Switching gears now. Real estate brokerage, compass released
its latest earnings report yesterday, the company reporting 1/4
quarter revenue jump of 31% year over year, reaching
$1.6 billion. But at the same time the firm
is still experiencing difficulty when it comes to recouping ongoing
losses from its continued expansion. But it keeps adding
agents to its team as its territory grows. Compass
now controls a 5.6% share of the U. S
. Real estate market. Joining us now is robert
rifkin ceo of compass, robert, thank you for
being with us. So walk us through these results
. See your revenue increased during a hot market last
year. But when do you expect to begin to
recover from losses related to your I. P.
O. And you're an expansion. And we feel
really good about the year that we generated$6.4 billion
73% year over year, our market share grew 40%
. And we actually generated adjusted Ebitda profitability for the
year Which was two years earlier than we said we
would in the IP0. Which was just one year
ago in April. Now let's focus on expansion.
Cause I mentioned that in the intro to you,
you launched in a number of new markets last year
. Tell us about the growth and where you anticipate
expanding next. And so we really focused the growth
on moving to markets where we saw our clients were
moving too. So let's say north Carolina, a
number of pockets throughout florida, Nashville ST louis hawaii
and that was really the focus of all the being
able to cover all the covid moves going forward,
we're going to continue that strategy. But at a
more moderated rate Now, agents are also flocking to
your company. How many joined last year? And
how much business did they do during 2021's hot housing
market. And so agents, the reason they come
to campus but in context is to grow their business
and have a better quality of life. And we
have invested over$600 million in R. And D
. To help them achieve that goal. We're investing
$300 million in run rate R. And D.
Which is likely larger than every other traditional broker firm
in the country combined. And so on the on
the side you have a crm marking tools to market
themselves and their properties, client collaboration tools, valuation
tools, transaction management tools, all to help them
run their business as they are. They consider themselves
entrepreneurs and small business owners. Uh That that we
actually see the proof of the the tools working in
that the top 25% of users of the platform are
growing their business three times faster than the bottom 25%
. And they're also staying at the company at a
98% agent retention rate versus 86% for the bottom quartile
wow. And you also have a unique platform for
agents which you mentioned. Um So when it comes
to your agents and your broker's, what is the
selling point? Is it the software that makes them
feel like their own, their own entrepreneur. Is
it the brand recognition that Compass now has or is
it the fact that they see this company as something
that's steadily growing and they want to be part of
it? Yes. Yes. Yes and more.
So let me start by saying my mom is actually
a real estate agent has been the majority of my
life. She's a real estate agent today at Compass
. And so I built a compass with her in
mind and the goal for an agent is to grow
their business and have a better quality of life,
more income to support their family, more time to
be with their family. And it's not just software
, it's a platform of software and services. We
talked about the software, the services would be an
in house marketing and advertising agency that helps them better
market their clients properties to get them more exposure or
compass concierge, we front load the cost of home
improvement services and get paid out of proceeds. So
homes are move in ready and when they are they
they sell for a higher price and they sell faster
as well. And so that those are the reasons
why agents come to compass and we continue we believe
that they will continue to come next year at the
same rate. They came last year. Now 2021
was a nice time to be a real estate agent
. They were very, very busy. But 2022
seems to be a little different with my co anchor
just mentioning that lumbering lumber prices are soaring that these
new houses aren't getting built as quickly. Also these
consumers dealing with higher than normal inflation. So how
is your business ready to pivot to create a better
I guess future for the company during 2022 when these
headwinds should be on the way? Yes. So
the inflation is significant and real in our country today
and that's going to leave rates moving up. Now
. We're protected from that more than the average brokerage
firm because we play more in the high end our
average transaction prices above$1 million dollars and the high
end isn't as sensitive to race because they don't use
mortgages as much. But I would say this is
an incredible time to consider selling because you have record
demands multiple offers in all of our markets and record
low inventory. And so if you look at your
your neighbor and you see them getting a price that's
very attractive and this is a unique time because it's
so supply constrained to be able to take advantage of
that. What about buying? This is a hard
time to be a buyer. Yeah. If you're
trying to be a seller. Um and look if
you're a buyer. I highly recommend you find one
of the best agents in the country. Like I'm
biased, I would say it's compass, but agents
have access to inventory that is not always available on
websites. And so in a world where inventory is
so constrained, you want to make sure you can
see as much of the inventory that that isn't on
the Internet. Got it, robert, Rifkin,
Ceo of Compass, robert. Always a pleasure to
have you on. Thank you so much for joining 00:05:46.029 --> us.