Compass, Inc 10-Q for FY2026 Q3
Compass, Inc. (COMP)
10-Q
2026-11-06
For: 2026-09-30
View Original
Added on
November 06, 2026
About this 10-Q
Compass, Inc filed this 10-Q on November 6, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.9B
- up 111.1% from $1.85B a year earlier
- Net income
- $62M
- compared with a net loss of $4M a year earlier
- Diluted EPS
- $0.07
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________
FORM 10-Q
___________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ______ to ______
Commission File Number: 001-40291
___________________________
(Exact Name of Registrant as Specified in its Charter)
___________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
(Registrant’s telephone number, including area code)
___________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
___________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of November 3, 2026, there were 766,884,741 shares of the registrant’s common stock outstanding.
Compass, Inc.
Table of Contents
| Page | ||||||||
2
Unless otherwise expressly stated or the context otherwise requires, references in this Quarterly Report on Form 10-Q, which we refer to as this Quarterly Report, to (i) to “Compass,” “Company,” “our,” “us,” and “we” and similar references refer to Compass, Inc. and its consolidated subsidiaries, (ii) “Anywhere” refers to Anywhere Real Estate Inc., (iii) “Anywhere Merger” refers to the Merger of the Company and Anywhere completed on January 9, 2026, as announced in the Company’s Current Report on Form 8-K filed on January 9, 2026, and (iv) “Anywhere Merger Agreement” refers to an Agreement and Plan of Merger pursuant to which the Company and Anywhere consummated the Merger.
WHERE YOU CAN FIND MORE INFORMATION
Investors and others should note that we may announce material business and financial information to our investors using our investor relations page on our website (www.compass.com), filings we make with the Securities and Exchange Commission, or the SEC, webcasts, press releases and conference calls. We use these mediums, including our website, to communicate with our stockholders and the public about our company, our product candidates and other matters. It is possible that the information we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.
From time to time, we also intend to announce material information to the public through the investor relations page on our website, press releases, public conference calls, public webcasts, our X (formerly Twitter) feed (@Compass), our Facebook page, our LinkedIn page, our Instagram account, our YouTube channel, and Robert Reffkin’s X feed (@RobReffkin) and Instagram account (@robreffkin). We use these mediums, including our website, to communicate with our stockholders and the public about our company, our product candidates and other matters. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our Company to review the information that we make available on our website and social media channels. Further, corporate governance information, including our governance guidelines, board committee charters and code of ethics, is also available on our investor relations website under the heading “Governance.”
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
The information contained on, or that can be accessed through, the website referenced in this Quarterly Report is not incorporated by reference into this filing, and the website address is provided only as an inactive textual reference.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the federal Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations are forward-looking statements. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “expects,” “could,” “should,” “would,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties, including but not limited to:
•General economic conditions, economic and industry downturns, the effects of geopolitical conflicts, the health of the U.S. real estate industry, and risks generally incident to the ownership of residential real estate;
•The effect of monetary policies of the federal government and its agencies;
•High mortgage interest rates;
•Low home inventory levels;
•Our ability to successfully integrate Anywhere’s business and realize cost synergies and other anticipated benefits of the Anywhere Merger;
•The rapid advancement and integration of AI technologies in real estate, which could result in potential disintermediation of real estate professionals, increased competitive pressure and a variety of operational, ethical and regulatory challenges, and our ability to adapt to any changes driven by AI technologies in a timely and effective manner;
•The significant debt (and increased interest expense) we incurred in connection with the Anywhere Merger, including its impact on our business, cash flow and operations;
3
•An event of default under our material debt agreements would adversely affect our operations and our ability to satisfy obligations under our indebtedness;
•Our ability to raise capital to grow our business or refinance or restructure our existing debt on terms acceptable to us, or at all;
•Our ability to recruit and retain real estate professionals at the same rate as in the past;
•Review of the Anywhere Merger by regulatory authorities and private parties and any challenges and resulting actions that could adversely affect our business;
•Ongoing industry antitrust class action litigation or any related regulatory activities;
•Decreases in our gross commission income or the percentage of commissions that we or our franchisees collect;
•Risks related to the significant increase in our franchise business following the Anywhere Merger;
•Our ability to carefully manage our expense structure;
•Adverse economic, real estate or business conditions in geographic areas where our business is concentrated and/or impacting high-end markets;
•Our ability to continuously innovate, improve and expand our technology offerings to create value for our real estate professionals;
•Our ability to expand our operations and to offer additional integrated services;
•Our ability to realize the expected benefits from our joint ventures, including mortgage and title underwriting;
•Our ability to compete successfully;
•Our ability to attract and retain real estate professionals at our owned-brokerage and expand our franchisees;
•Fluctuations in our quarterly results and other operating metrics;
•The loss of one or more of our key personnel and our ability to attract and retain other highly qualified personnel;
•Actions by real estate professionals, employees or franchisees that could adversely affect our reputation and subject us to liability;
•Our ability to pursue acquisitions that are successful and integrated into our existing operations;
•Our ability to maintain or establish relationships with MLSs, listing providers and third-party listing providers, and attempts by such parties or by other brokerages and agents to impose industry rules or standards or otherwise impair our ability to compete;
•The impact of cybersecurity incidents and the potential loss of critical and confidential information;
•The reliability of our fraud detection processes;
•Depository banks not honoring our escrow and trust deposits;
•Any impairment of our goodwill and other long-lived assets;
•Liabilities arising out of Anywhere’s frozen pension plan;
•Exposure to risks inherent to international markets;
•Our ability to develop and maintain an effective system of internal control over financial reporting;
•Our ability to use net operating losses and other tax attributes may be limited;
•Our reliance on assumptions, estimates and business data to calculate our key performance indicators;
•Changes in, and our reliance on, accounting standards, assumptions, estimates and business data;
•Our ability to continue to securitize certain assets of Cartus;
•The dependability of our platform, technology offerings and software;
•Our ability to maintain our company culture;
•Our ability to obtain or maintain adequate insurance coverage;
•Disruption or delay in service from third-party service providers;
•Our ability to generate high-quality leads for real estate professionals and franchisees;
•A loss of our largest real estate benefit program client or continued reduction in spending on relocation services;
•Investor expectations related to corporate responsibility, environmental, social and governance factors;
•Natural disasters and catastrophic events, including war, military action and international instability;
4
•The effect of claims, lawsuits, government investigations, and other proceedings, including with respect to our business and marketing strategies, among other matters, and the costs and distraction of pursuing or defending such matters;
•Changes in federal or state laws regarding the classification of real estate professionals as independent contractors;
•Compliance with privacy laws and regulations;
•Compliance with applicable laws and regulations and changes to applicable laws and regulations;
•Our ability to protect our intellectual property rights, and our reliance on the intellectual property rights of third parties;
•Our use of open source software;
•The impact of having a multi-class structure of common stock;
•Volatility in our trading price;
•The content of securities analysts reports and/or change in our debt rating by a rating agency;
•Our charter provisions may make us more difficult to acquire, may limit stockholder attempts to remove or replace management and/or obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
•Our plan to continue to retain earnings rather than pay dividends for the foreseeable future;
•The impact of the accounting method for the Company’s 0.25% Convertible Senior Notes due 2031 (the “Convertible Notes”) on our reported financial results;
•Potential for common stock dilution or stock price depression related to the Convertible Notes;
•Counterparty risk with respect to the privately negotiated capped call transactions (the “Capped Call Transactions”) entered into in connection with the pricing of the Convertible Notes; and
•Other factors set forth under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on February 27, 2026, which we refer to as our 2025 Form 10-K.
We have based these forward-looking statements on our current expectations and projections as of the date of this filing about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements speak only as of the date of this filing and are subject to a number of known and unknown risks, uncertainties and assumptions, including, but not limited to, the important factors discussed in Part II, Item 1A, “Risk Factors” in this Quarterly Report and in Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K. Readers are urged to carefully review and consider the various disclosures made in this filing, our 2025 Form 10-K and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and circumstances discussed in this filing may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should completely read this filing and the documents that we reference herein and have filed with the SEC as exhibits to this Quarterly Report with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. The forward-looking statements in this Quarterly Report are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update such statements for any reason after the date of this filing or to conform statements to actual results or revised expectations, except as required by law.
5
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Compass, Inc.
Condensed Consolidated Balance Sheets
(In millions, except share and per share data, unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Relocation receivables | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Commissions payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Current lease liabilities | |||||||||||
| Securitization obligations | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Non-current lease liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ||||||||||
| Total Compass, Inc. stockholders’ equity | |||||||||||
| Non-controlling interest | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
6
Compass, Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share data, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Commissions and other related expenses | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Anywhere Merger transaction and integration expenses | |||||||||||||||||||||||
| Restructuring costs | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ( | ( | ||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) before income taxes and equity in income of unconsolidated entities | ( | ( | ( | ||||||||||||||||||||
| Income tax benefit | |||||||||||||||||||||||
| Equity in income of unconsolidated entities | |||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||
| Net income attributable to non-controlling interests | ( | ( | |||||||||||||||||||||
| Net income (loss) attributable to Compass, Inc. | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income (loss) per share attributable to Compass, Inc., basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income (loss) per share attributable to Compass, Inc., diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share attributable to Compass, Inc., basic | |||||||||||||||||||||||
| Weighted-average shares used in computing net income (loss) per share attributable to Compass, Inc., diluted | |||||||||||||||||||||||
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
7
Compass, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In millions, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Other comprehensive loss, net of tax: | |||||||||||||||||||||||
| Currency translation adjustment | ( | ||||||||||||||||||||||
| Other comprehensive loss, before tax | ( | ||||||||||||||||||||||
Income tax expense related to items of other comprehensive income | |||||||||||||||||||||||
| Other comprehensive loss, net of tax | ( | ||||||||||||||||||||||
| Comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) attributable to Compass, Inc. | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
8
Compass, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In millions, except share amounts, unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Compass, Inc. Stockholders’ Equity | Non-controlling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended September 30, 2026: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with business combinations | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of RSUs, net of taxes withheld | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
For the three months ended September 30, 2025: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Shares issued in connection with the acquisition of Christie’s International Real Estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with business combinations | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of RSUs, net of taxes withheld | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
9
Compass, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In millions, except share amounts, unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Compass, Inc. Stockholders’ Equity | Non-controlling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the nine months ended September 30, 2026: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued in connection with the acquisition of Christie's International Real Estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Anywhere Merger consideration and replacement awards (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of legacy Anywhere cash awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of capped call for convertible notes | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with business combinations | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of RSUs, net of taxes withheld | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| For the nine months ended September 30, 2025: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Share Consideration issued and to be issued in connection with the acquisition of Christie’s International Real Estate | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with business combinations | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of RSUs, net of taxes withheld | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at September 30, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
(1)Represents activity in connection with the Anywhere Merger, consisting of (i) a $1,987 million increase to Additional paid-in capital representing the fair value of 162.1 million shares of common stock issued as merger consideration and (ii) an $80 million increase to Additional paid-in capital representing the fair value of replacement employee equity awards attributable to pre-combination services. See Note 3 — “Acquisitions” for further information.
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
10
Compass, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions, unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Equity in income of unconsolidated entities | ( | ( | |||||||||
| Bad debt expense | |||||||||||
| Change in acquisition-related contingent consideration | ( | ||||||||||
| Amortization of debt issuance costs, premiums, and discounts | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Relocation receivables | ( | ( | |||||||||
| Other current and non-current assets | ( | ||||||||||
| Operating lease right-of-use assets and operating lease liabilities | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Commissions payable | |||||||||||
| Accrued expenses and other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| Investment in unconsolidated entities | ( | ||||||||||
| Capital expenditures | ( | ( | |||||||||
| Payments for business combinations, net of cash acquired | ( | ( | |||||||||
| Distributions from equity method investments in excess of cumulative earnings | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Proceeds from stock option exercises and Employee Stock Purchase Plan issuances | |||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ( | |||||||||
| Net change in Securitization obligations | |||||||||||
| Proceeds from issuance of convertible notes, net of issuance costs | |||||||||||
| Purchase of capped call for convertible notes | ( | ||||||||||
| Proceeds from drawdowns on Revolving Credit Facility | |||||||||||
| Repayments of drawdowns on Revolving Credit Facility | ( | ||||||||||
| Payments for financing leases | ( | ||||||||||
| Other | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
| Effect of changes in exchange rates on cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Income tax payments, net | |||||||||||
| Supplemental non-cash information: | |||||||||||
| Issuance of common stock for business combinations | $ | $ | |||||||||
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
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Compass, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Business and Basis of Presentation
Description of the Business
Compass, Inc. (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc.
On January 9, 2026, the Company completed its acquisition of Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), pursuant to the Agreement and Plan of Merger, dated as of September 22, 2025 (“Anywhere Merger Agreement”) by and among the Company, Anywhere, and Velocity Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”). Pursuant to the terms of the Anywhere Merger Agreement, Merger Sub merged with and into Anywhere, with Anywhere surviving the Merger as a wholly owned subsidiary of the Company (“Anywhere Merger” or the “Merger”). Refer to Note 3 — “Acquisitions” for more details.
Real estate professionals at the Company's owned-brokerage business are independent contractors who associate their real estate licenses with the Company and operate their businesses on the Company's platform and/or utilize the Company's technology offerings. The Company primarily generates revenue from its owned-brokerage business by assisting home sellers and buyers in listing, marketing, selling, and finding homes and collecting gross sales commissions on completed home sale transactions. Gross sales commissions are typically calculated as a percentage of the home sale price. Following the Anywhere Merger, the Company operates its owned-brokerage business primarily under the @properties, Coldwell Banker, Compass, Corcoran, and Sotheby's International Realty brands.
The Company also attracts independently operated brokerages that affiliate with the Company as franchisees or licensees under long-term franchise or license agreements. In addition, the Company provides non-brokerage services to real estate professionals and their clients, including title and escrow, and relocation services.
The Company provides an end-to-end platform that empowers its residential real estate professionals to deliver exceptional service to seller and buyer clients. The Company’s platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, and other critical functionality, all custom-built for the real estate industry, which enables the Company’s core brokerage services. The platform also uses proprietary data, analytics, artificial intelligence, and machine learning to deliver high value recommendations and outcomes for real estate professionals at the Company's owned-brokerage operating under the Compass brand and their clients. Other real estate professionals and franchisees affiliated with the Company currently utilize other technology offerings.
Effective January 9, 2026 with the Anywhere Merger, the Company changed its operating segments and reports its operations in the following three business segments: Brokerage, Franchise, and Integrated Services. See Note 17 — “Segment Information” for more details.
Basis of Presentation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the assets, liabilities, revenues, and expenses of all controlled subsidiaries. The condensed consolidated statements of operations include the results of entities acquired from the date of each respective acquisition. Interests held by third parties in consolidated subsidiaries are presented as non-controlling interests, which represents the non-controlling stockholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries.
The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the interim periods presented.
Certain prior period amounts for 2025 have been reclassified on the condensed consolidated balance sheet and condensed consolidated statements of operations to conform to the current period presentation. On the condensed consolidated balance sheet, Concierge receivables are now presented within Other current assets, as the balance is not material to the combined company. On the condensed consolidated statements of operations, for the three and nine months ended September 30,
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2025, the Company reclassified $35 104
Separately, the Company renamed “Research and development” to “Technology and development” on the statements of operations. This is a presentational change only, with no reclassification of prior period amounts.
The results of the interim periods presented are not necessarily indicative of the results expected for the full year. Certain information and notes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted under the SEC’s rules and regulations. Accordingly, the unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended December 31, 2025 included in the 2025 Form 10-K.
2. Summary of Significant Accounting Policies
Consolidation
The Company consolidates an entity if its ownership, direct or indirect, exceeds 50 % of the outstanding voting shares of an entity and/or it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. Interests held by third parties in consolidated subsidiaries are presented as non-controlling interests, which represents the non-controlling stockholders’ interests in the underlying net assets of the Company’s consolidated subsidiaries. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity method or at fair value with changes in fair value recognized in net income, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee. The Company measures all other investments at fair value with changes in fair value recognized in net income or in the case that an equity investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the condensed consolidated financial statements and accompanying notes. These judgments, estimates and assumptions are used for, but not limited to (i) fair value of acquired intangible assets and goodwill, (ii) incremental borrowing rate used for the Company’s operating leases, (iii) useful lives of long-lived assets, (iv) impairment of intangible assets and goodwill, and (v) income taxes and certain deferred tax assets. The Company determines its estimates and judgments based on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates and these differences may be material.
Business Combinations
Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. Such adjustments may be material. After the measurement period, any
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Leases
The Company determines if an arrangement contains a lease at inception based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company classifies leases as either finance or operating. Right-of-use (“ROU”) assets are recognized at the lease commencement date and represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the remaining lease term.
Present value of lease payments are discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate. Because the rate implicit in the lease generally cannot be readily determined, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for collateralized borrowings with a similar term, an amount equal to the lease payments and in a similar economic environment where the leased asset is located. The collateralized borrowings were based on the Company’s estimated credit rating corroborated with market credit metrics like debt level and interest coverage.
The Company’s lease ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred, and (iii) lease incentives under the lease. Options to renew or terminate the lease are recognized as part of the Company’s ROU assets and lease liabilities when it is reasonably certain the options will be exercised. ROU assets are also assessed for impairments consistent with the Company’s long-lived asset policy. Furthermore, the Company recognizes impairment charges related to the exit and sublease of certain real estate operating leases.
Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset or the lease term. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term.
The Company does not allocate consideration between lease and non-lease components, such as maintenance costs, as the Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets. Variable lease payments for real estate taxes, insurance, maintenance and utilities, which are generally based on the Company’s pro rata share of the total property, are not included in the measurement of the ROU assets or lease liabilities and are expensed as incurred.
Stock-Based Compensation
The Company measures compensation expense for all stock-based awards based on the estimated fair value of the awards on the date of grant. Compensation expense is generally recognized as expense on a straight-line basis over the service period based on the vesting requirements generally ranging from to five years . The Company recognizes forfeitures as they occur.
On a limited basis, the Company has issued restricted stock units (“RSUs”) that contain service, performance and market-based vesting conditions. Such awards were valued using a Monte Carlo simulation and the underlying expense will be recognized as the associated vesting conditions are met.
New Accounting Pronouncements
The Company systematically reviews and evaluates the relevance and implications of all Accounting Standards Updates. While recently issued standards not expressly listed below were scrutinized, they were deemed either inapplicable or are anticipated to have minimal impact on the Company's consolidated financial position or results of operations.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures of specific account categories, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. The amendments in this update are
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effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software. The new guidance eliminates project stages and requires capitalizing software costs to begin when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The transition method may be prospective, retrospective or modified prospective. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.
3. Acquisitions
Anywhere Real Estate Inc.
