Compass was able to bury some of its tougher Q2 data amidst a pretty standout revelation: the brokerage was cash flow positive by the end of the second quarter of the year. According to its just-released earnings report, Compass says it brought in $51 million more than it spent, marking the first time the company has been cash flow positive since going public in 2021.
That doesn’t mean Compass avoided the impact of a slow residential market, though. Revenue decreased by 26 percent year-over-year to $1.5 billion as transactions declined 19 percent in Q2. The company had a net loss of $48 million, an improvement of 53 percent from a net loss of $101 million one year ago.
“Compass continued to enhance its proprietary end-to-end platform with the launch of new features like Performance Tracker, Compass GPT integration as well as 1-click Title & Escrow,” said Robert Reffkin, Founder and Chief Executive Officer of Compass. “The non-GAAP Commissions expense as a percentage of revenue improved by approximately 38 basis points from the second quarter of last year when excluding the impact of the Agent Equity Program on the year ago period. High levels of principal agent retention continued with over 90% annualized retention in Q2 2023. Every month in the first half of the year, the number of principal agents the Company lost was less than the month before.”
Compass’ national market share in Q2 2023 was 4.6 percent, up 13 basis points sequentially from Q1 2023. This marks the third consecutive quarter of market share gains, increasing 45 basis points over the period. The brokerage’s average number of Principal Agents was 13,633 for Q2 2023, an increase of 429 principal agents from Q2 2022.