Compass, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Page Reports of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 68 Consolidated Balance Sheets as of December 31, 2025 and 2024 71 Consolidated Statements of Operations for the years ended December 31, 2025 , 2024 and 2023 72 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025 , 2024 and 2023 73 Consolidated Statements of Cash Flows for the years ended December 31, 2025 , 2024 and 2023 74 Notes to Consolidated Financial Statements 75 67 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Compass, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Compass, Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2025 appearing under Item 15(a)2 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. 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. 68 Table of Contents Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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. 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 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; (ii) the 69 Table of Contents 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 New York , New York February 27, 2026 We have served as the Company’s auditor since 2014. 70 Table of Contents Compass, Inc. Consolidated Balance Sheets (In millions, except share and per share data) December 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 199.0 $ 223.8 Accounts receivable, net of allowance of $ 3.5 and $ 4.4 , respectively 57.0 48.6 Compass Concierge receivables, net of allowance of $ 9.7 and $ 10.4 , respectively 25.0 24.4 Other current assets 36.2 33.2 Total current assets 317.2 330.0 Property and equipment, net 113.8 125.5 Operating lease right-of-use assets 381.1 389.7 Intangible assets, net 193.3 73.8 Goodwill 479.2 233.6 Other non-current assets 54.9 25.4 Total assets $ 1,539.5 $ 1,178.0 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 12.5 $ 13.0 Commissions payable 94.8 82.8 Accrued expenses and other current liabilities 138.0 140.3 Current lease liabilities 99.3 93.5 Concierge credit facility 22.7 23.6 Total current liabilities 367.3 353.2 Non-current lease liabilities 354.2 380.5 Other non-current liabilities 30.7 31.9 Total liabilities 752.2 765.6 Commitments and contingencies (Note 11) Stockholders’ equity Common stock, $ 0.00001 par value, 13,850,000,000 shares authorized at December 31, 2025 and 2024; 563,479,423 and 513,143,108 shares issued and outstanding at December 31, 2025 and 2024, respectively — — Additional paid-in capital 3,512.7 3,081.6 Accumulated deficit ( 2,730.7 ) ( 2,672.2 ) Total Compass, Inc. stockholders’ equity 782.0 409.4 Non-controlling interest 5.3 3.0 Total stockholders’ equity 787.3 412.4 Total liabilities and stockholders’ equity $ 1,539.5 $ 1,178.0 The accompanying footnotes are an integral part of these consolidated financial statements. 71 Table of Contents Compass, Inc. Consolidated Statements of Operations ( In millions, except share and per share data ) Year Ended December 31, 2025 2024 2023 Revenue $ 6,961.6 $ 5,629.1 $ 4,885.0 Operating expenses: Commissions and other related expense 5,679.7 4,634.6 4,007.0 Sales and marketing 377.9 368.7 435.4 Operations and support 429.4 334.5 326.9 Research and development 245.8 188.8 184.5 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 Depreciation and amortization 112.7 82.4 90.0 Total operating expenses 7,025.0 5,783.9 5,199.9 Loss from operations ( 63.4 ) ( 154.8 ) ( 314.9 ) Investment income, net 5.5 6.8 8.5 Interest expense ( 9.0 ) ( 6.4 ) ( 10.8 ) 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 income (loss) of unconsolidated entities 7.1 ( 0.6 ) ( 3.3 ) Net loss ( 58.7 ) ( 154.5 ) ( 320.1 ) Net loss (income) attributable to non-controlling interests 0.2 0.1 ( 1.2 ) Net loss attributable to Compass, Inc. $ ( 58.5 ) $ ( 154.4 ) $ ( 321.3 ) Net loss per share attributable to Compass, Inc., basic and diluted $ ( 0.10 ) $ ( 0.31 ) $ ( 0.69 ) Weighted-average shares used in computing net loss per share attributable to Compass, Inc., basic and diluted 562,153,375 501,514,681 466,522,935 The accompanying footnotes are an integral part of these consolidated financial statements. 72 Table of Contents Compass, Inc. Consolidated Statements of Stockholders’ Equity (In millions, except share amounts) Common Stock Additional Paid-in Capital Accumulated Deficit Total Compass, Inc. Stockholders’ Equity Non-controlling Interest Total Stockholders’ Equity Shares Amount Balances at December 31, 2022 438,098,194 $ — $ 2,713.6 $ ( 2,196.5 ) $ 517.1 $ 3.6 $ 520.7 Net loss — — — ( 321.3 ) ( 321.3 ) 1.2 ( 320.1 ) Other activity related to non-controlling interests — — — — — ( 1.5 ) ( 1.5 ) 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 Issuance of common stock upon settlement of RSUs, net of taxes withheld 14,229,086 — ( 23.5 ) — ( 23.5 ) — ( 23.5 ) 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 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 Balances at December 31, 2023 484,893,266 $ — $ 2,946.5 $ ( 2,517.8 ) $ 428.7 $ 3.3 $ 432.0 Net loss — — — ( 154.4 ) ( 154.4 ) ( 0.1 ) ( 154.5 ) Other activity related to non-controlling interests — — — — — ( 0.2 ) ( 0.2 ) 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 ) Issuance of common stock under the ESPP 721,275 — 2.2 — 2.2 — 2.2 Stock-based compensation — — 131.3 — 131.3 — 131.3 Balances at December 31, 2024 513,143,108 $ — $ 3,081.6 $ ( 2,672.2 ) $ 409.4 $ 3.0 $ 412.4 Net loss — — — ( 58.5 ) ( 58.5 ) ( 0.2 ) ( 58.7 ) Other activity related to non-controlling interests — — — — — 2.5 2.5 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 Issuance of common stock upon settlement of RSUs, net of taxes withheld 15,222,294 — ( 61.1 ) — ( 61.1 ) — ( 61.1 ) Issuance of common stock under the ESPP 560,040 — 2.9 — 2.9 — 2.9 Stock-based compensation — — 207.6 — 207.6 — 207.6 Balances at December 31, 2025 563,479,423 $ — $ 3,512.7 $ ( 2,730.7 ) $ 782.0 $ 5.3 $ 787.3 The accompanying footnotes are an integral part of these consolidated financial statements. 73 Table of Contents Compass, Inc. Consolidated Statements of Cash Flows (In millions) Year Ended December 31, 2025 2024 2023 Operating Activities Net loss $ ( 58.7 ) $ ( 154.5 ) $ ( 320.1 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 112.7 82.4 90.0 Stock-based compensation 202.7 127.5 158.2 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 expense ( 0.6 ) ( 2.1 ) 4.4 Amortization of debt issuance costs 1.0 0.7 0.7 Changes in operating assets and liabilities: Accounts receivable 7.1 ( 8.0 ) ( 3.5 ) Compass Concierge receivables ( 1.0 ) ( 0.8 ) 18.0 Other current assets 1.7 21.3 21.4 Other non-current assets ( 6.8 ) 7.0 9.1 Operating lease right-of-use assets and operating lease liabilities ( 12.0 ) ( 17.4 ) ( 1.2 ) Accounts payable ( 2.8 ) ( 6.3 ) ( 9.8 ) Commissions payable 5.3 23.1 11.6 Accrued expenses and other liabilities ( 24.6 ) 42.0 ( 10.6 ) Net cash provided by (used in) operating activities 216.7 121.5 ( 25.9 ) Investing Activities Investment in unconsolidated entities ( 3.9 ) ( 2.0 ) ( 1.2 ) Capital expenditures ( 13.4 ) ( 15.7 ) ( 11.2 ) Payments for acquisitions, net of cash acquired ( 174.0 ) ( 18.9 ) 0.7 Net cash used in investing activities ( 191.3 ) ( 36.6 ) ( 11.7 ) Financing Activities Proceeds from exercise of stock options 17.8 9.5 4.5 Proceeds from issuance of common stock under the Employee Stock Purchase Plan 2.9 2.2 2.5 Taxes paid related to net share settlement of equity awards ( 61.1 ) ( 35.0 ) ( 23.5 ) 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 Payments related to acquisitions, including contingent consideration ( 7.4 ) ( 3.4 ) ( 14.6 ) Other 2.6 ( 0.1 ) ( 1.5 ) 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 Cash and cash equivalents at end of period $ 199.0 $ 223.8 $ 166.9 Supplemental disclosures of cash flow information: Cash paid for interest $ 5.6 $ 3.4 $ 9.0 Supplemental non-cash information: Issuance of common stock for acquisitions $ 264.3 $ 26.6 $ 17.9 The accompanying footnotes are an integral part of these consolidated financial statements. 