Despite ongoing economic upheaval and a stubbornly difficult real estate market, brokerage giant Compass announced another quarter of record numbers. 

Compass delivered its strongest third quarter in company history, reporting record revenue, profits and market share despite what CEO Robert Reffkin described as a "trough-level housing market." Reffkin said Compass achieved new third-quarter records across nearly every major financial and operational metric, including $1.85 billion in revenue (up 23.6% year-over-year), adjusted EBITDA of $93.6 million (up 80% year-over-year), free cash flow and organic principal agent growth.

The company also touted better-than-anticipated growth with Christie's International Real Estate, and touched on new AI-driven tools it believes will give agents a major edge as real estate search begins to see an earnest shift toward AI-powered models.

What Compass had to say

On the Anywhere deal: Reffkin expressed enthusiasm about Compass' planned acquisition of Anywhere Real Estate and reaffirmed the company's confidence in being able to close the transaction in the second half of 2026. Reffkin called the deal "highly compelling," saying it will be "pro-competitive" and deliver "more choice and better products" for agents, consumers and franchise owners.

Reffkin also raised the company's projected cost synergies from $225 million to "more than $300 million," with half expected in the first year after closing.

On momentum with Christie's: One of the most frequent questions investors have been asking since the company announced its planned acquisition of Anywhere was if Compass can continue to grow organically after the deal closes, Reffkin said. "To answer this question, we believe we already have a blueprint in the Christie's International Real Estate transaction," he said, highlighting the boutique brand's growing title business, agent count and profitability. 

"We have proven an ability to drive both top- and bottom-line growth post-close, and to do so organically," he said, noting that Compass added four new affiliates to Christie's International Real Estate in the third quarter and has another six in the pipeline.

Betting big on AI, agent productivity: Compass is also accelerating its AI initiatives. Reffkin highlighted the company's "Compass AI 2.0" effort — its next-generation agentic AI platform — which enables agents to complete complex tasks by voice and is already being tested live with clients. The platform is expected to roll out companywide before the next earnings call.

But Reffkin also pointed to major value in consumers utilizing ChatGPT with their agent search — and said referrals from popular LLMs can build Compass' credibility and save agents money on referral fees.

"I've had dozens of top real estate professionals tell me they're getting free business from today's conversational AI platforms, as homebuyers are now asking models like ChatGPT for the best agents in their market," Reffkin explained. "Here's the critical distinction: Unlike real estate portals that divert buyers to the highest-paying agents, AI models like ChatGPT are sending buyers to agents that have verifiable real-world data — things like transaction history, unique listings and client reviews."

Key numbers

Revenue: $1.85 billion in Q3, up 23.6% year-over-year, marking the strongest third quarter in Compass history. Even excluding M&A activity, organic revenue grew 11% from the same period last year, the company said. 

Cash and cash equivalents: $170.3 million at the end of Q3, with no outstanding balance on the company's revolving credit facility after paying down the $50 million drawn for the Christie's acquisition earlier in the year.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $93.6 million, an 80% increase from $52 million in Q3 2024, exceeding the high end of guidance by 17%.

Net income/loss: A GAAP net loss of $4.6 million, compared to a $1.7 million loss a year ago. Excluding $7.5 million in merger-related expenses tied to the Anywhere transaction, Compass would have posted positive net income of $2.9 million.

Transactions: Compass' owned-brokerage agents closed 67,886 total transactions in Q3. Total transactions rose 21.5% year-over-year, or 6.6% organically, outpacing the broader market's transaction growth of 2%. Gross transaction value reached $70.7 billion, up 22.5%.

Agent count: Compass added a record 851 principal agents organically during the quarter, bringing its total to 21,550. Retention held steady at 97.3%. The company expects to add another 800 principal agents organically in Q4.

Notable moves

Perhaps Compass' most notable move in the executive suite during Q3 was the appointment of Ethan Glass as chief legal officer. Glass, who formally started in September but was already representing Compass earlier in the year in its lawsuit against Northwest Multiple Listing Service, brings antitrust litigation experience from his time working as the National Association of Realtors' lead antitrust attorney in the Sitzer/Burnett case, at the Department of Justice and at Cooley LLP, where he led the firm's Global Antitrust and Competition Practice.

Additionally, the company saw a change in its finance leadership with former CFO Kalani Reelitz resigning in August. Chief Accounting Officer Scott Wahlers was promoted to fill the vacated position.

Original Article by: AJ LaTrace, Real Estate News