COMP 10-K & 10-Q changes, risk factors and insider trading
Compass, Inc. · NYSE · Real Estate Agents & Managers (For Others) · CIK 1563190 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to U.S. Real Estate Industry”
New heading “High mortgage rates and tighter mortgage underwriting standards have had an adverse effect on our business, financial condition and results of operations.”
New heading “We may be unable to successfully integrate Anywhere’s business and realize cost synergies and other anticipated benefits of the Anywhere Merger.”
New heading “In connection with the Anywhere Merger, we became a party to significant additional indebtedness, which could adversely affect our business and operations, including by decreasing our business flexibility and significantly increasing our interest expense, among other things.”
New heading “An event of default under our 2025 Revolving Credit Facility or the indentures governing our other material indebtedness would adversely affect our operations and our ability to satisfy obligations under our indebtedness.”
New heading “We may need to raise additional capital to continue to grow our business, and we may not be able to raise additional capital on terms acceptable to us, or at all.”
New heading “Regulatory authorities and private parties may continue to review the Anywhere Merger, and any challenges and resulting actions could adversely affect our business.”
New heading “Our franchise business increased significantly as a result of the Anywhere Merger, and our future financial results are expected to be materially impacted by the operating results of our franchisees and the terms of our arrangements with them.”
New heading “AI and AI-related technologies could lead to changes in the real estate industry and present various operational, reputational and compliance risks. If we fail to adapt to the changes in a timely and effective manner or any of such risks materialize in a material way, our business and results of operations may be adversely affected.”
New heading “Our goodwill and other long-lived assets are subject to potential impairment which could negatively impact our earnings.”
New heading “We may incur substantial liabilities arising out of Anywhere’s legacy pension plan.”
New heading “We may be unable to continue to securitize certain of the relocation assets of Cartus, which may adversely impact our liquidity.”
New heading “We may not be able to generate a meaningful number of high-quality leads for real estate professionals and franchisees.”
New heading “Continued reductions in the global spending on relocation services or a cessation or reduction in the volume of business generated from multiple significant relocation clients, or the loss of our largest real estate benefit program client could adversely affect our revenues and profitability.”
New heading “A downgrade, suspension or withdrawal of the rating assigned by a rating agency to us or our indebtedness could make it more difficult for us to refinance or restructure our debt or obtain additional debt financing in the future.”
New heading “Risks Related to the Convertible Notes”
New heading “The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.”
New heading “Conversion of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our Class A common stock.”
New heading “The capped call transactions may affect the value of our Class A common stock.”
New heading “We are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned.”
Removed heading “We have experienced rapid growth in the past, which may not be indicative of our future growth. Additionally, given our continued focus on our expense structure and cost savings efforts, we may not be able to continue to grow our business as fast or at all, which could have an adverse effect on our business, financial condition and results of operations.”
Removed heading “We currently use cash to satisfy payroll tax withholding obligations that arise in connection with the monthly net settlements of RSU awards granted to our employees, which may have an adverse effect on our financial condition and liquidity. If we instead choose to implement a “sell-to-cover” settlement method in the future, additional shares will be issued and sold in the market at settlement to cover payroll tax withholding obligations, which would result in dilution to our stockholders.”
Removed heading “We may be subject to losses relating to the operations of our title and escrow businesses as a result of errors, omissions, fraud, defalcation, or other misconduct.”
Removed heading “A change in mortgage underwriting standards could reduce the ability of homebuyers to access the credit markets on reasonable terms, or at all.”
Removed heading “A significant adoption by consumers of alternatives to full-service agents could have an adverse effect on our business, financial condition, and results of operations.”
Removed heading “We have integrated, and may continue to integrate in the future, machine learning and AI in certain tools and features available on our platform. Machine learning and AI technology present various operational, compliance and reputational risks and if any such risks were to materialize, our business and results of operations may be adversely affected.”
Removed heading “Covenants in our debt agreements may restrict our borrowing capacity or operating activities and adversely affect our financial condition.”
Removed heading “We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition, and results of operations.”
Removed heading “We may be subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.”
Removed heading “Internet law is evolving, and unfavorable changes to, or failure by us to comply with, these laws and regulations could adversely affect our business, financial condition, and results of operations.”
Removed heading “We may need to raise additional capital to continue to grow our business and we may not be able to raise additional capital on terms acceptable to us, or at all.”
Largest changes
“Additionally, as we expand our brokerage business internationally, our platform becomes subject to complex U.S. and foreign export controls, economic sanctions, and technology licensing requirements, including the U.S. Export Administration Regulations and sanctions administered by the Office of Foreign Assets Control. Complying with these regulations, such as obtaining necessary licenses for encryption technology or screening for embargoed jurisdictions, can be time-consuming and may delay or prevent the deployment of our platform in certain markets. …”see in full comparison
“If we further expand our brokerage business to international markets, our platform may become subject to U.S. export controls, including the U.S. Export Administration Regulations. Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the U.S. …”see in full comparison
“While we have policies and procedures to address compliance with such laws, there is a risk that our employees and agents will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. If we further expand internationally, our risks under these laws may increase. …”see in full comparison
“The option counterparties are, or are affiliates of, financial institutions, and we will be subject to the risk that they might default or otherwise fail to perform, or may exercise certain rights to terminate their obligations under the applicable capped call transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions, including the bankruptcy filing by Lehman Brothers Holdings Inc. …”see in full comparison
“If we are unable to comply with the Total Net Leverage Ratio covenant under the 2025 Revolving Credit Facility (as defined in the underlying agreement) or if we are unable to comply with other restrictive covenants under that agreement or the indentures governing the Anywhere Secured Notes and Anywhere Unsecured Notes and we fail to remedy or avoid a default as permitted under the applicable debt arrangement, there would be an “event of default” under such arrangement.”see in full comparison
“Other events of default include, without limitation, nonpayment of principal or interest, material misrepresentations, insolvency, bankruptcy, certain material judgments, change of control, and cross-events of default on material indebtedness as well as, under the 2025 Revolving Credit Facility, failure to obtain an unqualified audit opinion by 90 days after the end of any fiscal year. …”see in full comparison
Full comparison: every changed paragraph (220)
A description of the material risks and uncertainties associated with our business is set forth below. You should carefully consider the risks and uncertainties described below, as well as the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below, or of additional risks and uncertainties not presently known to us or that we currently deem immaterial, could materially and adversely affect our business, financial condition and results of operations.
Risks Related to U.S. Real Estate Industry
Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or other constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; actual or perceived instability of financial institutions; legislative, regulatory or industry changes; changes in, or uncertainty regarding, trade policy; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation, the cost and availability of home insurance, changes in tax law, and wage stagnation or wage increases that do not keep pace with inflation; population decline or growth (including in connection with immigration policy); and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership. Recent changes in U.S. tariff policies, retaliatory tariffs and trade tensions could disrupt global supply chains and increase the cost of housing construction and renovation. Uncertainty regarding price stability and asset valuations, volatility in the capital markets, the possibility of a reduction in economic growth or a recession with concomitant job losses may cause prospective home buyers to delay or cancel their decision to purchase a home leading to a reduction in transaction volume which, if it occurs, could have a material adverse effect on our business, financial condition and results of operations.
As our revenue is primarily driven by sales commissions, transaction fees and royalty fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by real estate professionals could adversely affect our business, financial condition and results of operations. Additionally, any decrease in the number of transactions our title and escrow business closes and the number of mortgages our mortgage business originates, could further impact our business, financial condition and results of operations.
The U.S. real estate market is significantly affected by the monetary policies of the federal government and its agencies, and is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S. and impacts the real estate market through its effect on mortgage interest rates. Mortgage rates remained elevated by historical standards, with the average 30-year fixed mortgage rate still in the low-6% range as of January 2026. The Federal Reserve Board’s summary of economic projections suggests fewer rate cuts in 2026 than in 2025, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates. It is also possible that mortgage rates and the long end of the interest rate curve could remain elevated in spite of lower federal funds rates. Changes in the Federal Reserve Board’s policies and other macroeconomic factors affecting mortgage rates are beyond our control, difficult to predict, and could negatively impact the residential real estate market, which in turn could have a material adverse effect on our business, financial condition and results of operations.
High mortgage rates and tighter mortgage underwriting standards have had an adverse effect on our business, financial condition and results of operations.
High mortgage rates have contributed to inventory constraints and a decline in residential real estate home sale transaction volume by discouraging potential sellers from giving up lower existing mortgage rates and by decreasing overall housing affordability. Although inventory has increased recently, affordability and high mortgage rates continue to constrain home sale transaction volume and negatively impact our business, financial condition and results of operations.
Lower transaction volume also reduces demand for title, escrow, settlement, and mortgage services. Reduced purchase and refinance activity generally increases competition among loan originators and title agencies, putting pressure on revenue and margins in our mortgage and title agency businesses.
In addition, during the past several years, many lenders have significantly tightened their underwriting standards or added new criteria or approvals necessary to underwrite mortgages, and many alternative mortgage products have become less available in the marketplace. Underwriting standards could be changed or tightened as a result of changes in regulations, including those enacted to increase guarantee fees of federally-insured mortgages. More stringent mortgage underwriting standards generally adversely affect the ability and willingness of prospective buyers to finance home purchases or to sell their existing homes in order to purchase new homes, which may decrease the number of real estate transactions that real estate professionals execute and that our title and escrow businesses close, and may decrease the number of mortgages that our mortgage business originates. Any of these impacts would adversely affect our business, financial condition, and results of operations.
Home inventory levels have been low in certain markets and price points in recent years, which has caused more homeowners to retain their homes for longer periods of time, driving a negative impact on the volume of home sale transactions closed by real estate professionals. This lack of supply has been caused by a variety of factors outside our control, including high mortgage rates and other affordability constraints, slow new housing construction, and macroeconomic conditions. Continued low inventory levels have had and could continue to have a material adverse effect on our business, financial condition and results of operations.
We may be unable to successfully integrate Anywhere’s business and realize cost synergies and other anticipated benefits of the Anywhere Merger.
The success of the Anywhere Merger will depend, in part, on our ability to successfully combine and integrate the two companies and realize the cost synergies and other anticipated benefits, including innovation opportunities and operational efficiencies, from the Anywhere Merger, in a manner that does not materially disrupt existing real estate professional, broker, franchise, affiliate, customer, real estate partner, employee and other stakeholder relations nor result in decreased revenues. If we are unable to achieve the cost synergies and other anticipated benefits within the expected timeframe, or at all, our business, financial condition, results of operations and the trading price of our Class A common stock may be materially adversely affected.