On January 9, 2026 (the “Anywhere Closing Date”), the Company completed the Anywhere Merger contemplated by the Anywhere Merger Agreement with Anywhere and Merger Sub. Pursuant to the Anywhere Merger Agreement and subject to its terms and conditions, Merger Sub merged with and into Anywhere, with Anywhere surviving as a wholly owned subsidiary of the Company. In connection with the Anywhere Merger, the Company acquired all outstanding shares of Anywhere common stock in a stock-for-stock transaction. Holders of Anywhere common stock received 1.436 shares of Compass Class A common stock for each share of Anywhere common stock, and the Company issued 162.1 million shares of its Class A common stock (“Anywhere Share Consideration”).
The aggregate consideration (“Anywhere Purchase Consideration”) payable pursuant to the Anywhere Merger Agreement consisted of (i) $502 million for the repayment of the outstanding balance of Anywhere’s revolving credit facility, which contained a change in control provision and was required to be repaid upon the closing of the Anywhere Merger (the “Anywhere Cash Consideration”); (ii) the Anywhere Share Consideration; and (iii) the fair value of replacement awards of the Company granted to Anywhere award holders attributable to pre-combination vesting (the “Replacement of Equity Awards”).
The following table summarizes the individual elements within the calculation of total consideration transferred (in millions):
| Amount | |||||
| Cash consideration | $ | ||||
| Share consideration | |||||
| Replacement of equity awards | |||||
| Total consideration transferred | $ | ||||
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The following table summarizes the preliminary allocation of consideration transferred to the estimated fair values of the net assets acquired by the Company as of the acquisition date (in millions):
| Amount | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
Relocation receivables | |||||
| Other current assets | |||||
| Property and equipment | |||||
| Operating lease right-of-use assets | |||||
| Intangible assets | |||||
| Goodwill | |||||
Other non-current assets | |||||
| Total assets | |||||
| Accounts payable | ( | ||||
Accrued expenses and other current liabilities (1) | ( | ||||
| Commissions payable | ( | ||||
| Current lease liabilities | ( | ||||
| Securitization obligations - current | ( | ||||
| Non-current lease liabilities | ( | ||||
Other non-current liabilities (1) | ( | ||||
Long-term debt (2) | ( | ||||
Deferred income taxes | ( | ||||
| Total liabilities | ( | ||||
| Non-controlling interest | ( | ||||
| Net assets | $ | ||||
(1)In connection with the Anywhere Merger, the Company assumed Anywhere's defined benefit pension plan, including an accumulated benefit obligation of $89 million and plan assets with a fair value of $80 million, resulting in an unfunded accumulated benefit obligation of $9 million, which was recorded in Accrued expenses and other current liabilities and Other non-current liabilities in the condensed consolidated balance sheet. The defined benefit pension plan was closed to new entrants as of July 1, 1997 and existing participants do not accrue any additional benefits. Expense related to this plan for the year ending December 31, 2026 is expected to be immaterial.
(2)Refer to Note 10 — “Debt” for details of the long-term debt acquired as part of the transaction.
The fair value of identified intangible assets and their respective useful lives as of the time of acquisition were as follows (in millions):
| Amount | Useful Life | ||||||||||
| Trademarks | $ | Indefinite | |||||||||
Developed technology | |||||||||||
Franchise agreements | |||||||||||
| Customer relationships - Relocation | |||||||||||
| Customer relationships - Agent network | |||||||||||
Pending transactions and listings | |||||||||||
| Title plants | Indefinite | ||||||||||
| Total intangible assets | $ | ||||||||||
The intangible assets above were recorded at fair value in accordance with the acquisition method of accounting. The Company applied the multi-period excess earnings method to value the customer relationships, franchise agreements, and
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agent network intangible assets, the relief from royalty method to value the trademarks, and title plants, and the replacement cost method to value the developed technology. These valuations required significant judgment, estimates, and assumptions, including discount rates, revenue growth rates, projected margins, customer retention rates, royalty rates, estimated reproduction costs, and obsolescence factors. Definite-lived intangible assets are amortized over their estimated useful lives using a pattern that reflects the timing of the economic benefits expected to be derived. Indefinite-lived intangible assets are initially recorded at fair value and are not amortized. They are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributable to expected monetization opportunities from the combined company's current and future offerings and the value of the assembled workforce.
The Company has recorded the preliminary purchase price allocation as of the acquisition date and expects to finalize its analysis within the measurement period (up to one year from the acquisition date) of the transaction. Any adjustments during the measurement period would have a corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the condensed consolidated statements of operations.
Anywhere Merger Transaction and Integration Expenses
In connection with the Anywhere Merger, the Company incurred approximately $28 million and $245 million in merger and integration costs during the three and nine months ended September 30, 2026, respectively. These costs consisted of legal, investment banking, and other transaction-related costs, as well as severance and other personnel-related costs, and other integration costs related to the integration of systems, technologies, and other processes, all of which were expensed as incurred. Included in these amounts is $64 million in stock-based compensation for the nine months ended September 30, 2026, primarily related to the acceleration of certain Anywhere awards that were converted to equity awards of the Company in connection with the Anywhere Merger and subsequently accelerated upon the termination of certain employees. All such expenses are presented within the Anywhere Merger transaction and integration expenses line of the condensed consolidated statements of operations.
The following table summarizes the total costs incurred in connection with the Anywhere Merger during the three and nine months ended September 30, 2026 (in millions):
| Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | ||||||||||
| Legal, investment banking and other transaction-related expenses | $ | $ | |||||||||
Severance-related personnel costs (1) | |||||||||||
| Stock-based compensation expense | |||||||||||
| Integration-related costs | |||||||||||
| Total Anywhere Merger transaction and integration expenses | $ | $ | |||||||||
(1)As of September 30, 2026, the Company had $28 million of unpaid severance costs related to the Anywhere Merger recorded within Accrued expenses and other current liabilities on its condensed consolidated balance sheet. The Company expects to recognize an additional $16 million of severance and retention charges related to previously actioned role eliminations over the remainder of the year ending December 31, 2026, reflecting certain employees' remaining required service periods.
The Company incurred $18 million of additional transaction-related expenses during the second half of 2025.
The results of operations of the Anywhere Merger have been included in the Company’s condensed consolidated financial statements since the acquisition date of January 9, 2026. For the period from the acquisition date through September 30, 2026, the acquired business contributed revenue of $4,876 million and a net loss of $297 million.
Christie’s International Real Estate
On January 13, 2025, the Company closed its acquisition of At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate” or “CIRE”) (the “CIRE Merger”). The Company
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entered into this transaction to expand its existing brokerage and integrated services businesses in key domestic markets and to establish a presence in the high-margin franchise sector through the Christie’s International Real Estate brand.
The total consideration transferred was $403 million, which included $153 million in cash and $250 million in Company Class A common stock (the “CIRE Share Consideration”) based on its fair value at the acquisition date. In January 2026, the CIRE Share Consideration was finalized and the Company delivered 3.7 million shares and will deliver an additional total of 6.8 million shares in two equal installments in January 2027 and 2028 to certain sellers. These shares are incremental to 28.4 million shares that were issued as CIRE Share Consideration during the year ended December 31, 2025.
Refer to the Company's 2025 Form 10-K for a discussion of the allocation of purchase price, accounting policies and valuation methodologies applied to the intangible assets acquired in the CIRE Merger.
Of the total Goodwill recorded for this acquisition, $211 million is deductible for tax purposes.
Other Acquisitions
During the three months ended September 30, 2026, the Company acquired 100 % of the equity interests in four Sotheby’s International Realty franchisees and converted them to company-owned brokerage operations (the “Conversions”). The Company has accounted for the Conversions as business combinations.
The total consideration for the Conversions completed during the three months ended September 30, 2026 was $238 million, primarily comprised of: (i) $98 million of cash paid at or near closing, net of $12 million of cash acquired; (ii) $55 million of the Company's Class A common stock issued at closing; (iii) an estimated $20 million of deferred purchase price consideration to be paid in cash or the Company's Class A common stock at a later date; and (iv) $43 million of amounts payable in cash or Class A common stock, contingent on the respective businesses achieving certain earnings-based targets through 2028. $18 million of deferred purchase price consideration and $20 million of contingent consideration was recorded within Accrued expenses and other current liabilities and $2 million of deferred purchase price and $23 million of contingent consideration was recorded within Other non-current liabilities on the condensed consolidated balance sheet. The range of undiscounted amounts the Company could pay related to contingent consideration is between zero and $57 million.
The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of $76 million of goodwill, $64 million of ROU lease assets, $14 million of current lease liabilities, $50 million of non-current lease liabilities, and $156 million of intangible assets related to customer relationships, which are being amortized over the estimated useful life of approximately five years . Goodwill represents the expected synergies from combining the acquired assets and the operations of the Company and the value of the assembled workforce.
The Company has recorded preliminary purchase price allocations and expects to finalize them within each applicable one-year measurement period.
Approximately $16 million of the goodwill recorded during the three months ended September 30, 2026 is deductible for tax purposes. The amount of tax-deductible goodwill may increase in the future to approximately $54 million dependent on the payment of certain contingent consideration arrangements.
The converted entities' results have been included in the Company's consolidated financial statements from the respective conversion dates onward. For the three months ended September 30, 2026, the Conversions contributed an incremental $141 million in revenue and $4 million in net income.
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Pro Forma Information
The below presents the Company’s pro forma results as if the Anywhere Merger and the Conversions had occurred on January 1, 2025 (in millions):
| Pro Forma | ||||||||||||||||||||||||||
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income (loss) | ( | ( | ||||||||||||||||||||||||
The unaudited pro forma results assume the Anywhere Merger and the Conversions occurred on January 1, 2025. The pro forma results include adjustments for debt extinguishment costs, compensation expense for accelerated awards, additional amortization of acquired finite-lived intangible assets, and the related tax effects. In addition, the $407 million income tax benefit from the release of valuation allowance on certain deferred tax assets, which resulted from deferred tax liabilities established in connection with the Anywhere Merger and the Conversions, is reflected in the first quarter of 2025, the period in which the transactions are assumed to have been completed. The pro forma information does not purport to represent what the Company’s actual results of operations would have been had the Anywhere Merger and the Conversions occurred on January 1, 2025, nor does it purport to predict the results of operations for future periods.
Other Acquisition-Related Arrangements
In connection with the Company’s past acquisitions, certain amounts paid or to be paid to selling shareholders are subject to clawback and forfeiture dependent on certain employees and real estate professionals providing continued service to the Company. These retention-based payments are accounted for as compensation for future services and the Company recognizes the expenses over the service period. For the three and nine months ended September 30, 2026, the Company recognized expense of $1 million and $3 million, respectively, within Operations and support in the condensed consolidated statements of operations related to these arrangements. For the three and nine months ended September 30, 2025, the Company recognized expense of $1
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4. Revenue Recognition
Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue accounting standard. The Company's revenue disaggregated by major revenue categories and by reportable segment is presented in the tables below (in millions):
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||
Gross commission income (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Service revenue (2) | |||||||||||||||||||||||||||||||||||||||||||||||
Franchise fees (3) | |||||||||||||||||||||||||||||||||||||||||||||||
Other (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||
Gross commission income (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Service revenue (2) | |||||||||||||||||||||||||||||||||||||||||||||||
Franchise fees (3) | |||||||||||||||||||||||||||||||||||||||||||||||
Other (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1)Gross commission income within the Brokerage segment is recognized at a point in time upon the closing of a home sale transaction.
(2)Service revenue primarily consists of title and escrow fees earned by the Company's title and escrow businesses, which are recognized at a point in time upon the closing of a home sale transaction. Service revenue also includes relocation fees, which are recognized when the related performance obligation is satisfied depending on the type of service performed.
(3)Franchise fees earned by the Franchise segment primarily consist of domestic royalties, which are recognized at a point in time when the underlying franchisee revenue is earned upon the closing of a home sale transaction.
(4)Other revenue is comprised of brand marketing funds received from franchisees within the Franchise segment and other miscellaneous revenues across the Company's other business segments.
The Company's revenue streams are discussed further below by business segment.
Brokerage
Brokerage revenue is primarily comprised of gross commission income which contains a single performance obligation that is satisfied upon the closing of a real estate services transaction, at which point the entire transaction price is earned. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided.
Franchise
Domestic Franchisees
In the U.S., the Company employs a direct franchising model whereby it franchises its real estate brands to real estate brokerage businesses that are independently owned and operated. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a gross percentage of the franchisee’s gross commission income. Royalty fees are recorded as the underlying franchisee revenue is earned (upon close of the real estate transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Other sales incentives are generally recorded as a reduction to revenue ratably over the related performance period or from
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the date of issuance through the remaining life of the related franchise agreement. Franchise revenue also includes domestic initial franchise fees and marketing fees. Initial franchise fees are generally non-refundable and recognized as revenue upon the execution or opening of a new franchisee office to cover the upfront costs of opening the franchisee for business under one of the Franchise segment's brands. Marketing fees earned from franchisees are utilized by the Company to fund marketing campaigns on their behalf.
International Franchisees
The Company utilizes a direct franchising model and master franchise model outside of the U.S. Under both the direct and master franchise models outside of the U.S., the Company enters into long-term franchise agreements (generally 25 years in duration) and receives an initial area development fee (“ADF”) and ongoing royalties. Ongoing royalties are generally a percentage of the royalties received by the master franchisor from its franchisees with which it contracts and are recorded once the funds are received by the master franchisor. Under the direct franchise model, a royalty fee is paid to the Company on transactions conducted by its franchisees in the applicable country or region. The ADFs that the Company collects are recorded as deferred revenue when received and are classified as current or non-current liabilities in the condensed consolidated balance sheets based on the expected timing of revenue recognition. ADFs are recognized into franchise revenue over the average 25-year life of the related franchise agreement as consideration for the right to access and benefit from the Company’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination.
In connection with the Anywhere Merger, the Company assumed $49 million of deferred revenue liabilities related to the acquired franchise business, primarily consisting of the ADFs that are recognized as franchise revenue over a 25-year period. During the nine months ended September 30, 2026, the Company recognized $69 million in additional deferred revenue partially offset by $64 million of revenue recognized from various sources including brand marketing fees. The Company earns the brand marketing fees from its franchisees and utilizes such fees to fund marketing campaigns on behalf of its franchisees. Brand marketing fees are recorded as deferred revenue when received and recognized into revenue as earned when these funds are spent on marketing activities. The outstanding balance for deferred revenue was $54 million as of September 30, 2026 related to the Anywhere franchise business.
Integrated Services
The Company provides incremental services related to a real estate transaction, including title and escrow and settlement services to consumers, real estate companies, corporations and financial institutions. These services relate to the closing of home purchases and refinancing of home loans and therefore, title revenues, title and escrow fees, and closing service fees are recorded at the time a real estate transaction or refinancing closes.
Additionally, the Company provides relocation services, through Cartus, to corporations managing employee transfers and earns referral fees for directing brokerage transactions to real estate professionals in its Brokerage and Franchise segments. Services include home sale assistance, policy counseling, group move management, expense processing, compensation and compliance support, visa and immigration support, and household goods moving. Revenue comes from fees paid by real estate brokers and moving companies, recognized when services are completed, and from outsourcing management fees charged to clients. Management fees are recorded as deferred revenue when billed (typically at the start of a relocation) and recognized over the move's duration, generally 3 to 6 months.
5. Equity Method Investments
The Company applies the equity method of accounting for investments in ventures when it possesses significant influence over operational and financial decisions but lacks controlling interests. The Company records its proportionate share of net earnings or losses from these equity method investments under the Equity in income of unconsolidated entities line in the condensed consolidated statements of operations. Investments not subject to the equity method are valued at fair market value with adjustments recognized in net income. If the fair value is not readily determinable, these investments are measured at cost minus impairment (if any), plus or minus changes reflecting observable price changes in orderly transactions for an identical or similar investment.
In April 2026, the Company entered into a multi-party transaction with a company (the “Franchisee Parent”) that owns certain franchisees operating under the Sotheby's International Realty and Century 21 brands to restructure financial
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obligations of the Franchisee Parent's predecessor (the “Transaction”). As part of the Transaction, the Company became a 51 % holder of Franchisee Parent's common equity and entered into a 30-month installment payment plan pursuant to which certain outstanding indebtedness owed to the Company will be satisfied.
Because certain substantive rights held by other shareholders party to the Transaction limit the Company's ability to direct Franchisee Parent's most significant activities, the Company does not control Franchisee Parent and accounts for its investment under the equity method. As of September 30, 2026, the carrying value of the equity method investment was $22 million.
Additionally, the Company and certain funds managed or advised by Angelo, Gordon & Co., L.P. or its affiliates (collectively, “TPG”) entered into an agreement (the “Put Agreement”) under which TPG has the right, but not the obligation (the “Put Right”), to require the Company to purchase 100 % of Franchisee Parent's senior preferred equity at a price determined by a formula set forth in the Put Agreement. The Company recorded the Put Right as a liability at fair value, which was $22 million as of September 30, 2026 (the “Put Right liability”). Refer to Note 6 — “Fair Value of Financial Assets and Liabilities,” for further information on determination of the Put Right's fair value.
As of September 30, 2026, the Company had various equity method investments totaling $204 million recorded on the Other non-current assets line on the accompanying condensed consolidated balance sheet. Although the Company holds certain governance rights in these unconsolidated entities, it lacks controlling financial interests in these investments.
The Company's equity method investment balances at September 30, 2026 and December 31, 2025 were as follows (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
Mortgage joint ventures (1) | $ | $ | |||||||||||||||||||||
Title insurance underwriter joint venture (2) | |||||||||||||||||||||||
Brokerage equity method investments (3) | |||||||||||||||||||||||
Other equity method investments (4) | |||||||||||||||||||||||
Total equity method investments | $ | $ | |||||||||||||||||||||
(1)Represents the Company's equity method investments in OriginPoint, LLC and Guaranteed Rate Affinity, each of which is a 49.9 % minority-owned mortgage origination joint venture with Guaranteed Rate, Inc. The Guaranteed Rate Affinity investment was acquired in connection with the Anywhere Merger. Both investments are held within the Integrated Services segment and originate and market mortgage lending services to the Company's owned-brokerage as well as other real estate brokerage companies across the country.
(2)Represents the Company's 22 % equity interest in a title insurance underwriter joint venture, acquired in connection with the Anywhere Merger, and held within the Integrated Services segment.
(3)Includes the Company's various other equity method investments held within the Brokerage segment. These investments include the Company's 50 % owned interest in an unconsolidated joint venture (Concierge Auctions) with Sotheby's, as well as the Company's 51 % common equity interest in a company that owns certain franchisees operating under the Sotheby's International Realty and Century 21 brands.
(4)Includes the Company's various other equity method investments held within the Integrated Services segment.
During the nine months ended September 30, 2026 and 2025, the Company received distributions from equity method investments of $11 million and $3 million, respectively, classified as operating activities (return of earnings). During the nine months ended September 30, 2026, the Company also received $8 million of distributions classified as investing activities (return of investment). These distributions primarily relate to equity method investments acquired in the Anywhere Merger. Because the Company’s cumulative equity in earnings of these investments is measured from the Anywhere Closing Date, distributions received in excess of earnings recognized since the Merger are classified as returns of investment, even though they are paid from the investees’ earnings.
