Compass Q3 2026: Anywhere Deal Doubles Revenue, Dents EPS

Compass closed its January 2026 acquisition of Anywhere Real Estate, absorbing brands including Coldwell Banker, CENTURY 21, and Sotheby's International Realty, and revenue surged 111% year over year to $3.90 billion, essentially matching the consensus estimate to within a rounding error. GAAP earnings came in at $0.07 per share, missing the $0.19 consensus by about 63%.

The gap between reported and expected earnings reflects acquisition accounting rather than deteriorating operations. Compass absorbed $28 million in Anywhere merger transaction and integration expenses, $145 million in depreciation and amortization elevated by acquired intangibles, and $4 million in restructuring costs during the quarter, with only a $4 million income tax benefit partially softening the blow. Strip those items out and the underlying business looked healthier: Adjusted EBITDA of $306 million cleared the high end of the company's own guidance range, and free cash flow reached $240 million.

On the operational side, Compass outpaced the broader market in its core brokerage business. Organic Brokerage gross transaction value grew 7.5% on a pro forma basis against 0.7% growth for the U.S. market overall, and organic brokerage transactions declined only 0.3% while the broader market fell 1.8%. The company ended the quarter with 85,476 total brokerage agents after adding 6,390 gross agents in the period, though agent retention slipped to 95.1% from 95.5% in Q2 2026.

Leverage is moving in the right direction. Net debt to Adjusted EBITDA improved to 2.7x, down from 4.4x at the time the Anywhere transaction was announced, and management has flagged plans to redeem the $500 million 9.75% Notes when they become first callable in Q2 2027. Cash and equivalents stood at $841 million at quarter end.

Looking ahead, Compass guided Q4 2026 revenue of $3.15 billion to $3.35 billion and Adjusted EBITDA of $100 million to $130 million, a range that reflects a more cautious near-term outlook. CEO Robert Reffkin specifically noted that the housing market has softened over the past few weeks, and the company also faces an ongoing securities class action tied to antitrust questions surrounding the Anywhere deal, adding a layer of legal uncertainty to what is already a complex integration story.