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Fri Oct 23 · markets open6 signals today103 insider buys this week · $208.8MCIRO short report next: Oct 31The week ahead

COMP

Compass, Inc.
NYSE · REAL ESTATE · REAL ESTATE AGENTS & MANAGERS (FOR OTHERS)
9.97
+0.25 +2.57%
USD · close Oct 22
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Work order
71
PASS · shorts 71
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $7.6BP/E 166.2DIV YIELD —FCF YIELD 1.70%REV TTM $10.6B +67.8%NET INCOME $66.8MNET DEBT $2.4B52W 6.68 – 13.58SEC XBRL · TTM TO Invalid Date

How COMP rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
28%
of sentences unchanged
Added
346
new sentences
Dropped
268
sentences removed
Length
+3,660
words, now 21,991

New in FY2025

  • A description of the material risks and uncertainties associated with our business is set forth below.
  • Real Estate Industry Our success depends on general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, and our business may be negatively impacted by economic and industry downturns, including seasonal and cyclical trends, and volatility in the residential real estate market.
  • Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or other constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; actual or perceived instability of financial institutions; legislative, regulatory or industry changes; changes in, or uncertainty regarding, trade policy; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation, the cost and availability of home insurance, changes in tax law, and wage stagnation or wage increases that do not keep pace with inflation; population decline or growth (including in connection with immigration policy); and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership.
  • Recent changes in U.S. tariff policies, retaliatory tariffs and trade tensions could disrupt global supply chains and increase the cost of housing construction and renovation.
  • Uncertainty regarding price stability and asset valuations, volatility in the capital markets, the possibility of a reduction in economic growth or a recession with concomitant job losses may cause prospective home buyers to delay or cancel their decision to purchase a home leading to a reduction in transaction volume which, if it occurs, could have a material adverse effect on our business, financial condition and results of operations.
  • As our revenue is primarily driven by sales commissions, transaction fees and royalty fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by real estate professionals could adversely affect our business, financial condition and results of operations.
  • Mortgage rates remained elevated by historical standards, with the average 30-year fixed mortgage rate still in the low-6% range as of January 2026.
  • The Table of C ontents Federal Reserve Board’s summary of economic projections suggests fewer rate cuts in 2026 than in 2025, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates.
  • It is also possible that mortgage rates and the long end of the interest rate curve could remain elevated in spite of lower federal funds rates.
  • High mortgage rates and tighter mortgage underwriting standards have had an adverse effect on our business, financial condition and results of operations.
  • High mortgage rates have contributed to inventory constraints and a decline in residential real estate home sale transaction volume by discouraging potential sellers from giving up lower existing mortgage rates and by decreasing overall housing affordability.
  • Although inventory has increased recently, affordability and high mortgage rates continue to constrain home sale transaction volume and negatively impact our business, financial condition and results of operations.
  • Lower transaction volume also reduces demand for title, escrow, settlement, and mortgage services.
  • Reduced purchase and refinance activity generally increases competition among loan originators and title agencies, putting pressure on revenue and margins in our mortgage and title agency businesses.
  • In addition, during the past several years, many lenders have significantly tightened their underwriting standards or added new criteria or approvals necessary to underwrite mortgages, and many alternative mortgage products have become less available in the marketplace.
  • More stringent mortgage underwriting standards generally adversely affect the ability and willingness of prospective buyers to finance home purchases or to sell their existing homes in order to purchase new homes, which may decrease the number of real estate transactions that real estate professionals execute and that our title and escrow businesses close, and may decrease the number of mortgages that our mortgage business originates.
  • Home inventory levels have been low in certain markets and price points in recent years, which has caused more homeowners to retain their homes for longer periods of time, driving a negative impact on the volume of home sale transactions closed by real estate professionals.
  • This lack of supply has been caused by a variety of factors outside our control, including high mortgage rates and other affordability constraints, slow new housing construction, and macroeconomic conditions.
  • Risks Related to Our Business and Operations We may be unable to successfully integrate Anywhere’s business and realize cost synergies and other anticipated benefits of the Anywhere Merger.
  • The success of the Anywhere Merger will depend, in part, on our ability to successfully combine and integrate the two companies and realize the cost synergies and other anticipated benefits, including innovation opportunities and operational efficiencies, from the Anywhere Merger, in a manner that does not materially disrupt existing real estate professional, broker, franchise, affiliate, customer, real estate partner, employee and other stakeholder relations nor result in decreased revenues.
  • If we are unable to achieve the cost synergies and other anticipated benefits within the expected timeframe, or at all, our business, financial condition, results of operations and the trading price of our Class A common stock may be materially adversely affected.
