Compass Q3 Revenue Reaches $3.9 Billion After Anywhere Acquisition

Compass, Inc. (COMP) reported sharply higher third-quarter revenue and profitability following its acquisition of Anywhere Real Estate, while comparable operating metrics showed a more mixed performance across its brokerage, franchise and integrated-services businesses. The company also projected positive free cash flow for full-year 2026 and issued fourth-quarter revenue guidance of $3.15 billion to $3.35 billion.

Revenue for the quarter ended September 30 rose to $3.90 billion from $1.85 billion a year earlier, largely reflecting the addition of Anywhere, which Compass acquired on January 9, 2026. On a pro forma basis that treats the companies as combined in both periods, third-quarter revenue increased by about 12% from $3.49 billion.

Compass recorded net income attributable to the company of $62 million, or $0.07 per diluted share, compared with a net loss of $4 million, or $0.01 per share, a year earlier. Income from operations was $87 million, reversing a $6 million operating loss.

Adjusted EBITDA rose to $306 million from $94 million, while adjusted EBITDA margin expanded to 7.9% from 5.1%. The non-GAAP measure excluded $145 million of depreciation and amortization, $41 million of interest expense, $36 million of stock-based compensation and $28 million of Anywhere transaction and integration costs, among other items.

Free cash flow increased to $240 million from $74 million, supported by $248 million of operating cash flow. Compass ended the quarter with $841 million in cash and cash equivalents and $3.14 billion of long-term debt. Interest expense increased to $41 million from $2 million following the Anywhere transaction.

Brokerage Drives Combined Revenue

The Brokerage segment generated $3.58 billion of revenue and $320 million of segment adjusted EBITDA. Brokerage gross transaction value reached $138.9 billion across 140,118 transactions, compared with pro forma figures of $124.1 billion and 136,660 transactions in the prior-year quarter. The company had 85,476 brokerage agents at quarter-end.

Franchise revenue was $122 million, with segment adjusted EBITDA of $82 million. Franchise gross transaction value was $108.9 billion, slightly below the pro forma prior-year level of $110.4 billion, while transactions declined to 191,809 from 202,310. Net royalty revenue per transaction side increased to $486 from $475 on a pro forma basis.

Integrated Services produced $197 million of revenue and $40 million of segment adjusted EBITDA. Purchase title and escrow transactions increased to 35,106 from a pro forma 34,577, while refinancing transactions rose to 3,651 from 3,546. Average title and escrow revenue per transaction was $3,590, compared with $3,541.

Total non-GAAP operating expenses excluding commissions and related costs were $676 million, down from $699 million in the second quarter but above $641 million in the first quarter. Commissions and other related expenses totaled $2.92 billion in the third quarter, representing the largest component of Compass’ $3.81 billion in GAAP operating expenses.

Fourth-Quarter and Full-Year Outlook

Compass expects fourth-quarter revenue of $3.15 billion to $3.35 billion and adjusted EBITDA of $100 million to $130 million. The company projects a basic weighted-average share count of 776 million to 778 million for the quarter.

For full-year 2026, management expects non-GAAP operating expenses of $2.71 billion to $2.73 billion and positive free cash flow. The presentation did not provide full-year revenue or adjusted EBITDA guidance.

Compass also presented illustrative, non-guidance scenarios based on a pro forma 2025 operating base and $500 million of assumed cost synergies from the Anywhere combination, consisting of $420 million in operating expenses and $80 million in capital expenditures. The scenarios show potential results at different levels of U.S. existing-home sales, while holding factors including market share, average selling prices and service-attachment rates constant.

Integration, Debt and Housing Conditions Remain Key Risks

The company identified successful integration of Anywhere and realization of the anticipated synergies as important uncertainties. Compass incurred $28 million of merger transaction and integration expenses during the quarter and $245 million during the first nine months of 2026.

Other risks cited in the presentation include high mortgage rates, low housing inventory, broader real estate and economic conditions, the company’s increased debt and interest expense, antitrust litigation, agent recruitment and retention, and potential competitive or operational disruption from artificial intelligence. Compass also noted that its reported results can fluctuate and should not be viewed as an indication of future performance.