Compass (NYSE:COMP) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Company ParticipantsAlec Brondolo - Senior Equity Research AssociateDae Lee - VP of Equity ResearchElizabeth Langan - Assistant VP of Equity ResearchJason Helfstein - Managing Director and Head of Internet ResearchMichael Ng - Managing Director of Global Investment ResearchRobert Reffkin - Founder and CEORyan McKeveney - Managing Director of Equity ResearchScott Wahlers - CFOSoham Bhonsle - Head of Investor RelationsConference Call Part ...

Compass (NYSE:COMP) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Company ParticipantsAlec Brondolo - Senior Equity Research AssociateDae Lee - VP of Equity ResearchElizabeth Langan - Assistant VP of Equity ResearchJason Helfstein - Managing Director and Head of Internet ResearchMichael Ng - Managing Director of Global Investment ResearchRobert Reffkin - Founder and CEORyan McKeveny - Managing Director of Equity ResearchScott Wahlers - CFOSoham Bhonsle - Head of Investor RelationsConference Call Parti ...

Compass (NYSE:COMP) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Speaker5Hello, everyone. Thank you for joining us, and welcome to the Compass, Inc. 2025 Q4 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn our call over to Soham Bhansale, Head of Investor Relations. Please go ahead.Speaker9Thank you ver ...

Group 1: Fourth Quarter 2025 Highlights - Total revenue decreased by 1.8% to $71.1 million compared to the fourth quarter of 2024 [1] - Revenue excluding Marketing Funds decreased by 0.4% to $53.6 million, impacted by a negative 0.4% organic revenue growth and flat foreign currency movements [1] - Net income attributable to RE/MAX Holdings, Inc. was $1.4 million, with a GAAP EPS of $0.07 [1] - Adjusted EBITDA decreased by 4.0% to $22.4 million, with an Adjusted EBITDA margin of 31.5% and an Adjusted EPS of $0.30 [1] - Total agent count increased by 1.4% to 148,660 agents, while the U.S. and Canada combined agent count decreased by 4.6% to 72,977 agents [1] Group 2: Full-Year 2025 Highlights - Total revenue decreased by 5.2% to $291.6 million compared to the full year of 2024 [1] - Revenue excluding Marketing Funds decreased by 4.3% to $218.8 million, driven by negative 3.9% organic growth and adverse foreign currency movements of 0.4% [1] - Net income attributable to RE/MAX Holdings, Inc. was $8.2 million, with a GAAP EPS of $0.40 [1] - Adjusted EBITDA decreased by 4.1% to $93.7 million, with an Adjusted EBITDA margin of 32.1% and an Adjusted EPS of $1.30 [1] Group 3: Company Strategy and Market Context - The company stated that its strategy is working and beginning to yield results despite 2025 being the third consecutive year of a historically tough housing market in the United States and Canada [1]