  • The integration of the two companies may result in material challenges, including, without limitation: • the diversion of management’s attention from ongoing business concerns and performance shortfalls at the combined business as a result of the devotion of management’s attention to the Anywhere Merger and related integration work; • the disruption of, or loss of momentum in, ongoing businesses or inconsistencies in standards, controls, procedures and policies; • managing a larger and more complex combined business, including a diverse portfolio of brands, a significantly expanded franchisee system, a larger title and escrow business, a relocation business, a leads business, and a title underwriter joint venture; Table of C ontents • maintaining employee morale, retaining key management and other employees and the possibility that the integration process and potential organizational changes may adversely impact the ability to maintain employee relationships; • retaining existing business and operational relationships, including but not limited to those with real estate professionals, brokers, franchisees, affiliates, customers, real estate partners, employees and other counterparties; and attracting new business and operational relationships; • the integration process not proceeding as expected, including due to a possibility of faulty assumptions or expectations regarding the integration process or Anywhere’s operations; • the discovery of new or expanded liabilities or costs from Anywhere; • the ability to identify and provide change-in-control notices or otherwise avoid defaults, penalties, or other adverse contractual consequences; • consolidating corporate, administrative and compliance infrastructures and eliminating duplicative operations; • coordinating geographically separate organizations, including in international markets with differing business, legal and regulatory climates; • challenges and risks associated with onboarding real estate professionals and franchisees affiliated with Anywhere onto our platform on a timely basis or at all; • pending such onboarding, the increased complexity and risk related to the maintenance of Anywhere’s products and services; • unanticipated issues in integrating information technology, communications and other complex systems; • uncertainty among affiliates, partners and others with whom we do business (which may cause them to delay, defer, renegotiate or terminate business relationships); and • unforeseen expenses, costs, liabilities or delays associated with the Anywhere Merger or the integration.
  • Many of these factors will be outside of our control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues or cost synergies and diversion of management’s time and energy, which could materially affect our business, financial condition, results of operations and the trading price of our Class A common stock.
  • In connection with the Anywhere Merger, we became a party to significant additional indebtedness, which could adversely affect our business and operations, including by decreasing our business flexibility and significantly increasing our interest expense, among other things.
  • In connection with the Anywhere Merger, we became a party (through our subsidiaries and as a guarantor) to the Anywhere Secured Notes and Anywhere Unsecured Notes; issued and sold $1.0 billion in aggregate principal amount of the Convertible Notes; executed a performance guarantee for the Apple Ridge securitization program; and continue to be subject to the 2025 Revolving Credit Facility and Concierge Facility.
  • Additionally, lender commitments for the 2025 Revolving Credit Facility, which is secured by substantially all of our assets and our subsidiary guarantors, automatically increased to $0.5 billion upon consummation of the Anywhere Merger.
  • We may also incur additional indebtedness to meet future financing needs.
  • As a result, we have substantially increased indebtedness following completion of the Anywhere Merger in comparison to our historical levels, which could have the effect, among other things, of: • reducing our flexibility to respond to changing business and economic conditions; • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
  • Our interest expense has significantly increased in connection with such indebtedness.
  • If we do not achieve the cost synergies and other anticipated benefits from the Anywhere Merger, if the financial performance of the combined company Table of C ontents does not meet current expectations, or if our business does not otherwise generate sufficient funds, then our ability to comply with the financial covenant under the 2025 Revolving Credit Facility, service our indebtedness, or satisfy our other cash needs may be adversely impacted, any of which may have a material adverse impact on our financial condition and results of operations.
  • Additionally, our debt agreements contain, and any future agreement relating to additional indebtedness which we may enter into may contain, various affirmative covenants, such as financial statement reporting requirements, negative covenants, and financial covenants applicable to us and our restricted subsidiaries.
  • The negative covenants include restrictions that, among other things, restrict our and our subsidiaries’ ability to incur liens and indebtedness, make loans, advances or other investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases, repay junior or contractually subordinated debt and consummate certain other matters, all subject to certain exceptions.
  • The ability of the combined company and its subsidiaries to comply with these provisions may be affected by events beyond its control.
  • In certain cases, we may be required to repay all of the relevant debt immediately and the occurrence of such an event may have an adverse impact on our financial condition and results of operations.
  • An event of default under our 2025 Revolving Credit Facility or the indentures governing our other material indebtedness would adversely affect our operations and our ability to satisfy obligations under our indebtedness.
  • If we are unable to comply with the Total Net Leverage Ratio covenant under the 2025 Revolving Credit Facility (as defined in the underlying agreement) or if we are unable to comply with other restrictive covenants under that agreement or the indentures governing the Anywhere Secured Notes and Anywhere Unsecured Notes and we fail to remedy or avoid a default as permitted under the applicable debt arrangement, there would be an “event of default” under such arrangement.
  • Other events of default include, without limitation, nonpayment of principal or interest, material misrepresentations, insolvency, bankruptcy, certain material judgments, change of control, and cross-events of default on material indebtedness as well as, under the 2025 Revolving Credit Facility, failure to obtain an unqualified audit opinion by 90 days after the end of any fiscal year.
  • Upon the occurrence of an event of default under the 2025 Revolving Credit Facility, the lenders will not be required to lend any additional amounts to us, could elect to declare all borrowings outstanding, together with accrued interest and fees, to be immediately due and payable and may prevent us from making payments on the Anywhere Secured Notes, Anywhere Unsecured Notes and Convertible Notes, any of which could result in an event of default under the indentures governing such notes or our securitization programs.
  • If we were unable to repay the amounts outstanding under our 2025 Revolving Credit Facility, the lenders and holders of such debt could proceed against the collateral granted to secure those debt arrangements.
  • We have pledged a significant portion of our assets as collateral to secure such indebtedness.

