Compass, Inc. Q4 FY2025 earnings call

1. Recap of record Q4 2025 results: Q4 delivered record revenue, adjusted EBITDA, etc. 2. Historic Rocket Redfin partnership: Four pillars - 1.2 million high intent leads from Redfin.com and Rockin Mortgage over three years, unique inventory on Redfin.com with leads routed to listing agents, agents' name and brokerage affiliation displayed on listings, and making home buying more affordable. 3. Four sustainable financial advantages: Higher than industry revenue per transaction via value - added services, lowest cost to serve position via platform improvements, etc., expanding LTV per agent by connecting real estate professionals on one platform, and declining cost of customer acquisition. 4. Integration and cost synergy efforts: Good progress in integration, $175 million in cost synergies realized since close, committed to $2.5 billion in first - year and $4 billion in three - year cost synergies. 5. AI impact: Three pillars - proprietary data, trust (Compass brokers trust, not just brokering information), and positive network effects from 340,000 agents strengthening the platform.

In Q4 2025, Compass delivered record fourth - quarter revenue of $1.7 billion and record adjusted EBITDA of $58 million, both above the high end of guidance. Adjusted EBITDA margin also reached a record. Added 830 principal agents in Q4, the best organic principal agent recruiting quarter for Q4. Compass platform hit a Q4 record of 20 average weekly sessions per agent. Title and escrow revenue and mortgage JV earnings in Q4 reached record levels, and title and escrow attach in legacy markets hit all - time highs. In 2025, Compass generated approximately $7 billion in revenue, surpassing the prior peak in 2021. Adjusted EBITDA was $293 million, and operating cash flow was $217 million.

For Q1 2026, consolidated revenue including Anywhere transaction is expected to be in the range of $2.55 billion to $2.75 billion. Adjusted EBITDA is expected to be in the range of $15 million to $35 million. First quarter has short - term challenges due to weather, but optimistic about spring selling season. Weighted average share count for Q1 is between 720 million to 730 million shares. OpEx details to be updated after purchase accounting. Q1 will have negative free cash flow due to transaction - related expenses, but will return to positive in future quarters. Long - term debt is $3.15 billion, not expecting prepayment before at least April 2027.

AI brings risks such as fake accounts, fake listings, fake offers, etc. MLS and Zillow restrictive rules also pose risks. Short - term weather factors in Q1 can affect results.

Q: Regarding the pushback on exclusive strategy and economics of Rocket Redfin partnership, A: Robert said homeowner choice will win, agents are excited about leads and value, and financial details on economics not shared yet.

Q: On AI helping agents communicate value and combined entity's commission percent and free cash flow conversion, A: Robert said AI leads to more noise, agents provide certainty, Scott said gross margin will increase with franchise and title business, and free cash flow conversion is around 70% - 80% adjusted for interest.

Q: On strategy of syndicating private exclusives to Rocket Redfin vs O&O portal, A: Robert said partnership with Rocket Redfin is great as another large participant advocates home seller choice, and MLS restrictions will be exposed.

Q: On integration of Anywhere's private exclusives and timeline for coming soon on Redfin, A: Technology launching to owned brokerages in July, franchise broker owners in January, and option to create coming soon or private exclusives by end of next month with most going to Redfin.

Q: On Rocket Mortgage and guaranteed rate affinity, A: Rockin Mortgage is digital partner, guaranteed rate is in - person partner.

Q: On revenue synergy and title/franchise business future, A: Focus on cost synergies now, title business has scale opportunities from combined entities, but details on revenue synergies to come later.