Compass Real Estate reported its strongest quarterly performance in company history during the second quarter — delivering record revenue and profitability despite challenging housing market conditions.
The company reported a 21.1% year-over-year revenue increase to $2.06 billion in the second quarter of 2025, with total transactions rising 20.9%.
Compass CEO Robert Reffkin emphasized the company’s strategic focus on agent empowerment, technology innovation and operational execution Wednesday during a second-quarter earnings call.
“I hope more brokerage CEOs see our results as a signal that they will attract more agents if they fight for them and not simply acquiesce to portals and MLSs that ban and fine agents for marketing listings outside their platforms,” he said. “Now, beyond our record agent recruiting quarter, our M+A pipeline is also larger than it has ever been.
“As we said previously, a slowing housing market or a move higher in rates will likely hurt our competitors more than Compass as they don’t have the capital, the technology or the operational resources to scale, and this is exactly what we are seeing play out today.”
Their record results contrasted with a 0.9% decline in overall market transactions, Reffkin added.
The acquisition of Christie’s International Real Estate contributed 10.4% of the revenue growth during the quarter.
Organic revenue grew year-over-year by 8.7%, while revenue from acquisitions completed since April 1, 2024, added 12.4%.
Adjusted EBITDA increased by $48.5 million to $125.9 million from $77.4 million a year prior. Operating cash flow reached $72.8 million, with free cash flow at $68.0 million.
At quarter-end, cash and cash equivalents totaled $177.3 million, with $50 million drawn on the company’s revolving credit facility.
Market position, agent retention
Compass expanded its national market share to 6.09% in Q2 2025, up 96 basis points from the prior year.
Organic market share grew by 40 basis points. The company’s principal agent count increased 23.3% year-over-year to 20,965 — adding 832 agents sequentially from Q1 to Q2 2025.
Agent retention remained strong at 97.5%, a 20 basis point improvement.
“The consistent thing we are hearing from agents that join this quarter is that they want to be at a company that stands up for agents and stands up for their clients,” Reffkin said. “No agent wants to be told by a portal or an MLS how they must work, and none of their clients want to be limited in when and how they market their home.
“The reality is, the intention of the portal and MLS listing policies is control. The purpose of control is to get the homeowners’ listings from agents for free and to monetize those listings on their platforms. And the mechanism for control is banning and fining agents that market off their platforms.”
Total transactions closed by Compass agents hit 73,025 in the quarter. Gross transaction value (GTV) grew 20.3% to $78.3 billion, with organic GTV at $69.3 billion, ahead of the market’s 1.4% GTV growth, Reffkin said.
Expansion in title and escrow
Compass’ title and escrow business also hit new highs in revenue and attach rates, with attach rates now approaching 75% in some markets.
“This gives us confidence that over the long term, we can attach (title and escrow) at a 50% in most of our markets,” Reffkin said. “We expect contribution from this business to increase meaningfully over the coming years.
The business recently expanded to New York — one of Compass’ largest markets — and is projected to cover 70% of the company’s geographic footprint by the end of this year.
Technology and future outlook
Reffkin highlighted Compass’ technological progress, particularly its plans to leverage artificial intelligence (AI) to enhance agent productivity and operational efficiency.
“We envision a platform that is made more seamless as we leverage AI to be the connective tissue for all the wonderful tools we created for agents so far,” he said.
He stressed that Compass already has the team and technology to harness AI without massive new investment.
“Most of our competitors’ agents are on third-party software platforms that do not allow them to connect all the various parts of an agent’s workflow,” Reffkin said. “This ultimately will take value away from these brokerages, while increasing the value of brokerages like ours in the eyes of the agents.”
Reffkin said beta testing of Compass AI 2.0 will begin this fall — initially focused on improving agent productivity before expanding across the organization.
For the third quarter of 2025, Compass projects revenue between $1.725 billion and $1.85 billion, with adjusted EBITDA estimated between $60 million and $80 million.
The updated full-year 2025 outlook anticipates non-GAAP operating expenses between $1.01 billion and $1.02 billion, reflecting a slight reduction from prior guidance.
English