Q2 2025 Compass Inc Earnings Call

July 30, 2025

Session. If you would like to ask a question. Please raise your hand, if you have dialed in to today's call. Please press star nine to raise your hand and star six to on mute I will now hand, the conference over to so hambone play head of Investor Relations. Please go ahead.

Operator: After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Soham Bhonsle, Head of Investor Relations. Please go ahead.

Thank you very much operator, and good afternoon, everybody and thank you for joining the company second quarter 2025 earnings call joining us today will be Robert Raskin, our founder and CEO and Columbia, <unk>, Our Chief Financial Officer.

Soham Bhonsle: Thank you very much, operator. Good afternoon, everybody. Thank you for joining the Compass Q2 2025 earnings call. Joining us today will be Robert Reffkin, our Founder and CEO, and Kalani Reelitz, our Chief Financial Officer. In discussing our company's performance, we will refer to some non-GAAP measures. You can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in our Q2 2025 earnings release posted on our investor relations website. Any discussion regarding organic revenue, organic transactions, or organic GTV excludes any activity from businesses we acquired since 1 April 2024. We will make forward-looking statements that are based on our current expectations, forecasts, and assumptions, and involve risks and uncertainties.

In discussing our company's performance, we will refer to some non-GAAP measures.

Can find the right completion of these non-GAAP measures to the most directly comparable GAAP measures in our second quarter 2025 earnings release posted on our Investor Relations website.

Any discussion regarding organic revenue organic transactions or organic GTD excludes any activity from businesses. We acquired since April one 2024.

We will make forward looking statements that are based on our current expectations forecasts and assumptions and involve risks and uncertainties.

Soham Bhonsle: We will make forward-looking statements that are based on our current expectations, forecasts, and assumptions, and involve risks and uncertainties. These statements include our guidance for Q3 2025 and full year 2025, including comments related to our expected financial results, operating expenses, and free cash flow, as well as our expectations for operational achievements. Our actual results may differ materially from these statements.

These statements include our guidance for the third quarter of 2025, and full year 2025, including comments related to our expected financial results operating expenses and free cash flow as well as our expectations for operational achievements.

Soham Bhonsle: These statements include our guidance for Q3 2025 and full year 2025, including comments related to our expected financial results, operating expenses, and free cash flow, as well as our expectations for operational achievements. Our actual results may differ materially from these statements. You can find more information about risks, uncertainties, and other factors that could affect our results in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC and available on our investor relations website. You should not place undue reliance on any forward-looking statements. All information in this presentation is as of today's date, 30 July. We expressly disclaim any obligation to update this information. I will now turn the call over to Robert Reffkin. Robert?

Our actual results may differ materially from these statements.

You can find more information about risks uncertainties and other factors that could affect our results in our most recent annual report on Form 10-K, and quarterly reports on Form 10-Q filed with the SEC and available on our Investor Relations website you.

Soham Bhonsle: You can find more information about risks, uncertainties, and other factors that could affect our results in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC and available on our investor relations website. You should not place undue reliance on any forward-looking statements. All information in this presentation is as of today's date, 30 July. We expressly disclaim any obligation to update this information. I will now turn the call over to Robert Reffkin. Robert?

You should not place undue reliance on any forward looking statements all information in this presentation is as of today's date July 30.

We expressly disclaim any obligation to update this information I will now turn the call over to Robert Revkin Robert.

Thank you for joining us today for our second quarter conference call in what remains a trough level housing market I am pleased to share that the compass team produced the strongest quarterly result in our history with 10 quarterly records.

Robert Reffkin: Thank you for joining us today for our second quarter conference call. In what remains a trough-level housing market, I am pleased to share that the Compass team produced the strongest quarterly results in our history, with 10 quarterly records. In Q2, Compass delivered all-time high revenue, delivered all-time high Adjusted EBITDA, delivered record-Adjusted EBITDA margins, delivered all-time high GAAP net income, delivered all-time high free cash flow, increased market share to an all-time high, delivered the best organic principal agent recruiting quarter in the company's history, grew our title and escrow revenue to an all-time high, grew our title and escrow attach to an all-time high, and lastly, the Compass platform hit a record 24 average weekly sessions per agent in Q2, representing 37% growth compared to Q2 of last year. Revenue in Q2 increased by 21.1% year-over-year.

In Q2 <unk>.

Delivered all time high revenue.

Levered all time high adjusted EBITDA delivered record adjusted EBITDA margins delivered all time high GAAP net income delivered all time high free cash flow increased market share to an all time high deliver the best organic principal agent recruiting quarter in the company's history.

Drew our title and escrow revenue to an all time high grew our title and escrow attach to an all time high and lastly, the compass platform hit a record 24 hour average weekly sessions per agent in Q2, representing 37% growth compared to Q2 of <unk>.

Last year.

Revenue in the second quarter increased by 21, 1% year over year total transactions increased by 29% and organic transactions were up six 3% year over year, respectively, as compared to the overall market where transactions decreased by 0.9%.

Robert Reffkin: Total transactions increased by 20.9%, and organic transactions were up 6.3% year-over-year, respectively, as compared to the overall market, where transactions decreased by 0.9%. This means Compass's total transaction count growth outpaced the market's growth by close to 22%, and Compass's organic transaction count growth outpaced the market growth by 7%. For 17 consecutive quarters, spanning our entire history as a public company, Compass has outperformed the market on an organic basis. There has never been a quarter since we started measuring this metric where Compass hasn't grown faster than the market. In Q2 2025, we generated Adjusted EBITDA of $126 million, up 63% from the $77 million in the year-ago quarter. Quarterly principal agent retention improved by 20 basis points year-over-year to a solid 97.5% in Q2.

So this means compass is total transaction count growth outpaced the market growth by close to 22% and company's organic transaction account growth outpaced the market growth by 7%.

For 17 consecutive quarters spanning our entire history as a public company comp.

<unk> has outperformed the market on an organic basis.

There has never been a quarter since we started measuring this metric where congress hasnt grown faster than the market.

Robert Reffkin: There has never been a quarter since we started measuring this metric where Compass hasn't grown faster than the market. In Q2 2025, we generated Adjusted EBITDA of $126 million, up 63% from the $77 million in the year-ago quarter. Quarterly principal agent retention improved by 20 basis points year-over-year to a solid 97.5% in Q2. In the quarter, we also successfully recruited 832 gross principal agents organically to Compass, which is up 53% year-over-year and, again, represents our best recruiting quarter in the company's history. The consistent new theme we are hearing from agents that join this quarter is that they want to be at a company that stands up for agents and stands up for their clients.

In Q2, 2025, we generated adjusted EBITDA of $126 million.

Up 63% from the $77 million in the year ago quarter.

Quarterly principal agent retention improved by 20 basis points year over year to a solid 97, 5% in Q2.

In the quarter. We also successfully recruited 832 gross principal agents organically to compass, which is up 53% year over year and.

Robert Reffkin: In the quarter, we also successfully recruited 832 gross principal agents organically to Compass, which is up 53% year-over-year and, again, represents our best recruiting quarter in the company's history. The consistent new theme we are hearing from agents that join this quarter is that they want to be at a company that stands up for agents and stands up for their clients. No agent wants to be told by a portal or an MLS how they must work, and none of their clients want to be limited in when, where, and how they market their home. The reality is the intention of the portal and MLS listing policies is control. The purpose of control is to get the homeowners' listings from agents for free and to monetize those listings on their platforms. The mechanism for control is banning and fining agents that market off their platforms.

And again represents our best recruiting quarter in the company's history.

The consistent new theme, we're hearing from agents that joined this quarter is that they want to be at a company that stands up for agents and stands up for their clients.

No agent wants to be told by a portal or.

Robert Reffkin: No agent wants to be told by a portal or an MLS how they must work, and none of their clients want to be limited in when, where, and how they market their home. The reality is the intention of the portal and MLS listing policies is control. The purpose of control is to get the homeowners' listings from agents for free and to monetize those listings on their platforms. The mechanism for control is banning and fining agents that market off their platforms.

And MLS how they must work and none of their clients want to be limited and when where and how they market their home.

The reality is the intention of the portal and MLS listing policies is control.

The purpose of control is to get the homeowners listings from agents for free and to monetize those listings on their platforms.

And the mechanism for control is banning and fining Egypt.

The end market off their platforms.

And so when there is a company that is advocating for agents and their clients to have choice and to not be controlled by these third party platforms that it wants to make money off their listings.

Robert Reffkin: When there is a company that's advocating for agents and their clients to have choice and to not be controlled by these third-party platforms that want to make money off their listings, that is and will continue to be the winning recruiting strategy. I continue to be amazed by the silence amongst brokerage CEOs who have been acquiescing to the portals and MLSs that are dictating how their agents work and how homeowners market properties. I hope more brokerage CEOs see our results as a signal that they will attract more agents if they fight for them and not simply acquiesce to portals and MLSs that ban and fine agents for marketing listings outside their platforms. Now, beyond our record agent recruiting quarter, our M&A pipeline, which consists of term sheets both signed and actively negotiated, is also larger than it has ever been.

That is and will continue to be the winning recruiting strategy.

I continue to be amazed by the silence amongst brokered Ceos.

Who have been acquiescing to the portals and Msas that are dictating how their agents work and.

And how homeowners market properties I hope more brokerage COC our results as a signal that they will attract more agents if they fight for them and not simply acquiesce to portals and msas that ban and fine agents for marketing listings outside their platforms.

Now beyond our record agent recruiting quarter, our M&A pipeline, which consists of term sheets signed and actually negotiated is also larger than it has ever been.

Robert Reffkin: Now, beyond our record agent recruiting quarter, our M&A pipeline, which consists of term sheets both signed and actively negotiated, is also larger than it has ever been. As we said previously, a slowing housing market or a move higher in rates will likely hurt our competitors more than Compass, as they don't have the capital, the technology, or the operational resources to scale. This is exactly what we are seeing play out today. Taking a step back, what do our record recruiting results and M&A pipeline show?

As we said previously.

A slowing housing market or a move higher in rates will likely hurt our competitors more than compass as they don't have the capital.

Robert Reffkin: As we said previously, a slowing housing market or a move higher in rates will likely hurt our competitors more than Compass, as they don't have the capital, the technology, or the operational resources to scale. This is exactly what we are seeing play out today. Taking a step back, what do our record recruiting results and M&A pipeline show? They show that the demand for Compass is stronger than it has ever been, and we are particularly pleased to be delivering these results in one of the toughest housing markets in history. Moving to the T&E business, as I shared earlier, we posted record quarterly revenue and attach in Q2, and our attach rate was up close to 700 basis points year-over-year. In some of our largest and most mature markets, our attach rates today are consistently in the 40% range.

The technology or the operational resources to scale and this is exactly what we're seeing play out today.

So taking a step back.

Well do a record recruiting results and M&A pipeline show.

Robert Reffkin: They show that the demand for Compass is stronger than it has ever been, and we are particularly pleased to be delivering these results in one of the toughest housing markets in history. Moving to the T&E business, as I shared earlier, we posted record quarterly revenue and attach in Q2, and our attach rate was up close to 700 basis points year-over-year. In some of our largest and most mature markets, our attach rates today are consistently in the 40% range.

As I shared earlier, we posted record quarterly revenue and attach in Q2, and our attach rate was up close to 700 basis points year over year.

And some of our largest and most mature markets our attach rates today are consistently in the 40% range.

And for users of our one click title function that goes through our platform, we are seeing attach rates closer to 75%.

Robert Reffkin: For users of our One-Click Title function that goes through our platform, we are seeing attach rates closer to 75%. This gives us confidence that over the long term, we can attach T&E at a 50%-plus rate in most of our markets. Given the mounting evidence that our efforts in T&E are bearing fruit, we continue to invest in our T&E business, and are excited to share that last week, we entered one of our largest markets, New York. By year-end, we expect our T&E business to have a presence in 70% of our markets and expect contribution from this business to increase meaningfully over the coming years. The Christie's International Real Estate business also continues to grow, with three new affiliates joining the network in the quarter and six affiliates in the pipeline.

This gives us confidence that over the long term, we can attach <unk> at a 50% plus rate and most of our markets.

Given the mounting evidence that our efforts in <unk> are bearing fruit, we continue to invest in our <unk> business and are excited to share that last week. We entered one of our largest markets New York by.

By year end, we expect our <unk> business to have a presence in 70% of our markets and expect contribution from this business to increase meaningfully over the coming years.

The Christie's International Real estate business also continues to grow with three new affiliates joined the network in the quarter and six affiliates in the pipeline.

Robert Reffkin: The Christie's International Real Estate business also continues to grow, with three new affiliates joining the network in the quarter and six affiliates in the pipeline. Additionally, I am pleased to report that our financial results for the business are moving ahead of plan, and integration efforts are on track with plan. In Q2, we also added Gavin Swartzman to the Christie's International Real Estate leadership team as president to help grow our affiliate network. Gavin previously led Peerage Realty Partners, the 10th largest real estate company in the US per T3 Sixty, which is also the largest global franchisee in the Sotheby's International Realty Network.

Additionally, I am pleased to report that our financial results for the business are moving ahead of plan and integration efforts are on track with plan.

Robert Reffkin: Additionally, I am pleased to report that our financial results for the business are moving ahead of plan, and integration efforts are on track with plan. In Q2, we also added Gavin Swartzman to the Christie's International Real Estate leadership team as president to help grow our affiliate network. Gavin previously led Peerage Realty Partners, the 10th largest real estate company in the US per T3 Sixty, which is also the largest global franchisee in the Sotheby's International Realty Network. We continue to believe that we can more than 5x the number of domestic Christie's International Real Estate affiliates over time. As a reminder, this is a 30% to 35% Adjusted EBITDA margin business for us. Revenue left commissions and other related expenses as a percentage of revenue in Q2 was 18.2%, which is 80 basis points above the 17.4% reported in the year-ago quarter.

In Q2, we also added Gavin just fortunate to the Christie's International real estate leadership team as president to help through our affiliate network. Gavin previously led periods Realty partners, the 10th largest real estate company in the U S per T $3 60, which is also the largest global franchisee in the southern bees.

International Realty network, we continue to believe that we can more than five ex the number of domestic Christie's international real estate affiliates overtime and as a reminder, this is a 30% to 35% adjusted EBITDA margin business for us.

Robert Reffkin: We continue to believe that we can more than 5x the number of domestic Christie's International Real Estate affiliates over time. As a reminder, this is a 30% to 35% Adjusted EBITDA margin business for us. Revenue left commissions and other related expenses as a percentage of revenue in Q2 was 18.2%, which is 80 basis points above the 17.4% reported in the year-ago quarter.

