Compass, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue increased 111% year-over-year to $3.90 billion, compared to $1.85 billion in Q3 2025; pro forma revenue increased 11.6% to $3.90 billion from $3.49 billion in Q3 2025.
• Organic revenue (non-GAAP) was $3.75 billion, growing 7.4% year-over-year on a pro forma basis.
• GAAP net income was $62 million, a reversal from a net loss of $4 million in Q3 2025.
• Adjusted EBITDA (non-GAAP) reached an all-time record of $306 million, up from $94 million in Q3 2025.
• Operating cash flow was $248 million, and free cash flow was $240 million.
• Cash balance increased to $841 million at quarter-end, with no balance on the revolver.
• Total long-term debt was $3.14 billion, resulting in a Net Debt to Adjusted EBITDA ratio of 2.7x, down from 4.4x at the time of the Anywhere transaction announcement.
• Nine-month 2026 GAAP net income was $176 million, compared to a net loss of $16 million in the same period in 2025.

Guidance and Future Outlook:

• Q4 2026 revenue guidance is set at $3.150 billion to $3.350 billion.
• Q4 2026 Adjusted EBITDA guidance is $100 million to $130 million.
• Full-year 2026 Non-GAAP OPEX guidance is $2.71 billion to $2.73 billion, a decrease from the prior range of $2.75 billion to $2.80 billion.
• The company expects to be free cash flow positive for the full year 2026.
• Management indicated plans to redeem $500 million of 9.75% Notes when they become first callable in Q2 2027.

Business Segments and Product Lines:

• Brokerage: Gross Transaction Value (GTV) was $138.9 billion, up 96.5% year-over-year; organic GTV grew 7.5% on a pro forma basis. Total transactions were 140,118, up 106.4% year-over-year; organic transactions decreased 0.3% on a pro forma basis.
• Franchise: GTV was $108.9 billion, up 1,181% year-over-year; organic GTV grew 2.3% on a pro forma basis. Total transactions were 191,809, up 2,073% year-over-year; organic transactions decreased 3.6% on a pro forma basis. Net royalty rate per side was $486, down 27.4% year-over-year due to lower average sales prices from newly acquired brands.
• Integrated Services: Title and Escrow transactions were 38,757, up 406% year-over-year; organic transactions increased 1.7% on a pro forma basis. Average revenue per transaction was $3,590, up 1.4% year-over-year on a pro forma basis.
• Mortgage: Funded loan volume was $3.30 billion in Q3 2026, up 9.9% year-over-year on a pro forma basis.
• Platform: Onboarded 33,950 real estate professionals from Coldwell Banker Realty, Corcoran, and Sotheby's International Realty as of October 31, 2026, bringing the total to 68,349 professionals across owned-brokerage brands. The platform plans to roll out to the franchise network in Q1 2027.
• AI Assistant: Usage included nearly 990,000 tool calls in Q3 2026 and over 461,000 conversations in October.
• Client Dashboard: Nearly 71,000 clients were invited to access the dashboard in Q3 2026, with over 36,000 invites in October.
• Structural Advantage Tools: Used by over 25,200 professionals in Q3 2026, up 44% from Q2 2026.

Market and Competitive Landscape:

• The U.S. residential real estate market GTV increased 0.7% year-over-year, while Compass organic Brokerage GTV outperformed the market by 680 basis points on a pro forma basis.
• The U.S. residential real estate market transactions decreased 1.8% year-over-year, while Compass organic Brokerage transactions outperformed the market by approximately 150 basis points.
• Compass has outperformed the market for 22 consecutive quarters as a public company, including three consecutive quarters including Anywhere.
• Website traffic to Compass.com and mobile apps increased 53.6% year-over-year in Q3 2026.

Risks and Challenges:

• The housing market has softened over the past few weeks.
• The company faces risks related to the integration of Anywhere's business and realizing cost synergies.
• Potential disintermediation of real estate professionals and competitive pressure from rapid AI advancements.
• Significant debt incurred in connection with the Anywhere transaction and associated interest expense.
• Ongoing industry antitrust class action litigation.
• Risks related to the significant increase in the franchise business following the Anywhere transaction.

Management Commentary and Tone:

• CEO Robert Reffkin stated that despite a year-over-year decline in housing transactions, Compass delivered record financial and operational results.
• CFO Scott Wahlers highlighted the cash flow generative nature of the business, noting strong OPEX discipline and cost synergy realization.
• Management expressed confidence that the company is positioned to do very well in the current environment, leveraging financial strength to delever the balance sheet while continuing to invest in agents and the platform.

Other Key Points:

• Total agents reached 85,476 at the end of Q3 2026, up from 83,184 at the end of Q2 2026.
• The company added 6,390 agents on a gross basis during Q3 2026.
• Agent retention rate was 95.1% in Q3 2026, with 97.9% retention excluding $0 GCI agents and 98.7% excluding agents with $20,000 or less in GCI.
• 58% of agent separations in Q3 2026 reflected agents with $0 GCI in the last twelve months.
• The company announced the acquisition of Anywhere, which closed on January 9, 2026, driving significant year-over-year growth in franchise and integrated services metrics.
• A litigation charge of $7 million was incurred during the nine months ended September 30, 2026, in connection with Antitrust Lawsuits.
• The company plans to continue retaining earnings rather than paying dividends for the foreseeable future.