Compass Q2 2025 Earnings Report

Compass EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.07
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Compass Revenue Results

• Actual Revenue: $2.06 billion
• Expected Revenue: $2.08 billion
• Beat/Miss: Missed by -$17.12 million
• YoY Revenue Growth: N/A

Compass Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 5:00PM ET

Compass (NYSE:COMP) provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality in the real estate industry. The company offers mobile apps that allow agents to manage their business anytime and anywhere, as well as designs consumer-grade user interfaces, automated and simplified workflows for agent-client interactions, and insight-rich dashboards and reports. It also provides full-service title and escrow/settlement services to real estate agents' clients, real estate companies, and financial institutions relating to the closing of home purchases as well as the refinancing of home loans; and Compass Concierge, a program in which home sellers access to capital to front the cost of home improvement services. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was incorporated in 2012 and is headquartered in New York, New York.

Compass Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Compass delivered all-time high revenue (up 21.1% YoY), record adjusted EBITDA (up 63% YoY), highest GAAP net income and free cash flow in company history.
• Positive Sentiment: Organic transactions rose 6.3% versus a 0.9% market decline, marking 17 consecutive quarters of outpacing the market on an organic basis.
• Positive Sentiment: Second quarter saw the best ever principal agent recruiting (up 53% YoY) with retention at 97.5%, reflecting strong demand for Compass’s agent-first strategy.
• Positive Sentiment: Title & escrow revenue and attach rate reached record levels, with mature markets hitting ~40% attach and one-click users approaching 75%, targeting a long-term 50%+ attach rate.
• Positive Sentiment: OpEx discipline delivered $600 million in savings over three years, and a new efficiency program aims for an additional $50–75 million in incremental adjusted EBITDA by 2026.

Presentation

[Operator]

Ladies and gentlemen, thank you for joining us, and welcome to the Compass Second Quarter twenty twenty five Earnings Call. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Soham Bonsley, Head of Investor Relations. Please go ahead.

[Soham Bhonsle, Head - IR at Compass]

Thank you very much, operator, and good afternoon, everybody. And thank you for joining the Compass second quarter twenty twenty five earnings call. Joining us today will be Robert Rufkin, our Founder and CEO and Kalani Rielitz, our Chief Financial Officer. In discussing our company's performance, we will refer to some non GAAP measures. You can find the reconciliation of these non GAAP measures to the most directly comparable GAAP measures in our second quarter twenty twenty five earnings release posted on our Investor Relations website.

[Soham Bhonsle, Head - IR at Compass]

Any discussion regarding organic revenue, organic transactions or organic GTV excludes any activity from businesses we acquired since 04/01/2024. We will make forward looking statements that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include our guidance for the 2025 and full year 2025, including comments related to our expected financial results, operating expenses, and free cash flow as well as our expectations for operational achievements. Our actual results may differ materially from these statements. You can find more information about risks, uncertainties and other factors that could affect our results in our most recent annual report on Form 10 ks and quarterly reports on Form 10 Q filed with the SEC and available on our Investor Relations website.

[Soham Bhonsle, Head - IR at Compass]

You should not place undue reliance on any forward looking statements. All information in this presentation is as of today's date, July 30. We expressly disclaim any obligation to update this information. I will now turn the call over to Robert Rufkin. Robert?

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Thank you for joining us today for our second quarter conference call. In what remains a trough level housing market, I am pleased to share that the Compass team produced the strongest quarterly results in our history with 10 quarterly records. In q two, Compass delivered all time high revenue, delivered all time high adjusted EBITDA, delivered record adjusted EBITDA margins, delivered all time high GAAP net income, delivered all time high free cash flow, increased market share to an all time high, delivered the best organic principal agent recruiting quarter in the company's history, grew our title and escrow revenue to an all time high, grew our title and escrow attach to an all time high. And lastly, the Compass platform hit a record 24 average weekly sessions per agent in q two, representing 37% growth compared to q two of last year. Revenue in the second quarter increased by 21.1% year over year.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Total transactions increased by 20.9%, and organic transactions were up 6.3% as compared to the overall market where transactions decreased by 0.9%. So this means Compass' total transaction count growth outpaced the market's growth by close to 22%, and Compass' organic transaction count growth outpaced the market growth by 7%. For seventeen consecutive quarters, spanning our entire history as a public company, Compass has outperformed the market on an organic basis. There has never been a quarter since we started measuring this metric where Compass hasn't grown faster than the market. In Q2 twenty twenty five, we generated adjusted EBITDA of $126,000,000 up 63 from the $77,000,000 in the year ago quarter.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Quarterly principal agent retention improved by 20 basis points year over year to a solid 97.5% in q two. In the quarter, we also successfully recruited eight thirty two gross principal agents organically to Compass, which is up 53% year over year and, again, represents our best recruiting quarter in the company's history. The consistent new theme we are hearing from agents that joined this quarter is that they want to be at a company that stands up for agents and stands up for their clients. No agent wants to be told by a portal or an MLS how they must work, and none of their clients wanna be limited in when, where, and how they market their home. The reality is the intention of the portal and MLS listing policies is control.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