Revenue less commissions and other related expenses as a percentage of revenue in the second quarter was 18, 2%.

Which is 80 basis points above the 17, 4% reported in the year ago quarter.

non-GAAP Opex was $250 million in Q2, which now includes a full quarter from the Christie's International real estate acquisition.

Robert Reffkin: non-GAAP OpEx was $250 million in Q2, which now includes a full quarter from the Christie's International Real Estate acquisition. OpEx discipline in driving savings and efficiencies has become a strategic advantage for Compass in the current environment. With over $600 million in OpEx savings delivered over the last three years and our disciplined OpEx growth of 3% to 4%, we have proven our ability to deliver on stated goals, even as revenue grows at a much faster rate than our OpEx. Kalani will share more in his prepared remarks, I'm excited to share that we now have a new program already underway that will drive $50 to $75 million of incremental Adjusted EBITDA, with at least $50 million of Adjusted EBITDA improvement in 2026. We will achieve these results through continued focus on cost efficiencies and opportunities to offset the inflationary increases we have seen recently.

Opex discipline and driving savings inefficiencies has become a strategic advantage for compass in the current environment.

With over $600 million in Opex savings delivered over the last three years and our disciplined opex growth of 3% to 4% we have proven our ability to deliver on stated goals.

Even as revenue grows at a much faster rate than our Opex cumani will share more in his prepared remarks, but I am excited to share that we now have a new program already underway that will drive 50% to $75 million of incremental adjusted EBITDA with at least 50 million.

Robert Reffkin: Kalani will share more in his prepared remarks, I'm excited to share that we now have a new program already underway that will drive $50 to $75 million of incremental Adjusted EBITDA, with at least $50 million of Adjusted EBITDA improvement in 2026. We will achieve these results through continued focus on cost efficiencies and opportunities to offset the inflationary increases we have seen recently.

Of adjusted EBITDA improvement in 2026.

We will achieve these results to continue to focus on cost efficiencies and opportunities to offset the inflationary increases we have seen recently.

So as you can see from our results we are not standing still at compass, regardless of where the housing market goes we will continue to execute against our long term strategy, which consists of one managing our opex prudently to recruiting and retaining agents at high levels 3 billion.

Robert Reffkin: As you can see from our results, we are not standing still at Compass. Regardless of where the housing market goes, we will continue to execute against our long-term strategy, which consists of, 1, managing our OPEX prudently, 2, recruiting and retaining agents at high levels, 3, building a platform that empowers agents to be more productive and gain market share, 4, pursuing accretive M&A, and 5, growing our high-margin T&E and affiliate businesses. By sticking to this core strategy alone, we believe we can generate a level of Adjusted EBITDA and free cash flow that will significantly reward our shareholders over time. I would like to close with an update on the next iteration of the Compass platform and why we are so excited about the future.

The platform that empowers Eaton has to be more productive and gain market share for pursuing accretive M&A and five growing our high margin <unk> and affiliate businesses.

By sticking to this core strategy alone. We believe we can generate a level of adjusted EBITDA and free cash flow that will significantly reward our shareholders over time.

Now I would like to close with an update on the next iteration of the commerce platform and why we're so excited about the future.

Robert Reffkin: I would like to close with an update on the next iteration of the Compass platform and why we are so excited about the future. Ever since we started our journey to build the Compass platform 13 years ago, the goal was always to provide agents with the best-in-class workflow platform to run their business on. In many ways, we've now achieved that goal. Just ask our agents. As we think about the next iteration of the Compass platform, we envision a platform that is made more seamless as we leverage AI to be the connective tissue for all the wonderful tools we've created for agents so far.

Ever since we started our journey to build the commerce platform 13 years ago. The goal was always to provide agents with the best in class workflow platform to run their business on it.

Robert Reffkin: Ever since we started our journey to build the Compass platform 13 years ago, the goal was always to provide agents with the best-in-class workflow platform to run their business on. In many ways, we've now achieved that goal. Just ask our agents. As we think about the next iteration of the Compass platform, we envision a platform that is made more seamless as we leverage AI to be the connective tissue for all the wonderful tools we've created for agents so far. What is particularly exciting about the direction we are going in is, 1, we don't need a big team or increased investment to harness the power of AI. We have the team we need.

And in many ways. We've now achieved that goal just ask our agents, but as we think about the next iteration of the compass platform.

We envision a platform that is made more seamless as we leverage AI to be the connective tissue.

All the wonderful tools, we've created for agents so far.

What is particularly exciting about the direction, we're going in is one we don't need a big team.

Robert Reffkin: What is particularly exciting about the direction we are going in is, 1, we don't need a big team or increased investment to harness the power of AI. We have the team we need. 2, there are clear benefits from AI that extend even beyond the productivity benefits we drive for agents, as it will make our software engineers and our broker support operations more efficient. 3, we believe we are the only brokers today with a platform that is truly end-to-end, which is what's required to harness agentic AI. We believe that most of our competitors' agents are on third-party software platforms that do not allow them to connect all the various parts of an agent's workflow.

Our increased investment to harness the power of AI, we have the team we need.

Two there are clear benefits from AI that extend even beyond the productivity benefits, we drive for agents as it will make our software engineers.

Robert Reffkin: 2, there are clear benefits from AI that extend even beyond the productivity benefits we drive for agents, as it will make our software engineers and our broker support operations more efficient. 3, we believe we are the only brokers today with a platform that is truly end-to-end, which is what's required to harness agentic AI. We believe that most of our competitors' agents are on third-party software platforms that do not allow them to connect all the various parts of an agent's workflow. This ultimately will take value away from these brokerages while increasing the value of brokerages like ours in the eyes of the agents because we'll be able to help them save even more time and make even more money. Last month, I demoed the next iteration of Compass AI. At our all-company gathering, there was a 2-minute standing ovation from our agents.

And our brokerage support operations more efficient and.

And three we believe we are the only brokerage today with a platform that is truly end to end, which is what's required to harness <unk> AI.

And we believe that most of our competitors Edens, our on third party software platforms that do not allow them to connect all the various parts of an agent's workflow. This ultimately will take value away from these brokerages, while increasing the value of brokerages like ours in the eyes of the agents because we will be able to help them save you.

Robert Reffkin: This ultimately will take value away from these brokerages while increasing the value of brokerages like ours in the eyes of the agents because we'll be able to help them save even more time and make even more money. Last month, I demoed the next iteration of Compass AI. At our all-company gathering, there was a 2-minute standing ovation from our agents.

Even more time and make even more money.

Last month I demo the next iteration of Commerce AI at our all company gathering there's a two minute standing ovation from our agents thousands of them were present it was great to demonstrate the potential of AI to our agents, which we're going to improve over time.

Robert Reffkin: Thousands of them were present. It was great to demonstrate the potential of AI to our agents, which we're going to improve over time. This fall, we will be beta testing Compass AI 2.0, which will initially be focused on improving agent productivity but over time be deployed across the organization to make us more efficient. Before I hand it over, I want to take a moment to thank Kalani Reelitz, who has informed us of his decision to pursue a new and exciting opportunity for him and his family. We are fully supportive of his decision to take this new opportunity outside of our industry and are grateful for all of his contributions over these last three years. Kalani has been an incredible partner and leader in helping strengthen our financial foundation, driving our operational rigor, and in positioning the company for long-term success.

And this fall we will be beta test incumbent AI to point out, which will initially be focused on improving agent productivity, but overtime be deployed across the organization to make us more efficient.

Before I hand, it over I want to take a moment to thank colonialists, who has informed us of his decision to pursue a new and exciting opportunity for him and his family.

We're fully supportive of his decision to take this new opportunity outside of our industry and are grateful for all of his contributions over these last three years.

<unk> has been an incredible partner and leader in helping strengthen our financial foundation, driving our operational rigor and in positioning the company for long term success.

Robert Reffkin: Kalani has been an incredible partner and leader in helping strengthen our financial foundation, driving our operational rigor, and in positioning the company for long-term success. I'm also pleased to share that we will be promoting Scott Wahlers, our Chief Accounting Officer to CFO. Many of you are familiar with Scott, who joined Compass 7 years ago as Chief Accounting Officer and has also been leading our F&A function for the past 2 years. Importantly, he has been Kalani's partner in executing our OPEX initiatives over the past 3 years, which he will continue to do in his new role.

I'm also pleased to share that we will be promoting Scott Wallace, our chief accounting officer to CFO.

Robert Reffkin: I'm also pleased to share that we will be promoting Scott Wahlers, our Chief Accounting Officer to CFO. Many of you are familiar with Scott, who joined Compass 7 years ago as Chief Accounting Officer and has also been leading our F&A function for the past 2 years. Importantly, he has been Kalani's partner in executing our OPEX initiatives over the past 3 years, which he will continue to do in his new role. Scott brings deep institutional knowledge, outstanding execution, and strong alignment with our strategy. Kalani will remain on through the end of August to ensure a smooth handoff, and we're confident in our continued momentum moving forward. I'll now turn over to Kalani. Thanks for the kind words, Robert. As Robert mentioned, I've made the personal decision to pursue a new opportunity outside of the brokerage industry that I am excited about.

Many of you are familiar with Scott, who joined <unk> seven years ago, as Chief Accounting Officer and has also been leading our F&I function for the past two years importantly, he has been <unk> partner in executing our opex initiatives over the past three years, which she will continue to do in his new role Scott brings.

Deep institutional knowledge outstanding execution, and strong alignment with our strategy Kalana.

Robert Reffkin: Scott brings deep institutional knowledge, outstanding execution, and strong alignment with our strategy. Kalani will remain on through the end of August to ensure a smooth handoff, and we're confident in our continued momentum moving forward. I'll now turn over to Kalani.

<unk> will remain on through the end of August to ensure a smooth handoff and we're confident in our continued momentum moving forward.

I'll now turn it over to <unk>.

Thanks for the kind words, Robert as Robert mentioned I've made the personal decision to pursue a new opportunity outside of the brokerage industry that I am excited about I'm incredibly proud of what we've accomplished together over the last three years and continue to be excited for <unk> future.

Kalani Reelitz: Thanks for the kind words, Robert. As Robert mentioned, I've made the personal decision to pursue a new opportunity outside of the brokerage industry that I am excited about. I'm incredibly proud of what we've accomplished together over the last three years and continue to be excited for Compass's future. I am leaving Compass in a position of strength with a winning strategy and zero concerns with our financial and accounting operations, internal controls, and business operations. I am proud of the work we've done here at Compass, and I'm especially confident knowing that Scott Wahlers, who has been my partner since I've arrived here, will be stepping into the CFO role.

Robert Reffkin: I'm incredibly proud of what we've accomplished together over the last three years and continue to be excited for Compass's future. I am leaving Compass in a position of strength with a winning strategy and zero concerns with our financial and accounting operations, internal controls, and business operations. I am proud of the work we've done here at Compass, and I'm especially confident knowing that Scott Wahlers, who has been my partner since I've arrived here, will be stepping into the CFO role. With that, let me walk you through the financial results for the quarter. As Robert stated earlier, our Q2 results were the strongest quarterly results in Compass's history and set a series of new records both financially and operationally. Our Q2 revenue was $2.06 billion, an increase of 21.1% from the year-ago period, and an all-time quarterly record for Compass.

I am leave encompass and a position of strength with a winning strategy in zero concerns with our financial and accounting operations internal controls and business operations I am proud of the work we've done here at Compass, and I'm, especially confident knowing that Scott Wallace, who has been my partner since I've arrived here will be stepping into the CFO role with that.

Now, let me walk you through the financial results for the quarter.

Kalani Reelitz: With that, let me walk you through the financial results for the quarter. As Robert stated earlier, our Q2 results were the strongest quarterly results in Compass's history and set a series of new records both financially and operationally. Our Q2 revenue was $2.06 billion, an increase of 21.1% from the year-ago period, and an all-time quarterly record for Compass.

As Robert stated earlier, our Q2 results were the strongest quarterly results encompasses history.

And set a series of new records, both financially and operationally.

Our second quarter revenue was $2.06 billion, an increase of 21, 1% from the year ago period.

And an all time quarterly record for Compass.

While M&A contributed to the year over year growth in revenue, even excluding M&A revenue increased eight 7% on an organic basis.

Robert Reffkin: While M&A contributed to the year-over-year growth in revenue, even excluding M&A, revenue increased 8.7% on an organic basis. Transactions for the quarter increased 20.9% or 6.3% on an organic basis, which compares very favorably to the overall market where transactions declined by 0.9%. This outperformance to the industry is also reflected in our market share, which was 6.09% in the quarter, an increase of 96 basis points from the year-ago period, and an 8-basis-point increase from Q1. Gross transaction value was $78.3 billion in Q2, an increase of 20.3% from a year ago, reflecting the 20.9% increase in total transactions combined with a slight decrease in average selling price of about 1%. Our average selling price was higher by about 3% on an organic basis.

Kalani Reelitz: While M&A contributed to the year-over-year growth in revenue, even excluding M&A, revenue increased 8.7% on an organic basis. Transactions for the quarter increased 20.9% or 6.3% on an organic basis, which compares very favorably to the overall market where transactions declined by 0.9%. This outperformance to the industry is also reflected in our market share, which was 6.09% in the quarter, an increase of 96 basis points from the year-ago period, and an 8-basis-point increase from Q1. Gross transaction value was $78.3 billion in Q2, an increase of 20.3% from a year ago, reflecting the 20.9% increase in total transactions combined with a slight decrease in average selling price of about 1%.

Transactions for the quarter increased 29% or six 3% on an organic basis, which compares very favorably to the overall market where transactions declined by <unk>, 9%.

This outperformance to the industry is also reflected in our market share, which was 6.09% in the quarter, an increase of 96 basis points from the year ago period, and an eight basis point increase from Q1.

Gross transaction value was $78 3 billion in the second quarter, an increase of 23% from a year ago, reflecting the 29% increase in total transactions combined with a slight decrease in average selling price of about 1%.

Our average selling price was higher by about 3% on an organic basis. However, our acquisitions over the past year have lower average selling prices compared to our overall asps.

Kalani Reelitz: Our average selling price was higher by about 3% on an organic basis. Our acquisitions over the past year have lower average selling prices compared to our overall ASP, which reduced the overall increase in average selling price. Our commissions and other related expenses as a percent of revenue was 81.84%, an improvement of 80 basis points compared to Q2 of last year at 82.64%. Consistent with our comments last quarter, we expected the acquisition of Christie's International Real Estate to favorably impact this metric, which is reflected in the results.

