CEO Robert Reffkin cited “the wealth effect” as a revenue driver. He also criticized MLSs and portals, and suggested Compass could become the No. 1 search site.
While the national housing market remains sluggish overall, Compass appears to be benefiting from the more resilient luxury market sector.
The brokerage reported $4.31 billion in revenue for the second quarter, topping analyst forecasts of $4.1 billion. On a pro forma basis — comparing current Compass International Holdings numbers to what the combined Compass-Anywhere revenue would have been a year earlier — revenue increased 14.3%.
Investors reacted positively to the earnings report, with shares up around 11% in after-hours trading.
What Compass had to say
During an Aug. 4 earnings call, CEO Robert Reffkin said Compass’ pace of growth picked up between Q1 and Q2, telling investors that “this outperformance is a reflection of the quality of our agents and exposure to the higher end of the market, which tends to be less rate sensitive.”
The luxury tier has outpaced the national housing market in some areas, with metros like San Francisco — where Compass has significant market share — being reshaped by tech wealth arising from the artificial intelligence boom.
“We believe the wealth effect created by a record stock market and a growing U.S. economy has been a driver of demand for our business and is helping offset the rise in interest rates,” Reffkin said.
Taking shots at MLSs, portals: Reffkin spent part of the call criticizing multiple listing services, which he said have been weaponized against their subscribers.
“Real estate agents pay the MLSs money. Real estate agents give the MLS the results of their hard work and their intellectual property. In exchange, the MLS tells the real estate agent how to compete and fines and punishes the agent if they compete too hard. This is anticompetitive,” Reffkin told investors.
Reffkin also reiterated that if MLSs and portals were forced to compete for brokerages, brokers would win, citing Compass’ partnership with Rocket/Redfin as an example. He noted that the arrangement has provided Compass with a beneficial lead-gen channel while giving Redfin access to Compass’ coming-soon listings.
“So everything Compass has done in the past and everything it is doing today is designed to infuse competition into the MLS and portals in real estate,” Reffkin said.
And if a more competitive environment emerges? Agents will put more listings on websites like Compass, Reffkin believes, bringing more consumers to the brokerage. “Is it unreasonable to expect that the company that has the most listings in the United States is the number-one place people search in the United States? I don’t think so,” Reffkin said.
Ramping up recruiting: The number of agents at Compass’ owned brokerages was a little over 83,000 at the end of Q2, down about 1,000 from the previous quarter. That number does not include the Anywhere brands franchise network, which brings the total Compass International Holdings agent count to roughly 340,000 worldwide.
The company said it is still in the process of culling some low- and non-producing agents, but it plans to ramp up recruiting efforts within the franchise brands and should be at full scale by early 2027.
Key numbers
Revenue: $4.31 billion in Q2, up 109% from a year earlier. On a pro forma basis, which reflects what revenue would have been if Compass and Anywhere had been combined a year ago, revenue increased 14.3% year-over-year.
Cash and cash equivalents: The company had a cash balance of $694 million at the end of the second quarter, while long-term debt was $3.14 billion.
Net income: A gain of $92 million in Q2, much improved from the $39 million net loss reported a year ago.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $363 million in Q2, up from $125 million a year ago.
Transactions: Brokerage agents closed 153,009 transactions in Q2, up from 73,024 for the same period a year ago. Pro forma transactions rose 7.4% year-over-year.
Agent count: The company reported 83,184 U.S. brokerage agents at the end of Q2, down from 84,187 in Q1. According to a company news release, the quarterly decline in agent count was driven primarily by intentional reductions of low- and non-productive agents at a former Anywhere brand.
Q3 outlook: The company expects revenue to be between $3.85 billion and $4.05 billion, with an expected adjusted EBITDA of $275 million to $305 million.
Notable moves
Compass made a handful of executive appointments during the second quarter, adding Tanya Reu-Narvaez as chief people officer, Greg Hague as director of home sale strategy and Cory Perkins as president of integrated services.
The brokerage also announced several MLS partnerships, including deals with MRED, The MLS/CLAW, Realtracs and Bright MLS.
On the legal front, Compass dropped its case against Zillow following the launch of Zillow Preview in March, but was then sued by the search giant in May. Compass is also facing a legal challenge brought by Florida homebuyers over the firm’s transaction fees. Meanwhile, the firm reached a settlement in the buyer-initiated commissions litigation by opting into the Tuccori settlement in April.
This summer, Compass began rolling out its AI-driven Home Platform across its company-owned brokerage brands, including those acquired in the Anywhere deal. Describing it as an end-to-end technology platform, Compass expects to expand the technology to the full franchise network in 2027.
Just last week, the company made the decision to partner with the American Real Estate Association, which was founded in 2024 as an alternative to the National Association of Realtors.
