In the first quarter of 2024, Compass exceeded its expectations with market and agent count growth. During the company’s Q2 earnings call, held on Wed. July 31, 2024, the company again reported that it was outpacing general market trends and claimed it was sitting on a path to continued success.
Highlights:
- Compass remained free cash flow positive in Q2 2024 at $40.4 million. The company has been free cash flow positive for four out of the last five quarterly reports.
- Company revenue generated by Compass in Q2 2024 was $1.7 billion, up from $1.05 billion in Q1 2024.
- Compass’ GAAP (generally accepted accounting principles) net income for Q2 2024 was $20.7 million, up over $65 million from a net loss of $47.8 million a year prior.
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $77.4 million this quarter, an increase of over $47 million from a year prior.
- As Compass Chief Financial Officer Kalani Reelitz noted on the call, the company’s overall cash balance at the end of the quarter was $185.8 million.
Operating strengths stressed by Compass on the earnings call included them increasing their number of transactions by 11.4% (compared to a marketwide decline of -3.3%), increasing their agent count (16,997 agents total, a 24% increase year-over-year) and raising Compass’ quarterly national marketshare to 5.13%.
On the earnings call to investors, Compass Founder and CEO Robert Reffkin was enthusiastic about the current performance:
“In light of a quarter where the real estate market saw historically low volume, I am particularly pleased that we achieved all-time high net income, all-time high Adjusted EBITDA, and generated positive free cash flow for the quarter, making (Compass) free cash flow positive in four of the last five quarters. Q2 revenue grew 14% year-over-year, and we significantly grew the Number of Principal Agents with the addition of over 2,000 principal agents from the acquisitions of Latter & Blum and 2 Parks Real Estate and over 500 principal agents organically.”
Looking forward, Compass projects they will post revenue between $1.43 billion to $1.53 billion and an Adjusted EBITDA between $30 to $50 million in Q3. The company also expects to be cash flow positive for the remainder of 2024.
For the full Q2 2024 earnings call, click here.
