Ladies and gentlemen, thank you for standing by and welcome to the Compass, Inc. First Quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Rich Simonelli, Vice President of Investor Relations, you may begin your conference. Thank you, operator, and good afternoon, everybody. Thank you for joining the Compass First Quarter 2022 earnings call. Today's review of our actual financials will address the continuing operations of Compass, and certain items are presented on a non-GAAP basis. The reconciliations between GAAP and non-GAAP measures for first quarter financials, as well as our near-term guidance and long-term targets, are included at the back of our Q1 earnings release, as well as the presentation posted on our website. Please also see our disclosure on forward-looking statements, which reflects Compass' current view of future financial performance, which may be materially different from our actual performance for reasons that we cite in our Form 10-K and other SEC filings. Joining us today will be Robert Reffkin, Founder, Chairman and Chief Executive Officer, Compass, and Kristen Ankerbrandt, our CFO. Robert will provide a brief overview of Compass' results and a discussion of our strategy, and then Kristen will cover the financial results and outlook in more detail. Now I'll turn the call over to Robert. Thank you, Rich, and thank you to everyone joining our earnings call today. I hope everyone is safe and well. Today, we are sharing our financial results for the first quarter of 2022 and our outlook for the rest of 2022. Before we get into the numbers and our view of the market, I want to take this opportunity to say I am so thankful for continuing the journey, growing this amazing business with our outstanding team of Compass employees and over 27,000 world-class agents. Through their hard work, we are now the number one brokerage in the United States based on sales volume in 2021. We achieved the number one ranking in less than 10 years, displacing long-time incumbent brokerages, some that have been in the business for more than a century. What makes us even more exciting is that we became the number one brokerage with considerably fewer agents than our competition and covering significantly less geography, about half the population of the United States. We have entered these difficult times as the number one agency in the United States, and we plan on coming out of this turbulent time even stronger. Our momentum for 2021 continues into the first quarter as we achieve strong Q1 financial results. We beat the upper end of our first quarter revenue guidance by generating $1.4 billion in revenue. We also beat our expectations for Adjusted EBITDA, coming in at a loss of $97 million. Kristen Ankerbrandt, our CFO, will go through the numbers in more detail in a few minutes. In turbulent times like these, our cash position is an increasingly top priority. I am pleased to report our balance sheet is strong, and we ended March 2022 with $476 million in cash, and we have access to a $350 million credit facility. We have virtually no debt. As we said on our last financial results call, our revenue increases with seasonality in Q2 and Q3, resulting in expected positive EBITDA, which fortifies our cash position. We have a number of levers we can pull to manage our cash outlays, including the rate of expansion, the pace of M&A, and recruiting investments. This means we can regulate and control cash as necessary. While the real estate market outlook is uncertain, we have modeled out various negative industry scenarios, and in all cases, we believe we will have significant liquidity while still gaining market share. We are managing the business to ensure we will not require additional capital. To further emphasize the point, we are managing the business to ensure we will not require additional capital. We have been actively engaged in assessing our strategic roadmap, and we'll slow the rate of investment based on our priorities. We will do more with less. We will continue to drive cost efficiencies as we adjust our cost structure. We believe this will strengthen the company even more. I see this time as a tremendous opportunity. Our past investments have given us a significant technology lead over the rest of the industry, and these economic conditions give us an even wider moat. Most importantly, we have significant leverage to reduce spending and still continue to strengthen Compass and our cash position as we drive to positive Free Cash Flow. We have proven throughout our history that we can be nimble, pivot, and adapt quickly. Being nimble is in our DNA. While current market conditions are having an effect on second quarter revenue, it does not alter how we feel about our plans for the future. We are committed as an organization to do what it takes to ensure that we continue to drive toward being Free Cash Flow positive in 2023, with Adjusted EBITDA margins of 10% in 2025 and 8%-9% Free Cash Flow conversion. We are committed to driving market expansion from the cost side of the business, and we will continue to take market share because of our superior position in the market. For example, over time, we have already driven down the cost to serve our agents. Since 2018, we have reduced the average cost to serve an agent by 35%. We are targeting a further 9% reduction in cost to serve per agent in 2022. As we apply technology, we will lower our cost to serve even further. We will drive costs down more aggressively on all aspects of our business in order to achieve our objectives. We will continue to invest in strengthening the Compass