Compass Inc. 2026 Q3 Earnings Call - COMPASS INC

Good day everyone and welcome to the Compass Inc 2026 Q3 Earnings Conference Call. All participants will be in a listen-only mode until the question and answer session begins. Following the presentation we will conduct a question and asker session. This call is being recorded. If you have any objections please disconnect at this time. I would now like to turn the call over to Soham Bhosle. Please go ahead. Thank you very much, Operator, and good afternoon, everybody, and thank you for joining the Compass Third Quarter 2026 Earnings Call. Joining us today will be Robert Refkin, our founder and CEO, and Scott Wallers, our Chief Financial Officer. In discussing our company's performance, we will refer to some non-GAAP measures and may discuss some metrics on a non-GAP pro forma basis. You can find the reconciliation of the non- GAAP measures to the most directly comparable gap measures and supplemental non-gap pro forma information for prior quarters in our third quarter 2026 earnings release posted on our investor relations website. All pro forma business metrics referred to on today's call are presented as of Compass and Anywhere combined as of July 1st 2025, which reflects the beginning of the year-ago quarter. All metrics and any year-over-year comparisons referred to as organic are presented on a pro forma basis and include only the results of businesses that either compass or anywhere owned as of July 1st, 2025. We will also make forward-looking statements that are based on our current expectations, forecasts, and assumptions and involve risks and uncertainties. These statements include our guidance for the fourth quarter of 2026 and full year 2026, and comments related to our expectations for realizing cost synergies and operational achievements. Our actual results may differ materially from these statements. For more information, see our most recent annual report on Form 10-K and our recent Form 10Q. You should not place undue reliance on any forward-looking statements. I will now to turn the call over to Robert Refkin. Robert. Good afternoon and thank you for joining us. Before I dive into our results, I want to take a moment to acknowledge the environment we are currently operating in. During the quarter, the 30-year mortgage rate rose by 95 base points to 7.6%. The 10-year treasury rate rose to 24-year highs. Seasonally adjusted home sales dipped below 4 million once again, and 43% of homes experienced a price cut. Against this backdrop, I am pleased to say that our company delivered record Q3 revenue of $3.9 billion, record Q2 net income of $62 million, record q3 adjusted EBITDA of $306 million, which was also above the high end of our guide and reflects more adjusted EBITDA than either standalone Compass or standalone Anywhere generated for the full year of 2025. We also delivered record Q3 free cash flow of $240 million, bringing cash on hand to a very healthy $841 million. And we drove net debt to adjusted EBITDA down to 2.7 times, nearly two full turns below when we announced the Anywhere merger last September. Our agents also continue to outperform the market in Q3. Organic brokerage transactions outperformed the market by 150 base points, marking 22 consecutive quarters where the Compass brand has outperformed the market. And now for three consecutive quarters, outperforming the market, including anywhere. Organic brokerage GTV was up 7.5% year over year, representing 680 base points of outperformance. In franchise, organic GTV, was up 2.3%, delivering 160 base points of outperformance. This was the second consecutive quarter the franchise business outperformed the market. Over the past two quarters, the legacy anywhere franchise brands have experienced both agent count growth and franchisee retention rates that are at five-year highs. So taking a step back in a quarter where mortgage rates broke above 7.5% and seasonally adjusted existing home sales broke below $4 million. We still delivered record Q3 revenue, record Q2 net income, record Q1 adjusted EBITDA, and record Q4 free cash flow. Additionally, we lowered our net debt to adjusted EBIDDA ratio by nearly two turns, and we continue to outperform the industry. These record results are not an accident. They are the direct byproduct of our maniacal focus on execution. So what's driving this performance? First is our focus on OpEx, which we intend to carry going forward. Pro forma OpEx in the court was down 6% year over year, even as pro forma revenue increased by 12%. This was driven by the strong financial discipline that we've instilled into the organization over the past four years and an acceleration of some cost synergy actions in light of the current environment. As of last week, we have actioned $360 million in net cost synergies compared to the $330 million full-year target for 2026 we shared last quarter. And we remain fully committed to our $500 million target in less than three years. Second is our relentless focus on attracting, retaining, and growing with our real estate professionals. Our home platform is the industry's only fully integrated technology solution, which empowers agents to complete that transaction from first contact to close and to be more productive. Our three-phase marketing program also provides a differentiated listing strategy that helps our agents win more business in our view. And our brands are home to many of the industry'S most productive agents. agents. And as they say, tough markets are when the best agents separate themselves from the rest. This relentless focus on the real estate professional has allowed us to maintain industry-leading retention rates at above 98% for agents producing more than $20,000 in GCI. And we are now seeing strong momentum on the recruiting front as well. Specifically, The number of opportunities added to our growth team's weekly active pipeline is up 39% quarter to date compared to the second and third quarter of this year. Our walkover pipeline is also sitting at the highest levels we've seen year to date. We believe the stronger recruiting pipeline we are seeing today is being driven by a flight to quality as agents seek out brokerages that can provide them with technology and tools to help grow their business in a challenging market. And so given our current pipeline, we expect agent ads to improve relative to our Q3 