and 306 more.

Gone since FY2024

  • A description of the risks and uncertainties associated with our business is set forth below.
  • Risks Related to Our Business and Operations Our success depends on general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, and our business may be negatively impacted by economic and industry downturns, including seasonal and cyclical trends, and volatility in the residential real estate market .
  • Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; instability of financial institutions; legislative, regulatory or industry changes; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation and wage stagnation or wage increases that do not keep pace with inflation; and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership.
  • As our revenue is primarily driven by sales commissions and transaction fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by agents at our owned-brokerage and our affiliates could adversely affect our business, financial condition and results of operations.
  • The Federal Reserve Board took aggressive actions aimed at controlling inflation in 2022 and 2023, including raising the federal funds rate and reducing its holdings of mortgage-backed securities.
  • Rising interest rates in 2022 and 2023 contributed to higher mortgage interest rates, which in turn contributed to a decline in residential real estate home sale transaction volume and inventory constraints.
  • While the Federal Reserve Board shifted its policy in 2024 with three interest rate cuts that altogether shaved a full percentage point off the federal funds rate, the housing market remained under pressure as high mortgage rates and economic volatility continued to shape the landscape.
  • The Federal Reserve Board’s summary of economic projections suggests even fewer rate cuts in 2025 than in 2024, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates if inflation persists.
  • It is also possible that mortgage rates and the long end of the interest rate curve could remain elevated in spite of lower federal funds rates due in part to the high level of treasury securities expected to be issued to fund federal deficits and higher interest rate expenses.
  • High mortgage rates have contributed to a decline in residential real estate home sale transaction volume and title and escrow and mortgage activity, which has had an adverse effect on our business, financial condition and results of operations .
  • High mortgage rates have contributed to a decline in residential real estate home sale transaction volume, which has had an adverse effect on our business, financial condition and results of operations.
  • As mortgage rates remain high, potential home sellers are more likely to choose to stay with their lower mortgage rates rather than sell their home and pay a higher mortgage rate with the purchase of another home, or prefer to rent rather than purchase a home.
  • Additionally, the overall affordability of homes generally decreases in a high mortgage rate environment.
  • Both of these trends have contributed to inventory constraints and a decline in home sale transaction volume in recent years.
  • Although inventory has increased recently, affordability and high mortgage rates continue to constrain home sale transaction volume, which we expect to have an adverse effect on our business, financial condition and results of operations.
  • A decline in home sale transaction volume also has a negative impact on title and escrow activities, which has had and could continue to have an adverse effect on our business, financial condition and results of operations.
  • High mortgage rates have also had an adverse effect on our mortgage business.
  • As mortgage rates remain high, reduced demand for purchase mortgages and refinancing generally results in an increase in competition among loan originators, which has had, and is likely to continue to have, a negative impact on revenue volume and gross profit margin for our mortgage business, which in turn has had and could continue to have an adverse effect on our business, financial condition and results of operations.
  • Ongoing industry antitrust class action litigation (including the Antitrust Lawsuits filed against us) or any related regulatory activities could result in additional meaningful industry-wide changes and the recent changes and/or any additional meaningful changes could have a materially adverse effect on our business, operations, financial condition and results of operations .