The integration of the two companies may result in material challenges, including, without limitation:
•the diversion of management’s attention from ongoing business concerns and performance shortfalls at the combined business as a result of the devotion of management’s attention to the Anywhere Merger and related integration work;
•the disruption of, or loss of momentum in, ongoing businesses or inconsistencies in standards, controls, procedures and policies;
•managing a larger and more complex combined business, including a diverse portfolio of brands, a significantly expanded franchisee system, a larger title and escrow business, a relocation business, a leads business, and a title underwriter joint venture;
•maintaining employee morale, retaining key management and other employees and the possibility that the integration process and potential organizational changes may adversely impact the ability to maintain employee relationships;
•retaining existing business and operational relationships, including but not limited to those with real estate professionals, brokers, franchisees, affiliates, customers, real estate partners, employees and other counterparties; and attracting new business and operational relationships;
•the integration process not proceeding as expected, including due to a possibility of faulty assumptions or expectations regarding the integration process or Anywhere’s operations;
•the discovery of new or expanded liabilities or costs from Anywhere;
•the ability to identify and provide change-in-control notices or otherwise avoid defaults, penalties, or other adverse contractual consequences;
•consolidating corporate, administrative and compliance infrastructures and eliminating duplicative operations;
•coordinating geographically separate organizations, including in international markets with differing business, legal and regulatory climates;
•challenges and risks associated with onboarding real estate professionals and franchisees affiliated with Anywhere onto our platform on a timely basis or at all;
•pending such onboarding, the increased complexity and risk related to the maintenance of Anywhere’s products and services;
•unanticipated issues in integrating information technology, communications and other complex systems;
•uncertainty among affiliates, partners and others with whom we do business (which may cause them to delay, defer, renegotiate or terminate business relationships); and
•unforeseen expenses, costs, liabilities or delays associated with the Anywhere Merger or the integration.
Many of these factors will be outside of our control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues or cost synergies and diversion of management’s time and energy, which could materially affect our business, financial condition, results of operations and the trading price of our Class A common stock.
In connection with the Anywhere Merger, we became a party to significant additional indebtedness, which could adversely affect our business and operations, including by decreasing our business flexibility and significantly increasing our interest expense, among other things.
In connection with the Anywhere Merger, we became a party (through our subsidiaries and as a guarantor) to the Anywhere Secured Notes and Anywhere Unsecured Notes; issued and sold $1.0 billion in aggregate principal amount of the Convertible Notes; executed a performance guarantee for the Apple Ridge securitization program; and continue to be subject to the 2025 Revolving Credit Facility and Concierge Facility. Additionally, lender commitments for the 2025 Revolving Credit Facility, which is secured by substantially all of our assets and our subsidiary guarantors, automatically increased to $0.5 billion upon consummation of the Anywhere Merger. We may also incur additional indebtedness to meet future financing needs.
As a result, we have substantially increased indebtedness following completion of the Anywhere Merger in comparison to our historical levels, which could have the effect, among other things, of:
•reducing our flexibility to respond to changing business and economic conditions;
•increasing our vulnerability to adverse economic and industry conditions;
•limiting our ability to obtain additional financing;
•requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
•limiting our flexibility to plan for, or react to, changes in our business; and
•placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our interest expense has significantly increased in connection with such indebtedness. If we do not achieve the cost synergies and other anticipated benefits from the Anywhere Merger, if the financial performance of the combined company does not meet current expectations, or if our business does not otherwise generate sufficient funds, then our ability to comply with the financial covenant under the 2025 Revolving Credit Facility, service our indebtedness, or satisfy our other cash needs may be adversely impacted, any of which may have a material adverse impact on our financial condition and results of operations.
Additionally, our debt agreements contain, and any future agreement relating to additional indebtedness which we may enter into may contain, various affirmative covenants, such as financial statement reporting requirements, negative covenants, and financial covenants applicable to us and our restricted subsidiaries. The negative covenants include restrictions that, among other things, restrict our and our subsidiaries’ ability to incur liens and indebtedness, make loans, advances or other investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases, repay junior or contractually subordinated debt and consummate certain other matters, all subject to certain exceptions. The ability of the combined company and its subsidiaries to comply with these provisions may be affected by events beyond its control. In certain cases, we may be required to repay all of the relevant debt immediately and the occurrence of such an event may have an adverse impact on our financial condition and results of operations.
An event of default under our 2025 Revolving Credit Facility or the indentures governing our other material indebtedness would adversely affect our operations and our ability to satisfy obligations under our indebtedness.
If we are unable to comply with the Total Net Leverage Ratio covenant under the 2025 Revolving Credit Facility (as defined in the underlying agreement) or if we are unable to comply with other restrictive covenants under that agreement or the indentures governing the Anywhere Secured Notes and Anywhere Unsecured Notes and we fail to remedy or avoid a default as permitted under the applicable debt arrangement, there would be an “event of default” under such arrangement.
Other events of default include, without limitation, nonpayment of principal or interest, material misrepresentations, insolvency, bankruptcy, certain material judgments, change of control, and cross-events of default on material indebtedness as well as, under the 2025 Revolving Credit Facility, failure to obtain an unqualified audit opinion by 90 days after the end of any fiscal year. Upon the occurrence of an event of default under the 2025 Revolving Credit Facility, the lenders will not be required to lend any additional amounts to us, could elect to declare all borrowings outstanding, together with accrued interest and fees, to be immediately due and payable and may prevent us from making payments on the Anywhere Secured Notes, Anywhere Unsecured Notes and Convertible Notes, any of which could result in an event of default under the indentures governing such notes or our securitization programs.
If we were unable to repay the amounts outstanding under our 2025 Revolving Credit Facility, the lenders and holders of such debt could proceed against the collateral granted to secure those debt arrangements. We have pledged a significant portion of our assets as collateral to secure such indebtedness. If the lenders under those debt arrangements accelerate the repayment of borrowings, we may not have sufficient assets to repay the 2025 Revolving Credit Facility and our other indebtedness or be able to borrow sufficient funds to refinance or restructure such indebtedness.
Upon the occurrence of an event of default under the indentures governing our Convertible Notes, Anywhere Secured Notes and Anywhere Unsecured Notes, the trustee or holders of 25% of the outstanding applicable notes could elect to declare the principal of, premium, if any, and accrued but unpaid interest on such notes to be due and payable. Any of the foregoing would have a material adverse effect on our business, financial condition and results of operations.
We may need to raise additional capital to continue to grow our business, and we may not be able to raise additional capital on terms acceptable to us, or at all.
Growing and operating our business, including by continuously innovating, improving, and expanding our platform, expanding our integrated services and expanding into new markets, may require significant cash outlays, liquidity reserves, and capital expenditures. If cash on hand, cash generated from operations, supplemented by funds available under our 2025 Revolving Credit Facility and securitization facilities, and cash equivalents and investment balances are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital, and we may not be able to raise the necessary cash on terms acceptable to us, or at all. Likewise, we may not be able to refinance or restructure any of our existing debt on terms as favorable as those of currently outstanding debt, or at all. Financing arrangements we pursue or assume may require us to grant certain rights, take certain actions, or agree to certain restrictions that could negatively impact our business. If additional capital is not available to us on terms acceptable to us or at all, we may need to modify our business plans, which would harm our ability to grow our operations. Refinancing or restructuring debt at a higher cost would affect our operating results. We could also issue public or private placements of our common stock or preferred stock or additional convertible notes, any of which could, among other things, dilute our current stockholders and materially and adversely affect the market price of our common stock.
Our success is impacted, directly and indirectly, by a number of factors related to general economic conditions, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate, many of which are beyond our control, including: adverse changes in local, regional, or national economic conditions, including periods of slow economic growth or recessionary conditions; volatility in the residential real estate industry; seasonal and cyclical trends in the residential real estate industry; changes in real estate market conditions; insufficient or excessive home inventory levels; high mortgage rates and down payment requirements or constraints on the availability of mortgage financing; low levels of consumer confidence in the economy or the residential real estate market; weak credit markets; instability of financial institutions; legislative, regulatory or industry changes; high levels of foreclosure activity; the inability or unwillingness of consumers to enter into sale transactions; a decrease in the affordability of homes including the impact of high mortgage rates, home price appreciation and wage stagnation or wage increases that do not keep pace with inflation; and decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership.
As our revenue is primarily driven by sales commissions and transaction fees, any slowdown or decrease in the total number of residential real estate sale transactions executed by agents at our owned-brokerage and our affiliates could adversely affect our business, financial condition and results of operations. Additionally, any decrease in the number of transactions our title and escrow business closes and the number of mortgages our mortgage business originates, could further impact our business, financial condition and results of operations.
The U.S. real estate market is significantly affected by the monetary policies of the federal government and its agencies, and is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S. and impacts the real estate market through its effect on mortgage interest rates. The Federal Reserve Board took aggressive actions aimed at controlling inflation in 2022 and 2023, including raising the federal funds rate and reducing its holdings of mortgage-backed securities. Rising interest rates in 2022 and 2023 contributed to higher mortgage interest rates, which in turn contributed to a decline in residential real estate home sale transaction volume and inventory constraints. While the Federal Reserve Board shifted its policy in 2024 with three interest rate cuts that altogether shaved a full percentage point off the federal funds rate, the housing market remained under pressure as high mortgage rates and economic volatility continued to shape the landscape. The Federal Reserve Board’s summary of economic projections suggests even fewer rate cuts in 2025 than in 2024, and it is also possible that the Federal Reserve Board may hold interest rates steady or may even increase rates if inflation persists. It is also possible that mortgage rates and the long end of the interest rate curve could remain elevated in spite of lower federal funds rates due in part to the high level of treasury securities expected to be issued to fund federal deficits and higher interest rate expenses. Changes in the Federal Reserve Board’s policies and other macroeconomic factors affecting mortgage rates are beyond our control, difficult to predict, and could negatively impact the residential real estate market, which in turn could have a material adverse effect on our business, financial condition and results of operations.
HighWe mortgagemight ratesnot havebe contributedable to arecruit declineand in residentialretain real estate homeprofessionals saleat transactionthe volumesame rate as in the past, which could adversely affect our and titlethe andcombined escrow and mortgage activity, which has had an adverse effect on ourcompany’s business, financial condition and results of operations.
