Compass Revenue Jumps 111% to $3.90 Billion in Third Quarter
Key Facts
Compass reported results on November 5 for the third quarter ended September 30, 2026, posting revenue of $3.90 billion, up 111% from $1.85 billion in the year-earlier period, according to a company statement. The figure reflects the expanded business following the addition of Anywhere, as revenue growth was 11.6% on a pro forma basis compared with third-quarter 2025 revenue of $3.49 billion. The results showed net income under U.S. generally accepted accounting principles of $62 million, compared with a net loss of $4 million a year earlier. Adjusted EBITDA also rose to $306 million from $94 million in the third quarter of 2025. These figures put the shift to profitability and revenue expansion at the forefront of the company's results, with a clear difference between reported growth and growth on a pro forma basis.
The difference is also reflected in brokerage activity. Gross transaction value was $138.9 billion, up 96.5% year over year, while organic transaction value, calculated on a pro forma basis, was $133.1 billion, up 7.5%. The company's agents closed 140,118 transactions during the quarter, an increase of 106.4% from the year-earlier period. But organic transactions, at 135,956, declined 0.3% on a pro forma basis. Across the broader market, U.S. residential housing transactions fell 1.8% from the same period. These comparisons mean the large aggregate figures coincided with weaker organic performance than the growth rate shown by results following the expansion of the business.
The chief executive said the housing market had seen a year-over-year decline in transactions, adding that "the housing market has weakened over the past few weeks." By contrast, the company said organic brokerage transaction value outperformed the market by 680 basis points on a pro forma basis. The chief executive added that the Compass brand had outperformed the market in every quarter of the company's history as a public company, for 22 consecutive quarters. The company said visits to Compass's website and apps increased 53.6% year over year in the third quarter, with growth accelerating to 68.5% in September. These figures offer the company's indicators of its brand presence and platform activity amid the market's weakness in recent weeks.
On liquidity, Compass generated $248 million in operating cash flow and $240 million in free cash flow during the third quarter. It ended the period with cash of $841 million and no balance on its revolving credit facility, while long-term debt stood at $3.14 billion. Net debt to adjusted EBITDA was 2.7 times at quarter-end, compared with 4.4 times when the Anywhere deal was announced. The company said it remained well positioned to redeem $500 million of notes bearing interest at 9.75% at the first redemption date in the second quarter of 2027. Liquidity and cash flows form part of the financing picture the company presented alongside its plans for the coming year.
In its outlook, the company forecast revenue of between $3.150 billion and $3.350 billion in the fourth quarter of 2026, with adjusted EBITDA of between $100 million and $130 million. It also narrowed its range for fiscal 2026 operating expenses not in accordance with U.S. generally accepted accounting principles to $2.71–$2.73 billion, from a previous range of $2.75–$2.80 billion. It said it expects positive full-year free cash flow. Compass plans to begin rolling out the Home platform to all real estate professionals in its franchise network starting in the first quarter of 2027. On financing, the company said it was well positioned to redeem the high-interest notes when the first permitted date arrives in the second quarter of 2027.