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. And so when there is a company that's advocating for agents and their clients to have choice and to not be controlled by these third party platforms that want to make money off their listings, that is and will continue to be the winning recruiting strategy. I continue to be amazed by the silence amongst brokered COs who have been acquiescing to the portals and MLSs that are dictating how their agents work and how homeowners market properties. 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 find agents for marketing listings outside their platforms.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Now beyond our record agent recruiting quarter, our m and a pipeline, which consists of term sheets, both signed and actually negotiated, 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. So taking a step back, what do our record recruiting results and m and a pipeline show? They show that the demand for Compass is stronger than it has ever been, and we are particularly pleased to be delivering these results in one of the toughest housing markets in history.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Moving to the T and E business. As I shared earlier, we posted record quarterly revenue and attach in Q2, and our attach rate was up close to 700 basis points year over year. In some of our largest and most mature markets, our attach rates today are consistently in the 40% range. And for users of our one click title function that goes through our platform, we are seeing attach rates closer to 75%. This gives us confidence that over the long term, we can attach T and E at a 50% plus rate in most of our markets.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Given the mounting evidence that our efforts in T and E are bearing fruit, we continue to invest in our T and E business and are excited to share that last week, we entered one of our largest markets, New York. By year end, we expect our T and E business to have a presence in 70% of our markets and expect contribution from this business to increase meaningfully over the coming years. The Christie's international real estate business also continues to grow with three new affiliates joining the network in the quarter and six affiliates in the pipeline. Additionally, I am pleased to report that our financial results for the business are moving ahead of plan, and integration efforts are on track with plan. In q two, we also added Gavin Schwartzman to the Christie's international real estate leadership team as president to help grow our affiliate network.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Gavin previously led Peerage Realty Partners, the tenth largest real estate company in The US per t three sixty, which is also the largest global franchisee in the Sotheby's International Realty Network. We continue to believe that we can more than five x the number of domestic Christie's international real estate affiliates over time. And as a reminder, this is a 30 to 35% adjusted EBITDA margin business for us. Revenue less commissions and other related expenses as a percentage of revenue in the second quarter was 18.2%, which is 80 basis points above the 17.4% reported in the year ago quarter. Non GAAP OpEx was $250,000,000 in Q2, which now includes a full quarter from the Christie's International Real Estate acquisition.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

OpEx discipline in driving savings and efficiencies has become a strategic advantage for Compass in the current environment. With over $600,000,000 in OpEx savings delivered over the last three years and our disciplined OpEx growth of 3% to 4%, We have proven our ability to deliver on stated goals even as revenue grows at a much faster rate than our OpEx. Kalani will share more in his prepared remarks, but I'm excited to share that we now have a new program already underway that will drive 50 to $75,000,000 of incremental adjusted EBITDA with at least $50,000,000 of adjusted EBITDA improvement in 2026. We will achieve these results through continued focus on cost efficiencies and opportunities to offset the inflationary increases we have seen recently. So as you can see from our results, we are not standing still at Compass.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Regardless of where the housing market goes, we will continue to execute against our long term strategy, which consists of, one, managing our OpEx prudently, two, recruiting and retaining agents at high levels, Three, building a platform that empowers agents to be more productive and gain market share. Four, pursuing accretive m and a. And five, growing our high margin T and E and affiliate businesses. By sticking to this core strategy alone, we believe we can generate a level of adjusted EBITDA and free cash flow that will significantly reward our shareholders over time. Now I would like to close with an update on the next iteration of the Compass platform and why we are so excited about the future.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Ever since we started our journey to build the Compass platform thirteen years ago, the goal was always to provide agents with the best in class workflow platform to run their business on. And in many ways, we've now achieved that goal. Just ask our agents. But as we think about the next iteration of the Compass platform, we envision a platform that is made more seamless as we leverage AI to be the connective tissue for all the wonderful tools we've created for agents so far. What is particularly exciting about the direction we are going in is, one, we don't need a big team or increase investment to harness the power of AI.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We have the team we need. Two, there are clear benefits from AI that extend even beyond the productivity benefits we drive for agents as it will make our software engineers and our broker support operations more efficient. And three, 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. And we believe that 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. This ultimately will take value away from these brokerages while increasing the value of brokerages like ours in the eyes of the agents because we'll be able to help them save even more time and make even more money.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Last month, I demoed the next iteration of Compass AI at our all company gathering. There's a two minute standing ovation from our agents. Thousands of them were present. It was great to demonstrate the potential of AI to our agents, which we're going to improve over time. And this fall, we will be beta testing Compass AI two point o, which will initially be focused on improving agent productivity, but over time, be deployed across the organization to make us more efficient.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Before I hand it over, I wanna take a moment to thank Kolani Rielitz, who has informed us of his decision to pursue a new and exciting opportunity for him and his family. We are fully supportive of his decision to take this new opportunity outside of our industry and are grateful for all of his contributions over these last three years. Kalani has been an incredible partner and leader in helping strengthen our financial foundation, driving our operational rigor, and in positioning the company for long term success. I'm also pleased to share that we will be promoting Scott Wallers, our chief accounting officer to CFO. Many of you are familiar with Scott, who joined Compass seven years ago as chief accounting officer and has also been leading our FNA function for the past two years.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Importantly, he has been Kehlani's partner in executing our OpEx initiatives over the past three years, which he will continue to do in his new role. Scott brings deep institutional knowledge, outstanding execution, and strong alignment with our strategy. Kalani will remain on through the August to ensure a smooth hand off, and we're confident in our continued momentum moving forward. I'll now turn it over to Kalani.

[Kalani Reelitz, CFO at Compass]

Thanks for the kind words, Robert. As Robert mentioned, I've made the personal decision to pursue a new opportunity outside of the brokerage industry that I am excited about. I'm incredibly proud of what we've accomplished together over the last three years and continue to be excited for Compass' future. I am leaving Compass in a position of strength with a winning strategy and zero concerns with our financial and accounting operations, internal controls, and business operations. I am proud of the work we've done here at Compass, and I'm especially confident knowing that Scott Wallers, who has been my partner since I've arrived here, will be stepping into the CFO role.

[Kalani Reelitz, CFO at Compass]

With that, let me walk you through the financial results for the quarter. As Robert stated earlier, our q two results were the strongest quarterly results in Compass' history and set a series of new records both financially and operationally. Our second quarter revenue was $2,060,000,000 an increase of 21.1% from the year ago period and an all time quarterly record for Compass. While M and A contributed to the year over year growth in revenue, even excluding M and A, revenue increased 8.7% on an organic basis. Transactions for the quarter increased 20.9% or 6.3% on an organic basis, which compares very favorably to the overall market where transactions declined by 0.9%.

[Kalani Reelitz, CFO at Compass]

This outperformance to the industry is also reflected in our market share, which was 6.09% in the quarter, an increase of 96 basis points from the year ago period and an eight basis point increase from Q1. Gross transaction value was $78,300,000,000 in the second quarter, an increase of 20.3% from a year ago, reflecting the 20.9 increase in total transactions combined with a slight decrease in average selling price of about 1%. Our average selling price was higher by about 3% on an organic basis. However, our acquisitions over the past year have lower average selling prices compared to our overall ASP, which reduced the overall increase in average selling price. Our commissions and other related expenses as a percent of revenue was 81.84%, an improvement of 80 basis points compared to Q2 of last year at 82.64%.

