Compass, Inc. (NYSE: COMP) says it beat a shrinking housing market in the third quarter. The brokerage reported a $62 million GAAP profit and $306 million in adjusted EBITDA on $3.90 billion of revenue, while warning that the market “has softened over the past few weeks.”
The results, released Nov. 5, are the third quarterly report to include Anywhere Real Estate, whose merger with Compass closed on Jan. 9, 2026. That deal brought Coldwell Banker, Corcoran, Sotheby’s International Realty and a large franchise network under one company. The company called its revenue, net income, adjusted EBITDA and operating cash flow “all-time Q3 records.”
The numbers, reported and pro forma
Because of the merger, the reported year-over-year comparisons are very large. Revenue rose 111% from $1.85 billion in the third quarter of 2025. On a pro forma basis, which treats Compass and Anywhere as if they had been combined since July 1, 2025, revenue grew 11.6% from $3.49 billion. Organic revenue, which counts only businesses either company owned at that date, was $3.75 billion, up 7.4% pro forma.
GAAP net income was $62 million, compared with a $4 million net loss a year earlier. Adjusted EBITDA was $306 million, up from $94 million, and Compass said it came in above the high end of its guidance. That figure excludes $145 million of depreciation and amortization, $36 million of stock-based compensation and $28 million of merger transaction and integration costs. Operating cash flow was $248 million and free cash flow $240 million. Revenue was down from the second quarter, when Compass reported $4.3 billion.
Outperforming a flat market
Compass measures itself against National Association of Realtors existing-home data, cited in its release. By that benchmark, dollar volume for the U.S. residential market rose 0.7% over the period and transactions fell 1.8%.
Brokerage gross transaction value (GTV), the total value of homes its agents sold, was $138.9 billion. Organic brokerage GTV of $133.1 billion was up 7.5% pro forma. Agents closed 140,118 transactions, and organic transactions slipped 0.3%, which beat the market’s 1.8% decline. “Across our entire history as a public company, spanning 22 consecutive quarters, the Compass standalone brand has outperformed the market,” founder and CEO Robert Reffkin said.
The franchise business, which came almost entirely from Anywhere, recorded $108.9 billion of GTV and 191,809 transactions. Organic franchise GTV rose 2.3% pro forma while organic franchise transactions fell 3.6%. The net royalty per side dropped 27.4% to $486, which the company said was “driven primarily by newly acquired brands that have a lower average sales price compared to the Christie’s International Real Estate network.” On an organic basis it rose 3.8% to $470.
Compass ended the quarter with 85,476 brokerage agents, up from 83,184 at the end of June, after adding 6,390 agents gross. Retention was 95.1%, down from 95.5%. The company said 58% of the 4,098 agents who left had generated no gross commission income in the prior 12 months, and 74% had generated $20,000 or less.
Title, mortgage and the platform
Title and escrow transactions rose 1.7% pro forma to 38,757, and average revenue per transaction was $3,590. Funded volume across Compass’s mortgage joint ventures, OriginPoint and Guaranteed Rate Affinity, was $3.30 billion, up 9.9% pro forma; the company credited loan-officer recruiting and higher attach rates. The two ventures were recently combined under the OriginPoint name.
On technology, Compass said it had moved 33,950 professionals from Coldwell Banker Realty, Corcoran and Sotheby’s International Realty onto its proprietary platform as of Oct. 31, for a total of 68,349 across its owned brokerages. It plans to roll the platform out to its franchise network starting in the first quarter of 2027. The company said its AI Assistant handled nearly 990,000 tool calls in the third quarter and more than 461,000 conversations in October alone.
Debt and the fourth quarter
Compass finished September with $841 million in cash, no balance on its revolving credit line and $3.14 billion of long-term debt. CFO Scott Wahlers said net debt was 2.7 times adjusted EBITDA, “nearly two turns below the 4.4x when we first announced the Anywhere transaction,” and that the company is positioned to redeem its $500 million of 9.75% notes when they first become callable in the second quarter of 2027.
For the fourth quarter, Compass guided to revenue of $3.15 billion to $3.35 billion and adjusted EBITDA of $100 million to $130 million. It cut its full-year non-GAAP operating expense forecast to $2.71 billion to $2.73 billion, from $2.75 billion to $2.80 billion, and still expects positive free cash flow for 2026.
On our reading, Reffkin’s comment about the past few weeks matters as much as the quarter itself. Fourth-quarter guidance implies revenue well below the third quarter’s $3.90 billion, a larger drop than the market’s flat third quarter alone would suggest, though the fourth quarter is typically slower for home sales. That guidance was set as mortgage rates climbed to a two-year high in October before easing. Compass’s answer is cost control: it lowered its expense outlook even as it promised to keep investing in agents and technology.
