Compass, Inc.
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
COMP$10.21+10.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001563190-25-000196
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001563190-26-000101
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 161 current paragraphs.
37 unchanged; 28 reworded; 95 added; 59 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (95)
Current report
Following the Anywhere Merger, we expanded our service area to include a presence in every major U.S. city and approximately 120 countries and territories, and we operate a portfolio of some of the most recognized and iconic brands, including @properties, Better Homes and Gardens Real Estate, Century 21, Christie’s International Real Estate, Coldwell Banker, Compass, Corcoran, ERA, and Sotheby’s International Realty. Following the Anywhere Merger, we served a global network of more than 340,000 real estate professionals in our owned-brokerage and franchise businesses.
Current report
The Company reports its operations in three business segments: Brokerage, Franchise and Integrated Services. We refer to independent sales agents at our owned-brokerage and at our franchises collectively as “real estate professionals.”
Current report
Following the Anywhere Merger, we operate our owned-brokerage business primarily under the @properties, Coldwell Banker, Compass, Corcoran, and Sotheby’s International Realty brands.
Current report
In January 2025, we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand. As a part of the Anywhere Merger, we also acquired a franchise portfolio of well-known, industry-leading franchise brokerage brands, including Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Coldwell Banker Commercial, Corcoran, ERA and Sotheby's International Realty. We attract independently operated brokerages that affiliate with us as franchisees or licensees under long-term franchise or license agreements. We generate revenue from our franchise business when we collect royalties from our independently owned and operated franchisees, which are based on a percentage of the franchisee’s gross sales commissions, as well as certain other fees, such as marketing and technology fees.
Current report
We also provide non-brokerage services to real estate professionals and their clients, including title and escrow and, via minority-owned joint ventures, mortgage. The Anywhere Merger expanded these services and added additional services, including relocation, and title underwriting via a minority-owned joint venture. We refer to these services collectively as “Integrated Services.”
Current report
As part of the Anywhere Merger, we acquired Cartus, a provider of global relocation services. Cartus offers a broad range of world-class employee relocation services designed to manage all aspects of an employee’s move and allow our clients to outsource their entire relocation programs to us.
Current report
Our Technology Offerings
Current report
As part of the Christie’s International Real Estate acquisition, we acquired a proprietary multi-tenant technology platform that is offered to our franchisees operating under the Christie’s International Real Estate brand and their real estate professionals. Real estate professionals operating under historical Anywhere brands continue to utilize the technology-powered tools and services in place at the time of the Anywhere Merger.
Current report
Recent Developments
Current report
On January 9, 2026, we completed our merger with Anywhere, acquiring all outstanding Anywhere common stock in a stock-for-stock transaction. Holders of Anywhere common stock received 1.436 shares of our Class A common stock for each Anywhere share, resulting in the issuance of 162.1 million shares. We also repaid $502 million of Anywhere's revolving credit facility at closing, as required under its change in control provisions, and issued replacement equity awards to Anywhere award holders.
Current report
During the three months ended March 31, 2026, we incurred $183 million of merger-related expenses, which included legal and investment banking fees, severance and other personnel costs, integration costs, and $61 million of stock-based compensation from the acceleration of converted Anywhere awards upon certain employee terminations. These amounts are reported within the Anywhere merger transaction and integration expenses line of the condensed consolidated statements of operations.
Current report
Convertible Notes
Current report
In anticipation with the Anywhere Merger, on January 9, 2026 we issued $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 mature on April 15, 2031, unless earlier repurchased, converted or redeemed. The Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at our 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 Class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $15.98 per share of Class A common stock. The net proceeds were used to repay the revolving credit facility 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 (as defined below).
Current report
Capped Call Transactions
Current report
Additionally, we entered into privately negotiated capped call transactions (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 Class A common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions is $23.68 per share of Class A common stock, which represents a premium of 100% over the last reported sale price of the Class A common stock on January 7, 2026. We paid $97 million for the Capped Call Transactions, funded with proceeds from the Convertible Notes. The net cash proceeds we received from the offering of the Convertible Notes were approximately $880 million after considering the $97 million cost of the Capped Call Transaction and $23 million of debt issuance costs.
Current report
Secured and Unsecured Notes
Current report
Following the Anywhere Merger, the 9.75% Senior Secured Second Lien Notes and the 7.00% Senior Secured Second Lien Notes (together, the “Secured Notes”) and the 5.75% Senior Notes and 5.25% Senior Notes (together, the “Unsecured Notes”) continued as obligations of the Anywhere issuers and are reflected in the Company’s condensed consolidated financial statements for the period ended March 31, 2026.
Current report
For additional discussion of the impact of the Anywhere Merger and related financing transactions, including the Convertible Notes, the Capped Call Transactions and the Secured Notes and Unsecured Notes on our liquidity, see “—Liquidity and Capital Resources.”
Current report
The following discussion presents our results of operations on both a consolidated basis and by reportable segment for the three months ended March 31, 2026 and 2025. Our results for the three months ended March 31, 2026 include the operations of the combined company following the Anywhere Merger, which closed on January 9, 2026. Results for the three months ended March 31, 2025 reflect the historical results of Compass, Inc. on a stand-alone basis.