[Kalani Reelitz, CFO at Compass]

Consistent with our comments last quarter, we expected the acquisition of Christie's International Real Estate to favorably impact this metric, which is reflected in the results. Excluding m and a, our commissions and other related expenses as a percent of revenue were flat with the prior year quarter as some modest growth in T and E revenue was offset with some of the highest producing agents and therefore higher split agents taking more of the market share gains. This is consistent with our comments last quarter, and we are okay with this trade off today given that our highest producing agents are also taking share in the current environment. Over the long term, we remain focused on recruiting the up and coming agents that come at a much better split than our highest producing agents. Our total non GAAP operating expenses were $250,000,000 in Q2, an increase from $217,000,000 of OpEx in the year ago period, which was driven by M and A, including the OpEx we assumed from the 01/13/2025 acquisition of Christie's International Real Estate, the Washington Fine Properties acquisition in February 2025, and the acquisition of Ladder and Bloom and Parks Real Estate in the 2024.

[Kalani Reelitz, CFO at Compass]

Adjusted EBITDA was 125,900,000.0, a strong improvement of 63% versus adjusted EBITDA of $77,000,000 a year ago and also represents a new all time record for quarterly adjusted EBITDA. GAAP net income was $39,400,000 in Q2 compared to the GAAP net income of $20,700,000 a year ago, an improvement of 90% and also represents a new all time record for quarterly GAAP net income. As for cash, we generated $68,000,000 in free cash flow in the second quarter, which was not only an improvement over the $40,400,000 of cash flow from Q2 twenty twenty four, but also a new record level of quarterly free cash flow. Last quarter, I mentioned that in both 2024 and 2025, our free cash flow exceeded adjusted EBITDA levels, and therefore, we expected to give back some of that favorable timing of working capital changes in q two. We also paid for the second and final installment of our class action settlement payment in Q2 in the amount of $28,750,000 which negatively impacted free cash flow.

[Kalani Reelitz, CFO at Compass]

We ended the second quarter with $177,000,000 of cash and cash equivalents on our balance sheet and $50,000,000 outstanding on our revolver. As we discussed last quarter, the $50,000,000 balance on the revolver was drawn to fulfill the cash portion of the purchase price for Christie's International Real Estate. Our basic weighted average share count for the first quarter was 560,300,000 which was in line with our guidance. Additionally, because we reported GAAP net income, we are required to present a fully diluted share count, which was 591,400,000.0 shares. Turning now to financial guidance.

[Kalani Reelitz, CFO at Compass]

For 2025, we expect revenue in the range of $1,725,000,000 to $1,850,000,000 and expect adjusted EBITDA to be in the range of $60,000,000 to $80,000,000 We expect our weighted average share count for the third quarter to be between $566,000,000 to $569,000,000 shares. We expect our stock based compensation expense to be in the 55,000,000 to 60,000,000 range for the third quarter, which is a slight increase from the $55,000,000 level for Q2. We expect the Q3 level of stock based compensation expense to be the high point and you'll see decreases sequentially into Q4 and 2026. As you can see from our results, we remain maniacally focused on OpEx, efficiency improvements and driving profitable growth. Additionally, we have also been making good progress on the integration of our 2024 and 2025 acquisitions.

[Kalani Reelitz, CFO at Compass]

As a result of these efforts, we are now pacing ahead of the OpEx range we previously laid out for 2025. Specifically, last quarter, we announced that our OpEx for 2025 would be in the range of 1,017,000,000.000 to 1,042,000,000.000, but we now expect OpEx to be in the range of 1.01 to 1,020,000,000.00, which reflects a reduction of 25,000,000 off the high end of the range when considering the incremental OpEx from the two small brokerage acquisitions announced this month. Finally, as Robert mentioned earlier, we have a new program underway that improves our profitability incrementally starting in 2026 by 50 to 75,000,000. We intend to keep the majority of the 2025 OpEx favorability permanent going into next year, and we'll see even further benefit from areas including process efficiencies in our end to end transaction flows, continued support optimization that lowers cost while improving agent service levels, and increasing efficiencies from a reduction in cost driven by use of AI across various areas of our technology and operational functions. Additionally, we believe there are opportunities to directly offset some of the inflationary pressures we have experienced, including opportunities to leverage learnings from our recent acquisitions.

[Kalani Reelitz, CFO at Compass]

We believe these actions will drive fifty to seventy five million in incremental adjusted EBITDA with at least 50,000,000 of direct adjusted EBITDA benefit in 2026. In my three years here at Compass, I am proud of the DNA and discipline we've built. We have developed a proven track record of stating our intent and delivering on our goals. I am confident we will achieve at least our stated goal of 50 to 75,000,000 as we deploy the same teams and processes that we have been successful with in the past. And finally, as I close out my final earnings call here at Compass, I wanna thank Robert, the management team, and the Compass board for the opportunity they gave me three years ago.

[Kalani Reelitz, CFO at Compass]

As I depart, Compass has never been stronger. We are well positioned financially, strategically, and operationally to continue to lead the industry. Scott is the right leader for our next chapter, and I'm excited to see him partner with Robert. For the last ten quarters, I've had the honor of presenting the record breaking outcomes that are created by the incredible work of our agents and our employees. At Compass, our agents are our customers, and it's been a true honor to work for and serve our roughly 38,000 agents.

[Kalani Reelitz, CFO at Compass]

I'll end by sending a mahalo to our Compass leadership team that I've been able to work side by side with every day, and a giant mahalo to all of our team members who work every day to make Compass a special place. Thank you for all that you do for Compass. With that, I'll turn over the call to the operator for q and a.

[Operator]

Thank you. We will now begin the question and answer session. Your first question comes from the line of Bernie McTurnan with Needham and Company. Your line is open. Please go ahead.