platform, but understand we will have to prioritize investment dollars. We remain confident that we are a long-term market share gainer because we have the top agents and the top technology platform in residential real estate. I believe that if the real estate market experiences a prolonged downturn, agents will be even more interested in coming to Compass. This will help Compass gain even more market share. Agents are coming to Compass and staying because we are helping them grow their business, which in turn collectively grows the Compass business. We were able to significantly increase our market share to 6.1% in the first quarter of 2022 and 5.8% on an LTM basis. Our market share increased from 5.6% market share in the fourth quarter as a result of the increase in the number of agents we have added and the productivity the Compass platform has driven. Even with these market share gains, our 6.1% market share in the quarter means there is significant share of the market left to be earned for Compass. As I mentioned earlier, we operate in geographies that cover less than half of the U.S. population, which gives us more opportunity to grow. We will also grow as we add agents in the markets in which we already operate. Adding in historically proven productivity gains gives us the confidence as to why we can continue to gain market share. I would like to highlight the five agent-related KPIs that we discussed last quarter. We focus on these KPIs each and every day to drive market share gains while also delivering operational efficiencies that move us toward our margin goals. First, agent recruitment. We recruited as much gross commission in Q1 2022 as we did in Q1 2021, but we did so with substantially improved economics, with fewer incentives while improving non-GAAP C&O as a percentage of revenue. In Q1 2022, 63% of the agents who came to Compass told us they did so for a less favorable split than at their previous brokerage. Why would an agent take less split to join Compass? Quite simply, they believe they can grow their business better at Compass. Here are specific reasons why. They are coming to Compass because of our growing stature in the market. Winning agents want to be with a winning company. They are coming to Compass for our outstanding expanding network, which increases their ability to give and receive client referrals, which earns them commissions. They are coming to us for our advanced Compass platform, which saves them time and money. Our platform helps them grow their business and reduce their expenses on assistant support and third-party tools and services. Ultimately, agents are small business owners looking to increase their profits. I believe in these turbulent times, more agents will look to strengthen their business by coming to Compass. Second, agent retention. Our strong technology platform, the strength of the Compass brand, and the large amounts of Compass referrals coming from our network are clear drivers of our ability to successfully recruit agents. They are also keys to our industry-leading ability to retain agents. As mentioned last quarter, our principal agent retention rates have consistently been above 90% in an industry that averages 60% retention. Third, technology adoption. Further agent adoption of the Compass platform is a key focus in 2022. Adoption drives retention and revenue. Our technology is a key driver of agent productivity and margin in the future. We launched two new professional coaching programs in the first quarter of 2022. One-third of our agents opted into the programs, and for 10 weeks, they spent three hours a week being trained on ways to grow their business using the Compass platform. The goal of these programs is to demonstrate to our agents the main tools available to them in the platform and to train them on how to incorporate proven ways of using them in their daily workflows. One area we emphasized was the Likely to Sell tool. This AI-powered Compass software tool is particularly important in this low inventory environment. We are surfacing over 14,000 Likely to Sell recommendations per week to our agents. In some cases, these Likely to Sell recommendations surface clients that agents may not have spoken to in some time. In other words, we are converting cold and warm client leads into active clients. We have a significant technology advantage which will allow us to increase monetization from our powerful Compass platform. With limited R&D investment from our competitors, the moat around our business continues to widen as we move further away from the rest of the industry. Fourth, lowering our cost to serve our agents. As we mentioned on our last earnings call, now that we are close to being able to support the whole transaction on our platform, we're spending more time developing ways to use our software and technology to lower the cost to serve our agents and improve our margins. This will drive even more leverage from our tech spending. No one else in the industry is even trying to do this at scale. We are focused on delivering high leverage on cost by driving automation and standardization that allows us to serve many more customers with the same number of people. We are using two key levers to accelerate cost to serve improvements. The first is people. We are simplifying our organizational design to remove management layers and to improve the customer experience with fewer points of contact. Fifth, adjacent services. As you know, we have just begun to build our adjacent services business, so it is still in the early stages of development and represents a