Uncertainties associated with the Anywhere Merger, including but not limited to issues related to the actual or perceived difficulty of integration or desire not to become associated with the combined company, may cause real estate professionals recruitment and retention rates to decline. Furthermore, we may be required to incur additional costs to retain real estate professionals at our owned-brokerage, potentially by offering them compensation arrangements on terms that are less favorable to us. As a result, we may experience a decline in gross sales commissions that we generate or we may not generate anticipated gross sales commissions on the expected timeframe, which could adversely affect our business, financial condition and results of operations. Likewise, our franchisees could experience similar issues, which could result in a decrease in royalty fees received by us, negatively affect franchisees’ perception of our value proposition, limit our ability to expand our franchise network, or require us to offer more advantageous financial arrangements to attract and retain franchisees. Any of the foregoing could adversely affect our business, financial condition and results of operations.
Regulatory authorities and private parties may continue to review the Anywhere Merger, and any challenges and resulting actions could adversely affect our business.
Although the Anywhere Merger has been completed, applicable U.S. authorities or any state attorney general could take any action under antitrust or other applicable regulatory laws as they deem necessary or desirable in the public interest, which may include inquiries, investigations, or enforcement actions that could potentially result in conditions, restrictions, or required divestitures, as well as increased compliance costs or operational limitations. Private parties may also challenge the Anywhere Merger under applicable laws. Any of these actions could negatively impact our business, financial condition, or results of operations.
High mortgage rates have contributed to a decline in residential real estate home sale transaction volume, which has had an adverse effect on our business, financial condition and results of operations. As mortgage rates remain high, potential home sellers are more likely to choose to stay with their lower mortgage rates rather than sell their home and pay a higher mortgage rate with the purchase of another home, or prefer to rent rather than purchase a home. Additionally, the overall affordability of homes generally decreases in a high mortgage rate environment. Both of these trends have contributed to inventory constraints and a decline in home sale transaction volume in recent years. Although inventory has increased recently, affordability and high mortgage rates continue to constrain home sale transaction volume, which we expect to have an adverse effect on our business, financial condition and results of operations.
A decline in home sale transaction volume also has a negative impact on title and escrow activities, which has had and could continue to have an adverse effect on our business, financial condition and results of operations.
High mortgage rates have also had an adverse effect on our mortgage business. As mortgage rates remain high, reduced demand for purchase mortgages and refinancing generally results in an increase in competition among loan originators, which has had, and is likely to continue to have, a negative impact on revenue volume and gross profit margin for our mortgage business, which in turn has had and could continue to have an adverse effect on our business, financial condition and results of operations.
Ongoing industry antitrust class action litigation (including the Antitrustantitrust Lawsuitslawsuits filed against us and Anywhere) or any related regulatory activities could result in additional meaningful industry-wide changeschanges, and the recent changes and/or any additional meaningful changes could have a materially adverse effect on our business, operations, financial condition and results of operations.
The ongoing industry antitrust class action litigation, as well as the Antitrust Lawsuits filed against us (as described in more detail in Note 11 to our consolidated financial statements included elsewhere in this Annual Report) and Anywhere (includingas anydescribed injunctivein relief,more appealsdetail orunder settlements“ – Item 3. Legal Proceedings”), either alone or in combination with related regulatory or governmental actions,actions and including any injunctive relief, appeals or settlements, or any resulting changes to competitive dynamics or consumer preferences, has resulted in certain industry-wide changes and could result in additional meaningful industry-wide changes, including changes to the broker commission structure and meaningful decreases in the average broker commission rate (including the average buy-side commission rate)., the share of royalties we receive from our franchisees, or the percentage of home buyers or home sellers using a real estate professional in their real estate transactions. Such changes could have a materially adverse effect on our business, operations, financial condition and results of operations.
Any decrease in our gross commission income or the percentage of commissions that we or our franchisees collect may harm our business, financial condition and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “Merger With Anywhere Real Estate Inc.”
New heading “Impact of Recent Industry Practice Changes on the U.S. Residential Real Estate Market and Our Business”
New heading “Anywhere merger transaction and integration expenses”
New heading “Anywhere merger transaction and integration expenses”
New heading “2021 Revolving Credit Facility”
New heading “2025 Revolving Credit Facility”
New heading “0.25% Convertible Senior Notes due 2031”
New heading “Anywhere Secured Notes”
New heading “Anywhere Unsecured Notes”
New heading “Anywhere Securitization Obligations”
New heading “Intangible Assets”
Removed heading “Revolving Credit and Guaranty Agreement”
Removed heading “Revenue Recognition”
Largest changes
“The Revolving Credit Facility includes customary events of default that include, among other things, nonpayment of principal, interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain material ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the Revolving Credit Facility.”see in full comparison
“As of December 31, 2024, we had no outstanding borrowings under our Revolving Credit Facility and outstanding letters of credit totaled approximately $53.8 million. Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) a floating rate per annum equal to the base rate plus a margin of 0.50% or (ii) a rate per annum equal to SOFR plus a margin of 1.50%. During an event of default under the Revolving Credit Facility the applicable interest rates are increased by 2.0% per annum. …”see in full comparison
“The Revolving Credit Facility contains customary representations, warranties, financial covenants applicable to us and our restricted subsidiaries, affirmative covenants, such as financial statement reporting requirements, and negative covenants which restrict its ability, among other things, to incur liens and indebtedness, make certain investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions. …”see in full comparison
“We have the option to repay our borrowings under the Concierge Facility without premium or penalty prior to maturity. The Concierge Facility contains customary affirmative covenants, such as financial statement reporting requirements, as well as covenants that restrict its ability to, among other things, incur additional indebtedness, sell certain receivables, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions. …”see in full comparison
“We have the option to repay our borrowings under the Concierge Facility without premium or penalty prior to maturity. The Concierge Facility contains customary affirmative covenants, such as financial statement reporting requirements, as well as covenants that restrict its ability to, among other things, incur additional indebtedness, sell certain receivables, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions. …”see in full comparison
“Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) a floating rate per annum equal to the base rate plus a margin of 0.50% or (ii) a rate per annum equal to the secured overnight financing rate, or SOFR, plus a margin of 1.50%. The base rate is equal to the highest of (a) the prime rate as quoted by The Wall Street Journal, (b) the federal funds effective rate plus 0.50%, (c) the SOFR term rate for a one-month interest period plus 1.00%, and (d) 1.00%. The SOFR term rate is determined by the Administrative Agent as the forward-looking term rate plus a 0. …”see in full comparison
Full comparison: every changed paragraph (145)
•Key Business Metrics and Non-GAAP Financial Measures. This section provides a discussion of key business metrics and non-GAAP financial measures we use to evaluate our business and measure our performance, in addition to the measures presented in our consolidated financial statements.performance.
Following the Anywhere Merger, we are a global real estate services company with a presence in every major U.S. city and approximately 120 countries and territories, and we operate a portfolio of some of the most recognized and iconic brands.
WeIn are2025, we were a leading tech-enabled real estate services company that includesincluded the largest residential real estate brokerage in the United States by sales volume.volume, which primarily operates under the Compass brand operating in 39 states and Washington DC, with approximately 37,0002 agents at our owned-brokerages. We also provide integrated services to real estate agents and their clients, including title, escrow and mortgage. In January 2025, we acquired a company with the 2 In October 2025, we divested our Latter & Blum Texas business, which reduced our total agent count by approximately 900. The divestiture was not material to our consolidated financial statements.
exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand. We refer to the independently operated brokerages that license the Christie’s International Real Estate brand name as franchisees. Christie’s International Real Estate is among the world’s premier global luxury real estate brands with over 100 independently operated brokerages in over 50 countries and territories. We refer to agents at our owned-brokerage and at our franchises collectively as “real estate professionals.”
Following the Anywhere Merger, which is discussed further under the “Recent Developments” header below, we operate our owned-brokerage business under the Coldwell Banker, Compass, Corcoran, and Sotheby’s International Realty brands and our franchise business under the Better Homes and Gardens Real Estate, Century 21, Christie’s International Real Estate, Coldwell Banker, Coldwell Banker Commercial, Corcoran, ERA, and Sotheby’s International Realty brands. On a combined basis, we served a global network of more than 340,000 real estate professionals in our owned-brokerage and franchise businesses as of January 31, 2026.
We also provide non-brokerage services to real estate professionals and their clients, including title and escrow and, via a minority-owned joint venture, mortgage. The Anywhere Merger expanded these services and added additional services, including relocation and, via a minority-owned joint venture, title underwriting. We refer to these services collectively as “integrated services.”
Our business model is directly aligned with the success of real estate professionals. Real estate professionals at our owned-brokerage business are independent contractors that associate their real estate licenses with us and choose to operate their businesses on our platform. We primarily generate revenue from our owned-brokerage business when we collect a share of the gross sales commissions that these real estate professionals earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price.
We also attract independently operated brokerages that affiliate with us as franchisees or licensees under long-term franchise or license agreements. We generate revenue from our franchise business when we collect royalties from our franchisees, which are based on the percentage of the franchisee’s gross sales commissions, as well as certain other fees, such as marketing and technology fees.
In 2025, we earned substantially all of our revenue from our owned-brokerage business with integrated services and our franchise business comprising a small portion of our revenue.
Our technology offerings provide a strong foundation for agents and empower them to deliver exceptional service to their clients. Agents utilize our technology offerings to grow their businesses, save time and manage their businesses more effectively.
WeOur provide an end-to-end proprietary technologyCompass platform thatallows empowers residentialour real estate agents to deliverperform exceptionaltheir serviceprimary workflows, from first contact to sellerclose, with a single log-in and buyerwithout clients.leaving Ourthe platform. The Compass platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. The Compass platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of agents and deliver high-value recommendations and outcomes for both agents and their clients. Additionally, we provide integrated services, such ascertain title and escrow and mortgage,mortgage bothservices ofare whichintegrated and are available on the Compass platform. Compass agents utilize the platform to grow their businesses, save time and manage their businesses more effectively.
Compass One, an all-in-one client dashboard, launched in February 2025, provides a client-facing version of the Compass platform to consumers, allowing agents’ clients to have a differentiated experience where they can access the tools, services and advantages Compass offers to manage their homeownership journey.