Robert Reffkin: Our acquisitions over the past year have lower average selling prices compared to our overall ASP, which reduced the overall increase in average selling price. Our commissions and other related expenses as a percent of revenue was 81.84%, an improvement of 80 basis points compared to Q2 of last year at 82.64%. Consistent with our comments last quarter, we expected the acquisition of Christie's International Real Estate to favorably impact this metric, which is reflected in the results. Excluding M&A, our commissions and other related expenses as a percent of revenue were flat with the prior year quarter, as some modest growth in T&E revenue was offset with some of the highest-producing agents and therefore higher-split agents taking more of the market share gains.

Which reduced the overall increase in average selling price.

Our commissions and other related expenses as a percent of revenue was 80, 184% an improvement of 80 basis points compared to Q2 of last year at 80, 264%.

Consistent with our comments last quarter, we expected the acquisition of Christie's International real estate to favorably impact this metric which is reflected in the results.

Excluding M&A, our commissions and other related expenses as a percent of revenue were flat with the prior year quarter as some modest growth in <unk> revenue was offset with some of the highest producing agents and therefore higher split agents, taking more of the market share gains.

Kalani Reelitz: Excluding M&A, our commissions and other related expenses as a percent of revenue were flat with the prior year quarter, as some modest growth in T&E revenue was offset with some of the highest-producing agents and therefore higher-split agents taking more of the market share gains. This is consistent with our comments last quarter, and we are okay with this trade-off today given that our highest-producing agents are also taking share in the current environment. Over the long term, we remain focused on recruiting the up-and-coming agents that come at a much better split than our highest-producing agents.

This is consistent with our comments last quarter and we are okay. With this tradeoff today given that our highest producing agents are also taking share in the current environment.

Robert Reffkin: This is consistent with our comments last quarter, and we are okay with this trade-off today given that our highest-producing agents are also taking share in the current environment. Over the long term, we remain focused on recruiting the up-and-coming agents that come at a much better split than our highest-producing agents. Our total non-GAAP operating expenses were $250 million in Q2, an increase from $217 million of OPEX in the year-ago period, which was driven by M&A, including the OPEX we assumed from the 13 January 2025 acquisition of Christie's International Real Estate, the Washington Fine Properties acquisition in February 2025, and the acquisition of Latter & Blum and Parks Real Estate in Q2 2024. Adjusted EBITDA was $125.9 million, a strong improvement of 63% versus Adjusted EBITDA of $77 million a year ago, and also represents a new all-time record for quarterly Adjusted EBITDA.

Over the long term, we remain focused on recruiting the up and coming agents that come at a much better split that our highest producing agents.

Our total non-GAAP operating expenses were $250 million in Q2, an increase from $217 million of Opex in the year ago period, which was driven by M&A, including the Opex. We assumed from the January 13, 2025 acquisition of Christie's International real estate.

Kalani Reelitz: Our total non-GAAP operating expenses were $250 million in Q2, an increase from $217 million of OPEX in the year-ago period, which was driven by M&A, including the OPEX we assumed from the 13 January 2025 acquisition of Christie's International Real Estate, the Washington Fine Properties acquisition in February 2025, and the acquisition of Latter & Blum and Parks Real Estate in Q2 2024. Adjusted EBITDA was $125.9 million, a strong improvement of 63% versus Adjusted EBITDA of $77 million a year ago, and also represents a new all-time record for quarterly Adjusted EBITDA.

The Washington find properties acquisition in February 2025, and the acquisition of ladder in Bloom and parks real estate in the second quarter of 2024.

Adjusted EBITDA was $125 9 million, a strong improvement of 63% versus adjusted EBITDA of $77 million a year ago and also represents a new all time record for quarterly adjusted EBITDA.

GAAP net income was $39 4 million in Q2 compared to the GAAP net income of $20 7 million a year ago, an improvement of 90%.

Robert Reffkin: GAAP net income was $39.4 million in Q2 compared to the GAAP net income of $20.7 million a year ago, an improvement of 90%, also represents a new all-time record for quarterly GAAP net income. As for cash, we generated $68 million in free cash flow in Q2, which was not only an improvement over the $40.4 million of cash flow from Q2 2024 but also a new record level of quarterly free cash flow. Last quarter, I mentioned that in both Q4 2024 and Q1 2025, our free cash flow exceeded Adjusted EBITDA levels. Therefore, we expected to give back some of that favorable timing of working capital changes in Q2. We also paid for the second and final installment of our class action settlement payment in Q2 in the amount of $28.75 million, which negatively impacted free cash flow.

Kalani Reelitz: GAAP net income was $39.4 million in Q2 compared to the GAAP net income of $20.7 million a year ago, an improvement of 90%, also represents a new all-time record for quarterly GAAP net income. As for cash, we generated $68 million in free cash flow in Q2, which was not only an improvement over the $40.4 million of cash flow from Q2 2024 but also a new record level of quarterly free cash flow. Last quarter, I mentioned that in both Q4 2024 and Q1 2025, our free cash flow exceeded Adjusted EBITDA levels. Therefore, we expected to give back some of that favorable timing of working capital changes in Q2.

And also represents a new all time record for quarterly GAAP net income.

As for cash we generated $68 million in free cash flow in the second quarter, which was not only an improvement over the $40 4 million of cash flow from Q2, 2024, but also a new record level of quarterly free cash flow.

Last quarter I mentioned that in both Q4 of 2024 and Q1 of 2025, our free cash flow exceeded adjusted EBITDA levels and therefore, we expect it to give back some of that favorable timing of working capital changes in Q2.

We also paid for the second and final installment of our class action settlement payment in Q2 in the amount of $28 $75 million, which negatively impacted free cash flow.

Kalani Reelitz: We also paid for the second and final installment of our class action settlement payment in Q2 in the amount of $28.75 million, which negatively impacted free cash flow. We ended Q2 with $177 million of cash and cash equivalents on our balance sheet and $50 million outstanding on our revolver. As we discussed last quarter, the $50 million balance on the revolver was drawn to fulfill the cash portion of the purchase price for Christie's International Real Estate. Our basic weighted average share count for Q1 was 560.3 million, which was in line with our guidance.

We ended the second quarter with $177 million of cash and cash equivalents on our balance sheet and $50 million outstanding on our revolver.

Robert Reffkin: We ended Q2 with $177 million of cash and cash equivalents on our balance sheet and $50 million outstanding on our revolver. As we discussed last quarter, the $50 million balance on the revolver was drawn to fulfill the cash portion of the purchase price for Christie's International Real Estate. Our basic weighted average share count for Q1 was 560.3 million, which was in line with our guidance. Additionally, because we reported GAAP net income, we are required to present a fully diluted share count, which was 591.4 million shares. Turning now to financial guidance. For Q3 2025, we expect revenue in the range of $1.725 billion to $1.85 billion and expect Adjusted EBITDA to be in the range of $60 to $80 million. We expect our weighted average share count for Q3 to be between 566 to 569 million shares.

As we discussed last quarter, the 50 million balance on the revolver was drawn to fulfill the cash portion of the purchase price for Christie's International real estate.

Our basic weighted average share count for the first quarter was $563 million, which was in line with our guidance. Additionally, because we reported GAAP net income we are required to present, our fully diluted share count, which was 591 4 million shares.

Kalani Reelitz: Additionally, because we reported GAAP net income, we are required to present a fully diluted share count, which was 591.4 million shares. Turning now to financial guidance. For Q3 2025, we expect revenue in the range of $1.725 billion to $1.85 billion and expect Adjusted EBITDA to be in the range of $60 to $80 million. We expect our weighted average share count for Q3 to be between 566 to 569 million shares.

Turning now to financial guidance.

For Q3 of 2025, we expect revenue in the range of $1 75 billion to 185 billion and expect adjusted EBITDA to be in the range of $60 million to $80 million.

We expect our weighted average share count for the third quarter to be between 566 to 569 million shares.

We expect our stock based compensation expense to be in the $55 million to $60 million range for the third quarter, which is a slight increase from the $55 million level for Q2.

Robert Reffkin: We expect our stock-based compensation expense to be in the $55 to $60 million range for Q3, which is a slight increase from the $55 million level for Q2. We expect the Q3 level of stock-based compensation expense to be the high point, and you'll see decreases sequentially into Q4 and 2026. As you can see from our results, we remain maniacally focused on OPEX, efficiency improvements, and driving profitable growth. Additionally, we have also been making good progress on the integration of our 2024 and 2025 acquisitions. As a result of these efforts, we are now pacing ahead of the OPEX range we previously laid out for 2025.

Kalani Reelitz: We expect our stock-based compensation expense to be in the $55 to $60 million range for Q3, which is a slight increase from the $55 million level for Q2. We expect the Q3 level of stock-based compensation expense to be the high point, and you'll see decreases sequentially into Q4 and 2026. As you can see from our results, we remain maniacally focused on OPEX, efficiency improvements, and driving profitable growth. Additionally, we have also been making good progress on the integration of our 2024 and 2025 acquisitions. As a result of these efforts, we are now pacing ahead of the OPEX range we previously laid out for 2025.

We expect the Q3 level of stock based compensation expense to be the high point and Youll see decreases sequentially into Q4 and 2026.

As you can see from our results we remain maniacally focused on opex efficiency improvements and driving profitable growth. Additionally, we have also been making good progress on the integration of our 2024 and 2025 acquisitions.

As a result of these efforts we are now pacing ahead of the Opex range. We previously laid out for 2025.

Specifically last quarter, we announced that our Opex for 2025 would be in the range of 1.0, $1 7 billion to 1.042 billion.

Robert Reffkin: Specifically, last quarter, we announced that our OPEX for 2025 would be in the range of $1.017 billion to $1.042 billion. We now expect OPEX to be in the range of $1.01 to $1.02 billion, which reflects a reduction of $25 million off the high end of the range when considering the incremental OPEX from the two small brokerage acquisitions announced this month. Finally, as Robert mentioned earlier, we have a new program underway that improves our profitability incrementally starting in 2026 by $50 to $75 million.

Kalani Reelitz: Specifically, last quarter, we announced that our OPEX for 2025 would be in the range of $1.017 billion to $1.042 billion. We now expect OPEX to be in the range of $1.01 to $1.02 billion, which reflects a reduction of $25 million off the high end of the range when considering the incremental OPEX from the two small brokerage acquisitions announced this month. Finally, as Robert mentioned earlier, we have a new program underway that improves our profitability incrementally starting in 2026 by $50 to $75 million.

But we now expect opex to be in the range of 1.01 to 1.02 billion, which reflects a reduction of $25 million off the high end of the range when considering the incremental opex from the two small brokerage acquisitions announced this month.

Finally, as Robert mentioned earlier, we have a new program underway that improves our profitability incrementally starting in 2026 by $50 million to $75 million we.

We intend to keep the majority of the 2025 Opex favorability permanent going into next year, and we'll see even further benefit from areas, including process efficiencies in our end to end transaction flows continued support optimization that lowers cost, while improving agent service levels and increasing efficiencies from a reduction in costs driven by.

Robert Reffkin: We intend to keep the majority of the 2025 OpEx favorability permanent going into next year. We'll see even further benefit from areas including process efficiencies in our end-to-end transaction flows, continued support optimization that lowers costs while improving agent service levels, and increasing efficiencies from a reduction in costs driven by use of AI across various areas of our technology and operational functions. Additionally, we believe there are opportunities to directly offset some of the inflationary pressures we have experienced, including opportunities to leverage learnings from our recent acquisitions. We believe these actions will drive $50 to $75 million in incremental Adjusted EBITDA, with at least $50 million of direct Adjusted EBITDA benefit in 2026. In my three years here at Compass, I am proud of the DNA and discipline we've built. We have developed a proven track record of stating our intent and delivering on our goals.

Kalani Reelitz: We intend to keep the majority of the 2025 OpEx favorability permanent going into next year. We'll see even further benefit from areas including process efficiencies in our end-to-end transaction flows, continued support optimization that lowers costs while improving agent service levels, and increasing efficiencies from a reduction in costs driven by use of AI across various areas of our technology and operational functions. Additionally, we believe there are opportunities to directly offset some of the inflationary pressures we have experienced, including opportunities to leverage learnings from our recent acquisitions.

The use of AI across various areas of our technology and operational functions.

Additionally, we believe there are opportunities to directly offset some of the inflationary pressures, we have experienced including opportunities to leverage learnings from our recent acquisitions.

We believe these actions will drive $50 million to $75 million in incremental adjusted EBITDA with at least $50 million of direct adjusted EBITDA benefit.

Kalani Reelitz: We believe these actions will drive $50 to $75 million in incremental Adjusted EBITDA, with at least $50 million of direct Adjusted EBITDA benefit in 2026. In my three years here at Compass, I am proud of the DNA and discipline we've built. We have developed a proven track record of stating our intent and delivering on our goals. I am confident we will achieve at least our stated goal of $50 to $75 million as we deploy the same teams and processes that we have been successful with in the past. Finally, as I close out my final earnings call here at Compass, I want to thank Robert, the management team, and the Compass board for the opportunity they gave me 3 years ago.

In 2026.

In my three years here at Compass I am proud of the DNA and discipline. We built we have developed a proven track record of stating our intense and delivering on our goals I'm confident we will achieve at least our stated goal of $50 million to $75 million as we deploy the same teams and processes that we have been successful with in the past.

Robert Reffkin: I am confident we will achieve at least our stated goal of $50 to $75 million as we deploy the same teams and processes that we have been successful with in the past. Finally, as I close out my final earnings call here at Compass, I want to thank Robert, the management team, and the Compass board for the opportunity they gave me 3 years ago. As I depart, Compass has never been stronger. We are well-positioned financially, strategically, and operationally to continue to lead the industry. Scott is the right leader for our next chapter, and I'm excited to see him partner with Robert. For the last 10 quarters, I've had the honor of presenting the record-breaking outcomes that are created by the incredible work of our agents and our employees.

And finally as I close out my final earnings call here at Compass I want to thank Robert the management team and the Compass Board for the opportunity. They gave me three years ago.

As I depart compass has never been stronger we are well positioned financially strategically and operationally to continue to lead the industry.

Kalani Reelitz: As I depart, Compass has never been stronger. We are well-positioned financially, strategically, and operationally to continue to lead the industry. Scott is the right leader for our next chapter, and I'm excited to see him partner with Robert. For the last 10 quarters, I've had the honor of presenting the record-breaking outcomes that are created by the incredible work of our agents and our employees.

Scott is the right leader for our next chapter and I am excited to see him partner with Robert.

For the last 10 quarters I've had the honor of presenting the record breaking outcomes that are created by the incredible work of our agents and our employees.

At Compass, our agents are our customers and it's been a true honor to work for and serve our roughly 38000 agents.