small fraction of our revenue today, about 1%. As a result, the recent sharp downturn of the refi business that others are having to contend with is not having a material impact on our financials. We continue to see strong attach rates for our title and escrow services, and I am excited about our recent acquisition of Consumer's Title, which gives us licensed coverage in all of California's 58 counties in active operations in three California markets. It's great to have another first-rate title and escrow team join the Compass family, and we continue to increase our mortgage footprint by adding markets and loan officers. We believe that the company that is the best at increasing profitability for agents will be the winner in the real estate industry. We built the Compass platform having looked at everything the agents spend to operate and grow their business. As a result, we listened to our agents and learned. We now believe we are the best in the industry at driving agent sales up while driving their operating costs down. This benefits the agents, which in turn drives profits for Compass. Revenue growth may slow due to market environments, but we are confident that our market share will continue to grow as we attract more agents, increase their productivity, and cover more of the United States. It is the reason that agents come to Compass, stay at Compass, and why they are outperforming the industry year after year. They become part of Compass because they believe that they can grow their business here faster than anywhere else. As a result, we have more than tripled the total number of agents since Q4 2018, and we added nearly 400 average principal agents and approximately 1,100 average total agents in the first quarter of 2022, just as we had planned. I have enormous faith in the Compass agent's ability to navigate all kinds of market environments as they have done brilliantly in the past, and they are doing so again in this market. Our employees continue to develop and deliver the most comprehensive agent-focused platform in the history of the United States. We remain committed to driving growth in revenue and delivering positive Adjusted EBITDA and Free Cash Flow to our investors. We will achieve this by providing our agents with the tools and the technology platform they need to be more productive, which will drive more profitable revenue for Compass. On a final note, as many of you have already seen in the press release earlier today, we are making some leadership changes over the coming months. Greg Hart will be taking on an expanded role as our Chief Operating Officer. In his new role, Greg will add leadership of the operations organization to his current oversight of the Compass product organization, bringing more closely together the teams that work with the customers each day with the organization working to build tools and platforms to make customers more successful. Greg started at Compass two years ago after 23 years at Amazon, where among other roles, he led the creation and launch of Echo and Alexa, managed million-dollar retail businesses, and led Prime Video globally. Alongside Chief Technology Officer Joseph Sirosh, he has overseen the development of Compass's integrated technology platform designed to help agents grow their businesses. Additionally, Kristen has decided to leave Compass in September. I'd like to thank her for the incredible leadership and her impact at Compass. Kristen has an incredible impact at Compass in helping us to grow the business, deliver on our path to profitability, and guide us through COVID and the IPO. Her work formed the foundation for the 2025 margin targets and put us on a strong financial footing. Kristen's leadership over the past four years is a key reason I believe we are well-prepared to continue to grow, outperform the industry, and take share while delivering on our commitments to profitability and cash flow, regardless of market conditions. Kristen has had a long passion to start and lead her own company, and as a Founder and CEO, I understand that passion and fully support her. We've retained one of the world's leading search firms to find our next CFO, and Kristen will partner with us on that search. I'll now pass it over to Kristen. Thank you, Robert. These past four years at Compass have been an incredible journey. Managing the company through outstanding growth to become the number one brokerage in the U.S., delivering on our commitment to profitability, effectively managing the business through COVID, and guiding the company through the IPO. As Robert mentioned, I have long had a passion to start and lead my own company, and that conviction has only gotten stronger in my time here at Compass. I intend to launch my own investment fund, building on my 20-year career as an investor prior to Compass. It is rare to work at a company that aligns such a powerful mission with unbounded market opportunity. It's been a privilege to work with Robert and our talented executive team who pushed me and the company to move further and faster every day. Between now and September, I look forward to partnering with Robert and the Compass team on a smooth transition plan that will allow Compass to continue to deliver for our agents, our employees, and our investors. Now let's turn to our Q1 results. We delivered strong first quarter results that exceeded our expectations, beating our guidance range for both revenue and Adjusted EBITDA. We continue to gain market share and add more agents and transactions to the platform despite inventory at record lows in the market. Our first quarter