Dae Lee

Dae Lee inquired about how Compass plans to leverage AI to help agents communicate their personal and emotional value proposition, ensuring per-transaction economics remain resilient, and asked CFO Scott Wahlers about the combined entity's commission as a percentage of revenue and normalized free cash flow conversion for 2026.

Answer

CEO Robert Reffkin explained that AI will amplify trusted agents, not replace them, drawing parallels to how the internet increased agent usage by creating more 'noise' and fake information, thus increasing the value of trust. CFO Scott Wahlers noted that the consolidated gross margin (revenue minus commissions) is expected to increase due to the franchise and title businesses from Anywhere, which lack direct commission expenses, and Anywhere's brokerage margins being better. For cash flow, Wahlers suggested a 70%-80% conversion from EBITDA to free cash flow on a normalized basis, adjusted for interest, but warned of negative free cash flow in Q1 2026 due to transaction-related expenses.

Dae Lee asked how Compass plans to help agents articulate their personal and emotional value proposition amidst increasing transparency and self-serve tools, and whether AI can differentiate this value. He also questioned the expected blended commission as a percentage of revenue for the combined entity in 2026 and normalized free cash flow conversion.

Answer

Robert Reffkin, Founder and CEO, explained that AI will amplify trusted agents, not replace them, by eliminating friction and enhancing productivity, reinforcing the value of human judgment in high-stakes transactions. Scott Wahlers, CFO, stated that the combined entity's gross margin (revenue minus commissions) is expected to increase due to the inclusion of franchise and title businesses, and Anywhere's brokerage margins. He provided a normalized free cash flow conversion estimate of 70-80% of Adjusted EBITDA, adjusted for interest and one-time transaction costs.

Dae Lee asked about the most impactful areas for AI in Offerpad's business and which P&L line would first reflect these benefits, as well as the projected ramp-up in transaction volume from Q1 2026 to the year-end target of 1,000 transactions per quarter, including key milestones.

Answer

CFO Peter Knag detailed an expected linear growth trend from approximately 100 transactions per month to over 300 transactions per month by year-end 2026, encompassing Cash Offer, Cash Offer Marketplace, and traditional listing products. CEO Brian Bair highlighted AI's potential in real estate operations, particularly for pricing sensitivity and disposition processes, leveraging a decade of data. He also noted immediate benefits in AI voice scheduling for inspections and call center Q&A, contributing to overall employee efficiency.

Dae Lee asked about the most exciting impacts of AI on Offerpad's business, specifically which P&L lines would show the impact first, and requested a bridge from Q1 2026 transaction volume to the year-end target of 1,000 transactions per quarter, including key step-ups and the expected growth ramp.

Answer

Brian Bair, Chairman and CEO, expressed excitement about AI's impact on real estate operations, particularly in pricing sensitivity, leveraging 10 years of data for property inspections and disposition processes. He also noted immediate benefits in AI voice scheduling for inspections and call center Q&A, improving employee efficiency. Peter Knag, CFO, outlined the transaction ramp, guiding to 250-300 real estate transactions in Q1 2026 across Cash Offer, Cash Offer Marketplace, and traditional listings. He expects a roughly linear growth trend from approximately 100 transactions per month to over 300 transactions per month by the end of 2026.

Dae Lee of JPMorgan Chase & Co. inquired about Offerpad's home acquisition pace for the remainder of 2025, whether underwriting spreads are normalizing, and the key drivers behind the strong momentum in the Renovate business.

Answer

CEO Brian Bair explained that the Renovate business is growing by serving mid-to-small investors and that underwriting remains disciplined with wider spreads due to market uncertainty. CFO Peter Knag added that Q3 guidance reflects intentionally lower cash offer volume, with a strategic shift toward a higher mix of asset-light transactions, which will lead to future guidance focusing on total real estate transaction volume.

Inquired about the home acquisition pace and underwriting spreads for the remainder of the year, the drivers behind the strong growth in the Renovate business, and the future mix of asset-light offerings, particularly the role of HomePro.

