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Compass, Inc. (COMP)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $2.06B (+21.1% y/y), GAAP diluted EPS $0.07, Adjusted EBITDA $125.9M, free cash flow $68.0M; market share reached 6.09% (+96 bps y/y) .
  • Guidance: Q3 revenue $1.725–$1.850B and Adjusted EBITDA $60–$80M; FY2025 non-GAAP OPEX cut to $1.010–$1.020B (from $1.017–$1.042B), expecting full-year FCF positive .
  • Street comparison: Revenue modestly above S&P Global consensus; EPS above; S&P “EBITDA” below consensus while company’s Adjusted EBITDA was a record. Bold beats reflect S&P consensus measures; note definitional differences for EBITDA (see Estimates Context) [Values retrieved from S&P Global]*.
  • Catalysts: OPEX guide reduction and cost program targeting $50–$75M incremental Adjusted EBITDA starting 2026; strong agent recruiting/retention; rising Title & Escrow attach; CFO transition to Scott Wahlers with continuity in FP&A/controls .

What Went Well and What Went Wrong

What Went Well

  • “Best quarterly results in our history” across 10 records (market share, revenue, GAAP NI, Adjusted EBITDA/margin, FCF, T&E attach, platform engagement); “record 832 principal agents” joined; retention 97.5% .
  • Organic outperformance: total transactions +20.9% vs market −0.9%; organic transactions +6.3%; quarterly market share up 96 bps to 6.09% .
  • T&E attach rising; one-click title users attach ~2x; attach rates ~40% overall and ~75% for one-click users; expansion into New York; goal 50%+ long-term .

What Went Wrong

  • Commission splits: commissions and related expense ~81.84% of revenue (flat ex-M&A), reflecting higher mix of top producers; near-term margin headwind offset by long-term focus on recruiting emerging agents at better splits .
  • Cash headwind from litigation: paid final ~$28.75M settlement installment in Q2, pressuring free cash flow timing despite record FCF .
  • EBITDA definitional mismatch versus consensus: S&P Global “EBITDA” fell below consensus, despite company’s non-GAAP Adjusted EBITDA being a record (see Estimates Context) [Values retrieved from S&P Global]* .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.3804 $1.3562 $2.0596
GAAP Diluted EPS ($USD)-$0.08 -$0.09 $0.07
Adjusted EBITDA ($USD Millions)$16.7 $15.6 $125.9
Free Cash Flow ($USD Millions)$26.7 $19.5 $68.0

Revenue growth drivers (Q2 2025):

DriverQ2 2025
Organic revenue growth (%)8.7%
Acquisitions since Apr 1, 2024 (%)12.4%
Christie's International contribution to revenue growth (%)10.4%

KPIs and market metrics:

KPIQ4 2024Q1 2025Q2 2025
Market share (%)5.06 6.0 6.09
Total transactions50,411 49,121 73,025
Gross Transaction Value ($USD Billions)$54.0 $52.4 $78.3
Principal agents (period-end)17,752 20,656 20,965

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)Q3 2025—$1.725–$1.850 New
Adjusted EBITDA ($USD Millions)Q3 2025—$60–$80 New
Non-GAAP OPEX ($USD Billions)FY 2025$1.017–$1.042 $1.010–$1.020 Lowered
Free Cash FlowFY 2025Positive Positive Maintained
Weighted avg shares (Millions)Q3 2025—566–569 (mgmt call) New
Stock-based comp ($USD Millions)Q3 2025—$55–$60 (mgmt call) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesCompass One launched nationally; Reverse Prospecting; One-click Title rollout (iOS); rising platform engagement “Compass AI 2.0” beta in fall; AI to be “connective tissue” across end-to-end platform; standing ovation at demo Expanding scope; increasing adoption
Title & Escrow attach+800 bps y/y attach improvement; one-click title planning Attach ~40% overall; ~75% for one-click users; entering New York; target 50%+ long term Strengthening attach and footprint
Macro (inventory/prices)Q1: tariffs created volatility; outperformance vs market July pendings +5% market y/y; single-family inventory +27%; ~42% of listings with price drops; expect 2025 to look like 2024 Mixed but stabilizing; Compass gains share
Regulatory/legalAntitrust settlement charge ($57.5M in Q1’24) and payments across 2024–2025 Final installment ~$28.75M paid in Q2; continued advocacy for homeowner choice vs portal/MLS control Cash flow headwind resolved; continued narrative
Agent recruiting/retentionQ1: 700 organic principal adds; retention 96.6% Record 832 organic principal adds; retention 97.5%; total agents added ~1,700 gross Accelerating
M&A pipelineChristie's acquisition closed; contributing synergies Pipeline “larger than ever”; boutique consolidation drivers; capital flexibility Increasing opportunity
Commission ratesStable by market; Q1 commentary on mix and splits “Flat to slight” changes; overall stable; mix of high-producer agents elevates splits Stable with mix effects

