Compass (NYSE:COMP) capped off its 2025 fourth quarter with record results and outlined plans to accelerate integration work following its recently closed transaction with Anywhere, alongside a newly announced strategic alliance with Rocket and Redfin aimed at expanding seller marketing options and lead flow.
Record Q4 and full-year 2025 results
Founder and CEO Robert Reffkin said Compass delivered record fourth quarter revenue of $1.7 billion and record fourth quarter adjusted EBITDA of $58 million, both above the high end of the company’s guidance. Reffkin also highlighted operational milestones, including a fourth-quarter record of 20 average weekly sessions per agent, record title and escrow revenue, record mortgage JV earnings for the quarter, and all-time-high title and escrow attach in legacy markets.
CFO Scott Wahlers added that fourth-quarter revenue rose 23% year-over-year, with 11.3% organic growth excluding M&A. Compass reported organic transactions up 5.6% versus a 1% market increase, marking what management said was the 19th consecutive quarter of market outperformance since the IPO. Gross transaction value (GTV) in Q4 was $65.6 billion, up 21.6%, reflecting a 19.7% increase in total transactions and about a 2% increase in average selling price (about 5% organically, Wahlers said).
Compass added 830 principal agents in Q4, a fourth-quarter record, with quarterly principal agent retention of 96.8%. Wahlers noted the company will discontinue reporting principal agent count starting in Q1 due to differing methodologies between Compass and Anywhere, and will continue providing total agent counts.
Partnership with Rocket and Redfin targets “seller choice” and lead flow
Reffkin framed the Rocket and Redfin partnership as a response to what he called restrictive industry dynamics, including the “Zillow ban,” which he said pressures sellers to provide listings to Zillow within 24 hours of public marketing and subjects listings to negative insights such as days on market and price drop history. He argued sellers should be able to market homes “when, where, and how they want,” and said the new partnership is intended to preserve that flexibility while avoiding negative insights for listings not on Zillow.
Reffkin described four “highly accretive pillars” of the alliance, including:
- Lead volume: an opportunity for agents across Compass’s network of brands to receive 1.2 million “high intent” leads from Redfin.com and Rocket Mortgage over a three-year strategic alliance, with lead flow structured to increase each year and potential upside in year three depending on conversion.
- Inventory distribution: Compass’s “unique inventory” will be displayed on Redfin.com, with leads routed directly to listing agents across the company’s brands.
- Brand prominence: agent names and brokerage affiliations will be displayed prominently on listings, which Reffkin said “reclaims the digital yard sign” for agents and brands.
- Buyer incentives: Reffkin said the partnership could make buying more affordable by increasing inventory and offering home buyers one percentage point off their mortgage rate in year one or up to $6,000 in lender-paid credits through Rocket Mortgage.
During Q&A, Reffkin said the relationship is exclusive and declined to share financial terms, though he suggested the company may provide more detail in future quarters. He also said Compass will continue building its own consumer sites, but viewed the alliance as a way to partner with “one of the best companies in our space” while adding resources to advocate for seller marketing flexibility.
Anywhere integration, synergy targets, and financing
Reffkin said the combined company now serves 340,000 real estate professionals and more than 2,000 franchise broker-owners across 120 countries and territories. He said the integration is being managed via a transformation office, with a roadmap focused on organizational efficiency. Reffkin also cited agent sentiment and early retention metrics, noting Anywhere’s GCI retention rate for its top two quartiles of agents—representing 91% of Anywhere’s owned brokerage GCI over the trailing 12 months—reached an “all-time high” in January, according to management.
On synergies, management increased targets. Reffkin reiterated a prior goal of $150 million of first-year synergies and $300 million over three years, then said the company has already actioned approximately $175 million in cost synergies roughly 6.5 to 7 weeks after closing. He made a “CEO commitment” to action $250 million in the first year and $400 million in net cost synergies over three years.