[Bernie Mcternan, Senior Analyst at Needham & Company]

Great. Thanks for taking questions. Just first, Kalani, thanks for all the help over the last couple of years. It's been it's been great working with you, but I know we're in capable hands with Scott. And maybe maybe it's fitting to ask this question, then, Claudia, just on the on the 50,000,000 for benefit for next year.

[Bernie Mcternan, Senior Analyst at Needham & Company]

Appreciate all the color and detail, but should we think about that more as a run rate savings that you're going to be achieving by the year end or an actual 50,000,000 benefit to OpEx, so therefore, we could actually see OpEx fall year over year? And then I have a follow-up.

[Kalani Reelitz, CFO at Compass]

Yeah. Bernie, thank you for the the kind words. I'm I'm I'm really excited about Scott and and and partnering with you more. I I think the way to to think about it is, you know, against I'll say it the way we think about it. Against our forecast and expectations, say, in our long range plan, we think this is a benefit.

[Kalani Reelitz, CFO at Compass]

So we think we can reduce kind of overall cost by 50,000,000 and and ultimately improve profitability, EBITDA by 50,000,000. So we we definitely think it's run rate. We think it stays. And quite frankly, I think the the nice thing about this is I think there's direct kind of mathematical benefit onto our EBITDA, but also some of the work we're doing will allow us to scale as the market comes back even further. You know, the things like leveraging AI or process improvement are gonna actually, you know, hopefully help even maybe not drive the the pure mathematics down, but but as we think about the growth rate, allow us to, you know, maintain three to 4% or even lower over time as, say, your your revenue is is at the 15 to 20% CAGR as the market comes back.

[Bernie Mcternan, Senior Analyst at Needham & Company]

Understood. And then, Robert, just bigger, bigger picture question for you. I mean, the industry has had some pretty big shifts over the past two years. You know, given where you sit, just would love your thoughts in terms of, like, how close are we to the endpoint in terms of, like, knowing what, you know, the the operating rule like, the rules of of, yeah, operations for the industry and and and how you know, and what the next, you know, five or ten years are gonna look like.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Look. There's a there's a tug and pull happening right now in the industry, which you you can see very well. It's between choice and control. Should sellers have the choice of when, where, how their homes are marketed? Should the decision be made between the listing, their agent, and the seller, the person who has the fiduciary relationship and the seller, or and that's where Compass stands by.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Or should platforms port which include MLSs and portals, should they be able to find agents? That's what MLSs do, and portal's now banning agents who don't give them their listings. And they don't have the fiduciary duty. And I think when you look at every other market in the country, seller in the world, every other market in the world, sellers have choice. It's worth noting yeah.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

In every other world world in the world, the sellers have choice. And in places like Australia, don't even have days on marketing price drop history on the major sites, because it's made for sellers. And so I think the trend line of the world would say sellers should have choice. And, and, you know, it's worth noting there's not a single thing that we advocate for that the most sophisticated profit driven repeat sellers in real estate aren't doing every day. Builders and, developers, they all premarket.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

They all test price. They can all list off of an MLS and put on whenever they want without penalty. They can all list off of, you know, that portal, you know, the name of, and then put it back They're not penalized and restricted anyway. It's only the individual American homeowner that is.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And so, look, to answer your question, I think it could take some time, but I you can see in the arc of the narrative that people are starting to realize what's going on. This organized real estate is in MLS and portals and NAR. They just want the listing so they can make money off them. So they can alter the listing, monetize it, sell the data to third parties, sell the data to financial institutions, sell the leads. And so I I think, you know, as as you can clearly see, some things need to be settled in court. I think this will be settled in court.

[Bernie Mcternan, Senior Analyst at Needham & Company]

Understood. Thank you both.

[Operator]

Thank you. Your next question comes from the line of Jason Helfstein with Oppenheimer and Company. Your line is open. Please go ahead.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

There we go. Okay. Hey, everybody. Thanks for the questions. So first, Kehlani, it's been a pleasure and good luck on your next chapter.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

So Robert, just I want to dig in a little more. I mean, have you given, I guess, some of the actions in the industry in the past several months, has there been any change in the execution of the three phased marketing? Or has it basically been business as usual and kind of waiting for kind of what the next shoe to drop is, I guess. And I guess, yeah, anything you wanna share there. You obviously updated us what the plan has been, but have you had to make any changes in the field because of actions of others?

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

And then the second question, maybe talk about your appetite to do more acquisitions between now and the end of the year. And if you feel like you have the capital you need to pursue the acquisitions you're looking at? Thank you.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

So on the first question, in terms of results, the Compass private exclusives have stayed at basically the same level throughout the last number of months. In terms of demand, demand, of course, remains high. You know, what what seller, wouldn't want choice? Sellers want more choice, not less choice. And if if Compass agents as you can see, they're gaining market share.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

You can see it on the data. If a Compass agent is going to you, you're the seller, and saying, I can test price privately, no days of market, no price drop history. I can build an interest list just like, developers build buyer interest lists. We I could send it to the the toppings across different brokerage firms and create a tour that that gets a sense of demand and and scarcity. And and by the way, there's no you cannot test an aspirational price in the, quote, unquote, open market without risk of of a price drop.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

You can't do that. It's it's impossible. But here, you know, you can. If I'm if a compass agency and all that and much more, and then the person that comes in right after is going to you from a different company who's being told by their CEO, don't don't offer don't offer anything but MLS. Don't offer just, you know, everything that's off MLS is bad.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

But if I if that agent is who's being coached by their CEO to do that just says, hey, Jason. What I'm gonna do is I'm gonna take your list. I'm gonna put in MLS into open houses. On balance, you know, you, the seller, are gonna choose the compensation who offers more choice. In every other part of our ecosystem, let's take mortgages, you're they're winning offer off of offering more choices, more solutions, more options for a client, not less.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And so that that at a high level is on demand. Demand continues to be strong, and our agents understand that they have an advantage in the living room. And we're deeply thankful to all the broker CEOs who are convincing their agents, that they should offer less choice in the living room because we have a competitive edge then. In terms of the, you know, the the the, m and a, I think this what's happened in the overall environment has led a lot as as you heard, we have more demand from CEOs to join Compass with their companies than ever before. I think what what has happened is portals and, and NAR MLS rules are basically telling every brokerage firm, we're gonna control you.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We're gonna we we are gonna tell you how you operate your business and how every one of your agents operate business. And if you do not give us if you do not if you do not give us what we want, we will find in Bania. And so it's it's sending a signal to every CEO that we need to join forces to be able to protect ourselves from the control of portals, Gnar, MLS. And so I think that's really what's happening. I mean, clearly, there are people of different perspectives and different sides, but, but this is accelerating conversations that would not have happened otherwise.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And in terms of the capital, yes, we feel good about our our ability to our our our capital.

