Compass, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Q3 2026 Revenue reached $3.90 billion, a 111% year-over-year increase from $1.85 billion in Q3 2025, and an 11.6% increase on a pro forma basis compared to $3.49 billion in Q3 2025.
• Organic Revenue was $3.75 billion, growing 7.4% year-over-year on a pro forma basis.
• GAAP Net Income was $62 million, a turnaround from a net loss of $4 million in Q3 2025.
• Adjusted EBITDA was $306 million, up from $94 million in Q3 2025, exceeding the high-end of guidance.
• 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.
• Non-GAAP OPEX for the quarter was $676 million, excluding commissions and other related expenses.

Guidance and Future Outlook

• Q4 2026 Revenue guidance is set between $3.150 billion and $3.350 billion.
• Q4 2026 Adjusted EBITDA guidance is set between $100 million and $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.
• The "Home" platform is scheduled to roll out to all real estate professionals in the franchise network starting in Q1 2027.

Business Segments and Product Lines

• Brokerage:
  • Gross Transaction Value (GTV) was $138.9 billion, a 96.5% year-over-year increase; Organic Brokerage GTV grew 7.5% year-over-year on a pro forma basis.
  • Total transactions closed were 140,118, a 106.4% year-over-year increase; Organic transactions decreased 0.3% year-over-year on a pro forma basis.
  • Total agents reached 85,476, with 6,390 gross agent additions and a retention rate of 95.1%.
• Franchise:
  • GTV was $108.9 billion, a 1,181% year-over-year increase; Organic Franchise GTV grew 2.3% year-over-year on a pro forma basis.
  • Total transactions closed were 191,809, a 2,073% year-over-year increase; Organic transactions decreased 3.6% year-over-year on a pro forma basis.
  • Net royalty rate per side was $486, down 27.4% year-over-year; Organic net royalty per side grew 3.8% year-over-year on a pro forma basis.
• Integrated Services:
  • Title and Escrow (T&E) transactions totaled 38,757, a 406% year-over-year increase; pro forma T&E transactions increased 1.7% year-over-year.
  • Average revenue per T&E transaction was $3,590, up 1.4% year-over-year on a pro forma basis.
  • Mortgage funded loan volume was $3.30 billion, up 9.9% year-over-year on a pro forma basis.
• Platform:
  • 33,950 real estate professionals from Coldwell Banker Realty, Corcoran, and Sotheby's International Realty were onboarded to the "Home" platform as of October 31, 2026.
  • Total real estate professionals on the platform across all owned-brokerage brands reached 68,349.
  • Customer Satisfaction (CSAT) score was 4.1 out of 5 (82%).
  • The AI Assistant generated over 461,000 conversations in October alone.
  • The Client Dashboard saw nearly 71,000 invites sent in Q3 2026.
  • Structural Advantage Tools were used by over 25,200 professionals, a 44% increase from Q2 2026.

Market and Competitive Landscape

• The U.S. residential real estate market GTV increased by 0.7% year-over-year, while transactions decreased by 1.8%.
• Organic Brokerage GTV outperformed the market by 680 basis points on a pro forma basis.
• Organic Brokerage transactions outperformed the market by approximately 150 basis points.
• The Compass standalone brand has outperformed the market for 22 consecutive quarters, 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.
• Risks include general economic conditions, high mortgage rates, low home inventory levels, and the ability to successfully integrate Anywhere's business.
• Potential disintermediation of real estate professionals due to rapid AI advancement and associated regulatory challenges.
• Significant debt levels and increased interest expense from the Anywhere transaction.
• Ongoing industry antitrust class action litigation and regulatory reviews of the Anywhere transaction.
• Risks related to the significant increase in the franchise business following the Anywhere transaction.
• Potential for common stock dilution related to the 0.25% Convertible Senior Notes due 2031.

Management Commentary and Tone

• CEO Robert Reffkin stated that Compass delivered record financial and operational results despite a year-over-year decline in housing market transactions.
• Reffkin highlighted that Adjusted EBITDA surpassed guidance due to OPEX discipline and cost synergy realization.
• CFO Scott Wahlers noted the cash flow generative nature of the business, generating $248 million in operating cash flow and $240 million in free cash flow in a challenging environment.
• Management expressed confidence in generating significant free cash flow and deleveraging the balance sheet while continuing to invest in agents and the platform.
• The tone was confident regarding the company's track record of outperforming the market and its ability to navigate a softened housing environment.

Other Key Points

• The company completed the acquisition of Anywhere, with pro forma metrics reflecting the combined operations as of July 1, 2025.
• The company plans to retain earnings rather than pay dividends for the foreseeable future.
• A litigation charge of $7 million was incurred during the nine months ended September 30, 2026, in connection with Antitrust Lawsuits.
• The company has no balance on its revolver and a healthy cash position to support future operations and debt redemption.
• Segment Adjusted EBITDA for Q3 2026 was $320 million for Brokerage, $82 million for Franchise, and $40 million for Integrated Services.