Current report
Following the Anywhere Merger, the Company operates through three reportable segments: Brokerage, Franchise, and Integrated Services. These segments reflect the manner in which the Chief Operating Decision Maker ("CODM") reviews operating performance and allocates resources. Management's discussion of segment operating performance in this MD&A is based on the same segment structure and performance measures used by the CODM and disclosed in Note 17 — "Segment Information", to the condensed consolidated financial statements. Any changes to the Company's segment structure or the manner in which segment performance is evaluated would be reflected in both the segment footnote and MD&A.
Current report
The results below are presented on both a GAAP and non-GAAP basis, with reconciliations of non-GAAP measures to the most directly comparable GAAP measures provided where applicable.
Current report
Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025
Current report
The following section provides analysis of our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025. References to "stand-alone Compass" refer to our results excluding the impact of the Anywhere Merger. Additional discussion of financial metrics for the Company's reportable segments follows in the "- Segment Operating Performance" section.
Current report
On a consolidated basis, commissions and other related expenses was $2.0 billion for the three months ended March 31, 2026, an increase of $903 million, or 81.7%, compared to the prior-year period. Of this increase, $789 million related to the Anywhere Merger. Including the impact of the Anywhere Merger, commissions and other related expenses as a percentage of revenue decreased to 74.3% from 81.5% for the three months ended March 31, 2026 and 2025, respectively. This decrease is primarily attributable to Anywhere's franchise and integrated services businesses, which contributed $198 million of revenue and do not incur commissions and other related expense. Excluding the impact of Anywhere, commissions and other related expenses for stand-alone Compass as a percentage of revenue decreased to 81.1% from 81.5% for the three months ended March 31, 2026 and 2025, respectively, as a result of our other acquisitions completed in 2025, which operated with more favorable average agent splits.
Current report
On a consolidated basis, sales and marketing expense was $97 million during the three months ended March 31, 2026, an increase of $39 million, or 67.2%, compared to the prior-year period, of which $45 million is related to the Anywhere Merger.
Current report
Excluding the impact of the Anywhere Merger, sales and marketing expense was $52 million for the three months ended March 31, 2026, a decrease of $6 million, or 10.3%, year-over-year. Sales and marketing expense for stand-alone Compass included stock-based compensation of $5 million and $7 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, sales and marketing expense for stand-alone Compass was $47 million and $51 million for the three months ended March 31, 2026 and 2025, respectively, representing a 7.8% decrease and comprising 3.1% and 3.8% of revenue. The year-over-year decrease in absolute dollars was primarily driven by lower cash-based incentives and marketing expenses for our stand-alone Compass real estate professionals. The decrease as a percentage of revenue reflects both the aforementioned lower costs and higher revenue year-over-year.
Current report
On a consolidated basis, operations and support expense was $398 million during the three months ended March 31, 2026, an increase of $266 million, or 202%, compared to the prior-year period, of which $250 million is related to the Anywhere Merger.
Current report
Excluding the impact of the Anywhere Merger, operations and support expense was $148 million for the three months ended March 31, 2026, an increase of $16 million, or 12.1%, year-over-year. Operations and support expense for stand-alone Compass included stock-based compensation of $9 million and $5 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, operations and support expense for stand-alone Compass was $139 million and $127 million for the three months ended March 31, 2026 and 2025, respectively, representing a 9.4% increase and comprising 9.2% and 9.4% of revenue. The year-over-year increase in absolute dollars was primarily driven by higher personnel expenses resulting from increased headcount related to our 2025 acquisitions. As a percentage of revenue, operations and support expense for the stand-alone Compass business remained relatively flat year-over-year.
Current report
Technology and development
Current report
On a consolidated basis, technology and development expense was $119 million during the three months ended March 31, 2026, an increase of $69 million, or 138%, compared to the prior-year period, of which $60 million is related to the Anywhere Merger.
Current report
Excluding the impact of the Anywhere Merger, technology and development expense was $59 million for the three months ended March 31, 2026, an increase of $9 million, or 18.0%, year-over-year. Technology and development expense for stand-alone Compass included stock-based compensation of $19 million and $13 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, technology and development expense for stand-alone Compass was $40 million and $37 million for the three months ended March 31, 2026 and 2025, respectively, representing a 8.1% increase and comprising 2.7% of revenue in both periods. The year-over-year increase in absolute dollars was primarily driven by higher personnel expenses from increased headcount as we continue to invest in our platform.
Current report
On a consolidated basis, general and administrative expense was $81 million during the three months ended March 31, 2026, an increase of $54 million, or 200%, compared to the prior-year period, of which $38 million is related to the Anywhere Merger.
Current report
Excluding the impact of the Anywhere Merger, general and administrative expense was $43 million for the three months ended March 31, 2026, an increase of $16 million, or 59.3%, year-over-year. General and administrative expense for the three months ended March 31, 2026 includes a $7 million legal charge in connection with the Antitrust Litigation (see Note 11 — "Commitments and Contingencies" to the condensed consolidated financial statements, for further information). General and administrative expense for stand-alone Compass also includes stock-based compensation of $11 million and $6 million for the three months ended March 31, 2026 and 2025, respectively. Excluding the legal charge and stock-based compensation, general and administrative expense for stand-alone Compass was $25 million and $21 million for the three months ended March 31, 2026 and 2025, respectively, and comprised 1.7% and 1.5% of revenue. The year-over-year increase in absolute dollars and as a percentage of revenue for stand-alone Compass general and administrative expense was immaterial.