Robert Reffkin: At Compass, our agents are our customers, and it's been a true honor to work for and serve our roughly 38,000 agents. I'll end by sending a mahalo to our Compass leadership team that I've been able to work side by side with every day, and a giant mahalo to all of our team members who work every day to make Compass a special place. Thank you for all that you do for Compass. With that, I'll turn over the call to the operator for Q&A. Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please raise your hand now. We ask that you limit yourself to one question and one follow-up. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster.

Kalani Reelitz: At Compass, our agents are our customers, and it's been a true honor to work for and serve our roughly 38,000 agents. I'll end by sending a mahalo to our Compass leadership team that I've been able to work side by side with every day, and a giant mahalo to all of our team members who work every day to make Compass a special place. Thank you for all that you do for Compass. With that, I'll turn over the call to the operator for Q&A.

I'll end by sending an mahalo to our compass leadership team that I've been able to work side by side with everyday.

In a giant mahalo to all of our team members, who work every day to make compass a special place.

Thank you for all that you do for Compass.

With that I'll turn over the call to the operator for Q&A.

Thank you we will now begin the question and answer session.

Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please raise your hand now. We ask that you limit yourself to one question and one follow-up. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Bernie McTernan with Needham & Company. Your line is open. Please go ahead.

I would like to ask a question. Please raise your hand now we ask that you limit yourself to one question and one follow up if you have dialed into todays call. Please press star known to raise your hand and star.

Please standby, while we compile the Q&A roster.

Your first question comes from the line of Bernie Mcternan with Needham and company. Your line is open. Please go ahead.

Robert Reffkin: Your first question comes from the line of Bernie McTernan with Needham & Company. Your line is open. Please go ahead. Great. Thanks for the questions. Just first, Kalani, thanks for all the help over the last couple of years. It's been great working with you, but I know we're in capable hands with Scott. Maybe it's fitting to ask this question then, Kalani. Just on the $50 million benefit for next year, I appreciate all the color and detail, but should we think about that more as a run-rate savings that you're going to be achieving by the year-end or an actual $50 million benefit to OPEX, so therefore we could actually see OPEX fall year-over-year? I have a follow-up. Yeah, Bernie, thank you for the kind words. I'm really excited about Scott and him partnering with you more.

Great. Thanks for taking questions just first Claudia thanks for all the help over the last couple of years. It's been it's been great working with you, but I know we are in capable hands with Scott.

Bernie McTernan: Great. Thanks for the questions. Just first, Kalani, thanks for all the help over the last couple of years. It's been great working with you, but I know we're in capable hands with Scott. Maybe it's fitting to ask this question then, Kalani. Just on the $50 million benefit for next year, I appreciate all the color and detail, but should we think about that more as a run-rate savings that you're going to be achieving by the year-end or an actual $50 million benefit to OPEX, so therefore we could actually see OPEX fall year-over-year? I have a follow-up.

And maybe just maybe it's fitting to ask this question then Claudia just on the on the $50 million.

For benefit for next year I appreciate all the color and detail, but should we think about that more as.

Our run rate savings that youre going to be achieving by the year end or an actual 50 million benefit yet.

Opex. So therefore, we could actually see opex fall year over year, and then I have a follow up.

Yes. Thank you for the kind words, I'm I'm I'm really excited about Scott and partner with you more.

Kalani Reelitz: Yeah, Bernie, thank you for the kind words. I'm really excited about Scott and him partnering with you more. I think the way to think about it is against I'll say it the way we think about it. Against our forecasts and expectations, say, in our long-range plan, we think this is a benefit. We think we can reduce kind of overall costs by $50 million and ultimately improve profitability, EBITDA, by $50 million. We definitely think it's run rate. We think it stays. Quite frankly, I think the nice thing about this is I think there's direct kind of mathematical benefit onto our EBITDA, but also some of the work we're doing will allow us to scale as the market comes back even further.

I think the way to think about it is.

Robert Reffkin: I think the way to think about it is against I'll say it the way we think about it. Against our forecasts and expectations, say, in our long-range plan, we think this is a benefit. We think we can reduce kind of overall costs by $50 million and ultimately improve profitability, EBITDA, by $50 million. We definitely think it's run rate. We think it stays. Quite frankly, I think the nice thing about this is I think there's direct kind of mathematical benefit onto our EBITDA, but also some of the work we're doing will allow us to scale as the market comes back even further.

I'll say it the way, we think about it against our forecasted expectations say in our long range plan. We think this is a benefit. So we think we can reduce kind of overall cost by $50 million.

And ultimately improve profitability EBITDA by $50 million. So we definitely think its run rate, we think it stays and.

And quite frankly, I think the nice thing about this is I think there is direct kind of mathematical benefit onto our EBITDA, but also some of the work we're doing will allow us to scale as the market comes back even further you know things like leveraging AI or process improvement are going to actually hopefully help even maybe not drive the pure mathematics.

Robert Reffkin: The things like leveraging AI or process improvement are going to actually hopefully help even maybe not drive the pure mathematics down, but as we think about the growth rate, allow us to maintain 3% to 4% or even lower over time as, say, your revenue is at the 15% to 20% CAGR as the market comes back. Understood. Robert, just bigger picture question for you. I mean, the industry's had some pretty big shifts over the past two years. Given where you sit, just would love your thoughts in terms of how close are we to the endpoint in terms of knowing what the operating rules of operations for the industry and what the next five or 10 years are going to look like? Look, there's a tug-and-pull happening right now in the industry, which you can see very well. It's between choice and control.

Kalani Reelitz: The things like leveraging AI or process improvement are going to actually hopefully help even maybe not drive the pure mathematics down, but as we think about the growth rate, allow us to maintain 3% to 4% or even lower over time as, say, your revenue is at the 15% to 20% CAGR as the market comes back.

But as we think about the growth rate allow us to maintain 3% to 4% or even lower over time as say your your revenue is at the 15% to 20% CAGR as the market comes back.

Understood and then.

Bernie McTernan: Understood. Robert, just bigger picture question for you. I mean, the industry's had some pretty big shifts over the past two years. Given where you sit, just would love your thoughts in terms of how close are we to the endpoint in terms of knowing what the operating rules of operations for the industry and what the next five or 10 years are going to look like?

Robert just bigger.

Picture a question for you I mean, the industry has had some pretty big shifts over the past two years.

Given where you said just would love your thoughts in terms of like how close are we to the endpoint in terms of knowing what the operating rules the rules are.

Yes, the operations for the industry and how and what the next five or 10 years, we're going to look like.

Look there is a tug and pull happening right now in the industry, which you can see very well it's between choice and control should sellers have the choice of when where and how their homes or marketed.

Robert Reffkin: Look, there's a tug-and-pull happening right now in the industry, which you can see very well. It's between choice and control. Should sellers have the choice of when, where, and how their homes are marketed? Should the decision be made between their agent and the seller? The person is the fiduciary relationship and the seller. That's where Compass stands by. Should platforms, which include MLSs and portals, be able to fine agents? That's what MLSs do.

Robert Reffkin: Should sellers have the choice of when, where, and how their homes are marketed? Should the decision be made between their agent and the seller? The person is the fiduciary relationship and the seller. That's where Compass stands by. Should platforms, which include MLSs and portals, be able to fine agents? That's what MLSs do. Portals now banning agents who don't give them their listings. They don't have the fiduciary duty. I think when you look at every other market in the country seller in the world, every other market in the world, sellers have choice. It's worth noting yeah, in every other world, more than the world, sellers have choice. In places like Australia, they don't even have days on market and price drop history on the major sites because it's made for sellers.

The decision be made between the listing agent in the seller of the percent of the fiduciary relationship and the seller or and Thats, where <unk> stands by or should platforms.

Which include Mls's and portals should they be able to find agents MLS is due and portals now banning agents, who don't give them their listings.

Robert Reffkin: Portals now banning agents who don't give them their listings. They don't have the fiduciary duty. I think when you look at every other market in the country seller in the world, every other market in the world, sellers have choice. It's worth noting yeah, in every other world, more than the world, sellers have choice. In places like Australia, they don't even have days on market and price drop history on the major sites because it's made for sellers.

And they don't have their fiduciary duty.

And.

I think when you look at every other market in the country seller in the World every other market in the world sellers have choice.

It's worth noting.

There isn't one.

So as a choice and in places like Australia. They don't even have days on margin and price drop history on the major sites.

Because it's made for sellers and so I think the trend line of the world, which say sellers should have choice and.

Robert Reffkin: I think the trendline of the world would say sellers should have choice. It's worth noting, there's not a single thing that we advocate for that the most sophisticated, profit-driven, repeat sellers in real estate aren't doing every day. Builders and developers, they all pre-market. They all test price. They can all list off of an MLS and put it on whenever they want without penalty. They can all list off of that portal, the name of, and then put it back on at any point. They're not penalized and restricted anyway. It's only the individual American homeowner that is. Look, to answer your question, I think it could take some time, but you can see in the arc of the narrative that people are starting to realize what's going on.

And it's worth noting.

There's not a single thing that we advocate for that the most sophisticated profit driven repeat sellers in real estate or aren't doing everyday builders.

And <unk>.

Developers.

They are pre market. They all test price. They can all list off of and MLS and put on whenever they want without penalty theyre going to lift off of that portal the.

The name of and then put it back on at any point they are not penalized in restricted anyway. It's only the individual American homeowner that is and so to answer your question I think it could take some time, but you can see in the arc of the narrative that people are starting to realize what's going on.

This organized real estate is in Mos and portals and nor they just want the listing so they can make money off them. So they can alter the lifting monetize it so the data to third parties, so elevated financial institutions. So the leads and so I think.

Robert Reffkin: This organized real estate as an MLS and portals and NAR, they just want the listing so they can make money off them. They can alter the listing, monetize it, sell the data to third parties, sell the data to financial institutions, sell the leads. I think, as you can clearly see, some things need to be settled in court. I think this will be settled in court. Understood. Thank you both. Thank you. Your next question comes from the line of Jason Helfstein with Oppenheimer & Company. Your line is open. Please go ahead. Jason, a reminder to please press star 6 in order to unmute. There we go. Okay. Hey, everybody. Thanks for the questions. First, Kalani, it's been a pleasure, and good luck on your next chapter. Robert, just to want to dig in a little more.

And as you can clearly see some things seem to be settling court I think this will be southern in court.

Understood. Thank you Bob.

Bernie McTernan: Understood. Thank you both.

Thank you. Your next question comes from the line of Jason <unk> with Oppenheimer <unk> Company. Your line is open. Please go ahead.

Operator: Thank you. Your next question comes from the line of Jason Helfstein with Oppenheimer & Company. Your line is open. Please go ahead. Jason, a reminder to please press star 6 in order to unmute.

Jason a reminder to please press star six in order to annually.

Okay, everybody. Thank you for the questions.

Jason Helfstein: There we go. Okay. Hey, everybody. Thanks for the questions. First, Kalani, it's been a pleasure, and good luck on your next chapter. Robert, just to want to dig in a little more. I mean, given, I guess, some of the actions in the industry in the past several months, has there been any change in the execution of the Three-phase Marketing, or has it basically been business as usual and kind of waiting for kind of what the next shoe to drop is, I guess? I guess, yeah, anything you want to share there. You've obviously updated us what the plan has been, but have you had to make any changes in the field because of actions of others? The second question, maybe talk about your appetite to do more acquisitions between now and the end of the year and if you feel like you have the capital you need to pursue the acquisitions you're looking at. Thank you.

So first <unk> been a.

A pleasure and good luck on your next chapter.

So Robert just wanted to dig in a little more.

<unk> have.

Given I guess some of the actions in the industry in the past several months.

Robert Reffkin: I mean, given, I guess, some of the actions in the industry in the past several months, has there been any change in the execution of the Three-phase Marketing, or has it basically been business as usual and kind of waiting for kind of what the next shoe to drop is, I guess? I guess, yeah, anything you want to share there. You've obviously updated us what the plan has been, but have you had to make any changes in the field because of actions of others? The second question, maybe talk about your appetite to do more acquisitions between now and the end of the year and if you feel like you have the capital you need to pursue the acquisitions you're looking at. Thank you.

Hi.

Has there been any change in the execution of the three based marketing or has it basically been.

Business as usual and kind of waiting for.

Kind of what the next shoe to drop is I guess and I guess.

Yes, anything you want to share there like you Abbvie. The updated is what the plan has been but have you had to make any changes in the field because of the actions of others and then the second question.

Maybe talk about your appetite.

Do more acquisitions between now and the end of the year.

And if you feel like you have the capital you need to pursue the acquisitions Youre looking at thank you.

So on the first question.

In terms of results the company's private exclusives have stayed at basically the same level throughout.

Robert Reffkin: On the 1st question, in terms of results, the Compass Private Exclusives have stayed at basically the same level throughout the last number of months. In terms of demand, of course, remains high. What seller wouldn't want choice? Sellers want more choice, not less choice. If Compass agents as you can see, they're gaining market share. You can see it on the data. If a Compass agent is going to you're the seller, and saying, I can test price privately, no days on market, no price drop history. I can build an interest list just like developers build buyer interest lists. I could send it to the toppings across different brokerage firms and create a tour that gets a sense of demand and scarcity. By the way, you cannot test an aspirational price in the open market without risk of a price drop.

The last number of months.

In terms of demand demand of course remains high.

What seller.

Wouldn't want choice sellers want more choice not less choice and if.

If compass agents as you can see they are gaining market share you can see on the data.

If a compass agent is going to you are the seller and so.

Jane I can test priced privately no days of market no price drop history I can build an interest list.

Like.

Developers build buyer interest list I can send it to the toppings across different brokerage firms and create.

Tour that gets the sense of demand and scarcity.

And.

And by the way there is no you cannot tests.

Robert Reffkin: By the way, you cannot test an aspirational price in the open market without risk of a price drop. You can't do that. It's impossible. Here, you can. A Compass agent is seeing all that and much more. The person that comes in right after is going to you from a different company who's being told by their CEO, Don't offer anything but MLS. Don't offer just everything that's off MLS is bad. If that agent who's being coached by their CEO to do that just says, Hey, Jason, what I'm going to do is I'm going to take your list and put it in the MLS and do open houses.

Aspirational price in the quote unquote open market without risk of a price drop that you can't do that it's impossible.

But here you can buy a.

Robert Reffkin: You can't do that. It's impossible. Here, you can. A Compass agent is seeing all that and much more. The person that comes in right after is going to you from a different company who's being told by their CEO, Don't offer anything but MLS. Don't offer just everything that's off MLS is bad. If that agent who's being coached by their CEO to do that just says, Hey, Jason, what I'm going to do is I'm going to take your list and put it in the MLS and do open houses. On balance, you, the seller, are going to choose the Compass agent who offers more choice. In every other part of our ecosystem, let's take mortgages, they're winning off of offering more choices, more solutions, more options for a client, not less. That at a high level is on demand.