Wahlers emphasized the difference between synergies “actioned” and the timing of financial statement realization. For modeling, he suggested planning for about $5 million of realization in Q1 2026 and about $44 million in Q4 2026, implying about $100 million realized in 2026 from the $175 million already actioned. He added that slightly more than half of the 2026 benefit is expected to show up as reduced CapEx, reflecting cuts to projects that Anywhere historically capitalized, as the technology focus shifts to the Compass platform.
On financing, Wahlers said Compass completed a $1 billion convertible note issuance on Jan. 7, 2026, with a 0.25% coupon, used to repay $500 million of Anywhere’s revolver at closing. He said the refinancing created $25 million of immediate annualized cash interest savings. The notes have a $15.98 conversion price and include a capped call designed to protect against dilution up to $23.68. Net proceeds were $880 million after the cap call and issuance costs. The company ended Q4 with $199 million in cash and cash equivalents, and Wahlers referenced Anywhere’s year-end cash of $139 million.
Q1 2026 outlook and near-term cash flow expectations
For Q1 2026, Compass guided consolidated revenue (including Anywhere, but excluding the first eight days of the quarter because the deal closed Jan. 9) to $2.55 billion to $2.75 billion and consolidated adjusted EBITDA to $15 million to $35 million. Management cited weather-related softness in January and February, referencing NAR’s January existing home sales of 3.9 million units, down 4.4% year-over-year, and MBA data indicating mortgage purchase applications fell 14% in late January and early February. Wahlers characterized the issues as short-term, weather-driven timing impacts and said the company is optimistic heading into spring due to mortgage rates at three-year lows, stable financial markets, and year-over-year inventory growth.
Wahlers said essentially all Q1 adjusted EBITDA contribution is expected from the Compass side, with the Anywhere entities contributing negatively in Q1. He attributed that to three items: Anywhere’s cash-settled LTIP accounting impact tied to stock price appreciation, higher healthcare benefit costs that he said are expected to be a new baseline in 2026, and a purchase accounting reset that increases GAAP rent expense by $4 million to $5 million per quarter. He estimated these items add $15 million to $20 million of incremental expense in Q1 compared to the prior year period.
Compass expects weighted average shares outstanding in Q1 of 720 million to 730 million, including 167 million shares issued for the Anywhere transaction. Wahlers also said the company expects stock-based compensation on a consolidated basis to not exceed $50 million in any future quarter beginning in Q2, though a one-time incremental charge related to change-in-control severance for certain former Anywhere executives is expected in Q1.
On cash flow, Wahlers said Compass expects to report materially negative free cash flow in Q1 due to transaction-related outflows, costs to achieve synergies, and scheduled payouts for Anywhere’s bonus and LTIP programs. He said the company expects to return to positive free cash flow in future quarters excluding one-time transaction and cost-to-achieve items, and described 70% to 80% conversion from EBITDA to free cash flow as a reasonable rule of thumb, adjusted for higher interest expense.
AI strategy: data, trust, and network effects
Reffkin argued that AI will become a structural tailwind and said Compass is positioned to benefit through proprietary data, trust, and network effects. He pointed to more than 20,000 “Make Me Sell” listings available only at Compass and said the Rocket and Redfin partnership could expand the company’s base of “Coming Soon” and “Private Exclusive” listings. He also emphasized the role of agents in a “high trust advisory business,” asserting that AI could increase noise and fraud risks through fake listings, fake offers, and other manipulation, making trusted networks more valuable.
Separately, Reffkin said Compass is using AI to “eliminate friction” and increase agent productivity, while noting the company has already identified potential annualized efficiencies “in the vicinity of $20 million” since launching an enterprise-wide AI effort. He also highlighted Anywhere’s use of AI-driven automation, including an AI-based document assignment engine that management said operates at 89% accuracy.
About Compass (NYSE:COMP)
Compass, Inc is a technology-driven real estate brokerage firm that provides a full suite of services for home buyers, sellers and renters. Utilizing a proprietary software platform, the company equips its network of licensed real estate agents with data analytics, marketing automation and client relationship tools designed to enhance efficiency and transaction transparency.
Founded in 2012 by Ori Allon and Robert Reffkin, Compass has grown from a single office in New York City to serve more than 300 markets across the United States.