Current report
Anywhere merger transaction and integration expenses during the three months ended March 31, 2026 represents transaction and integration costs incurred in connection with the Anywhere Merger. These costs were comprised of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. In addition, we incurred $61 million in stock-based compensation expense related to the acceleration of certain Anywhere equity awards that were converted to Company equity awards in connection with the Anywhere Merger and subsequently accelerated upon the termination of certain employees.
Current report
Restructuring costs were $6 million and $9 million during the three months ended March 31, 2026 and 2025, respectively. These costs primarily consisted of lease termination costs and other related costs pertaining to restructuring programs initiated prior to the Anywhere Merger.
Current report
Depreciation and amortization expense increased $134 million, or 462%, for the three months ended March 31, 2026 compared to the prior-year period. The year-over-year increase was primarily attributable to the Anywhere Merger, with the acquired Anywhere businesses contributing $137 million of depreciation and amortization expense, of which $113 million related to acquired intangible assets.
Current report
Investment income
Current report
Interest expense was $37 million for the three months ended March 31, 2026, an increase of $35 million year-over-year. The increase was primarily attributable to the Anywhere Merger, with assumed debt contributing $35 million of interest expense during the current period.
Current report
For the three months ended March 31, 2026, Income tax benefit increased by $398 million when compared to the three months ended March 31, 2025. The benefit during the three months ended March 31, 2026 resulted from the establishment of
Current report
deferred tax liabilities for the recognition of intangible assets created through the Anywhere Merger that are non-deductible for tax purposes.
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Removed paragraphs (59)
Previous report
OVERVIEW
Previous report
Management’s discussion and analysis of financial condition and results of operations, or MD&A, is provided as a supplement to the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report and is intended to provide an understanding of our results of operations, financial condition and changes in our results of operations and financial condition. Our MD&A is organized as follows:
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•Introduction. This section provides a general description of our company and its business, recent developments affecting our company, operational highlights and discussions of how seasonal factors and macroeconomic conditions may impact our results.
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•Results of Operations. This section provides our analysis and outlook for the significant line items on our statements of operations, as well as other information that we deem meaningful to understand our results of operations on a consolidated basis.
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•Key Business Metrics and Non-GAAP Financial Measures. This section provides a discussion of key business metrics and non-GAAP financial measures we use to evaluate our business and measure our performance, in addition to the measures presented in our condensed consolidated financial statements.
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•Liquidity and Capital Resources. This section provides an analysis of our liquidity and cash flows, as well as a discussion of our commitments that existed as of September 30, 2025.
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•Critical Accounting Estimates and Policies. This section discusses those accounting policies that are considered important to the evaluation and reporting of our financial condition and results of operations, and whose application requires us to exercise subjective and often complex judgments in making estimates and assumptions.
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•Recent Accounting Pronouncements. This section provides a summary of the most recent authoritative accounting standards and guidance that have either been recently adopted by our company or may be adopted in the future.
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Our Business and Business Model
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Our technology offerings provide a strong foundation for agents and empower them to deliver exceptional service to their clients. Agents utilize our technology offerings to grow their businesses, save time and manage their businesses more effectively.
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Compass One, an all-in-one client dashboard, launched in February 2025, provides a client-facing version of the Compass platform to consumers, allowing agents’ clients to have a differentiated experience where they can access the tools, services and advantages Compass offers to manage their homeownership journey.
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Operational Highlights for the Three Months Ended September 30, 2025
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We continue to attract and retain the most talented agents to our platform, which is critical to our long-term success. We grow our revenue by attracting high-performing agents looking to grow their business and increasing the productivity of our agents. We invest in our proprietary, integrated platform designed for real estate agents, to enable them to grow their business and save them time and money. This value proposition allows us to recruit more agents, help them grow their business and retain them on our platform at industry leading retention rates.
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We had approximately 38,400 agents on our platform as of September 30, 2025. A subset of our agents are considered principal agents, which we define as either agents who are leaders of their respective agent teams or individual agents operating independently on our platform.
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As of September 30, 2025, the Number of Principal Agents was 21,5501, an increase of 4,008, or 22.8%, from September 30, 2024. The principal agent additions primarily relate to our recent acquisitions of various residential real estate brokerages and organic recruitment efforts.
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During the three months ended September 30, 2025, our agents closed 67,886 Total Transactions, an increase of 21.5% when compared to the three months ended September 30, 2024. For the three months ended September 30, 2025, the increase in total transactions was primarily attributable to the residential real estate brokerages acquires since the prior-year period and organic recruitment efforts.
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Our Gross Transaction Value for the three months ended September 30, 2025 was $70.7 billion, an increase of 22.5% when compared to the three months ended September 30, 2024. Gross Transaction Value is primarily driven by home values in the markets we serve and by changes in the number of our agents in those markets, as well as the residential real estate brokerages acquired since the same period a year ago.