Companies didn't see all of that and much more and then the person that comes in right. After is going to you from a different company who's being told by their CEO.

So don't offer don't offer anything, but MLS don't offer.

Everything that's optimal that's as bad, but if that agent has been coach whether to do that just says hey, Jason.

I'm going to do is I would take your lithium or putting the MLS them do open houses on balance you. The seller are introduced to compensate and offers more choice in every other part of our ecosystem, let's take mortgages youre winning offer offering more choices more solutions.

Robert Reffkin: On balance, you, the seller, are going to choose the Compass agent who offers more choice. In every other part of our ecosystem, let's take mortgages, they're winning off of offering more choices, more solutions, more options for a client, not less. That at a high level is on demand. Demand continues to be strong, our agents understand that they have an advantage in the living room. We're deeply thankful to all the brokerage CEOs who are convincing their agents that they should offer less choice in the living room because we have a competitive edge then. I

More options for our client not less.

That at a high level is on demand demand continues to be strong and our eaton's understand that they have an advantage in the living room, and we are deeply thankful to all of the brokerage Ceos, who are convincing their agents.

Robert Reffkin: Demand continues to be strong, our agents understand that they have an advantage in the living room. We're deeply thankful to all the brokerage CEOs who are convincing their agents that they should offer less choice in the living room because we have a competitive edge then. In terms of the M&A, I think what's happened in the overall environment has led a lot as you heard, we have more demand from CEOs to join Compass with their companies than ever before. I think what has happened is portals and NAR MLS rules are basically telling every brokerage firm, We're going to control you. We are going to tell you how you operate your business and how every one of your agents operate your business.

<unk>.

They should offer less choice in the living room, because we have a competitive edge done.

In terms of.

Robert Reffkin: n terms of the M&A, I think what's happened in the overall environment has led a lot as you heard, we have more demand from CEOs to join Compass with their companies than ever before. I think what has happened is portals and NAR MLS rules are basically telling every brokerage firm, We're going to control you. We are going to tell you how you operate your business and how every one of your agents operate your business.

The.

<unk>.

M&A I think what's.

What's happened in the overall environment.

Has led a lot as you heard we have more demand from Ceos, who joined <unk> best with their companies than ever before I think was what has happened.

Is <unk>.

Portals.

And.

Nor MLS rules are basically telling every brokerage firm, we're going to control you.

We're going to we're going to tell you how you operate your business and how every one of your <unk> and if you do not give us is it.

It gives what we want we will find and Daniel.

Robert Reffkin: If you do not give us what we want, we will fine and ban you." It's sending a signal to every CEO that we need to join forces to be able to protect ourselves from the control of portals, NAR, and MLS. I think that's really what's happening. I mean, clearly, people have different perspectives and different sides, but this is accelerating conversations that would not have happened otherwise. In terms of the capital, yes, we feel good about our ability to our capital. Yeah.

And so it's sending a signal to every CEO that.

We need to join forces to be able to protect ourselves from the control of.

Portals, and our MLS and so I think that's really what's happening I mean, clearly there are people who have different prospects in different sites, but but this is accelerating conversations that would not have happened otherwise.

And in terms of the capital, Yes, we feel good about our our ability to use our capital Yeah, Hey, Robert the only thing I'd add to Jason to your question is the other thing on the other side of it all we've done a really nice job of taking our partners from acquisitions in the past and really leveraging them and putting them out to make sure that they're helping.

Robert Reffkin: Hey, Robert, the only thing I'd add to Jason, your question, is the other thing that on the other side of it all, we've done a really nice job of taking our partners from acquisitions in the past and really leveraging them and putting them out to make sure that they're helping those CEOs that Robert's talking about feel really comfortable about coming to Compass and sharing their success stories. I mean, as Robert said, our teams have never been busier. I think we have been and proven from a capital structure to be pretty flexible and make sure the deals make sense for us economically, but also for partners. We've just seen success. I think now is a very important time just given the unique circumstances. Yeah. I'm glad you brought that up, Kalani. The brokerage CEOs out there, you all know who you are.

Kalani Reelitz: Hey, Robert, the only thing I'd add to Jason, your question, is the other thing that on the other side of it all, we've done a really nice job of taking our partners from acquisitions in the past and really leveraging them and putting them out to make sure that they're helping those CEOs that Robert's talking about feel really comfortable about coming to Compass and sharing their success stories. I mean, as Robert said, our teams have never been busier. I think we have been and proven from a capital structure to be pretty flexible and make sure the deals make sense for us economically, but also for partners. We've just seen success. I think now is a very important time just given the unique circumstances.

Those Ceos that Robert was talking about feel really comfortable about coming to compass and sharing their their success stories as Robert said, our teams have never been busier.

Think we have been and proven from a capital structure to be pretty flexible and make sure of deals make sense for us economically but also for for partners and so we've just seen success and I think now is a very.

Important time, just given the unique circumstances.

I'm glad I'm glad you brought that up colony the.

Robert Reffkin: Yeah. I'm glad you brought that up, Kalani. The brokerage CEOs out there, you all know who you are. We are in conversations with look, they all want to be successful. We want to be successful just like agents. Everyone wants to be successful. We're all entrepreneurs. When our entrepreneurial potential is being capped, being controlled by portals and MLSs, that's bringing us together. Look, I love boutiques. I love that our industry has thousands of brokerage firms. MLSs and portals love it more because boutiques can't defend themselves against and protect themselves from control. Again, I think this is and this sentiment has been written about by others in the public that these industry rules are bringing conversations together on the M&A side.

The brokerage Ceos out there you all know who you are we are in conversations with but they all want to be successful we want to be social just like agents everyone's to be successful and we're all entrepreneurs and when our entrepreneur potential is being kept being controlled by portals now molasses.

Robert Reffkin: We are in conversations with look, they all want to be successful. We want to be successful just like agents. Everyone wants to be successful. We're all entrepreneurs. When our entrepreneurial potential is being capped, being controlled by portals and MLSs, that's bringing us together. Look, I love boutiques. I love that our industry has thousands of brokerage firms. MLSs and portals love it more because boutiques can't defend themselves against and protect themselves from control. Again, I think this is and this sentiment has been written about by others in the public that these industry rules are bringing conversations together on the M&A side. I appreciate that. Thank you. Thank you. Your next question comes from the line of Chris Kuntarich with UBS, please go ahead. A reminder to please unmute yourself, Chris, and we should be able to hear you.

<unk>.

That's bringing us together and look I love boutiques I love.

I love that our industry is thousands brokerage firms, but MLR portals love it more because.

Boutiques can't defend themselves against and protect themselves from control.

And so again I think this is and as this is the sentiment has been written about by others in the public debt.

These industry rules.

Breen, our Breen conversations together on the M&A side.

I appreciate that thank you.

Thank you.

Jason Helfstein: I appreciate that. Thank you.

Operator: Thank you. Your next question comes from the line of Chris Kuntarich with UBS, please go ahead. A reminder to please unmute yourself, Chris, and we should be able to hear you. All right. We will move on to the next questioner. We will move on to Nick McAndrew from Zelman & Associates. Please go ahead.

Our next question comes from the line of Chris <unk> with UBC UBS. Please go ahead.

A reminder to please on mute yourself, Chris and we ship it particularly.

Alright, we will move onto the next questioner, we will move onto Nick Nick Andrew from Zelman and Associates. Please go ahead.

Robert Reffkin: All right. We will move on to the next questioner. We will move on to Nick McAndrew from Zelman & Associates. Please go ahead. Hey, guys. Thanks for taking my questions. Kalani, congratulations on the new chapter. It's been great working with you. Scott, looking forward to working with you as well. Robert, maybe just one for you to start. It's pretty encouraging to see platform engagement hitting an all-time high. I'm just wondering if you have any early feedback to share from either top producers or their customers on the Compass One dashboard. I'm curious to see if there are any early signals that you're seeing on if this is helping just increase the stickiness of the platform in general for both agents and consumers. Thanks. Yeah. Thank you for asking. Yeah, the number that we've given out is for total agents.

Guys. Thanks for taking my questions Kolodny, congratulations on the new chapter it's been great working with you and Scott looking forward to working with you as well.

Nick McAndrew: Hey, guys. Thanks for taking my questions. Kalani, congratulations on the new chapter. It's been great working with you. Scott, looking forward to working with you as well. Robert, maybe just one for you to start. It's pretty encouraging to see platform engagement hitting an all-time high. I'm just wondering if you have any early feedback to share from either top producers or their customers on the Compass One dashboard. I'm curious to see if there are any early signals that you're seeing on if this is helping just increase the stickiness of the platform in general for both agents and consumers. Thanks.

Robert maybe just one for you to start it's it's pretty encouraging to see platform engagement hitting an all time high.

And I'm just wondering if you had any early feedback to share from either top producers or their customers on the compass, one dashboard and I'm curious to see if there are any early signals that you're seeing on if this is helping just increase the stickiness of the platform in general for both agents and consumers. Thanks.

And thank you for asking and.

The number that we've given out is for total agents member.

Robert Reffkin: Yeah. Thank you for asking. Yeah, the number that we've given out is for total agents. Remember, a lot of our agents are working at different spectrums of activity. If you look at our principal agents, the number of sessions per agent is even higher. We're very encouraged by that. In terms of Compass One, the feedback is very strong. I think there's more we could do on adoption, right? This spring, we focused more on the 3-Phased Marketing Strategy than adoption of Compass One. We're seeing very, I'd say, good adoption, but it could be better. There's opportunity there.

A lot of our agents are working at different spectrums of activity. If you look at our principal agents.

Robert Reffkin: Remember, a lot of our agents are working at different spectrums of activity. If you look at our principal agents, the number of sessions per agent is even higher. We're very encouraged by that. In terms of Compass One, the feedback is very strong. I think there's more we could do on adoption, right? This spring, we focused more on the 3-Phased Marketing Strategy than adoption of Compass One. We're seeing very, I'd say, good adoption, but it could be better. There's opportunity there. For those that are adopting it's, I would say, transforming their workflow with their clients. It gives 24/7 transparency to every step of the process before, during, and after the transaction to the client. It puts everything in one place. We continue to add more to it.

The number of sessions per agent is even higher.

We're very encouraged by that.

<unk>.

The.

The in terms of Compass one.

The feedback is very strong.

And we think there's more we could do an adoption rate. We've this spring we focus more on the three phase market strategy, then adoptions numbers one.

Very.

Good adoption, but it could be better so there's opportunity there but for those that are adopting it is I would say transforming their workflow with their clients and it gives $24 seven transparency to every step of the process before during and after the transaction.

Robert Reffkin: For those that are adopting it's, I would say, transforming their workflow with their clients. It gives 24/7 transparency to every step of the process before, during, and after the transaction to the client. It puts everything in one place. We continue to add more to it. We just launched listing insights to show how much traffic you get on every listing into it. The use case there is, let's say, you're getting 500 hits a day, and it's going down and down and down, and it's going to 10 hits a day after a certain period of time. You can say, Hey, you're not visible anymore in the search alerts. People have already seen your listing.

Their clients.

And it puts everything in one place we continue to add more to it.

We just launched lifting insights to show how much trap you get on every listing into into it and so the use case there is.

Robert Reffkin: We just launched listing insights to show how much traffic you get on every listing into it. The use case there is, let's say, you're getting 500 hits a day, and it's going down and down and down, and it's going to 10 hits a day after a certain period of time. You can say, Hey, you're not visible anymore in the search alerts. People have already seen your listing. If you bring the price and you have a price drop, then you're going to pop back up in the search alerts and everyone's search alert, and they'll see you again. I think we put an e-signature. We already had e-signature in Compass One, but now it's in the timeline in a way that's very simple. We already put the tours all the open house feedback is in there now as well with the buyer tours.

Let's say you have you're getting 500 hits, a day and it's going down down down and is going to.

When hits a day after a certain period of time, you can say, hey, you're not visible anymore in.

In the circulars people very senior listing, but he bring the pricing of a price drop then youre going to pop back up in the surcharge and everyone's referred and they'll see you again.

Robert Reffkin: If you bring the price and you have a price drop, then you're going to pop back up in the search alerts and everyone's search alert, and they'll see you again. I think we put an e-signature. We already had e-signature in Compass One, but now it's in the timeline in a way that's very simple. We already put the tours all the open house feedback is in there now as well with the buyer tours.

We will put an esignature, where now we already had esignature in Comverse, one, but now it's in the timeline.

In a way to think very simple, we already put the tourists, albeit the open the open house.

Feedback is in there now as well with the buyer tours. So we've continued to add more and more to it.

Ultimately, we want to create harmony and simplicity in the real estate process, where it's all in one single place and so yes, we're definitely happy to we made the investment we're going to continue to improve it more over time and it'll be a focus of our fall adoption efforts with our agents.

Robert Reffkin: We just continue to add more and more to it where ultimately, we want to create kind of harmony and simplicity in the real estate process where it's all in one single place. Yes, we're definitely happy that we made the investment. We're going to continue to improve it more over time. It'll be a focus of our fall adoption efforts with our agents. Great. Thank you. That's very helpful. Just to follow up too, I think there was a comment made that agents using One-Click Title are attaching title at pretty much 2 times the rate. From your perspective, what's driving the better attach? Is it just the simplicity of what One-Click Title is?

Great. Thank you that's very helpful. And then just a follow up to I think there was a comment made that agents using a one click teeny are attaching title it pretty much two times the rate and from your perspective, what's driving a better attach is it just the simplicity of what one click title is and can you also just remind us if theres an opportunity for something similar on the.

Nick McAndrew: Great. Thank you. That's very helpful. Just to follow up too, I think there was a comment made that agents using One-Click Title are attaching title at pretty much 2 times the rate. From your perspective, what's driving the better attach? Is it just the simplicity of what One-Click Title is? Can you also just remind us if there's an opportunity for something similar on the mortgage side with OriginPoint as well to grow just mortgage attach over time? Thank you.

Robert Reffkin: Can you also just remind us if there's an opportunity for something similar on the mortgage side with OriginPoint as well to grow just mortgage attach over time? Thank you. Yeah. No, absolutely. What drives the higher attach of One-Click Title? Look, for an agent, time is money. You, of course, know with RESPA, you can't financially incentivize an agent to drive attach. What One-Click Title does is it saves them and their client time. It's one click versus creating the email and putting a bunch of information together and sending it by email, waiting for the response that gets hidden in someone's email or maybe in spam folder. It's all living in the system.