organic ads of 2,734, which should serve as a positive growth lever in 2027. now shifting to our number one strategic priority the rollout of the home platform which is the biggest catalyst of agent and company success over the past decade we have invested over two billion dollars to build our end-to-end platform now it's about getting the platform into the hands of more agents and that's exactly what we are doing today as of the end of october we successfully onboarded 33,950 agents, and we expect to onboard the remainder of the 46,000 owned brokerage agents from Kallbaker, Corcoran, and Sotheby's International Realty by the end of Q4. This will bring the total number of agents on the platform to approximately 85,000 by year-end. Engagement from agents during our rollout has been fantastic. Over 30,000 agents have attended a training, and those trained agents are utilizing the platform at least twice as much as those that have not attended a training. Interestingly, trained Coldwell Banker agents are using the platform's AI capabilities roughly three times more than the current average. Direct feedback has also been positive. CSAT, or Customer Satisfaction Scores, where onboarded agents rate the platform was 4.1 out of 5, or 82% at the end of Q3, which is generally considered to be a strong score in the software industry. Agents are also noting the ability to save money on third-party tools, save time so they can focus on their client relationships, and the superior speed and intuitive interface of the platform. In early 2027, our focus will be quickly shifting to onboarding our franchise network where initial interest levels in the platform are incredibly high. Nearly 80% of franchisees that have been surveyed internally have indicated they are ready for the platform More agents on the platform means compounding positive network effects that are already taking shape. Newly on board agents have imported 29 million contacts into the home platform CRM. This brings the total number of contacts in the platform to 225 million, providing our agents the significant reach across the United States. Our likely to sell feature currently has 1.2 million contacts. And in October alone, the platform has serviced more than 300,000 potential sellers for our agents to reach out to. Onboard agents have sent 70,955 unique client dashboard invites since July 1st alone. This puts the home platform directly into the hands of thousands of new home buyers and home sellers. Furthermore, the number of see it first on Compass listings, which includes both private exclusives and coming soons. These listings were added to the platform by onboard agents at a level that was four times higher in October than in July. In cities where we face no industry restrictions on marketing today, three-phase marketing adoption of newly launched listings in the Compass brand is on average at 63% as of the most recent week. We also hit over 70% adoption in some of these cities during the quarter, suggesting that as the industry's artificial restrictions on homeowners and seller choice are removed, the good majority of listings would start off as a private exclusive or coming soon and be a see-it-first listing on compass.com and our sister company sites. As the positive network effects in the platform grow, we believe we will create a distinct advantage in an AI-driven future. First, as consumers increasingly begin their home search with personal AI systems like Instinct or Muse. We believe these tools will care about providing genuine utility to the consumer. And that means going to the source of the data, to the listing agent, to the listening broker, to the list of data, to the website where they can find the best data. With our listing data architecture already optimized for agentic workflows, our early testing is showing AI systems like Instict bypassing traditional portals and going directly to brokerage websites to service coming soon inventory directly. This generates more direct leads for our agents, helping them grow their business and generate more business. Coupled with our Rocket Redfin partnership, where our agents have received roughly 110,000 leads to date and Compass.com traffic, which is up 68% year over year in September, we believe that our top of funnel reach is rapidly expanding. second our ai assistant becomes stronger because of the proprietary context we have and we are already seeing this play out today the number of ai drafted tasks approved per active user has 5x in q3 compared to q2 and when i say active user i'm referring to an active agent That's the strongest indication that our agents trust the model's output. The number of AI-based actions per active agent has doubled from 13 in Q2 to 26 actions in Q3. The numberof AI-assisted follow-ups have also tripled per active user, quarter over quarter. We believe all of these actions help our agents save time so they can be more productive. But while we see AI changing how buyers search and how productive it can make our agents, what we aren't seeing is AI replacing the trust that our real estate professionals have with buyers and sellers. A home purchase or sale is the largest transaction most people will make in their lives. It is highly complex, hyper-local, and extremely emotional. It is a transaction that has proved year after year that the better technology gets, it has not replaced the agent, and quite frankly, the use of agents has only increased with the use of technology year over year over year. In our platform is the infrastructure layer that enables the complex transaction from search to close. This is why we are building a future where a human, or in a case, a real estate professional, remains in the loop and is armed with agentic capabilities. Examples include using the more than 400,000 daily signals we can observe in the platform to provide our real estate professionals with early insights. Again, more agents means more positive network effects to help our agents win, better serve their buyers, and better serve their sellers. We also plan to launch do-it-forming capabilities in the future that execute complex cumbersome workflows like creation of market materials and creation of CMA valuations. This is only possible because we have the ability to stitch together these complex workflows in one end-to-end platform. And this is also why we recently brought on Sissy