74 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 1. Business Description of the Business 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. The Company’s platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service and other critical functionality, all custom-built for the real estate industry, which enables the Company’s core brokerage services. The platform also uses proprietary data, analytics, artificial intelligence, and machine learning to deliver high value recommendations and outcomes for Compass agents and their clients. 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. 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the assets, liabilities, revenues and expenses of all controlled subsidiaries. The consolidated statements of operations include the results of entities acquired from the date of each respective acquisition. Consolidation The Company consolidates an entity if its ownership, direct or indirect, exceeds 50 % of the outstanding voting shares of an entity and/or it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. Interests held by third parties in consolidated subsidiaries are presented as non-controlling interests, which represents the non-controlling stockholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity method or at fair value with changes in fair value recognized in net income, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee. The Company measures all other investments at fair value with changes in fair value recognized in net income or in the case that an equity investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the consolidated financial statements and accompanying notes. These judgments, estimates and assumptions are used for, but not limited to (i) valuation of the Company’s common stock and stock awards, (ii) fair value of acquired intangible assets and goodwill, (iii) fair value of contingent consideration arrangements in connection with business combinations, (iv) incremental borrowing rate used for the Company’s operating leases, (v) useful lives of long-lived assets, (vi) impairment of intangible assets and goodwill, (vii) allowance for Compass Concierge receivables and (viii) income taxes and certain deferred tax assets. The Company determines its estimates and judgments on historical 75 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates and these differences may be material. Net Loss Per Share Attributable to Compass, Inc. The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. 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. For periods in which the Company reports net losses, diluted net loss per common share attributable to Compass, Inc. is the same as basic net loss per common share attributable to Compass, Inc., because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Cash and Cash Equivalents The Company considers all investments with an original maturity date at the time of purchase of three months or less to be cash and cash equivalents. Cash equivalents consist primarily of money market funds and U.S. treasury securities . Accounts Receivable and Allowance for Credit Losses Accounts receivable is stated as the amount billed, net of an estimated allowance for credit losses (“ACL”). The Company’s ACL is adjusted periodically and is based on management’s consideration of the age and nature of the past due accounts as well as specific payment issues. Changes in the Company’s estimate to the ACL is recorded through bad debt expense and individual accounts are charged against the allowance when all reasonable collection efforts are exhausted. The following table summarizes the activity of the ACL for Accounts receivable (in millions): December 31, 2025 2024 Opening balance $ 4.4 $ 8.6 Changes in allowances ( 1.0 ) ( 2.5 ) Net write-offs and other 0.1 ( 1.7 ) Closing balance $ 3.5 $ 4.4 Prepaid Agent Incentives Other current assets and Other non-current assets in the consolidated balance sheets include prepaid agent incentives that represent cash payments made to certain agents as an incentive to associate their license with the Company. The prepaid agent incentives have a related service period requirement which provides for the repayment of such amounts if the agent disassociates from the Company prior to the completion of the specified service period. The value of these prepaid agent incentives are amortized within Sales and marketing expense in the consolidated statements of operations over the underlying service periods. Property and Equipment, net Property and equipment is reported at cost net of any accumulated depreciation and is depreciated using the straight-line method over the useful lives of the related assets. Expenditures for maintenance, repair and renewals of minor items are charged to expense as incurred. Major improvements are capitalized. 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. 76 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements The useful lives of property and equipment are as follows: Description Useful Life Leasehold improvements Lesser of estimated useful life or remaining lease term Office furniture and equipment Five years Computer software and internally-developed software Three years Computer equipment Three years Business Combinations Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal, advisory and consulting fees, are expensed as incurred. Intangible Assets Intangible assets resulting from the acquisition of entities are accounted for using the acquisition method based on management’s estimate of the fair value of assets received. Intangible assets are finite lived and mainly consist of customer relationships, workforce and acquired technology and are amortized over their respective estimated useful lives. The useful lives were determined by estimating future cash flows generated by the acquired intangible assets. The Company amortizes these intangible assets on a straight-line basis over their estimated useful lives within the Company’s operating expenses. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or asset groups (collectively, “asset groups”) may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset groups’ carrying amount may not be recoverable. Recoverability of asset groups to be held and used is measured first by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset group. If such asset groups were considered to be impaired, an impairment loss would be recognized when the carrying amount of the asset exceeds the fair value of the asset. No material impairment losses for long-lived assets have been recognized in any of the periods presented. Goodwill Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition. Goodwill is not subject to amortization but is subject to impairment testing on an annual basis, as of October 1, or whenever events and circumstances indicate that the carrying value of the reporting unit may be in excess of the reporting unit’s fair value. 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 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 77 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. The Company has not recorded any impairments related to goodwill as of December 31, 2025. Leases The Company determines if an arrangement contains a lease at inception based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company classifies leases as either financing or operating. The Company does not have any finance leases. Right-of-use (“ROU”) assets are recognized at the lease commencement date and represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the remaining lease term. Present value of lease payments are discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate. Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for collateralized borrowings with a similar term, an amount equal to the lease payments and in a similar economic environment where the leased asset is located. The collateralized borrowings were based on the Company’s estimated credit rating corroborated with market credit metrics like debt level and interest coverage. The Company’s operating lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) lease incentives under the lease. Options to renew or terminate the lease are recognized as part of the Company’s ROU assets and lease liabilities when it is reasonably certain the options will be exercised. ROU assets are also assessed for impairments consistent with the Company’s long-lived asset policy. The Company does not allocate consideration between lease and non-lease components, such as maintenance costs, as the Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease payments for real estate taxes, insurance, maintenance and utilities, which are generally based on the Company’s pro rata share of the total property, are not included in the measurement of the ROU assets or lease liabilities and are expensed as incurred. Operating leases are presented separately as operating lease ROU assets and operating lease liabilities, current and non-current, in the accompanying consolidated balance sheets. Revenue Recognition 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. Although the Company’s agents are independent contractors, they cannot execute a real estate transaction without a brokerage license, which the Company possesses. The Company has the only contractual relationship for the sale or exchange of real estate with their clients. Accordingly, the Company is the principal in its transactions with home buyers and sellers. As principal, the Company recognizes revenue in the gross amount of consideration to which the Company expects to receive in exchange for those services. 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. 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 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 78 Table of Contents 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. As the Company generally bills for its services at the time of revenue recognition, the Company does not have material deferred revenue or contract asset balances. In addition, the Company does not capitalize commissions paid to agents as incremental contract costs as there are no future benefits associated with the expenses. Commissions and Other Related Expense 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 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 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 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. Advertising costs were $ 77.7 million, $ 73.7 million and $ 96.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Compensation costs includes salaries, taxes, benefits, bonuses and stock-based compensation. Operations and Support 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 Research and development expense consists primarily of compensation and other personnel-related costs for employees in the product, engineering and technology functions, website hosting expenses, software licenses and equipment, third-party consulting costs, data licenses and other related expenses. 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. 79 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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 Costs and liabilities associated with management-approved restructuring activities are recognized when they are incurred. Restructuring charges primarily consist of costs associated with workforce reductions and operating lease right-of-use asset impairments. One-time employee termination costs are recognized at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Ongoing employee termination benefits are recognized as a liability when it is probable that a liability exists and the amount is reasonably estimable. Restructuring charges are recognized as an operating expense within the consolidated statements of operations and related liabilities are recorded within Accrued expenses and other current liabilities on the consolidated balance sheets. The Company periodically evaluates and, if necessary, adjusts its estimates based on currently available information. Depreciation and Amortization Depreciation and amortization expense primarily consists of depreciation and amortization of the Company’s property and equipment, capitalized software and acquired intangible assets. Interest Expense Interest expense consists primarily of expense related to the interest, commitment fees and amortization of debt issuance costs associated with the Company’s revolving credit facility and concierge credit facility. See Note 9 — “Debt”. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to settle. The effect on deferred tax assets and liabilities resulting from a change in tax rates is recognized as income or expense in the period that includes the enactment date. Deferred tax assets and liabilities are classified as non-current in accordance with Accounting Standard Update (“ASU”) 2015-17. Valuation allowances are established against deferred tax assets if it is more likely than not that they will not be realized. The Company recognizes tax benefits from uncertain tax positions only if the Company believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company continuously reviews issues raised in connection with ongoing examinations and open tax years to evaluate the adequacy of its tax liabilities. The Company’s policy is to adjust these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on its financial condition and operating results. The provision for income taxes includes the effects of any reserves that management identifies. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants on the measurement date. The accounting standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. 80 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. 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. As of December 31, 2025 and 2024, the carrying amount of the Company’s debt facilities approximates fair value as the stated interest rate approximates market rates currently available to the Company. See Note 5 — “Fair Value of Financial Assets and Liabilities,” for more information on the fair value of financial assets and liabilities. Segment Reporting Operating segments are defined as components of an entity with discrete financial information reviewed by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. 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, 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. The CODM measures segment performance based on net income (loss), using it to guide key operating decisions, including budget allocation across the significant expense categories included in operating expenses within the consolidated statements of operations. Other measures of profit or loss are also utilized. There are no other expense categories regularly provided to the CODM that are not already included in the primary financial statements herein. Stock-Based Compensation The Company measures compensation expense for all stock-based awards based on the estimated fair value of the awards on the date of grant. Compensation expense is generally recognized as expense on a straight-line basis over the service period based on the vesting requirements. The Company recognizes forfeitures as they occur. 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. 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 2021 Equity Incentive Plan, as applicable. 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 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. 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. 81 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures . This standard includes enhanced income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid for annual periods. The amendments in this update are effective for public companies with fiscal years beginning after December 15, 2024, with early adoption permitted. 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. This new guidance is designed to improve the disclosures of specific account categories, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. 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. 