Answer

The company is maintaining a disciplined acquisition approach with higher spreads due to market uncertainty. Renovate's growth is driven by operational efficiency and expanding its client base to smaller investors. The company expects a significant shift towards asset-light revenue from services like HomePro, Direct Plus, and traditional listings, and will adjust its reporting to reflect total real estate transactions rather than just cash-offer sales.

Dae Lee from JPMorgan Chase & Co. questioned whether Offerpad's selective acceleration in home acquisitions signals confidence in market stability for 2025 and asked for the financial impact of recent operational changes made in April.

Answer

CEO Brian Bair clarified that while market volatility persists, they are seeing more opportunities to buy homes that meet their risk metrics, driven by increased direct traffic and agent partnerships. CFO Peter Knag stated that more details on the cost savings from the April actions would be provided next quarter, but they are similar in nature to past efforts.

Dae Lee asked about the primary factors influencing the Q1 home acquisition outlook and what is needed for more confidence. He also sought clarification on whether the 'slightly better' Q1 adjusted EBITDA guidance was sequential or year-over-year and its underlying margin assumptions.

Answer

CEO Brian Bair explained that the acquisition outlook is 'cautiously optimistic' and more flat than previously hoped, leading to a selective strategy focused on buying the 'right' inventory in specific market pockets. CFO Peter Knag clarified that the adjusted EBITDA improvement is expected to be sequential throughout the year. He attributed this confidence to ongoing expense reductions, which totaled nearly $70 million in 2023 and $44 million in 2024, combined with top-line improvements from new processes.

Dae Lee inquired about the sentiment among RE/MAX franchises and agents regarding AI-driven automation, asking if they feel optimistic or apprehensive about the automation narrative and how the company is responding. He also asked about the key swing factors influencing the high versus low end of the 2026 revenue guidance, the KPIs to track for positive growth, and if the guidance assumes U.S. agents returning to positive growth.

Answer

CEO Erik Carlson stated that RE/MAX takes a purposeful approach to AI deployment, focusing on tools like MAX/AI for lead nurturing and BoldTrail's Folio for workflow automation, aiming to help agents win business, save time, and make more money. CFO Karri Callahan identified macro tailwinds, further stabilization and growth in U.S. agent count, pipeline momentum from conversions and M&A, and accelerated adoption of new monetization initiatives like Marketing-as-a-Service and digital channels as factors that could push revenue to the higher end of the 2026 guidance.

Dae Lee asked about the sentiment among franchises and agents regarding AI-driven automation and how they are responding to the automation narrative, and also sought clarification on the key swing factors for the high versus low end of the 2026 revenue guidance.

Answer

Erik Carlson, CEO, explained RE/MAX's purposeful approach to AI, deploying tools like MAX AI and BoldTrail's Folio to help agents win business, save time, and increase earnings, noting a mix of curiosity and apprehension within the network. Karri Callahan, CFO, identified macro tailwinds, further stabilization and growth in U.S. agent count, pipeline momentum from conversions and M&A, and outperformance of new monetization initiatives (Marketing-as-a-Service, digital channels) as factors that could push revenue to the higher end of the guidance.

Day Lee from JPMorgan Chase & Co. asked about the quality and profitability of homes acquired since ramping up, any surprises encountered, and the key factors or milestones Opendoor is monitoring for progress toward profitability and margin targets.

Answer

CFO Christy Schwartz highlighted the October 2025 acquisition cohort as a key data source, noting its improved selection, faster turns, and 2x resale velocity compared to October 2024, with margins exceeding expectations. She mentioned the surprise of flat margin degradation (up 18 basis points) from 10% to 50% sold through in a tough market. Key objectives for progress include scaling acquisitions to 6,000 per quarter, achieving 5%-7% contribution margin, and building operating leverage.

Dae Lee from JPMorgan Chase & Co. asked about the quality and profitability of homes acquired since Opendoor ramped up acquisitions, any surprises encountered, and key milestones for profitability and margin targets.

Answer

CFO Christy Schwartz emphasized the strong performance of the October 2025 acquisition cohort, citing improved selection, 2x resale velocity, and margins exceeding expectations due to Opendoor 2.0's operational changes and ML pricing. She noted a surprising flat margin degradation in the cohort and outlined key milestones: 6,000 quarterly acquisitions, 5%-7% contribution margin, and sustained operating leverage.