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For the three months ended September 30, 2025, our Gross Transaction Value represented 5.63% of residential real estate transacted in the U.S., compared to 4.80% for the three months ended September 30, 2024. We calculate our market share
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1 The Number of Principal Agents metric excludes approximately 900 principal agents located in Texas who joined Compass during the second quarter of 2024 as part of the Latter & Blum Holdings, LLC acquisition. These agents operate with a flat fee / transaction fee based model, which is different from the Company’s standard commission model.
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by dividing our Gross Transaction Value, or the total dollar value of transactions closed by agents on our platform, by two times (to account for the sell-side and buy-side of each transaction) the aggregate dollar value of U.S. existing home sales as reported by the National Association of Realtors (“NAR”). Gross Transaction Value includes a de minimis number of new development and commercial brokerage transactions.
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For the definitions of Number of Principal Agents, Total Transactions and Gross Transaction Value, please refer to the section entitled “Key Business Metrics” included elsewhere in this Quarterly Report.
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Under the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, each share of common stock of Anywhere issued and outstanding will be converted into the right to receive 1.436 fully paid and nonassessable shares of our Class A common stock. All outstanding equity awards of Anywhere will be converted into Compass equity awards under the 1.436 exchange ratio.
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In connection with our entry into the Merger Agreement, on September 22, 2025, we entered into a debt financing commitment letter and related fee letters with Morgan Stanley Senior Funding, Inc. (“MSSF”), pursuant to which MSSF has committed to provide us with debt financing in an aggregate principal amount of up to $750 million in the form of a 364-day senior secured bridge loan facility, subject to customary conditions and entry into definitive financing and ancillary documentation as set forth therein. We expect that the existing senior notes of Anywhere and its subsidiaries will remain in place following the closing. The net proceeds of the debt financing are expected to be used to refinance certain existing indebtedness of Anywhere and its subsidiaries and to pay fees, costs and expenses related thereto.
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The Merger is expected to close in the second half of 2026, subject to approval by both our and Anywhere’s shareholders, and satisfaction of customary closing conditions, including receipt of regulatory approvals. As of the date of this filing, we have submitted our notification and report forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR") with the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice and expect to file our preliminary proxy statement/prospectus on Form S-4 with the SEC in November 2025.
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Upon termination of the Merger Agreement under certain specified circumstances, a termination fee of $200 million will be payable by Compass or Anywhere, as applicable. In addition, upon termination of the Merger Agreement because certain required regulatory clearances are not obtained before the Outside Date (as defined in the Merger Agreement) or if the Merger is permanently enjoined, we will be required to pay Anywhere a termination fee of $350 million.
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Impact of the Macroeconomic Conditions and Recent Industry Practice Changes on the U.S. Residential Real Estate Market and Our Business
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A number of macroeconomic conditions, including high interest rates and the Federal Reserve Board’s policies, have contributed to the slowdown in the U.S. residential real estate market, impacting our business and financial results.
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Specifically, these conditions resulted in slowed consumer demand, declining home affordability and low inventory. While the Federal Reserve Board has begun to ease interest rates and the U.S. residential real estate market has experienced slight improvements, lack of further improvements, any slowdown or additional challenging conditions could have a significant impact on our business and financial results during the remainder of 2025 and beyond.
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Additionally, as part of its nationwide class action settlement of the antitrust claims, NAR agreed to implement certain industry-wide practice changes, including, but not limited to, prohibiting buyer brokers’ offers of compensation from being included in listings on Multiple Listing Services and requiring a buyer to enter into a written agreement with their agent that would set forth the buyer broker’s fee before showing the buyer a property. These changes went into effect in August of 2024. Early in the spring of 2024, we entered into our own class action antitrust settlement and agreed to implement certain other practice changes. See Note 6 - “Commitments and Contingencies” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. Further, we believe the Department of Justice is continuing to focus on the real estate industry, including the practice changes resulting from the NAR settlement, which could result in additional practice-wide changes.
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While we continue to assess the effects of the ongoing slowdown and the industry-wide changes on our business and financial results, the ultimate impact will depend on future developments, which are highly uncertain and difficult to predict, as well as the actions that we have taken, or will take, to minimize any current and future impact on our revenue, profitability, or liquidity. In the meantime, the significant cost reduction actions that we have taken since 2022 and our continued cost discipline reduced our operating expense levels to the point that we are able to consistently generate positive operating cash flow, aside from a limited number of seasonally slower transaction volume months during the year.
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Commissions and other related expense was $1,503.4 million and $4,295.2 million during the three and nine months ended September 30, 2025, an increase of $275.7 million, or 22.5%, and $799.9 million, or 22.9%, compared to the prior-year periods, respectively. The increase in absolute dollars of Commission and other related expense for the three and nine months ended September 30, 2025 when compared to the prior-year periods was primarily driven by increased revenue. The decrease as a percentage of revenue was driven by the impact of recent acquisitions which operate with more favorable average agent commissions splits compared to our core brokerage.