Management Commentary

  • “Compass delivered the best quarterly results in our history, marked by ten all-time highs… A record 832 principal agents also joined Compass organically in Q2… Organic quarterly market share grew 40 bps and total quarterly market share grew 96 bps y/y to 6.09%” — Robert Reffkin, CEO .
  • “We grew revenue by 21.1%, Adjusted EBITDA by 63%, and GAAP net income by 90.3% y/y… record operating cash flow of $72.8M and free cash flow of $68M” — Kalani Reelitz, CFO .
  • “This fall we will be beta testing Compass AI 2.0… we believe we’re the only brokerage today with a platform that is truly end-to-end, which is what’s required to harness agentic AI” — Robert Reffkin .
  • “Attach rates today are consistently in the 40% range… one-click title users ~75% attach; confidence to attach at 50%+ long term” — Robert Reffkin .

Q&A Highlights

  • Cost program: Management targeting $50–$75M incremental Adjusted EBITDA beginning in 2026, with at least $50M in 2026; driven by process efficiencies, AI-enabled operations, and inflation offsets .
  • T&E attach drivers: One-click title saves agent time, reduces anxiety, and speeds transactions; mortgage attach enhancements targeted for 2026 .
  • Macro pulse: July pendings and contract listings up ~5% y/y; expect sales to show in September; 2025 likely to resemble 2024 .
  • Commission rates/churn: Commission rates broadly stable; churn seasonal and consistent; retention improved y/y .
  • Recruiting outlook: Baseline 600–700 principal additions per quarter; upside from boutique “walkovers” onto platform; retention strong .

Estimates Context

  • Q2 2025 vs S&P Global consensus: Revenue $2.0414B estimate vs $2.0596B actual*; Primary EPS $0.073 estimate vs $0.160 actual*; EBITDA $119.5M estimate vs $69.4M actual* [Values retrieved from S&P Global].
  • Note: Company reports GAAP diluted EPS of $0.07 and Adjusted EBITDA of $125.9M; S&P “Primary EPS” and “EBITDA” figures reflect S&P’s standardized definitions and may differ from company-reported GAAP/non-GAAP metrics .
  • Coverage depth: 8 EPS and 8 revenue estimates in the quarter* [Values retrieved from S&P Global].
Metric (S&P Global)Q2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Billions)$2.0414*$2.0596*
Primary EPS ($USD)$0.0727*$0.1600*
EBITDA ($USD Millions)$119.5*$69.4*
EPS - # of Estimates8*—
Revenue - # of Estimates8*—

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Strong execution with broad-based records and continued market outperformance; revenue and EPS beat S&P consensus; Adjusted EBITDA at high end of intra-quarter expectations [Values retrieved from S&P Global]*.
  • OPEX discipline remains a core advantage; FY non-GAAP OPEX guidance lowered, underpinning margin and FCF trajectory .
  • T&E strategy is working; rising attach and one-click adoption should lift high-margin contribution; New York entry expands footprint .
  • Structural advantages (end-to-end platform, AI roadmap, agent density) support continued share gains and accretive M&A optionality .
  • Watch EBITDA definitions in models; align S&P standardized EBITDA with company’s Adjusted EBITDA to avoid misinterpretation (consensus miss vs company record) [Values retrieved from S&P Global]*.
  • Near-term: Q3 guide implies seasonal step-down from Q2; focus on agent adds, attach, and OPEX progress; monitor CFO transition—continuity via promotion of Chief Accounting Officer .
  • Medium-term: Cost program ($50–$75M incremental Adjusted EBITDA) and affiliate/T&E scaling support higher-quality earnings and FCF resiliency .

Appendix: Additional Source Documents

  • Q2 2025 press release and financials .
  • 8-K (Item 2.02) including exhibit and reconciliations .
  • Q2 2025 earnings call transcript .
  • Q1 2025 press release and call (prior quarter trend) .
  • Q4 2024 press release (two quarters prior) .
  • Q2 2025 results announcement PR .