revenue was $1.4 billion, up 25% compared to Q1 2021, as we beat our guidance range of $1.28 billion-$1.36 billion. Q1 2022 transactions grew 18% to just over 47,000, and our gross transaction volume was $54 billion, up 23% compared to prior year. The growth in GTV reflects strength in both units and our average sales price. Note that this transaction and GTV growth was achieved despite inventory being down over 20% across the industry in Q1 2022 versus the prior period. Transactions for principal agent were 3.8 in the quarter, down from 4.1 transactions in Q1 of 2021. This is not surprising since inventory for the first quarter was historically low, combined with a late start to the spring season. Despite this, our agents captured 6.1% market share in the quarter, up 90 basis points year-over-year. Right now, the market is highly competitive for agents as they work with sellers and buyers to win listings and close transactions. In today's competitive market, the best agents tend to win, and I firmly believe the best agents are Compass agents. Our Adjusted EBITDA loss was $97 million as we beat our guidance range of a loss of $100 million-$110 million. This loss was larger than prior year as a result of two key factors. First, our revenue in Q1 2021 had the benefit of a robust post-COVID market, while in Q1 2022, we saw a return to more normal seasonal trends. Second, our expense base increased in Q1 2022 compared to a year ago, driven by the annualization of investments we made last year to drive profitable growth in the long term, namely in our platform, adjacent services, and our new expansion markets. Our non-GAAP operating costs have remained relatively stable in recent quarters, with Q1 OpEx flat with the fourth quarter. During the first quarter of 2022, we incurred a GAAP net loss of $188 million compared to a net loss of $212 million in the prior year. Included in GAAP net loss is stock-based compensation of $64 million in Q1 2022 compared to $168 million in Q1 2021. The higher expense a year ago is related to a one-time acceleration of stock-based compensation expense in connection with our IPO. Now, before getting to our guidance, I want to discuss what we're seeing in the market. The macroeconomic and geopolitical environments are applying a significant amount of pressure to our economy. Record inflation, the unprecedented pace of mortgage rate increases, the conflict in Ukraine, supply chain delays, continued COVID outbreaks, and significant stock market declines have all contributed to a difficult environment. The first six weeks of the second quarter have resulted in tougher times across all industries. These headwinds, along with constrained inventory, contributed to a slower start to the second quarter than we expected. As a result, our Q2 revenue outlook was affected, as you will see in our second quarter guidance. Despite uncertainty in the current macro environment, we still expect market growth in our markets in 2022 as a result of strong continued demand and historically low inventory that is driving prices higher. Home prices would have to reverse their current upward trend and fall dramatically to turn market growth negative. We do not believe this will occur, particularly with prices in our markets continuing to increase. I want to be explicit that we are actively managing our expenses and are prudent with our cash. With ample cash on our balance sheet as of the end of March and a $350 million credit facility, we do not see the need for additional capital to fund our current business plan. We believe we will have more than enough liquidity and can still continue to gain market share in 2022. We remain committed to getting to positive Free Cash Flow in 2023 and 8%-9% Free Cash Flow margins in 2025 as we move towards our target of 10% Adjusted EBITDA margins. Now we have the control to quickly ratchet up or down our cash investment through a number of different levers, as we demonstrated in the early days of the COVID pandemic. Already, we've found savings by slowing M&A, slowing expansion into new markets, and allocating resources and prioritizing our investments as needed. We welcome the opportunity to accelerate some of the cost savings initiatives that were already planned for 2023 as we march toward our 2025 targets. This is a unique moment for us to execute on these initiatives sooner than we had originally planned. Now let me turn to guidance. As a result of the global economic and political uncertainty, and in spite of our first quarter beat on both revenue and Adjusted EBITDA, we believe it is prudent to take a measured approach to our full year 2022 outlook at this time. Turning to our second quarter 2022 guidance, we expect revenue of $2 billion-$2.2 billion and an Adjusted EBITDA range of breakeven to $40 million. The revenue guidance, which is below our original expectations, reflects the dynamic macro backdrop in which we are operating the business. We believe our first quarter revenue number received some benefit from the pull forward of transactions as consumers sought to finalize deals at lower rates when it became clear that mortgage rates were increasing at a record pace. In early Q2, we saw a short-term market shock as consumers were orienting themselves to the new higher cost of purchasing a home. Simply put, the purchasing power of the average buyer has decreased. However, we have already seen an increase in pending transactions that we expect to close before the end of the quarter, pointing to buyers and sellers finding a new equilibrium as price expectations align. Our Q2 guide was