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Sales and marketing expense was $93.8 million and $281.9 million during the three and nine months ended September 30, 2025, an increase of $5.6 million, or 6.3%, and $5.4 million, or 2.0%, compared to the prior-year periods, respectively. Included in Sales and marketing expense were non-cash expenses related to stock-based compensation of $9.0 million and $24.6 million for the three and nine months ended September 30, 2025 and $7.8 million and $24.0 million for the three and nine months ended September 30, 2024, respectively. Sales and marketing expense excluding stock-based compensation expense, was $84.8 million, or 4.6% of revenue, and $257.3 million, or 4.9% of revenue, for the three and nine months ended September 30, 2025 and $80.4 million, or 5.4% of revenue, and $252.5 million, or 5.9% of revenue, for the three and nine months ended September 30, 2024, respectively. The increase in Sales and marketing expense in absolute dollars, excluding stock-based compensation expense, during the three and nine months ended September 30, 2025 as compared to the prior-year periods was primarily due to increased occupancy and personnel-related costs resulting from recent acquisitions, partially offset by lower agent marketing costs and reduced cash-based incentives for agents. The decrease in Sales and marketing expense as a percentage of revenue, excluding stock-based compensation expense, during the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024 was primarily driven by the increases in revenue outpacing the year-over-year increases in Sales and marketing expense.
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Operations and support expense was $111.1 million and $317.1 million during the three and nine months ended September 30, 2025, an increase of $26.7 million, or 31.6%, and $70.6 million, or 28.6%, compared to the prior-year periods, respectively. Included in Operations and support expense were non-cash expenses related to stock-based compensation of $11.4 million and $25.8 million for the three and nine months ended September 30, 2025 and $4.2 million and $12.3 million for the three and nine months ended September 30, 2024, respectively. Operations and support expense, excluding stock-based compensation expense, was $99.7 million, or 5.4% of revenue, and $291.3 million, or 5.5% of revenue, for the three and nine months ended September 30, 2025 and $80.2 million, or 5.4% of revenue, and $234.2 million, or 5.5% of revenue, for the three and nine months ended September 30, 2024, respectively. Excluding stock-based compensation, the increase in Operations and support expense was primarily due to higher personnel costs from recent acquisitions. As a percentage of revenue, Operations and support expense remained generally consistent compared to the prior-year periods.
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Research and development
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Research and development expense was $67.4 million and $180.7 million during the three and nine months ended September 30, 2025, an increase of $19.9 million, or 41.9%, and $38.8 million, or 27.3%, compared to the prior-year periods, respectively. Included in Research and development expense were non-cash expenses related to stock-based compensation of $27.7 million and $66.0 million for the three and nine months ended September 30, 2025 and $14.6 million and $44.7 million for the three and nine months ended September 30, 2024, respectively. Research and development expense, excluding stock-based compensation expense, was $39.7 million, or 2.2% of revenue, and $114.7 million, or 2.2% of revenue, for the three and nine months ended September 30, 2025 and $32.9 million, or 2.2% of revenue, and $97.2 million, or 2.3% of revenue, for the three and nine months ended September 30, 2024, respectively. The increase in Research and development expense, excluding stock-based compensation expense, in absolute dollars was primarily driven by an increase in personnel and outside contractor costs. Research and development expense, excluding stock-based compensation, remained generally consistent as a percentage of revenue compared to the same periods in the prior year.
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General and administrative expense was $40.1 million and $100.9 million during the three and nine months ended September 30, 2025, an increase of $12.7 million, or 46.4%, and a decrease of $31.6 million, or 23.8%, compared to the prior-year periods, respectively. General and administrative expense includes a charge of $57.5 million for the nine months ended September 30, 2024 in connection with the Antitrust Lawsuits, which is discussed in Note 6 - “Commitments and Contingencies” to our condensed consolidated financial statements included elsewhere in this Quarterly Report. Also included in General and administrative expense were non-cash expenses related to stock-based compensation of $11.1 million and $28.4 million for the three and nine months ended September 30, 2025 and $5.9 million and $15.3 million for the three and nine months ended September 30, 2024, respectively. General and administrative expense excluding stock-based compensation expense and the aforementioned litigation charge, was $29.0 million, or 1.6% of revenue, and $72.5 million, or 1.4% of revenue, for the three and nine months ended September 30, 2025 and $21.5 million, or 1.4% of revenue, and $59.7 million, or 1.4% of revenue, for the three and nine months ended September 30, 2024, respectively. Excluding stock-based compensation expense and the litigation charge, General and administrative expense increased due to increased legal fees, transaction expenses incurred in connection with the closing of the acquisition of Christie’s International Real Estate and other general and administrative costs assumed from our acquired businesses. As a percentage of revenue, General and administrative expense, excluding stock-based compensation expense and the litigation charge, remained generally consistent compared to the prior-year periods.
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Restructuring costs during the three months ended September 30, 2025 were relatively consistent with the same period in the prior year, as both periods primarily reflected costs associated with lease terminations. The increase in restructuring costs for the nine months ended September 30, 2025, compared to the prior year period, was primarily driven by expenses related to severance and other employee termination benefits, in addition to lease termination costs incurred in both the current and prior periods.
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Depreciation and amortization expense increased $7.1 million, or 34.6%, for the three months ending September 30, 2025 compared to the three months ended September 30, 2024 and increased $23.1 million, or 36.8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase for the three and nine months ended September 30, 2025 was primarily due to higher amortization of intangible assets from acquisitions completed since the prior year.