Dae Lee of JPMorgan Chase & Co. inquired about the current state of the housing macro environment, the expected timeline for new agent-focused initiatives to materially impact financial results, and how products like Key Connections and Cash Plus will affect Opendoor's contribution margin profile.

Answer

CFO Selim Freiha stated that the macro environment has stabilized at a lower level and the company's outlook assumes this continues. CEO Carrie Wheeler explained that the impact of new initiatives will appear in conversion metrics before the P&L, with a more significant financial contribution expected in 2026. CFO Selim Freiha added that Cash Plus is a better risk-adjusted product targeting a similar contribution margin, while listings revenue is a high-margin stream that will benefit overall contribution margin over time.

Dae Lee asked about Opendoor's Q2 acquisition slowdown, questioning if the guided 1,700 homes is the new baseline for the second half of the year and whether this strategy is market-specific. He also inquired about the expected contribution margins for homes acquired with newer, higher spreads.

Answer

Executive Selim Freiha explained that the acquisition pace is expected to follow a seasonal 'barbell' pattern, with higher volumes in Q1/Q4 and lower volumes in Q2/Q3, making the Q2 level a reasonable expectation for Q3, all else equal. Regarding margins, he noted that the Q2 guidance of 4.5%-4.9% is impacted by a mix-shift towards selling older, lower-margin inventory. While newly acquired homes show strong early margins, it's not enough to offset this mix effect in the near term.

Dae Lee asked about future cost-saving opportunities, the balance between achieving profitability and maintaining operational scale, and recent performance indicators for the Marketplace product in Charlotte and Raleigh.

Answer

CFO Selim Freiha addressed the cost questions, stating that Opendoor expects to realize the full $85 million in savings from prior initiatives in 2025 and will continue seeking efficiencies. He noted the company is rightsized for current scale but can support medium-term growth without significant cost increases. CEO Carrie Wheeler discussed Marketplace, highlighting strong customer opt-in rates and good clearance, explaining it serves sellers who want to test the market without the exposure of an MLS listing.

Dae Lee asked Zillow to elaborate on improvements in housing affordability versus expectations for the housing market to 'bounce along the bottom,' and whether investment plans are sensitive to housing market growth or if the expense framework is less correlated to housing conditions.

Answer

CFO Jeremy Hofmann explained that while affordability has improved (housing expenses as a percent of income down to 32% from 38% peak), Zillow is not planning for a significant housing market recovery in 2026. He clarified that Zillow's expense framework is consistent regardless of the macro environment, with fixed costs growing with inflation and variable costs invested for growth.

Dae Lee from JPMorgan Chase & Co. asked whether Zillow's partners anticipate significant disruption from the NAR settlement implementation and what specific factors are driving the underperformance of first-time homebuyer activity.

Answer

COO Jeremy Wacksman stated that Zillow sees the NAR settlement as an 'evolutionary' change leading to more educated consumers, not a revolution, and that partners are adapting. He noted that in states with similar rules, conversion rates are higher. CFO Jeremy Hofmann attributed the first-time homebuyer weakness directly to the recent 'rate shock,' emphasizing it's the speed of the rate increase, not the absolute level, that has the most impact, but he expects this to be a temporary headwind.

Dae Lee from JPMorgan Chase & Co. asked about the current health of global travel, potential impacts from major sporting events like the Winter Olympics or World Cup, and the expected benefits and diversification driven by newer products such as Trivago Book & Go and the CPA model.

Answer

Wolf Schmuhl, CFO, provided Q4 internal data on travel trends, noting positive ADRs in Rest of World, slightly negative in Americas and Developed Europe, and stable ABV. Johannes Thomas, CEO, stated no specific modeling for mega events, as they generally increase travel. He highlighted the CPA model's significant impact on partner competitiveness and the Trivago Book & Go funnel's 137% growth (Q4 2025 vs. Q4 2023) in driving conversion.

Dae Lee, on behalf of Doug Anmuth, asked about the current health of global travel and any anticipated impact from major sporting events like the Winter Olympics or the World Cup. He also inquired about the primary benefits expected from newer products such as Book & Go and the CPA model, and their potential to diversify Trivago's advertiser base.