3. Acquisitions Assets acquired and liabilities assumed in business combinations are recognized at their acquisition date fair values. Determination of the fair values of assets and liabilities acquired requires estimates and the use of valuation techniques when market values are not readily available. The results of operations of businesses acquired by the Company have been included in the consolidated statements of operations since their respective dates of acquisition. 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 82 Table of Contents 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): Amount Cash Consideration $ 153.0 Share Consideration 250.1 Total consideration transferred $ 403.1 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): 83 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Amount 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): Amount Useful Life (in years) 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. 84 Table of Contents 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. 85 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 2024 Acquisitions During the year ended December 31, 2024, the Company completed the acquisition of 100 % of the ownership interests in Latter & Blum Holdings, LLC and Parks Village Nashville, LLC, two residential real estate brokerages, and the acquisition of 100 % ownership interest in a title insurance and escrow settlement services company. The purpose of these acquisitions was to expand the Company’s existing brokerage business and title and escrow presence 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, 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. 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: $ 28.7 million of customer relationships; $ 2.4 million of trademark intangible assets; $ 20.0 million of other current and non-current assets; and $ 18.3 million of current and non-current liabilities. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets was recorded as goodwill of $ 23.9 million. Goodwill represents the expected synergies from combining the acquired assets and the operations of the acquirer as well as the intangible assets that do not qualify for separate recognition. The acquired intangible assets are being amortized over the estimated useful lives of approximately 5 to 6 years. Approximately $ 10.1 million of the goodwill recorded during the year ended December 31, 2024 is deductible for tax purposes. The amount of tax-deductible goodwill may increase in the future to approximately $ 16.9 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 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. 2023 Acquisitions During the year ended December 31, 2023, the Company completed the acquisition of 100 % of the ownership interests in two residential real estate brokerages and acquired the assets of a smaller residential real estate brokerage. The purpose of these acquisitions was to expand the Company’s existing brokerage business in key domestic markets. The Company has accounted for these transactions as business combinations. The consideration for the acquisitions completed during the year ended December 31, 2023 is primarily comprised of $ 6.8 million in the Company’s Class A common stock, $ 1.1 million of cash paid at closing, an additional $ 1.0 million paid at a later date and an estimated $ 14.0 million of additional Class A common stock and cash that may be paid contingent on certain earnings-based targets being met at various payment dates through 2033. Payments in excess of the original estimate may impact the Company’s statement of operations in future periods. The future consideration amounts were recorded as 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, inclusive of any measurement period adjustments, primarily resulted in the recognition of: $ 10.8 million of customer relationships; $ 4.7 million of other current and non-current assets; and $ 5.5 million of other current and non-current liabilities. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets was recorded as goodwill of $ 10.8 million. The acquired customer relationships are being amortized over the estimated useful lives of approximately 5 years. Approximately $ 0.7 million of the goodwill recorded during the year ended December 31, 2023 is deductible for tax purposes. 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 86 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. Contingent Consideration Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired businesses in the event that certain targets and milestones are met. As of December 31, 2025, the undiscounted estimated payment under these arrangements was $ 46.3 million. Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions): Year Ended December 31, 2025 2024 2023 Opening balance $ 31.0 $ 20.9 $ 14.0 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 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. 4. 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. OriginPoint originates, processes, underwrites, closes and/or funds mortgage loans for sale, transfer and assignment to investors and eligible wholesale lenders, including affiliates, or effects any other secondary market transactions related to such mortgage loans. OriginPoint is owned 49.9 % by the Company and 50.1 % by Guaranteed Rate. 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 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 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. 87 Table of Contents 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. 5. Fair Value of Financial Assets and Liabilities 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. The Company does not hold any Level 2 financial instruments. The Company’s contingent consideration liabilities of $ 31.4 million and $ 31.0 million as of December 31, 2025 and 2024, respectively, are the Company’s only Level 3 financial instruments. See Note 3 — “Acquisitions” for changes in contingent consideration during the years ended December 31, 2025, 2024 and 2023. The following tables present the balances of contingent consideration as presented in the consolidated balance sheets (in millions): December 31, 2025 2024 Accrued expenses and other current liabilities $ 6.9 $ 3.3 Other non-current liabilities 24.5 27.7 Total contingent consideration $ 31.4 $ 31.0 There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented. Level 3 Financial Liabilities The Company’s Level 3 financial liabilities relate to acquisition-related contingent consideration arrangements. Contingent consideration represents obligations of the Company to transfer cash or the Company’s common stock to the sellers of certain acquired entities in the event that certain targets and milestones are met. The primary method the Company used to estimate the fair value of contingent consideration liabilities was a Monte-Carlo simulation, which is based on inputs such as forecasted future results of the acquired businesses, which are not observable in the market, discount rates and earnings volatility measures. 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 expense in the consolidated statements of operations (see Note 3 – “Acquisitions”). 88 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 6. Property and Equipment, Net Property and equipment, net consisted of the following (in millions): December 31, 2025 2024 Leasehold improvements $ 197.5 $ 186.2 Office furniture and equipment 39.5 37.4 Computer software and internally-developed software 56.9 49.9 Computer equipment 16.4 26.1 310.3 299.6 Less: accumulated depreciation ( 196.5 ) ( 174.1 ) Property and equipment, net $ 113.8 $ 125.5 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. The Company capitalized internally-developed software costs of $ 7.4 million and $ 9.7 million during the years ended December 31, 2025 and 2024, respectively. 