[Kalani Reelitz, CFO at Compass]

Yeah. Hey, Robert. The only thing I'd add to, Jason, your question is, you know, the other thing that on the other side of it all, like, you know, we've done a really nice job of taking our partners that, from acquisitions in the past and really leveraging them and putting them out, to make sure that they're helping those CEOs that Robert's talking about feel really comfortable about coming to Compass and sharing their their success stories. I mean, as Robert said, our teams have never been busier. And I think we have been improving, from a capital structure to be pretty flexible and make sure deals make sense, for for us economically, but also for for partners.

[Kalani Reelitz, CFO at Compass]

And so we we've just seen success, and I think now is a a very important time just given the unique circumstances.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. And I'm glad I'm glad you brought that up, Kalani. The the the broker CEOs out there, you all know who you are. We are having conversations with look. They all wanna be successful.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We wanna be successful. Just like agents, everyone wants to be successful. And we're all entrepreneurs. And when our entrepreneurial potential is being capped, being controlled by, you know, portals and MLSs, that that's bringing us together. And, look, I love boutiques.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

I I love, I love that our industry has thousands, thousands brokerage firms, but MLSs and portals love it more because boutiques can't defend themselves against and protect themselves from control. And so, again, I think this is and this this this sentiment has been written about by others in the public that that these industry rules are bringing our are are bringing conversations together on the m and a side.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

I appreciate that. Thank you.

[Operator]

Thank you. Your next question comes from the line of Chris Kunturik with UBS. Please go ahead. A reminder to please unmute yourself, Chris, and we should be able to hear you. Alright.

[Operator]

We will move on to the next questioner. We will move on to Nick McAndrew from Zelman and Associates. Please go ahead.

[Nick McAndrew, Equity Research Associate at Zelman & Associates]

Hey, guys. Thanks for taking my questions. Kalani, congratulations on the new chapter. It's been great working with you. And Scott, looking forward to working with you as well.

[Nick McAndrew, Equity Research Associate at Zelman & Associates]

Robert, maybe just one for you to start. It's it's pretty encouraging to see platform engagement hitting an all time high. And I'm just wondering if you have any early feedback to share from either top producers or their customers on the Compass One dashboard. And I'm curious to see if there are any early signals that you're seeing on if this is helping just increase the stickiness of the platform in general for both agents and consumers? Thanks.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. Yeah. Thank you for asking. And, yeah, the the number that we've given out is for total agents. Remember, a lot a lot of our agents are working at different spectrums of of activity.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

If you look at our principal agents, the number of sessions per agent is even higher. So we're very encouraged encouraged by that. The the in terms of Compass One, we the feedback is is very strong. And, you know, we get I think we there's more we could do on adoption. Right?

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We've this spring, we focus more on the three phase marketing strategy than adoption of Compass One. We're seeing very, I'd say, good adoption, but it it could be better. So there's opportunity there. But for those that are adopting it, it's, I would say, transforming their workflow with their clients, and it gives twenty four seven transparency to every step of the process before, during, and after the transaction, to their client. And it puts everything in one place.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We continue to add more to it. We, just launched listing insights to show how much traffic you get on every listing into into it. And so, you know, the the use case there is, let's say you have you're getting 500 hits a day, and it's going down and down down, and it's going to, you know, you know, 10 hits a day after a certain period of time. You can say, hey. You're you're not visible anymore in in the search alerts.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

People have already seen your listing. But if you bring the price, you have a price drop, then you're gonna pop back up in the search alerts, and everyone search alert, and they'll they'll see you again. That's in we put an esignature. We're now we already had esignature in Compass One, but now it's in the the timeline, in a way that's, like, very simple. We already put the tours.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

All the the open the open house, feedback is in there now as well with the buyer tours. So we just continue to add more and more to it where, ultimately, we wanna create kind of harmony and simplicity in the real estate prospects all in one single place. And so, yes, we're we're we're definitely happy that we made the investment. We're gonna continue to improve it more over time, and it'll be a focus of our fall adoption efforts with our agents.

[Nick McAndrew, Equity Research Associate at Zelman & Associates]

Great. Thank you. That's very helpful. And then just a follow-up too. I think there was a comment made that agents using one click T and E are attaching title at pretty much two times the rate.

[Nick McAndrew, Equity Research Associate at Zelman & Associates]

And from your perspective, what's driving the better attach? Is it just the simplicity of what one click title is? And can you also just remind us if there's an opportunity for something similar on the mortgage side with Originpoint as well to grow just mortgage attach over time? Thank you.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. No. Absolutely. And so what what drives the higher attach of one click title? Look.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

For an agent, time is money. And, you, of course, know with RESPA, you can't financially incentivize an agent to drive attach. But if you but what one click title does is it makes it saves them and their client time. It's it's one click versus creating an email and, you know, putting a bunch of information together and sending it by email, waiting for the response. It gets hidden in in someone's email or maybe in spam folder.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

It's all living in the system. And and so that saves them time, but also saves them anxiety, which in this business is a lot of anxiety that when you make an action that it may not be followed up with or may get lost when you're doing so many transaction at a time. And so and so that that's why it has a better attach rate because it, it saves the agent time. It reduces anxiety. And, in speeding up the transaction with their client, it reduces the chance that, you know, the extent that something can happen that can make the transaction not, you know, fall apart.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

In terms of mortgage, we wanna bring the same to mortgage, but that'll probably be, yeah, a 2026 effort. No. Not this year.