Mortgage side with origin point as well to grow just mortgage attach overtime. Thank you.

Absolutely and so what drives the higher attach of one quick title looked for in agents.

Robert Reffkin: Yeah. No, absolutely. What drives the higher attach of One-Click Title? Look, for an agent, time is money. You, of course, know with RESPA, you can't financially incentivize an agent to drive attach. What One-Click Title does is it saves them and their client time. It's one click versus creating the email and putting a bunch of information together and sending it by email, waiting for the response that gets hidden in someone's email or maybe in spam folder. It's all living in the system.

Time is money.

And you of course know with restaurant you can financially incentivize the agents too.

Drive attach, but if you buy one click title does is it makes it saves them and their client in time.

It's one click versus creating the email.

Putting a bunch of information gathering sending by email waiting for the respond to gets hidden in.

In someone's email or maybe in spam folder is all living in the system.

And answer.

So that saves them time and which.

Robert Reffkin: That saves them time, but also saves them anxiety, which in this business is a lot of anxiety that when you make an action, it may not be followed up with or may get lost when you're doing so many transactions at a time. That's why it has a better attach rate because it saves the agent time. It reduces anxiety. In speeding up the transaction with their client, it reduces the chance that something can happen that can make the transaction not fall apart. In terms of mortgage, we want to bring the same to mortgage, but that will probably be a 2026 effort, not this year. Got it. That's helpful. Thank you, guys. Your next question comes from the line of Alec Brondolo with Wells Fargo. Your line is open. Please go ahead. Yeah. Hey, thanks so much for the question.

But also saves them anxiety, which in this business, there's a lot of anxiety that when you.

Make an action that may not be followed up with or May get lost and when youre doing so many transaction at a time and so.

That's why it has a better attach rate because.

It saves the agent time, it reduces anxiety and.

In speeding up the transaction with their client it reduces the chance that the.

Theres something can happen that can make the transaction.

Fall apart in terms of mortgage.

We want to bring the same to mortgage but they'll probably be.

'twenty 'twenty six effort not this year.

Got it that's helpful. Thank you guys.

Nick McAndrew: Got it. That's helpful. Thank you, guys.

Your next question comes from the line of Alex <unk> with Wells Fargo. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Alec Brondolo with Wells Fargo. Your line is open. Please go ahead. Yeah. Hey, thanks so much for the question.

Yeah, Hey, thanks, so much for the question I really appreciate it and maybe if I could start with.

832, each in gross addition, number I guess I asked the question I have is Robert do you feel like Youre evangelism around the private exclusive strategy.

Robert Reffkin: I really appreciate it. Maybe if I could start with the 832 agent gross addition number. I guess the question I have is, Robert, do you feel like your evangelism around the Private Exclusive strategy had a tangible or meaningful kind of benefit to agent gross heads in the quarter? Were there other factors that drove the strength? That's maybe the first question. The second question is, any kind of update or feedback on the macro in July? I think the industry, everybody in the industry agrees Q2 was tepid, but Anywhere Real Estate, Realogy on their earnings call a couple of days ago, I think they called out improved trends in July. Just any thoughts that would be helpful as well. Yeah. Look, we continue to get better and better in all the things that we do. By no means is it just the advocacy.

Alec Brondolo: I really appreciate it. Maybe if I could start with the 832 agent gross addition number. I guess the question I have is, Robert, do you feel like your evangelism around the Private Exclusive strategy had a tangible or meaningful kind of benefit to agent gross heads in the quarter? Were there other factors that drove the strength? That's maybe the first question. The second question is, any kind of update or feedback on the macro in July? I think the industry, everybody in the industry agrees Q2 was tepid, but Anywhere Real Estate, Realogy on their earnings call a couple of days ago, I think they called out improved trends in July. Just any thoughts that would be helpful as well.

Tangible or meaningful benefit to Egypt gross adds in the quarter or were there other factors that.

That drove the strength that's maybe the first question. The second question is on <unk>.

Any kind of update or feedback on the macro in July.

The industry every industry increased <unk>, which was tepid, but anywhere anywhere real estate real Jay on the earnings call. A couple of days ago, I think they called out improved trends in July so just any thoughts there would be helpful as well.

Yes.

So we continue to get.

Robert Reffkin: Yeah. Look, we continue to get better and better in all the things that we do. By no means is it just the advocacy. I think what has changed the most this last quarter versus the prior year, yes, technology. I mean, you can see the adoption of our tech is up 37%, right? We are seeing those improvements. When you're recruiting someone, they wouldn't know that. Now, they could talk to their agents that are friends here and tell them, and so you get good referrals for sure. Look, I think there are views on different sides of what is right, and people have very personal views about it. The agents, I think, on balance, top agents for sure want choice. There's one of our top agents, Gretchen Coley in Raleigh, she said, You know what?

Better and better and all of the things that we do.

And so by no means is it just the advocacy.

But I think what has changed the most this last quarter versus the prior year, Yes technology you can see the adoption of our tech is up 37% rate. So we.

Robert Reffkin: I think what has changed the most this last quarter versus the prior year, yes, technology. I mean, you can see the adoption of our tech is up 37%, right? We are seeing those improvements. When you're recruiting someone, they wouldn't know that. Now, they could talk to their agents that are friends here and tell them, and so you get good referrals for sure. Look, I think there are views on different sides of what is right, and people have very personal views about it. The agents, I think, on balance, top agents for sure want choice. There's one of our top agents, Gretchen Coley in Raleigh, she said, You know what?

We are seeing those improvements.

But when you're recruiting someone they don't like the difference when you increase someone they wouldn't know that now that you can talk to their agents that are friends here and tell them if they can get good.

<unk> referrals for sure, but I I think their views different sizes of.

Of what is right and people are very personal views about it.

The agents I think unbalanced top agents.

Sure one choice there is one of our when we're tapping into Venezuela Gretchen Holloway.

And Raleigh.

She said.

I'm starting to look at all these all these comments and the comments section of these people who are saying you shouldnt be able to market optimized.

Robert Reffkin: I'm starting to look at all these comments in the comments section of these people who are saying you shouldn't be able to market off the MLS. I'm realizing they don't sell real estate." What she meant by that, these are agents that don't have a business, or these are people or these organized real estate members of the association and the organized system of these portals and MLSs. Top agents, these top agents love their clients more than they give more to their clients than their own families in certain senses. When they give you a dinner with your family, and if you're a top agent and someone calls, many of them will be like they pick up for that client. Their entire business is because they give so much to their clients. They care so much for their clients.

Yeah, I'm really isn't they don't sell real estate.

And what you meant by that these are the agent that don't have a business or these are people or these organized real estate members of the association.

And this the organized system of these portals and losses.

But Tom Egypt, These top agents love their clients.

More than.

They give more to their clients and their own families.

Our incentives with meaningful when it can be a dinner with your family and your top agent someone call many of them will be like they they pick up for that client.

Their entire business is because it gives so much their cars they care so much for the clients and the very content.

Robert Reffkin: Their entire business is because they give so much to their clients. They care so much for their clients. The very concept that an MLS and a portal would find them and ban them, find them up to $5,000, ban them for giving choice to their sellers, the same choice that their developers have. These top agents are sophisticated. They understand what's happening. They feel sold out by organized real estate. Again, some of them, really, they don't all feel that way. Some of them believe what they've been told, maximum exposure equals maximum price. That's a really great line, maximum exposure equals maximum price.

And a portal would find them and ban them find out up to 5000 has been banned them for giving choices sellers. The same choice that there the developers out in these type of items are sophisticated they understand what's happening happening.

Robert Reffkin: The very concept that an MLS and a portal would find them and ban them, find them up to $5,000, ban them for giving choice to their sellers, the same choice that their developers have. These top agents are sophisticated. They understand what's happening. They feel sold out by organized real estate. Again, some of them, really, they don't all feel that way. Some of them believe what they've been told, maximum exposure equals maximum price. That's a really great line, maximum exposure equals maximum price. Although if that were true, everything would be on Amazon. It's not. If that were true, LVMH wouldn't be able to sell a bag that costs $200 for $20,000, right? Maximum exposure, maximum price is not true. It's not a true thing.

So they they feel sold out by organized real estate real estate and again some of them.

They don't all feel that way some of them believe that what they've been told maximum exposure to a maximum price. That's a really great line nine eagle maximum price although.

If that were true everything would be on Amazon and is not.

Robert Reffkin: Although if that were true, everything would be on Amazon. It's not. If that were true, LVMH wouldn't be able to sell a bag that costs $200 for $20,000, right? Maximum exposure, maximum price is not true. It's not a true thing. Top agents understand that, and that's why they just want someone to fight for them and to advocate for them. That's what we're doing. You can see it also in our retention numbers. Our retention numbers were 97.5%, meaningfully higher than it was a year ago. We see it in the data.

If there were two <unk> wouldn't be able to sell a bank for that cost $200 for 'twenty.

It's not just those where it makes sense is not true as Im sure thing.

So Tom <unk> understand that and that's why they just want someone to find for them and to advocate for them and Thats what were doing.

Robert Reffkin: Top agents understand that, and that's why they just want someone to fight for them and to advocate for them. That's what we're doing. You can see it also in our retention numbers. Our retention numbers were 97.5%, meaningfully higher than it was a year ago. We see it in the data. Your next question will come from the line of Chris Kuntarich with UBS. Please go ahead. A reminder to please unmute yourself by hitting star 6. All right. We will move on to the next question. Oh, Chris, are you there? Can you hear me now? Yes, I can. Can you hear me now? Please go ahead. All right. Sorry about that. Kalani, congratulations. I guess I can't let you go.

And you can see it also in retention numbers, a retention number 97, 5% meaningfully higher than it was a year ago.

And we see it in the data.

Operator: Your next question will come from the line of Chris Kuntarich with UBS. Please go ahead. A reminder to please unmute yourself by hitting star 6. All right. We will move on to the next question. Oh, Chris, are you there?

Your next question comes from the line of Chris <unk>.

With UBS. Please go ahead.

A reminder to please yourself bye.

Sorry.

Alright, we will move on to the next question Chris.

Chris are you there right now.

Yes, Hi can you hear me now ahead, alright, sorry about that.

Chris Kuntarich: Can you hear me now?

Operator: Yes, I can.

Chris Kuntarich: Can you hear me now?

Hello, Hi.

Operator: Please go ahead.

Chris Kuntarich: All right. Sorry about that. Kalani, congratulations. I guess I can't let you go. After making you wait this long for me to ask my question, to ask a question about our full-year non-GAAP OpEx guide, can you just give us a sense of what could potentially drive that to the low end of the range versus kind of the midpoint and kind of how your visibility compares versus maybe this point last year? I think it was touched on maybe one for Robert here on the one-click T&E. I think last Q, you were calling out that you were rolling this out to iOS devices.

Congratulations and I guess I can't let you go after making you wait this long for me to ask my question to ask a question about our full year non <unk>.

Robert Reffkin: After making you wait this long for me to ask my question, to ask a question about our full-year non-GAAP OpEx guide, can you just give us a sense of what could potentially drive that to the low end of the range versus kind of the midpoint and kind of how your visibility compares versus maybe this point last year? I think it was touched on maybe one for Robert here on the one-click T&E. I think last Q, you were calling out that you were rolling this out to iOS devices. I think you were saying you're looking to get it into the hands of kind of 70% of markets. Can you just talk to us about how much of this is potentially getting it into Android? Is this being done by a market basis?

GAAP Opex guide can you just give us a sense of.

What could potentially drive that to the low end of the range versus kind of the mid point and kind of how your visibility compares.

Versus maybe.

This point last year, and then I think it was touched on maybe one for Robert here on the one click.

<unk>.

I think last quarter, you were calling out that you were rolling this out to iOS devices.

I think you were saying it was.

You are looking to get it into the hands of kind of 70% of markets can you just talk to us about how much. If this is essentially getting it into Android is this being done by a market by market basis, just how much of a lift is it from a tech perspective versus just kind of operational execution. Thanks. So much.

Chris Kuntarich: I think you were saying you're looking to get it into the hands of kind of 70% of markets. Can you just talk to us about how much of this is potentially getting it into Android? Is this being done by a market basis? Just how much of a lift is it from a tech perspective versus just kind of operational execution? Thanks so much.

Robert Reffkin: Just how much of a lift is it from a tech perspective versus just kind of operational execution? Thanks so much. Yeah, Robert, I'll go first on the OpEx. Chris, thanks for the question. I think to get to the low end of our guide, it's going to be let me start it this way. I think what we've done over the last three years has really driven kind of all of our leaders from corporate to office level to really look at costs. What's driving the favorability so far is continued cost controls in some of the very basic areas as well as a lot of work from our folks and leaders in the field as they look at how to maximize expenses, right? Our agent economics continue to improve.

Yes, well I'll go first on the Opex, Chris Thanks for the question.

Kalani Reelitz: Yeah, Robert, I'll go first on the OpEx. Chris, thanks for the question. I think to get to the low end of our guide, it's going to be let me start it this way. I think what we've done over the last three years has really driven kind of all of our leaders from corporate to office level to really look at costs. What's driving the favorability so far is continued cost controls in some of the very basic areas as well as a lot of work from our folks and leaders in the field as they look at how to maximize expenses, right? Our agent economics continue to improve.

I think.

To get to the low end of our guide.

It's going to be let me, let me start this way I think I think what we've done over the last three years is really driven kind of all of our our meters from corporate to office level to really look at cost and so what's driving the favorability. So far is continued cost controls and some of the the very basic areas as well as.

A lot of work from our folks and leaders in the field as they look at how to maximize.

<unk> expenses are Asian, economics continue to improve so to get to the low end, it's really going to be just continued focus on cost and and really seeing some of the work in the field come through from an agent economic standpoint.

Robert Reffkin: To get to the low end, it's really going to be just continued focus on cost and really seeing some of the work in the field come through from an agent economics standpoint and working there. Again, I think some of the good news is a lot of what the field is working on can save us costs, but also just improves service to our agents. Obviously, that's our number one concern. We're getting the best of both worlds. I think to get to the low end, though, we're going to see it really be maximizing by our regional leaders in their individual offices. Robert? Yeah. In terms of One-Click Title, we launched in all of our markets One-Click Title. We have expanded our title operations to new markets, and that takes some time to launch when you get into a new market.

Kalani Reelitz: To get to the low end, it's really going to be just continued focus on cost and really seeing some of the work in the field come through from an agent economics standpoint and working there. Again, I think some of the good news is a lot of what the field is working on can save us costs, but also just improves service to our agents. Obviously, that's our number one concern. We're getting the best of both worlds. I think to get to the low end, though, we're going to see it really be maximizing by our regional leaders in their individual offices. Robert?