7. Goodwill and Intangible Assets, Net The following table summarizes the changes in the carrying amount of goodwill (in millions): Amount Balance at December 31, 2023 $ 209.8 Acquisitions 24.4 Measurement period adjustments ( 0.6 ) Balance at December 31, 2024 233.6 Acquisitions 246.1 Measurement period adjustments $ ( 0.5 ) Balance at December 31, 2025 $ 479.2 The following table summarizes the carrying amounts and accumulated amortization of intangible assets (in millions, except weighted-average remaining useful life): December 31, 2025 Useful Life Gross Carrying Amount Accumulated Amortization Net Value Weighted Average Remaining Useful Life (Years) Finite-lived intangible assets: Customer relationships 3 - 9 years $ 327.4 $ ( 171.2 ) $ 156.2 4.8 Acquired technology 2 - 5 years 34.7 ( 19.3 ) 15.4 1.0 Trademarks 2 - 9 years 39.1 ( 17.7 ) 21.4 3.3 Indefinite-lived intangible assets: Domain name 0.3 — 0.3 n/a Total $ 401.5 $ ( 208.2 ) $ 193.3 89 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements December 31, 2024 Useful Life Gross Carrying Amount Accumulated Amortization Net Value Weighted Average Remaining Useful Life (Years) Finite-lived intangible assets: Customer relationships 3 - 9 years $ 188.8 $ ( 123.5 ) $ 65.3 3.3 Acquired technology 5 years 5.5 ( 4.0 ) 1.5 1.3 Trademarks 2 - 9 years 14.9 ( 8.2 ) 6.7 3.9 Indefinite-lived intangible assets: Domain name 0.3 — 0.3 n/a Total $ 209.5 $ ( 135.7 ) $ 73.8 Amortization expense was $ 72.5 million, $ 34.9 million and $ 32.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Estimated future amortization expense for finite-lived intangible assets as of December 31, 2025 is as follows (in millions): 2026 $ 62.6 2027 38.5 2028 33.9 2029 25.1 2030 21.2 Thereafter 11.7 Total $ 193.0 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in millions): December 31, 2025 2024 Accrued compensation $ 61.0 $ 51.1 Accrued antitrust-related litigation charge (Note 11) — 28.8 Other 77.0 60.4 Accrued expenses and other current liabilities $ 138.0 $ 140.3 9. Debt Concierge Credit Facility In July 2020, the Company entered into a Revolving Credit and Security Agreement (the “Concierge Facility”) with Barclays Bank PLC, as administrative agent, and the several lenders party thereto. The Concierge Facility provides for a $ 75.0 million revolving credit facility and is solely used to finance a portion of the Company’s Compass Concierge Program. The Concierge Facility is secured primarily by the Concierge Receivables and cash of the Compass Concierge Program. Borrowings under the Concierge Facility bear interest at the term SOFR rate plus a margin of 2.50 %. 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 1, 2025, the revolving period under the Concierge Facility was extended to July 31, 90 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 2027. The interest rate on the drawn down balance of the Concierge Facility was 6.57 % as of December 31, 2025. Pursuant to the Concierge Facility, the principal amount, if any, is payable in full in January 2028, unless earlier terminated or extended. The Company has the option to repay the borrowings under the Concierge Facility without premium or penalty prior to maturity. The Concierge Facility contains customary affirmative covenants, such as financial statement reporting requirements, as well as covenants that restrict 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. 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. The Concierge 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, bankruptcy and insolvency events, material judgments and change of control. The occurrence of an event of default could result in the acceleration of the obligations and/or the increase in the applicable interest rate under the Concierge Facility. 2021 Revolving Credit Facility 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 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 91 Table of Contents 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. 10. Leases The components of lease costs for operating leases for the years ended December 31, 2025, 2024 and 2023 was as follows (in millions): Year Ended December 31, 2025 2024 2023 Operating lease costs $ 107.5 $ 101.6 $ 109.8 Short-term lease costs 3.0 3.4 3.5 Sublease income ( 6.0 ) ( 5.8 ) ( 5.1 ) Variable lease costs 38.7 36.0 37.6 Total $ 143.2 $ 135.2 $ 145.8 The Company has a small population of subleases whereby it acts as a lessor and has recognized sublease income as noted in the table above. The impact of this portfolio is not material to the consolidated financial statements. 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. 92 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Supplemental cash flow information related to leases was as follows (in millions): Year Ended December 31, 2025 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows used in operating leases $ 128.5 $ 127.3 $ 126.9 Supplemental disclosure of non-cash leasing activities: ROU assets obtained in exchange for new operating lease liabilities $ 80.9 $ 68.2 $ 25.3 The following table represents the weighted-average remaining lease term and discount rate for the Company’s operating leases: December 31, 2025 2024 Weighted average remaining lease term (years) 5.1 5.7 Weighted average discount rate 6.1 % 5.7 % Future undiscounted lease payments for the Company’s operating lease liabilities are as follows as of December 31, 2025 (in millions): 2026 $ 124.0 2027 111.0 2028 96.4 2029 78.3 2030 52.5 Thereafter 71.1 Total future lease payments 533.3 Less: imputed interest ( 79.8 ) Present value of lease liabilities $ 453.5 As of December 31, 2025, the Company had additional operating leases that have not yet commenced with future undiscounted lease payments of approximately $ 25.8 million payable through 2038, which have been excluded from above. 11. Commitments and Contingencies Legal Proceedings From time to time, the Company may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the Company’s business taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal costs related to the defense of loss contingencies are expensed as incurred. Claims or regulatory actions against the Company, whether meritorious or not, could have an adverse impact on the Company due to legal costs, diversion of management resources and other elements. Except as identified with respect to the matters below, the Company does not believe that the outcome of any individual existing legal or regulatory proceeding to which it is a party will have a material adverse effect on its results of operations, financial condition or overall business in each case, taken as a whole. 93 Table of Contents 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. v. 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. v. 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. Umpa, et al. v. 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. Boykin v. 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. 1:23-cv-09995 (S.D.N.Y.) (“March”), filed on November 13, 2023, and Friedman v. Real Estate Board of New York, et al., Case No. 1:23-cv-09601 (S.D.N.Y.) (“Friedman”), filed on January 18, 2024, name the Company as a defendant and allege, among other things, that 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 Friedman and March matters also allege violations of the Donnelly Act, N.Y. Gen. Bus. § 340, and the March matter further seeks injunctive relief pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26. The Friedman and March matters are limited in scope to the New York City boroughs of Brooklyn, and Manhattan, respectively. One putative class action lawsuit, QJ Team, LLC, et al. v. Texas Association of Realtors, Inc., et al., No. 4:23-cv-01013 (E.D. Tx.) (“QJ Team”), filed on November 13, 2023, names Realty Austin, LLC, a subsidiary of the Company, as a defendant and alleges, among other things, that certain trade associations, including the Texas Association of Realtors, 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. Martin, et al. v. Texas Association of Realtors, Inc., et al., No. 423-cv-01104 (E.D. Tx.) (“Martin”), filed on December 14, 2023, was consolidated into the QJ Team matter on March 21, 2024. One putative class action lawsuit, Peiffer v. Latter & Blum Holding, LLC, et al., Case No. 2:24-cv-00557 (E.D. La.) (“Peiffer”), filed on March 5, 2024, names Latter & Blum, a subsidiary of the Company, as a defendant and alleges, among other things, that certain trade associations, including the National Association of Realtors, multiple listing services, 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. On April 3, 2024, the Company announced that it had entered into an agreement to acquire Latter & Blum. 