[Nick McAndrew, Equity Research Associate at Zelman & Associates]

Got it. That's helpful. Thank you, guys.

[Operator]

Your next question comes from the line of Alec Brundolo with Wells Fargo. Your line is open. Please go ahead.

[Alec Brondolo, Director - Equity Research at Wells Fargo]

Yes. Hey, thanks so much for the question. I really appreciate it. Maybe if I can start with the $8.32 agent gross addition number. I guess the question I have is, Robert, do you feel like your evangelism around the private exclusive strategy had like a tangible or meaningful kind of benefit to agent gross adds in the quarter?

[Alec Brondolo, Director - Equity Research at Wells Fargo]

Were there other factors that drove the strength? That's maybe the first question. The second question is, any kind of update or feedback on the macro in July? I think the industry every industry agrees 2Q was tepid, but, you know, anywhere real anywhere real estate, Realogy, on their earnings call a couple days ago, I think they called out improved trends in July. So just any any thoughts there would be helpful as well.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. So, look, we we continue to get, you know, better and better in in all the things that we do. And so by no means is it just the advocacy, but I think the what has changed the most, you know, this last quarter versus the prior year, yes, technology. And you can see the adoption of our tech is up 37%. Right?

[Robert Reffkin, Founder, Chairman & CEO at Compass]

So we are seeing those improvements. But when you're recruiting someone, they don't like, the difference when you're recruiting someone, they wouldn't know that. Now they could talk to their agents that are friends here and tell them, and so you get good, you know, referrals for sure. Look. I I think their their views on different sides of of what is right, and people have very, like, personal views about it.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

The agents, I think, balance, top agents, for sure, want choice. There's one of our one of our one of our top agents, Gretchen Coley, in Raleigh. She she said, you know what? You know, I'm starting to look at all these all these comments in the comment section of these people who are saying, you know, you you shouldn't be able to market off the list. You know, I'm realizing they don't sell real estate.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And what she meant by that, these are agents that don't have a business or these are people or these organized real estate, members of, like, the association and and this and this the organized system of of these portals and MLSs. And but top agents. When you these top agents love their clients more than they give more to their clients than their own families in in certain senses. And when when there's a phone, when they give you a dinner with your family. And if you're if you're a top agent and someone calls, many of them will will will be like they they they pick up for that client.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Their their their entire business is because they give so much to their clients. They care so much for their clients. And the very concept that an MLS in a portal would would find them and ban them, find them up to $5,000, ban ban them for giving choice to their sellers, the same choice that their the developers have. And and these top agents are sophisticated. They understand what's happen happening.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And so they they feel sold out by organized real real estate. And, again, some of them really they they don't all feel that way. Some of them believe this you know, what they've been told, maximum exposure equals maximum price. That's a really great line. Max exposure equals maximum price.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Although if that were true, everything would be on Amazon, and it's not. You know? If that were true, LVMH wouldn't be able to sell it back for that cost $200 for 20,000. Right? It's it's you know, max exposure max price is not true.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

It's not a true thing. But but and and so top agents understand that, and that's why they just want someone to fight for them and to advocate for them, and that's what we're doing. And and you can see it also in retention numbers. Our retention numbers were 97.5%, meaningfully higher than it was a year ago, and we see it in the data.

[Operator]

Your next question will come from the line of Chris Kunturak with UBS. Please go ahead. Alright. We will move on to the next quest oh, Chris, are you there?

[Chris Kuntarich, Internet Equity Research at UBS Group]

Right now?

[Operator]

Yes. I can.

[Chris Kuntarich, Internet Equity Research at UBS Group]

Can you hear Alright. Sorry about that. Kalani, congratulations, and, I guess I can't let you go after making you wait this long for me to ask my question to ask a question about our full year non GAAP OpEx guide. Can you just give us a sense of what could potentially drive that to the low end of the range versus kind of the midpoint and kinda how your visibility compares, versus maybe, this point last year. And then I think it was touched on maybe one for Robert here, on the one click, TNE.

[Chris Kuntarich, Internet Equity Research at UBS Group]

I think last quarter, you were calling out that you were rolling this out to iOS devices. I think you were saying it was you're looking to get it into the hands of kind of 70% of markets. Can you just talk to us about how much of this is potentially getting it into Android? Is this being done by a market basis? Just how much of a lift is it from a tech perspective versus just kind of operational execution? So much.

[Kalani Reelitz, CFO at Compass]

Yeah. Robert, I'll go first on the OpEx. Chris, thanks for the question. I I think, you know, to get to the low end of of our guide, I you know, we it it's gonna be let me let me start this way. I think I think what we've done over the last three years is really driven kind of all of our our our leaders from corporate to to office level to really look at cost.

[Kalani Reelitz, CFO at Compass]

And so what's driving the favorability so far is, you know, continued cost controls in in some of the the very basic areas as well as, a lot of work from our folks and leaders in the field, as they look at how to to maximize, expenses. Right? Our agent economics continue to improve. So to get to the low end, it's really gonna be just continued focus on cost and and really seeing some of the the work in the field come through from an agent economic standpoint and working working there. Again, I think some of the the good news is a lot of what the field is is working on can save us cost, but also just improves service to our agents.

[Kalani Reelitz, CFO at Compass]

And, obviously, that's our number one concern. So we're getting both best of both worlds. I think to get to the low end, though, we're gonna see it really be maximizing by our our regional leaders in in their individual offices. Robert?

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. In in terms of one click title, we we launched in all of our markets one click title. The we have expanded our title operations to new markets, and that, you know, takes some time to to launch when you will get into a new market. And we're working on getting it to to Android. That will take a a little more time.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

One question, I think I was cut off earlier. In terms of July, the and the last analyst asked the question on what do we see in July. July was healthy. It I think it can reflect some of the delayed demand from the spring market where tariffs were the focus in April and and much of spring. And we we are seeing pendings up in contract listings up 5% year over year.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

That's not, you know, heroic numb increase, but it is it is up. And so I'd expect that to flow through into the, call it, September data for solds. But, you know, I think this year will look a lot like last year. And, you know, and, you know, that, you know, that kinda is what is on the financial side, but on the competitive side, it yeah. I think it creates opportunities, and you can see that in our market share or what's happened over the course of, you know, the last year.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

You can see that in the m and a. You can see that in the recruiting. You can see that in the retention.