Our business model is directly aligned with the success of agents. We attract agents to our brokerage and partner with them as independent contractors that affiliate their real estate licenses with us, operating their businesses on the Compass platform and under our brand. We currently generate substantially all of our revenue from commissions paid to us by our agents' clients at the time that a home is transacted on the Compass platform. While integrated services comprise a small portion of our revenue to date, we believe we are well-positioned to capture meaningful revenue from integrated services as we continue to diversify our offerings within the real estate ecosystem.
Merger With Anywhere Real Estate Inc.
On January 9, 2026, we completed the merger contemplated by the Agreement and Plan of Merger (the “Anywhere Merger Agreement”) with Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), and Velocity Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”). Pursuant to the Anywhere Merger Agreement and subject to its terms and conditions, Merger Sub merged with and into Anywhere (the “Anywhere Merger”), with Anywhere surviving as our wholly owned subsidiary. In connection with the Anywhere Merger, we acquired all outstanding shares of Anywhere common stock in a stock-for-stock transaction. Holders of Anywhere common stock received 1.436 shares of Compass Class A common stock for each share of Anywhere common stock, and we issued approximately 162.1 million shares of our Class A common stock.
During the year ended December 31, 2025, we incurred $18.1 million of transaction and integration expenses in connection with the Anywhere Merger. These expenses consist of transaction costs, including legal and investment banking fees, incurred in connection with our entry into the Anywhere Merger Agreement, as well as costs related to preliminary integration activities. Such expenses are presented within the Anywhere merger transaction and integration expenses line item in the consolidated statements of operations. Of these amounts, $6.3 million was paid during the year ended December 31, 2025. Additional transaction and integration costs, as well as stock-based compensation costs, are expected to be material and will be incurred in 2026 and future periods in connection with the closing of the Anywhere Merger and the related integration activities.
In connection with the Anywhere Merger, on January 7, 2026 we completed an offering of $1.0 billion in aggregate principal amount of 0.25% Convertible Senior Notes due 2031 (the “Convertible Notes”) to Morgan Stanley & Co. LLC and certain other initial purchasers (collectively, the “Initial Purchasers”). The Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at our option at any time, and from time to time, on or after April 20, 2029 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price. The initial conversion rate for the Convertible Notes is 62.5626 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $15.98 per share of common stock. The Convertible Notes will mature on April 15, 2031. The net proceeds were used to repay certain existing indebtedness of Anywhere and its subsidiaries, pay related fees, costs and expenses related to the Anywhere Merger and fund the net cost of entering into the capped call transactions (the “Capped Call Transactions”).
Additionally, we entered into the Capped Call Transactions with certain of the Initial Purchasers and/or their respective affiliates and/or other financial institutions. The Capped Call Transactions are expected generally to reduce potential dilution to the common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be $23.68 per share of common stock, which represents a premium of 100.0% over the last reported sale price of the common stock on January 7, 2026. We paid $96.5 million for the Capped Call Transactions, funded with proceeds from the Convertible Notes. The net cash proceeds we received from the offering of the Convertible Notes were approximately $880 million after considering the $96.5 million cost of the Capped Call Transaction and $23.5 million of debt issuance costs.
For additional discussion of the impact of the Anywhere Merger and related financing transactions, including the Convertible Notes, the Capped Call Transactions and the assumption of Anywhere’s outstanding debt, on our liquidity, see “—Liquidity and Capital Resources.”.
Impact of Recent Industry Practice Changes on the U.S. Residential Real Estate Market and Our Business
A number of macroeconomic conditions, including high interest rates and the Federal Reserve Board's policies, have contributed to the slowdown in the U.S. residential real estate market, impacting our business and financial results. Specifically, these conditions resulted in slowed consumer demand, declining home affordability and low inventory. While the Federal Reserve Board began to ease interest rates during 2024 and the beginning signs of a housing market recovery emerged, any further slowdown, additional challenging conditions or lack of further improvement in the U.S. residential real estate market could have a significant impact on our business and financial results during 2025 and beyond.
Additionally, asAs part of its nationwide class action settlement of antitrust claims, NAR agreed to implement certain industry-wide practice changes, including, but not limited to, prohibiting buyer brokers'brokers’ offers of compensation from being included in listings on Multiple Listing Services and requiring a buyer to enter into a written agreement with their agent that would set forth the buyer broker'sbroker’s fee before showing the buyer a property. These changes went into effect in August of 2024. Early in the spring of 2024, the Companywe entered into itsour own class action antitrust settlement and agreed to implement certain other practice changes. See Note 11 -— "“Commitments and Contingencies"” to our consolidated financial statements included elsewhere in this Annual Report for more information. Further, we believe the Department of Justice is continuing to focus on the real estate industry, including the practice changes resulting from the NAR settlement, which could result in additional practice-wide changes.
While we continue to assess the effects of the ongoing slowdown and the recent industry-wide changes on our business and financial results, the ultimate impact will depend on future developments, which are highly uncertain and difficult to predict, as well as the actions that we have taken, or will take, to minimize any current and future impact on our revenue, profitability, or liquidity. InDuring thethis meantime,time, thewe have taken significant cost reduction actions that we have taken since 2022 have reduced our operating expense levels to the point that we are able to consistently generate positive operating cash flow, aside from a limited number of seasonally slower transaction volume months during the year.
We had overapproximately 33,00037,0003 agents on our platform as of December 31, 2024.2025. A subset of our agents are considered principal agents, which we define as either agents who are leaders of their respective agent teams or individual agents operating independently on our platform.
As of December 31, 2024,2025, 20232024 and 2022,2023, the Number of Principal Agents1,2,3Agents4 was 17,752,21,1905, 14,68317,752 and 13,649,14,683, respectively. The principal agent additions cameprimarily inattributable bothto newthe residential real estate brokerages acquired since the prior-year period and existingorganic markets.recruitment efforts.
During the years ended December 31, 2024,2025, 20232024 and 2022,2023, our agents closed 205,122,250,360, 205,122 and 178,848 and 211,538 Total Transactions1,Transactions4, respectively. The increase for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 was primarily attributable to the increaseresidential inreal estate brokerages acquired since the numberprior-year ofperiod agentsand onorganic ourrecruitment platform.efforts.
Our Gross Transaction Value1Value4 for the years ended December 31, 2024,2025, 2024 and 2023 and 2022 was $216.8$267.0 billion, $186.1$216.8 billion and $230.3$186.1 billion, respectively. Gross Transaction Value is primarily driven by home values in the markets we serve and by changes in the number of our agents in those markets. The increase for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 was primarily attributable to the home values in the markets we serve and the increase ofin the number of our agents onin ourthose platform.markets, as well as the residential real estate brokerages acquired since the prior-year period.
For the year ended December 31, 2024, our Gross Transaction Value represented 4.95% of residential real estate transacted in the United States, compared to 4.46% for the year ended December 31, 2023. We calculate our market share by dividing our Gross Transaction Value, or the total dollar value of transactions closed by agents on our platform, by two times (to account for the sell-side and buy-side of each transaction) the aggregate dollar value of U.S. existing home sales as reported by NAR. Gross Transaction Value includes a de minimis number of new development and commercial brokerage transactions.
The residential real estate market is seasonal, which directly impacts our agents’ businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter. We experience the most significant financial effect from this seasonality in the first and fourth quarters of each year, when our revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.
We also recognize revenue from other integrated services related to the home transaction such as title and escrow services.services Whileand revenueroyalties and fees from third-party franchisees. Revenue from these servicessources has been immaterial through 2024, we expect revenue from these services to grow over time as we expand existing and add new integrated services into our platform.2025.
3 In October 2025, we divested our Latter & Blum Texas business, which reduced our total agent count by approximately 900. The divestiture was not material to our consolidated financial statements.
5 Number of Principal Agents as of December 31, 2025 reflects the impact from a prior-period correction of 493 non-producing Principal Agents that had been incorrectly included as Principal Agents in connection with acquisitions completed during the second quarter of 2024.
2 During the first quarter of 2024, the Company began to report its agent statistics as of the period end. The Company's Number of Principal Agents and year over year growth reported in this Annual Report is based on the period end count.
3 Excludes approximately 1,000 principal agents located in Texas who joined Compass during the second quarter of 2024 as part of the Latter & Blum Holdings, LLC acquisition. These agents operate with a flat fee / transaction fee based model, which is different from the Company's standard commission model.
Our commissions and other related expense as a percentage of revenue is expected to fluctuate from period-to-period based on the mix of the commission arrangements we have with our agents, the fees we collect and any changes in integrated services and franchise revenue.
Sales and marketing expense consists primarily of marketing and advertising expenses, compensation and other personnel-related costs for employees supporting sales, marketing, expansion and related functions, occupancy-related costs for our regional offices, agent acquisitionrecruitment and marketing incentives and costs related to administering the Compass Concierge Program, including associated bad debt expenses. Advertising expense primarily includes the cost of marketing activities such as print advertising, online advertising and promotional items, which are expensed as incurred. Compensation and other personnel-related costs include salaries, benefits, bonuses and stock-based compensation expense.
Anywhere merger transaction and integration expenses
Anywhere merger transaction and integration expenses consists of transaction costs, such as legal or investment banking fees, incurred in connection with our entry into the Anywhere Merger Agreement with Anywhere and costs related to preliminary integration activities.
Restructuring costs consistsconsist primarily of severance and other termination benefits for employees whose roles are being eliminated, lease terminations costs as a result of the accelerated amortization of various right-of-use assets and other restructuring costs.
Depreciation and amortization expense consists primarily of depreciation and amortization of our property and equipment, capitalized software and acquired intangible assets. We expect depreciation and amortization expense willto vary from period-to-periodincrease as both a percentage of revenue forand on an absolute basis as a result of the foreseeableAnywhere future.Merger.
Interest expense consists primarily of expense related to the interest expenses, including commitment fees for available borrowing capacities, and amortization of debt issuance costs associated with our Concierge Facility and Revolvingrevolving Creditcredit Facility.facilities. We expect interest expense to increase as a result of the Anywhere Merger.
Benefit from income taxes consists of a partial reduction in the valuation allowance related to the carryover tax basis in deferred tax liabilities from acquisitions netted with the recognition of deferred tax assets in India. Additionally, the Companywe incurred current income tax expense from states and itsour foreign operations in India.India and the UK. We maintain a full valuation allowance against our U.S. deferred tax assets for income tax purposes because we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Equity in Income (Loss) of Unconsolidated EntityEntities
Equity in income (loss) of unconsolidated entityentities includes the results of our share of earnings and losses from our mortgageequity jointmethod venture with Guaranteed Rate, Inc.investments.
