock Plan,” and such shares, the “Added Shares”).

See Note 18 — “Subsequent Events” for further information regarding the Anywhere Merger.

2021 Employee Stock Purchase Plan

3 unchanged sentences

As of December 31, 2025, 17.5 million shares of Class A common stock remain available for grant under the ESPP.

The Company has elected to forgo the annual increase to the number of authorized shares available for grant under the ESPP that would have occurred on January 1, 2025.

Effective January 1, 2026, the authorized shares increased by 5.5 million shares as a result of the annual increase provision described above.

The ESPP permits employees to purchase shares of the Company’s Class A common stock through payroll deductions accumulated during six-month offering periods up to a maximum value of $ 12,500 per offering period.

The offering periods begin each February and August, or such other period determined by the Compensation Committee.

Compass, Inc.

Notes to Consolidated Financial Statements

purchase date, eligible employees may purchase the shares at a price per share equal to 85 % of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP.

On each purchase date, eligible employees may purchase the shares at a price per share equal to 85 % of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP.

During the year ended December 31, 2025, the Company issued 0.6 million shares of Class A common stock under the ESPP.

5 unchanged sentences

The fair value of each stock option award is estimated on the grant date using the Black-Scholes option pricing model.

There were no options granted for the year ended December 31, 2025.

For the years ended December 31, 2024 and 2023 stock options granted were not material to the Company’s financial statements.

6 unchanged sentences

33,683,424 $ 6.02 4.4 $ 30.2

Granted 970 7.07

Exercised ( 4,388,068 ) 3.96

4 unchanged sentences

27,996,364 $ 6.23 3.6 $ 128.1

Compass, Inc.

Notes to Consolidated Financial Statements

(1) The aggregate intrinsic values have been calculated using the Company’s closing stock prices of $ 10.57 and $ 5.85 as of December 31, 2025 and December 31, 2024, respectively.

2 unchanged sentences

As of December 31, 2025, unrecognized compensation costs totaled $ 1.9 million and are expected to be recognized over a weighted-average period of 0.9 years.

Compass, Inc.

Notes to Consolidated Financial Statements

Restricted Stock Units

10 unchanged sentences

(1) During the year ended December 31, 2025, the Company net settled all RSUs through which it issued an aggregate of 23.3 million shares of Class A common stock and withheld an aggregate of 8.1 million shares of Class A common st ock to satisfy $ 61.1 million of tax withholding obligations on behalf of the Company’s employees.

As of December 31, 2024, all unvested RSUs had total compensation costs of $ 102.9 million not yet recognized and is expected to be recognized over a weighted-average period of 2.2 years.

As previously disclosed, prior to 2022 the Company generally provided share-based compensation to its employees through grants that vested ratably over four-year periods.

Beginning in 2022, the Company changed the method of its employee grants to a series of four consecutive annual grants (each at 25 % of the previous four-year value) that each vest over the one-year period following grant.

As of December 31, 2024, the Company has remaining commitments to its employees related to this methodology to grant an aggregate of 26.4 million RSUs during 2025, 2026 and 2027 which will each vest over the subsequent one-year period following the respective grant dates.

Beginning in 2025, the Company will revert to its previous method of one grant vesting ratably over a four-year period following the grant date for substantially all new equity commitments.

Note the foregoing excludes a non-material number of additional committed but not yet granted RSUs which the Company will grant during 2025 which commitments were denominated in dollar values rather than shares.

As of December 31, 2025, all unvested RSUs had total compensation costs of $ 256.2 million not yet recognized.

This expense is expected to be recognized over a weighted-average period of 3.0 years.

As previously disclosed, prior to 2022 the Company typically issued share-based compensation through grants that vested ratably over four years .

Beginning in 2022, the Company adopted a new approach, issuing a series of four consecutive annual grants (each equal to 25 % of the total four-year grant value) with each grant vesting over the one-year period following its grant.

During the three months ended June 30, 2025, the Company issued the remaining 16.2 million RSUs committed under this methodology.

These RSUs were originally expected to be granted across 2025, 2026 and 2027, with each tranche vesting over the one-year period following its respective grant date.

The remaining RSUs granted during the three months ended June 30, 2025 will vest on the same schedule as initially contemplated under the original commitments.

Beginning in 2025, the Company reverted to its previous method of one grant vesting ratably over a four-year period following the grant date for substantially all new equity commitments.