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The Company recorded equity in income from its equity method investments as follows (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Mortgage joint ventures | $ | $ | $ | $ | |||||||||||||||||||
| Title insurance underwriter joint venture | ( | ||||||||||||||||||||||
| Brokerage equity method investments | |||||||||||||||||||||||
Other equity method investments | |||||||||||||||||||||||
| Equity in income of unconsolidated entities | $ | $ | $ | $ | |||||||||||||||||||
6. Fair Value of Financial Assets and Liabilities
Level 1 Financial Instruments
The Company’s cash and cash equivalents of $841 million and $199 million as of September 30, 2026 and December 31, 2025, respectively, are held in cash, money market funds, and U.S. treasury bills with original maturities of three months or less at the date of purchase. Money market funds and U.S. treasury bills are classified as Level 1 within the fair value hierarchy because they are valued using quoted prices in active markets for identical assets. These are the Company's only Level 1 financial instruments.
Level 2 Financial Instruments
The following table summarizes the principal amount of the Company’s indebtedness compared to the estimated fair value, primarily determined by quoted market values, as of September 30, 2026 (in millions). These are the Company’s only Level 2 financial instruments.
| September 30, 2026 | |||||||||||||||||||||||
| Principal Amount | Estimated Fair Value (1) | ||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
(1)The fair value of the Company's indebtedness is categorized as Level 2.
Level 3 Financial Instruments
The Company’s Level 3 financial liabilities relate to acquisition-related contingent consideration arrangements and a Put Right liability.
Contingent consideration represents obligations of the Company to transfer cash or the Company’s common stock to the sellers of certain acquired entities in the event that certain targets and milestones are met. For certain contingent consideration liabilities, the Company estimated fair value using a Monte Carlo simulation, which is based on inputs such as forecasted future results of the acquired businesses, which are not observable in the market, discount rates and earnings volatility measures. For contingent consideration arrangements related to the Conversions completed during the three months ended September 30, 2026, the Company estimated fair value using a probability-weighted expected payment approach, which considers management’s assessment of the likelihood of achieving the applicable targets and milestones, discounted to present value.
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The Put Right liability relates to the Company's investment in an entity that owns certain franchisees operating under the Sotheby's International Realty and Century 21 brands. The related transaction, including the Put Agreement, was entered into during the three months ended June 30, 2026, at which time the Put Right liability was initially recorded at $22 million. The fair value of this liability was determined using a lattice-based option pricing model, based on significant unobservable inputs, including estimated future cash flows of the investment and discount rates. Refer to Note 5 — “Equity Method Investments,” for further information on the related transaction.
The Company has not presented certain quantitative information regarding the unobservable inputs utilized to measure contingent consideration liabilities or the Put Right liability given changes in these assumptions have not and are not expected to materially impact the Company’s operating results during 2026 or in future periods. Changes in the fair value of Level 3 contingent consideration liabilities are included within Operations and support expense in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2026, there were no material changes in the fair value of the Put Right liability.
A reconciliation of the opening balances to closing balances of the Company's Level 3 financial liabilities is as follows (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | |||||||||||||||||||
| Contingent consideration | |||||||||||||||||||||||
| Issuance of the Put Right liability | |||||||||||||||||||||||
| Payments | ( | ( | ( | ( | |||||||||||||||||||
| Changes in fair value included in net income (loss) | ( | ||||||||||||||||||||||
| Closing balance | $ | $ | $ | $ | |||||||||||||||||||
The Company’s contingent consideration liabilities were $72 million and $31 million as of September 30, 2026 and December 31, 2025, respectively. The Company's Put Right liability was $22 million as of September 30, 2026. Balances of Level 3 financial liabilities as of September 30, 2026 and December 31, 2025 were presented within the condensed consolidated balance sheets as follows (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accrued expenses and other current liabilities | $ | $ | |||||||||
| Other non-current liabilities | |||||||||||
| Total Level 3 financial instruments | $ | $ | |||||||||
There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.
7. Leases
The components of lease costs for operating leases, inclusive of leases assumed as a part of the Anywhere Merger, for the three and nine months ended September 30, 2026 and 2025 was as follows (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | |||||||||||||||||||
| Short-term lease costs | |||||||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Variable lease costs | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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The Company has a small population of subleases whereby it acts as a lessor and has recognized sublease income as noted in the table above. The impact of this portfolio is not material to the condensed consolidated financial statements.
For the three months ended September 30, 2026 and 2025, the Company recognized costs related to operating leases, net of sublease income, of $67 million and $35 million, respectively, in Operations and support and $2 million and $1 million, respectively, in General and administrative in the condensed consolidated statements of operations. For the nine months ended September 30, 2026 and 2025, the Company recognized costs related to operating leases, net of sublease income, of $206 million and $104 million, respectively, in Operations and support and $6 million and $3 million, respectively in General and administrative in the condensed consolidated statements of operations.
In connection with the Anywhere Merger, the Company acquired finance lease assets which represent equipment leases which primarily consist of furniture, computers and other office equipment. During the three and nine months ended September 30, 2026, the Company recognized $1 million and $9 million, respectively, of expense related to its finance lease assets.
Supplemental balance sheet information related to the Company's leases was as follows (in millions):
| Lease Type | Balance Sheet Classification | September 30, 2026 | December 31, 2025 | |||||||||||||||||
| Assets: | ||||||||||||||||||||
| Operating lease assets | Operating lease right-of-use assets | $ | $ | |||||||||||||||||
| Finance lease assets | Property and equipment, net | |||||||||||||||||||
| Total lease assets, net | $ | $ | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current: | ||||||||||||||||||||
| Operating lease liabilities | Current lease liabilities | $ | $ | |||||||||||||||||
| Finance lease liabilities | Current lease liabilities | |||||||||||||||||||
| Non-current: | ||||||||||||||||||||
| Operating lease liabilities | Non-current lease liabilities | |||||||||||||||||||
| Finance lease liabilities | Non-current lease liabilities | |||||||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||||||||
The following table represents the weighted-average remaining lease term and discount rate for the Company’s operating leases:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease term (years): | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
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Future undiscounted lease payments for the Company’s operating and finance lease liabilities are as follows as of September 30, 2026 (in millions):
| Operating Leases | Finance Leases | Total | ||||||||||||||||||
Remaining 2026 | $ | $ | $ | |||||||||||||||||
2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total future lease payments | ||||||||||||||||||||
| Less: imputed interest | ||||||||||||||||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||||||||||
Supplemental cash flow information related to leases was as follows (in millions):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Financing cash flows from finance leases | |||||||||||
| Supplemental non-cash information: | |||||||||||
| Lease assets obtained in exchange for lease obligations: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | |||||||||||
As of September 30, 2026, the Company had additional operating leases that have not yet commenced with future undiscounted lease payments of approximately $56 million payable through 2038, which have been excluded from above.
8. Goodwill and Intangible Assets
Goodwill
In connection with the Anywhere Merger, the Company realigned its results to three reportable segments: Brokerage, Franchise, and Integrated Services. Refer to Note 17 — “Segment Information” for further information on the Company’s reportable segments. As a result of the change in segments, in accordance with ASC 350, Intangibles-Goodwill and Other, the Company reallocated goodwill of $479 million using a relative fair value approach on January 9, 2026 (the “Reorganization Date”).
Prior to the segment realignment, the Company performed a goodwill impairment assessment and determined that no impairment existed, as the fair value of the single reporting unit exceeded its carrying amount. In connection with the realignment, goodwill was reallocated to the newly identified reporting units using a relative fair value approach, which was determined by estimating fair value based on Segment Adjusted EBITDA multiples (see Note 17 — “Segment Information” for more information). Under this approach, the Company assigned goodwill based on the proportion of each reporting unit’s fair value relative to the total fair value of the original reporting unit immediately prior to the reorganization.
Following the reallocation, the Company assessed goodwill for impairment at each of the newly established reporting units using a qualitative approach. In performing this assessment, the Company considered, among other factors, its overall market capitalization relative to book value, the historical and projected operating performance of the underlying reporting
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units, and implied valuation multiples, including EBITDA multiples, derived from both market data and internal analyses. Based on this assessment, the Company determined that no impairment existed.
In connection with the Anywhere Merger, the Company also allocated the acquired goodwill to the reporting units. During the nine months ended September 30, 2026, the Company continued to refine its purchase accounting for the Anywhere Merger, as permitted under the measurement period provided by ASC 805, Business Combinations. This included the refinement of how the acquired goodwill from the Anywhere Merger was allocated to the Company's reportable segments.
Changes in the carrying amount of Goodwill by reportable segment were as follows (in millions):
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||
| Reallocation of goodwill at the Reorganization Date | $ | $ | $ | $ | |||||||||||||||||||
Goodwill acquired in Anywhere Merger | |||||||||||||||||||||||
Measurement period adjustments related to the Anywhere Merger | ( | ( | |||||||||||||||||||||
Conversions completed during the three months ended September 30, 2026 (1) | |||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||
(1)Refer to Note 3 — “Acquisitions” for more information.
Intangible Assets
The following tables summarize the carrying amounts and accumulated amortization of intangible assets (in millions, except weighted-average remaining useful life):
| September 30, 2026 | |||||||||||||||||||||||||||||
| Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Value | Weighted Average Remaining Useful Life (Years) | |||||||||||||||||||||||||
| Finite-lived intangible assets: | |||||||||||||||||||||||||||||
| Franchise-related intangibles | $ | $ | ( | $ | |||||||||||||||||||||||||
Customer relationships (1) | ( | ||||||||||||||||||||||||||||
| Acquired technology | ( | ||||||||||||||||||||||||||||
| Trademarks | ( | ||||||||||||||||||||||||||||
| Indefinite-lived intangible assets: | |||||||||||||||||||||||||||||
| Trademarks | — | ||||||||||||||||||||||||||||
| Title plants | — | ||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | |||||||||||||||||||||||||
(1)For more information on the increase of the gross carrying amount of customer relationships during the third quarter, refer to Note 3 — “Acquisitions”.
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| December 31, 2025 | |||||||||||||||||||||||||||||
| Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Value | Weighted Average Remaining Useful Life (Years) | |||||||||||||||||||||||||
| Finite-lived intangible assets: | |||||||||||||||||||||||||||||
| Franchise agreements | $ | $ | ( | $ | |||||||||||||||||||||||||
| Customer relationships | ( | ||||||||||||||||||||||||||||
| Acquired technology | ( | ||||||||||||||||||||||||||||
| Trademarks | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | |||||||||||||||||||||||||
Amortization expense for the three and nine months ended September 30, 2026 and 2025 was $121 million and $377 million, respectively, and $19 million and $55 million, respectively.
The weighted average remaining useful life of all finite-lived intangible assets as of September 30, 2026 is 5.2 years. Estimated future amortization expense for finite-lived intangible assets as of September 30, 2026 is as follows (in millions):
| Total | ||||||||
| Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
9. Other Current Assets and Accrued Expenses and Other Current Liabilities
Other current assets consisted of (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Prepaid contracts and other prepaid expenses | $ | $ | |||||||||
| Prepaid agent incentives | |||||||||||
| Concierge receivables | |||||||||||
| Franchise incentives | |||||||||||
| Other | |||||||||||
| Total other current assets | $ | $ | |||||||||
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Accrued expenses and other current liabilities consisted of (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
Accrued payroll and related employee costs | $ | $ | |||||||||
| Accrued litigation settlements | |||||||||||
| Accrued interest | |||||||||||
| Accrued merger-related severance costs | |||||||||||
| Accrued expenses | |||||||||||
| Contingent consideration | |||||||||||
| Other | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
10. Debt
The Company's indebtedness consists of a financing facility, two securitization facilities, and outstanding secured, unsecured, and convertible senior notes, each described below. The Company was in compliance with all related covenants under these borrowing arrangements as of September 30, 2026. The following table summarizes these borrowing arrangements as of September 30, 2026 (in millions, except interest rates and expiration dates):
| Interest Rate | Expiration Date | Principal Amount | Unamortized Fair Value Discount (Premium) and Debt Issuance Costs | Net Amount | |||||||||||||||||||||||||
Revolving Credit Facility (1) | November 2030 | $ | * | $ | |||||||||||||||||||||||||
Long-term Debt: | |||||||||||||||||||||||||||||
| April 2030 | $ | $ | ( | $ | |||||||||||||||||||||||||
| April 2030 | ( | ||||||||||||||||||||||||||||
| January 2029 | |||||||||||||||||||||||||||||
| April 2030 | |||||||||||||||||||||||||||||
| April 2031 | |||||||||||||||||||||||||||||
Total Long-term debt | $ | $ | $ | ||||||||||||||||||||||||||
Securitization Obligations: (2) | |||||||||||||||||||||||||||||
Concierge Facility | January 2028 | $ | * | $ | |||||||||||||||||||||||||
Apple Ridge Securitization | May 2027 | * | |||||||||||||||||||||||||||
| Total Securitization obligations | $ | $ | |||||||||||||||||||||||||||
*The debt issuance costs related to the Revolving Credit Facility and Securitization Obligations are classified as deferred financing assets within Other non-current assets in the condensed consolidated balance sheet. Unamortized debt issuance costs are amortized within Interest expense in the condensed consolidated statements of operations.
(1)See below under the header “Revolving Credit Facility” for additional information.
(2)See below under the header “Securitization Obligations” for additional information.
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Maturities Table
As of September 30, 2026, the combined aggregate amount of future maturities for long-term debt are as follows (in millions):
| Amount | ||||||||
Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
2031 and thereafter | ||||||||
Total future maturities | $ | |||||||
Revolving Credit Facility
In November 2025, the Company entered into a Revolving Credit and Guaranty Agreement (the “Revolving Credit Facility”) with Morgan Stanley Senior Funding, Inc., as administrative agent and as collateral agent and a syndicate of other lenders. Under the Revolving Credit Facility, the Company obtained revolving commitments from lenders in an initial amount of $250 million. The lenders’ commitments under the Revolving Credit Facility automatically increased by $250 million to an aggregate amount of $500 million upon the completion of the Anywhere Merger in January 2026. The Revolving Credit Facility also included a letter of credit sublimit of $100 million which automatically increased to $170 million upon the completion of the Anywhere Merger. The Company’s obligations under the Revolving Credit Facility are guaranteed by certain of the Company’s subsidiaries and are secured by a first priority security interest in substantially all of the assets of the Company and the Company’s subsidiary guarantors, subject to customary exceptions.
Borrowings under the Revolving Credit Facility bear interest at Term SOFR plus an applicable rate between 1.50 % and 2.25 % per annum, based on a pricing grid in which the levels are set based on the Company’s Total Net Leverage Ratio (as defined in the underlying agreement). The Company is also obligated to pay other customary fees under the Revolving Credit Facility, including (i) a commitment fee to the lenders on amounts they have committed, which are unused, of between 0.175 % and 0.35 % per annum, based on a pricing grid in which the levels are set based on the Company’s Total Net Leverage Ratio, (ii) fees associated with the issuance of letters of credit, (iii) administrative agent fees, and (iv) upfront fees.
The maturity date of the Revolving Credit Facility is November 17, 2030. In the event there is an aggregate principal amount outstanding on certain of Anywhere’s second lien and unsecured notes that exceeds $50 million on the date that is 91 days prior to the respective final stated maturity dates of such notes, the Revolving Credit Facility is subject to an earlier springing maturity on such 91st day.
The Company has the option to repay the Company’s borrowings, and to permanently reduce the commitments in whole or in part, under the Revolving Credit Facility without premium or penalty. As of September 30, 2026, there were no borrowings outstanding under the Revolving Credit Facility and outstanding letters of credit under the Revolving Credit Facility totaled $48 million. As of September 30, 2026, the Company had $452 million available to be drawn under its Revolving Credit Facility.
The Revolving Credit Facility contains customary representations, warranties, affirmative covenants, and negative covenants. The negative covenants restrict the Company’s and its restricted subsidiaries’ ability to, among other things, incur liens and indebtedness, make certain investments, declare and pay dividends, dispose of, transfer or sell assets, make stock repurchases, and consummate certain other matters, all subject to certain exceptions. The financial covenant under the Revolving Credit Facility requires that following the consummation of the Anywhere Merger, the Company maintains a Total Net Leverage Ratio level of no greater than 5.00 to 1.00, stepping down to 4.50 to 1.00 on December 31, 2027 and 4.25 to 1.00 on December 31, 2028 with no requirement to maintain a minimum Liquidity level or a minimum
Consolidated Total Revenue level.
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Senior Secured Second Lien Notes
Following the Anywhere Merger, the 9.75 % Senior Secured Second Lien Notes and the 7.00 % Senior Secured Second Lien Notes (together, the “Secured Notes”) continued as obligations of the Anywhere issuers and are reflected in the Company’s condensed consolidated financial statements. The Secured Notes mature on April 15, 2030 and bear interest payable semiannually in arrears on April 15 and October 15 of each year. As of September 30, 2026, the principal outstanding under 9.75 % Senior Secured Second Lien Notes and the 7.00 % Senior Secured Second Lien Notes were $500 million and $640 million, respectively.
The Company may redeem all or a portion of the 9.75 % Senior Secured Second Lien Notes or the 7.00 % Senior Secured Second Lien Notes, as applicable, at the redemption prices set forth in the applicable indenture. Prior to April 15, 2027, the Company may only redeem the 9.75 % Senior Secured Second Lien Notes at a make-whole redemption price calculated in accordance with the indenture. On and after April 15, 2027, the notes may be redeemed at the applicable call prices set forth in the indenture, beginning at 104.875 % of the outstanding principal amount, plus accrued and unpaid interest.
The Secured Notes are (1) guaranteed on a senior secured, second priority basis by all material domestic subsidiaries that are guarantors under the Revolving Credit Facility; (2) guaranteed by Compass on a voluntary and unsecured senior subordinated basis; and (3) secured by substantially the same collateral as the existing first lien obligations under the Company's Revolving Credit Facility, but on a second priority basis.
The indentures governing the Secured Notes contain various negative covenants that limit the Company and its restricted subsidiaries’ ability, among other things, to incur or guarantee additional indebtedness, issue disqualified stock or preferred stock, pay dividends or make distributions to their stockholders, repurchase or redeem capital stock, make investments or acquisitions, incur restrictions on the ability of certain of their subsidiaries to pay dividends or to make other payments, enter into transactions with affiliates, create liens, merge or consolidate with other companies or transfer all or substantially all of their assets, transfer or sell assets, including capital stock of subsidiaries and prepay, redeem or repurchase debt that is subordinated in right of payment to the Secured Notes, all subject to certain exceptions.
Senior Unsecured Notes
Following the Anywhere Merger, the 5.75 % Senior Notes and 5.25 % Senior Notes (together, the “Unsecured Notes”) continued as obligations of the Anywhere issuers and are reflected in the Company's condensed consolidated financial statements. The 5.75 % Senior Notes mature on January 15, 2029 with interest on such notes payable each year semiannually on January 15 and July 15. The 5.25 % Senior Notes mature on April 15, 2030 with interest on such notes payable each year semiannually on April 15 and October 15. As of September 30, 2026, the principal outstanding under 5.75 % Senior Notes and the 5.25 % Senior Notes were $559 million and $449 million, respectively.