[Operator]

Your next question comes from the line of Michael Ng from Goldman Sachs. Your line is open. Please go ahead.

[Michael Ng, Analyst at Goldman Sachs]

Hey, good afternoon. Thank you for the question. And, Kalani, I wanted to extend my positive sentiments to you on your new rule as well. I just have two. First, I was wondering if you could talk about any potential changes in commission rates that you're seeing.

[Michael Ng, Analyst at Goldman Sachs]

GAAP revenue as a percentage of GTV has been remarkably stable on a year over year basis. Just wondering if you could double click on that a little bit. And wondering if we just strip out adjacent services, the commission rate stable? And then I have a quick follow-up. Thank you.

[Kalani Reelitz, CFO at Compass]

Yes. Yes. I'll cover that, Mike. Thanks for the sentiment. I think when we compare kind of the rates for Q2 versus prior Q2, it is, as you said, stable.

[Kalani Reelitz, CFO at Compass]

I think we've seen it up in a few markets and down in a few, but on average kind of flat to to very, you know, kind of very slightly down or up, depending on the market. Overall, we have not seen degradation and I I think, in in the metric. And I think it's expected given our typical agent is that that full time professional agent, and they're demonstrating the the value to their clients. So I think you you have it right. You know, we're seeing some ebbs and flows in markets, but even that is very, very stable compared.

[Kalani Reelitz, CFO at Compass]

And I think it it if you as we chart the kind of five, ten year history of it, it kinda looks like the same ebb and flow. We haven't seen a lot of difference.

[Michael Ng, Analyst at Goldman Sachs]

Great. Thank you. And I just wanted to ask about the agent net add outlook. Encouraging to see the record principal agent organic net adds in the quarter. I was just wondering if you could talk a little bit about your expectations for net adds on both a gross and a net basis for the rest of the year.

[Michael Ng, Analyst at Goldman Sachs]

Is there any pressure from the industry itself shrinking just given some of the challenges in the housing market?

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Maybe

[Robert Reffkin, Founder, Chairman & CEO at Compass]

I'll start, and then I'll pass it on to Kolani. I also want to add some color. The 5% up for July, that's for the market impendings. That's not for Compass. That's just an overall market number.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

As you can see in the past, we've we've grown faster than the market, but that was just a a market number. We we don't disclose ours. In terms of net ads, I think it is worth noting, we brought on, you know, over 800 agents, principal agents. But the total number of agents, so not just principals, was nearly 2,000. I think approximately around 1,700.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And and so when you compare us to other companies, I think you can, you know, you can you should just look at that app apples to apples. And, yeah, in in terms of the competitive pressure, the industry is losing agents. I think NAR came out and said they're the the number of agents has gone down 20% in the last year, and there there's a there's something that came out in in about two months ago. So that's one data point. And, you know, I think, again, in down markets, the best agents gain market share.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

In down markets, you know, the best agents gain business while the the worst agents leave the business. Yeah. And so we are seeing we we I think we are fortunate that we have built a company really focused on the best agents who are who are not only growing and staying, but, you know, gaining market share as a result. But, Connie, on

[Kalani Reelitz, CFO at Compass]

on Yeah.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Net principal ads.

[Kalani Reelitz, CFO at Compass]

Yeah. Yeah. Sure. Sure. Michael, look, I I think we clearly had good results this quarter.

[Kalani Reelitz, CFO at Compass]

Great results this quarter actually on the recruiting front. I still I still think that six to 700 principal ads is the I think I think the the variable for us on moving kind of above the 700 range in volume is really the walk over volume that we see. Reminder, those are smaller boutiques that that kinda shed some of their OpEx and and come on to our platform and take advantage of it. We we have a tremendous pipeline of the team and the recruiting team is working well with those folks.

[Kalani Reelitz, CFO at Compass]

I think it'll depend on the timing of when and how those folks come over. But that will drive that will be the driver, I guess, of over performance, against that 700 baseline. You know, think over time, we'll continue to as Robert said earlier, we just keep getting better at this. So I expect the team and Scott to raise the expectation of of our recruiting team. But, look, think the big takeaway here is that, you know, we are seeing momentum and that demand for Compass has never been been stronger.

[Kalani Reelitz, CFO at Compass]

As you think about the other side of your net equation, you know, our retention is it was actually slightly better than a year ago quarter. And so, we expect to kind of be this year at we're roughly 310 net adds. You know, again, I'll I'll I'll I'll aim for the 150 to 200, and then the upside will will be on the the teams working through the the walkover. So I hope that, hope that adds, for your guidance and your models.

[Michael Ng, Analyst at Goldman Sachs]

Great. Thank you, Robert. Thank you, Clay.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And as as a reminder, the agents that we bring on, the recruit generate I have more production agents that leave. But when we give you the retention number and those that leave, it's a very high integrity number. It includes agents that retire. It it includes agents that move to cities that we don't operate in. It includes agents that move to different industries altogether.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And and so, you know, the what we've seen over time is the the biggest competitor compass is retirement. Right? In a five in twenty year career, five you should lose 5% of your people, every year.

[Operator]

Your next question comes from the line of Elizabeth Langan with Barclays. Please go ahead.

[Elizabeth Langan, AVP - Equity Research at Barclays]

Hi. You've got Elizabeth on from Matt's team today. Kalani, I will also extend my congratulations and wish you luck as you kind of move into your next chapter. Just starting off, I wanted to ask about, you know, general, like, market trends. You know, obviously, over the last few months, we've seen a pretty wide set of outcomes dependent on geography.