Financial Data and Key Metrics Changes - In 2025, the company reported revenue growth of 8.5%, reaching $755 million compared to $696 million in 2024 [5][21] - Adjusted EBITDA improved significantly to $25 million in 2025, up from $9 million in the previous year [5][29] - For Q4 2025, total revenue was $244 million, a 2% increase from $240 million in Q4 2024 [21] Business Line Data and Key Metrics Changes - Real estate brokerage commissions for Q4 were $205 million, accounting for 84% of quarterly revenue, with 1,902 transactions totaling $11.8 billion [21][22] - Private Client transactions grew 13% in volume and 10% in transaction count, contributing 64% of brokerage revenue for the full year [23] - Financing revenue increased by 23% in 2025, totaling $104 million, driven by a 33% rise in transaction count [25] Market Data and Key Metrics Changes - The company completed nearly 9,000 transactions totaling over $50 billion in volume throughout 2025 [8] - The Private Client and Middle Market segments saw a 12% growth in transaction count and revenue, indicating a recovery in these areas [9] - The financing business continued its strong trajectory, with revenue up 23% in 2025 [10] Company Strategy and Development Direction - The company aims to expand its leadership in the private client market and penetrate the institutional segment further [18] - Strategic investments are being made while maintaining cost controls, focusing on technology and talent acquisition [13] - The company is exploring acquisitions to enhance its service offerings, with a strong balance sheet of nearly $400 million in cash [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing improved market conditions and a more predictable valuation benchmark [16] - The company anticipates continued momentum in transaction activity, although macroeconomic uncertainties may moderate growth [32] - Management highlighted the importance of AI in improving operational efficiency while maintaining the value-added role of brokers [16][36] Other Important Information - The company returned $47 million to shareholders through dividends and share repurchases in 2025 [20] - A semiannual dividend of $0.25 per share was declared, payable on April 3, 2026 [31] - The company is focused on leveraging AI to enhance productivity and efficiency across various operational aspects [15] Q&A Session Summary Question: Concerns about AI displacement in the CRE sector - Management acknowledged AI's potential to improve efficiency in manual processes but emphasized the enduring need for human expertise in commercial real estate [36][38] Question: Growth in broker count and recruitment efforts - Management confirmed that the growth in broker count was anticipated due to enhanced recruitment strategies and a stronger candidate pool [43][45] Question: Strategic acquisitions and market uncertainty - Management remains committed to pursuing acquisitions despite market uncertainties, believing that the return of market clarity will enhance acquisition opportunities [50][52]

Financial Data and Key Metrics Changes - In 2025, the company reported revenue growth of 8.5%, reaching $755 million compared to $696 million in 2024 [5][21] - Adjusted EBITDA improved significantly to $25 million in 2025, up from $9 million in the previous year [5][28] - For Q4 2025, total revenue was $244 million, a 2% increase from $240 million in Q4 2024 [21] Business Line Data and Key Metrics Changes - Real estate brokerage commissions for Q4 were $205 million, accounting for 84% of quarterly revenue, with 1,902 transactions totaling $11.8 billion [21][22] - Private Client transactions grew 13% in volume and 10% in transaction count, contributing 64% of brokerage revenue for the full year [23] - Financing revenue increased by 23% in 2025, totaling $104 million, driven by a 33% rise in transaction count [25] Market Data and Key Metrics Changes - The company completed nearly 9,000 transactions totaling over $50 billion in volume throughout 2025 [8] - The Private Client and Middle Market segments saw a 12% growth in transaction count and revenue [9] - The financing business continued its strong trajectory, with revenue up 23% in 2025 [10] Company Strategy and Development Direction - The company aims to expand its leadership in the private client market and penetrate the institutional segment further [18] - Strategic investments are being made while maintaining cost controls, focusing on technology and talent acquisition [13] - The company is exploring acquisitions to enhance its service offerings, with a strong balance sheet of nearly $400 million in cash [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing improved market conditions and a more predictable valuation benchmark [16] - The company anticipates continued momentum in transaction activity as the market stabilizes [17] - Management acknowledged ongoing macroeconomic uncertainties but remains cautiously optimistic about future performance [32] Other Important Information - The company returned $47 million to shareholders through dividends and share repurchases in 2025 [20] - A semiannual dividend of $0.25 per share was declared, payable on April 3, 2026 [31] Q&A Session Summary Question: Concerns about AI displacement in the CRE sector - Management acknowledged AI's potential to improve efficiency in manual processes but emphasized the importance of human expertise in the brokerage business [35][36][39] Question: Growth in broker count and recruitment efforts - Management noted that the increase in broker count was anticipated due to improved recruitment strategies and a stronger candidate pool [44][49] Question: Strategic acquisitions and market uncertainty - Management confirmed that market uncertainty has not deterred their acquisition strategy, focusing on firms that align with their culture and values [51][59]

