Compass stock price jumps on promise of ‘durable profitability’
The company gets a vote of confidence from investors after reporting $2.7 billion in Q1 revenue — its first earnings report since the Anywhere deal closed.
Investors got their first look at the combined Compass-Anywhere company this week — and initial reactions appear to be enthusiastic.
Compass' share price jumped 20% in the first hour of after-hours trading following the release of the company's first-quarter earnings, a report that includes both Compass and Anywhere data. Compass' acquisition of Anywhere, which was first announced in September 2025, closed in early January.
The jump in after-hours trading could be attributed to the company's bullish forecast for the quarter ahead — and its better-than-expected cost savings.
The May 5 report presented year-over-year differences and pro forma data, which shows how today's company compares to what a combined Compass-Anywhere firm would have looked like a year ago. For example, revenue for the combined company was at $2.7 billion in Q1 — a 99% increase compared to Q1 of 2025, while the pro forma data indicates a more modest 7% increase in revenue.
What Compass had to say
'Durable profitability' ahead: Compass International Holdings is finding more cost savings in the combined company than originally expected, Chairman and CEO Robert Reffkin told investors, adding that the company's projected cost synergy target is now rising from $400 million to $500 million over the next three years.
"By fully realizing these cost synergies, we believe Compass will be able to achieve durable profitability and lower our financial leverage in a flat housing market, with significant upside in a housing market recovery," Reffkin said.
Cutting underperforming agents: One area of investor interest was agent count. The combined company had 84,187 U.S. brokerage agents at the end of Q1, with a pro forma retention rate of 94%. That number does not include its franchise network, which has a total agent count of about 340,000.
Chief Financial Officer Scott Wahlers noted that much of the attrition came from underperforming and nonperforming Anywhere agents coming into Compass. Of those that left, 56% had zero production, Wahlers said.
"There might be more choppiness in the near term on that," Wahlers said, "but the important thing is we're just dropping numbers of agents. It's not dropping production at all."
'Trust will matter even more' as AI use expands: Reffkin is concerned about trust when it comes to AI, which is leading to more defensive measures to protect the company's proprietary data.
"We believe it will become even more important in a world where AI agents will bring inaccurate and fake information into the market — like fake offers, fake listings, fake accounts, fake pictures and fake renderings," Reffkin said.
"I'm already starting to see it. In this future, human validation will continue to be important, given the high-stakes, high-ticket transaction. Trust will matter even more than before," he added.
Key numbers
Revenue: $2.7 billion in Q1, a 99% increase compared to a year earlier. Pro forma revenue (which reflects what the revenue would have been if the two companies had been combined a year ago) increased 7% year-over-year.
Cash and cash equivalents: The company had a cash balance of $484 million at the end of the first quarter, while long-term debt was at $3.14 billion.
Net income: A gain of $22 million in Q1, much improved from the $51 million net loss reported a year ago. This includes $183 million in merger transaction and integration expenses, non-cash stock-based compensation expense of $47 million, depreciation and amortization of $163 million and a non-cash tax benefit of $401 million.
Adjusted EBITDA: $61 million in Q1. This excludes the $401 million non-cash tax benefit and the $183 million in merger transaction and integration expenses.
Transactions: Brokerage agents closed 99,504 transactions in Q1, up from 49,121 for the same period a year ago. Pro forma transactions rose 2.6% year-over-year.
Agent count: The company reported 84,187 total U.S. brokerage agents in Q1, up from 36,990 at the end of 2025. On a per forma basis, the agent retention rate was 94%. The company said the decline "was driven primarily by a strategy at Anywhere to separate non-productive agents" as the acquisition closed.
Q2 outlook: The company expects revenue to be between $4 billion and $4.2 billion, with an expected adjusted EBITDA of $310 million to $350 million.
Notable moves
Aside from busily combining Anywhere and Compass International Holdings — a task that has involved several leadership shakeups, including the additions of former Anywhere execs Sue Yannaccone, Tanya Reu-Narvaez and Timothy Gustavson — Reffkin has been striving to persuade industry leaders that private listings and seller choice should be more widely embraced.
He reiterated his arguments during the May 5 earnings call, noting that some major industry players are suddenly adopting "preview" or "coming soon" listing options for sellers.
"Didn't the seller deserve that five years ago and 10 years ago? Why didn't they have it?" Reffkin asked. "We're pushing on the system so that sellers and agents have more choices, less mandates."