Compass CEO Robert Reffkin (Compass, Getty)
UPDATED, May 12 2021, 6:35 p.m.: The bar was set high for Compass’ first quarterly earnings report as a public company.
The brokerage, which went public on April 1, reported $1.1 billion in revenue for the quarter across 40,268 transactions valued at $43.8 billion.
“This was the best first quarter for transactions in our history and our third largest quarter ever,” said Robert Reffkin, the brokerage’s CEO and co-founder, on the company’s earnings call on Wednesday. “We see this momentum continuing into the second quarter.”
Compass’ revenue is up 80 percent year-over-year from $619.9 million in the first quarter of 2020, while the number of transactions increased 67 percent. According to Bloomberg, analysts expected the company to report $968.67 million in revenue.
Compass CEO Robert Reffkin (iStock, Getty/Illustration by Kevin Rebong for The Real Deal)
Since 2018, Compass has spent more than $300 million to scale its business, buying other brokerages and tech companies to support its “end-to-end platform,” according to the company’s IPO filing.
Backed by $1.5 billion in venture capital from investors including Fidelity, Wellington and SoftBank, Compass’ growth story has been unmatched in residential real estate. The brokerage aggressively courted agents after launching in 2012, but six years later, it switched gears and began scooping up firms wholesale.
Generally speaking, Compass’ acquisition strategy is to buy brokerages in markets that are top priorities for recruitment. Recent purchases of technology companies indicate Compass is not above buying a ready-made platform instead of building it in-house.
Inman Connect
Compass spent much of 2018 and 2019 growing through headline-grabbing acquisitions, the details of which had been scarce with the company’s status as a privately held firm. But as the company prepares to go public and lays its financials bare, for the first time, it’s revealing what it paid for some of its biggest acquisitions.
“We will continue to evaluate potential acquisitions in the real estate technology ecosystem that can bolster the value of our fully integrated platform and accelerate initiatives in our product roadmap,” the company wrote in the filing. “For example, in 2020 we acquired Modus, a title and escrow software company, expanding our capabilities into a critical component of the transaction.