Core Insights - Coldwell Banker Realty's Pettingell Professionals team achieved over $161 million in closed sales volume in 2025, ranking them as the No. 1 Duo in the Coldwell Banker Real Estate network [1] - The team has been ranked No. 1 in Sarasota County for 16 consecutive years, with founder Roger Pettingell amassing over $3 billion in sales throughout his career [3] - The team has developed a strong digital presence, with a YouTube channel exceeding 100,000 subscribers and a long-running series, REALTALK™ with Roger Pettingell, featuring over 420 episodes [4] Team Composition - Pettingell Professionals consists of founder Roger Pettingell, director of sales Thomas Arbuckle, luxury property specialist Kelly Rosenberg, director of marketing Saleemah Stanley, director of operations Lola Diaz, and project manager Scott Shields [2] Market Position and Recognition - Roger Pettingell has received Coldwell Banker's International Society of Excellence, the brand's highest production honor, and was recognized on the 2025 RealTrends + Tom Ferry The Thousand list, ranking among the top 250 individual real estate agents in the U.S. [3] - The team's approach to luxury real estate has set new standards in the Gulf Coast market, as noted by industry leaders [6][7] Community Engagement - The team is committed to local philanthropy through The Pettingell Family Foundation, which supports initiatives in Sarasota and Manatee counties [5] Company Overview - Coldwell Banker Realty operates company-owned real estate brokerage offices in leading U.S. markets, representing approximately 48,000 independent real estate agents and is part of Compass International Holdings [8]