The Company may redeem all or a portion of the 5.75 % Senior Notes or 5.25 % Senior Notes, as applicable, at the redemption price set forth in the applicable indenture governing such notes. The Unsecured Notes are guaranteed on a general senior unsecured basis by Compass (on a voluntary basis) and all material domestic subsidiaries that are guarantors under the Revolving Credit Facility and the Company's outstanding debt securities.
The indentures governing the Unsecured Notes contain various negative covenants that limit the Company and its restricted subsidiaries’ ability, among other things, to incur or guarantee additional indebtedness, issue disqualified stock or preferred stock, pay dividends or make distributions to their stockholders, repurchase or redeem capital stock, make investments or acquisitions, incur restrictions on the ability of certain of their subsidiaries to pay dividends or to make other payments, enter into transactions with affiliates, create liens, merge or consolidate with other companies or transfer all or substantially all of their assets, transfer or sell assets, including capital stock of subsidiaries and prepay, redeem or repurchase debt that is subordinated in right of payment to the Unsecured Notes, all subject to certain exceptions.
In connection with the Anywhere Merger, on January 9, 2026 the Company issued $1.0 billion in aggregate principal amount of 0.25 % Convertible Senior Notes due 2031 (the “Convertible Notes”). The Convertible Notes will mature on April 15, 2031, unless earlier repurchased, converted or redeemed. The Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at the Company’s option at any time, and from time to time, on or after April 20, 2029 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price. The initial conversion rate for the Convertible Notes is 62.5626 shares of Class A common stock per $1,000 principal amount
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of Convertible Notes, which is equivalent to an initial conversion price of approximately $15.98 per share of Class A common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the indenture governing the notes. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.
Additionally, the Company also entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to the Class A common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be $23.68 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock on January 7, 2026, and is subject to certain customary adjustments under the terms of the Capped Call Transactions. The Company paid $97 million for the Capped Call Transactions, funded with proceeds from the Convertible Notes. The net cash proceeds received from the offering of the Convertible Notes were approximately $880 million after considering the $97 million cost of the Capped Call Transaction and $23 million of debt issuance costs. The Capped Call Transactions are equity-classified, are not remeasured each reporting period, and are recorded as a reduction to Additional paid-in capital in the condensed consolidated balance sheet.
Securitization Obligations
Concierge Facility
In July 2020, the Company entered into a Revolving Credit and Security Agreement (as amended, amended and restated, modified or supplemented from time to time, the “Concierge Facility”) with Barclays Bank PLC, as administrative agent, and the several lenders party thereto. The Concierge Facility provides for a $75 million revolving credit facility and is solely used to finance a portion of the Company’s Compass Concierge Program. The Concierge Facility is secured primarily by the Concierge receivables and cash of the Compass Concierge Program.
Borrowings under the Concierge Facility bear interest at the term SOFR rate plus a margin of 2.50 %. The two year commitment fee is 0.35 % if the Concierge Facility is utilized greater than 50 % and 0.50 % if the Concierge Facility is utilized less than 50%. On August 1, 2025, the revolving period under the Concierge Facility was extended to July 31, 2027. The interest rate on the drawn down balance of the Concierge Facility was 6.54 % as of September 30, 2026. Pursuant to the Concierge Facility, the principal amount, if any, is payable in full in January 2028, unless earlier terminated or extended.
The Company has the option to repay the borrowings under the Concierge Facility without premium or penalty prior to maturity. The Concierge Facility contains customary affirmative and negative covenants. Additionally, in the event that the Company fails to comply with certain financial measures tied to liquidity and leverage or other specified requirements, the lenders may cause the commitments under the Concierge Facility to automatically be reduced to zero and require the Company to repay any outstanding loans under the Concierge Facility. In April 2026, the Concierge Facility was amended to align the leverage-related financial measure under the Concierge Facility with the Total Net Leverage Ratio financial covenant applicable under the Revolving Credit Facility.
The Concierge Facility includes customary events of default that include, among other things, nonpayment of principal, interest or fees, inaccuracy of representations and warranties, violation of certain covenants, bankruptcy and insolvency events, material judgments and change of control. The occurrence of an event of default could result in the acceleration of the obligations and/or the increase in the applicable interest rate under the Concierge Facility.
Apple Ridge Funding LLC
The Company, through certain subsidiaries, including certain consolidated special purpose entities, maintains a relocation securitization program (the “Apple Ridge Securitization”) to securitize relocation receivables and related assets. Borrowings under the Apple Ridge facility currently bear interest, depending on the lender, at either the CP Rate (which represents the variable cost of commercial paper issued by the lenders to fund the facility) or SOFR plus a margin of 0.1 %. Additionally, a program fee of 1.80 % and an unused fee of 0.90 % are incurred. The one year renewal fee is 0.15 %. The securitization obligations represent floating rate debt for which the interest rate on the drawn down balance of the Apple Ridge facility was 5.95 % as of September 30, 2026.
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In May 2026, the Company amended and extended the existing Apple Ridge Securitization program through May 28, 2027 in the amount of $180 million. The securitization program includes a seasonal increase provision which allows for a temporary increase to $200 million of borrowing capacity from May 29, 2026 to October 15, 2026 only, at which time it reverts back to $180 million of borrowing capacity for the remainder of the term.
As of September 30, 2026, the Company had $200 million of borrowing capacity under the Apple Ridge Securitization program with $160 million being utilized, leaving $40 million of available capacity subject to maintaining sufficient relocation related assets to collateralize the securitization obligation.
Assets under the Apple Ridge Securitization program are generated from advancing funds on behalf of clients of the Company's relocation operations in order to facilitate the relocation of their employees. Assets of these special purpose entities are not available to pay the Company’s general obligations. Under the Apple Ridge Securitization program, provided no termination or amortization event has occurred, any new receivables generated under the designated relocation management agreements are sold into the securitization program and as new eligible relocation management agreements are entered into, the new agreements are designated to the program.
Certain of the funds that the Company receives from relocation receivables and related assets are required to be utilized to repay securitization obligations. These obligations are collateralized by $220 million of underlying relocation receivables and other related relocation assets at September 30, 2026. Substantially all relocation related assets are realized in less than twelve months from the transaction date. Accordingly, all of the Company's securitization obligations are classified as current in the accompanying condensed consolidated balance sheets. As a result of the Anywhere Merger, the Company acquired $8 million of restricted cash, which serves as part of the collateral for the securitization obligations described above and is included in Other current assets on the condensed consolidated balance sheet. As of September 30, 2026, restricted cash related to these collateralized assets totaled $5 million. Changes in restricted cash during the period are reflected in operating activities on the condensed consolidated statements of cash flows.
Interest incurred in connection with borrowings under the facility amounted to $3 million and $7 million for the three and nine months ended September 30, 2026, respectively. This interest expense is recorded within Revenue in the accompanying condensed consolidated statements of operations as related borrowings are utilized to fund the Company's relocation operations where interest is generally earned on such assets.
The Apple Ridge securitization program has restrictive covenants and trigger events, the occurrence of which could restrict the Company's ability to access new or existing funding under this facility or result in termination of the facility.
11. Commitments and Contingencies
Legal Proceedings
The Company is currently involved in, and may be involved in, disputes, legal proceedings, claims, and regulatory and governmental inquiries and investigations, and has received subpoenas and requests for documents and information, in connection with, among other things, antitrust and anti-competition claims. Further, the Company is currently involved in, and may be involved in, commercial disputes, labor and employment claims, intellectual property disputes, consumer complaints, and matters related to regulatory compliance. The Company does not expect any material financial loss or business implications related to these matters. However, the outcomes of the Company’s regulatory investigations and legal proceedings are inherently unpredictable and subject to substantial uncertainties. Certain claims, including RESPA, antitrust, and TCPA matters, may involve joint and several liability or significant, potentially trebled damages. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the Company’s business taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal costs related to the defense of loss contingencies are expensed as incurred.
Claims or regulatory actions against the Company, whether meritorious or not, could have an adverse impact on the Company due to legal costs, diversion of management resources and other elements. Except as identified with respect to the matters below, the Company does not believe that the outcome of any individual existing legal or regulatory proceeding
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to which it is a party will have a material adverse effect on its results of operations, financial condition or overall business in each case, taken as a whole.
The Company and its subsidiaries, inclusive of those subsidiaries acquired as a part of the Anywhere Merger, have been named as defendants in lawsuits that allege, among other things, violations of Section 1 of the Sherman Act, 15 U.S.C. § 1 or other antitrust laws, as set forth below (the “Antitrust Lawsuits”).
Real Estate Commission Sell-Side Antitrust Litigation
Anywhere was formerly known as Realogy Holdings Corp. and is named in the following three class actions covering sellers of homes utilizing a broker during the class period that challenge residential real estate industry rules and practices that require an offer of compensation and payment of buyer-broker commissions and certain alleged associated practices: (1) Burnett, et al. v. National Association of Realtors, et al., No. 4:19-CV-00332 (W.D. Mo.) (“Burnett”), filed on April 29, 2019, (2) Moehrl, et al. v. National Association of Realtors, et al., No. 1:19-CV-01610 (N.D. Ill.) (“Moehrl”), filed on March 6, 2019, and (3) Nosalek, et al. v. MLS Property Information Network, Inc., et al., No. 1:20-CV-12244 (D. Mass.) (“Nosalek”), filed on December 17, 2022.
In October 2023, Anywhere agreed to a settlement, on a nationwide basis, of all claims asserted or that could have been asserted against Anywhere in the Burnett, Moehrl and Nosalek cases, including claims asserted on behalf of home sellers in similar matters (the “Anywhere Settlement”) and the court granted final approval of the Anywhere Settlement on May 9, 2024. The final approval has been appealed by several parties, including a plaintiff class member from the Batton I buy-side case (described below), specifically claiming that the release in the Anywhere Settlement should not release any buy-side claims that sellers may also have. On September 15, 2026, the Eighth Circuit Court of Appeals affirmed the grant of final approval of the Anywhere Settlement.
The Anywhere Settlement releases Anywhere, including all of its subsidiary company-owned brokerages and franchise-affiliated brokerages, and their affiliated real estate professionals from all claims that were or could have been asserted by all persons who sold a home that was listed on a multiple listing service anywhere in the United States where a commission was paid to any brokerage in connection with the sale of the home in the relevant class period. The Anywhere Settlement is not an admission of liability, nor does it concede or validate any of the claims asserted against Anywhere.
Under the terms of the nationwide Anywhere Settlement, which was entered into prior to the closing of the Anywhere Merger, Anywhere agreed to injunctive relief (including practice changes) as well as monetary relief of $84 million, of which $30 million has been paid and the remaining $54 million will be due within 21 business days after all appellate rights are exhausted. While the timing of this payment is uncertain, the Company currently expects the payment to occur no earlier than the first quarter of 2027.
Four putative class action lawsuits, captioned Gibson, et al. v. National Association of Realtors, et al., No. 4:23-cv-00788-FJG (W.D. Mo.) (“Gibson”), filed on October 31, 2023, Grace v. National Association of Realtors, et al., No. 3:23-cv-06352 (N.D. Cal.) (“Grace”), filed on December 8, 2023, Fierro, et al. v. National Association of Realtors, et al., Case No. 2:24-cv-00449 (C.D. Cal.) (“Fierro”), filed on January 17, 2024, and Whaley v. Arizona Association of Realtors, Case No. 2:24-cv-00105 (D. Nev.) (“Whaley”), filed on January 15, 2024 name the Company as a defendant and allege, among other things, that certain trade associations, including the National Association of Realtors, multiple listing services, and real estate brokerages engaged in a continuing contract, combination, or conspiracy to unreasonably restrain interstate trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 by entering into a continuing agreement to require sellers of residential property to make inflated payments to brokers representing buyers. Umpa, et al. v. National Association of Realtors, et al., 4:23-cv-00945 (W.D. Mo.) (“Umpa”), filed on December 27, 2023, was consolidated into the Gibson matter on April 23, 2024 (Umpa hereafter referred to singularly as Gibson). Boykin v. National Association of Realtors, et al., No. 2:24-cv-00340 (D. Nev.) (“Boykin”), filed on February 16, 2024, was terminated and consolidated into the Whaley matter on March 20, 2024. The plaintiffs in Gibson allege a nationwide scope, while the Grace and Fierro matters are limited in scope to Northern California and Southern California, respectively and the Whaley matter is limited in scope to Nevada.
Two putative class action lawsuits, March v. Real Estate Board of New York, et al., No. 1:23-cv-09995 (S.D.N.Y.) (“March”), filed on November 13, 2023, and Friedman v. Real Estate Board of New York, et al., Case No. 1:23-cv-09601 (S.D.N.Y.) (“Friedman”), filed on January 18, 2024, name the Company as a defendant and allege, among other things, that the Real Estate Board of New York, and a number of real estate brokerages engaged in a continuing contract, combination, or conspiracy to unreasonably restrain interstate trade and commerce in violation of Section 1 of the Sherman Act, 15
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U.S.C. § 1 by entering into a continuing agreement to require sellers of residential property to make inflated payments to brokers representing buyers. The Friedman and March matters also allege violations of the Donnelly Act, N.Y. Gen. Bus. § 340, and the March matter further seeks injunctive relief pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26. The Friedman and March matters are limited in scope to the New York City boroughs of Brooklyn, and Manhattan, respectively.
On March 21, 2024, the Company entered into a settlement agreement to resolve Gibson on a nationwide basis (the “Compass Settlement”). The Compass Settlement resolves all claims in these cases and similar claims in other lawsuits alleging claims on behalf of sellers on a nationwide basis against the Company, including all of its subsidiary company-owned brokerages and franchise-affiliated brokerages, and their affiliated agents (collectively, the “Claims”) and releases them from the Claims. Under the Compass Settlement, the Company agreed to pay $58 million and make certain changes to its business practices. The Company’s motion for final approval of the Compass Settlement was granted on October 31, 2024. The final approval ruling was appealed by certain class members that objected to the Compass Settlement, including but not limited to plaintiffs in the March and Friedman matters, referenced above, and the Batton II matter referenced below. The Eighth Circuit Court of Appeals affirmed the grant of final approval of the Compass Settlement on September 1, 2026. The March and Friedman cases were dismissed with prejudice as to the Company and its subsidiaries subsequent to the Eighth Circuit's affirmance. Grace, Fierro, and Whaley have not been dismissed as to the Company. No further amounts are due under the Compass Settlement.
The Company does not expect the terms of the Compass Settlement, the Anywhere Settlement, or the process of moving to enforce the settlements nationwide to have a material impact on its future operations.
In addition, since late October 2023, dozens of copycat additional lawsuits with similar or related claims have been filed against various real estate brokerages, the National Association of Realtors, MLSs, and/or state and local Realtor associations, less than a third of which name the Company, its subsidiaries or franchisees. In those cases, plaintiffs have generally either agreed to dismiss or stay the actions against the Company, its subsidiaries or franchisees pending the conclusion of the appeals of the trial court's grant of final approval of the Compass and Anywhere Settlements, including the putative class action lawsuits of QJ Team, LLC, et al. v. Texas Association of Realtors, Inc., et al., No. 4:23-cv-01013 (E.D. Tx.) (“QJ Team”), filed on November 13, 2023 and Peiffer v. Latter & Blum Holding, LLC, et al., Case No. 2:24-cv-00557 (E.D. La.) (“Peiffer”), filed on March 5, 2024, each of which the Company formerly presented as separately captioned matters in the Commitments and Contingencies footnote.
Real Estate Commission Buy-Side Antitrust Litigation
Separately, a putative nationwide class action on behalf of home buyers (instead of sellers) captioned Batton, et al. v. The National Association of Realtors, et al., No. 1:21-CV-00430 (N.D. Ill.) (“Batton I”), which names Anywhere, was filed on January 25, 2021, in which the plaintiffs take issue with certain policies of the National Association of Realtors, including those related to buyer-broker compensation at issue in the Moehrl, Burnett and Nosalek matters, but claim the alleged conspiracy has harmed buyers (instead of sellers), and seek a permanent injunction enjoining the National Association of Realtors from establishing in the future the same or similar rules, policies, or practices as those challenged in the action as well as an award of damages and/or restitution, interest, and reasonable attorneys’ fees and expenses. The only claims remaining outstanding are state law claims. The final approval of the Anywhere Settlement has limited the size of the Batton I case because the settling plaintiffs are releasing claims of the type alleged in Batton I. As noted above, the named plaintiffs in the Batton I case have filed an appeal of the final approval of the Anywhere Settlement, objecting to the release of buy-side claims in that settlement. On November 13, 2025, the court struck the class certification motion filed by the Batton I plaintiffs and stayed all class certification proceedings pending resolution of the appeal of the Anywhere Settlement (though fact discovery would continue). As described in the next paragraph, developments in a separate, related buy‑side action, Tuccori v. At World Properties, et al., have implications for resolution of the claims asserted against Anywhere in Batton I.
Tuccori v. At World Properties, et al., (N.D. Ill.), No. 1:24-CV-00150 (“Tuccori”), is a case that consolidated several purported class actions filed by home buyers. On October 15, 2025, the court in Tuccori granted preliminary approval of a nationwide settlement entered by several real estate brokerages related to the home buyer claims (“Tuccori Settlement”). The Tuccori Settlement, as preliminarily approved by the court on October 15, 2025, included an opt-in procedure under which other companies subject to home buyer claims could opt into the Tuccori Settlement, subject to preliminary and final court approval of such an opt-in settlement. On February 22, 2026, Anywhere opted into the Tuccori Settlement via a nationwide Opt-In Settlement Agreement (“Anywhere Opt-In Settlement” with Anywhere being an “Opt-In Settlor”). On February 23, 2026, the Tuccori plaintiffs filed a motion for preliminary approval of the Anywhere Opt-In Settlement and
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several other opt-in settlements by other real estate brokerages. Anywhere agreed to pay $10 million under the Anywhere Opt-In Settlement (which was properly reserved at December 31, 2025), and paid $1 million of this obligation in March 2026. The Anywhere Opt-In Settlement received preliminarily court approval on March 6, 2026 and, if finally approved by the court and sustained on any appeal, will release Anywhere and all of its respective past, present, and future direct and indirect parents (including holding companies), subsidiaries, related entities and affiliates, associates (all as defined in SEC Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934), predecessors, and successors, and all of their respective franchisees, and sub-franchisors from any and all state and federal claims regardless of the cause of action arising from or related to conduct that was or could have been alleged in the Tuccori Case or against Opt-In Settlor in the Batton Case (as described in the prior paragraph) based on any or all of the same factual predicates as those claims, including but not limited to claims based on antitrust laws, consumer protection or other state laws, and/or anticompetitive conduct relating to the commissions negotiated, offered, obtained, or paid to brokerages, or the impact of the foregoing on the purchase price, in connection with the purchase or sale of residential real estate. Certain Batton I plaintiffs have lodged challenges to the Anywhere Opt-In Settlement, both before the Batton I Court and before the Tuccori Court, including appeals of rulings adverse to their challenges. By order dated April 16, 2026, the Batton I Court stayed all discovery and struck the pending discovery deadline pending resolution of the issues surrounding the Anywhere Opt-In Settlement in Tuccori. Subsequently, by order dated May 29, 2026, the Batton I Court stayed that entire case after the Company and other defendants received preliminary approval of settlements they entered in Tuccori. A final approval hearing for the Tuccori settlements (including the Compass Tuccori settlement set forth below) was held on November 2, 2026. The court will issue a written opinion at some point in the future.