Agent Equity Program

In connection with the 2021 Agent Equity Program, the Company recognized a total of $ 100.0 million in stock-based compensation expense of which $ 84.8 million was recognized during the year ended December 31, 2021 and $ 15.2 million was recognized during the year ended December 31, 2022.

In February 2022, the Company granted 13.6 million RSUs, which immediately vested and converted to Class A common stock in connection with the 2021 Agent Equity Program.

Prior to the issuance of the underlying RSUs, the stock-based compensation expense associated with these awards was recorded as a liability and $ 100.0 million was ultimately reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were granted.

In connection with the 2022 Agent Equity Program, the Company recognized a total of $ 53.3 million stock-based compensation expense of which $ 41.7 million was recognized during the year ended the year ended December 31, 2022 and $ 11.6 million was recognized during the year ended December 31, 2023.

In January 2023, the Company granted 14.1 million RSUs to affiliated agents in connection with the 2022 Agent Equity Program.

In connection with the 2022 Agent Equity Program, the Company recognized a total of $ 53.3 million stock-based compensation expense of which $ 41.7 million was recognized during the year ended December 31, 2022 and $ 11.6 million was recognized during the year ended December 31, 2023.

In January 2023, the Company granted 14.1 million RSUs to independent sales agents in connection with the 2022 Agent Equity Program.

Prior to the issuance of the underlying RSUs, the stock-based compensation expense associated with these awards was recorded as a liability and $ 53.3 million was ultimately reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were granted.

19 unchanged sentences

Total $ ( 59.6 ) $ ( 154.9 ) $ ( 321.7 )

For the year ended December 31, 2024, the loss before income taxes of $ 154.9 million includes $ 0.6 million of losses from the Company’s equity investment in OriginPoint and excludes $ 0.1 million in net income attributable to non-controlling interests.

The OriginPoint business and other non-controlling interests operate in the United States.

For the year ended December 31, 2025, the loss before income taxes of $ 59.6 million includes $ 7.1 million of income from the Company’s equity method investments and excludes $ 0.2 million in net income attributable to non-controlling interests.

The businesses in which the Company has equity method investments and other non-controlling interests operate in the United States.

The components of the Company’s income tax benefit (provision) consisted of (in millions):

11 unchanged sentences

The Company had an income tax benefit for the years ended December 31, 2025, 2024 and 2023 resulting from a partial reduction in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions.

The benefit from income taxes is reduced by current taxes in India that are not offset with future alternative minimum tax

Compass, Inc.

Notes to Consolidated Financial Statements

credits and state income tax expense.

In 2024, the Company also recognized benefit from income taxes as a result of the recognition of deferred tax assets in India.

The effective income tax rate differed from the statutory federal income tax rate as follows:

benefit from income taxes is reduced by current taxes in India that are not offset with future alternative minimum tax credits, as well as UK and state income tax expense.

The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025 and have included the following table as a result of this adoption, which presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in millions):

Year Ended December 31, 2025

US federal $ —

US state & local:

United Kingdom 0.5

The effective income tax rate differed from the statutory federal income tax rate for the year ended December 31, 2025 as follows (in millions, except percentages):

Tax at federal statutory rate:

$ ( 12.5 ) 21.0 %

State taxes, net of federal effect ( 0.3 ) 0.5

Change in valuation allowance 13.4 ( 22.8 )

Non-taxable or non-deductible items:

Stock-based compensation ( 6.8 ) 11.5

Non-deductible executive compensation 3.1 ( 5.1 )

Non-deductible expenses 0.7 ( 1.1 )

Foreign tax effects:

Statutory tax rate difference 1.2 ( 2.0 )

United Kingdom

Statutory tax rate difference 0.1 ( 0.1 )

Benefit from income taxes $ ( 1.1 ) 1.9 %

Compass, Inc.

Notes to Consolidated Financial Statements

The effective income tax rate differed from the statutory federal income tax rate as follows for the years ended December 31, 2024 and December 31, 2023 (in millions, except percentages):

Year Ended December 31,

Tax at federal statutory rate:

21.0 % 21.0 %

State taxes, net of federal effect 5.8 5.2

24 unchanged sentences

Net deferred tax assets $ 2.4 $ 3.7

The Company is subject to income taxes in the United States and India.

