Compass Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So we get asked the question. I'm sure you're like -- why are you a technology company or why should you be valued at a premium to the brokerage industry even though you are not right now? We kind of think about Salesforce.com, the network effect of data. I don't want to say data lock-in because that's not nice, and we could talk about who owns the data. Maybe give us your take on -- again, you made a point. 100% of the services now can be done in your software. Agents don't have to go and use six or seven different software and hack the data to work together. Just talk about like the vision of how you got here and where you see it go.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Okay, so that is very robust what you described. And I encourage any clients, just find a Compass broker and ask them. It's not hard. It actually came up at dinner last night. Someone didn't even know I covered Compass, et cetera. What stops other brokerage firms from developing a similar suite of software?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : I want to hear your pitch that you can -- we'll do that afterwards, what your --

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Go on. Put it on. Give me your pitch.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So maybe to that point, Kristen, the Company clearly has been in an investment mode. We are starting to see initial signs of meaningful leverage this quarter. All lines of the P&L showed positive leverage. Just talk about how you think about balancing investment versus margin improvement because again, historically, this is a business that has been an EBITDA cash flow business, but yet tech tends to like be looked at more of a revenue growth profit. How do you think about the balance, Kristen?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Terrific. So, Robert, I want to go back to the idea of like the flywheel in the marketplace. And again, we all know the Salesforce.com success story, right? Once they built it and they got clients with data on it, you had multiple third-party providers then building vertical solutions, et cetera. Talk about -- so you have your own aspirations to offer more services. You've talked about title and escrow. We know that you've launched mortgage with a joint venture. There's repairs, staging, moving, post-move services. Just talk about that flywheel, what you want to offer as Compass and what you want to basically open up your network to have third parties come in and sell to your network. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2021 / 1:05PM, COMP.N - Compass Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So do you have a sense -- I mean, look, we cover Fiverr, right? They basically offer services. So you could go hire a photographer, you can hire a videographer. Do you know what percent of your agents are effectively doing all these things off your network, meaning hiring other people, like you don't even know they are hiring and hence, it's -- you are missing that kind of capture?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So let's talk about market. So you've historically focused on premium listings over $1 million, and that number keeps inching up. I think there's been a -- you've clearly said you are adding more markets. Is there a strategy to move down market -- now down market can mean two things. It could mean markets that are just smaller, right, smaller cities, smaller MSAs. And then there is also to lower value transactions. So maybe share your thoughts about expansion and once you reach, again, where you want to be amongst the biggest markets, how do you think about growth from there?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : No Bozeman yet? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2021 / 1:05PM, COMP.N - Compass Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : No Bozeman?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Bozeman, Boise, all of these markets where you have all these people from big cities moving to.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : To the detriment of the people who live there apparently. Don't ask people from Bozeman or Boise what they think about it. Go ahead.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Got it. So, Kristen, talk about the impact on the P&L as you move down market. What does that mean?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : I want to go back to the broader disruption in the industry, Robert. So the way at least I look at it is not a real estate expert that basically Keller Williams disrupted or tried to disrupt traditional brokerage firms. Now you have EXPI and Redfin trying to disrupt Keller Williams. I mean, is this history repeating itself? And like at the end of the day, just as the market just gets segmented, and so you have X percent of the market, of brokers who really value the technology and the full stack. And then you've got one or two companies who were just effectively -- they are just trying to sell the biggest -- tried to take the lowest commission with the least services. How do you see disruption happening broadly in the real estate industry?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : No, I will scratch that on the replay.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So do you think a discount brokerage model can work for the high-end? And again, I guess there's the ultrahigh end, and then there is -- saying, okay, homes over $1 million, $1.2 million, $1.4 million. What are your thoughts on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2021 / 1:05PM, COMP.N - Compass Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : What do you charge a customer, yes.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : You're owning your own cooking, don't fake it.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Right. Okay, so two more questions. And I just -- I encourage everybody -- we've gotten close to the end of time. So if you have any more, please -- I'm pointing there. I should point here. Put them in the chat. How are you thinking about the real estate cycle? What's your prediction for inventory levels and prices over the next 18 months? I'm not holding you to this. This is kind of like you can change your mind in a month. This is just like at this moment. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 11, 2021 / 1:05PM, COMP.N - Compass Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Hold on. We have multiple companies. It's interesting. Fiverr, GoDaddy, Wix this morning. They are like -- our business people finally decided to take a vacation, and you kind of saw it. There was a slowdown. This is SMB, but I mean, in a way, your agents are SMBs. They finally decided to go on vacation.

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : So, the last thing, Kristen, just to remind everybody the pending lockup dates, details, time?

Question: Jason Helfstein - Oppenheimer & Co. Inc. - Analyst : Great. I want to thank you both for the time. And for our clients, we look forward to seeing you at the next panel. Robert, Kristen, thank you very much.