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Investment income, net
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Interest expense was $2.1 million and $7.1 million for the three and nine months ended September 30, 2025. The increase from the prior-year periods was primarily driven by the interest expense incurred on our Revolving Credit Facility as a result of balances outstanding during the three and nine months ended September 30, 2025 with no comparable balances outstanding in the prior year. As of September 30, 2025, no balance was outstanding under the Revolving Credit Facility.
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Reworded paragraphs (28)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024 included in the 2024 Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section entitled “Special Note Regarding Forward-Looking Statements”. You should review the disclosure under the section entitled “Risk Factors” in Part II, Item 1A, “Risk Factor” in this Quarterly Report and Part I, Item 1A, “Risk Factors” in our 2024 Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in the 2025 Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section entitled “Special Note Regarding Forward-Looking Statements”. You should review the disclosure under the section entitled “Risk Factors” in Part II, Item 1A, “Risk Factors” in this Quarterly Report and Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Previous wording
On September 22, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), and Velocity Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”). Under the Merger Agreement, and subject to its terms and conditions, Merger Sub will merge with and into Anywhere (the “Merger”), with Anywhere continuing as our wholly owned subsidiary.
Current wording
On January 9, 2026, we completed the merger contemplated by the Agreement and Plan of Merger (the “Anywhere Merger Agreement”), by and among the Company, Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), and Velocity Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”). Pursuant to the terms of the Anywhere Merger Agreement, Merger Sub merged with and into Anywhere, with Anywhere surviving as our wholly owned subsidiary (the “Anywhere Merger”). See “— Recent Developments — Merger With Anywhere Real Estate Inc.” for additional information about the Anywhere Merger.
Previous wording
We are a leading tech-enabled real estate services company that includes the largest residential real estate brokerage in the United States by sales volume, which primarily operates under the Compass brand operating in 39 states and Washington DC, with approximately 38,400 agents. We also provide integrated services to real estate agents and their clients, including title, escrow and mortgage. In January 2025, we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand. We refer to the independently operated brokerages that license the Christie’s International Real Estate brand name as “affiliates”. Christie’s International Real Estate is among the world’s premier global luxury real estate brands with over 100 independently operated brokerages in over 50 countries and territories.
Current wording
Prior to the Anywhere Merger, we were a leading tech-enabled real estate services company that included the largest residential real estate brokerage in the United States by sales volume, which primarily operated under the Compass brand in 39 states and Washington D.C., with approximately 37,000 real estate professionals at our owned-brokerages. We also provided integrated services to real estate professionals and their clients, including title, escrow, and mortgage.
Previous wording
Our business model is directly aligned with the success of our agents. Our agents are independent contractors that associate their real estate license with us and choose to operate their businesses on our platform and under our brands. We currently generate substantially all of our revenue from the gross sales commissions that the agents earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price. Integrated services and our affiliate business comprise a small portion of our revenue and earnings. We believe we are well-positioned to grow our integrated services and affiliate business and expect revenue and earnings for these businesses to grow as a portion of our overall revenue and earnings over the long-term.
Current wording
Our business model is directly aligned with the success of real estate professionals. Real estate professionals at our owned-brokerage business are independent contractors that associate their real estate license with us and choose to operate their businesses on our platform and/or utilize our technology offerings. We primarily generate revenue from our owned-brokerage business when we collect a share of the gross sales commissions that these real estate professionals earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price.
Previous wording
Our end-to-end proprietary technology platform (the “Compass platform”) allows real estate agents to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform. The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients. Additionally, title and escrow and mortgage services are integrated and are available on the Compass platform.
Current wording
Our end-to-end proprietary technology platform (the “Compass platform”) allows real estate professionals to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform. The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of real estate professionals and deliver high-value recommendations and outcomes for their clients. Additionally, certain title and escrow and mortgage services are integrated and are available on the Compass platform. Currently, the Compass platform is only available to real estate professionals at our owned-brokerage operating under the Compass brand and is not yet available to other real estate professionals or our franchisees and their real estate professionals.
Previous wording
Proposed Merger With Anywhere Real Estate Inc.
Current wording
Merger With Anywhere Real Estate Inc.
Previous wording
The residential real estate market is seasonal, which directly impacts our agents’ businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter. We experience the most significant financial effect from this seasonality in the first and fourth quarters of each year, when our revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.
Current wording
The residential real estate market is seasonal, which directly impacts our real estate professionals’ businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter. We experience the most significant financial effect from this seasonality in the first and fourth quarters of each year, when our revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Current wording
Comparison of the Three Months Ended March 31, 2026 and 2025
Previous wording
Revenue was $1,846.0 million and $5,261.8 million during the three and nine months ended September 30, 2025, an increase of $352.0 million, or 23.6%, and $1,013.1 million, or 23.8%, compared to the prior-year periods, respectively. The increase for the three and nine months ended September 30, 2025 was primarily driven by an increase in the number of agents that joined our platform during 2024 and 2025, including those agents attributable to businesses acquired since October 2024. The Number of Principal Agents as of September 30, 2025 grew to 21,550, an increase of 22.8% from the year ago period.