Batton, et al. v. Compass, Inc., et al., No. 1:23-cv-15618 (N.D. Ill.) (“Batton II”), filed on November 2, 2023, names Compass and seven other brokerages as defendants. The allegations in Batton II are substantially similar to those contained in Batton I. Compass and the defendants in the Batton II matter filed a motion to dismiss the amended complaint on June 21, 2024, which the court denied on March 24, 2026. In April 2026, Compass opted into the Tuccori Settlement via the nationwide Opt-In Settlement Agreement (the “Compass Opt-In Settlement”). The Compass Opt-In Settlement amount is approximately $7 million. The Tuccori Court granted preliminary approval of the Compass Opt-In Settlement on May 26, 2026 and we paid $1 million of this obligation in June 2026. On May 29, 2026, as a result of preliminary approval of the Compass Opt-In Settlement in Tuccori, the Batton II Court stayed that entire case.
Assuming final court approval of each of the Anywhere and Compass Opt-In Settlements, we currently expect to pay the remaining settlement amounts no earlier than the fourth quarter of 2026 and more likely in 2027.
McFall v. Canadian Real Estate Association, et al., Federal Court, Canada, Court File No. T-119-24 is a putative class action, filed on January 18, 2024, in which plaintiff alleges that Coldwell Banker Canada, amongst other brokers, franchisors, Regional Real Estate Boards and the Canadian Real Estate Board conspired to fix the price of buyer brokerage services in violation of civil and criminal statutes. On March 14, 2024, the court entered an order functionally staying the matter pending further order of the court. The Company believes the court will reexamine this order upon conclusion of the appeal in a previously filed matter, called Sunderland, involving similar allegations but different parties. On October 14, 2026, the court ruled on the Sunderland appeal, finding that the claims against brokerages and associations could proceed, but claims against franchisors could not.
Other Antitrust Litigation
Homie Technology v. National Association of Realtors, et al., No. 2:24CV00616 (D. Utah) (“Homie”), filed on August 22, 2024, names the National Association of Realtors, Anywhere, several other real estate brokerages and franchisors and an MLS, seeking damages and injunctive relief, alleging that the defendants had conspired to exclude Homie and other new market entrants from the market for real estate brokerage services. The alleged conspiracy includes creating a market structure that facilitates boycotts of new entrants, including through the implementation and enforcement of the rules of the National Association of Realtors governing the operation of MLSs, which Homie claims to be exclusionary. Homie asserts violations of federal and state antitrust laws along with a common law claim of economic harm. Anywhere’s motion to dismiss was granted and the action was dismissed with prejudice by the court on July 15, 2025. Homie filed a notice of appeal of the dismissal on August 7, 2025. The order dismissing the case was affirmed on appeal on August 11, 2026.
Telephone Consumer Protection Act Litigation
In Bumpus, et al. v. Realogy Holdings Corp., et al., No. 3:19-cv-03309 (N.D. Cal.) (“Bumpus”), filed on June 11, 2019, plaintiffs allege that real estate professionals affiliated with Anywhere Advisors LLC violated the Telephone Consumer Protection Act of 1991 (TCPA) using dialers provided by Mojo Dialing Solutions, LLC and others. Plaintiffs seek relief on
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behalf of a National Do Not Call Registry class, an Internal Do Not Call class, and an Artificial or Prerecorded Message class. In January 2025, Anywhere entered into a settlement of the case pursuant to which it will pay $20 million, subject to final approval by the court, which was granted on March 18, 2026. The Company assumed the remaining $19 million owed under the settlement as a liability in connection with the Anywhere Merger and made this final payment during the three months ended June 30, 2026.
Securities Litigation
On October 7, 2026, a putative class action captioned Magloire v. Compass, Inc., et al., No. 1:26-cv-08885, was filed in the U.S. District Court for the Southern District of New York against the Company and certain individual defendants, including current and former officers and directors of the Company. The complaint asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 on behalf of former Anywhere stockholders who acquired the Company's common stock in connection with the January 2026 Anywhere Merger, alleging that the registration statement and prospectus for the Merger contained materially false and misleading statements and omissions regarding the regulatory review process and related risks. The plaintiff seeks unspecified monetary damages, equitable relief, including rescission or disgorgement, and attorney's fees and costs.
During the nine months ended September 30, 2026, the Company recognized an expense of $7 million within General and administrative expense in the condensed consolidated statements of operations in connection with the Antitrust Lawsuits.
Letter of Credit Agreements
The Company has irrevocable letters of credit with various financial institutions, primarily related to security deposits for leased facilities. As of September 30, 2026 and December 31, 2025, the Company was contingently liable for $48 million and $31 million, respectively, under these letters of credit. The letters of credit were collateralized by the Revolving Credit Facility.
Escrow and Trust Deposits
As a service to its home buyers and sellers, the Company administers escrow and trust deposits, which represent undistributed amounts for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250,000 . The escrow and trust deposits totaled approximately $1.1 billion and $300 million as of September 30, 2026 and December 31, 2025, respectively. The increase from December 31, 2025 is primarily driven by the $688 million of escrow and trust deposits relating to the Anywhere business. These deposits are not assets of the Company and therefore are excluded from the accompanying condensed consolidated balance sheets. However, the Company remains contingently liable for the disposition of these deposits.
12. Preferred Stock and Common Stock
Undesignated Preferred Stock
In April 2021, the Company adopted a restated certificate of incorporation which provides for authorized undesignated preferred stock to 25.0 million shares with a $0.00001 par value per share. As of September 30, 2026 and December 31, 2025, there are no
Common Stock
In February 2021, the Company approved the establishment of Class C common stock and an agreement with the Company’s CEO to exchange his Class A common stock for Class C common stock. Any Class A common stock issued to the Company’s CEO from RSU awards granted prior to February 2021 are able to be exchanged for Class C common stock. Each share of Class C common stock is entitled to twenty votes per share and will be convertible at any time into one share of Class A common stock and will automatically convert into Class A common stock under certain “sunset” provisions. Other than certain permitted transfers for estate planning purposes, upon a transfer of Class C common stock, the Class C common stock will convert into Class A common stock.
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In April 2021, the Company adopted a restated certificate of incorporation and changed its authorized capital stock to consist of 12.5 billion shares of Class A common stock, 1.25 billion shares of Class B common stock and 100 million shares of Class C common stock. Each class has par value of $0.00001
The following tables reflect the authorized, issued and outstanding shares for each of the classes of common stock as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | |||||||||||||||||
| Shares Authorized | Shares Issued | Shares Outstanding | |||||||||||||||
| Class A common stock | |||||||||||||||||
| Class B common stock | |||||||||||||||||
| Class C common stock | |||||||||||||||||
| Total | |||||||||||||||||
| December 31, 2025 | |||||||||||||||||
| Shares Authorized | Shares Issued | Shares Outstanding | |||||||||||||||
| Class A common stock | |||||||||||||||||
| Class B common stock | |||||||||||||||||
| Class C common stock | |||||||||||||||||
| Total | |||||||||||||||||
Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are not entitled to vote. Holders of Class C common stock are entitled to twenty votes per share.
Each share of Class C common stock is convertible at any time at the option of the holder into one share of Class A common stock. Each share of Class C common stock will automatically convert into a share of Class A common stock upon sale or transfer, except for certain permitted transfers.
13. Stock-Based Compensation
2021 Equity Incentive Plan
Effective January 1, 2026, the number of shares of Class A common stock available for future grants was increased by an additional 28.2 million shares as a result of the annual increase provision allowed under 2021 Equity Incentive Plan, as amended (the “2021 Plan”).
In connection with the Anywhere Merger, the Realogy Holdings Corp. Amended and Restated 2012 Long-Term Incentive Plan (the “Former Anywhere Plan”), the Anywhere Real Estate Inc. Third Amended and Restated 2018 Long-Term Incentive Plan (the “Anywhere Plan”) and the Realogy Holdings Corp. Non-Plan Inducement Stock Option Agreement (the “Inducement Stock Option Agreement”), as well as certain equity awards that were granted and outstanding under the Former Anywhere Plan, the Anywhere Plan and Inducement Stock Option Agreement were assumed by the Company and converted into equity awards in respect of 14.2 million shares of Class A common stock. In addition, 9.8 million shares remaining available for future issuance under the Anywhere Plan were assumed by the Company and added to the number of shares of the Class A common stock available for issuance under 2021 Plan (the “Added Shares”). During the period from January 9, 2026 and March 31, 2026, certain of these Added Shares were issued, and 0.5 million of the Added Shares remain available for issuance as of September 30, 2026.
As of September 30, 2026, there were 77.0 million shares available for future grants under the 2021 Plan, inclusive of the remaining Added Shares.
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2021 Employee Stock Purchase Plan
Effective January 1, 2026, the authorized shares increased by 5.5 million shares as a result of the annual increase provision allowed under the 2021 Employee Stock Purchase Plan (the “ESPP”). As of September 30, 2026, 22.6 million shares of Class A common stock remain available for grant under the ESPP. During the nine months ended September 30, 2026, the Company issued 0.4 million shares of Class A common stock under the ESPP.
Stock Options
A summary of stock option activity is presented below (in millions, except share and per share amounts):
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contract Term (in years) | Aggregate Intrinsic Value (1) | ||||||||||||||||||||
Balance as of December 31, 2025 | $ | $ | |||||||||||||||||||||
| Replacement awards assumed in connection with the Anywhere Merger | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
Balance as of September 30, 2026 | $ | $ | |||||||||||||||||||||
Exercisable and vested at September 30, 2026 | $ | $ | |||||||||||||||||||||
During the nine months ended September 30, 2026 and 2025, the intrinsic value of options exercised was $36 million and $15 million, respectively.
Restricted Stock Units
A summary of RSU activity is presented below:
| Number of Awards | Weighted Average Grant Date Fair Value | ||||||||||
Balance as of December 31, 2025 | $ | ||||||||||
Granted (1) | |||||||||||
| Replacement awards assumed in connection with the Anywhere Merger | |||||||||||
Vested and converted to common stock (2) | ( | ||||||||||
| Forfeited | ( | ||||||||||
Balance as of September 30, 2026 | $ | ||||||||||
(1)Included within the 19.5 million RSUs granted during the nine months ended September 30, 2026 are 5.0 million RSUs granted during the second quarter of 2026 resulting from the Company's modification of certain outstanding cash awards held by legacy Anywhere employees. As a result of this modification, $20 million of liabilities were reclassified to Additional paid-in capital on the modification date.
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Stock-Based Compensation Expense
Total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 is as follows (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Commissions and other related expenses | $ | $ | $ | $ | |||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Anywhere Merger transaction and integration expenses | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026, unrecognized stock-based compensation expense totaled $264 million and is expected to be recognized over a weighted-average period of 3.0 years.
The Company has not recognized any tax benefits from stock-based compensation as a result of the full valuation allowance maintained on its stock-based compensation related deferred tax assets.
14. Income Taxes
The Company recognized $4 million and $400 million of income tax benefit for the three and nine months ended September 30, 2026, respectively. Benefits for both periods primarily resulted from the reduction of valuation allowance on certain deferred tax assets related to the establishment of deferred tax liabilities created in connection with the Conversions and the Anywhere Merger. These deferred tax liabilities can be used to realize certain deferred tax assets against which the Company had previously recorded a full valuation allowance. Refer to Note 3 — “Acquisitions” for more information. In comparison, the Company recognized no income tax benefit for the three months ended September 30, 2025, and a $3 million income tax benefit for the nine months ended September 30, 2025.
The U.S. is the Company’s only material tax jurisdiction. The Company is generally no longer subject to U.S. federal examination by the Internal Revenue Service (“IRS”) for years before 2015. The IRS and state taxing authorities can subject the Company to audit dating back to 2012 when the Company begins to utilize its net operating loss carryforwards.
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15. Net Income (Loss) Per Share Attributable to Compass, Inc.
The Company computes net income (loss) per share under the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock, Class B common stock, and Class C common stock are substantially identical, other than voting rights. Accordingly, the net income (loss) per share attributable to Compass, Inc. will be the same for Class A common stock, Class B common stock, and Class C common stock on an individual or combined basis.
The following table sets forth the computation of basic and diluted net income (loss) per share attributable to Compass, Inc. (in millions, except share and per share amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Basic net income (loss) per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to Compass, Inc. | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
Weighted-average shares used in computing net income (loss) per share attributable to Compass, Inc., basic (1) | |||||||||||||||||||||||
| Net income (loss) per share attributable to Compass, Inc., basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted net income (loss) per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to Compass, Inc. | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Add: Interest expense on the | |||||||||||||||||||||||
| Net income (loss) used in computing diluted net income per share of common stock | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Number of shares used in basic calculation | |||||||||||||||||||||||
| Weighted-average effect of dilutive securities: | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
| Employee Stock Purchase Plan | |||||||||||||||||||||||
Shares issuable upon conversion of the | |||||||||||||||||||||||
| Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to Compass, Inc., diluted | |||||||||||||||||||||||
| Net income (loss) per share attributable to Compass, Inc., diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
(1)For the three and nine months ended September 30, 2025, the weighted-average shares used in computing net income (loss) per share attributable to Compass, Inc., basic includes 38.5
The Company applies the if-converted method to determine the dilutive effect of its 0.25 % Convertible Senior Notes (see Note 10 — “Debt”). Under this method, after-tax interest expense associated with the Convertible Notes is added back to net income in the numerator, and the shares issuable upon assumed conversion are included in the denominator, provided the effect is dilutive.
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For the three and nine months ended September 30, 2026, application of the if-converted method resulted in diluted earnings per share. Accordingly, the 0.25 % Convertible Senior Notes are reflected in the diluted earnings per share calculation presented above.
In connection with the issuance of the 0.25 % Convertible Senior Notes, the Company entered into capped call transactions intended to reduce potential dilution to the Company's Class A common stock upon conversion. The capped call transactions are not reflected in diluted earnings per share because their effect would be anti-dilutive, even though they are expected to reduce actual share dilution upon conversion.
The following participating securities were excluded from the computation of diluted net income (loss) per share attributable to Compass, Inc. for the periods presented, because including them would have been anti-dilutive (on an as-converted basis):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Outstanding stock options | |||||||||||||||||||||||
| Outstanding RSUs | |||||||||||||||||||||||
| Shares subject to the Employee Stock Purchase Plan | |||||||||||||||||||||||
| Unvested common stock | |||||||||||||||||||||||
| Incremental common stock to be issued in connection with the CIRE Share Consideration | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
16. Restructuring Activities
The Company previously undertook a restructuring plan to better align its organizational structure with its long-term strategy, drive cost efficiencies, and progress toward profitability and positive free cash flow. The plan included workforce reductions, which were completed in prior periods, and actions to reduce occupancy costs. Costs incurred in the current periods are largely lease-related and consist of (i) termination costs for leases the Company exited from the restructuring through the closing of the Anywhere Merger and (ii) ongoing costs for office space Anywhere had vacated or terminated before the Anywhere Merger, which the Company assumed at closing.
These costs are presented within Restructuring costs in the condensed consolidated statements of operations. Total restructuring costs for the three and nine months ended September 30, 2026 were $4 million and $12 million, respectively, and $2 million and $14 million for the three and nine months ended September 30, 2025, respectively.
The following table summarizes the estimated timing of the Company's future lease and lease-related payments, net of amounts contractually subleased, related to restructuring activities, inclusive of those assumed from Anywhere, for lease termination costs as of September 30, 2026 (in millions):
| Payment Due by Period | ||||||||
| Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
17. Segment Information
The reportable segments presented represent those for which the Company maintains separate financial information regularly provided to and reviewed by its chief operating decision maker (“CODM”) for performance assessment and resource allocation. The Company's CODM is the .
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Effective January 9, 2026 with the Anywhere Merger, the Company realigned its operating segments according to how the CODM will now allocate resources and assess performance. Each of the operating segments conducts distinct business activities from which it earns revenues and incurs expenses: the Brokerage segment generates revenues primarily from real estate commissions earned upon transaction close; the Franchise segment generates royalties and marketing fees primarily under long-term franchise agreements, including from the brands operating within the Brokerage segment. These intercompany revenues are eliminated in consolidation and are not reflected in the financial information presented below; the Integrated Services segment generates revenues from (i) title, escrow, settlement, and related services associated with real estate transactions and (ii) relocation services (provided by Cartus) to corporate and individual clients through service-based arrangements. The Integrated Services segment also provides mortgage services through its 49 % owned joint ventures, OriginPoint and Guaranteed Rate Affinity. Based on these factors, the Company has combined certain of its operating segments, which consist of businesses that provide similar services and are operated in a similar manner, and operates in three reportable segments:
•Brokerage;
•Franchise; and
•Integrated Services, which includes title and escrow, relocation services (provided by Cartus), and mortgage services (provided by OriginPoint and Guaranteed Rate Affinity).
Substantially all long-lived assets and revenue are based in the United States.
Segment Adjusted EBITDA represents net income (loss) attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, (iii) transaction and integration expenses associated with the Anywhere Merger, and (iv) other acquisition-related expenses.
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Set forth in the tables below are Segment revenue and Segment Adjusted EBITDA and a reconciliation to Net income (loss) attributable to Compass, Inc. for the three and nine months ended September 30, 2026 and 2025 (in millions):
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||
| Segment revenue | $ | $ | $ | $ | |||||||||||||||||||
Less (1): | |||||||||||||||||||||||
| Commissions and other related expenses | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Equity in income of unconsolidated entities | ( | ( | |||||||||||||||||||||
| Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to Net income attributable to Compass, Inc.: | |||||||||||||||||||||||
Unallocated corporate expenses (2) | $ | ( | |||||||||||||||||||||
| Stock-based compensation | ( | ||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||
| Restructuring costs | ( | ||||||||||||||||||||||
Anywhere Merger transaction and integration expenses (3) | ( | ||||||||||||||||||||||
| Other acquisition-related expenses | ( | ||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Income tax benefit | |||||||||||||||||||||||
Net income attributable to Compass, Inc. | $ | ||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Unallocated corporate expenses represent costs managed at the corporate level that are not allocated to the reporting segments. For the three months ended September 30, 2026, these costs are reflected in the following line items within the condensed consolidated statements of operations: $4 million in Operations and support, $79 million in Technology and development, and $53 million in General and administrative.
(3)Includes transaction and integration-related expenses incurred in connection with the Anywhere Merger. Refer to Note 3 — “Acquisitions” for more information.