Revenue increased by $744.1$1,332.5 million, or 15.2%,23.7%, for 20242025 compared to 2023.2024. The increase was primarily driven by an increase in the number of agents that joined our platform during 2023 and 2024 and a2025, higherincluding volumethose ofagents transactions.attributable to the businesses acquired since the prior-year period. The Number of Principal Agents for 20242025 was 17,75221,190 compared to 14,68317,752 for 2023.2024. Total Transactions for 20242025 increased to 205,122,250,360, an increase of 14.7%22.1% from 2023.2024.
Commissions and other related expense increased by $1,045.1 million, or 22.5%, for 2025 compared to 2024. The increase in absolute dollars was primarily driven by increased revenue. As a percentage of revenue, Commissions and other related expense decreased from 82.3% to 81.6%. This decrease as a percentage of revenue was driven by the impact of recent acquisitions which operate with more favorable average agent commissions splits compared to our core brokerage.
Commissions and other related expense increased by $627.6 million, or 15.7%, for 2024 compared to 2023. Included in Commissions and other related expense were non-cash expenses related to stock-based compensation of $11.6 million for the year ended December 31, 2023. The decline in stock-based compensation expense in 2024 as compared to 2023 was due to the discontinuation of the Agent Equity Program in 2023. Commissions and other related expense excluding such non-cash stock-based compensation expense was $4,634.6 million, or 82.3% of revenue for 2024, and $3,995.4 million, or 81.8% for 2023. The increase in absolute dollars and as a percentage of revenue of Commission and other related expense, excluding the non-cash stock-based compensation, was primarily driven by increased revenue and the impact of recent acquisitions, which operate in markets with higher average agent commissions splits compared to our core brokerage.
Sales and marketing expense decreasedincreased by $66.7$9.2 million, or 15.3%,2.5%, for 20242025 compared to 2023.2024. Included in Sales and marketing expense were non-cash expenses related to stock-based compensation of $32.6 million for the year ended December 31, 2025 and $31.5 million for the year ended December 31, 2024 and $35.0 million for the year ended December 31, 2023. The decrease in stock-based compensation expense for 2024 as compared to 2023 was primarily due to the Company ceasing to offer share-based awards as incentives for agents.2024. Sales and marketing expense excluding such non-cash stock-based compensation expense was $345.3 million, or 5.0% of revenue for 2025, and $337.2 million, or 6.0% of revenue for 2024, and $400.4 million, or 8.2% for 2023, respectively. The decreaseincrease in salesSales and marketing expense in absolute dollars and on a percentage of revenue,dollars, excluding non-cash stock-based compensation expense, was primarily due to aincreased decreaseoccupancy inand personnel-related costs resulting from recent acquisitions, partially offset by lower agent marketing costs and areduced reductioncash-based incentives for agents. The decrease in cash-basedSales agentand incentives.marketing expense as a percentage of revenue, excluding stock-based compensation expense, was primarily driven by the increases in revenue outpacing the year-over-year increases in Sales and marketing expense.
Operations and support expense increased by $7.6$94.9 million, or 2.3%,28.4%, for 20242025 compared to 2023.2024. Included in Operations and support expense were non-cash expenses related to stock-based compensation of $37.4 million for the year ended December 31, 2025 and $16.5 million for the year ended December 31, 2024 and $16.1 million for the year ended December 31, 2023, which remained relatively flat.2024. Operations and support expense excluding such non-cash stock-based compensation expense was $318.0$392.0 million, or 5.6% of revenue for 2024,2025, and $310.8$318.0 million, or 6.4%5.6% for 2023.2024. The increase in absolute dollars, excluding such non-cash stock-based compensation expense, was primarily driven by an increase in personnel costs resultingheadcount from our acquisitions during the Company'syear recentand acquisitions.core Thebrokerage decreaseoperations. As a percentage of revenue, Operations and support expense, excluding such non-cash stock-based compensation expense, asremained agenerally percentage of revenue was primarily related to the increase in revenueconsistent compared to the prior yearprior-year period.
Research and development expense increased by $4.3$57.0 million, or 2.3%,30.2%, for 20242025 compared to 2023.2024. Included in Research and development expense were non-cash expenses related to stock-based compensation of $92.4 million for the year ended December 31, 2025 and $58.0 million for the year ended December 31, 2024 and $45.7 million for the year ended December 31, 2023. The increase in stock-based compensation expense for 2024 as compared to 2023 was primarily driven by forfeitures incurred due to the workforce reductions taken in connection with our restructuring activities in the prior year with no comparable activity in the current year.2024. Research and development expense excluding non-cash stock-based compensation expense was $153.4 million, or 2.2% of revenue for 2025, and $130.8 million, or 2.3% of revenue for 2024,2024. The increase in Research and $138.8development million,expense, orexcluding 2.8%stock-based forcompensation 2023. The decreaseexpense, in absolute dollars was primarily driven by an increase in personnel and onoutside contractor costs. As a percentage of revenuerevenue, basis,Research and development expense, excluding such non-cash stock-based compensation expense,expense wasremained primarilygenerally drivenconsistent bycompared a decrease in information technology related expenses as a result ofto the Company'sprior-year cost reduction initiatives as described in Note 17 - "Restructuring Activities" in our consolidated financial statements included elsewhere in this Annual Report.period.
General and administrative expense increaseddecreased by $39.5$20.9 million, or 31.4%,12.7%, for 20242025 compared to 2023.2024. During the year ended December 31, 2024, General and administrative expense includes a charge of $57.5 million in connection with the Antitrust Lawsuits, which is discussed in Note 11 - "“Commitments and Contingencies"” to our consolidated financial statements included elsewhere in this Annual Report. Also included in General and administrative expense were non-cash expenses related to stock-based compensation of $39.4 million for 2025 and $21.5 million for 2024 and $49.8 million for 2023. The decrease in stock-based compensation expense for 2024 as compared to 2023 was primarily driven by the modification of the Company's Chief Executive Officer's performance-based RSUs at the end of 2023.2024. General and administrative expense excluding non-cash stock-based compensation expense and the aforementioned litigation charge was $104.9 million, or 1.5% of revenue for 2025, and $86.2 million, or 1.5% of revenue for 2024, and $75.9 million, or 1.6% of revenue for 2023.2024. The increase in absolute dollars excluding such non-cash stock-based compensation expense and the litigation charge,charge was primarily due to theincreased factlegal thatfees, duringtransaction expenses incurred in connection with the yearclosing endedof Decemberthe 31,acquisition 2023,of Christie’s International Real Estate and other general and administrative costs assumed from our acquired businesses. As a percentage of revenue, General and administrative expense included a benefit of $7.2 million for tax refunds resulting from a change in estimates for certain state taxes paid in prior years. These state taxes are now included in the Benefit from income taxes line of our consolidated statements of operations. On a percentage of revenue basis,expense, excluding such non-cash stock-based compensation expense and the litigation charge, General and administrative expense remained relativelygenerally flat.consistent compared to the prior-year periods.
Anywhere merger transaction and integration expenses
Anywhere merger transaction and integration expenses during the year ended December 31, 2025 represent transaction expenses incurred in connection with Anywhere Merger. These expenses consist of transaction costs, including legal and investment banking fees, incurred in connection with our entry into the Anywhere Merger Agreement, as well as costs related to preliminary integration activities. Additional information regarding the merger is provided in Note 18 — “Subsequent Events” in our consolidated financial statements included elsewhere in this Annual Report.
Restructuring costs during the year ended December 31, 20242025 primarily consisted of lease terminations costscosts, as a result of theincluding accelerated amortization of various right-of-use assets and other related costs.costs, Restructuringas costswell during the year ended December 31, 2023 primarily consisted of lease terminations costs andas severance and other termination benefits for employees whose roles were eliminated. The year-over-year increase was primarily attributable to the absence of comparable severance charges in the prior-year period. See Note 17 -— "“Restructuring Activities"” in our consolidated financial statements included elsewhere in this Annual Report, for additional information.
Depreciation and amortization expense decreasedincreased by $7.6$30.3 million, or 8.4%,36.8%, for 20242025 compared to 2023.2024. The decreaseincrease in absolute dollars and on a percentage of revenue basis was primarily drivendue byto ahigher year-over-year decrease in the amountamortization of fixedintangible assets whosefrom depreciationacquisitions wascompleted accelerated in connection the exit of offices. The remaining decline relates to a slow down in capital expenditures when compared tosince the prior year period.year.
During the year ended December 31, 2025, investment income was $5.5 million and during year ended December 31, 2024, investment income was $6.8 million and during year ended December 31, 2023, investment income was $8.5 million. Investment income, net decreased during the year ended December 31, 20242025 as a result of the Company holding less short-term interest-bearing investments throughout the year.
Interest expense decreasedincreased by $4.4$2.6 million, or 40.7%,40.6%, for 20242025 compared to 2023.2024. The decreaseincrease from the prior year period was primarily driven by the interest expense incurred on our Revolving Credit Facility as a result of balances outstanding induring the prior year on the credit2021 facilityRevolving Credit Facility, with no comparable balance outstanding duringin the yearprior ended December 31, 2024.year.
Benefit from income taxes increased by $0.1$0.6 million, or 25.0%,120.0%, for 20242025 compared to 2023.2024. The changeincrease from the prior year primarily resulted from a partial reduction in the recognitionvaluation ofallowance deferredoffset with current tax assets in India.the United Kingdom resulting from the Christie’s International Real Estate acquisition.
Equity in income (loss) of unconsolidated entityentities
During the year ended December 31, 2024,2025, equityEquity in lossincome of unconsolidated entityentities was $0.6$7.1 million, and during the year ended December 31, 2023,2024, equityEquity in loss of unconsolidated entityentities was $3.3$0.6 million. TheseThe lossesincome areearned during the year ended December 31, 2025 was primarily driven by our share of earnings from our mortgage joint ventureventure, withOriginPoint, GuaranteedLLC, Rate,as Inc.well as income from other equity method investments acquired since the prior year.
