Will Compass Real Estate ever be profitable?

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Will Compass Real Estate ever be profitable?

Compass reported a GAAP net loss of $4.6 million for the third quarter of 2025, but the loss was primarily due to one-time transaction expenses related to its planned mega-merger with Anywhere Real Estate. Excluding these expenses, Compass would have posted a positive net income.

The company issued a “bullish” forecast for the Anywhere deal, with CEO Robert Reffkin reaffirming expectations for the merger to close in the second half of 2026 and for the combined company to achieve over $300 million in net cost synergies.

Key Details from the Q3 2025 Report:

Net Loss: The reported GAAP net loss of $4.6 million for Q3 2025 was a slight increase from the $1.7 million net loss in Q3 2024. This loss includes $7.5 million in transaction and integration expenses related to the Anywhere merger.
Adjusted EBITDA: On a non-GAAP basis, which excludes merger costs and stock-based compensation, Compass achieved a record Q3 adjusted EBITDA of $93.6 million, an 80% increase year-over-year.
Revenue and Growth: The company reported record third-quarter revenue of $1.85 billion, a 23.6% increase year-over-year, significantly outpacing the overall U.S. residential real estate market’s 2% growth in transactions.
Agent Performance: Compass added a record 851 principal agents organically in the quarter and maintained a high retention rate of 97.3%.
Merger Outlook: Reffkin expressed strong confidence in the Anywhere Real Estate merger, highlighting the potential for significant cost synergies and the strategic advantage it will provide. The deal is an all-stock transaction and is currently in the regulatory process, with an expected closing in the latter half of 2026.

In essence, while the official GAAP accounting showed a net loss, the underlying operational metrics and the outlook for the Anywhere merger presented a highly optimistic picture to investors, leading to a positive market reaction