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| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||
| Segment revenue | $ | $ | $ | $ | |||||||||||||||||||
Less (1): | |||||||||||||||||||||||
| Commissions and other related expenses | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Equity in income of unconsolidated entities | ( | ||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of Segment Adjusted EBITDA to Net loss attributable to Compass, Inc.: | |||||||||||||||||||||||
Unallocated corporate expenses (2) | $ | ( | |||||||||||||||||||||
| Stock-based compensation | ( | ||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||
| Restructuring costs | ( | ||||||||||||||||||||||
Anywhere Merger transaction and integration expenses (3) | ( | ||||||||||||||||||||||
| Other acquisition-related expenses | ( | ||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Net loss attributable to Compass, Inc. | $ | ( | |||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Unallocated corporate expenses represent costs managed at the corporate level that are not allocated to the reporting segments. For the three months ended September 30, 2025, these costs are reflected in the following line items within the condensed consolidated statements of operations: $34 million in Technology and development and $24 million in General and administrative.
(3)Includes transaction and integration-related expenses incurred in connection with the Anywhere Merger. Refer to Note 3 — “Acquisitions” for more information.
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| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||
Segment revenue | $ | $ | $ | $ | |||||||||||||||||||
Less (1): | |||||||||||||||||||||||
Commissions and other related expenses | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
Equity in income of unconsolidated entities | ( | ( | |||||||||||||||||||||
| Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
Reconciliation of Segment Adjusted EBITDA to Net income attributable to Compass, Inc.: | |||||||||||||||||||||||
Unallocated corporate expenses (2) | $ | ( | |||||||||||||||||||||
| Stock-based compensation | ( | ||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||
| Restructuring costs | ( | ||||||||||||||||||||||
Anywhere Merger transaction and integration expenses (3) | ( | ||||||||||||||||||||||
| Litigation charge | ( | ||||||||||||||||||||||
| Other acquisition-related expenses | ( | ||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Income tax benefit | |||||||||||||||||||||||
Net income attributable to Compass, Inc. | $ | ||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Unallocated corporate expenses represent costs managed at the corporate level that are not allocated to the reporting segments. For the nine months ended September 30, 2026, these costs are reflected in the following line items within the condensed consolidated statements of operations: $12 million in Operations and support, $245 million in Technology and development, and $177 million in General and administrative.
(3)Includes transaction and integration-related expenses incurred in connection with the Anywhere Merger. Refer to Note 3 — “Acquisitions” for more information.
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| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| Brokerage | Franchise | Integrated Services | Total | ||||||||||||||||||||
Segment revenue | $ | $ | $ | $ | |||||||||||||||||||
Less (1): | |||||||||||||||||||||||
Commissions and other related expenses | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
| Operations and support | |||||||||||||||||||||||
Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
Equity in income of unconsolidated entities | ( | ||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
Reconciliation of Segment Adjusted EBITDA to Net loss attributable to Compass, Inc.: | |||||||||||||||||||||||
Unallocated corporate expenses (2) | $ | ( | |||||||||||||||||||||
| Stock-based compensation | ( | ||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||
| Restructuring costs | ( | ||||||||||||||||||||||
Anywhere Merger transaction and integration expenses (3) | ( | ||||||||||||||||||||||
| Other acquisition-related expenses | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||
| Income tax benefit | |||||||||||||||||||||||
Net loss attributable to Compass, Inc. | $ | ( | |||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Unallocated corporate expenses represent costs managed at the corporate level that are not allocated to the reporting segments. For the nine months ended September 30, 2025, these costs are reflected in the following line items within the condensed consolidated statements of operations: $1 million in Operations and support, $100 million in Technology and development, and $63 million in General and administrative.
(3)Includes transaction and integration-related expenses incurred in connection with the Anywhere Merger. Refer to Note 3 — “Acquisitions” for more information.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in the 2025 Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section entitled “Special Note Regarding Forward-Looking Statements.” You should review the disclosure under the section entitled “Risk Factors” in Part II, Item 1A, “Risk Factors” in this Quarterly Report and Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
INTRODUCTION
Our Company
Compass, Inc. (the “Company”) was incorporated in Delaware on October 4, 2012 under the name Urban Compass, Inc. The Company has been based in New York City since its incorporation.
On January 9, 2026, we completed the Merger contemplated by the Agreement and Plan of Merger (the “Anywhere Merger Agreement”), by and among the Company, Anywhere Real Estate Inc., a Delaware corporation (“Anywhere”), and Velocity Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”). Pursuant to the terms of the Anywhere Merger Agreement, Merger Sub merged with and into Anywhere, with Anywhere surviving as our wholly owned subsidiary (the “Anywhere Merger” or the "Merger"). See “— Merger and Other Debt Transactions— Merger With Anywhere Real Estate Inc.” for additional information about the Anywhere Merger.
Prior to the Anywhere Merger, we were a leading tech-enabled real estate services company that included the largest residential real estate brokerage in the United States by sales volume, which primarily operated under the Compass brand in 39 states and Washington D.C., with approximately 37,000 real estate professionals at our owned-brokerages. We also provided integrated services to real estate professionals and their clients, including title, escrow, and mortgage.
Following the Anywhere Merger, we expanded our service area to include a presence in every major U.S. city and approximately 120 countries and territories, and we operate a portfolio of some of the most recognized and iconic brands, including @properties, Better Homes and Gardens Real Estate, Century 21, Christie’s International Real Estate, Coldwell Banker, Compass, Corcoran, ERA, and Sotheby’s International Realty. Following the Anywhere Merger, we served a global network of more than 340,000 real estate professionals in our owned-brokerage and franchise businesses.
The Company reports its operations in three business segments: Brokerage, Franchise and Integrated Services. We refer to independent sales agents at our owned-brokerage and at our franchises collectively as “real estate professionals.”
Brokerage
Following the Anywhere Merger, we operate our owned-brokerage business primarily under the @properties, Coldwell Banker, Compass, Corcoran, and Sotheby’s International Realty brands.
Our business model is directly aligned with the success of real estate professionals. Real estate professionals at our owned-brokerage business are independent contractors that associate their real estate license with us and choose to operate their businesses on our platform and/or utilize our technology offerings. We primarily generate revenue from our owned-brokerage business when we collect a share of the gross sales commissions that these real estate professionals earn from home sales and certain other fees, such as flat transaction commission fees. Gross sales commissions are typically based on a percentage of the home sale price.
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Franchise
In January 2025, we acquired a company with the exclusive, worldwide right to operate, franchise and license the Christie’s International Real Estate brand. As a part of the Anywhere Merger, we also acquired a franchise portfolio of well-known, industry-leading franchise brokerage brands, including Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Coldwell Banker Commercial, Corcoran, ERA and Sotheby's International Realty. We attract independently operated brokerages that affiliate with us as franchisees or licensees under long-term franchise or license agreements. We generate revenue from our franchise business when we collect royalties from our independently owned and operated franchisees, which are based on a percentage of the franchisee’s gross sales commissions, as well as certain other fees, such as marketing and technology fees.
Integrated Services
We also provide non-brokerage services to real estate professionals and their clients, including title and escrow and, via minority-owned joint ventures, mortgage. The Anywhere Merger expanded these services and added additional services, including relocation, and title underwriting via a minority-owned joint venture. We refer to these services collectively as “Integrated Services.”
As part of the Anywhere Merger, we acquired Cartus, a provider of global relocation services. Cartus offers a broad range of world-class employee relocation services designed to manage all aspects of an employee’s move and allow our clients to outsource their entire relocation programs to us.
Our Technology Offerings
Our end-to-end proprietary technology platform, branded “Home Platform”, allows real estate professionals to perform their primary workflows, from first contact to close, with a single log-in and without leaving the platform. Home Platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service, brokerage services and other critical functionalities, all custom-built for the real estate industry. Home Platform also uses proprietary data, analytics, AI, and machine learning to simplify workflows of real estate professionals and deliver high-value recommendations and outcomes for their clients. Additionally, certain title and escrow and mortgage services are integrated and are available on the platform. As of September 30, 2026, Home Platform is available to real estate professionals at our owned-brokerage operating under the Compass brand and substantially all real estate professionals operating under the @properties, Coldwell Banker, Corcoran, and Sotheby's International Realty brands, although certain functionality is still being deployed. We plan to release Home Platform to our franchise network in 2027.
Merger and Other Debt Transactions
Merger With Anywhere Real Estate Inc.
On January 9, 2026, we completed our Merger with Anywhere, acquiring all outstanding Anywhere common stock in a stock-for-stock transaction. Holders of Anywhere common stock received 1.436 shares of our Class A common stock for each Anywhere share, resulting in the issuance of 162.1 million shares. We also repaid $502 million of Anywhere's revolving credit facility at closing, as required under its change in control provisions, and issued replacement equity awards to Anywhere award holders.
During the three and nine months ended September 30, 2026, we incurred $28 million and $245 million of merger-related expenses. These included legal, investment banking and other transaction-related fees; severance and other personnel-related costs; and costs to integrate systems, technologies and other processes. These amounts are reported within the Anywhere Merger transaction and integration expenses line of the condensed consolidated statements of operations.
Secured and Unsecured Notes
Following the Anywhere Merger, the 9.75% Senior Secured Second Lien Notes and the 7.00% Senior Secured Second Lien Notes (together, the “Secured Notes”) and the 5.75% Senior Notes and 5.25% Senior Notes (together, the “Unsecured Notes”) continued as obligations of the Anywhere issuers. The Secured Notes and Unsecured Notes represent an aggregate of $2.1 billion in principal amount of debt assumed in the Anywhere Merger and are reflected in the Company's condensed consolidated financial statements as of September 30, 2026.
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For additional discussion of the impact of the Anywhere Merger and related financing transactions, including the Convertible Notes, the Capped Call Transactions and the Secured Notes and Unsecured Notes on our liquidity, see “Liquidity and Capital Resources.”
Convertible Notes
In anticipation of the Anywhere Merger, on January 9, 2026 we issued $1.0 billion in aggregate principal amount of 0.25% Convertible Senior Notes due 2031 (the “Convertible Notes”). The Convertible Notes will mature on April 15, 2031, unless earlier repurchased, converted or redeemed. The Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), at our option at any time, and from time to time, on or after April 20, 2029 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price. The initial conversion rate for the Convertible Notes is 62.5626 shares of Class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $15.98 per share of Class A common stock. The net proceeds were used to repay the revolving credit facility of Anywhere and its subsidiaries, pay related fees, costs and expenses related to the Anywhere Merger and fund the net cost of entering into the Capped Call Transactions (as defined below).
Capped Call Transactions
Additionally, we also entered into privately negotiated capped call transactions (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to the Class A common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions is $23.68 per share of Class A common stock, which represents a premium of 100% over the last reported sale price of the Class A common stock on January 7, 2026. We paid $97 million for the Capped Call Transactions, funded with proceeds from the Convertible Notes. The net cash proceeds we received from the offering of the Convertible Notes were approximately $880 million after considering the $97 million cost of the Capped Call Transaction and $23 million of debt issuance costs.
Seasonality and Cyclicality
The residential real estate market is seasonal, which directly impacts our real estate professionals’ businesses. While individual markets may vary, transaction volume is typically highest in spring and summer, and then declines gradually in late fall and winter. We experience the most significant financial effect from this seasonality in the first and fourth quarters of each year, when our revenue is typically lower relative to the second and third quarters. The effect of this seasonality on our revenue has a larger effect on our results of operations as many of our operating expenses (excluding commissions) are somewhat fixed in nature and do not vary directly in line with our revenue. We believe that this seasonality has affected and will continue to affect our quarterly results.
The broader residential real estate industry is cyclical, and individual markets can have their own dynamics that diverge from broad market conditions. The real estate industry can be impacted by the strength or weakness of the economy, changes in interest rates or mortgage lending standards, or extreme economic or political conditions. Our revenue growth rate tends to increase as the real estate industry performs well and to decrease when the real estate industry performs poorly.
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RESULTS OF OPERATIONS
The following discussion presents our results of operations on both a consolidated basis and by reportable segment for the three and nine months ended September 30, 2026 and 2025. Our results for the three and nine months ended September 30, 2026 include the operations of the combined company following the Anywhere Merger, which closed on January 9, 2026. Results for the three and nine months ended September 30, 2025 reflect the historical results of Compass, Inc. on a stand-alone basis.
Following the Anywhere Merger, the Company operates through three reportable segments: Brokerage, Franchise, and Integrated Services. These segments reflect the manner in which the Chief Operating Decision Maker (“CODM”) reviews operating performance and allocates resources. Management's discussion of segment operating performance in this MD&A is based on the same segment structure and performance measures used by the CODM and disclosed in Note 17 — “Segment Information”, to the condensed consolidated financial statements. Any changes to the Company's segment structure or the manner in which segment performance is evaluated would be reflected in both the segment footnote and MD&A.
The results below are presented on both a GAAP and non-GAAP basis, with reconciliations of non-GAAP measures to the most directly comparable GAAP measures provided where applicable.
The following table sets forth our condensed consolidated statements of operations data for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 3,897 | 100.0 | % | $ | 1,846 | 100.0 | % | $ | 10,907 | 100.0 | % | $ | 5,262 | 100.0 | % | |||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Commissions and other related expenses (1) | 2,921 | 75.0 | 1,502 | 81.4 | 8,183 | 75.0 | 4,293 | 81.6 | |||||||||||||||||||||||||||||||||||||||
Sales and marketing (1) | 107 | 2.7 | 59 | 3.2 | 312 | 2.9 | 178 | 3.4 | |||||||||||||||||||||||||||||||||||||||
Operations and support (1) | 426 | 10.9 | 146 | 7.9 | 1,253 | 11.5 | 423 | 8.0 | |||||||||||||||||||||||||||||||||||||||
Technology and development (1) | 107 | 2.7 | 67 | 3.6 | 335 | 3.1 | 180 | 3.4 | |||||||||||||||||||||||||||||||||||||||
General and administrative (1) | 72 | 1.8 | 40 | 2.2 | 246 | 2.3 | 101 | 1.9 | |||||||||||||||||||||||||||||||||||||||
Anywhere Merger transaction and integration expenses (1) | 28 | 0.7 | 8 | 0.4 | 245 | 2.2 | 8 | 0.2 | |||||||||||||||||||||||||||||||||||||||
| Restructuring costs | 4 | 0.1 | 2 | 0.1 | 12 | 0.1 | 14 | 0.3 | |||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 145 | 3.7 | 28 | 1.5 | 461 | 4.2 | 86 | 1.6 | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 3,810 | 97.8 | 1,852 | 100.3 | 11,047 | 101.3 | 5,283 | 100.4 | |||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | 87 | 2.2 | (6) | (0.3) | (140) | (1.3) | (21) | (0.4) | |||||||||||||||||||||||||||||||||||||||
| Investment income | 7 | 0.2 | 2 | 0.1 | 15 | 0.1 | 4 | 0.1 | |||||||||||||||||||||||||||||||||||||||
| Interest expense | (41) | (1.1) | (2) | (0.1) | (119) | (1.1) | (7) | (0.1) | |||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and equity in income of unconsolidated entities | 53 | 1.4 | (6) | (0.3) | (244) | (2.2) | (24) | (0.5) | |||||||||||||||||||||||||||||||||||||||
| Income tax benefit | 4 | 0.1 | — | — | 400 | 3.7 | 3 | 0.1 | |||||||||||||||||||||||||||||||||||||||
| Equity in income of unconsolidated entities | 6 | 0.2 | 2 | 0.1 | 21 | 0.2 | 5 | 0.1 | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 63 | 1.6 | (4) | (0.2) | 177 | 1.6 | (16) | (0.3) | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to non-controlling interests | (1) | — | — | — | (1) | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Compass, Inc. | $ | 62 | 1.6 | % | $ | (4) | (0.2 | %) | $ | 176 | 1.6 | % | $ | (16) | (0.3 | %) | |||||||||||||||||||||||||||||||
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(1)Includes stock-based compensation expense as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Commissions and other related expenses | $ | 1 | $ | — | $ | 2 | $ | — | |||||||||||||||
| Sales and marketing | 3 | 9 | 12 | 25 | |||||||||||||||||||
| Operations and support | 8 | 11 | 26 | 26 | |||||||||||||||||||
| Technology and development | 13 | 28 | 45 | 66 | |||||||||||||||||||
| General and administrative | 11 | 11 | 36 | 28 | |||||||||||||||||||
| Anywhere Merger transaction and integration expenses | — | — | 64 | — | |||||||||||||||||||
| Total stock-based compensation expense | $ | 36 | $ | 59 | $ | 185 | $ | 145 | |||||||||||||||
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
The following section provides analysis of our condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025.
Within the discussion of Revenue and of Commissions and other related expenses, we have included Supplemental Pro Forma Revenue and Commissions and other related expenses for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through September 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. This pro forma financial information has not been prepared in accordance with the requirements of Article 11 of Regulation S-X or Accounting Standards Codification 805, Business Combinations, and was prepared for illustrative and informational purposes only.
Additional discussion of financial metrics for the Company's reportable segments follows in the “Segment Operating Performance” section.
Revenue
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 3,897 | $ | 1,846 | $ | 2,051 | 111.1 | % | $ | 10,907 | $ | 5,262 | $ | 5,645 | 107.3 | % | |||||||||||||||||||||||||||||||
| Supplemental pro forma information: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pro forma revenue | $ | 3,897 | $ | 3,493 | $ | 404 | 11.6 | % | $ | 10,960 | $ | 9,837 | $ | 1,123 | 11.4 | % | |||||||||||||||||||||||||||||||
On a consolidated basis, revenue was $3.9 billion and $10.9 billion during the three and nine months ended September 30, 2026, respectively, an increase of $2.1 billion, or 111.1%, and an increase of $5.6 billion, or 107.3%, compared to the prior-year periods, respectively. These increases are primarily the result of the acquisition of Anywhere in January 2026.
On a pro forma basis, revenue was $3.9 billion and $11.0 billion during the three and nine months ended September 30, 2026, respectively, an increase of $404 million, or 11.6%, and an increase of $1,123 million, or 11.4%, compared to the prior-year periods. These increases are primarily a result of higher average sale prices across our various segments.
52
Operating Expenses
Commissions and other related expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Commissions and other related expenses | $ | 2,921 | $ | 1,502 | $ | 1,419 | 94.5% | $ | 8,183 | $ | 4,293 | $ | 3,890 | 90.6% | |||||||||||||||||||||||||||||||||
| Percentage of revenue | 75.0 | % | 81.4 | % | 75.0 | % | 81.6 | % | |||||||||||||||||||||||||||||||||||||||
| Supplemental pro forma information: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pro forma commissions and other related expenses | $ | 2,921 | $ | 2,586 | $ | 335 | 13.0% | $ | 8,213 | $ | 7,297 | $ | 916 | 12.6% | |||||||||||||||||||||||||||||||||
| Percentage of pro forma revenue | 75.0 | % | 74.0 | % | 74.9 | % | 74.2 | % | |||||||||||||||||||||||||||||||||||||||
On a consolidated basis, commissions and other related expenses was $2.9 billion and $8.2 billion for the three and nine months ended September 30, 2026, respectively, an increase of $1.4 billion, or 94.5%, and $3.9 billion, or 90.6%, compared to the prior-year periods, respectively. These increases on an absolute dollar basis are primarily the result of the acquisition of Anywhere in January 2026. Including the impact of the Anywhere Merger, commissions and other related expenses as a percentage of revenue decreased to 75.0% from 81.4% for the three months ended September 30, 2026 and 2025, respectively, and to 75.0% from 81.6% for the nine months ended September 30, 2026 and 2025, respectively. These decreases were primarily attributable to Anywhere’s franchise and integrated services businesses, which contributed meaningful revenue in 2026 but do not incur expenses classified within commissions and other related expenses.
