Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026 for Compass, Inc. The reporting period is significantly impacted by the completion of the Anywhere Merger on January 9, 2026, which combined Compass with Anywhere Real Estate Inc. Following the merger, the Company operates through three reportable segments: Brokerage, Franchise, and Integrated Services. The Company serves a global network of over 340,000 real estate professionals across owned-brokerage and franchise businesses.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Revenue | $4,306 million | $7,010 million |
| Net Income (Attributable to Compass) | $92 million | $114 million |
| Adjusted EBITDA | $363 million | $424 million |
| Operating Cash Flow | Filing text does not provide a clear value for the three-month period | $34 million |
| Cash and Cash Equivalents | $694 million (as of June 30, 2026) | $694 million (as of June 30, 2026) |
| Total Debt (Long-term) | $3,140 million | $3,140 million |
| Securitization Obligations | $191 million | $191 million |
| Net Income Margin | 2.1% | 1.6% |
| Adjusted EBITDA Margin | 8.4% | 6.1% |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 109.0% year-over-year for the three months ended June 30, 2026, and 105.2% for the six-month period. This growth is primarily attributable to the inclusion of Anywhere's operations following the January 2026 merger. On a pro forma basis, revenue increased 14.3% (Q2) and 11.3% (YTD).
- Profitability: The Company reported net income of $92 million for Q2 2026, compared to $39 million in Q2 2025. For the six months ended June 30, 2026, net income was $114 million, a significant improvement from a net loss of $12 million in the prior year period.
- Expense Structure: Operating expenses increased significantly due to the merger. Commissions and other related expenses rose 93.0% (Q2) and 88.5% (YTD). Depreciation and amortization increased 427.6% (Q2) and 444.8% (YTD) due to acquired intangible assets.
- Debt Profile: Long-term debt increased from $0 at December 31, 2025, to $3,140 million at June 30, 2026, reflecting the assumption of Anywhere's debt and the issuance of $1.0 billion in Convertible Senior Notes.
- Segment Performance:
- Brokerage: Revenue $3,960 million (Q2); Adjusted EBITDA $377 million.
- Franchise: Revenue $135 million (Q2); Adjusted EBITDA $87 million.
- Integrated Services: Revenue $211 million (Q2); Adjusted EBITDA $52 million.
Guidance, Outlook, Risks, and Unusual Items
- Merger Integration: The Company incurred $34 million in merger transaction and integration expenses for Q2 2026 and $217 million for the six-month period. These costs include legal fees, severance, and stock-based compensation related to accelerated awards.
- Legal Contingencies: The Company is involved in significant antitrust litigation.
- Sell-Side: A $54 million settlement payment related to the Anywhere Settlement is expected in 2026 pending appellate rights exhaustion.
- Buy-Side: The Company agreed to pay $10 million (Anywhere Opt-In) and $7 million (Compass Opt-In) in settlements. Partial payments have been made, with remaining amounts expected in late 2026 or 2027.
- Debt Covenants: The Company maintains a Revolving Credit Facility with a Total Net Leverage Ratio covenant of no greater than 5.00 to 1.00, stepping down to 4.50 to 1.00 by December 31, 2027. As of June 30, 2026, the Company was in compliance.
- Forward-Looking Risks: Key risks include the ability to successfully integrate Anywhere, high mortgage interest rates, low home inventory, regulatory challenges regarding antitrust and independent contractor classification, and the impact of AI technologies on the real estate industry.
Investor Verification Checklist
- Merger Synergies: Verify the timeline and progress of cost synergies and integration benefits anticipated from the Anywhere Merger.
- Debt Service Capacity: Assess the Company's ability to service approximately $3.1 billion in long-term debt maturities between 2029 and 2031, including interest payments on fixed-rate notes.
- Antitrust Exposure: Monitor the status of appeals regarding the Compass and Anywhere antitrust settlements and potential for additional "copycat" litigation.
- Pro Forma Performance: Review pro forma metrics to understand organic growth trends excluding the one-time impact of the acquisition.
- Convertible Notes: Evaluate the dilution impact of the $1.0 billion 0.25% Convertible Senior Notes due 2031 and the effectiveness of the associated Capped Call Transactions.