Compass loses $4.6M, issues bullish forecast for Anywhere deal

Core Insights - Compass reported a record revenue growth of nearly 24% to $1.85 billion in Q3, driven by a 22% increase in transactions, while the overall housing market grew only 2% [1][2] - The company experienced a net loss of $4.6 million in Q3, an improvement from a loss of $1.7 million a year ago, influenced by $7.5 million in expenses related to the Anywhere deal [2] - Compass achieved its seventh consecutive quarter of positive free cash flow at $73.6 million and ended the quarter with approximately $170 million in cash [3] Revenue and Growth - The firm’s organic transactions grew by 7%, surpassing market growth [1] - Compass projects Q4 revenue between $1.59 billion and $1.69 billion and has reduced its full-year operating expenditure projections to between $1 billion and $1.005 billion [3] Mergers and Acquisitions - The company is pursuing a $1.6 billion merger with Anywhere Real Estate, with commitments to higher cost reductions than previously projected [4] - Compass will pause on tuck-in M&A activities to focus on the integration of Anywhere [5] - The firm has seen a 10% increase in attach rates in its Christie's title business, contributing to improved profitability and a projected cost reduction of $30 million [6] Strategic Outlook - The CEO expressed confidence in replicating the successful strategies from the Christie's acquisition in the Anywhere integration, aiming for at least $225 million in cost synergies [7]