Current wording
On a consolidated basis, revenue was $2.7 billion during the three months ended March 31, 2026, an increase of $1.3 billion, or 99.4%, compared to the prior-year period, of which $1.2 billion was attributable to the Anywhere Merger. The remaining increase of $148 million, or 10.9%, for the three months ended March 31, 2026 was primarily driven by an increase in the number of real estate professionals that joined our platform during 2025 and 2026, including those real estate professionals attributable to businesses acquired since January 2025.
Previous wording
Investment income, net decreased during the three and nine months ended September 30, 2025 primarily as a result of a decrease in our average short-term interest-bearing investments as compared to the year ago periods.
Current wording
Investment income increased during the three months ended March 31, 2026 primarily as a result of an increase in our average short-term interest-bearing investments as compared to the three months ended March 31, 2025.
Previous wording
Equity in income (loss) of unconsolidated entities
Current wording
Equity in income of unconsolidated entities
Previous wording
We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe Adjusted EBITDA and Adjusted EBITDA margin are also helpful to investors, analysts and other interested parties because these measures can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, however, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including Net loss attributable to Compass, Inc. and our other GAAP results. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are not presented in accordance with GAAP and the use of these terms varies from others in our industry.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results reported under GAAP. Investors should consider these measures alongside other financial performance measures, including Net income (loss) attributable to Compass, Inc. and our other GAAP results. In the future, we may incur expenses similar to the adjustments reflected in these measures, and our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the items excluded from their calculation. These measures are not presented in accordance with GAAP, and the use of these terms varies from others in our industry.
Previous wording
The following table provides a reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA (in millions):
Current wording
The following table provides a reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA (in millions):
Previous wording
Anywhere merger transaction and integration expenses during the three and nine months ended September 30, 2025 represents transaction expenses incurred in connection with our signing of the Agreement and Plan of Merger with Anywhere Real Estate Inc. These expenses primarily consist of investment banking and legal fees. Additional information regarding the proposed merger is provided in Note 13 -“Proposed Merger With Anywhere Real Estate Inc.” to our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Current wording
(1)Represents transaction expenses incurred in connection with the closing of the Anywhere Merger and related integration activities. During the three months ended March 31, 2026, these expenses consist of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. Additional information regarding the Anywhere Merger is provided in Note 3 — “Acquisitions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Previous wording
(2)Includes adjustments related to the change in fair value of contingent consideration and other adjustments related to acquisition consideration. See Note 3 - “Acquisitions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.
Current wording
(2)Includes adjustments related to the change in fair value of contingent consideration and other adjustments related to acquisition consideration.
Previous wording
(3)Represents a charge of $57.5 million incurred during the three months ended March 31, 2024 in connection with the Antitrust Lawsuits. See Note 6 - “Commitments and Contingencies” to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.
Current wording
(3)Represents a charge of $7 million incurred during the three months ended March 31, 2026 in connection with the Antitrust Lawsuits. See Note 11 – “Commitments and Contingencies” to the consolidated financial statements included elsewhere in this Quarterly Report for more information.
Previous wording
The following tables provide supplemental information to the Reconciliation of Net loss attributable to Compass, Inc. to Adjusted EBITDA presented above. These tables identify how each of the Operating expenses related financial statement line items contained within the condensed consolidated statements of operations elsewhere in this Quarterly Report are impacted by the items excluded from Adjusted EBITDA (in millions):
Current wording
The following tables provide supplemental information to the Reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA presented above. These tables identify how each of the Operating expenses related financial statement line items contained within the condensed consolidated statements of operations elsewhere in this Quarterly Report are impacted by the items excluded from Adjusted EBITDA (in millions):
Previous wording
Adjusted EBITDA is a non-GAAP financial measure that represents our Net loss attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, net, interest expense, stock-based compensation expense, benefit from income tax and other items. During the periods presented, other items included (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits and (iii) transaction and integration expenses associated with our signing of the Agreement and Plan of Merger with Anywhere Real Estate Inc. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.
Current wording
The CODM evaluates segment performance and allocates resources based on Segment Revenue and Segment Adjusted EBITDA, a non-GAAP measure. Segment Adjusted EBITDA represents net income (loss) attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, benefit from income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, and (iii) transaction and integration expenses associated with the Anywhere Merger. Segment Adjusted EBITDA margin is calculated by dividing Segment Adjusted EBITDA by segment revenue.
Previous wording
Total Transactions is a key measure of the scale of our platform, which drives our financial performance. We define Total Transactions as the sum of all transactions closed on our platform in which our agent represented the buyer or seller in the purchase or sale of a home. We include a single transaction twice when one or more of our agents represent both the buyer and seller in any given transaction. This metric excludes rental transactions.
Current wording
Total Transactions represents the sum of all transactions closed by our Brokerage segment during the period in which our real estate professional represented the buyer or seller in the purchase or sale of a home. A single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Total Transactions as a key measure of the scale of our Brokerage platform, which drives our financial performance.