Hsiao onto our board. Sissy comes to us after spending over 20 years at Google, where she most recently helped create the Gemini app. And I'm excited to be working with her to build the next iteration of our platform and the next generation of our AI capabilities. So bringing it all together, while the macro environment remains tough, we remain highly focused. With our cost synergies and optics discipline, we plan to pay down our debt. And with the improving recruiting pipeline, the rollout of the home platform to more agents, and the industry's best agents, I believe we are positioned to do very well in a higher for longer rate environment. With that, I will now hand it over to Scott. Thanks, Robert, and good afternoon, everyone. As Robert just noted, we are operating in a challenging market environment driven by higher mortgage rates. We can't control mortgage rates, but what we can control and what our Q3 results demonstrate is our discipline over operating expenses, our continued focus on cost synergies, and our unwavering support of our real estate professionals, which has led to another quarter of record results. Consolidated revenue in Q3 reached $3.9 billion and was within our guidance range, despite the challenging market backdrop In our owned brokerage business, organic revenue was $3,42 billion in the quarter, reflecting a year-over-year increase of 8.2% on a pro forma basis Our organic transactions declined slightly by 0.3% year-over-year on a pro forma basis, but still outperformed the entire U.S. residential real estate market by 1.5%. Organic gross transaction value for the brokerage segment was $133.1 billion in the third quarter, up 7.5% year over year on a Pro forma basis driven by an increase in average selling price. As of September 30th, we had 85,476 agents on our owned brokerage operations and added 2,734 agents on an organic basis during the quarter. Slightly down from the agent additions in Q2 and in line with normal seasonality. For the third quarter in a row since closing the Anywhere transaction, total agent retention in our brokerage operation remained very strong. and consistent with the trend lines we've seen all year, we're retaining the agents we want to retain. 74% of the total agent separations in the quarter had no production or very low production in the trailing 12-month period. Excluding agents with 20,000 or less of GCI in the last 12 months, which on average equates to approximately one or two transactions, agent retention was 98.7% in Q3, consistent with the last quarter. Commissions and other related expense as a percentage of owned brokerage revenue is essentially flat year-over-year on a pro forma basis, increasing by just six basis points to 81.61%. In our franchise segment, organic franchise GTV was up 2.3% year-ever-year, on a Pro Forma basis, compared to industry market volumes that were up 0.7%. The franchise segment is generally more exposed to broader market trends and price points, but we are pleased to see the outperformance in franchise GTV over the past two quarters relative to the market. Integrated services revenue reached $197 million for the third quarter, up 3.1% year over year on a pro forma basis, with title and escrow revenue being the primary driver. Title and escrow for purchase transactions grew by 1.5%, which compares to market transactions down 1.8%. Our mortgage joint venture businesses also continue to perform well, with funded pro forma volumes up 10% year over year due to a higher attach rate. We just merged our two mortgage JVs we have with Guaranteed Rate, Guarantee Rate Affinity and Origin Point. The newly combined JVs will operate under the OriginPoint brand, and we expect the combined businesses to be a top 10 retail mortgage lender in the U.S. this year. Our total non-GAAP operating expenses were $676 million in Q3, down $23 million sequentially from Q2, reflecting continued cost synergy realization and strong discipline on OPEX, including some volume-based savings. We continue to move ahead of our plan on cost synergies. As Robert touched on earlier, we have now actioned 360 million in net cost synergies as of today. That exceeds the revised $330 million year-end target we shared last quarter. As a result of these additional actions, we now expect to realize about $245 million in 2026 compared to the 220 million we shared the last quarter, About $175 million will come through the P&L in 2026, benefiting adjusted EBITDA and cash flow, while the remaining $70 million will be reflected as lower CapEx, which won't directly benefit adjusted EBitda, but will benefit cash flow. Adjusted EBITda in Q3 was $306 million, more than triple the amount of adjusted EBItda Compass generated a year ago on a standalone basis. We achieved gap net income of $62 million this quarter, another record. It's the first time in Compass's history that we've achieved positive gap net income in the third quarter. The $240 million of free cash flow we generated in Q3 is a record for any quarterly period and also represents more free cashflow in one quarter than Compass generated in any annual period in its history on a standalone basis. We ended the quarter with record liquidity of $841 million of cash, underpinning our ability to redeem the $500 million of our 9.75% notes, which we expect to do in the second quarter of 2027. As I turn to our guidance for the fourth quarter, I want to spend a moment expanding on the market backdrop that Robert touched on earlier, because it's an important context for hour outlook. The defining feature of the past few months has been a sharply higher move in interest rates. In early October, the yield on the 10-year treasury climbed above 5.3%, the highest level in 24 years, and it's still hovering near 5%. And the 30-year mortgage rate that broke through 7.5% is a sharp reversal from July, when economists were forecasting that mortgage rates would average about 6.4% in the fourth quarter. Additionally, over the past four weeks ending October 30th, pending home sales nationally were lower than the year-ago period by 15%, and the final three weeks of October reported fewer pending sale contracts than any previous week in October in the past five years, including 2022 levels. Pending home sales generally convert to home sales 30 to 60 days once a home goes into pending status. So the forward-looking data is currently pointing to Q4 