Answer

CFO Robin Harries provided Q4 internal data on travel trends, noting positive ADRs in the Rest of the World, slightly negative in Americas and Developed Europe, and stable to positive ABV across segments. He highlighted a shift towards domestic trips by US travelers and a decline in travel to the US from certain countries. CEO Johannes Thomas stated that no specific modeling was done for mega events, generally viewing them as driving more travel. He explained that the CPA model had a greater impact on partner competitiveness, while Book & Go, which grew 137% in Q4 2025 compared to Q4 2023, is expected to continue driving conversions.

Dae Lee from JPMorgan Chase & Co. asked about the behavioral differences of logged-in users and the company's strategy for increasing user logins. He also sought clarity on the factors driving confidence in the Q3 2025 double-digit revenue growth forecast.

Answer

CEO Johannes Thomas explained that logged-in users, who now account for 20% of referral revenue, have a 25% higher conversion rate, driven by exclusive deals and features like price alerts. For Q3, he cited strong double-digit branded traffic and revenue growth in July and August as key confidence drivers, despite temporary headwinds from tough year-over-year comparisons.

Dae Lee from JPMorgan Chase & Co. asked about the behavioral differences of logged-in users versus others and the strategies to increase logins. He also sought clarity on the confidence behind the Q3 revenue growth forecast, given the single-digit growth observed in July.

Answer

Johannes Thomas, MD & CEO, explained that logged-in users, who now account for 20% of referral revenue, have a 25% higher conversion rate. trivago encourages sign-ups with exclusive member-only deals and features like price alerts. Regarding Q3, Thomas attributed July's slower growth to FX and a temporary comp issue from last year. He expressed confidence in achieving double-digit growth for the quarter, supported by strong double-digit branded traffic growth in July and August, which is a key leading indicator.

Dae Lee of JPMorgan Chase & Co. asked about trivago's profitability strategy, specifically whether the company will continue to reinvest revenue gains to maintain a breakeven adjusted EBITDA or if it plans to let profits flow through. He also inquired about early learnings from the AI Smart Search feature regarding user behavior and KPIs.

Answer

Executive Robin Harries stated that achieving growth is currently a higher priority than profitability, and the company plans to reinvest profits into brand marketing to capture the significant revenue opportunity. Executive Johannes Thomas added that a shift to profitability would only occur if investment returns diminish. Regarding AI Smart Search, he explained it's a new semantic search feature being introduced gradually to users, and that changing user behavior is a slow process they are carefully monitoring.

Dae Lee, on behalf of Doug Anmuth, asked for clarification on the 'temporary unfavorable market conditions' in the Americas during Q3 and whether the region's return to growth signified a resolution of those issues. He also questioned if the new Jürgen Klopp campaign indicated a plan to increase marketing investments in Q4 and into 2025.

Answer

Executive Robin Harries explained that the Q3 Americas headwinds were due to softer demand and TV viewership shifts to major sports and political events, which reduced ad effectiveness and led to a tactical spending cut. Executive Johannes Thomas added that the Jürgen Klopp campaign is designed to increase marketing efficiency, not necessarily total spend. By using AI to localize a single global celebrity, trivago can run an impactful campaign more cost-effectively than hiring multiple local ambassadors.

Dae Lee of JPMorgan Chase & Co. questioned the drivers behind the strong July acceleration in paid creators and ticket volume, its sustainability, and whether competitive landscape changes were affecting the creator mix.

Answer

Julia Hartz, Co-Founder, CEO & Executive Chair, attributed the July performance to the recovery strategy gaining traction, with paid creators nearly flat year-over-year. She highlighted focused efforts in marketing, sales, and product to attract larger creators and improve discovery. Hartz noted that while creator recovery is on track, the average tickets per creator is a lagging indicator causing a short-term mix issue. She stated the competitive landscape is stable, with Eventbrite well-positioned due to its marketplace, brand, and technology.

Dae Lee asked about the core philosophy behind the app redesign, specifically whether the goal is user engagement or another consumer action. He also questioned if the reiterated full-year guidance reflects confidence in the company's strategy despite potential macroeconomic pressures.

