v3.25.2
Acquisitions
 6 Months Ended
Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Christie’s International Real Estate
On January 13, 2025, the Company closed the merger transaction (the “Acquisition”) contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate”), At World Properties Principals Blocker, Inc. (“Principals Blocker”), At World Properties IX Blocker, Inc. (“IX Blocker”), Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative. Pursuant to the Merger Agreement, on January 13, 2025 (the “Closing Date”), the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and Christie’s International Real Estate and each of Principals Blocker, IX Blocker and Christie’s International Real Estate became a wholly owned subsidiary of the Company. The Company entered into this transaction to expand its existing brokerage and integrated services businesses in key domestic markets and to establish a presence in the high-margin franchise sector through the Christie's International Real Estate brand.
The aggregate consideration (“Purchase Consideration”) payable pursuant to the Merger Agreement consisted of (i) $153.0 million (the “Cash Consideration”); and (ii) 44.1 million shares of the Company’s Class A common stock (the “Share Consideration”). The Share Consideration is subject to further adjustment (the “Share Consideration Adjustment”) if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Company’s Class A common stock for the 10-trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), is (i) greater than $344.0 million, in which case the Share Consideration will be reduced by a number of shares in an aggregate amount of up to $50.0 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares, or (ii) less than $344.0 million, in which case the Share Consideration will be increased by a number of shares in an aggregate amount of up to $50.0 million (determined using the greater of $6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares. In May 2025, the Company and certain sellers of the Christie's International Real Estate entities amended the terms of the Share Consideration (the "May 2025 Amendment"). Under the May 2025 Amendment, if the Company’s stock price reaches the value that would trigger the minimum number of shares to be issued under the original collar structure, the sellers will be paid at that time rather than at the end of the original one-year collar period. This accelerated payment can occur only (1) after the six-month anniversary and before the one-year anniversary of the Closing Date, and (2) if the spot price of the Company’s stock equals or exceeds the volume-weighted average price used to measure achievement of the target value. If these conditions are not met, payment will occur as originally provided in the Merger Agreement.
The total consideration transferred included $153.0 million in cash paid. The total consideration transferred also included the fair value of the Share Consideration, estimated at $250.1 million as of the acquisition date. The final number of shares to be issued in connection with the Share Consideration is dependent on the Company’s share price on the 366th day following the Closing Date. The Company utilized a Monte Carlo simulation model to estimate the fair value of the Share Consideration as of the acquisition date. Significant inputs to the model included the term of the Share Consideration adjustment period, the Company’s historical equity volatility, and the target share price. Because the settlement amount is based on the future trading price of the Company’s common stock, which represents an unobservable input, the fair value measurement is classified within Level 3 of the fair value hierarchy. The Company determined that the Share Consideration should be classified as equity as the monetary value of the obligation is not predominantly fixed and the variability in the settlement amount is based solely on changes in the Company’s own stock price. The May 2025 Amendment provides mutual economic benefit to the Company and participating sellers, affecting only the timing of settlement within the
original arrangement’s terms. As a result, the equity classification of the Share Consideration remains unchanged, and the accounting impact was recorded entirely in Additional Paid-In Capital, with no effect on the income statement or purchase accounting.
The following table summarizes the individual elements within the calculation of total consideration transferred (in millions):

Amount
Cash Consideration$153.0 
Share Consideration250.1 
Total consideration transferred
$403.1 

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the net assets acquired by the Company as of the acquisition date (in millions):