On a pro forma basis, commissions and other related expenses was $2.9 billion and $8.2 billion during the three and nine months ended September 30, 2026, respectively, an increase of $335 million, or 13.0%, and an increase of $916 million, or 12.6%, compared to the prior-year periods, respectively. Year-over-year increases in absolute dollars were driven by higher gross commission income from our owned-brokerage business during the three months ended September 30, 2026. On a pro forma basis, commissions and other related expenses as a percentage of revenue increased slightly for the three and nine months ended September 30, 2026 when compared to the prior-year periods, reflecting changes in agent commission arrangements and geographic mix.
Sales and marketing
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 107 | $ | 59 | $ | 48 | 81.4 | % | $ | 312 | $ | 178 | $ | 134 | 75.3 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 2.7 | % | 3.2 | % | 2.9 | % | 3.4 | % | |||||||||||||||||||||||||||||||||||||||
On a consolidated basis, sales and marketing expense was $107 million and $312 million during the three and nine months ended September 30, 2026, an increase of $48 million, or 81.4%, and an increase of $134 million, or 75.3%, compared to the prior-year periods, respectively. These increases were primarily driven by increased employee compensation for marketing staff, agent advertising, and marketing costs associated with the acquired Anywhere businesses.
Operations and support
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Operations and support | $ | 426 | $ | 146 | $ | 280 | 191.8 | % | $ | 1,253 | $ | 423 | $ | 830 | 196.2 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 10.9 | % | 7.9 | % | 11.5 | % | 8.0 | % | |||||||||||||||||||||||||||||||||||||||
53
On a consolidated basis, operations and support expense was $426 million and $1,253 million during the three and nine months ended September 30, 2026, an increase of $280 million, or 191.8%, and $830 million, or 196.2%, compared to the prior-year periods, respectively. The increases were primarily driven by the increased operating expenses related to employee compensation, occupancy, and other operating items as a result of the addition of Anywhere.
Technology and development
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Technology and development | $ | 107 | $ | 67 | $ | 40 | 59.7 | % | $ | 335 | $ | 180 | $ | 155 | 86.1 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 2.7 | % | 3.6 | % | 3.1 | % | 3.4 | % | |||||||||||||||||||||||||||||||||||||||
On a consolidated basis, technology and development expense was $107 million and $335 million during the three and nine months ended September 30, 2026, an increase of $40 million, or 59.7%, and $155 million, or 86.1%, compared to the prior-year periods, respectively. The increases were primarily driven by the addition of Anywhere's employee compensation, software, and information technology infrastructure costs. The improvement in technology and development expense as a percentage of revenue when comparing the three months ended September 30, 2026 to the nine months ended September 30, 2026 to the prior-year periods, respectively, is primarily driven by the benefit of realized cost synergies and continued cost management.
General and administrative
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 72 | $ | 40 | $ | 32 | 80.0 | % | $ | 246 | $ | 101 | $ | 145 | 143.6 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 1.8 | % | 2.2 | % | 2.3 | % | 1.9 | % | |||||||||||||||||||||||||||||||||||||||
On a consolidated basis, general and administrative expense was $72 million and $246 million during the three and nine months ended September 30, 2026, an increase of $32 million, or 80.0%, and $145 million, or 143.6%, compared to the prior-year periods, respectively. The increases were primarily driven by the addition of Anywhere's general and administrative functions.
Anywhere Merger transaction and integration expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Anywhere Merger transaction and integration expenses | $ | 28 | $ | 8 | $ | 20 | 250.0 | % | $ | 245 | $ | 8 | $ | 237 | 2,962.5 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 0.7 | % | 0.4 | % | 2.2 | % | 0.2 | % | |||||||||||||||||||||||||||||||||||||||
Anywhere Merger transaction and integration expenses during the three and nine months ended September 30, 2026 and 2025, represents transaction and integration costs incurred in connection with the Anywhere Merger. These costs were comprised of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. In addition, the Company incurred stock-based compensation expense of $64 million during the nine months ended September 30, 2026, primarily related to the acceleration of certain Anywhere equity awards. These awards were converted to Company equity awards in connection with the Anywhere Merger and subsequently accelerated upon the termination of certain employees.
54
Restructuring costs
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring costs | $ | 4 | $ | 2 | $ | 2 | 100.0 | % | $ | 12 | $ | 14 | $ | (2) | (14.3 | %) | |||||||||||||||||||||||||||||||
| Percentage of revenue | 0.1 | % | 0.1 | % | 0.1 | % | 0.3 | % | |||||||||||||||||||||||||||||||||||||||
Restructuring costs were $4 million and $12 million for three and nine months ended September 30, 2026, respectively. These costs primarily consisted of lease termination costs pertaining to restructuring programs initiated prior to the Anywhere Merger.
Depreciation and amortization
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 145 | $ | 28 | $ | 117 | 417.9 | % | $ | 461 | $ | 86 | $ | 375 | 436.0 | % | |||||||||||||||||||||||||||||||
| Percentage of revenue | 3.7 | % | 1.5 | % | 4.2 | % | 1.6 | % | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization expense increased $117 million, or 417.9%, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, and increased $375 million, or 436.0%, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was primarily attributable to amortization of intangible assets and depreciation of fixed assets recognized in the Anywhere Merger, which contributed $123 million and $388 million for the three and nine months ended September 30, 2026, respectively.
Investment income
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment income | $ | 7 | $ | 2 | $ | 5 | 250.0 | % | $ | 15 | $ | 4 | $ | 11 | 275.0 | % | |||||||||||||||||||||||||||||||
Investment income increased during the three and nine months ended September 30, 2026 primarily as a result of an increase in our average short-term interest-bearing investments as compared to the three and nine months ended September 30, 2025.
Interest expense
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | $ | 41 | $ | 2 | $ | 39 | 1,950.0 | % | $ | 119 | $ | 7 | $ | 112 | 1,600.0 | % | |||||||||||||||||||||||||||||||
Interest expense was $41 million and $119 million for the three and nine months ended September 30, 2026, an increase of $39 million and $112 million, respectively. The increased expense was primarily attributable to the Anywhere Merger, with assumed debt contributing $37 million and $108 million for the three and nine months ended September 30, 2026.
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Income tax (expense) benefit
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Income tax benefit | $ | 4 | $ | — | $ | 4 | 100.0 | % | $ | 400 | $ | 3 | $ | 397 | 13,233.3 | % | |||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2026, income tax benefit increased by $4 million and $397 million, respectively. Both increases were primarily driven by the reversal of valuation allowances on deferred tax assets following the establishment of deferred tax liabilities for the recognition of intangible assets that are non-deductible for tax purposes. These reversals were related to the Conversion of four Sotheby’s International Realty franchisees to company-owned brokerage operations (the “Conversions”) completed during the three months ended September 30, 2026 as disclosed in Note 3 — “Acquisitions” and the Anywhere Merger, respectively.
Equity in income of unconsolidated entities
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity in income of unconsolidated entities | $ | 6 | $ | 2 | $ | 4 | 200.0 | % | $ | 21 | $ | 5 | $ | 16 | 320.0 | % | |||||||||||||||||||||||||||||||
During the three and nine months ended September 30, 2026, Equity in income of unconsolidated entities was income of $6 million and $21 million, respectively. The increase compared to the prior-year periods was primarily attributable to our two mortgage joint ventures, one of which was acquired in connection with the Anywhere Merger, as well as the other unconsolidated entities acquired in the Anywhere Merger.
Adjusted EBITDA and Adjusted EBITDA margin
The following section provides analysis of Adjusted EBITDA and Adjusted EBITDA margin on a consolidated basis for the three and nine months ended September 30, 2026 and 2025. References to “stand-alone Compass” refer to our consolidated results excluding the impact of the Anywhere Merger. Adjusted EBITDA is a non-GAAP financial measure that represents Net income (loss) attributable to Compass, Inc., adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, (iii) transaction and integration expenses associated with the Anywhere Merger, and (iv) other acquisition-related expenses. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue.
We use Adjusted EBITDA and Adjusted EBITDA margin, together with GAAP measures, as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors regarding our financial performance. We believe these measures are also useful to investors, analysts, and other interested parties because they provide a more consistent and comparable view of our operations across historical financial periods.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results reported under GAAP. Investors should consider these measures alongside other financial performance measures, including Net income (loss) attributable to Compass, Inc. and our other GAAP results. In the future, we may incur expenses similar to the adjustments reflected in these measures, and our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the items excluded from their calculation. These measures are not presented in accordance with GAAP, and the use of these terms varies from others in our industry.
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The following table provides a reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) attributable to Compass, Inc. | $ | 62 | $ | (4) | $ | 176 | $ | (16) | |||||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||||||||
| Depreciation and amortization | 145 | 28 | 461 | 86 | |||||||||||||||||||
| Investment income | (7) | (2) | (15) | (4) | |||||||||||||||||||
| Interest expense | 41 | 2 | 119 | 7 | |||||||||||||||||||
| Stock-based compensation | 36 | 59 | 121 | 145 | |||||||||||||||||||
| Income tax benefit | (4) | — | (400) | (3) | |||||||||||||||||||
Anywhere Merger transaction and integration expenses (1) | 28 | 8 | 245 | 8 | |||||||||||||||||||
| Restructuring costs | 4 | 2 | 12 | 14 | |||||||||||||||||||
Other acquisition-related expenses (2) | 1 | 1 | 4 | (2) | |||||||||||||||||||
Litigation charge (3) | — | — | 7 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 306 | $ | 94 | $ | 730 | $ | 235 | |||||||||||||||
| Net income (loss) attributable to Compass, Inc. margin | 1.6 | % | (0.2 | %) | 1.6 | % | (0.3) | % | |||||||||||||||
| Adjusted EBITDA margin | 7.9 | % | 5.1 | % | 6.7 | % | 4.5 | % | |||||||||||||||
(1)Represents transaction expenses incurred in connection with the closing of the Anywhere Merger and related integration activities. During the three and nine months ended September 30, 2026, these expenses consist of legal, investment banking and other transaction-related costs, severance and other personnel-related costs, all of which were expensed as incurred. Additional information regarding the Anywhere Merger is provided in Note 3 — “Acquisitions” to the condensed consolidated financial statements included elsewhere in this Quarterly Report.
(2)Includes adjustments related to the change in fair value of contingent consideration and other adjustments related to acquisition consideration.
(3)Represents a charge of $7 million incurred during the nine months ended September 30, 2026 in connection with the Antitrust Lawsuits. See Note 11 — “Commitments and Contingencies” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for more information.
Consolidated Adjusted EBITDA was $306 million and $94 million during the three months ended September 30, 2026 and 2025, respectively, and $730 million and $235 million during the nine months ended September 30, 2026 and 2025, respectively. The year-over-year improvements in Adjusted EBITDA were primarily driven by the inclusion of Anywhere, higher revenue at stand-alone Compass, and realized cost synergies and continued cost management.
The following tables provide supplemental information to the Reconciliation of Net income (loss) attributable to Compass, Inc. to Adjusted EBITDA presented above. These tables identify how each of the Operating expenses related financial statement line items contained within the condensed consolidated statements of operations elsewhere in this Quarterly Report are impacted by the items excluded from Adjusted EBITDA (in millions):
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Sales and marketing | Operations and support | Technology and development | General and administrative | ||||||||||||||||||||||||||
| GAAP Basis | $ | 107 | $ | 426 | $ | 107 | $ | 72 | |||||||||||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||||||||||||||
| Stock-based compensation | (3) | (8) | (13) | (11) | |||||||||||||||||||||||||
| Other acquisition-related expenses | — | (1) | — | — | |||||||||||||||||||||||||
| Non-GAAP Basis | $ | 104 | $ | 417 | $ | 94 | $ | 61 | |||||||||||||||||||||
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| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Sales and marketing | Operations and support | Technology and development | General and administrative | ||||||||||||||||||||||||||
| GAAP Basis | $ | 59 | $ | 146 | $ | 67 | $ | 40 | |||||||||||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||||||||||||||
| Stock-based compensation | (9) | (11) | (28) | (11) | |||||||||||||||||||||||||
| Other acquisition-related expenses | — | (1) | — | — | |||||||||||||||||||||||||
| Non-GAAP Basis | $ | 50 | $ | 134 | $ | 39 | $ | 29 | |||||||||||||||||||||
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Sales and marketing | Operations and support | Technology and development | General and administrative | ||||||||||||||||||||||||||
| GAAP Basis | $ | 312 | $ | 1,253 | $ | 335 | $ | 246 | |||||||||||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||||||||||||||
| Stock-based compensation | (12) | (26) | (45) | (36) | |||||||||||||||||||||||||
| Other acquisition-related expenses | — | (4) | — | — | |||||||||||||||||||||||||
| Litigation charge | — | — | — | (7) | |||||||||||||||||||||||||
| Non-GAAP Basis | $ | 300 | $ | 1,223 | $ | 290 | $ | 203 | |||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Sales and marketing | Operations and support | Technology and development | General and administrative | ||||||||||||||||||||||||||
| GAAP Basis | $ | 178 | $ | 423 | $ | 180 | $ | 101 | |||||||||||||||||||||
| Adjusted to exclude the following: | |||||||||||||||||||||||||||||
| Stock-based compensation | (25) | (26) | (66) | (28) | |||||||||||||||||||||||||
| Other acquisition-related expenses | — | 2 | — | — | |||||||||||||||||||||||||
| Non-GAAP Basis | $ | 153 | $ | 399 | $ | 114 | $ | 73 | |||||||||||||||||||||
Segment Operating Performance
Effective January 9, 2026, in connection with the Anywhere Merger, the Company realigned its operating segments to reflect how the Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance. The Company now operates through three reportable segments: Brokerage, Franchise, and Integrated Services, which includes relocation services (provided by Cartus).
The CODM evaluates segment performance and allocates resources based on Segment Revenue and Segment Adjusted EBITDA, a non-GAAP measure. Segment Adjusted EBITDA represents net income (loss) attributable to Compass, Inc. adjusted for depreciation and amortization, investment income, interest expense, stock-based compensation expense, income taxes, and other items. For the periods presented, other items consisted of (i) restructuring charges associated with lease termination and severance costs, (ii) litigation charges in connection with the Antitrust Lawsuits, and (iii) transaction and integration expenses associated with the Anywhere Merger. Segment Adjusted EBITDA margin is calculated by dividing Segment Adjusted EBITDA by segment revenue.
To reconcile total Segment Adjusted EBITDA to consolidated Adjusted EBITDA, unallocated corporate expenses are deducted from the sum of Segment Adjusted EBITDA for the three reportable segments, as presented in Note 17 — “Segment Information” to the condensed consolidated financial statements.
The segment information presented herein reflects the same reportable segments and performance measures reviewed by the CODM and is consistent with the segment information disclosed in Note 17 — “Segment Information” to the condensed consolidated financial statements.
Additionally, we have included Supplemental Pro Forma Revenue for the Company (“Compass”) and Anywhere on a combined basis for the periods presented. These pro forma results are presented as if the Company's acquisition of Anywhere had
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occurred on January 1, 2025. For comparability, Anywhere's results have been included for the full period from January 1, 2025 through September 30, 2026, which incorporates the first eight days of January 2026 prior to the closing of the acquisition. This pro forma financial information has not been prepared in accordance with the requirements of Article 11 of Regulation S-X or Accounting Standards Codification 805, Business Combinations, and was prepared for illustrative and informational purposes only.
For the Supplemental Pro Forma revenue information, certain amounts in Anywhere’s historical financial statements have been reclassified to conform to the Company’s segment presentation, which became effective for the three months ended March 31, 2026. These reclassifications (i) move Cartus relocation revenue into Integrated Services, which now includes relocation revenue along with title and escrow revenue, and (ii) eliminate intercompany royalty revenue earned by the Franchise segment from the Brokerage segment.
The following table summarizes revenue, Segment Adjusted EBITDA, Segment Adjusted EBITDA margin, and pro forma revenue by segment for the periods indicated, each of which is described below (in millions, except percentages):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | $ | 3,578 | $ | 1,802 | $ | 1,776 | 98.6 | % | $ | 10,005 | $ | 5,143 | $ | 4,862 | 94.5 | % | |||||||||||||||||||||||||||||||
| Franchise | $ | 122 | $ | 8 | $ | 114 | 1,425.0 | % | $ | 347 | $ | 22 | $ | 325 | 1,477.3 | % | |||||||||||||||||||||||||||||||
| Integrated Services | $ | 197 | $ | 36 | $ | 161 | 447.2 | % | $ | 555 | $ | 97 | $ | 458 | 472.2 | % | |||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | $ | 320 | $ | 140 | $ | 180 | 128.6 | % | $ | 844 | $ | 366 | $ | 478 | 130.6 | % | |||||||||||||||||||||||||||||||
| Franchise | $ | 82 | $ | 3 | $ | 79 | 2,633.3 | % | $ | 215 | $ | 8 | $ | 207 | 2,587.5 | % | |||||||||||||||||||||||||||||||
| Integrated Services | $ | 40 | $ | 9 | $ | 31 | 344.4 | % | $ | 105 | $ | 25 | $ | 80 | 320.0 | % | |||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA margin: | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | 8.9 | % | 7.8 | % | 8.4 | % | 7.1 | % | |||||||||||||||||||||||||||||||||||||||
| Franchise | 67.2 | % | 37.5 | % | 62.0 | % | 36.4 | % | |||||||||||||||||||||||||||||||||||||||
| Integrated Services | 20.3 | % | 25.0 | % | 18.9 | % | 25.8 | % | |||||||||||||||||||||||||||||||||||||||
| Supplemental pro forma information: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pro forma revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokerage | $ | 3,578 | $ | 3,171 | $ | 407 | 12.8% | $ | 10,045 | $ | 8,956 | $ | 1,089 | 12.2% | |||||||||||||||||||||||||||||||||
| Franchise | 122 | 131 | (9) | (6.9%) | 352 | 354 | (2) | (0.6%) | |||||||||||||||||||||||||||||||||||||||
| Integrated Services | 197 | 191 | 6 | 3.1% | 563 | 527 | 36 | 6.8% | |||||||||||||||||||||||||||||||||||||||
| Total pro forma revenue | $ | 3,897 | $ | 3,493 | $ | 404 | 11.6% | $ | 10,960 | $ | 9,837 | $ | 1,123 | 11.4% | |||||||||||||||||||||||||||||||||
Brokerage
Brokerage revenue increased $1.8 billion, or 98.6% for the three months ended September 30, 2026 and $4.9 billion, or 94.5% for the nine months ended September 30, 2026, compared to the prior periods. The year-over-year increase was primarily driven by the inclusion of Anywhere. On a pro forma basis, Brokerage revenue increased 12.8% and 12.2% for the three months and nine months ended September 30, 2026, respectively, as compared to the prior year periods. These increases are primarily driven by higher average selling prices from our owned-brokerage real estate professionals.