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 above, which are now pending before the United States Circuit Court of Appeals 94 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. 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. 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. v. Compass, Inc., et al. Batton, et al. v. Compass, Inc., et al., No. 1:23-cv-15618 (N.D. Ill.) (“Batton II”), filed on November 2, 2023, names the Company and seven other brokerages as defendants and alleges that the defendants entered into 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 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 II are substantially similar to those contained in the case captioned Batton, et al. v. National Association of Realtors, et al., No. 1:21-cv-00430 (N.D. Ill.) (“Batton I”), filed on January 25, 2021, which does not name the Company but names the National Association of Realtors and six other brokerages. The Company and the defendants in the Batton II matter filed a motion to dismiss the amended complaint on June 21, 2024. The plaintiffs filed an opposition to the motion to dismiss on August 5, 2024 and the Company and the defendants filed a reply on September 4, 2024. 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. The ultimate resolution of Batton II could have a material adverse effect on the Company’s financial position, results of operations, and cash flow. Letter of Credit Agreements The Company has irrevocable letters of credit with various financial institutions, primarily related to security deposits for leased facilities. As of 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 As a service to its home buyers and sellers, the Company administers escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. The escrow and trust deposits totaled $ 294.4 million and $ 147.1 million as of December 31, 2025 and 2024, respectively. These deposits are not assets of the Company and therefore are excluded from the accompanying consolidated balance sheets. However, the Company remains contingently liable for the disposition of these deposits. 12. Preferred Stock and Common Stock Undesignated Preferred Stock In April 2021, the Company adopted a restated certificate of incorporation which provides for authorized undesignated preferred stock to 25.0 million shares of undesignated preferred stock with a $ 0.00001 par value per share. As of December 31, 2025 and 2024, there are no shares of the Company’s preferred stock issued and outstanding. 95 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Common Stock In February 2021, the Company approved the establishment of Class C common stock and an agreement with the Company’s CEO to exchange his Class A common stock for Class C common stock. Any Class A common stock issued to the Company’s CEO from RSU awards granted prior to February 2021 are able to be exchanged for Class C common stock. Each share of Class C common stock is entitled to twenty votes per share and will be convertible at any time into one share of Class A common stock and will automatically convert into Class A common stock under certain “sunset” provisions. Other than certain permitted transfers for estate planning purposes, upon a transfer of Class C common stock, the Class C common stock will convert into Class A common stock. In April 2021, the Company adopted a restated certificate of incorporation and changed its authorized capital stock to consist of 12.5 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. Each class has par value of $ 0.00001 . The followings tables reflect the authorized, issued and outstanding shares for each of the common share classes as of December 31, 2025 and 2024: December 31, 2025 Shares Authorized Shares Issued Shares Outstanding Class A common stock 12,500,000,000 553,356,990 553,356,990 Class B common stock 1,250,000,000 — — Class C common stock 100,000,000 10,122,433 10,122,433 Total 13,850,000,000 563,479,423 563,479,423 December 31, 2024 Shares Authorized Shares Issued Shares Outstanding Class A common stock 12,500,000,000 501,384,321 501,384,321 Class B common stock 1,250,000,000 — — Class C common stock 100,000,000 11,758,787 11,758,787 Total 13,850,000,000 513,143,108 513,143,108 The rights of common stock are as follows: Voting Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are not entitled to vote. Holders of Class C common stock are entitled to twenty votes per share. Dividends When and if declared by the Company’s board of directors, holders of Class A and Class B common stock are entitled in proportion to the number of shares of common stock that would be held by each such holder if all shares of convertible preferred stock were converted to common stock. No dividends have been declared since inception. Liquidation 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. 96 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Conversion Each share of Class A common stock may be converted to one share of Class B common stock at the option of the holder. Each share of Class B common stock may be converted to one share of Class A common stock only upon the following events: • the Company’s sale of its common stock pursuant to an effective registration statement; • any transfer of such share to a holder of convertible preferred stock; and • the approval of such conversion by the board of directors; such conversion shall be deemed to have been made immediately prior to the closing date of the public offering. Each share of Class C common stock is convertible at any time of the option of the holder into one share of Class A common stock. Each share of Class C common stock will automatically convert into a share of Class A common stock upon sale or transfer, except for certain permitted transfers. Strategic Transaction In August 2023, the Company entered into a definitive asset purchase agreement with a Canadian real estate proptech company (the “Strategic Transaction”) under which the Company received $ 32.3 million of cash in exchange for 9.0 million shares of Class A common stock and committed to make an additional contingent payment in the form of Class A common stock or cash, as determined by the Company. The contingent payment was dependent on a volume-weighted stock price target for the Company’s Class A common stock and was payable up to a maximum of $ 5.5 million in May 2025 (unless the volume-weighted stock price target is triggered). During the year ended December 31, 2024, the volume-weighted price target was met and the Company was released of its liability to make any additional payment in connection with this arrangement. 13. Stock-Based Compensation 2012 Stock Incentive Plan In October 2012, the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan, employees and non-employees could be granted stock options, RSUs and other stock-based awards. Generally, these awards were based on stock agreements with a maximum ten-year term for stock options and a maximum seven-year term for RSUs, subject to board approval. 2021 Equity Incentive Plan In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Equity Incentive Plan (the “2021 Plan”), with an initial pool of 29.7 million shares of common stock available for granting stock-based awards plus any reserved shares of common stock not issued or subject to outstanding awards granted under the 2012 Plan. In addition, on January 1 st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the 2021 Plan shall be increased automatically by the number of shares equal to 5 % of the total number of outstanding shares of common stock on the immediately preceding December 31 st , although the Company’s board of directors or one of its committees may reduce the amount of such increase in any particular year. The 2021 Plan became effective on March 30, 2021 and as of that date, the Company ceased granting new awards under the 2012 Plan and all remaining shares available under the 2012 Plan were transferred to the 2021 Plan. As of December 31, 2025, there were 51.2 million shares available for future grants under the 2021 Plan, inclusive of those shares transferred from the 2012 Plan. 