Compass is not your average real estate brokerage. Since its inception in 2012 as Urban Compass, the company has made waves in the industry. It went public in 2021 and has since become a major player in the market. But what sets Compass apart? In this article, we'll delve into the revenue and transaction statistics of Compass and uncover the secrets behind its success.
Key Compass Stats
In 2022, Compass agents represented buyers or sellers in an impressive 211,538 transactions, totaling over $230 billion in gross volume. These numbers solidify Compass as one of the largest real estate companies in the U.S.
Compass holds a 4.6% share of the total U.S. real estate market by transactions in 2022. While it generated approximately $6 billion in revenue that same year, it is not currently profitable. However, Compass has seen an 18% year-over-year increase in the average number of Principal Agents, reaching an impressive 13,073 in 2022.
How Many Transactions Does Compass Do?
Since its inception, Compass agents have participated in over 600,000 transactions. The company's annual reports showcase the steady growth in transaction numbers throughout the years.
Here is a breakdown of the number of deals closed by Compass agents since 2019:
| Year | Total Transactions |
|---|---|
| 2019 | 87,158 |
| 2020 | 144,748 |
| 2021 | 225,272 |
| 2022 | 211,538 |
Source: Compass
Compass claims to be the largest independent real estate brokerage by gross transaction volume. In 2022, the company's gross transaction volume amounted to $230 million, a 9% decrease from the previous year.
Here is a breakdown of Compass' gross transaction volume by year:
| Year | Gross Transaction Volume |
|---|---|
| 2019 | $98 million |
| 2020 | $152 million |
| 2021 | $254 million |
| 2022 | $230 million |
Source: Compass
How Many People Visit Compass.com?
Compass' website receives an average of 2.2 million organic visitors per month, marking a significant 58% year-over-year increase. The site ranks 13th among the most-visited residential real estate websites.
Here is a breakdown of Compass.com's average monthly organic visits:
| Year | Monthly Organic Visits |
|---|---|
| 2017 | 105,000 |
| 2018 | 152,000 |
| 2019 | 250,000 |
| 2020 | 550,000 |
| 2021 | 952,000 |
| 2022 | 1,504,000 |
Source: Ahrefs
Compass' early growth strategy involved acquiring traditional brokerages, enabling the company to harness lead generation for its agents. The increase in website traffic indicates its success in capitalizing on this strategy, similar to how Redfin operates.
Compass Revenue
Compass generates the majority of its revenue from agent commissions earned through helping customers buy and sell homes. The company also generates a small amount of revenue from ancillary real estate services like title and escrow. Compass plans to expand its revenue streams by increasing its focus on services and introducing new ones.
Here is a breakdown of Compass' revenue from 2019 to 2022:
| Year | Total Revenue |
|---|---|
| 2019 | $2.4 billion |
| 2020 | $3.7 billion |
| 2021 | $6.4 billion |
| 2022 | $6.0 billion |
Source: Compass
From 2019 to 2022, Compass experienced a remarkable 2.5x increase in revenue. The company witnessed significant growth primarily in 2020 and 2021, thanks to the addition of agents and the increase in transactions from both new and existing agents. However, in 2022, Compass experienced a slight revenue decline due to macroeconomic conditions.
Compass Expenses
Compass' total expenses amounted to $6.6 billion in 2022, reflecting a 2.3x increase from 2019. These expenses encompass commissions, sales and marketing, operations and support, research and development, and general & administrative costs.
Here is a breakdown of Compass' operating expenses since 2019:
| Year | Total Operating Expenses |
|---|---|
| 2019 | $2.8 billion |
| 2020 | $4.0 billion |
| 2021 | $6.9 billion |
| 2022 | $6.6 billion |
Source: Compass
Interestingly, Compass had slightly lower expenses in 2022 compared to 2021, aligning with its slightly lower revenue. Typically, higher income leads to higher costs, with commissions being one of the company's most substantial expenses.
Compass Expenses by Category
Approximately 74.7% of Compass' total expenses are attributed to commissions and other agent-related costs, amounting to $4.94 billion in 2022. Sales and marketing expenses come in second, accounting for 8.7% of the company's total expenses. Here is a breakdown of Compass' expenses by category in 2022:
Source: Compass
Is Compass Profitable?
In 2022, Compass reported a net loss of $601 million, resulting in a negative net margin of (10%). The previous year, in 2021, the company had a negative net margin of (7.7%). With these figures, it becomes evident that Compass, Inc. is not yet profitable.
Here is a breakdown of Compass' net income (loss) by year:
| Year | Net Income (Loss) |
|---|---|
| 2019 | ($388 million) |
| 2020 | ($270 million) |
| 2021 | ($494 million) |
| 2022 | ($602 million) |
Source: Compass
Compass Market Share
Compass holds a 4.6% share of the total U.S. real estate market by number of transactions in 2022, a slight increase from its 4.5% share in the previous year. It's worth noting that Compass adjusted its market share reporting method due to new reporting standards by the National Association of Realtors (NAR), which now focuses on the number of transactions rather than transaction volume.
Source: Compass
How Many People Work at Compass?
According to the latest available data from 2021, Compass had 4,775 employees. However, on June 14, 2022, the company laid off 10% of its non-agent workforce. Currently, Compass boasts over 28,000 agents, an impressive number considering there are 1.6 million Realtors in the U.S.
Approximately 46% of Compass' agents utilize the company's software platform and customer relationship management (CRM) system, making them Principal Agents. This subset of agents is vital to the company's growth potential, especially when combined with the strengths of Compass' platform.
In 2022, Compass had an average of 13,073 Principal Agents, marking an 18.2% year-over-year increase.
Here is a breakdown of the average number of Principal Agents in recent years:
| Year | Average Number of Principal Agents |
|---|---|
| 2019 | 6,787 |
| 2020 | 8,686 |
| 2021 | 11,058 |
| 2022 | 13,073 |
Source: Compass
Compass reports that its Principal Agents transact more than the average agent, with an average of 7.5 transactions per year compared to the industry average of 6.4 transactions. Additionally, Compass boasts a Principal Agent retention rate exceeding 90% in 2022.
Conclusion
In conclusion, Compass Real Estate continues to make waves in the industry. Despite a slight slowdown in 2022 due to macroeconomic trends, the company's website traffic showed notable improvements. While Compass has yet to achieve profitability, it still claims the title of the largest independent real estate brokerage in the U.S. by gross transaction volume. With its unique blend of technology and platform strength, Compass is undoubtedly a force to be reckoned with in the real estate market.
