Compass posts all-time high income, touts tech investments
The brokerage also reported double-digit growth in transactions and agent count, in part due to significant acquisitions this spring.
New York-based real estate brokerage Compass posted one of its best quarters on record in Q2 despite the ongoing softness in the real estate market.
The firm's net income reached an all-time high of $20.7 million compared to the nearly $133 million loss it recorded the previous quarter.
Agent count and transaction volume both saw double-digit increases as well. Transaction volume grew by 11.4% year-over-year, even as the U.S. real estate market saw transactions decline by more than 3% decline during the same period, according to NAR data.
Compass also announced plans to expand its tech offerings for agents. The brokerage is developing a client dashboard to help agents and customers better collaborate during the homebuying process. The dashboard is expected to enter beta testing in October and be ready for a full release in Q1 2025.
What Compass had to say
Compass CEO Robert Reffkin stressed that the Q2 results were the "best performance we've ever had as a company."
He also noted that the company reduced operating expenses by nearly $21 million compared to the same period last year. Most of these savings were driven by improved efficiencies in its end-to-end platform. The company plans to further these improvements by adding its Title & Escrow business to the platform.
Reffkin added that the company has a plan to achieve 30% market share in 30 top cities by 2026 with its "structural advantages." Those include its end-to-end platform, national scale, its number of top-rated agents, and the brokerage's "exclusive inventory," Reffkin said, a reference to the firm's Private Exclusives program.
Key numbers
Revenue: $1.7 billion, up from $1.05 billion in the previous quarter and up from $1.5 billion in Q2 2023.
Cash and cash equivalents: Cash on hand increased to $185.8 million, a more than 10.7% increase year-over-year.
Net income/loss: Net income improved to $20.7 million in Q2, which represents a more than $68.5 million upswing from the net loss of $47.8 million in Q2 2023. Compass recorded a net loss of $132.9 million last quarter, which was due in large part to the $57.5 million settlement the company reached in the commissions lawsuits.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Compass' EBITDA increased to $77.4 million in Q2 2024 compared to a net loss of $20.1 million last quarter and an EBITDA of $30.1 million a year ago.
Transactions: The company reported 60,390 closed transactions during Q2 2024 compared to the 38,449 total transactions last quarter and the 54,207 deals closed a year ago, an increase of 11.4% year-over-year.
Agent count: The total agent count at the end of Q2 was 16,997, which represents a 24% growth rate year-over-year.
Notable moves
Compass gained significant market share in recent months with the acquisition of Latter & Blum in April, a New Orleans firm with more than 3,200 agents and more than $4 billion in sales last year.
Compass also acquired Parks Realty, a brokerage based in Tennessee that specializes in luxury real estate.