What changed in the latest 10-Q
Risk Factors
We are subject to various risks and uncertainties, which could materially affect our business, results of operations, financial condition, future results, and the trading price of our common stock. You should read carefully the information appearing in Part I, Item 1A, Risk Factors in our 2025 Form 10-K. There have been no material changes to the risk factors set forth in our 2025 Form 10-K. However, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially adversely affect our business, financial condition and/or operating results.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
Removed heading “Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025”
Largest changes
“Excluding the impact of the Anywhere Merger, general and administrative expense was $43 million for the three months ended March 31, 2026, an increase of $16 million, or 59.3%, year-over-year. General and administrative expense for the three months ended March 31, 2026 includes a $7 million legal charge in connection with the Antitrust Litigation (see Note 11 — "Commitments and Contingencies" to the condensed consolidated financial statements, for further information). …”see in full comparison
As described under the headersee in full comparison"TCPA“Real Estate Commission Sell-Side Antitrust Litigation"” in Note 11 —"“Commitments and Contingencies"” to our condensed consolidated financial statements included elsewhere in this Quarterly Report,our remaining payment of $19$54 million in remaining settlementofpayments under theBumpusBurnett,caseMoehrl, and Nosalek cases will be due within 21 business days after all appellate rights are exhausted; the timing isexpecteduncertain, but we currently expect this tobe madeoccur inthe second quarter of2026. Additionally, as described under the header"“Real Estate Commission Buy-Side Antitrust Litigation"” in Note 11, on February 23, 2026, we agreed to pay $10 million under the Anywhere Opt-In Settlement (and paid $1 million of this obligation in March 2026, following preliminary approval by the court), andinon April 2026, weenteredagreedintoto pay $7 million under the Compass Opt-InSettlement.Settlement (and paid $1 million of this obligation in June 2026, following preliminary approval by the court). Assuming final court approval of each of the Anywhere and Compass Opt-In Settlements, we currently expect to pay the remaining settlement amounts no earlier than the fourth quarter of2026,2026althoughandthemoretiming could extend into 2027. Further, $54 millionlikely inremaining settlement payments under the Burnett, Moehrl and Nosalek cases described in Note 11 under the header "Real Estate Commission Sell-Side Antitrust Litigation" will be due within 21 business days after all appellate rights are exhausted, the timing of which is uncertain, but which we currently expect will occur in 2026.2027.
“Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025”see in full comparison
“Additionally, our company and certain funds managed or advised by Angelo, Gordon & Co., L.P. or its affiliates (collectively, “TPG”) entered into an agreement (the “Put Agreement”) under which TPG has the right, but not the obligation (the “Put Right”), to require us to purchase 100% of Parent's senior preferred equity. TPG may exercise the put at any time from the valuation date through the 54-month redemption date, and accordingly the related payment could become due in any period through that date. …”see in full comparison
“Within the discussion of Revenue and of Commissions and other related expenses, we have included Supplemental Pro Forma Revenue and Commissions and other related expenses for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through June 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. …”see in full comparison
“Additionally, we have included Supplemental Pro Forma Revenue for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through June 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. …”see in full comparison
Full comparison: every changed paragraph (98)
Our end-to-end proprietary technology platformplatform, (thebranded “CompassHome platformPlatform”), allows real estate professionals to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform. TheHome Compass platformPlatform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. TheHome Compass platformPlatform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of real estate professionals and deliver high-value recommendations and outcomes for their clients. Additionally, certain title and escrow and mortgage services are integrated and are available on the Compass platform. Currently, theHome Compass platformPlatform is only available to real estate professionals at our owned-brokerage operating under the Compass brand and isabout not yet available to other4,000 real estate professionals orat ourcertain franchiseesnon-Compass andbrokerage theirbrands, with plans to release Home Platform more broadly to all real estate professionals.professionals at our owned-brokerage in the second half of 2026 and to our franchise network in 2027. Until this future release, the majority of the real estate professionals operating under historical Anywhere brands will continue to utilize the technology-powered tools and services in place at the time of the Anywhere Merger.
As part of the Christie’s International Real Estate acquisition, we acquired a proprietary multi-tenant technology platform that is offered to our franchisees operating under the Christie’s International Real Estate brand and their real estate professionals. Real estate professionals operating under historical Anywhere brands continue to utilize the technology-powered tools and services in place at the time of the Anywhere Merger.
During the three and six months ended MarchJune 31,30, 2026, we incurred $183$34 million and $217 million of merger-related expenses, which included legal and investment banking fees, severance and other personnel costs, integration costs, and $61 million of stock-based compensation from the acceleration of converted Anywhere awards upon certain employee terminations.costs. These amounts are reported within the Anywhere merger transaction and integration expenses line of the condensed consolidated statements of operations.
Following the Anywhere Merger, the 9.75% Senior Secured Second Lien Notes and the 7.00% Senior Secured Second Lien Notes (together, the “Secured Notes”) and the 5.75% Senior Notes and 5.25% Senior Notes (together, the “Unsecured Notes”) continued as obligations of the Anywhere issuers and are reflected in the Company’s condensed consolidated financial statements for the period ended MarchJune 31,30, 2026.
The following discussion presents our results of operations on both a consolidated basis and by reportable segment for the three and six months ended MarchJune 31,30, 2026 and 2025. Our results for the three and six months ended MarchJune 31,30, 2026 include the operations of the combined company following the Anywhere Merger, which closed on January 9, 2026. Results for the three and six months ended MarchJune 31,30, 2025 reflect the historical results of Compass, Inc. on a stand-alone basis.
Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025
Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025
The following section provides analysis of our condensed consolidated statements of operations for the three and six months ended MarchJune 31,30, 2026 and 2025. References to "stand-alone Compass" refer to our results excluding the impact of the Anywhere Merger. Additional discussion of financial metrics for the Company's reportable segments follows in the "- Segment Operating Performance" section.
Within the discussion of Revenue and of Commissions and other related expenses, we have included Supplemental Pro Forma Revenue and Commissions and other related expenses for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through June 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. This pro forma financial information has not been prepared in accordance with the requirements of Article 11 of Regulation S-X or Accounting Standards Codification 805, Business Combinations, and was prepared for illustrative and informational purposes only.
Additional discussion of financial metrics for the Company's reportable segments follows in the “Segment Operating Performance” section.
On a consolidated basis, revenue was $4.3 billion and $7.0 billion during the three and six months ended June 30, 2026, respectively, an increase of $2.2 billion, or 109.0%, and an increase of $3.6 billion, or 105.2%, compared to the prior-year periods, respectively. These increases are primarily the result of the acquisition of Anywhere in January 2026. On a pro forma basis, revenue was $4.3 billion and $7.1 billion during the three and six months ended June 30, 2026, respectively, an increase of $539 million, or 14.3%, and an increase of $719 million, or 11.3%, compared to the prior-year periods, respectively. These increases are a result of higher transaction counts and higher average home sale prices across our various segments.
On a consolidated basis, revenue was $2.7 billion during the three months ended March 31, 2026, an increase of $1.3 billion, or 99.4%, compared to the prior-year period, of which $1.2 billion was attributable to the Anywhere Merger. The remaining increase of $148 million, or 10.9%, for the three months ended March 31, 2026 was primarily driven by an increase in the number of real estate professionals that joined our platform during 2025 and 2026, including those real estate professionals attributable to businesses acquired since January 2025.
Commissions and other related expenseexpenses
On a consolidated basis, commissions and other related expenses was $2.0$3.3 billion and $5.3 billion for the three and six months ended MarchJune 31,30, 2026, respectively, an increase of $903$1.6 million,billion, or 81.7%,93.0%, and $2.5 billion, or 88.5%, compared to the prior-year period.periods, Ofrespectively. thisThese increase,increases $789on millionan relatedabsolute todollar basis are primarily the result of the acquisition of Anywhere Merger.in January 2026. Including the impact of the Anywhere Merger, commissions and other related expenses as a percentage of revenue decreased to 74.3%75.6% from 81.5%81.8% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and to 75.1% from 81.7% for the six months ended June 30, 2026 and 2025, respectively. ThisThese decreasedecreases iswere primarily attributable to Anywhere'sAnywhere’s franchise and integrated services businesses, which contributed $198 million ofsignificant revenue andin 2026 but do not incur expenses classified within commissions and other related expense. Excluding the impact of Anywhere, commissions and other related expenses for stand-alone Compass as a percentage of revenue decreased to 81.1% from 81.5% for the three months ended March 31, 2026 and 2025, respectively, as a result of our other acquisitions completed in 2025, which operated with more favorable average agent splits.expenses.
On a pro forma basis, commissions and other related expenses was $3.3 billion and $5.3 billion during the three and six months ended June 30, 2026, respectively, an increase of $438 million, or 15.6%, and an increase of $581 million, or 12.3%, compared to the prior-year periods, respectively. The year-over-year increases on an absolute dollar basis are the result of increased transaction counts for our owned brokerage business. As a percentage of revenue, pro forma basis commissions and other related expenses increased from the prior-year periods. These increases are a result of changes in mix of the commission arrangements we have with our agents and changes in geographic mix.
On a consolidated basis, sales and marketing expense was $97$108 million and $205 million during the three and six months ended MarchJune 31,30, 2026, an increase of $39$47 million, or 67.2%,77.0%, and an increase of $86 million, or 72.3%, compared to the prior-year period,periods, ofrespectively. whichThe $45annual millionincreases iswere relatedprimarily todriven by increased employee compensation for marketing staff, agent advertising, and marketing costs associated with the acquired Anywhere Merger.businesses.
Excluding the impact of the Anywhere Merger, sales and marketing expense was $52 million for the three months ended March 31, 2026, a decrease of $6 million, or 10.3%, year-over-year. Sales and marketing expense for stand-alone Compass included stock-based compensation of $5 million and $7 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, sales and marketing expense for stand-alone Compass was $47 million and $51 million for the three months ended March 31, 2026 and 2025, respectively, representing a 7.8% decrease and comprising 3.1% and 3.8% of revenue. The year-over-year decrease in absolute dollars was primarily driven by lower cash-based incentives and marketing expenses for our stand-alone Compass real estate professionals. The decrease as a percentage of revenue reflects both the aforementioned lower costs and higher revenue year-over-year.
On a consolidated basis, operations and support expense was $398$429 million and $827 million during the three and six months ended MarchJune 31,30, 2026, an increase of $266$284 million, or 202%,195.9%, and $550 million, or 198.6%, compared to the prior-year period,periods, ofrespectively. whichThe $250annual millionincreases iswere primarily driven by the increased operating expenses related to employee compensation, occupancy, and other operating items as a result of the Anywhereaddition Merger.of Anywhere.