Amount
Cash and cash equivalents$3.5 
Accounts receivable14.6 
Other current assets5.5 
Property and equipment11.9 
Operating lease right-of-use assets20.2 
Other non-current assets8.1 
Goodwill230.0 
Intangible assets164.1 
Total assets457.9 
Accounts payable(2.0)
Commissions payable(6.3)
Accrued expenses and other current liabilities(21.7)
Current lease liabilities(4.9)
Non-current lease liabilities(15.4)
Other non-current liabilities(4.5)
Total liabilities(54.8)
Net assets$403.1 
The fair value of identified intangible assets and their respective useful lives as at the time of acquisition were as follows (in millions):
Amount
Useful Life
(in years)
Trademarks$20.3 
2 - 6 years
Acquired technology29.2 2 years
Agent networks72.3 7 years
Affiliate network42.3 6 years
Total intangible assets$164.1 
Intangible assets are amortized over the estimated useful lives in a pattern that most closely matches the timing of their economic benefits. The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the monetization opportunities from the Acquisition's current and future offerings and the value of the assembled workforce.
The Company has recorded the preliminary purchase price allocation as of the acquisition date and expects to finalize its analysis within the measurement period (up to one year from the acquisition date) of the transaction. Any adjustments
during the measurement period would have a corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the consolidated statements of operations.
Until the Share Consideration is issued, none of the goodwill recorded for this acquisition is deductible for tax purposes. Once issued, the amount of tax-deductible goodwill may increase to approximately $212.0 million. These amounts are not expected to have an impact on the income tax provision while the Company maintains a full valuation allowance on its U.S. deferred tax assets.
In connection with the Acquisition, the Company incurred approximately $5.0 million in transaction-related costs, of which $3.4 million are legal fees and $1.6 million are professional and general consulting fees, which were expensed as incurred. $4.3 million of these transaction-related expenses were incurred during the year ended December 31, 2024 and $0.7 million were incurred during the three months ended March 31, 2025.
Pro Forma Information
The acquired entity’s results have been included in the Company’s consolidated financial statements from the Acquisition date onward. The first column in the table below reflects the acquired entity’s actual results post-acquisition, while the second and third columns present the Company’s pro forma results as if the Acquisition had occurred on January 1, 2024 (in millions):
ActualsPro Forma
January 13, 2025 through
June 30, 2025		Six Months Ended June 30, 2025Six Months Ended June 30, 2024
Revenue$274.2 $3,424.0 $3,001.9 
Net income (loss)10.0 (17.0)(117.9)
The pro forma information depicted in the second and third columns above does not purport to represent what the actual results of operations of the Company would have been had the Acquisition actually occurred on January 1, 2024, nor does it purport to predict the results of operations for future periods. The unaudited pro forma results include adjustments for additional amortization of acquired finite-lived intangible assets and the related tax effects assuming the Acquisition occurred on January 1, 2024.
Other Acquisitions
During the six months ended June 30, 2025, the Company completed the acquisition of 100% ownership in a residential real estate brokerage and acquired the assets of a title insurance and escrow settlement business. The purpose of these acquisitions was to expand the Company's brokerage and title and escrow footprint in key domestic markets. The Company has accounted for these acquisitions as business combinations. The acquisition consideration includes $23.6 million in cash, net of cash acquired, paid during the six months ended June 30, 2025, $3.0 million expected to be paid in the third quarter of 2025, and additional amounts contingent on achieving earnings-based targets through 2027. The future consideration amounts were recorded within Accrued expenses and other current liabilities and Other non-current liabilities in the consolidated balance sheet. The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of $15.7 million of customer relationships, which is being amortized over the estimated useful life of approximately 4 years.
The Company has recorded preliminary purchase price allocations as of each acquisition date and expects to finalize them within each acquisition's applicable one-year measurement period. Adjustments during the measurement periods will be offset against goodwill. After the applicable measurement periods end, any further adjustments will be reflected in the consolidated statements of operations.
Pro forma revenue and earnings for these acquisitions has not been presented because they are not material to the Company’s consolidated revenue and results of operations.
Contingent Consideration
Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired businesses in the event that certain targets and milestones are met. As of June 30, 2025, the undiscounted
estimated payment under these arrangements was $31.9 million. Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions):
 Three Months Ended June 30,Six Months Ended June 30,
 2025202420252024
Opening balance$36.2 $19.5 $31.0 $20.9 
Acquisitions— 7.4 4.8 7.4 
Payments(3.3)(0.4)(3.5)(2.3)
Changes in fair value included in net income (loss)(2.1)0.4 (1.5)0.9 
Closing balance$30.8 $26.9 $30.8 $26.9