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 97 Table of Contents 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 In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Employee Stock Purchase Plan (the “ESPP”), with an initial pool of 7.4 million shares of Class A common stock available for authorized purchase rights to the Company’s employees or to employees of its designated affiliates. In addition, on January 1 st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the ESPP shall be increased automatically by the number of shares equal to 1 % of the total number of outstanding shares of common stock and outstanding shares of preferred stock (on an as converted to common stock basis) on the immediately preceding December 31 st, although the Company’s board of directors or one of its committees may reduce the amount of the increase in any particular year. No more than 150.0 million shares of common stock may be issued over the term of the ESPP, subject to certain exceptions set forth in the ESPP. As of December 31, 2025, 17.5 million shares of Class A common stock remain available for grant under the ESPP. 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. 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. The Company recognized $ 1.2 million and $ 1.0 million of stock-based compensation expense related to the ESPP during the years ended December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025 and 2024, $ 1.5 million and $ 1.1 million, respectively, had been withheld on behalf of employees for a future purchase under the ESPP. Stock Options Stock options vest over a prescribed service period generally lasting four years . Upon the exercise of any stock options, the Company issues shares to the award holder from the pool of authorized but unissued common stock. 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. A summary of stock option activity under the 2012 Plan and the 2021 Plan, including 1.1 million stock options that were granted outside of the 2012 Plan in 2019, is presented below (in millions, except share and per share amounts): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (in years) Aggregate Intrinsic Value (1) Balance as of December 31, 2024 33,683,424 $ 6.02 4.4 $ 30.2 Exercised ( 4,388,068 ) 3.96 Forfeited ( 736,007 ) 7.28 Balance as of December 31, 2025 28,559,349 $ 6.31 3.6 $ 129.7 Exercisable and vested at December 31, 2025 27,996,364 $ 6.23 3.6 $ 128.1 98 Table of Contents 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. During the years ended December 31, 2025, 2024 and 2023, the intrinsic value of options exercised was $ 21.7 million, $ 13.0 million and $ 6.2 million, respectively. Stock-based compensation recognized during the years ended December 31, 2025, 2024 and 2023 associated with stock options was $ 10.9 million, $ 17.7 million and $ 25.6 million, respectively. 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. Restricted Stock Units A summary of RSU activity under the 2012 Plan and the 2021 Plan is presented below: Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2024 27,889,410 $ 4.73 Granted 49,922,235 7.84 Vested and converted to common stock (1) ( 23,322,842 ) 6.12 Forfeited ( 5,868,294 ) 6.31 Balance as of December 31, 2025 48,620,509 $ 7.06 (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, 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 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. Following the issuance of these RSUs, the Company discontinued the Agent Equity Program. 99 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements Stock-Based Compensation Expense Total stock-based compensation expense included in the consolidated statement of operations is as follows (in millions): Year Ended December 31, 2025 2024 2023 Commissions and other related expense $ 0.9 $ — $ 11.6 Sales and marketing 32.6 31.5 35.0 Operations and support 37.4 16.5 16.1 Research and development 92.4 58.0 45.7 General and administrative 39.4 21.5 49.8 Total stock-based compensation expense $ 202.7 $ 127.5 $ 158.2 The Company has not recognized any tax benefits from stock-based compensation as a result of the full valuation allowance maintained on its deferred tax assets. 14. Income Taxes The Company’s loss before income taxes consisted of (in millions): Year Ended December 31, 2025 2024 2023 United States $ ( 63.6 ) $ ( 158.6 ) $ ( 314.1 ) International 4.0 3.7 ( 7.6 ) Total $ ( 59.6 ) $ ( 154.9 ) $ ( 321.7 ) 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): Year Ended December 31, 2025 2024 2023 Current: Federal $ — $ — $ — State ( 0.4 ) ( 0.3 ) ( 0.3 ) Foreign ( 1.3 ) ( 0.4 ) ( 0.1 ) Total current ( 1.7 ) ( 0.7 ) ( 0.4 ) Deferred: Federal 2.9 0.5 0.8 State 0.7 — — Foreign ( 0.8 ) 0.7 — Total deferred 2.8 1.2 0.8 Total benefit from income taxes $ 1.1 $ 0.5 $ 0.4 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 100 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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: Texas 0.3 Foreign: India 1.0 United Kingdom 0.5 Total $ 1.8 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): Amount Percent 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: India 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 % 101 Table of Contents 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, 2024 2023 Tax at federal statutory rate: 21.0 % 21.0 % State taxes, net of federal effect 5.8 5.2 Change in valuation allowance ( 26.2 ) ( 23.7 ) Stock-based compensation ( 0.6 ) ( 3.6 ) Non-deductible executive compensation ( 1.0 ) ( 0.6 ) Non-deductible expenses ( 0.4 ) ( 0.4 ) Worthless stock deduction 0.2 3.2 Other 1.5 ( 1.0 ) Benefit from income taxes 0.3 % 0.1 % The components of net deferred taxes arising from temporary differences were as follows (in millions): December 31, 2025 2024 Deferred tax assets: Nondeductible accruals $ 19.8 $ 27.8 Stock-based compensation 58.5 46.7 Lease liabilities 128.1 136.6 Net operating loss carryforward 520.8 476.8 Allowance for credit losses 9.3 10.1 Accrued compensation 12.9 16.9 Capitalized research & development costs 52.7 91.7 Intangible assets 24.3 18.5 Other 2.9 4.7 Total deferred tax assets $ 829.3 $ 829.8 Deferred tax liabilities: Operating lease right-of-use assets $ ( 101.7 ) $ ( 104.9 ) Property and equipment ( 12.5 ) ( 17.4 ) Total deferred tax liabilities ( 114.2 ) ( 122.3 ) Less: valuation allowance ( 712.7 ) ( 703.8 ) Net deferred tax assets $ 2.4 $ 3.7 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. As of December 31, 2025 and 2024, the Company’s deferred tax assets were primarily the result of U.S. federal and state net operating losses, operating lease obligations, capitalized research and development costs, stock-based compensation and other compensation and expense related accruals. A full valuation allowance was maintained against its U.S. 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 tax assets. As of December 31, 2025 and 2024, the Company continued to maintain that the realization of its deferred tax 102 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. As of December 31, 2025 and 2024, the Company had approximately $ 1.8 billion and $ 1.7 billion of gross federal net operating losses, respectively. Of those amounts, $ 152.0 million will begin to expire in 2032 and $ 1.7 billion have an unlimited carryforward with utilization limited to 80 % of taxable income. Such amounts may be subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, as a result of various ownership change rules. As of December 31, 2025 and 2024, the Company had approximately $ 2.2 billion and $ 2.0 billion of gross state net operating losses, respectively, that will begin to expire in 2026. The Company had no material uncertain tax positions as of December 31, 2025, 2024 and 2023. The Company does not anticipate a material increase or decrease in uncertain tax positions in the next twelve months after the reporting period. It is the Company’s policy to record interest and penalties related to uncertain tax positions as a component of the provision for income taxes. 