also impacted by the extremely low inventory levels in California, which makes up a significant portion of our revenue. There are some positive data points indicative of a healthier market in the remainder of the year. The California Association of REALTORS reported in April that inventory has already started to unlock, and there are similar reports of increasing inventory across the country. In addition, new home delivery, which has been delayed due to supply chain issues, is expected to increase later in the year, which should also add inventory across our markets. Mortgage applications increased for the second week in a row last week. Home buyers continue to show signs they will not be deterred by the current interest rate environment. Given the trends we are seeing in our second quarter and the broader macro uncertainty, we feel it is prudent to lower our full year 2022 guidance numbers at this time. As a result, our current outlook for 2022 is revenue of $7.6 billion-$8 billion, down from our prior outlook of $7.9 billion-$8.1 billion. This revenue range reflects year-over-year growth of 18.5%-25%. In our model, the top end of our revenue range assumes a 7% market growth rate in our markets, while the bottom end of the range assumes a 1% market growth rate. For 2022, we expect Adjusted EBITDA to be at least breakeven, reflecting a reduction to our prior expectations of $40 million. Adjusted EBITDA and Free Cash Flow continue to be our top financial priorities, and we are committed to managing the expenses in our business to ensure that we can deliver profitability in 2022. The reality of the current market conditions and uncertain outlook across companies and industries as we head into the second half of the year means we want to be conservative. As 2022 continues to unfold, we believe we will have more insight into the direction of the market and can adjust accordingly. Overall, we are pleased with the continued improvement in our financial profile since the IPO. Despite macro uncertainty, we believe we will continue to grow our agent base, increase our market share, and continue our path to profitability. We remain committed to our path to our 2025 targets and are laser-focused on continuing to deliver solid results in 2022 through strong financial discipline. We remain committed to generating Free Cash Flow in 2023 and beyond. With that, let me turn it back to the operator to start the Q&A portion of the call. At this time, I would like to remind everyone, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Your first question comes from the line of Trevor Young with Barclays. Your line is open. Great. Thanks. First one for Robert, I guess just a bigger picture one. Looking at the potentially softer transaction environment, the macro worries, rising interest rates and so forth, in that environment, do you see an opportunity to actually lean in and seed some more markets and take even more share, go out to the new markets, get those founder agents that maybe weren't looking to make a move previously? How do you balance that, you know, potential share gains and this disruption versus, you know, preserving cash? Yeah, look, I think, you know, cash has to be the priority, preserving cash. If there is a more significant downturn, we would pause, you know, expansion. We still benefit from the market in our existing markets. There's tremendous market share to gain in our existing markets, and the same reasons why, you know, founding agents in new markets would be particularly attracted to joining Compass in a prolonged downturn, agents in existing markets would have the same. We would have the same impact on them. Yeah, cash would definitely be the priority. You know, we would be able to take advantage of acquiring agents more efficiently in our existing markets and more cost effectively. As well, you know, there's real advantage that, you know, the table is set with the competitive landscape right now because capital isn't going to be funding, you know, new competitors. The table's really set, and the investment is also set within the competitive landscape. I think a prolonged downturn will just distance the degree to which our platform's value proposition will exist in two years, one to two years from now relative to the competition. It'll be, you know, more valuable because, you know, we're still investing in the platform while, you know, the competitive set really doesn't even have one to start investing in. That's really helpful. Thanks. Hey, Trevor, I might weigh in with just an additional comment. You know, we were pretty aggressive in terms of our expansion plan last year. We expanded over the last year to roughly 27 markets. We don't necessarily need to expand into new markets in order to be able to continue to bring agents onto the platform and to continue to gain meaningful share. There's a good opportunity this year for us to just look to really further penetrate those markets that we moved into over the course of the last year. This is actually not so different from our original plan to look to leverage the investment, the infrastructure we have in our existing markets, and be able to drive profitable growth by just going deeper in the markets where we already have operations. That's really clear. Thanks. Just on adjacent services, I think one of the slides alluded to a Compass-affiliated home insurance. I know we're still early stages in mortgage launch, but anything you can share there on timing for, you know, home insurance products? I think Robert, on the last call, you alluded to maybe another adjacency launching