Final second quarter numbers are trickling in this week, and today Compass finally gave investors and the public a look into their Q2 losses.
According to a just-released earnings report, Compass took a net loss of $101 million, compared to a loss of $7 million in the second quarter of 2021. The net loss includes non-cash stock based compensation expenses of $59 million, depreciation and amortization of $25 million, and restructuring charges due to the cost saving actions of $19 million.
It wasn’t all bad news for the brokerage, however, as revenue was up 4 percent year-over-year to a second quarter record of $2 billion.
“This performance highlights the strength of our agents and our commitment to enabling their success through superior technology and other programs”, said Robert Reffkin, Compass CEO. “Importantly, we expect to have our end-to-end technology platform fully deployed by the end of the quarter. This is a major milestone in our approximately $900 million investment in software over the years to benefit our agents.
“Given the challenges the real estate market has faced so far this year and the likelihood that this difficult environment will continue for the foreseeable future, we are announcing a significant cost reduction program,” Reskin added. “We have line of sight into each area that will drive these savings to our expenses, which we believe will enable us to be free cash flow positive in 2023. We expect to complete all targeted cost reductions by the end of this calendar year.”
With that, Compass’ outlook for Q3 includes revenue of $1.4-1.5 billion, with adjusted earnings to the tune of $60 million.
Back to Q2 numbers, Compass reports that it increased its national market shared to 4.6 percent over the last twelve months, up from 4.1 percent in 2Q of 2021. The company also added 405 agents since last quarter.