The Company is subject to income taxes in the United States, India and the United Kingdom.

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating losses and tax credit carryforwards.

3 unchanged sentences

gross deferred tax asset balances as of December 31, 2025 and 2024.

As of each reporting date, the Company considers new evidence, both positive and negative, that could impact the Company’s view with regard to future realization of deferred

As of each reporting date, the Company considers new evidence, both positive and negative, that could impact the Company’s view with regard to future realization of deferred tax assets.

As of December 31, 2025 and 2024, the Company continued to maintain that the realization of its deferred tax

Compass, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2024 and 2023, the Company continued to maintain that the realization of its deferred tax assets has not achieved a more-likely-than-not threshold primarily due to the evidence that the Company continued to maintain three-year cumulative pre-tax book losses.

assets has not achieved a more-likely-than-not threshold primarily due to the evidence that the Company continued to maintain three-year cumulative pre-tax book losses.

As of December 31, 2025, the valuation allowance was approximately $ 712.7 million, an increase of $ 8.9 million from December 31, 2024, which includes the impact of acquisition activity.

7 unchanged sentences

No material amounts of interest or penalties were recognized in the consolidated financial statements for the years ended December 31, 2025, 2024 and 2023.

The Company has obtained an income tax holiday for one of the three locations it operates in India, but the Company exited the location in 2024.

As a result of the exit, the Company recognized certain deferred tax assets that were not previously applicable for when the Company had the income tax holiday.

The number of years with open tax audits varies depending upon the tax jurisdiction.

13 unchanged sentences

Compass Concierge receivables (“Concierge Receivables”) are stated at the amount advanced to the home sellers, net of an estimated ACL in the accompanying consolidated balance sheets.

For the years ended December 31, 2024, 2023 and 2022, the Company did not recognize any material income 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.

Compass, Inc.

Notes to Consolidated Financial Statements

The Company manages its credit risk by establishing a comprehensive credit policy for the approval of new loans while monitoring and reviewing the performance of its existing Concierge Receivables.

Factors considered include but are not limited to:

• No negative liens or judgements on the property;

• No negative liens or judgments on the property;

• Seller’s available equity on the property;

• Loan to listing price ratio;

Compass, Inc.

Notes to Consolidated Financial Statements

• FICO score (only for Concierge Capital program);

18 unchanged sentences

The Company generally considers Concierge Receivables to be past due after being outstanding for over 30 days after the initial billing.

Changes in the Company’s estimate to the ACL are recorded through bad debt expense as Sales and marketing expense in the consolidated statements of operations and individual accounts are charged against the allowance

Compass, Inc.

Notes to Consolidated Financial Statements

when all reasonable collection efforts are exhausted.

The following table presents the aging analysis of Concierge Receivables as of December 31, 2025 and 2024 (in millions):

8 unchanged sentences

will be the same for Class A common stock, Class B common stock and Class C common stock on an individual or combined basis.

Compass, Inc.

Notes to Consolidated Financial Statements

The following table sets forth the computation of basic and diluted net loss per share attributable to Compass, Inc.

5 unchanged sentences

Weighted-average shares used in computing net loss per share attributable to Compass, Inc., basic and diluted (1)

562,153,375 501,514,681 466,522,935

Net loss per share attributable to Compass, Inc., basic and diluted $ ( 0.10 ) $ ( 0.31 ) $ ( 0.69 )

(1) For the year ended December 31, 2025, the weighted-average shares used in computing net loss per share attributable to Compass, Inc., basic and diluted, includes 38.5 million shares related to the Share Consideration.

These shares represent the minimum number of shares to be issued in connection with the CIRE Merger and were included in the calculation beginning on January 13, 2025, the acquisition date.

Of the total, 28.4 million shares were issued during the year ended December 31, 2025, and 10.1 million shares represents the minimum number of shares issuable to the Non-Accelerated Sellers.

In January 2026, the number of shares issuable to the Non-Accelerated Sellers was finalized and determined to be 10.5 million shares.

See Note 3 – “Acquisitions” for more information regarding the CIRE Merger.

The following participating securities were excluded from the computation of diluted net loss per share attributable to Compass, Inc.

