Compass, Inc., the nation’s largest real estate brokerage by sales volume, reported its revenue hit $1.4 billion in the first quarter of 2025, a jump of 28.7% year-over-year, brokerage executives announced Thursday during its Q1 earnings call.
The tech-focused brokerage said the positive revenue growth was driven by a 27.8% increase in transactions year-over-year despite a 2.1% housing market decline. While Compass posted a net loss of $50.7 million for Q1 2025, it’s a notable improvement on the $132.9 million loss in the same period last year. Adjusted EBITDA reached $15.6 million, compared to $20.1 million in the red in Q1 2024.
Despite the company’s strong first quarter results, Compass executives found themselves in the hot seat with investors who pressed them on the brokerage’s “3-Phased Price Discovery and Marketing Strategy.” This listing approach markets sellers’ properties within the Compass broker network first before eventually marketing them on the Multiple Listing Service (MLS).
When an investor asked if the exclusive listing strategy is still intact with the National Association of REALTORS® (NAR) upholding its controversial Clear Cooperation Policy (CCP), Compass Founder and CEO Robert Reffkin noted that the policy isn’t law. He added that NAR made a specific exception within its guidelines that allows Compass to move forward with its private exclusive marketing strategy.
“Homeowners are looking for more choice; they’re not looking for less choice,” Reffkin told investors on the earnings call. “Compass supports homeowner choice, and the Compass three-phase marketing strategy does exactly that. Instead of just one launch, you get three launches, and you get a test price privately without the risk of days on market or price drops.”
Reffkin noted that 36% of single-family homes currently on the market show a price drop, making them look like “damaged goods.”
“When it’s a Compass private exclusive, it comes on as ‘coming soon,’” Reffkin said. “There’s no days on market. There’s no price-drop history, and so it protects homeowners from that risk.”
Although Compass isn’t the only brokerage that lists homes off-market, the practice has become a signature part of how its agents market home listings. However, the move has drawn significant backlash from many industry leaders who argue the practice is exclusionary and further erodes consumer trust in real estate agents. Critics also worry that it could lead to potential fair housing issues and put smaller, independent brokerages at a disadvantage.
Other brokerage leaders have instead toed the line, supporting the broad commitment to transparency but affirming their flexibility with private listing networks.
In April, Zillow, the No. 1 search platform for U.S. real estate, unveiled a new policy that bans private listings from showing on its website if properties are listed for sale in private networks more than 24 hours before appearing on the MLS.
The potential impact of Zillow’s policy on Compass and other brokerages using a similar private listing strategy could be significant, setting up a real estate showdown. In its own Q1 earnings report, Zillow claimed an average of 224 million unique monthly visitors to its platform, far and away the most popular consumer portal by that metric.
During the call, Reffkin continued to claim that Compass’ private exclusive strategy gives sellers more options and better outcomes. According to the earnings release, the company’s internal analysis found that homes premarketed through its exclusive listings strategy were associated with a 2.9% higher average close price compared to properties not premarketed.
“The worst thing that happens is a homeowner gets an offer and they have an opportunity to turn it down and go to the public sites with the benefit of price discovery from premarketing,” Reffkin told investors. “That’s the downside, which means there is no downside. You don’t have to take an offer. You can always just reject the offer and go to the public sites with the benefit of premarketing.”
Another investor asked Reffkin what his yardstick for success is for Compass’ private exclusive strategy. In addition to giving sellers more choice, Reffkin explained it’s a point of differentiation for Compass agents to stand out from the pack.
“The unintended consequence of NAR rules like CCP are agents all look the same on their own listings, their names are almost invisible on third-party sites,” Reffkin said, noting that agents’ photos or videos are usually stripped out of listings.
“With the Compass three-phase marketing strategy, it helps them differentiate instead of a one-size-fits-all world where every agent works with their sellers, puts it in the MLS and that’s all. That’s their marketing plan.”
In looking back at the brokerage’s first quarter performance, Kalani Reelitz, chief financial officer with Compass, touted the company’s 6% marketshare, up 125 basis points compared to the same period a year ago and an increase of 95 basis points from the previous quarter.
Compass’ M&A activity was also a silver lining, contributing to an increase of 14.6% in year-over-year revenue growth, Reelitz said during the call.
Reelitz noted the “strong” year-over-year growth was near the low end of guidance for the quarter because of the slowdown in late March “due to market uncertainty driven by tariff discussions,” he said.
In the second quarter, Compass forecasts revenue between $2 billion and $2.15 billion with adjusted EBITDA of $115 million to $135 million. The company expects to remain free cash flow positive for all of 2025.
At press time Friday, Compass stock was trading at $6.30.