Excluding the impact of the Anywhere Merger, operations and support expense was $148 million for the three months ended March 31, 2026, an increase of $16 million, or 12.1%, year-over-year. Operations and support expense for stand-alone Compass included stock-based compensation of $9 million and $5 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, operations and support expense for stand-alone Compass was $139 million and $127 million for the three months ended March 31, 2026 and 2025, respectively, representing a 9.4% increase and comprising 9.2% and 9.4% of revenue. The year-over-year increase in absolute dollars was primarily driven by higher personnel expenses resulting from increased headcount related to our 2025 acquisitions. As a percentage of revenue, operations and support expense for the stand-alone Compass business remained relatively flat year-over-year.
On a consolidated basis, technology and development expense was $119$109 million and $228 million during the three and six months ended MarchJune 31,30, 2026, an increase of $69$46 million, or 138%,73.0%, and $115 million, or 101.8%, compared to the prior-year period,periods, respectively. The annual increases were primarily driven by the addition of whichAnywhere's $60employee millioncompensation, issoftware, relatedand toinformation thetechnology Anywhereinfrastructure Merger.costs.
Excluding the impact of the Anywhere Merger, technology and development expense was $59 million for the three months ended March 31, 2026, an increase of $9 million, or 18.0%, year-over-year. Technology and development expense for stand-alone Compass included stock-based compensation of $19 million and $13 million for the three months ended March 31, 2026 and 2025, respectively. Excluding stock-based compensation, technology and development expense for stand-alone Compass was $40 million and $37 million for the three months ended March 31, 2026 and 2025, respectively, representing a 8.1% increase and comprising 2.7% of revenue in both periods. The year-over-year increase in absolute dollars was primarily driven by higher personnel expenses from increased headcount as we continue to invest in our platform.
On a consolidated basis, general and administrative expense was $81$93 million and $174 million during the three and six months ended MarchJune 31,30, 2026, an increase of $54$59 million, or 200%,173.5%, and $113 million, or 185.2%, compared to the prior-year period,periods, ofrespectively. whichOf $38this increase, $52 million and $90 million is related to the Anywhere Merger.Merger for the three and six months ended June 30, 2026, respectively. The annual increases were primarily driven by the addition of Anywhere's general and administrative functions.
Excluding the impact of the Anywhere Merger, general and administrative expense was $43 million for the three months ended March 31, 2026, an increase of $16 million, or 59.3%, year-over-year. General and administrative expense for the three months ended March 31, 2026 includes a $7 million legal charge in connection with the Antitrust Litigation (see Note 11 — "Commitments and Contingencies" to the condensed consolidated financial statements, for further information). General and administrative expense for stand-alone Compass also includes stock-based compensation of $11 million and $6 million for the three months ended March 31, 2026 and 2025, respectively. Excluding the legal charge and stock-based compensation, general and administrative expense for stand-alone Compass was $25 million and $21 million for the three months ended March 31, 2026 and 2025, respectively, and comprised 1.7% and 1.5% of revenue. The year-over-year increase in absolute dollars and as a percentage of revenue for stand-alone Compass general and administrative expense was immaterial.
Anywhere merger transaction and integration expenses during the three and six months ended MarchJune 31,30, 2026 represents transaction and integration costs incurred in connection with the Anywhere Merger. These costs were comprised of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. In addition, wethe Company incurred $61 million in stock-based compensation expense of $3 million and $64 million for the three and six months ended June 30, 2026, respectively, primarily related to the acceleration of certain Anywhere equity awards. These awards that were converted to Company equity awards in connection with the Anywhere Merger and subsequently accelerated upon the termination of certain employees.
Restructuring costs were $6$2 million and $9$8 million during thefor three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively. These costs primarily consisted of lease termination costs and other related costs pertaining to restructuring programs initiated prior to the Anywhere Merger.
Depreciation and amortization expense increased $134$124 million, or 462%,427.6%, for the three months ended MarchJune 31,30, 2026 compared to the prior-yearthree period.months ended June 30, 2025 and increased $258 million, or 444.8%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The year-over-year increase was primarily attributable to the Anywhere Merger, with the acquired Anywhere businesses contributing $137$128 million ofand depreciation$265 million to the three and amortizationsix expense,months ofended whichJune $11330, million2026, related to acquired intangible assets.respectively.
Investment income increased during the three and six months ended MarchJune 31,30, 2026 primarily as a result of an increase in our average short-term interest-bearing investments as compared to the three and six months ended MarchJune 31,30, 2025.
Interest expense was $37$41 million and $78 million for the three and six months ended MarchJune 31,30, 2026, an increase of $35$38 million year-over-year.and $73 million, respectively. The increase was primarily attributable to the Anywhere Merger, with assumed debt contributing $35$36 million and $71 million for the three and six months ended June 30, 2026, respectively, of interest expense during the current period.
Income tax (expense) benefit
For the three months ended MarchJune 31,30, 2026, Incomeincome tax expense increased by $5 million. For the six months ended June 30, 2026, income tax benefit increased by $398$393 million when compared to the three months ended March 31, 2025.million. The benefitexpense during the three months ended MarchJune 31,30, 2026 primarily resulted from state and foreign income taxes. The benefit during the six months ended June 30, 2026 was primarily the result of a $401 million one-time, non-cash deferred tax benefit related to the reversal of valuation allowances on our deferred tax assets. This reversal was related to the establishment of deferred tax liabilities for the recognition of intangible assets created throughfrom the Anywhere Merger that are non-deductible for tax purposes.
During the three and six months ended MarchJune 31,30, 2026, Equity in income of unconsolidated entities was income of $5$10 million and $15 million, respectively. The increase compared to $1 million in the priorprior-year year period. The year-over-year increaseperiods was primarily attributable to our mortgage rate joint ventures.
The following section provides analysis of Adjusted EBITDA and Adjusted EBITDA margin on a consolidated basis for the three and six months ended MarchJune 31,30, 2026 and 2025. References to "“stand-alone Compass"” refer to our consolidated results excluding the impact of the Anywhere Merger. Adjusted EBITDA is a non-GAAP financial measure that represents Net income (loss) attributable to Compass, Inc., adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, benefit from income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, (iii) transaction and integration expenses associated with the Anywhere Merger, and (iv) other acquisition-related expenses. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue.
(1)Represents transaction expenses incurred in connection with the closing of the Anywhere Merger and related integration activities. During the three and six months ended MarchJune 31,30, 2026, these expenses consist of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. Additional information regarding the Anywhere Merger is provided in Note 3 — “Acquisitions” to our condensed consolidated financial statements included elsewhere in this Quarterly Report.
(3)Represents a charge of $7 million incurred during the threesix months ended MarchJune 31,30, 2026 in connection with the Antitrust Lawsuits. See Note 11 –— “Commitments and Contingencies” to the consolidated financial statements included elsewhere in this Quarterly Report for more information.
Consolidated Adjusted EBITDA was $363 million and $125 million during the three months ended June 30, 2026 and 2025, respectively, and $424 million and $141 million during the six months ended June 30, 2026 and 2025, respectively. The year-over-year improvements in Adjusted EBITDA were primarily driven by the addition of Anywhere, higher stand-alone Compass revenue from increased transaction counts, and continued cost management and synergies.
Consolidated Adjusted EBITDA was $61 million and $16 million during the three months ended March 31, 2026 and 2025, respectively. The improvement in Adjusted EBITDA during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was partially driven by $21 million attributable to the acquisition of Anywhere. The remaining $24 million improvement was driven by a $148 million increase in stand-alone Compass revenue that outpaced the increase in operating expenses. The year-over-year increase in revenue was primarily attributable to the growth in productive real estate professionals on our platform.
Effective January 9, 2026, in connection with the Anywhere Merger, the Company realigned its operating segments to reflect how the Chief Operating Decision Maker ("“CODM"”) allocates resources and assesses performance. The Company now operates through three reportable segments: Brokerage;Brokerage, Franchise;Franchise, and Integrated Services, which includes relocation services (provided by Cartus).
The CODM evaluates segment performance and allocates resources based on Segment Revenue and Segment Adjusted EBITDA, a non-GAAP measure. Segment Adjusted EBITDA represents net income (loss) attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, benefit from income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, and (iii) transaction and integration expenses associated with the Anywhere Merger. Segment Adjusted EBITDA margin is calculated by dividing Segment Adjusted EBITDA by segment revenue.
The segment information presented belowherein reflects the same reportable segments and performance measures reviewed by the CODM and is consistent with the segment information disclosed in Note 17 — "“Segment Information",” to the condensed consolidated financial statements. The following table summarizes revenue, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin by segment for the periods indicated, each of which is described below (in millions, except percentages):
Additionally, we have included Supplemental Pro Forma Revenue for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through June 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. This pro forma financial information has not been prepared in accordance with the requirements of Article 11 of Regulation S-X or Accounting Standards Codification 805, Business Combinations, and was prepared for illustrative and informational purposes only.
Certain amounts in Anywhere's historical financial statements have been reclassified to conform to the Company's new segment-level disclosure format, effective for the three months ended March 31, 2026. These reclassifications include (i) the reclassification of relocation revenue related to the Cartus business to Integrated Services, such that Integrated Services revenue now comprises relocation revenue in addition to title and escrow revenue and (ii) the elimination of intercompany royalty revenue earned by the Franchise business from the Brokerage segment.
The following table summarizes revenue, Segment Adjusted EBITDA, Segment Adjusted EBITDA margin, and pro forma revenue by segment for the periods indicated, each of which is described below (in millions, except percentages):
Brokerage revenue increased $1.9 billion, or 96.7% for the three months ended June 30, 2026 and $3.1 billion, or 92.4% for the six months ended June 30, 2026, compared to the prior periods. The year-over-year increase was primarily driven by the addition of Anywhere and higher transaction counts resulting from growth in the number of real estate professionals operating on Compass's platform. On a pro forma basis, Brokerage revenue increased 14.9% and 11.8% for the three months and six months ended June 30, 2026, respectively, as compared to the prior year periods. These increases are driven by higher transaction counts and average selling prices from our owned-brokerage real estate professionals.
Brokerage revenue increased $1.1 billion, or 85.8%, compared to the prior period, of which $1.0 billion was attributable to Anywhere. The remaining increase of $137 million, or 10.3%, was primarily driven by higher transaction count resulting from growth in the number of real estate professionals operating on Compass's platform year-over-year.