8 unchanged sentences

Contingent common stock to be issued in connection with the Strategic Transaction — — 1,664,551

Incremental common stock to be issued in connection with the Share Consideration (1)

Total 77,670,691 61,994,106 72,737,176

(1) Represents the incremental number of shares that would have been issuable to the Non-Accelerated Sellers in connection with the Share Consideration if the share count had been determined as of December 31, 2025.

This amount is incremental to the 10.1 million minimum shares already included in the weighted-average shares used to compute net loss per share attributable to Compass, Inc., basic and diluted.

Restructuring Activities

Beginning in 2022, the Company enacted certain workforce reductions, wound down Modus Technologies, Inc.

("Modus"), terminated certain of its operating leases and took actions to reduce its occupancy costs, the most significant being the scaling down of its New York administrative office.

The workforce reductions were part of a broader plan by the Company to take meaningful actions to improve the alignment between the Company’s organizational structure and its long-term

Beginning in 2022, the Company enacted certain workforce reductions, terminated certain of its operating leases and took actions to reduce its occupancy costs, the most significant being the scaling down of its New York administrative office.

The workforce reductions were part of a broader plan by the Company to take meaningful actions to improve the alignment between the Company’s organizational structure and its long-term business strategy, drive cost efficiencies enabled by the Company’s technology and other competitive advantages and continue to drive toward profitability and continued positive free cash flow.

As a result of restructuring actions taken during the years ended December 31, 2025, 2024 and 2023, the Company incurred restructuring costs of $ 17.1 million, $ 9.7 million and $ 30.4 million, respectively, resulting from severance and

Compass, Inc.

Notes to Consolidated Financial Statements

business strategy, drive cost efficiencies enabled by the Company’s technology and other competitive advantages and continue to drive toward profitability and positive free cash flow.

As a result of restructuring actions taken during the years ended December 31, 2024, 2023 and 2022, the Company incurred restructuring costs of $ 9.7 million, $ 30.4 million and $ 49.1 million, respectively, resulting from severance and other termination benefits for employees whose roles were eliminated, lease terminations costs as a result of the accelerated amortization of various right-of-use assets and other restructuring costs, including those costs related to the wind-down of Modus.

other termination benefits for employees whose roles were eliminated, lease termination costs as a result of the accelerated amortization of various right-of-use assets and other restructuring costs.

These costs have been presented within the Restructuring costs line in the consolidated statements of operations.

The Company incurred additional non-cash charges of approximately $ 0.8 million, $ 2.0 million and $ 5.3 million during the years ended December 31, 2025, 2024 and 2023, respectively, associated with the write-down of fixed assets for certain real estate leases that have been exited, or partially exited.

The Company incurred additional non-cash charges of approximately $ 4.6 million during the year ended December 31, 2022 associated with the discontinued use of certain intangible assets associated with Modus.

These costs have been included within the Depreciation and amortization line in the consolidated statements of operations.

The following table summarizes the total costs incurred in connection with the Company’s restructuring activities taken during the years ended December 31, 2025, 2024 and 2023 (in millions):

3 unchanged sentences

Lease termination costs 11.4 9.7 21.5

Accelerated amortization of intangible assets — — 4.6

Accelerated depreciation 0.8 2.0 5.3

Other restructuring activities — — 0.8

Total expense $ 17.9 $ 11.7 $ 35.7

8 unchanged sentences

Thereafter 6.0

Subsequent Event

On January 13, 2025, the Company closed its previously announced merger transaction (the “Transaction”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as

Subsequent Events

Completion of the Anywhere Merger

On January 9, 2026, the Company completed the merger contemplated by the Agreement and Plan of Merger (the “Anywhere Merger Agreement”) with Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), and Velocity Merger Sub, Inc., a Delaware corporation and the Company’s wholly owned subsidiary (“Merger Sub”).

Pursuant to the Anywhere Merger Agreement and subject to its terms and conditions, Merger Sub merged with and into Anywhere (the “Anywhere Merger”), with Anywhere surviving as a wholly owned subsidiary of the Company.

In connection with the Anywhere Merger, the Company acquired all outstanding shares of Anywhere common stock in a stock-for-stock transaction.

Holders of Anywhere common stock received 1.436 shares of Compass Class A common stock for each share of Anywhere common stock, and the Company issued approximately 162.1 million shares of its Class A common stock.

The Anywhere Merger will be considered a business combination and accounted for using the acquisition method.

Due to the close proximity of the Anywhere Merger close date and the Company’s filing of this Annual Report on Form 10-K for

Compass, Inc.