  • The ongoing industry antitrust class action litigation, as well as the Antitrust Lawsuits filed against us (as described in more detail in Note 11 to our consolidated financial statements included elsewhere in this Annual Report (including any injunctive relief, appeals or settlements), either alone or in combination with related regulatory or governmental actions, or any resulting changes to competitive dynamics or consumer preferences, has resulted in certain industry-wide changes and could result in additional meaningful industry-wide changes, including changes to the broker commission structure and meaningful decreases in the average broker commission rate (including the average buy-side commission rate).
  • Any decrease in our gross commission income or the percentage of commissions that we collect may harm our business, financial condition and results of operations .
  • Our business model depends upon our agents’ success in generating gross commission income, which we collect and from which we pay them net commissions.
  • The ongoing industry antitrust class action litigation reinforced the fact that commission rates are negotiable.
  • Additionally, the recent industry-wide practice changes could result in changes to customary commission rates.
  • Any decrease in commission rates could adversely impact our business, financial condition, and results of operations.
  • In addition, we collect fees from agents at our owned-brokerage and from our affiliates for use of our technology offerings and other services.
  • Home inventory levels have been low in certain markets and price points in recent years, which has caused more homeowners to retain their homes for longer periods of time, driving a negative impact on the volume of home sale transactions closed by agents at our owned-brokerage and our affiliates.
  • This lack of supply has been caused by pressures outside our control, including slow new housing construction, macroeconomic conditions, and real estate industry models that purchase homes for long-term rental or corporate use.
  • We must conservatively manage our cash and expenses in light of these and other negative changes in market conditions.
  • To date, we have done so through reductions in force, changes to our spending approval processes, adjustments to our sales incentives and sales teams, and otherwise by pivoting our focus from growth to profitability and cash flow.
  • Although we expect to continue to make future investments in the development and expansion of our business, we may also undertake further initiatives to restructure our operations to improve operational efficiency.
  • Gaining additional efficiencies may become increasingly difficult over time.
  • In addition, there are one-time restructuring costs and negative impacts on sales growth and company operations relating to restructurings.
  • Moreover, since we were founded, we have incurred net losses and have had an accumulated deficit, and may continue to do so, for a number of reasons, including: declines in U.S. residential real estate transaction volumes; changes in general economic conditions; changes in real estate market conditions; expansion into new markets for which we typically incur significant losses immediately following entry; increased competition; increased costs to attract and retain agents at our owned-brokerage; increased costs related to the expansion of our affiliate business; increased costs to hire additional personnel to support our overall growth, for research and development, and for sales and marketing; changes to the customary commission rates; changes in our fee structure or rates; inefficiencies in our technology and business model; failure to execute our growth strategies; and unforeseen expenses, difficulties, complications and delays.
  • A material portion of our real estate brokerage offices and agents are concentrated in certain geographic areas, such as Southern California, Northern California, Texas and the tri-state area.
  • Local and regional real estate and economic conditions could differ materially from prevailing conditions in other parts of the U.S.
  • Additionally, a material portion of our real estate transactions takes place in high-end markets.
  • Any downturn in high-end markets could result in a decline in our revenue and could have a material adverse effect on our operating results.
  • Further, if there is a downturn in high-end markets, agents at our owned-brokerage and our affiliates may shift to transactions involving middle and lower range market prices, which, absent a sufficient increase in the number of transactions, could result in a decline in our revenue and could have a material adverse effect on our operating results.
  • If we fail to continuously innovate, improve and expand our technology offerings to create value for agents at our owned-brokerage and our affiliates and their respective clients, our business, financial condition and results of operations could be adversely affected .

and 228 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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