Brokerage Segment Adjusted EBITDA was $147$377 million for the three months ended MarchJune 31,30, 2026 and $524 million for the six months ended June 30, 2026, representing an increase of $84$214 million, or 133.3%,131.3% for the three months ended June 30, 2026, and $298 million, or 131.9%, for the six months ended June 30, 2026, compared to the prior-year period, of which $57 million is attributable to the Anywhere Merger.periods. The remainingyear-over-year increase of $27 million, or 42.9%, was primarily driven by the addition of Anywhere and revenue growth outpacing the increase in operating costs. Segment Adjusted EBITDA margin increased to 6.0%9.5% for the three months ended June 30, 2026 and 8.2% for the six months ended June 30, 2026 from 4.7%8.1% year-over-year,for the three months ended June 30, 2025 and 6.8% for the six months ended June 30, 2025, reflecting the same dynamic.
Franchise revenue increased $127 million and $211 million for the three and six months ended June 30, 2026, respectively, as compared to the prior-year periods. These increases are primarily driven by the addition of the Anywhere franchise business. On a pro forma basis, Franchise revenue increased 7.1% and 3.1% for the three and six months ended June 30, 2026, respectively, as compared to the prior-year periods. These increases were primarily driven by higher transaction counts and average selling prices from our franchisee's real estate professionals.
Franchise revenue and Segment Adjusted EBITDA increased $84 million and $44$128 million,million for the three and six months ended June 30, 2026, respectively, compared to the prior-year period,periods, substantially all of which was attributable to the Anywhere Merger. Stand-alone Compass had minimal franchise operations prior to the merger, and Anywhere's franchise business accounts for substantially all of the current-period results. Segment Adjusted EBITDA margin was 51.1%64.4% and 59.1% for the three and six months ended MarchJune 31,30, 2026, respectively, compared to 33.3%37.5% and 35.7% in the prior-year period,periods, respectively, reflecting the margin profile of the combined Franchise segment following the merger.
Integrated Services revenue and Segment Adjusted EBITDA increased $125$172 million and $11$297 million,million for the three and six months ended June 30, 2026, respectively, as compared to the prior-year period,periods. substantiallyThese allincreases are primarily driven by the addition of which was attributable to the Anywhere Merger. Stand-alone Compass had smaller integrated services operationsbusiness. prior to the merger. AsOn a result,pro Anywhere'sforma integratedbasis, servicesIntegrated businessesServices accountrevenue forincreased substantially7.7% alland of the current-period results. Segment Adjusted EBITDA margin was 8.8%8.9% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to 9.1% in the prior-year period.periods. These increases were primarily driven by higher title and escrow transaction counts.
Integrated Services Segment Adjusted EBITDA increased $38 million and $49 million for the three and six months ended June 30, 2026, respectively, compared to the prior-year periods, substantially all of which was attributable to the Anywhere Merger. Because stand-alone Compass had smaller integrated services operations prior to the merger, Anywhere's integrated services businesses account for substantially all of the current-period results. Segment Adjusted EBITDA margin was 24.6% and 18.2% for the three and six months ended June 30, 2026, respectively, compared to 35.9% and 26.2% in the prior-year periods, respectively, reflecting the margin profile of the combined Integrated Services segment following the merger.
For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, unallocated corporate expenses were $145$153 million and $51$298 million, respectively, compared to $55 million and $106 million in the prior-year periods, respectively, representing aincreases $94of $98 million, or 184.3%,178.2%, increase,and of$192 whichmillion, $88or million181.1%, respectively. These annual increases are the result of the increaseadditional wasexpenses attributableincurred toby the corporate functions acquired during the Anywhere Merger.
The following key business metrics provide insight into the operating activity underlying the Company's financial results for the three and six months ended MarchJune 31,30, 2026 and 2025. These metrics reflect transaction volume, pricing trends, real estate professional and franchise activity, and title-relatedtitle and escrow services associated with residential real estate transactions. Certain metrics are more relevant to specific reportable segments due to differences in operating models, and the discussion below is organized by reportable segment to reflect that context. These metrics are presented to explain operating trends and activity levels and are not intended to represent measures of segment financial performance.
In addition to actual results, the following discussion includes the Company's key business metrics on a pro forma basis. Pro forma metrics reflect the combined operations of Compass and Anywhere as if the acquisition had occurred on January 1, 2025, and therefore include Anywhere's results across all periods presented. Because the acquisition actually closed on January 9, 2026, the pro forma metrics for the six months ended June 30, 2026 incorporate Anywhere's results for the first eight days of January 2026 prior to closing.
The following table summarizes the Brokerage segment's key business metrics on an actual and non-GAAPpro financialforma measuresbasis for the periods indicated, each of which is described below:
Total Transactions represents the sum of all transactions closed by our Brokerage segment during the periodperiods in which our real estate professional represented the buyer or seller in the purchase or sale of a home. A single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Total Transactions as a key measure of the scale of our Brokerage platform,operations, which drives our financial performance.
Total Transactions increased to 153,009 for the three months ended June 30, 2026 and 252,513 for the six months ended June 30, 2026. On a pro forma basis, Total Transactions increased by 10,505, or 7.4%, for the three months ended June 30, 2026, and increased by 13,070, or 5.4% for the six months ended June 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma Total Transactions primarily reflects higher market activity for the geographies and markets our owned-brokerage real estate professionals support.
Total Transactions increased to 99,504 for the three months ended March 31, 2026, representing a 103% increase compared to the same period in the prior year. The year-over-year increase was primarily attributable to the Anywhere Merger which contributed 96% of the total increase. Excluding Anywhere, stand-alone Compass transactions grew 6% year-over-year, reflecting an increased presence of productive agents on the Compass platform driven largely by prior-year acquisitions.
Gross Transaction Value represents the sum of all closing sale prices for homes transacted by real estate professionals within our Brokerage segment during the period.periods. The value of a single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Gross Transaction Value as a key measure of the scale of our Brokerage platformoperations and the success of our real estate professionals, both of which ultimately impact revenue.
Gross Transaction Value increased to $155.2 billion for the three months ended June 30, 2026, and $252.6 billion for the six months ended June 30, 2026. On a pro forma basis, Gross Transaction Value increased by $21.3 billion, or 15.9%, for the three months ended June 30, 2026, and increased by $28.0 billion, or 12.4%, for the six months ended June 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma Gross Transaction Volume was primarily driven by a higher number of transactions completed by our owned-brokerage real estate professionals, as well as a higher average sales price on those transactions.
Gross Transaction Value increased to $97.3 billion for the three months ended March 31, 2026, representing an 86% increase compared to the same period in the prior year. The year-over-year increase was primarily attributable to the Anywhere Merger which contributed 75% of the total increase. Excluding Anywhere, stand-alone Compass Gross Transaction Value grew 11% year-over-year, reflecting an increase in productive agents real estate professionals on the Compass platform driven largely by prior-year acquisitions and higher average sales price.
The following table summarizes the Franchise segment's key business metrics on an actual and non-GAAPpro financialforma measuresbasis for the periods indicated, each of which is described below:
COMP insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (1 insider, 3 trade dates, 70,368 shares, about $748.4K; 3 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -70,368 (purchases minus sales); net value about -$748.4K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-15 | Gustavson Timothy B. |
Shares withheld for tax | 1,176 | $10.65 | $12.5K |
| 2026-09-15 | Gustavson Timothy B. |
Option exercise | 2,299 | — | — |
| 2026-09-15 | Glass Ethan Charles |
Shares withheld for tax | 50,970 | $10.65 | $542.8K |
| 2026-09-15 | Glass Ethan Charles |
Option exercise | 101,734 | — | — |
| 2026-09-15 | Wahlers Scott R. |
Shares withheld for tax | 24,297 | $10.65 | $258.8K |
| 2026-09-15 | Wahlers Scott R. |
Option exercise | 47,466 | — | — |
| 2026-08-03 | Sordello Steven J |
Option exercise | 2,419 | — | — |
| 2026-08-03 | Reffkin Robert L. |
Open-market sale |
23,456 | $11.70 | $274.4K |
| 2026-07-01 | Reffkin Robert L. |
Open-market sale |
23,456 | $12.51 | $293.4K |
| 2026-06-15 | Gustavson Timothy B. |
Option exercise | 2,299 | — | — |
| 2026-06-15 | Gustavson Timothy B. |
Shares withheld for tax | 1,176 | $8.59 | $10.1K |
| 2026-06-15 | Glass Ethan Charles |
Option exercise | 101,733 | — | — |
| 2026-06-15 | Glass Ethan Charles |
Shares withheld for tax | 50,970 | $8.59 | $437.8K |
| 2026-06-15 | Wahlers Scott R. |
Shares withheld for tax | 24,233 | $8.59 | $208.2K |
| 2026-06-15 | Wahlers Scott R. |
Option exercise | 47,466 | — | — |
| 2026-06-11 | Mccarter Josh N. |
Gift | 35,288 | — | — |
| 2026-06-11 | Mccarter Josh N. |
Gift | 35,288 | — | — |
| 2026-06-03 | Reffkin Robert L. |
Open-market sale |
22,856 | $7.68 | $175.5K |
| 2026-06-03 | Reffkin Robert L. |
Open-market sale |
600 | $8.28 | $5.0K |
| 2026-05-14 | Martell Frank |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Leinwand Allan |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Phillips Jr Charles E |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Sordello Steven J |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Thomas-Graham Pamela |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Williams Dawanna |
Option exercise | 35,288 | — | — |
| 2026-05-14 | Mccarter Josh N. |
Option exercise | 35,288 | — | — |
| 2026-05-01 | Sordello Steven J |
Option exercise | 2,773 | — | — |
Well-known investors holding COMP (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D1 Capital Partners (Dan Sundheim) | 2026-06-30 | 15,224,831 | $187.7M | 0.54% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,937,662 | $23.9M | 0.01% | Added 47% |
| Two Sigma Investments | 2026-06-30 | 954,491 | $11.8M | 0.01% | Reduced 17% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 877,253 | $10.8M | 0.02% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 539,475 | $6.7M | 0.0% | Reduced 95% |
| Renaissance Technologies | 2026-06-30 | 401,639 | $5.0M | 0.01% | Reduced 90% |
| Millennium Management (Israel Englander) | 2026-06-30 | 384,828 | $4.7M | 0.0% | Reduced 93% |
| D. E. Shaw & Co. | 2026-06-30 | 139,805 | $1.7M | 0.0% | Reduced 65% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 18,719 | $230.8K | 0.0% | Reduced 40% |