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 number of years with open tax audits varies depending upon the tax jurisdiction. The Company is generally no longer subject to U.S. federal examination by the Internal Revenue Service (“IRS”) for years before 2015. The IRS and state taxing authorities can subject the Company to audit dating back to 2012 when the Company begins to utilize its net operating loss carryforwards. 15. Compass Concierge Receivables and Allowance for Credit Losses In 2018, the Company launched the Compass Concierge Program for home sellers who have engaged Compass as their exclusive listing agent. The initial program was based on a services model (“Concierge Classic”) provided by Compass Concierge, LLC (“Compass Concierge”), which included items such as consultation on suggested cosmetic updates or modifications to a specific property or guidance on securing licensed contractors or vendors to perform non-structural property improvements. The Concierge Classic program provided for the payment of the up-front costs of specified home improvement services provided by unrelated vendors. During 2022, the Company substantially ceased providing new payments under the Concierge Classic program. In 2019, the Compass Concierge Program was expanded to include a loan program underwritten by an independent third-party lender (the “Lender”) through a commercial arrangement with Compass Concierge (“Concierge Capital”). Under the Concierge Capital program, the Lender originates and services unsecured consumer loans to home sellers following its independent underwriting process pursuant to program-level criteria provided by the Company. The Company has no right or obligation with respect to any individual consumer loan originated by the Lender. Under the agreement, the Company has repayment rights against the Lender in connection with a corporate loan. Payment to the Company for these services under the Concierge Classic program or repayment of the loan funds under the Concierge Capital program is due upon the earlier of a successful home sale, the termination of the listing agreement or one year from the date in which costs were originally funded. Compass Concierge receivables (“Concierge Receivables”) are stated at the amount advanced to the home sellers, net of an estimated ACL in the accompanying consolidated balance sheets. The Company incurs service fees payable to the Lender and incurs bad debt expense in connection with the Compass Concierge Program. The Company manages its credit risk by establishing a comprehensive credit policy for the approval of 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 judgments on the property; • Seller’s available equity on the property; • Loan to listing price ratio; 103 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements • FICO score (only for Concierge Capital program); and • Macroeconomic conditions. Credit Quality The Company monitors credit quality by evaluating various attributes and utilizes such information in its evaluation of the appropriateness of the ACL. Based on the Company’s experience, the key credit quality indicator is whether the underlying properties associated with the Concierge Receivables will be sold or not. Concierge Receivables associated with properties that are eventually sold have a lower credit risk than those that are associated with properties that are not sold. As of December 31, 2025 and 2024, the amount of outstanding Concierge Receivables related to unsold properties was approximately 96 % and 97 %, respectively. For Concierge Receivables where repayments have not been triggered (i.e., earlier of (i) sale of the property, (ii) termination of a listing agreement or (iii) 12 months from the date costs were originally funded), the Company establishes an estimate as to the percentage of underlying properties that will be sold based on historical data. This estimate is updated as of the end of each reporting period. Allowance for Credit Losses The Company maintains an ACL for the expected credit losses over the contractual life of the Concierge Receivables. The amount of ACL is based on ongoing, quarterly assessments by management. Historical loss experience is generally the starting point when the Company estimates the expected credit losses. The Company then considers whether (i) current conditions and economic conditions, (ii) future economic conditions and (iii) any potential changes in the Compass Concierge Program that are reasonable and supportable would impact its ACL. The following table summarizes the activity of the ACL for Concierge Receivables as of December 31, 2025 and 2024 (in millions): December 31, 2025 2024 Opening balance $ 10.4 $ 13.2 Allowances 0.4 0.4 Net write-offs and other ( 1.1 ) ( 3.2 ) Closing balance $ 9.7 $ 10.4 Aging Status 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 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): December 31, 2025 2024 Current $ 29.4 $ 30.2 31-90 days 0.8 1.1 Over 90 days 4.5 3.5 Total $ 34.7 $ 34.8 16. Net Loss Per Share Attributable to Compass, Inc. The Company computes net loss per share under the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock, Class B common stock and Class C common stock are substantially identical, other than voting rights. Accordingly, the net loss per share attributable to Compass, Inc. will be the same for Class A common stock, Class B common stock and Class C common stock on an individual or combined basis. 104 Table of Contents 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. (in millions, except share and per share amounts): Year Ended December 31, 2025 2024 2023 Numerator: Net loss attributable to Compass, Inc. $ ( 58.5 ) $ ( 154.4 ) $ ( 321.3 ) Denominator: 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. for the periods presented because including them would have been anti-dilutive (on an as-converted basis): Year Ended December 31, 2025 2024 2023 Outstanding stock options 28,559,349 33,683,424 40,527,848 Outstanding RSUs 48,620,509 27,889,410 29,943,818 Shares subject to the Employee Stock Purchase Plan 241,618 327,107 589,729 Unvested early exercised options — — 11,230 Unvested common stock 7,243 94,165 — 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) 241,972 — — 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. 17. Restructuring Activities 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 105 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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 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): Year Ended December 31, 2025 2024 2023 Severance related personnel costs $ 5.7 $ — $ 8.9 Lease termination costs 11.4 9.7 21.5 Accelerated depreciation 0.8 2.0 5.3 Total expense $ 17.9 $ 11.7 $ 35.7 The total costs incurred in connection with the Company’s restructuring activities during the years ended December 31, 2025, 2024 and 2023 were included in the consolidated statements of operations as follows (in millions): Year Ended December 31, 2025 2024 2023 Restructuring costs $ 17.1 $ 9.7 $ 30.4 Depreciation and amortization 0.8 2.0 5.3 Total expense $ 17.9 $ 11.7 $ 35.7 The following table summarizes the estimated timing of the Company’s future lease and lease-related payments, net of amounts contractually subleased, related to restructuring activities for lease termination costs as of December 31, 2025 (in millions): Payment Due by Period 2026 $ 9.1 2027 6.8 2028 5.4 Thereafter 6.0 Total $ 27.3 18. 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 106 Table of Contents Compass, Inc. Notes to Consolidated Financial Statements 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. 107 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.