Answer

CEO Julia Hartz clarified that the app redesign's goal is to make Eventbrite the easiest place to find live experiences, converting engagement directly into ticket sales for creators. CFO Anand Gandhi added that while the company is cautious, it is not currently seeing a clear impact from macro pressures and believes its lower price points offer resilience. He confirmed confidence in the full-year outlook based on current performance.

Dae Lee asked for clarification on what consumer loyalty means for Eventbrite and the strategy to build it. He also asked new CFO Anand Gandhi about his biggest surprise since joining and where he sees the greatest opportunities.

Answer

CEO Julia Hartz explained that loyalty is centered on monthly active app users, who are more engaged. The strategy involves enhancing the app with personalized discovery features like 'It-Lists' to drive repeat attendance. CFO Anand Gandhi stated his biggest surprise was the strength of Eventbrite's foundational assets, including its vast historical reach and brand ubiquity, which he believes provides a tremendous advantage for accelerating the marketplace transition without costly user acquisition.

Dae Lee, on for Doug Anmuth at JPMorgan Chase & Co., asked for more detail on the B2B segment's performance, specifically its exposure to the softness in travel into the U.S. He also questioned if the U.S. softness was impacting the high-growth advertising business.

Answer

CEO Ariane Gorin confirmed that the U.S.-based portion of the B2B business was impacted by market softness but stated that the segment's global diversification allowed it to sustain double-digit growth. CFO Scott Schenkel noted that while a tougher B2C environment is a headwind for the advertising business, it remains a powerful growth engine, with new ad solutions helping to drive performance and double-digit growth remaining achievable.

Dae Lee, on for Doug Anmuth, asked for views on the overall travel demand environment, regional share gains, and the impact of the strong U.S. dollar. He also inquired about the updated loyalty strategy for 2025, particularly outside the U.S. and U.K.

Answer

CEO Ariane Gorin described Q4 travel demand as very healthy, with some January softening attributed to pull-forward from promotions, but no structural change. She noted that stronger international room night growth suggests share gains in those markets. On loyalty, she confirmed the One Key rollout was paused after the U.K. to apply learnings, as it was a net positive for the Expedia brand but a drag on Hotels.com, while the impact on Vrbo is still being assessed.

Dae Lee, on behalf of Douglass Anmuth at JPMorgan, asked how management expects experiences spending to perform in a slower consumer environment and requested details on the drivers behind favorable pricing in Brand Tripadvisor's Hotel Meta auction.

Answer

CEO Matt Goldberg explained that consumers have historically defended travel spending, particularly experiences, and that the company's diverse inventory serves all price points. He attributed the strong Hotel Meta pricing to product enhancements that improve the user experience with more content and context before click-out, which has driven a pricing uplift and serves as a proof point for their engagement-to-monetization strategy.

Speaking for Doug Anmuth, Dae Lee asked how the current membership offering differs from the previous Tripadvisor Plus subscription and what key initiatives in 2025 will enable Brand Tripadvisor's return to growth in 2026.

Answer

CEO Matt Goldberg clarified that the current focus is a free membership program designed to drive engagement and reward cross-category booking, unlike the former paid subscription. CFO Mike Noonan outlined the 2026 growth path for Brand Tripadvisor, which includes stabilizing Hotel Meta, scaling hotel booking capabilities, re-accelerating experiences revenue, and moving past significant investments in data/AI and the headwinds from deprioritizing legacy businesses.

Asked about market share trends in markets with the 'Redfin Next' model and whether the 2025 marketing increase is driven by confidence in that program or the macro outlook.

Answer

The company is encouraged by the performance in 'Next' markets but isn't breaking out share data by market type. The increased marketing spend is a strategic decision to compete more aggressively for traffic and growth, funded by restructuring, and reflects confidence in their new, larger agent force's ability to handle the demand.

On behalf of Doug Anmuth, Dae Lee asked for more detail on the reacceleration of growth seen in Europe during the quarter and requested any macroeconomic commentary on the U.S. region.

Answer

CFO Ewout Steenbergen explained that Europe's growth reaccelerated starting in August, driven by a combination of underlying demand improvement, the strength of the Booking.com app, and an expansion of the booking window. He noted this was partially market-driven and partially due to the company's strong value proposition in the region.