existing home sales that are weaker than any current industry forecast contemplate. With that context in mind, for the fourth quarter of 2026, we expect consolidated revenue in the range of $3.15 billion to $335 billion. At the midpoint, on a pro forma basis, this reflects an increase of 2.6% year-over-year. However, on an organic basis at the midpoint, this reflex a decline of 4.5% year over year. Our Q4 revenue guide incorporates the year-ever-year declines in transaction counts the industry is experiencing offset by expected home price appreciation. We expect fourth quarter consolidated adjusted EBITDA to be in the range of $100 million to $130 million. This implies a full-year adjusted EBITDA range of $830 million to $860 million, which at the midpoint is up 44% from the $587 million of consolidated pro forma adjusted EBITA in 2025. For the full year, we expect non-GAAP operating expenses in the range of $2.71 to $2,73 billion. At the midpoint, that implies an estimate of $704 million of OpEx for Q4, primarily due to additional OpEx and brokerage from the Q3 franchise conversions. We expect our basic weighted average share count for the fourth quarter to be between $776 to $778 million shares. And one final note on guidance. As you begin to think about 2027 OpEx modeling, be sure to consider that there will be an additional step up of OpEx for the eight-day period prior to the January 9th acquisition date of Anywhere, as those eight days of expenses weren't included in the 2026 period, but will be in the 1027 period. We've referred to that as a wraparound effect of OpX in the past, and the same concept would also apply to the added OpEx from the Q3 franchise conversions. All in, you should plan for the wraparound effect on OpEx to add about $120 million to OpEx in 2027 compared to 2026. As always, the added OpEx from this wraparround concept carries revenue and gross profit with it, so it's not diluted to adjusted EBITDA. To conclude our comments, the current interest rate environment is certainly providing us challenges, and the market data we're seeing suggests that the fourth quarter will be even tougher. That said, we're entering this challenging period from a position of strength, with $841 million of cash on our balance sheet, an untapped $500 million revolver, and having just announced a quarter with record revenue, record-adjusted EBITDA, and record free cash flow. Operator, we can now begin Q&A. Thank you. We will now open the line for Q&A. If you would like to ask a question and have joined via the webinar, please click on the raised hand icon. If you have joined by the phone line, please dial star five to raise your hand. In the interest of time, please limit yourself to one question and one follow up today. When you hear your name called, you will be prompted to unmute your line and ask your question. We will not take a moment to allow the queue to form. Our first question comes from Jason Helfstein at Oppenheimer. Jason, you may now unmute your line and ask your question. Thank you. Thanks for taking the question. So, Robert, maybe first, what's your reaction to the open real estate, whatever we want to call consortium website project? And then do you see any collaboration there potentially? And Scott, the guide implies fourth quarter opex something up around four percent um obviously it was down this quarter um i guess just any i don't know if you want to give us any thoughts around that like there's probably still some synergies you would like to achieve incrementally not in that but just and then how are you thinking about synergies for next year at this point thanks yeah so on open re like we welcome this change is it actually validates what we've been saying for the better part of two years. And so I'm really excited to see the four of them lead in this way and to see others join. And in terms of joining or not, I think there's definitely a path, but Compass National Holdings is definitely excited that there will be a national real estate listing service that will return the power back to the creator of the listing, the homeowner and their trusted agent. and that it's good news for all agents and uh for all their clients and we're looking forward to seeing um if you know there's a way for us to be involved yeah jason on the uh on the opex question i guess starting with q4 some of that walk and some of the step up you see from q3 into q4 really a couple of things there there's a little bit of um just one timing items there for um a couple agent conferences that are just scheduled and hit in the fourth quarter so that's when that expense drops and you also have a little bit of a step up from the incremental opex we just picked up from q3 conversions the franchise conversions and so that kind of explains the step up between q3 q4 as far as how those synergies should be thought about into 2027 i'll give you a couple of thoughts there you know first off Recall, we just upped our full year synergy target or action, I should say, to $360 million. And we told you $250 million of that is expected to be realized in 2026. That leaves a spread of about $110 million left. The majority of that will come through the financials in some capacity in 2027. Not all, but a significant amount of it. Recall that when an expense is actioned, it doesn't mean it starts to realize through the financials that day and action synergy could relate to a future decision or current decision but really relates to a feature action that still has to occur such as the decision to cancel a vendor contract today but it doesn't actually start having an effect until it's actually canceled in the future so that's why there's a delta there i think you're going to get some a little bit of a step up in mostly the opex lines you call some of that some of the synergy realization will come through some other lines as well some capex etc and then finally there will be some additional synergies that we action next year incrementally on top of that i'd say as we talked about it before the the easier and it's hard to say easy because every action that we've done to date has been hard these are tough decisions and it has taken hard work but on a relative basis they've been easier than some of the stuff that will carry on into the next two years, just given the fact that we're getting into some of the system integration work and more of