before year-end, but not sure if that was insurance or something else. Yeah. Home insurance is the third product that we're evaluating very closely. We don't have definitive plans, but yeah. Yes, you're correct. That's the third product that we are currently considering launching later this year. Would that possibly be like a JV-type model? We're looking at a few different scenarios. Great. Thank you. Your next question comes from the line of Justin Ages with Berenberg Capital Markets. Your line is open. Hi. Thanks for taking the questions. First, can you dive a little deeper into the programs to get more agents using the Compass platform more to kinda get those, you know, gains that you see the more time agents spend on the platform? More on the programs that are driving adoption of the platform or that are driving the recruitment of new agents? Just to make sure I understand. Yeah. Not the recruitment. As agents that are already- Yes. Got it. at Compass and getting them to use the platform more. Absolutely. Yeah. This has been our biggest new initiative of the year. It's coaching for agents. The way I would describe it, I think the historical strategy was training agents on how to use tools. You know, you're an agent, "Hey, come for an hour and learn our CRM." Then we learned the hard way that no one wants to learn new tools. They wanna learn how to grow their business. It just so happens that tools can be a strategy to grow your business. Instead of come and spend an hour or two to learn the CRM, the message is learn how to grow your repeatable business or learn how to acquire new listings in a tight inventory market. Then it just so happens that the entire way that we train it is within the context of our tools. That's just like a high-level shift in strategy and how we think about it. We created a team called a customer success team, which is led by some of our best real estate sales managers and coaches that we already had in the company, and they're scaling the training across all of our different markets and all of our agents. There's both national and regional training. We called it the Compass 10x10, where they would spend, you know, 10 weeks over three different types of trainings of an hour for each training. There's one training that is about learning the actual tools, one training that is about you know how to grow your repeatable business and better relationships with your clients. There's one regional training. The current training is called Compass CORE that we have expanded from 10x10, and 1/3 of our agents are currently doing it one hour a week. It's a 10-week program. This is one of the things that we're most excited by, and we can see in the data that agents that go through the program are using the tools more. We also have the historical relationship that agents that use the tools more grow their business more. We're really excited to see the results of this new focus. Yeah. That's great. Really thorough. Thanks for the answer there. Second, if I may, you mentioned, you know, as total transaction value kind of went up, that part of the reason that transactions per agent went down was, 'cause low inventory even as you gained market share. Should we expect that trend to continue? You know, recruitment is strong and, you know, the embedded kind of market share growth and market share gains in your guidance, but deals per agent to be at similar levels that we saw in Q1. You know, as we look at transactions per principal agent, we generally look at it on an LTM basis. If you look at how that number has trended over the last few years, you see it move from, you know, 12.5 to roughly 17 to just around 20 over the last three years. I think it was right around 20 in 2021. If you look at that on an LTM basis, we're still right there. I think there are a few things that sort of contributed to the transactions per principal agent decline. First, you have to remember last quarter, Q1 of 2021 had a stronger sort of post-COVID market embedded in it. In addition, we just saw a slower start to the spring selling season this year than we generally do, and that we generally see, and what we've seen in prior years. We've seen lower inventory here. I think what you saw in Q1 was extraordinary. I wouldn't expect for that number to continue to decline. I think there were a number of factors that went into sort of contributing to that. If we look at the number, you know, what it was, I think 4.1 a year ago. It's 3.8%, you know, this quarter, so, you know, not really that meaningful of a decline. As we look at the LTM transaction per principal agent number, we do expect to see that tick up slightly, as we move through the year. All right. That's helpful. Thank you very much for taking the question. Your next question comes from the line of Ryan McKeveny with Zelman & Associates. Your line is open. Hey, thanks very much. Robert, just to parlay a little on the first question you were asked about, balancing kind of the cash versus expansion, and I guess maybe just to get a little finer point on the agent count side of things. I guess either within the Q1 results or maybe the near term kind of Q2 outlook, is the market shift that we're seeing thus far already altering any plans around agent adds or recruitment generally, or were those comments more about you know just kind of staying prudent and having that as a lever to pull you know if the market shifts more dramatically? The comments are more about how we will, how we can respond and react to, a deep or extended or more meaningful, downturn in the market. The first three months