Previous wording
Gross Transaction Value is a key measure of the scale of our platform and success of our agents, which ultimately impacts revenue. Gross Transaction Value is the sum of all closing sale prices for homes transacted by agents on our platform. We include the value of a single transaction twice when our agents serve both the home buyer and home seller in the transaction. This metric excludes rental transactions.
Current wording
Gross Transaction Value represents the sum of all closing sale prices for homes transacted by real estate professionals within our Brokerage segment during the period. The value of a single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Gross Transaction Value as a key measure of the scale of our Brokerage platform and the success of our real estate professionals, both of which ultimately impact revenue.
Previous wording
See Note 5 - “Debt” in our condensed consolidated financial statements included elsewhere in this Quarterly Report, for information on our indebtedness as of September 30, 2025.
Current wording
For more information regarding our indebtedness as of March 31, 2026, including the Revolving Credit Facility, Convertible Notes, Capped Call Transactions, Secured Notes and Unsecured Notes, Concierge Facility and Apple Ridge Securitization, see Note 10 — "Debt" in our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Previous wording
For the nine months ended September 30, 2024, net cash provided by operating activities was $91.0 million. The inflow was primarily due to a $114.1 million Net loss adjusted for $161.4 million of non-cash charges and cash inflows due to changes in operating assets and liabilities of $43.7 million.
Current wording
For the three months ended March 31, 2025, net cash provided by operating activities was $23 million. The inflow was primarily due to a $51 million Net loss adjusted for $56 million of non-cash charges and cash inflows due to changes in operating assets and liabilities of $18 million.
Previous wording
During the nine months ended September 30, 2024, net cash used in investing activities was $32.8 million consisting of $18.9 million in payments for acquisitions, net of cash acquired, $11.9 million of capital expenditures and $2.0 million of investments in unconsolidated entities.
Current wording
During the three months ended March 31, 2026, net cash used in investing activities was $356 million consisting of $345 million in payments to acquire Anywhere, net of cash acquired and $11 million of capital expenditures.
Previous wording
During the nine months ended September 30, 2025, net cash used in investing activities was $189.0 million consisting of $174.8 million in payments for acquisitions, net of cash acquired, $10.3 million of capital expenditures and $3.9 million of investments in unconsolidated entities.
Current wording
During the three months ended March 31, 2025, net cash used in investing activities was $165 million consisting of $161 million in payments for acquisitions, net of cash acquired and $4 million of capital expenditures.
Previous wording
During the nine months ended September 30, 2024, net cash used in financing activities was $13.9 million primarily consisting of $21.8 million in taxes paid related to the net share settlement of equity awards and $2.9 million in payments related to acquisitions, including contingent consideration payments, partially offset by $5.9 million in proceeds from the exercise of stock options, $2.7 million in net proceeds from drawdowns and repayments on the Concierge Facility and $2.2 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Current wording
During the three months ended March 31, 2026, net cash provided by financing activities was $798 million primarily consisting of $977 million in net proceeds from the issuance of the Convertible Notes partially offset by $97 million in cash payments to purchase the capped call transactions related to the Convertible Notes and $77 million in taxes paid related to the net share settlement of equity awards.
Previous wording
During the nine months ended September 30, 2025, net cash used in financing activities was $35.9 million primarily consisting of $47.2 million in taxes paid related to the net share settlement of equity awards and $7.1 million in payments related to acquisitions, including contingent consideration payments, partially offset by $10.8 million in proceeds from the exercise of stock options, $5.2 million in net proceeds from drawdowns and repayments on the Concierge Facility and $2.9 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan.
Current wording
During the three months ended March 31, 2025, net cash provided by financing activities was $45 million primarily consisting of $50 million in proceeds from a drawdown on the Revolving Credit Facility, $6 million in proceeds from the exercise of stock options, $2 million in net proceeds from drawdowns and repayments on the Concierge Facility and $1 million in proceeds from the issuance of common stock under the Employee Stock Purchase Plan, partially offset by $14 million in taxes paid related to the net share settlement of equity awards.
Previous wording
We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. We are contingently liable for these escrow and trust deposits totaling $350.2 million and $147.1 million as of September 30, 2025 and December 31, 2024, respectively. We did not have any other off-balance sheet arrangements as of or during the periods presented.
Current wording
We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. We are contingently liable for these escrow and trust deposits totaling approximately $1.2 billion and $300 million as of March 31, 2026 and December 31, 2025, respectively. We did not have any other off-balance sheet arrangements as of or during the periods presented.
Previous wording
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, we 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 condensed consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal and consulting fees, are expensed as incurred.
Current wording
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, we 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 condensed consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal, advisory and consulting fees, are expensed as incurred.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We use Adjusted EBITDA and Adjusted EBITDA margin, together with GAAP measures, as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors regarding our financial performance. We believe these measures are also useful to investors, analysts, and other interested parties because they provide a more consistent and comparable view of our operations across historical financial periods.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
KEY BUSINESS METRICS AND NON-GAAP FINANCIAL MEASURES
Previous report — wording carried elsewhere
For the nine months ended September 30, 2025, net cash provided by operating activities was $171.4 million. The inflow was primarily due to a $16.2 million Net loss adjusted for $225.3 million of non-cash charges partially offset by cash outflows due to changes in operating assets and liabilities of $37.7 million.