Compass delivered a second quarter that was well received by the market, with management highlighting agent recruiting, platform engagement, and operational efficiency as primary drivers. CEO Robert Reffkin noted that Compass achieved all-time highs in several areas, including agent retention and technology adoption, despite what he called “one of the toughest housing markets in history.” Management also emphasized Compass’s ability to gain market share, outpacing broader industry transaction trends.
Is now the time to buy COMP? Find out in our full research report (it’s free).
Compass (COMP) Q2 CY2025 Highlights:
- Revenue: $2.06 billion vs analyst estimates of $2.06 billion (21.1% year-on-year growth, in line)
- Adjusted EPS: $0.16 vs analyst expectations of $0.17 (7.6% miss)
- Adjusted EBITDA: $125.9 million vs analyst estimates of $119.5 million (6.1% margin, 5.3% beat)
- Revenue Guidance for Q3 CY2025 is $1.79 billion at the midpoint, below analyst estimates of $1.81 billion
- EBITDA guidance for Q3 CY2025 is $70 million at the midpoint, above analyst estimates of $65.86 million
- Operating Margin: 1.9%, in line with the same quarter last year
- Transactions: 73,025, up 12,635 year on year
- Market Capitalization: $4.43 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Compass’s Q2 Earnings Call
- Bernard Jerome McTernan (Needham & Company) asked about the $50 million cost benefit for next year. CFO Kalani Reelitz clarified it is a run-rate savings expected to directly improve adjusted EBITDA.
- Jason Stuart Helfstein (Oppenheimer & Company) questioned if industry rule changes had altered Compass’s marketing execution. CEO Robert Reffkin said demand for agent choice remains high, with no major changes made to strategy.
- Nick McAndrew (Zelman & Associates) inquired about feedback on Compass One’s platform engagement. Reffkin reported strong feedback from top producers, with further adoption efforts planned for the fall.
- Alec Reid Brondolo (Wells Fargo) asked if the private exclusive strategy contributed to record agent adds. Reffkin attributed recruiting strength to both technology adoption and advocacy for agent choice in marketing.
- Michael Ng (Goldman Sachs) asked about commission rate stability. Reelitz noted rates have remained flat on average, with only minor market-level fluctuations observed.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will track (1) the adoption and impact of Compass AI 2.0 platform enhancements on agent productivity, (2) progress in expanding Title & Escrow services into new markets and achieving higher attach rates, and (3) execution of further operating expense reductions and integration of new brokerage acquisitions. Sustained agent recruiting and retention will also be important signals for Compass’s competitive position.
Compass currently trades at $8.48, up from $7.25 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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