[Elizabeth Langan, AVP - Equity Research at Barclays]

And I was wondering if you could speak to how Compass is positioned around that and, you know, what markets are seeing a little healthier traction versus ones that are coming in a little bit softer.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. So overall, prices are up 1% year over year. Inventory for single family, that is, is up 27% year over year. The number of homes that have a price drop right now is 42%. So 42% of the homes in July that exist in the country have a price drop.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

That's more more than any time in the last twelve years. They all look like damaged goods. The reason why Compass private exclusives and Compass coming soon are so valuable to sellers is we can protect you from that. When you have a coming soon or a private exclusive, there's no days in market. There's no price drop history.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And, you know, it's yeah. It's it's it's very meaningful. And so when you say how are we positioned, one, we're positioned to help protect people from the risk of marking their home through organized real estate, I e, MLS and portals that put negative insights on the listings with no no regard to what the seller wants because they have no choice. And they're they'll find that agent, and they'll find the the seller's agent and their client where the seller doesn't even know what's what's happening. They they and and so that's that's one.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

We in terms of markets, new developments still more demand because people want things that are new and move in ready. The Northeast has has, less inventory than the South. The normal migration pattern from the Northeast to the South has slowed dramatically. You have people moving from you know, there was a big move from California to places like Texas and Nashville, which is meaningfully moderated. But, yeah, overall, I expect this year to look a lot like last year.

[Elizabeth Langan, AVP - Equity Research at Barclays]

Okay.

[Elizabeth Langan, AVP - Equity Research at Barclays]

Thank you, Robert. And then, Kalani, I will leave you with last question from me. But you've obviously made a lot of progress on the cost out initiatives and, you know, the guide into for the OpEx, obviously. But you'd mentioned that there are some some inflationary pressures, which will be offset by some of these newer cost out initiatives. I was wondering if you could talk through where that incremental inflation is coming from?

[Kalani Reelitz, CFO at Compass]

Yes. Yes. No, I'm really excited with the program that that Robert and I talked about just given the the fact that it I think it improves everybody's expectations by 50,000,000 at least. On the inflationary side, you know, one of the things we're we're learning, you know, we've had some really great m and a partners over the last two years, and they've I I think because they've been active kind of like a regional test test areas for us, and they've been doing some really interesting work to offset inflation. Inflation's kinda coming from everywhere, from from some of the, you know, from a procurement side, from even some of the tech, you know, technology costs.

[Kalani Reelitz, CFO at Compass]

I think we have some some opportunities to to offset that, but we're still working through it. A lot of a lot of work to to figure out how best to because every market's, you know, a little different as we think about opt optimizing that. But we'll, you know, we've you know, folks like our our Christie's International Real Estate, one of the best at at driving, agent service and agent economics. And so we'll be kind of looking at ways to deploy some of the work they've done.

[Operator]

Your last question comes from the line of Benjamin Black. Please go ahead.

[Jeff Seiner, VP, Internet Equity Research at Deutsche Bank]

Hi, this is Jeff on for Ben. Thanks for taking my squeezing me in to take your last question. I just wanted to follow-up on the M and A that was discussed. You mentioned that industry rules are bringing additional M and A opportunities. Do you also think that maybe a weaker housing market has actually accelerated the pace of the M and A that you've done?

[Jeff Seiner, VP, Internet Equity Research at Deutsche Bank]

Or do you think as we head into next year, if we were to see a reduction in rates and the housing market improve, do you think that that would actually, give you guys an opportunity to accelerate, the number of acquisitions, that you you might be able to do as valuations come up? Thank you.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Yeah. I I think in in addition to industry rules that have created difficulty for broker CEOs in defining their own path, there's definitely the market, which you highlight, which has made it difficult for broker CEOs to create the the p and l that they seek in the moment. There's also a a big shift has been technology. Ten years ago, agents weren't using technology as much as they were as they are now. And I think it's it is indisputable.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

And ten years ago, a lot of them say, like, I don't need technology. Now the vast majority them say that they they do need it, and their clients expect it. And this industry of brokerages, interesting enough, what happened is they didn't have to build technology because they relied on the MLSs to do a big piece of of of the technology puzzle and then some third party tools. But now the industry of brokerages are at a place where they wouldn't be they don't have the capital to build what's needed. And so there's really no path to build what what an agent would expect.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Encompass is the only brokerage firm that built an end to end platform. We invested $1,800,000,000 in it over the last thirteen years. And and so, you know, I guess what I what I'm most excited by is the ability to continue to to distance from the competition and the value that we give our agents. And when when when you do that, more agents come where to stay, but, also, it's it's a signal to broker CEOs that it'd be more fun winning together than than than not. And so, it's that's really what a lot of this is about.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

It's about having fun and, you know, look your agents in the eye and saying we're we're we're we're we're giving you the best of everything in one place. And when we come together with a lot of these great companies, and they're truly great companies with great leaders. But when you come together, you're able to, you know, look in age and I and say, yeah. I I had not just the best culture, not just the best management, which I had before, not just the best, you know, local team and sales meeting culture, but now we have a national company with technology, with this end to end platform, with Compass Concierge, with, of course, the three phase marketing strategy, and and that's really what's leading to the conversations that we have today.

[Jeff Seiner, VP, Internet Equity Research at Deutsche Bank]

Great. Thank you.

[Operator]

There are no further questions at this time. I will now turn the call back to Robert Rufkin for closing remarks.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Great. Well, thank you, everyone, for joining our call today. I wanna end by thanking all of our employees and all of our agents for all their hard work. Together, we delivered the best quarter in our company's history. We have a long runway for growth, and I look forward to updating everyone on our progress.

[Robert Reffkin, Founder, Chairman & CEO at Compass]

Thank you, and have a great rest of your day.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Soham Bhonsle, Head - IR
• Robert Reffkin, Founder, Chairman & CEO
• Kalani Reelitz, CFO

Analysts

• Bernie Mcternan, Senior Analyst at Needham & Company
• Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.
• Nick McAndrew, Equity Research Associate at Zelman & Associates
• Alec Brondolo, Director - Equity Research at Wells Fargo
• Chris Kuntarich, Internet Equity Research at UBS Group
• Michael Ng, Analyst at Goldman Sachs
• Elizabeth Langan, AVP - Equity Research at Barclays
• Jeff Seiner, VP, Internet Equity Research at Deutsche Bank