Compass, Inc. Reports Record First Quarter 2025 Results

Core Insights - Compass, Inc. reported a revenue increase of 28.7% year-over-year in Q1 2025, reaching $1.4 billion, driven by a 27.8% increase in total transactions, while the overall market saw a decline of 2.1% [5][2][21] - The company achieved a record operating cash flow of $23.1 million, marking a 169% year-over-year growth, and free cash flow of $19.5 million, making it the fifth consecutive quarter of positive free cash flow [2][5][36] - Compass's quarterly market share grew to 6.0%, an increase of 125 basis points year-over-year, with organic market share up 82 basis points [2][5][21] Financial Performance - The net loss for Q1 2025 was $50.7 million, an improvement from a net loss of $132.9 million in Q1 2024, with non-cash stock-based compensation expenses of $30.4 million and depreciation and amortization of $28.8 million included in the loss [5][32][35] - Adjusted EBITDA for Q1 2025 was $15.6 million, a significant improvement from a loss of $20.1 million in Q1 2024 [5][35] - Operating expenses grew by 11.5% year-over-year, while revenue grew by 28.7%, indicating effective cost control [2][5] Operational Highlights - The number of principal agents increased by 41.6% year-over-year to 20,656, with a strong retention rate of 96.6% [5][2][25] - Total transactions closed by Compass agents reached 49,121 in Q1 2025, reflecting a 27.8% increase compared to the previous year [5][27] - Gross Transaction Value (GTV) was $52.4 billion, up 31% from $40.1 billion in Q1 2024, with organic GTV at $47.3 billion [5][28] Strategic Initiatives - The Compass 3-Phased Price Discovery and Marketing Strategy saw adoption by 48.2% of homeowners listing their homes, leading to faster sales and fewer price drops compared to non-pre-marketed listings [9][6][30] - The company launched several technology features, including Compass One and One-Click Title & Escrow Integration, aimed at enhancing agent efficiency and client engagement [9][6][20] - The outlook for Q2 2025 anticipates revenue between $2.0 billion and $2.15 billion, with Adjusted EBITDA projected at $115 million to $135 million [9][10]