Compass boosts outlook, expects 2024 revenue to top $5.6B
The brokerage revised its fourth-quarter and full-year earnings forecast upward, also noting that it added more than 650 agents in Q4.
Compass upgraded its earnings outlook this week and announced big year-end gains in agent count.
The company now expects both revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to be higher than previously forecast.
Compass also said operating expenses for the year will come in slightly below projections, and noted that it's still on track to end 2024 cash flow positive — a goal first announced a year ago after the company reported negative cash flow for 2023.
The company's stock jumped following the news and was up 21% in early afternoon trading. Year over year, share prices are up 3% — but remain well below the peak levels achieved around the time of its IPO in 2021.
The revised forecasts come two days after Compass closed on its acquisition of @properties Christie's International Real Estate, as reported via an SEC filing on Jan. 13. The $444 million deal was announced in early December.
Raising expectations: Compass is now projecting fourth quarter revenue of $1.36 billion to $1.39 billion, compared to a previous forecast of $1.22 billion to $1.325 billion. For the year, revenue is now expected to be in the $5.61 billion to $5.64 billion range versus $5.47 billion to $5.57 billion. If those estimates prove to be correct, they will represent significant year-over-year growth. Full-year revenue came in at $4.9 billion in 2023 and $1.1 billion for the fourth quarter of that year.
Adjusted EBITDA for 2024 is projected to be $124 million to $127 million, up from a previous forecast of $109 million to $119 million. For the fourth quarter, it is expected to land between $15 million to $18 million, up from zero to $10 million.
Compass Founder and CEO Robert Reffkin said the revisions reflect the company's ability to outperform the market at a time when transactions in the industry are near 29-year lows.
Recruitment efforts paying off: Compass' agent count also got a boost late in the year. The company reported that more than 650 principal agents joined the brokerage in Q4 as a result of organically driven recruitment — meaning it was not due to merger & acquisition activity — a 50% improvement over the same quarter a year ago, and up from the 545 agents added in Q3 of 2024.
The company's technology platform is cited as a key factor by many of the agents moving to the firm, said Compass spokesperson Devin Daly Huerta.
Several high-profile agents have recently joined Compass, including former Douglas Elliman agent Tracy Tutor and former Hilton & Hyland President David Kramer, who have both achieved career sales in the billions, and Julie Pham, who joined after 20 years at Corcoran.