Revenue in Q1 Grew 28.7% YoY and Organic Revenue Grew 14.6% YoY
Quarterly Market Share Grew 125bps YoY to a Record 6.0%; Organic Share Was Up 82bps
Operating Cash Flow Grew 169% YoY to a Record $23.1 Million in Q1
New York, NY - May 8, 2025 - Compass, Inc. (NYSE: COMP) (“Compass” or “the Company”), a leading tech-enabled real estate services company that includes the largest residential real estate brokerage in the United States by sales volume, announced its financial results for the first quarter ended March 31, 2025.
“Despite the heightened market volatility in Q1, Compass achieved record Q1 free cash flow, record Q1 Adjusted EBITDA and grew revenue by 28.7% year-over-year,” said Robert Reffkin, Founder and Chief Executive Officer of Compass. “In the first quarter, we continued to widen the gap against the industry as we grew organic transactions by 7.3% and total transactions by 27.8% compared to the market where transactions declined by 2.1% year-over-year, which means organic and total transactions outgrew the market by roughly 9% and 30%, respectively. Organic quarterly market share grew 82 basis points and total quarterly market share grew 125 basis points to 6.0%, which is our highest year-over-year market share increase in 8 quarters and 15 quarters, respectively. These results illustrate that the top agents and teams in the industry continue to take share and Compass has the highest number of both per RealTrends.”
Reffkin continued, “Looking ahead, while recent market trends have been somewhat mixed, we remain confident that our playbook and structural advantages position Compass to drive significant upside over-time.”
Kalani Reelitz, Chief Financial Officer of Compass said, “I am pleased with our Q1 results, which illustrate our ability to grow our top-line significantly while continuing to control our OPEX. In the quarter, OPEX inclusive of the Christie’s International Real Estate acquisition grew by 11.5%, while revenue grew by 28.7%, and we continue to track well against our full-year organic OPEX guide of 3-4% growth. Furthermore, in Q1 2025, we also generated positive operating cash flow of $23.1 million and free cash flow of $19.5 million, which makes this the 5th quarter in a row where we’ve been free cash flow positive.”
Q1 2025 Highlights:
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Revenue in Q1 2025 increased by 28.7% year-over-year to $1.4 billion as transactions increased 27.8% compared to the market transactions, which declined by 2.1%. The Christie’s International Real Estate acquisition contributed 9.2% of the revenue growth in the quarter. Year-over-year organic revenue growth (a non-GAAP measure) was up 14.6%, while revenue growth attributable to all acquisitions completed within the prior 12-months was 14%.
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GAAP Net loss in Q1 2025 was $50.7 million, an improvement of $82.2 million from a net loss of $132.9 million in Q1 2024. The net loss for Q1 2025 includes non-cash stock-based compensation expense of $30.4 million and depreciation and amortization of $28.8 million.
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Adjusted EBITDA (a non-GAAP measure) was $15.6 million in Q1 2025 compared to ($20.1) million in Q1 2024, an improvement of $35.7 million.
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Operating Cash Flow / Free Cash Flow (a non-GAAP measure): During Q1 2025, operating cash flow was $23.1 million and free cash flow was $19.5 million.
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Cash and cash equivalents at the end of Q1 2025 was $127 million. In the quarter, we used $105 million of cash from the balance sheet to satisfy a portion of the $155 million in cash consideration for the Christie’s International Real Estate acquisition. The remaining cash consideration was satisfied through our revolving credit facility (“revolver”), and at the end of Q1 2025 we had a balance of $50 million on our revolver.
Q1 2025 Operational Highlights:
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National market share: In Q1 2025, quarterly market share was 6.0%, an increase of 125 basis points compared to Q1 2024 and an increase of 95 basis points sequentially from Q4 2024. Quarterly organic market share growth year-over-year was 82 basis points in Q1 and 54 basis points sequentially from Q4 2024.
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Principal Agents : At the end of Q1 2025, the number of principal agents was 20,656 compared to 14,591 at the end of Q1 2024, an increase of 6,065 or 41.6% year-over-year. Sequentially, from Q4 2024 to Q1 2025, Compass added 3,590 agents on a gross basis, with 2,890 of these agents coming from acquisitions and 700 principal agents that we added organically. We continued the trend of strong agent retention with 96.6% quarterly principal agent retention in Q1 2025, up 30 basis points versus the prior year quarter.
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Transactions: Compass agents closed 49,121 total transactions in Q1 2025, an increase of 27.8% compared to Q1 2024 (38,449). Organic transactions in Q1 2025 increased by 7.3% compared to Q1 2024. Transactions for the entire U.S. residential real estate market decreased by 2.1% for the same period, according to NAR.
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Gross Transaction Value (“GTV”): GTV was $52.4 billion in Q1 2025, an increase of 31% compared to Q1 2024 GTV of $40.1 billion. Organic GTV was $47.3 billion in Q1 2025. The entire U.S. residential real estate market GTV increased 3.5% for the same period, according to NAR.