the operational infrastructure work. So there will be a little bit of a slowdown in that you split that difference of 140 million that's left to our target, call it 70-70 over the two years. I think you'll see 70 million kind of back-ended from an action standpoint in 2027, just as that system realization stuff is going to kind of backend itself a little Hopefully that's helpful. Thank you. Thank you, our next question comes from Matthew Booley. Your line is now open, please go ahead. Hi, you have Elizabeth laying it on for Matt tonight. Thank you guys for taking the questions. And you offered some color obviously on the weakness we've seen over the last few weeks. i was wondering if you could maybe unpack kind of what you're seeing across different geographies or different price points um and you know in the context of next quarter's revenue guide if you can maybe talk about her thinking about the relative magnitude between you know the impact of transaction volume weakness relative to your expectations on that positive price contribution yeah yeah happy to take that that question so look as we look into the um the guide for for the fourth quarter you know it's really a component of two items we talked about you know organically we're seeing revenue down of 4.5 percent built into that guide at the midpoint um you know breaking it down to transactions and price from a price standpoint we expect similar to what we see in the past few quarters this past quarter we're you know up between seven eight percent uh we would expect that to hold especially given the the uh the the markets in which we operate in on a transaction count perspective is really where the the downward impact comes from as we noted our prepared comments you know we're seeing pendings down 15 in october um so we've considered those trends but you know given our history of outperformance we would expect to outperform that a bit um in the prepared comments we also talked about that the down 15% in transactions is more in the last three weeks than any other prior October in the past five years, including 2022 levels. So that data point is really worse than normal seasonality. And so we've taken that consideration into our fourth quarter guide, expecting things could be worse than our typical seasonality, but it's worth noting though that interest rates have come down since October by about 50 basis points and so that could provide some Q4 revenue upside if interest rates stay at these current levels from where they were before. The only other context I provide is as we know you know from many years past and people the market slows down around midterms and so you know I think there's only There's only, we're not absolutely clear how much of the pending down year over years from midterms versus just the natural pressure for mortgage rates. But mortgage rates right now are 7.17%, a lot better than 7.65 just a few weeks ago. Let's hope it holds. No, that makes a lot of sense. And it's probably a little bit early to ask this, but kind of on the point where, you know past midterms and you know rates have come down a little bit you know do you is there anything you can kind of offer about how you're thinking about 27 you offered some interesting commentary about onboarding with the franchise network you know anything that we should be thinking about in terms of like the market you know more broadly or how you were thinking about it yeah I mean look as far as the overall market you're not going to predict that you can see that The large market forecasters, though, that are out there are starting to come down a little bit. Some are now saying the market down below 4 million home sales off of the current year. We'll see. I mean, I think the one thing we can offer, though. In addition to just what the market is going to do is what we have the ability to control. And, you know, we talked about this a littlebit earlier in the year when we put out that scenario slide in Q1. The primary driver of that scenario slide was various changes in existing home sales, but there were other drivers we called out there, including agent growth, including price appreciation, including integrated services attached for title and mortgage and the impact of leads. And so we're going to continue to drive all those items. Every analyst and every investor is going to have different assumptions as far as the impact of what those growth metrics could have on our revenue. but one thing is sure is they should all be directionally positive, right? And so we're going to keep pushing that. That's what's in our control. We can't control the market. And so, um, we'll have to see where that, where that comes out. We will, uh, we now have the vast majority of the agents on the platform from the own brokerage, uh in late spring, we're just bringing on the, uh the franchise broker owners. And, so, yeah, Every activity in the platform is designed to drive business, help agents generate more revenue and process more revenue. And so that should be a positive tailwind. And in terms of mortgage rates and activity, the consumer reacts more to the change in the mortgage rate than the actual rate itself. And so going through April and spring where I ran or leading to higher mortgage rates and then really extending through Q3, that did put some pressure on mortgage rates this year where even if we stayed at 7.17 for all of next year, I would expect, even though rates are actually higher than they started last year, if we stayed flat at 7.17, I would respect the transactions to be relatively flat as well. Thank you guys very much. Our next question comes from Ryan McKevney at Selman. Ryan, you may now unmute your line and ask your question. Thank you. Great. Thank You for taking the questions and nice job on the quarter. I wanted to dig in a bit more on the OPEX side of things. You know, great to see the execution on the synergies. And I think you called out an additional $25 million of cost synergies impacting the P&L. But the full year OPEx target came down by, I think, $55 million at the midpoint. So call it $30 million above and beyond the cost synergie. So and I think that's including the additional expenses of the franchise conversions. So can you talk about the drivers of the further improvement in that full year cost target? And I guess any commentary you can share on, you know, how much of that