of the year, as you can see from our results, were positive. With interest rates increasing at a faster rate, over a four-week period than any time in the history of the United States, we just really wanna prepare and look at multiple scenarios, to be cautious. Yeah, the comments were more about what would happen in an extended downturn, the levers that we have at play. That said, we are moderating our expansion outlook, but we're not moderating our hiring outlook. It's just much more profitable recruiting is in existing markets where there's still, of course, the demand to come to Compass and the opportunity. Given what we've seen over the last, you know, with these, with the interest rate hike and just the uncertainty in the second half of the year, we just think it is prudent to focus on more profitable growth over expansion. As Kristen mentioned, we expanded so much, so many markets, you know, over 20 markets last year. We've earned the luxury to be able to take that approach and still meet our goals. Perfect. Thanks very much. And one on the C&O expense. I think this quarter up 20 basis points year-over-year. I know that's modest, but maybe help us square the near-term trend in C&O as a percentage of revenue, you know, relative to the long-term targets. I know we're expecting over time to have better leverage there. I guess should we think that 2022 in total could be a year that sees some better leverage, C&O percentage of revenue, versus 2021, or should we think that that's, you know, more over time as we get closer to 2025, maybe some more of that leverage comes through? On that question, we did see a 20 basis point increase in C&O as a percentage of revenue, as you mentioned. Actually, if you look at the brokerage splits, we actually saw a 36 basis point improvement there. I think that's the piece that's probably most critical when you're looking at that calculation. There are a few different things that go into it. The other factor that is meaningful there is the pace of our adjacent services growth. As we continue to grow that adjacent services business, that will really supercharge our ability to improve that margin as we move towards those 2025 margin targets. We will see some progress this year, but I think you as that adjacent services business gets to be of a bigger scale as we move through 2023 and 2024, you'll probably see bigger movements there as a result of that piece in particular. Got it. That's helpful. Thank you very much. Your next question comes from the line of Michael Ng with Goldman Sachs. Your line is open. Hey, good afternoon. Thanks for the question. I just have two. First, would you just talk a little bit more about your expectations for market share for the rest of the year? You know, the company clearly has a lot of market share momentum, but it sounds like it might be balanced by some things like the California inventory tightness and maybe the pace of agent additions. I'm just wondering if you could just clarify that a little bit. I have a follow-up. Yeah. We expect to continue to gain market share. As Kristen alluded to in her section of the earnings call, we're starting to see real bright spots in California around unlocked inventory. The market dynamic, although you know more uncertain in terms of how it will play out over the course of the rest of the year, we are seeing some real bright spots. Prices are strong. We're not seeing anyone suggest that prices will be down year-over-year. The estimates that we generally look at are price increases of between 10%-13%. You know, the price increases this year are consistent with what they looked like in the first few months of last year. In terms of inventory, we're seeing more inventory come online, not just in California, but in other markets as well. In terms of demand, yes, you know, of course, you know, it's much more expensive to buy a home, and there are affordability issues, but the demand relative to inventory is still strong enough to support, of course, not just the price, but also units. You know, and people are adjusting to this, you know, current environment. Again, the demand we still see as there. I think it's worth noting that our guidance includes a range of market growth from 1%-7% for the year, and that reflects double-digit price growth and negative, you know, mid-single digit declining units. Even at 0% market growth, we have 18% top line growth. To put even a finer point on kind of our outlook for the year, even if there was no market growth, no new agents, and no new markets, and no growth in T&E and mortgage, we would expect to generate 15% top line growth. You know, given that, you know, we do believe that we're gonna continue to gain market share. Great. Thank you, Robert. That's very helpful. Separately, it was encouraging to hear about the upcoming completion of the end-to-end platform. Would you just talk a little bit about how you're expecting certain KPIs or financial metrics to potentially change once that's live, whether that's increased productivity on the agent side or, you know, perhaps lower levels of investment spending? Thank you. Yeah. There's an immediate KPI, and then a more, you know, medium-term one that's where that will empower the most. The immediate one is just NPS of agents driven by the productivity gains they get in lowering the time that it takes for them to do their jobs. Just the most valuable asset for an agent is time. You know, time kills deals, and, you know, time is just. No agent's saying that they have enough time in the day to do their job. We put everything in one place. They don't