Compass Posts $150 Million Loss In First Quarter Of 2023
Citing the sharpest decline in residential real estate transactions in U.S. history in its preamble to first quarter data, Compass has posted its latest earnings report, highlighting a challenging time for the brand.
“During this time, we increased our market share in the fourth quarter of 2022, and we’ve done so again in the first quarter of 2023,” said Robert Reffkin, Founder and Chief Executive Officer of Compass. “Our non-GAAP Commissions expense as a percentage of revenue improved by approximately 27 basis points from the first quarter of last year to 81.4 percent, when excluding the impact of the Agent Equity Program. We continue to benefit from taking decisive action with our expense reduction initiatives starting in early 2022. We are on schedule to achieve positive free cash flow in 2023, starting with Q2.”
Compass’ Q1 revenue decreased by 31 percent percent year-over-year to $957 million as transactions declined 24 percent, which was attributable to lower industry-wide transactions. Net loss for the quarter was $150 million, an improvement from a Net loss of $188 million in Q1 2022.
The brand’s national market share in Q1 2023 was 4.5 percent, up 17 basis points sequentially from Q4 2022. The average number of principal agents was 13,515 for Q1 2023, an increase of 721 principal agents, 6 percent, from Q1 2022.
Compass agents closed 35,886 Total Transactions in Q1 2023, a decline of 24 percent compared to Q1 2022.