Watch: Diving deep into Compass, with Compass 

Losing north of a billion dollars over two years is rarely cause for optimism. But Compass has found reasons to smile.

Its record-breaking losses can be viewed as investments into the future, its executives claim — a transformative bet on developing technology for its agents that rival firms will not be able to match. And now that the money has been spent, it’s time to focus on getting into the black, goes the thinking.

“The intention of raising all that capital was to spend it on things that would help attract the best agents and retain them,” Rory Golod, Compass’ president of growth, told The Real Deal’s Hiten Samtani shortly after the company’s first-quarter earnings call, when the company revealed it lost $150 million in the quarter. Golod cited a jump in the firm’s stock price as a sign that investors felt good about where the company’s headed.

“Investors are always looking forward, and saying, ‘ok, you’re proving to us that you actually can get there,’ Golod said, referring to the company’s goal of being free cash flow positive. 

Samtani and Golod dug deep into many broad issues at Compass, from its ability to attract and retain agents to its ongoing tech investments. “We’re still spending $100 million [annually] in technology,” Golod said. “There is no world where we see someone else being able to catch up to that because no company is gonna be able to raise that kind of capital, no investor is going to finance that.” 

The pair also discussed AI’s impact on residential brokerage and what Compass is doing to leverage it. 

Watch the above video for the full conversation.