Summary of Marcus & Millichap Update / Briefing (January 22, 2026) Company Overview - **Company**: Marcus & Millichap (NYSE: MMI) - **Established**: 1971 by George Marcus and Bill Millichap - **Focus**: Real estate investment brokerage and information delivery to the investment community [3][4] Economic Outlook for 2026 - **GDP Growth**: Expected to be between 2.5% and 3%, an improvement from 2025's growth of 2% to 2.5% [7][8] - **Unemployment Rate**: Currently at 4.4%, projected to rise to between 4.5% and 5% by next year [8] - **Key Growth Drivers**: - **Artificial Intelligence (AI)**: Significant investment in data centers and AI-related infrastructure, with the U.S. leading globally [10][11] - **Fiscal Stimulus**: Tax cuts and increased government spending expected to boost GDP by approximately $100 billion, contributing 2%-3% to GDP [13] - **Headwinds**: - **Deglobalization**: Ongoing tariffs and restrictive immigration policies impacting job growth [9][14] - **Labor Market**: Job growth has stagnated, with healthcare being the only sector adding jobs [15][16] Risks to Economic Growth - **K-shaped Economy**: Increasing income inequality affecting consumer spending, with the top 20% of earners driving a significant portion of economic activity [18][19] - **Equity Market Valuations**: High valuations in the stock market pose a risk if AI adoption does not lead to expected productivity gains [20][21] - **Bond Market Fragility**: Concerns about potential dislocation in the bond market, which could impact financial and real estate markets [22][23] Commercial Real Estate Insights - **Market Trends**: - **Apartments**: Stable vacancy rates below 5%, but a significant drop in multifamily starts (72% from peak) and units under construction [36][39] - **Office Market**: Gradual recovery with improved daily attendance, but significant variance in vacancy rates between older urban and newer suburban properties [48][50] - **Industrial Market**: High vacancy rates due to a surge in construction, but demand remains steady for smaller, private investor-owned facilities [51][58] - **Housing Affordability**: Only 28% of Americans can qualify for a typical first home purchase, leading to increased demand for rental housing [39][46] Federal Policy and Housing Market - **Proposed Limitations**: Recent federal proposals to limit acquisition of single-family homes driven by political pressures related to affordability concerns [42][43] - **Supply Focus**: Emphasis on increasing housing supply as a solution to affordability issues, with ongoing advocacy for policies that support this goal [44][46] Conclusion - **Overall Outlook**: 2026 is expected to be a better year for operations and rent growth due to supply pullback and strong demand, although challenges remain in the labor market and economic risks persist [47][48]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $194 million, a 15% increase from $169 million in Q3 2024, marking the fifth consecutive quarter of year-over-year revenue growth [5][19] - Adjusted EBITDA for the quarter was $6.9 million compared to break-even in the prior year, indicating a notable return to profitability [26][27] - Net income for the quarter was $240,000, or $0.01 per share, compared to a net loss of $5.4 million, or $0.14 per share in the prior year [25][26] Business Line Data and Key Metrics Changes - Real estate brokerage commissions accounted for 84% of total revenue, or $162 million, a 14% year-over-year increase [19] - Private client transactions grew 24% in volume and 22% in transaction count, contributing 63% of brokerage revenue for the quarter [20] - Financing revenue grew 28% year-over-year to $26 million, driven by a 34% increase in transaction volume totaling $2.9 billion [22] Market Data and Key Metrics Changes - Transaction volume declined 2% to $8.4 billion, with nearly 1,600 transactions closed at an average commission rate of 1.9% [19] - The overall brokerage volume posted a 2% gain compared to a 17% increase in market volume, indicating a challenging comparison due to outsized growth in larger deals last year [9][19] - The market is still estimated to be 15%-20% below normal activity levels, with some regions closer to pre-pandemic trading velocities [46][47] Company Strategy and Development Direction - The company aims to expand market coverage through improved hiring and synergistic acquisitions, focusing on retail and industrial sectors for growth [16][17] - Continued investments in technology and talent retention are prioritized to enhance long-term competitiveness [25][40] - The auction division is gaining traction, accounting for an estimated 25% share of total commercial property auctions in the U.S. [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a new sales and financing cycle as the market resets, driven by expected interest rate reductions and improved lending conditions [14][15] - The company anticipates continued sequential improvement in business as transaction activity drivers improve, despite challenging comparisons to last year's exceptional fourth quarter [28][29] - Ongoing uncertainty around global macro conditions and inflation remains, but a more accommodative Fed is expected to drive transactional activity [28] Other Important Information - The company reported a $4 million legal reserve impacting net income, which management intends to appeal [25][26] - The balance sheet remains strong with no debt and $382 million in cash and marketable securities, reflecting a $49 million increase over the last quarter [27] Q&A Session Summary Question: Discussion on larger transaction segment dynamics - Management noted that while larger deals faced tough comparisons due to an outsized number last year, the business in the $20 million-$50 million range has remained steady [31][32] Question: Customer motivations and market alignment - Management observed increased motivation among private clients to sell due to loan maturities and operational issues, with improved price alignment in the market [35][36] Question: Auction business growth potential - The auction business is expected to grow significantly, leveraging specialized teams and pre-qualified bidders to enhance transaction efficiency [48][49] Question: Nature of litigation and future implications - Management clarified that the litigation matter is an outlier and not indicative of broader issues within the business, with strong grounds for appeal [52][53]

Core Viewpoint - Compass is acquiring Anywhere Real Estate, which owns Century 21 and Coldwell Banker, in an all-stock transaction valued at approximately $10 billion, creating a significant player in the real estate brokerage industry [2][5]. Group 1: Acquisition Details - The acquisition involves Anywhere investors receiving 1.436 Compass shares for each share they own, valuing Anywhere shares at $13.01, which represents an 84% premium over its closing price prior to the announcement [3][5]. - Following the acquisition, Compass shareholders will control 78% of the new company, while Anywhere investors will hold the remaining 22% [3][5]. Group 2: Market Reaction - The announcement led to a nearly 60% increase in Anywhere shares during morning trading, while Compass shares experienced a decline [2][5]. Group 3: Leadership and Future Outlook - Robert Reffkin, the founder and CEO of Compass, will continue as CEO of the combined firm, emphasizing the goal of creating a thriving environment for real estate professionals [4]. - The transaction is anticipated to close in the second half of the following year [4].