have to log into 11 different, you know, software providers to do their job. The data flows all the way from beginning to end. I mean, you don't have to write the listing address, you know, a different time for a listing presentation, a different time for a CMA, a different time for the brochure, a different time to get paid, a different time for the open house app and the digital ad and so on, but this all flows all the way through the entire experience. Agents get their time back. That leads to NPS. NPS, what that really helps with is agents coming on at lower incentives. That's really the key driver of why agents are. You know, our Q1 add is, you know, consistent with the prior year, but with better economics, higher on the margin side and then lower incentives. It's because of NPS. You know, that is the driver, the primary driver of the NPS is the platform. The platform is as the rollout is completed through all our different markets, it's already in some of our markets today, but as it finishes in all the markets, we're gonna get that NPS which will lower the incentives and create more profitable growth. The more medium-term KPI opportunity is lowering our cost to serve because it will make it easier for us to deliver our agent services through the platform, which empowers, you know, standardization, optimization, and ultimately allows us to bring some key roles to lower cost countries, which obviously will have an impact. you know, that's really the way I would describe the kind of short-term KPI and the more medium term. If you think about how we expect the advantage of our platform to manifest itself in the financials, I mean in its most basic form, right, it should make retention easier as agents have their workflow embedded into our platform. I think there you could see an improvement in terms of the commissions and other lines. When it comes to recruitment, we believe that this enhanced value proposition will allow us to recruit agents at more attractive economics. That impact you should see both in commissions and other and in the sales and marketing line. Great. Thank you, Kristen. Thank you, Robert. Appreciate the thoughts. Your next question comes from the line of Jason Helfstein with Oppenheimer. Your line is open. Thanks. Just one question. Robert, you talked about kind of weak hands potentially getting flushed out, if we do go through a more extended kind of, you know, recession, you know, on top of, you know, just what is a slowing industry already. When you talk about that, do you mean specifically other brokerage firms? Is it technology providers that, you know, others are using? Just maybe go into a little more detail on who do you think are the weak hands that kind of wash out that ultimately benefit Compass. Thank you. Yeah. Yeah. I don't see the market being bad enough to wash out a bunch of traditional brokerage firms. I think on the traditional brokerage firm side, though, that it would reduce the spend, not investment, but the spend on third-party tools that they would offer their agents. Not investment, 'cause they're not. Investment would be building their own tools. I think it would reduce the spend on third-party tools that they would give to their agents. I think the real impact that we're gonna see are on standalone third-party software providers to agents. I don't think we're gonna see new ones come in, and I think the ones that are there aren't going to be able to have the same financial future they would have otherwise. They're all gonna pull back and invest less in creating more integration and more complete solutions for the agents that they provide their solutions to, either directly or through brokerage firms. That's one. The biggest one, though, is really the disruptive brokerage firm models. You know, the largest real estate periodical came out today, and it said that one of the, you know, well-known disruptive brokerage firm models went out of business on Tuesday of this past week. I think there are gonna be a I think in the last couple of years, a lot of ideas have come into the space to disrupt different parts of the value chain in the brokerage firm model, and I think that we're gonna see many of those companies not on the other side of a meaningful downturn. If they are on the other side, they will not have the capital to give them the resources to be able to make the investments that they would've wanted to make to have the impact they would've wanted to make on the industry. They would just have a much smaller presence in the overall ecosystem than they would've otherwise had. Just real quick, with the pre-IPO equity price, how does that play into agent retention, as far as either new agents or existing agents? Thanks. Yeah, yeah. I'm glad you brought that up. You know, you remember we mentioned in the last call in January that less than 9% of our agents were getting equity that we were bringing on. You know, we intend to sunset that over time to be virtually nothing, and it hasn't had an impact in our recruiting. That's on the recruiting side. On the retention side, you know, Q1 retention this past quarter was 1%, within where it was the prior year. You know, even with all the turmoil that's happened over the course of this past year, for it to be within 1%, I think reflects the strength of the company. Thank you. There are no further questions. I'll turn the call back to Kristen for closing remarks. Thank you all for your time on the call today. We look forward to speaking with you next quarter. This concludes today's conference call. Thank you for joining. You may now disconnect.