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Inventory: The Compass 3-Phased Price Discovery and Marketing Strategy is a tool that helps homeowners benefit from the same strategies used by the most sophisticated and profit-driven sellers of homes in the industry - real estate developers and homebuilders - by listing first as a Compass Private Exclusive and then as a Compass Coming Soon, before going active on the MLS or public real estate websites. The Compass 3-Phased Price Discovery and Marketing Strategy helps sellers opting into the programs see positive outcomes such as avoiding unnecessary days on market, price drop history, and negative insights displayed on their listing prior to it being made active on the MLS and public real estate websites. Since our Q4 2024 earnings call, we’ve seen a steady increase in adoption of the Compass 3-Phased Price Discovery and Marketing Strategy, as well as an improvement in the outcomes for sellers stated above. Below is an update on our progress:
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In Q1 2025, 48.2% of homeowners who listed their home with Compass, outside of Washington state, started their listing using the Compass 3-Phased Price Discovery and Marketing Strategy; this equates to 19,393 homeowners choosing these client offerings in Q1 2025 alone.
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Roughly 40% of Compass Private Exclusive and Compass Coming Soon listings were above a $1 million list price in Q1, with 60% being below a $1 million list price, which suggests that this listing strategy is resonating with homeowners across all price points.
And consistent with what we stated last quarter:
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For Compass sell-side transactions from January 1, 2024 through December 31, 2024, properties where the homeowner chose to pre-market as a Compass Private Exclusive and/or a Compass Coming Soon before going active on the MLS:
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Received an accepted offer 20% faster on average or 8 days faster on average once active on the MLS, than Compass listings without pre-marketing; and
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Created value for homeowners as only 13% of Compass listings on average that were pre-marketed had a price drop, compared to 19% for Compass listings without pre-marketing. This means approximately 30% fewer listings on average took a price drop once active on the MLS vs. Compass listings that were not pre-marketed16.
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Compass also completed an internal analysis to better understand the relationship between close price and pre-marketing as a Compass Private Exclusive and/or a Compass Coming Soon, before going active on the MLS. This analysis examined Compass sell-side transactions of all residential property types in 2024 and found that homes pre-marketed as a Compass Private Exclusive and/or a Compass Coming Soon before going active on the MLS were associated with a 2.9% higher average close price compared to Compass-sold properties that were not pre-marketed in 2024.
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At Compass’ average price point of roughly $1 million, homeowners who chose to pre-market their home with a Compass agent were therefore likely to have realized a $29,000 premium on what is often the most valuable asset most people own, compared to those who listed directly on the MLS.
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Platform: The Compass end-to-end proprietary technology platform allows real estate agents to perform their primary workflows, from first contact to close, with a single log-in and without leaving the Compass platform. Highlights from Q1 2025 include:
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Compass Make-Me-Sell: A feature in our platform that allows homeowners to share an aspirational price with their agent that would compel them to move continues to gain traction with approximately 12,500 entries at the end of Q1 2025 compared to 9,500 at the end of Q4 2024. Over time, we believe this tool will help convert a portion of our 100+ million CRM contacts into passive ‘willing-to-sell’ inventory that will only be available to Compass agents.
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Compass One-Click Title & Escrow (T&E) Integration: A feature in our platform that allows agents to seamlessly order T&E continues to drive our attach rates higher as we observe agents who utilize the integration attaching at an approximately 2x higher-rate than agents who have not used One-click T&E. In Q1, we also rolled-out One-Click T&E for iOS devices which should provide agents with added flexibility to order T&E on the go.
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Compass One: The industry’s premier all-in-one client dashboard that is designed to connect buyers and sellers with their agent to provide 24/7 transparency before, during, and after the transaction launched nationally on February 3, 2025. Since launch, agents have sent 130,447 invitations to clients and approximately 21% of all closed transactions have used Compass One.
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Compass Reverse Prospecting: Launched in late 2024, Reverse Prospecting provides homesellers with exclusive insights such as real-time updates on how often agents and their clients are looking at, commenting on, favoriting, or sharing listings across the Compass platform. Approximately 11,100 agents have used the feature so far and we’ve seen 100+ transactions use Reverse Prospecting to match buyers and sellers since launch.
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Additional information can be found in the Company’s Q1 2025 Earnings Presentation, which can be found in the Investor Relations section of the Compass website at https://investors.compass.com.
Q2 2025 Outlook:
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Revenue of $2.0 billion to $2.15 billion for Q2.
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Adjusted EBITDA of $115 million to $135 million for Q2.
Updated Full Year 2025 Outlook:
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Non-GAAP OPEX of $1.017 billion to $1.042 billion. Included in the range is an increase of 2024 OPEX of 3-4%, $10 million of wrap around OPEX from 2024 M&A, $105 million of OPEX from the Christie’s International Real Estate acquisition that closed on January 13, 2025 and $12 million from the acquisitions of Washington Fine Properties and a title company in Texas in February 2025 and April 2025, respectively.
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Free cash flow positive for the full year 2025.
We have not reconciled our guidance for Adjusted EBITDA to GAAP Net loss because certain expenses excluded from GAAP Net loss when calculating Adjusted EBITDA cannot be reasonably calculated or predicted at this time. Additionally, we have not reconciled our guidance for non-GAAP OPEX to GAAP OPEX because certain expenses excluded from GAAP OPEX cannot be reasonably calculated or predicted at this time. Accordingly, reconciliations are not available without unreasonable effort.
For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures on a historical basis, see “Reconciliation of Net Loss Attributable to Compass, Inc. to Adjusted EBITDA,” “Reconciliation of GAAP OPEX to non-GAAP OPEX” and “Reconciliation of GAAP Operating Cash Flow to Free Cash Flow” in the financial statement tables included in this press release.