reduction might be tied to just lower volume set differently, maybe more variable than fixed in nature? Thank you. Yeah. Hey, Ryan. Good to talk to you. I think the way to think about it, and you called it out the right pieces there. So the way to think about the differential on OPEX in the quarter is really the synergy realization coming through is half of it. And then I think just actual, you know, just good old fashioned tightening our belt is the other piece of it, I'd say. And you're right, there is some incremental costs in there from the additional Q3 conversions that weren't factored into our original guide last quarter. But look, we saw what was coming here with the market coming down. We saw what we saw with interest rates. And we just said to ourselves, we've got to get ahead of this a little bit. So we started pulling some cost actions that we had originally planned for early 2027 into 2026 here just to get ahead of it. And so that was really just proactive planning there. We're really glad we did it because it really kind of made the difference for the quarter. Revenue is a little tighter than we hoped, but we made it up on the OPEX and then some. You know, I think I can just say overall, I'm just so impressed with what we've been able to accomplish as a team on the synergies. You know. We just keep increasing the goals on what we can accomplish there. And, you know, we had critics originally thinking we couldn't handle the original goal of $225 million, which was a three-year goal, remember. And we just blew through that to another three- year goal of 300 million. Blew through that again. So we just keep producing more. And, you know, it's just a full team effort across the entire company. So really kind of leading into that opportunity and pulling things forward once we saw that rates were coming up a bit. Absolutely. Yeah, very, very impressive. And Robert, I guess one for you, within the press release, you guys split out some more detail than you have in the past about the mortgage business or the mortgage joint ventures and the funded volume. And obviously, it looks like really healthy growth in what's obviously a tough purchase market. So, you know, you also talked about the JVs coming together. So anything, you Know, we should be thinking about that's kind of going on behind the scenes. Obviously, you share the economics with rate, but, you Know, the rationale behind those JV is coming together, you Know, and some of the trends are seen in that business. Thank you. Yeah. So, look, we're now a top 10 mortgage lender, which is incredible after such a short amount of time. In Q3, even though it was a very tough mortgage market, our overall funded volume grew by 10% year over year in Q3 and year to date by 32%. And so we feel good about that progress. Longer term, we want to be a top five retail lender. We're obviously very committed to the business. We're committed to ensuring that our real estate professionals and their clients are able to have everything in one place, which is not just technology, not just marketing, not Just branding, not just to be domestic and international, but for title, escrow, and the mortgage as well. Everything in the platform and in one place so that they can do every part of the transaction without having to log into more than one company, without having to write the same thing more than once, and to do everything on their phone if they so choose. So this is something we're committed to and it's getting better and better over time. Yeah, right. just to add to that real quick you know the other the other benefit couple benefits of bringing the two jvs together is really just efficiency right we can we can eke out bar costs there as well and so that's what i was saying in response to jason's question earlier some of the additional synergies will realize are not all going to come through opex because some of those synergies are in that jv line they'll come through that jvline which isn't it benefits ebitda but it doesn't exactly fit in the opex line look the other benefits of it is by putting them two together now being a top 10 mortgage lender it's been attractive for loan officers coming on so we've seen an uptick in recruiting of loan officers that are much more interested in becoming a part of a large mortgage lender you know than a smaller one so a couple of good benefits there very helpful thank you thank you our next question comes from daily at jp morgan day you may now unmute your line and ask your question. Thank you. Great. Thanks for taking the questions. I also have two. First of all, I'm going back to the macro comments. Do you feel like there's any catalyst that might be ahead of us to help tilt macro in your favor a little bit? And in terms of your guidance, does the midpoint of the guidance kind of reflect the low 7% mortgage rates that we're seeing right now or is that an improvement you guys have seen after setting the guidance and then secondly um yeah i'll follow up after yeah so the the guidance was said yeah days passed right and so this it doesn't reflect what's happened in um the the last number of days and and where how the 10 years come down and how mortgage rates have come down. Look, I think we could tilt it into our favor. And there are reasons to be optimistic, but obviously we're not planning for that. We continue to focus on costs and plan for being conservative. But I think what can help in our favor are, one, we have more inventory right now than any point since even through 2019. And that's a really meaningful point because you cannot sell what's not for sale, right? And so, you know, more inventory means you can create more sales. Less inventory, you just can't. And in 2020, 21, 22, 23, 24, even through much of 25, the biggest issues were there's just not enough inventory. That issue in the country has gone away. And again, there's more inventory than even the pre-pandemic 2019 period. So that's a reason to be positive. Another reason to be positive is there's, you know, you have sellers and more negotiability. And so there's 43% of the homes have a price drop right now, which reflects the sellers are willing to negotiate. In terms of on the buy side for buyers, again, consumers react more to the change in mortgage rate than the absolute rate itself mortgages have come down uh and if you know if the 10-year continues to come