Notes to Consolidated Financial Statements

@properties Christie’s International Real Estate (“Christie’s International Real Estate”), At World Properties Principals Blocker, Inc.

(“Principals Blocker”), At World Properties IX Blocker, Inc.

(“IX Blocker”), Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative.

Pursuant to the Merger Agreement, on the Closing Date, the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and Christie’s International Real Estate and each of Principals Blocker, IX Blocker and Christie’s International Real Estate became a wholly-owned subsidiary of the Company.

The aggregate consideration (“Total Consideration”) payable pursuant to the Merger Agreement consisted of (i) $ 150 million (the “Cash Consideration”), subject to certain customary purchase price adjustments and (ii) 44.1 million shares of the Company’s Class A common stock (the “Share Consideration”).

The Share Consideration is subject to further adjustment (the “Share Consideration Adjustment”) if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Company’s Class A common stock for the 10 -trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), is (i) greater than $ 344 million, in which case the Share Consideration will be reduced by a number of shares in an aggregate amount of up to $ 50 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares, or (ii) less than $ 344 million, in which case the Share Consideration will be increased by a number of shares in an aggregate amount of up to $ 50 million (determined using the greater of $ 6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares.

Given the recent date of this acquisition, the Company has not yet completed its preliminary purchase price allocation.

The Company expects to finalize its analysis within the measurement period (up to one year from the acquisition date) of the transaction.

the year ended December 31, 2025, the initial accounting for the business combination is incomplete, and therefore the Company is unable to disclose the information required by ASC 805, Business Combinations.

The Company will include relevant disclosures as required in the first quarter of 2026.

During the year ended December 31, 2025, the Company incurred $ 18.1 million of transaction and integration expenses in connection with the Anywhere Merger.

These expenses consist of transaction costs, including legal and investment banking fees, incurred in connection with the Company’s entry into the Anywhere Merger Agreement, as well as costs related to preliminary integration activities.

Such expenses are presented within the Anywhere merger transaction and integration expenses line item in the consolidated statements of operations.

Of these amounts, $ 6.3 million was paid during the year ended December 31, 2025.

In connection with the ongoing integration of Anywhere and in support of the Company’s efforts to streamline the combined company’s organizational structure, the Company is implementing an ongoing reduction in force under a plan of termination and estimates to record pre-tax charges in the range of approximately $ 50 million to $ 55 million during the first quarter of 2026 for severance and other termination benefits.

The Company expects these charges to be included in the Anywhere merger transaction and integration expenses line of its statement of operations.

The charges that the Company expects to incur, and the timing thereof, are subject to a number of assumptions, and actual expenses and results may differ materially from the Company’s estimates disclosed above.

Additional transaction and integration costs, which are expected to be material, will be incurred in 2026 and future periods in connection with the closing of the Anywhere Merger and the related integration activities.

0.25 % Convertible Senior Notes due 2031

In connection with the Anywhere Merger, the Company completed an offering of $ 1.0 billion in aggregate principal amount of 0.25 % Convertible Senior Notes due 2031 (the “Convertible Notes”) to Morgan Stanley & Co.

LLC and certain other initial purchasers (collectively, the “Initial Purchasers”).

The Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at the Company’s option at any time, and from time to time, on or after April 20, 2029 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price.

The initial conversion rate for the Convertible Notes is 62.5626 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $ 15.98 per share of common stock.

The Convertible Notes will mature on April 15, 2031.

The net proceeds were used to repay certain existing indebtedness of Anywhere and its subsidiaries, pay related fees, costs and expenses related to the Anywhere Merger and fund the net cost of entering into the capped call transactions (the “Capped Call Transactions”).

Additionally, the Company entered into the Capped Call Transactions with certain of the Initial Purchasers and/or their respective affiliates and/or other financial institutions.

The Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

The cap price of the Capped Call Transactions will initially be $ 23.68 per share of common stock, which represents a premium of 100.0 % over the last reported sale price of the common stock on January 7, 2026.

The Company paid $ 96.5 million for the Capped Call Transactions, funded with proceeds from the Convertible Notes.

The net cash proceeds received from the offering of the Convertible Notes were approximately $ 880 million after considering the $ 96.5 million cost of the Capped Call Transaction and approximately $ 23.5 million of debt issuance costs.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data