Working working there again I think some of the good news is a lot of what the field is working on can save us cost, but also just improves service to our agents and obviously, that's our number one concern. So we're get into both the best of both worlds I think to get to the low end, though we're going to see it.

Really be maximizing by our regional leaders in their individual offices.

Robert.

In terms of one quick title.

Robert Reffkin: Yeah. In terms of One-Click Title, we launched in all of our markets One-Click Title. We have expanded our title operations to new markets, and that takes some time to launch when you get into a new market. We're working on getting it to Android, and that will take a little more time. One question, I think I was cut off earlier. In terms of July, the last analyst asked the question around what do we see in July. July was healthy. I think it kind of reflects some of the delayed demand from the spring market where tariffs were the focus in April and much of spring.

We we launched in all of our markets one click title.

We have expanded our title operations to new markets in that.

Takes some time to to launch when you won't get into a new market.

And we're working on getting it to Android that will take a little more time.

Robert Reffkin: We're working on getting it to Android, and that will take a little more time. One question, I think I was cut off earlier. In terms of July, the last analyst asked the question around what do we see in July. July was healthy. I think it kind of reflects some of the delayed demand from the spring market where tariffs were the focus in April and much of spring. We are seeing pendings up, in-contract listings up 5% year-over-year. That's not a heroic increase, but it is up. I'd expect that to flow through into the called September data for solds. I think this year will look a lot like last year. That kind of is what it is on the financial side. On the competitive side, yeah, I think it creates opportunities.

One question I think I was cut off early in terms of July at the last analyst asked the question around what do we see in July July was healthy.

Yeah, I think it can reflect some of the delayed demand from the spring market, where tariffs were the focus in April and in much of spring.

We we are seeing pendings up.

Robert Reffkin: We are seeing pendings up, in-contract listings up 5% year-over-year. That's not a heroic increase, but it is up. I'd expect that to flow through into the called September data for solds. I think this year will look a lot like last year. That kind of is what it is on the financial side. On the competitive side, yeah, I think it creates opportunities. You can see that in our market share of what's happened over the course of the last year. You can see that in the M&A. You can see that in the recruiting. You can see that in the retention.

In contract was up 5% year over year.

That's not yeah.

Heroic number increase but it is it is up and so I would expect that to flow through.

Into the September data for Salt.

But yes, I think this year will look a lot like last year yeah.

Yes.

Kind of is what it is on the financial side, but on the competitive side.

<unk> it.

Yes, I think it creates opportunities and you can see that in our market share or whatever happened over the course of the last year you can see that in the M&A you can see that in the recruiting you can see on the retention.

Robert Reffkin: You can see that in our market share of what's happened over the course of the last year. You can see that in the M&A. You can see that in the recruiting. You can see that in the retention. Your next question comes from the line of Michael Ng from Goldman Sachs. Your line is open. Please go ahead. Hey, good afternoon. Thank you for the question. Kalani, I wanted to extend my positive sentiments to you on your new role as well. I just have 2. First, I was wondering if you could talk about any potential changes in commission rates that you're seeing. GAAP revenue as a percentage of GTV has been remarkably stable on a year-over-year basis. Just wondering if you could double-click on that a little bit and wondering if we just strip out adjacent services, is the commission rate stable?

Operator: Your next question comes from the line of Michael Ng from Goldman Sachs. Your line is open. Please go ahead.

Your next question comes from the line of Michael <unk>.

From Goldman Sachs. Your line is open. Please go ahead.

Hey, good afternoon. Thank you for the question and client wanted to extend my my my positive sentiments to you on your new role as well.

Michael Ng: Hey, good afternoon. Thank you for the question. Kalani, I wanted to extend my positive sentiments to you on your new role as well. I just have 2. First, I was wondering if you could talk about any potential changes in commission rates that you're seeing. GAAP revenue as a percentage of GTV has been remarkably stable on a year-over-year basis. Just wondering if you could double-click on that a little bit and wondering if we just strip out adjacent services, is the commission rate stable? I have a quick follow-up. Thank you.

I just have two first I was wondering if you could talk about.

Any potential changes in commission rates that you're seeing.

<unk> revenue as a percentage of GTA V has been.

Remarkably stable on a year over year basis, just wondering if you could.

Click on that a little bit and.

I'm wondering if if if we just strip out adjacent services as the as the commission rates stable and then I have a quick follow up thank you.

Yes, I'll cover that but thanks for the thanks for the sentiment.

Robert Reffkin: I have a quick follow-up. Thank you. Yeah, yeah. I'll cover that. Thanks for the sentiment. I think when we compare kind of the rates for Q2 versus prior Q2s, it is, as you said, stable. I think we've seen it up in a few markets and down in a few, but on average, kind of flat to kind of very slightly down or up, but depending on the market. Overall, we have not seen degradation, and I think in the metric, and I think it's expected given our typical agent is that full-time professional agent, and they're demonstrating the value to their clients. I think you have it right. We're seeing some ebbs and flows in markets, but even that is very, very stable compared.

Kalani Reelitz: Yeah, yeah. I'll cover that. Thanks for the sentiment. I think when we compare kind of the rates for Q2 versus prior Q2s, it is, as you said, stable. I think we've seen it up in a few markets and down in a few, but on average, kind of flat to kind of very slightly down or up, but depending on the market. Overall, we have not seen degradation, and I think in the metric, and I think it's expected given our typical agent is that full-time professional agent, and they're demonstrating the value to their clients.

I think when we compare kind of the rates for Q2 versus prior Q2s. It is as you said stable.

We've seen it up in a few markets and down in a few but on average kind of flat to vary.

Kind of very slightly down or up but banana market overall.

We have not seen degradation in I think in the metric and I think it's <unk>.

Expected given our typical agent is that full time professional agents.

And there and demonstrating the value to their clients. So I think you you haven't right, we're seeing some ebbs and flows and markets, but even that is very very stable compared to and I think if you as we chart. The kind of 510 year history of it it kind of looks like the same ebb and flow we haven't seen a lot of difference great. Thank you.

Kalani Reelitz: I think you have it right. We're seeing some ebbs and flows in markets, but even that is very, very stable compared. I think if you, as we chart the kind of 5, 10-year history of it kind of looks like the same ebb and flow. We haven't seen a lot of difference.

Robert Reffkin: I think if you, as we chart the kind of 5, 10-year history of it kind of looks like the same ebb and flow. We haven't seen a lot of difference. Great. Thank you. I just wanted to ask about the agent net ad outlook, encouraging to see the record principal agent organic net ads in the quarter. I was just wondering if you could talk a little bit about your expectations for net ads on both a gross and a net basis for the rest of the year. Is there any pressure from the industry itself shrinking just given some of the challenges in the housing market? Thank you. Maybe I'll start, and then I'll pass it on to Kalani. I'll also want to add some color. The 5% up for July, that's for the market and pendings. That's not for Compass.

I just wanted to ask about the agent net ad outlook.

Kalani Reelitz: Great. Thank you. I just wanted to ask about the agent net ad outlook, encouraging to see the record principal agent organic net ads in the quarter. I was just wondering if you could talk a little bit about your expectations for net ads on both a gross and a net basis for the rest of the year. Is there any pressure from the industry itself shrinking just given some of the challenges in the housing market? Thank you.

Encouraging to see the.

The record principal agent organic net adds in the quarter.

I was just wondering if you could talk a little bit about your expectations for net.

Net adds on both a gross and a net basis for the rest of the year.

Is there any pressure from from the industry itself zinc shrinking just given.

Some of the challenges in the housing market. Thank you, maybe I'll start and I'll pass it on declining also want to.

Robert Reffkin: Maybe I'll start, and then I'll pass it on to Kalani. I'll also want to add some color. The 5% up for July, that's for the market and pendings. That's not for Compass. That's just an overall market number. As you can see in the past, we've grown faster than the market, but that was just a market number. We don't disclose ours. In terms of net ads, I think it is worth noting we brought on over 800 principal agents, but the total number of agents, so not just principals, was nearly 2,000, I think approximately around 1,700.

Add some color there are 5% up for July that's for the market and pending is not for compass.

That's just an overall market number.

As you can see in the past.

Robert Reffkin: That's just an overall market number. As you can see in the past, we've grown faster than the market, but that was just a market number. We don't disclose ours. In terms of net ads, I think it is worth noting we brought on over 800 principal agents, but the total number of agents, so not just principals, was nearly 2,000, I think approximately around 1,700. When you compare us to other companies, I think you can just look at that apples to apples. In terms of the competitive pressure, the industry is losing agents. I think NAR came out and said the number of agents has gone down 20% in the last year. There's something that came out about 2 months ago. That's 1 data point. I think, again, in down markets, the best agents gain market share.

We've grown faster than the market, but that was just a market number we don't disclose ours.

In terms of net adds I think it is worth noting we brought on.

Over 800 agents principal agents, but.

The total number of agents. So now its principals was nearly 2000 new.

Approximately around 1700 M.

And so when you compare us to other companies and then you can you can.

Robert Reffkin: When you compare us to other companies, I think you can just look at that apples to apples. In terms of the competitive pressure, the industry is losing agents. I think NAR came out and said the number of agents has gone down 20% in the last year. There's something that came out about 2 months ago. That's 1 data point. I think, again, in down markets, the best agents gain market share.

You should just look at that apples to apples.

And.

In terms of the competitive pressure the <unk>.

Industry is losing agents I think nor came out and said there.

The number of layers has gone down 20% in the last year and there Theres a.

There was something that came out in about two months ago. So that's one data point.

And I think again in down markets, the best agent gain market share in down markets.

Best agents.

Robert Reffkin: In down markets, the best agents gain business while the worst agents leave the business. We are seeing I think we are fortunate that we have built a company really focused on the best agents who are not only growing and staying, but gaining market share as a result. Kalani, on net principal ads. Yeah, yeah. Sure, sure. Michael, look, I think we clearly had good results this quarter, great results this quarter, actually, on the recruiting front. I still think that 6 to 700 principal ads is the right range. I think the variable for us on moving kind of above the 700 range in volume is really the walkover volume that we see. Reminder, those are smaller boutiques that kind of shed some of their OpEx and come onto our platform and take advantage of it. We have a tremendous pipeline.

Gain business, while the worst agents leave the business.

And so we are seeing.

I think we are fortunate that we have.

<unk> built a company really focus on the best agents, who are not only growing in Spain.

But gaining market share as a result.

But colonial.

Principal answer yes, yes sure sure.

I think we clearly had good results this quarter great results this quarter actually on the recruiting front I still I still think that 6% to 700, principally ads is the right range I think.

Kalani Reelitz: Sure, sure. Michael, look, I think we clearly had good results this quarter, great results this quarter, actually, on the recruiting front. I still think that 6 to 700 principal ads is the right range. I think the variable for us on moving kind of above the 700 range in volume is really the walkover volume that we see. Reminder, those are smaller boutiques that kind of shed some of their OpEx and come onto our platform and take advantage of it. We have a tremendous pipeline.

I think the variable for us on moving kind of above the 700 range.

And volume is really the work over volume that we see a reminder, those are smaller boutiques that.

Shed some of their opex and come onto our platform and take advantage of it.

We have a tremendous pipeline the team and they are creating teams working well with those folks I think it will depend on the timing of when and how those folks come over.

Robert Reffkin: The recruiting team is working well with those folks. I think it'll depend on the timing of when and how those folks come over. That will be the driver, I guess, of overperformance against that 700 baseline. I think over time, we'll continue to, as Robert said earlier, we just keep getting better at this. I expect the team and Scott to raise the expectation of our recruiting team. Look, I think the big takeaway here is that we are seeing momentum and that demand for Compass has never been stronger. As you think about the other side of your net equation, our retention was actually slightly better than a year ago quarter. We expect to kind of be this year, we're roughly 310 net ads.

Kalani Reelitz: The recruiting team is working well with those folks. I think it'll depend on the timing of when and how those folks come over. That will be the driver, I guess, of overperformance against that 700 baseline. I think over time, we'll continue to, as Robert said earlier, we just keep getting better at this. I expect the team and Scott to raise the expectation of our recruiting team.

But that will drive that will be the driver I guess of over performance.

Against that 700 baseline.

I think over time, we will continue to as Robert said earlier, we just keep getting better at this so I expect the team and Scott to raise the expectations of our recruiting team, but look I think the big takeaway here is that we are seeing momentum in that demand for compass has never been stronger as you think about the other side of your net equation.

Kalani Reelitz: Look, I think the big takeaway here is that we are seeing momentum and that demand for Compass has never been stronger. As you think about the other side of your net equation, our retention was actually slightly better than a year ago quarter. We expect to kind of be this year, we're roughly 310 net ads. Again, I'll aim for the 150 to 200, and then the upside will be on the teams working through the walkover. I hope that adds for your guidance and your models.

Our retention was actually slightly better than a year ago quarter.

So we expect to kind of be this year, we're roughly at 310 net ads.

<unk> for the 150 to 200 and then the upside will be on the teams working through the walk over so I hope that hope it adds for your guidance and your models.

Robert Reffkin: Again, I'll aim for the 150 to 200, and then the upside will be on the teams working through the walkover. I hope that adds for your guidance and your models. Great. Thank you, Robert. Thank you, Kalani. As a reminder, the agents that we bring on, the recruits, generate more production than agents that leave. When we give you the retention number and those that leave, it's a very high integrity number. It includes agents that retire. It includes agents that move to cities that we don't operate in. It includes agents that move to different industries altogether. What we've seen over time is the biggest competitor to Compass is retirement, right? In a 20-year career, you should lose 5 senior people every year. Your next question comes from the line of Elizabeth Langan with Barclays. Please go ahead. Hi.

Thank you Robert Thank you clay.

As a reminder, the agents that we bring on to recruit gender right I have more production may even believe that when we give you the retention number and those that lead to very high integrity number.

Michael Ng: Great. Thank you, Robert. Thank you, Kalani.

Robert Reffkin: As a reminder, the agents that we bring on, the recruits, generate more production than agents that leave. When we give you the retention number and those that leave, it's a very high integrity number. It includes agents that retire. It includes agents that move to cities that we don't operate in. It includes agents that move to different industries altogether. What we've seen over time is the biggest competitor to Compass is retirement, right? In a 20-year career, you should lose 5 senior people every year.

It includes agents.

<unk> agents that retire it includes agents that move to cities that we don't operate in it includes instead move to different industries altogether.

And so the what we've seen over time is the biggest competitive accompanies the retirement rate and a five.

20 year career at five years, you lose five senior people every year.