down because um people are moving their money from ai investments and into bonds um because they're moving because of you know stability with oil prices bringing down inflation and improving the 10 year over time and that will obviously flow through if it helps with mortgage rates the biggest driver for sure of this business are mortgage rates. And so hopefully there's more upside in mortgage rates going down from 7.17 over time than going up. Got it. And as a follow-up. You know, our biggest markets, of course, are Bay Area, New York, Florida. There's a lot of tailwinds that are in those markets, Even with what's happened the last day over in AI, if an anthropic IPO happens and open AI IPO happens, the Bay Area activity will go up. That's just math. And that activity isn't just flowing to the Bay area. It's flowing to investors across the country. In New York, you have the bonus pool, the profit pool for Wall Street bonuses is expected to be $90 billion, which is 38% higher than the previous peak, which ist another knock-on benefit of the AI activity. And so, obviously, a big driver of New York activity are Wall Street Bonuses. bonuses and so I mean it's where things are that will be we will have record bonuses coming uh in the months ahead and that will lead to more transactions um you know I there's you know there are a number of partners on Wall Street who have asked me for uh an introduction to their to our agents and I have made those introductions um and I think some of the smart people are trying before those bonuses get paid out because then there'll be more competition. And then New York activity, I'm sorry, Miami activity, Florida activity is still strong. Okay, that's very helpful. And then just as a quick follow-up, you guys have mentioned majority of your brokerage agents are on the home platform now. So just curious, when you look across those people who are onboarded, where are they in terms of maximizing the benefits that they can get from the home platform? And over time, where should we see that show up in the numbers that we can track from outside? Thank you. Yeah, so we now have 225 million contacts in our platform. We need contacts in your platform. We need to have contacts in the platform. You know, you think about how many people are living in the United States. I mean, this is, the majority, it's very likely the majority of the country is somewhere in our CRM. And that's important, not just because those are people that our agents can reach out to, send CMA valuations, send new inventory to, but also it's important because our agents can go to their potential sellers and say, when you work with me, you're not just working with me. You're working with hundreds of thousands of the best real estate professionals across the country, across these incredibly, incredible different brands, all operating on a home platform. We have 225 million unique contacts. And when you give me your listing, boom, it instantly pops up in their safe searches. And so I could bring these buyers to your home. It's such an incredible pitch to win listings and to compete against brokerages and agents at brokerages that have not invested in a platform. As we've talked about in the past, we've invested over $2 billion in the platform, and this is where it really starts paying dividends. So reaching out to more of your clients to generate business, being able to share with your potential clients that could bring them more listings and more buyers. because of our platform uh there there was uh there was an agent in uh in what in in houston who had a buyer who wanted oh i'm sorry had a client who just said hey i think i want to move to dallas that agent doesn't have the ability to search the mls and dallas it's a different market altogether. But that agent then searched the home platform to see what off-market listings are in the platform and then sent one to the, in Dallas, sent all of them to the client in Houston and the client Houston put an offer. Now that was, that is a transaction that is across geographies And that would not be possible without the home platform and across brands. Because one agent was at Sotheby's, the other one was at Compass. That's the power of the platform where it's no longer restricting how people work, but creating much more flexibility and opportunity for the clients of our agents. that that that client in houston for sure is going to tell her friend it's her and your friends hey you know talk to my agent if you're interested in going to dallas because and and that and that seller in dallas um who is able without days on mark without price drop history um to get an incredible offer from a buyer in a different brand in housten is definitely going to get to tell his or her friends hey use my agent as well thank you our next question comes from alec brondolo at wells fargo alec you may now unmute your line and ask your question thank you yeah hey uh thank you so much appreciate the opportunity to ask a question maybe two for me you know i think a lot of conversation about the subdued market environment some of the challenges that's creating in the fourth quarter uh on the call I'd love to maybe ask about an opportunity. I think perhaps walkover business could accelerate if the market remains subdued beyond the fourth quarter. I guess, how would you maybe think about attacking that opportunity a little bit more vigorously if that was the case? So that's the first question. And the second question, I think, you know, the commentary around web traffic, pretty encouraging, but it's off a very low base relative to kind of the leading scaled online real estate portals in the market. Could you consider leveraging M&A to perhaps give yourself a little bit of a boost in traffic? Thank you. And I'm just curious, when you say M&E, what type of M&M? buying another real estate portal and perhaps combining with the Compass website or re-platforming the Compass website there such that you'd have a lot more traffic than you do right now yeah so the in terms of the traffic like 68% September year over year definitely proud of that about 50% for the quarter I would expect that to continue to increase as we've launched the See It First campaign. The See It First campaign also, it's part of a rebranding exercise. I think some of our competitors have tried to brand the listings that we have as hidden, curly, anyone. All