Operator: Your next question comes from the line of Elizabeth Langan with Barclays. Please go ahead. Hi.

Your next question comes from the line of Elizabeth Rangan with backhaul.

Bob.

Hi, I thought it was worth on some.

<unk> today are Connie I'll also extend my congratulations unless you locked.

Robert Reffkin: You've got Elizabeth on from Matt's team today. Kalani, I will also extend my congratulations and wish you luck. I hope you kind of move into your next chapter. Just starting off, I wanted to ask about general market trends. Obviously, over the last few months, we've seen a pretty wide set of outcomes dependent on geography. I was wondering if you could speak to how Compass is positioned around that and what markets are seeing a little healthier attraction versus ones that are coming in a little bit softer. Yeah. Overall, prices are up 1% year-over-year. Inventory for single family, that is up 27% year-over-year. The number of homes that have a price drop right now is 42%. 42% of the homes in July that exist in the country have a price drop.

Elizabeth Langan: You've got Elizabeth on from Matt's team today. Kalani, I will also extend my congratulations and wish you luck. I hope you kind of move into your next chapter. Just starting off, I wanted to ask about general market trends. Obviously, over the last few months, we've seen a pretty wide set of outcomes dependent on geography. I was wondering if you could speak to how Compass is positioned around that and what markets are seeing a little healthier attraction versus ones that are coming in a little bit softer.

As you kind of it and then to your next chapter.

Just starting off I wanted to ask about in.

General market trends, obviously over the last few months.

In a pretty wide set of outcomes, depending on geography, and I was wondering if you could speak to how compass is positioned around that.

Markets are seeing healthier.

Healthier attraction versus ones that are coming in a little bit softer.

Yeah. So overall.

Robert Reffkin: Yeah. Overall, prices are up 1% year-over-year. Inventory for single family, that is up 27% year-over-year. The number of homes that have a price drop right now is 42%. 42% of the homes in July that exist in the country have a price drop. That's more than any time in the last 12 years. They all look like damaged goods. The reason why Compass Private Exclusives and Compass Coming Soon are so valuable to sellers is we can protect you from that. When you have a Coming Soon or Private Exclusive, there's no days on market.

Prices are up.

1% year over year inventory for single family that is about 27% year over year.

On the <unk>.

Number of homes that have a price drop right now is 42% so 42% of the homes in July that exist in the country have a price drop that's more more than any time in the last 12 years.

Robert Reffkin: That's more than any time in the last 12 years. They all look like damaged goods. The reason why Compass Private Exclusives and Compass Coming Soon are so valuable to sellers is we can protect you from that. When you have a Coming Soon or Private Exclusive, there's no days on market. There's no price drop history. Yeah, it's very meaningful. When you say how are we positioned, one, we're positioned to help protect people from the risk of marking their home through organized real estate, i.e., MLS and portals that put negative insights on the listings with no regard to what the seller wants because they have no choice. They'll find that agent, and they'll find the seller's agent and their client where the seller doesn't even know what's happening. That's one.

They all look like damage goods.

The reason why compass private exclusives and Congress coming assumes are so valuable to sellers as we can protect you from that when you are coming sooner products. Because there is no data market because of the pressure off history.

And it's.

Robert Reffkin: There's no price drop history. Yeah, it's very meaningful. When you say how are we positioned, one, we're positioned to help protect people from the risk of marking their home through organized real estate, i.e., MLS and portals that put negative insights on the listings with no regard to what the seller wants because they have no choice. They'll find that agent, and they'll find the seller's agent and their client where the seller doesn't even know what's happening. That's one.

Yeah.

It's very meaningful and so when you say, how repositioned one or position to help protect people from the risks.

Of.

Marketing their home through.

Organized real estate I E MLS and portals that put negative insights and listings with no.

No regard to what the seller wants because they have no choice and they'll find that agent and they'll find the seller's agents.

And their client where the seller doesn't even know what's happening.

They are and so that's that's one.

We in terms of markets new developments still.

Robert Reffkin: In terms of markets, new developments still more in demand because people want things that are new and move-in ready. The Northeast has less inventory than the South. The normal migration pattern from the Northeast to the South has slowed dramatically. You have people moving from there was a big move from California to places like Texas and Nashville, which is meaningfully moderated. Overall, I expect this year to look a lot like last year. Okay. Thank you, Robert. Kalani, I will leave you with the last question from me. You've obviously made a lot of progress on the cost out initiatives and the guide for the OpEx, obviously. You'd mentioned that there are some inflationary pressures, which will be offset by some of these newer cost out initiatives. I was wondering if you could talk through where that incremental inflation is coming from. Yeah.

More demand because people want things that are new and move in ready.

The northeast has has less.

Inventory than the south.

Than normal migration pattern from the north east of the South has slowed dramatically.

You have.

And people moving from.

There was a big move from California to places like.

Texas, and Nashville, which is meaningfully moderated.

But overall I expect this year to look a lot like last year.

Okay. Thank you Robert.

Elizabeth Langan: Okay. Thank you, Robert. Kalani, I will leave you with the last question from me. You've obviously made a lot of progress on the cost out initiatives and the guide for the OpEx, obviously. You'd mentioned that there are some inflationary pressures, which will be offset by some of these newer cost out initiatives. I was wondering if you could talk through where that incremental inflation is coming from. Yeah.

And then a colonial maybe it with Bob last question from me, but.

You've obviously made a lot of progress on the cost out initiatives.

Guide in Q4 Opex.

And but you had mentioned that there are some inflationary pressures will be offset by some of these newer cost out initiatives. I was wondering if you could talk to you where that incremental inflation that's coming from.

Yes.

Yes, no I'm really excited.

With the program that Robert and I talked about just given the fact that I think it improves everybody's expectations by $50 million at least on the inflationary side one of the things. We're learning we've had some really great M&A partners or last two years and Dave.

Robert Reffkin: Yeah. No, I'm really excited with the program that Robert and I talked about, just given the fact that I think it improves everybody's expectations by $50 million at least. On the inflationary side, one of the things we're learning, we've had some really great M&A partners over the last two years. I think because they've been kind of like regional test areas for us, and they've been doing some really interesting work to offset inflation. Inflation is kind of coming from everywhere, from a procurement side, from even some of the technology costs. I think we have some opportunities to offset that. We're still working through it. A lot of work to figure out how best to, because every market's a little different as we think about optimizing that.

Kalani Reelitz: Yeah. No, I'm really excited with the program that Robert and I talked about, just given the fact that I think it improves everybody's expectations by $50 million at least. On the inflationary side, one of the things we're learning, we've had some really great M&A partners over the last two years. I think because they've been kind of like regional test areas for us, and they've been doing some really interesting work to offset inflation. Inflation is kind of coming from everywhere, from a procurement side, from even some of the technology costs. I think we have some opportunities to offset that. We're still working through it. A lot of work to figure out how best to, because every market's a little different as we think about optimizing that.

I think because they have been active kind of like a regional tests.

First areas for us and they've been doing some really interesting work to offset inflation inflation kind of coming from everywhere.

From from some of the.

From a procurement side from even some of the tech technology costs I think we have some some opportunities there to offset that but we're still working through it a lot of a lot of work to figure out how best to because every market is a little different as we think about optimizing that.

But we will.

Folks like our Christie's International real estate, one of the best at driving agent service and agent economics, and so we'll be kind of looking at ways to deploy some of the work they've done.

Robert Reffkin: We've folks like our Christie's International Real Estate, one of the best at driving agent service and agent economics. We'll be kind of looking at ways to deploy some of the work they've done. Your last question comes from the line of Benjamin Black. Please go ahead. Hi. This is Jeff. I'm for Ben. Thanks for taking my squeezing me in to take your last question. I just wanted to follow up on the M&A that was discussed. You mentioned that industry rules are bringing additional M&A opportunities. Do you also think that maybe a weaker housing market has actually accelerated the pace of the M&A that you've done?

Kalani Reelitz: We've folks like our Christie's International Real Estate, one of the best at driving agent service and agent economics. We'll be kind of looking at ways to deploy some of the work they've done.

Operator: Your last question comes from the line of Benjamin Black. Please go ahead.

Your last question comes from the line of bonds.

And then black.

Carl.

Okay.

Jeff Rand: Hi. This is Jeff. I'm for Ben. Thanks for taking my squeezing me in to take your last question. I just wanted to follow up on the M&A that was discussed. You mentioned that industry rules are bringing additional M&A opportunities. Do you also think that maybe a weaker housing market has actually accelerated the pace of the M&A that you've done? Do you think as we head into next year, if we were to see a reduction in rates and the housing market improve, do you think that that would actually give you guys an opportunity to accelerate the number of acquisitions that you might be able to do as valuations come up? Thank you.

Hi, This is Jeff on for Ben Thanks for Thanks for taking my squeezing me undertake it last question.

Just wanted to follow up on the M&A that was discuss you mentioned that industry rules.

Our or bringing additional M&A opportunities.

Do you also think that maybe a weaker housing market has actually accelerated the pace.

The M&A that you've done or do you think as we head into next year, if we were to.

Robert Reffkin: Do you think as we head into next year, if we were to see a reduction in rates and the housing market improve, do you think that that would actually give you guys an opportunity to accelerate the number of acquisitions that you might be able to do as valuations come up? Thank you. Yeah. I think in addition to industry rules that have created difficulty for broker CEOs in defining their own path, there's definitely the market, which you highlight, which has made it difficult for broker CEOs to create the P&L that they seek in the moment. There's also a big shift has been technology. 10 years ago, agents weren't using technology as much as they are now. I think it is indisputable.

See a reduction in rates and the housing market improves do you think that that would actually give.

I'll give you guys an opportunity to accelerate that.

Number of acquisitions.

You might be able to do as valuations come out. Thank you.

Yes.

Yes, I think in addition to industry rules that have created difficulty for brokerage. He is in defining their own path. There is definitely the market.

Robert Reffkin: Yeah. I think in addition to industry rules that have created difficulty for broker CEOs in defining their own path, there's definitely the market, which you highlight, which has made it difficult for broker CEOs to create the P&L that they seek in the moment. There's also a big shift has been technology. 10 years ago, agents weren't using technology as much as they are now. I think it is indisputable.

You highlight which has made it difficult for brokers to use too.

Create the P&L the base seeking the moment Theres also.

They ship has been technology.

10 years ago agents weren't using technology as much as they were as they are now.

And I think it is indisputable that 10 years ago, I'm going to say like I don't need it technology now.

Robert Reffkin: 10 years ago, a lot of agents say, I don't need technology. Now, the vast majority of agents say that they do need it, and their clients expect it. This industry of brokerages, interesting enough, what happened is they didn't have to build technology because they relied on the MLSs to do a big piece of the technology puzzle and then some third-party tools. Now, the industry of brokerages are at a place where they don't have the capital to build what's needed. There's really no path to build what an agent would expect. Compass is the only brokerage firm that built an end-to-end platform. We invested $1.8 billion in it over the last 13 years. I guess what I'm most excited by is the ability to continue to distance from the competition and the value that we give our agents.

The vast majority of them say that they do need it and their clients expected.

And this industry of brokerages.

Interesting enough what happened is they didn't have to build technology because they relied on the MLS is to do a big piece of.

Of the technology puzzle and then some third party tools.

But now.

The industry of brokerages are at a place where they wouldn't be they don't have the capital to build what's needed and so theres really no path to build what when an agent would expect encompasses the only brokerage firm that built an end to end platform, we invested $1 $8 billion in.

Robert Reffkin: Now, the industry of brokerages are at a place where they don't have the capital to build what's needed. There's really no path to build what an agent would expect. Compass is the only brokerage firm that built an end-to-end platform. We invested $1.8 billion in it over the last 13 years. I guess what I'm most excited by is the ability to continue to distance from the competition and the value that we give our agents. When you do that, more agents come, more agents stay. Also, it's a signal to brokerage CEOs that it'd be more fun winning together than not. Yeah, that's really what a lot of this is about.

In it over the last 13 years and.

And so I guess, what I'm. Most excited by is the ability to continue to distance from the competition and the value that we give our agents.

And when when when.

When you do that more agents kind of more to stay but also it's a signal to brokerage he owes that.

Robert Reffkin: When you do that, more agents come, more agents stay. Also, it's a signal to brokerage CEOs that it'd be more fun winning together than not. Yeah, that's really what a lot of this is about.

It would be more fun winning together.

Then.

And then than not.

And say yeah, that's really what a lot of this is about it's about having fun and liquor ate into the eye and say, we're where we're giving you the best of everything in one place and when we come together with one of these great companies. They are truly great companies with great leaders, but when you come together, we were able to do.

Robert Reffkin: It's about having fun and look your agents in the eye and saying, "We're giving you the best of everything in one place." When we come together with a lot of these great companies and they're truly great companies with great leaders, but when you come together, you're able to look an agent's eye and say, "Yeah, I had not just the best culture, not just the best management, which I had before, not just the best local team and sales meeting culture, but now we have a national company with technology, with this end-to-end platform with Compass Concierge, with, of course, the 3-Phased Marketing Strategy." That's really what's leading to the conversations that we have today. Great. Thank you. There are no further questions at this time. I will now turn the call back to Robert Reffkin for closing remarks. Great.

Look in Asia, I would say.

Not just the best culture, not just this management, which I had before not just the best.

Our local team and sales meeting culture, but now we have a national company with technology.

It is end to end platform with <unk> with of course, the three based marketing strategy and.

And Thats really whats leading to the conversations that we have today.

Great. Thank you.

Jeff Rand: Great. Thank you.

There are no further questions at this time I will now turn the call back to Robert Baskin for closing remarks.

Operator: There are no further questions at this time. I will now turn the call back to Robert Reffkin for closing remarks.

Great well. Thank you everyone for joining our call today I want to end by thanking all of our employees and all of our agents for all their hard work together, we delivered the best quarter in our company's history.

Operator: Great. Well, thank you, everyone, for joining our call today. I want to end by thanking all of our employees and all of our agents for all their hard work. Together, we delivered the best quarter in our company's history. We have a long runway for growth, and I look forward to updating everyone on our progress. Thank you, and have a great rest of your day. This concludes today's call. Thank you for attending. You may now disconnect.

Robert Reffkin: Well, thank you, everyone, for joining our call today. I want to end by thanking all of our employees and all of our agents for all their hard work. Together, we delivered the best quarter in our company's history. We have a long runway for growth, and I look forward to updating everyone on our progress. Thank you, and have a great rest of your day. This concludes today's call. Thank you for attending. You may now disconnect.

We have a long runway for growth and I look forward to updating everyone on our progress. Thank you and have a great rest of your day.

This concludes today's call. Thank you for attending you may now disconnect.

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