of our listings are available to all agents and to all buyers. And when you call them see it first, then it's pretty clear we just want you to see it first on our site. You know, that which is a natural thing for a company to want to be able to do where you, you know, and so we actually made a pretty substantive change to the Compass platform. And we are working on replicating all the features of the Compass Platform for all of the sister brands so that this time next year, you take every brand that you know of, they'll all have the same features, the same unique inventory, same opportunity for people to see listings first and work with their agents while all of them will be connected to the home platform. What this will do for an agent at Caldwell Banker, When their client is searching Sotheby's in London, Hong Kong, Singapore, Dubai, or Sao Paulo, the Caldwell Banker agent will know. And vice versa for a Sothebys International Realty agent. Internationally, when they're working with a client who is interested in New York, they'll be able to operate successfully across those different geographies. And so we're really making an investment in our own site. And today, we have 89,000 homes on our website that you can see early and see it first by searching our sites across the country. Yeah, and then, Alex, just to touch on your question on walkovers, like, I think the walkover motion is definitely now running at Coldwell Banker now, too, so we're excited to see that pipeline building. I mean, think about it with our SGM team. They've got a new talk track they've got to get used to, right? A new sales pitch here. They're now recruiting for four brands, not just one. And so that takes a little bit of a messaging to work that. And then, of course, the walkover pipeline is a little bit longer to convert. It's a bigger decision than just for an individual agent. So that won't happen instantaneously. But we're really encouraged by the fact we see a strong pipeline, as Robert said in his prepared comments. The pipeline is as strong as it's been. on a year-to-date basis. So we think we have some opportunity there as well. And the more agents and broker owners that are using our platform, the easier it will be to recruit agents and to bring walkovers over because they're hearing walkover CEOs at the boutique brokerages are hearing from more people they know and trust that their agents are better served when they're using the home platform. And at the end of the day, Broker owners, there's one thing that is shared for sure, which is a deep desire just to see your agents be more successful. In the same way real estate agents love their clients, their buyers and sellers, broker owners, we all love our agents, just want to see them be the best that they can possibly be to help them grow their business and have more time. They have more income to support their family, more time to be with their family. And yeah, I just think that the word of mouth that we're seeing from the success of people on the platform will lead to more, to an increased pipeline in all regards. Perfect. Thank you. Thank you, our next question comes from Bernard McTernan, Needham & Company. Bernard, you may now unmute your line and ask your question. Thank you great. Thanks for taking the question. And maybe to follow up on the traffic question, Robert, you mentioned agentic shopping as well. What are you doing for your site to make sure that agents are coming to you organically or why do you think they are now or how you're preparing for it? And then secondarily, asking on broker agents, talked about the nice organic ads in the quarter. Can you talk about your M&A pipeline? um you know in previously you've benefited from smaller tuck-ins when when the times are tough in the real estate markets so is there you know an appetite for you and for sellers um in this current um season yeah so look on the ladder like we continue to um yeah when we continue to be a company that wants to support great operators and continue to have those conversations On the former, look, instinct and muse are just fantastic, right? If you go in and you say, hey, I live in Brooklyn Heights, let me know whenever there's a new listing that comes up. We're starting to see that it's more often than not bringing you to one of our listings where it comes first. I mean, Instinct and Muse, these AI agents don't, they're just trying to do what you're asking. It is the new search alert. For anyone that says, oh, how are you gonna find all the listings if they're not all in one site? Well, Instict and Muse prove that, it's just a different search alert, and it brings you to A, wherever the data comes first, and whoever's the original author of the listing, which is obviously the listing agent, not a portal. And then B, they're bringing you to listings that have more information. And so I think that's a real advantage for us. And it's happening across our brands. For what I just shared with you, I've seen it in Coldwell Banker, Sotheby's National Realty, Corcoran, Century One, Compass. And then you could ask the AI agent, why did you give me those listings and not one from a portal and it'll actually tell you say well this is the this is where the listing came from and we want to give you listings uh that you know that are the source or where they come first and so we just see a real it's hard to see a scenario where this does not help us uh the and and we're going to continue to optimize our site for not just SEO, but also AEO. Yeah, he's already quickly on your... Sorry, go ahead. You know, I think on the second question, yeah, it's just really that we have, we continue to have the conversations and just with, you know, we want to stay in touch with great operators and we'll continue to do so thank you thank you this concludes our q a session i will now turn the call back to robert refkin for closing remarks great well look first of all i want to say thank you uh everyone for joining our call today uh i want to end by thanking all of our employees all of of our agents. Our record Q3 results are a culmination of incredibly hard work from thousands and thousands of people over the past nine months. And I'm just very excited and very thankful for what we're building together and building the future of real estate together. So thank you to everyone. Have a great rest of your day.