Segment Adjusted EBITDA was $320 million for the three months ended September 30, 2026 and $844 million for the nine months ended September 30, 2026, representing an increase of $180 million, or 128.6% for the three months ended September 30, 2026, and $478 million, or 130.6%, for the nine months ended September 30, 2026, compared to the prior-year periods. The year-over-year increase was primarily driven by the addition of Anywhere and revenue growth outpacing the increase in operating costs. Segment Adjusted EBITDA margin increased to 8.9% for the three months ended September 30, 2026 and 8.4% for the nine months ended September 30, 2026 from 7.8% for the three months ended September 30, 2025 and 7.1% for the nine months ended September 30, 2025, reflecting the same dynamic.
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Franchise
Franchise revenue increased $114 million and $325 million for the three and nine months ended September 30, 2026, respectively, as compared to the prior-year periods. These increases are primarily driven by the addition of the Anywhere franchise business. On a pro forma basis, Franchise revenue decreased 6.9% and 0.6% for the three and nine months ended September 30, 2026, respectively, as compared to the prior-year periods. These decreases were primarily driven by lower royalty revenue following the Conversions.
Franchise Segment Adjusted EBITDA increased $79 million and $207 million for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods, substantially all of which was attributable to the Anywhere Merger. Segment Adjusted EBITDA margin was 67.2% and 62.0% for the three and nine months ended September 30, 2026, respectively, compared to 37.5% and 36.4% in the prior-year periods, respectively, reflecting the margin profile of the combined Franchise segment following the Anywhere Merger.
Integrated Services
Integrated Services revenue increased $161 million and $458 million for the three and nine months ended September 30, 2026, respectively, as compared to the prior-year periods. These increases are primarily driven by the addition of the Anywhere integrated services business. On a pro forma basis, Integrated Services revenue increased 3.1% and 6.8% for the three and nine months ended September 30, 2026, respectively, as compared to the prior-year periods. These increases were primarily driven by higher title and escrow transaction counts.
Integrated Services Segment Adjusted EBITDA increased $31 million and $80 million for the three and nine months ended September 30, 2026, respectively, compared to the prior-year periods, substantially all of which was attributable to the Anywhere Merger. Because stand-alone Compass had smaller integrated services operations prior to the Merger, Anywhere's integrated services businesses account for substantially all of the current-period results. Segment Adjusted EBITDA margin was 20.3% and 18.9% for the three and nine months ended September 30, 2026, respectively, compared to 25.0% and 25.8% in the prior-year periods, respectively, reflecting the margin profile of the combined Integrated Services segment following the Anywhere Merger.
Unallocated Corporate Expenses
Unallocated corporate expenses consist of operating expenses that are not allocated to any of the three reportable segments. These expenses primarily relate to our centralized technology organization and corporate functions, including human resources, finance, legal, and our executive leadership.
For the three and nine months ended September 30, 2026, unallocated corporate expenses were $136 million and $434 million, respectively, compared to $58 million and $164 million in the prior-year periods, respectively, representing increases of $78 million, or 134.5%, and $270 million, or 164.6%, respectively. These annual increases are the result of the additional expenses incurred by the corporate functions acquired during the Anywhere Merger.
For further details on how unallocated corporate expenses are classified within our statements of operations refer to Note 17 — “Segment Information” to the condensed consolidated financial statements.
KEY BUSINESS METRICS
The following key business metrics provide insight into the operating activity underlying the Company's financial results for the three and nine months ended September 30, 2026 and 2025. These metrics reflect transaction volume, pricing trends, real estate professional and franchise activity, and title and escrow services associated with residential real estate transactions. Certain metrics are more relevant to specific reportable segments due to differences in operating models, and the discussion below is organized by reportable segment to reflect that context. These metrics are presented to explain operating trends and activity levels and are not intended to represent measures of segment financial performance.
In addition to actual results, the following discussion includes the Company's key business metrics on a pro forma basis. Pro forma metrics reflect the combined operations of Compass and Anywhere as if the acquisition had occurred on January 1, 2025, and therefore include Anywhere's results across all periods presented. Because the acquisition actually closed on January 9,
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2026, the pro forma metrics for the nine months ended September 30, 2026 incorporate Anywhere's results for the first eight days of January 2026 prior to closing.
Brokerage Metrics
The following table summarizes the Brokerage segment's key business metrics on an actual and pro forma basis for the periods indicated, each of which is described below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Actuals: | |||||||||||||||||||||||
Total Transactions | 140,118 | 67,887 | 392,631 | 190,032 | |||||||||||||||||||
Gross Transaction Value (in billions) | $ | 138.9 | $ | 70.7 | $ | 391.5 | $ | 201.4 | |||||||||||||||
| Pro forma: | |||||||||||||||||||||||
Total Transactions | 140,118 | 136,660 | 394,274 | 377,746 | |||||||||||||||||||
Gross Transaction Value (in billions) | $ | 138.9 | $ | 124.1 | $ | 392.9 | $ | 349.9 | |||||||||||||||
Total Transactions
Total Transactions represents the sum of all transactions closed by our Brokerage segment during the periods in which our real estate professional represented the buyer or seller in the purchase or sale of a home. A single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Total Transactions as a key measure of the scale of our Brokerage operations, which drives our financial performance.
Total Transactions increased to 140,118 for the three months ended September 30, 2026 and 392,631 for the nine months ended September 30, 2026. On a pro forma basis, Total Transactions increased by 3,458, or 2.5%, for the three months ended September 30, 2026, and increased by 16,528, or 4.4% for the nine months ended September 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma Total Transactions was driven mainly by growth in stand-alone Compass’s owned brokerage businesses and by the conversion of four franchisees operating under the Sotheby's International Realty brand to company-owned brokerage operations during the three months ended September 30, 2026 (the “Conversions”).
Gross Transaction Value
Gross Transaction Value represents the sum of all closing sale prices for homes transacted by real estate professionals within our Brokerage segment during the periods. The value of a single transaction is counted twice when our real estate professionals represented both the buyer and the seller. This metric excludes rental transactions. We view Gross Transaction Value as a key measure of the scale of our Brokerage operations and the success of our real estate professionals, both of which ultimately impact revenue.
Gross Transaction Value increased to $138.9 billion for the three months ended September 30, 2026, and $391.5 billion for the nine months ended September 30, 2026. On a pro forma basis, Gross Transaction Value increased by $14.8 billion, or 11.9%, for the three months ended September 30, 2026, and increased by $43.0 billion, or 12.3%, for the nine months ended September 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma Gross Transaction Value was primarily driven by higher average sales price on transactions closed by our real estate professionals supporting the owned-brokerage business.
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Franchise Metrics
The following table summarizes the Franchise segment's key business metrics on an actual and pro forma basis for the periods indicated, each of which is described below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Actuals: | |||||||||||||||||||||||
Total Transactions | 191,809 | 8,825 | 532,363 | 23,792 | |||||||||||||||||||
| Gross Transaction Value (in billions) | $ | 108.9 | $ | 8.5 | $ | 305.8 | $ | 23.6 | |||||||||||||||
| Net Royalty Per Side | $ | 486 | $ | 669 | $ | 481 | $ | 638 | |||||||||||||||
| Pro forma: | |||||||||||||||||||||||
Total Transactions | 191,809 | 202,310 | 538,421 | 541,336 | |||||||||||||||||||
| Gross Transaction Value (in billions) | $ | 108.9 | $ | 110.4 | $ | 309.5 | $ | 294.9 | |||||||||||||||
| Net Royalty Per Side | $ | 486 | $ | 475 | $ | 480 | $ | 473 | |||||||||||||||
Total Transactions
Total Transactions represents the sum of all transactions closed by franchisees within our Franchise segment during the periods in which a franchisee real estate professional represented the buyer or seller in the purchase or sale of a home. A single transaction is counted twice when franchisee real estate professionals represented both the buyer and the seller. We view Total Transactions as a key measure of the scale of our Franchise segment, which drives our royalty revenue. This metric excludes any transactions from our international franchisees.
Total Transactions for the Franchise segment increased to 191,809 for the three months ended September 30, 2026 and 532,363 for the nine months ended September 30, 2026. On a pro forma basis, Total Transactions for the Franchise segment decreased by 10,501, or 5.2%, for the three months ended September 30, 2026, and decreased by 2,915, or 0.5% for the nine months ended September 30, 2026, compared to the prior year periods. The year-over-year decrease in pro forma transactions primarily reflects lower market activity in markets with lower average home price, as well as the Conversions. Transactions closed by these businesses after their respective date of conversion are reported in the Brokerage segment.
Gross Transaction Value
Gross Transaction Value represents the sum of all closing sale prices for homes transacted by franchisee real estate professionals within our Franchise segment during the periods presented. The value of a single transaction is counted twice when franchisee real estate professionals represented both the buyer and the seller. We view Gross Transaction Value as a key measure of the scale of our Franchise segment and the success of our franchisees, both of which ultimately impact royalty revenue. This metric excludes any transactions from our international franchisees.
Gross Transaction Value for the Franchise segment increased to $108.9 billion for the three months ended September 30, 2026, and $305.8 billion for the nine months ended September 30, 2026. On a pro forma basis, Gross Transaction Value for the Franchise segment decreased by $1.5 billion, or 1.4%, for the three months ended September 30, 2026, and increased by $14.6 billion, or 5.0%, for the nine months ended September 30, 2026, compared to the prior year periods. The quarterly decrease in pro forma Gross Transaction Value was driven mainly by the Conversions, since the Gross Transaction Value of those businesses is reported in the Brokerage segment after their conversion dates. The nine-month increase was driven mainly by higher average sales prices year-over-year.
When comparing the Brokerage and Franchise segment results, Franchise Total Transactions exceeds Brokerage Total Transactions, while Franchise Gross Transaction Value is lower than Brokerage Gross Transaction Value. This reflects differences in geographic mix and average home sale prices between the two segments rather than a change in the relative productivity of either. Our owned-brokerage operations are concentrated in major metropolitan markets, which carry higher average home prices, while our franchise network is more broadly distributed across the country, including markets with lower average home prices. As a result, a larger number of franchise transactions can generate lower aggregate transaction value relative to a smaller number of brokerage transactions.
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Net Royalty Per Side
Net Royalty Per Side represents the average net royalty revenue earned by our Franchise segment per franchisee transaction side closed during the periods. Net royalty revenue reflects gross royalty revenue earned under our franchise agreements, net of volume incentives and other contractual reductions paid or credited to franchisees. We view Net Royalty Per Side as an indicator of the economic value our Franchise segment generates from each franchisee transaction and the effectiveness of our franchise pricing and incentive structure. This metric excludes any activity from our international franchisees.
Net Royalty Per Side was $486 for the three months ended September 30, 2026 and $481 for the nine months ended September 30, 2026. On a pro forma basis, Net Royalty Per Side was $486 and $480 for the three and nine months ended September 30, 2026, respectively, representing increases of 2.3% and 1.5% from the prior year periods. These increases were driven by higher average sale prices.
Integrated Services Metrics
The following table summarizes the Integrated Services segment's key business metrics on an actual and pro forma basis for the periods indicated, each of which is described below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Actuals: | |||||||||||||||||||||||
Purchase title and escrow transactions | 35,106 | 7,089 | 98,515 | 18,387 | |||||||||||||||||||
Refinancing title and escrow transactions | 3,651 | 577 | 13,171 | 1,310 | |||||||||||||||||||
Average title and escrow revenue per transaction | $ | 3,590 | $ | 4,659 | $ | 3,600 | $ | 4,891 | |||||||||||||||
| Pro forma: | |||||||||||||||||||||||
Purchase title and escrow transactions | 35,106 | 34,577 | 99,683 | 96,053 | |||||||||||||||||||
Refinancing title and escrow transactions | 3,651 | 3,546 | 13,380 | 9,664 | |||||||||||||||||||
Average title and escrow revenue per transaction | $ | 3,590 | $ | 3,541 | $ | 3,593 | $ | 3,547 | |||||||||||||||
Purchase Title and Escrow Transactions
Purchase Title and Escrow Transactions represents the number of title insurance policies and escrow settlements completed by our Integrated Services segment during the periods in connection with home purchase transactions. We view Purchase Title and Escrow Transactions as an indicator of the scale of our title and escrow activity tied to residential home purchases and our ability to capture attach opportunities from real estate transactions.
Purchase Title and Escrow Transactions were 35,106 for the three months ended September 30, 2026 and 98,515 for the nine months ended September 30, 2026. On a pro forma basis, Title and Escrow Transactions increased by 529, or 1.5%, for the three months ended September 30, 2026 and increased by 3,630, or 3.8%, for the nine months ended September 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma purchase transactions primarily reflects higher transaction volume from businesses acquired by Compass prior to the Anywhere Merger, as well as increased market activity in the geographies served by our integrated services businesses.
Refinancing Title and Escrow Transactions
Refinancing Title and Escrow Transactions represents the number of title insurance policies and escrow settlements completed by our Integrated Services segment during the periods in connection with mortgage refinancing transactions. We view Refinancing Title and Escrow Transactions as an indicator of refinancing activity in the markets we serve, which is influenced by prevailing mortgage interest rates.
Refinancing Title and Escrow Transactions for our Integrated Services segment were 3,651 for the three months ended September 30, 2026 and 13,171 for the nine months ended September 30, 2026. On a pro forma basis, Refinancing Title and Escrow Transactions increased by 105, or 3.0%, for the three months ended September 30, 2026 and increased by 3,716, or
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38.5%, for the nine months ended September 30, 2026, compared to the prior year periods. The year-over-year increase in pro forma refinancing transactions primarily reflects lower prevailing mortgage rates year-over-year.
Average Title and Escrow Revenue Per Transaction
Average Title and Escrow Revenue Per Transaction represents the average revenue earned by our Integrated Services segment per title and escrow transaction completed during the periods, calculated as title and escrow revenue divided by the sum of purchasing and refinancing title and escrow transactions. We view Average Title and Escrow Revenue Per Transaction as an indicator of the revenue mix and pricing of our title and escrow services.
Average Title and Escrow Revenue Per Transaction for our Integrated Services segment was $3,590 for the three months ended September 30, 2026 and $3,600 for the nine months ended September 30, 2026. On a pro forma basis, Average Title and Escrow Revenue Per Transaction increased by $49, or 1.4%, for the three months ended September 30, 2026 and increased by $46, or 1.3%, for the nine months ended September 30, 2026, compared to the prior year periods. The increases in pro forma Average Title and Escrow Revenue Per Transaction primarily reflects a year-over-year shift of revenue to markets in which the Company demands a higher price per transaction.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity and capital resources are cash flows from operations, the proceeds from the $1.0 billion aggregate principal amount of Convertible Notes issued in connection with the Anywhere Merger, and our Revolving Credit Facility. Proceeds from the Convertible Notes were used to repay in full approximately $500 million of outstanding borrowings under the Anywhere revolving credit facility (eliminating these variable-rate borrowings), pay merger-related fees and expenses, and fund the Capped Call transactions, which were entered into to reduce potential dilution to Class A common stock and/or offset potential cash payments upon conversion of the Convertible Notes.
Our primary uses of liquidity include working capital and day-to-day operations, continued investment in our technology offerings, market footprint expansion, and strategic initiatives designed to simplify the real estate transaction experience. Additionally, we expect to fund merger and integration-related expenses from our available liquidity.
Liquidity is also used to service debt. In connection with the Anywhere Merger, substantially all of Anywhere’s outstanding indebtedness was added to our balance sheet, resulting in a significant increase in the Company’s consolidated debt balance starting in 2026. Debt service payments will include interest payments on the Convertible Notes and on the aggregate principal amount outstanding of $2.1 billion of the fixed-rate Secured Notes and Unsecured Notes. The Secured Notes and Unsecured Notes bear a weighted-average interest rate of 6.95% and mature in 2029 and 2030.
These debt maturities in 2029, 2030, and 2031 totaling approximately $3.1 billion represent a long‑term liquidity consideration, which management will continue to evaluate as part of its capital planning. From time to time, we may seek to repay, refinance, or restructure all or a portion of our debt or to repurchase our outstanding debt through, as applicable, tender offers, exchange offers, open market purchases, privately negotiated transactions or otherwise. Such transactions, if any, will depend on a number of factors, including prevailing market conditions, our liquidity requirements and contractual requirements (including compliance with the terms of our debt agreements), among other factors.
As described under the header “Real Estate Commission Sell-Side Antitrust Litigation” in Note 11 — “Commitments and Contingencies” to the condensed consolidated financial statements included elsewhere in this Quarterly Report, $54 million in remaining settlement payments under the Burnett, Moehrl, and Nosalek cases will be due within 21 business days after all appellate rights are exhausted; the timing is uncertain, but we currently expect this to occur in the first quarter of 2027. Additionally, as described under the header “Real Estate Commission Buy-Side Antitrust Litigation” in Note 11, on February 23, 2026, we agreed to pay $10 million under the Anywhere Opt-In Settlement (and paid $1 million of this obligation in March 2026, following preliminary approval by the court), and in April 2026, we agreed to pay $7 million under the Compass Opt-In Settlement (and paid $1 million of this obligation in June 2026, following preliminary approval by the court). Assuming final court approval of each of the Anywhere and Compass Opt-In Settlements, we currently expect to pay the remaining settlement amounts no earlier than the fourth quarter of 2026 and more likely in 2027.
As of September 30, 2026, we had cash and cash equivalents of $841 million. We maintain a $500 million Revolving Credit, subject to compliance with a financial covenant and certain other covenants. As of September 30, 2026, there were no outstanding borrowings, and $452 million was available, after giving effect to $48 million of letters of credit. As of September 30, 2026, we were in compliance with the financial covenant under the Revolving Credit Facility. See Note 10 —
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“Debt” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.
In April 2026, we entered into a multi-party transaction with a company (the “Franchisee Parent”) that owns certain franchisees operating under the Sotheby's International Realty and Century 21 brands to restructure financial obligations of the Franchisee Parent's predecessor (the “Transaction”). As part of the Transaction, the Company became a 51% holder of Franchisee Parent's common equity and entered into a 30-month installment payment plan pursuant to which certain outstanding indebtedness owed to the Company will be satisfied.
Additionally, our Company and certain funds managed or advised by Angelo, Gordon & Co., L.P. or its affiliates (collectively, “TPG”) entered into an agreement (the “Put Agreement”) under which TPG has the right, but not the obligation (the “Put Right”), to require us to purchase 100% of Franchisee Parent's senior preferred equity. TPG may exercise the put at any time from the valuation date through the 54-month redemption date, and accordingly the related payment could become due in any period through that date. The payment due on exercise is equal to the amount of TPG's initial investment in the Franchisee Parent plus a time-based accretion, less distributions received in cash, subject to a cap. We recorded a liability for the Put Right at estimated fair value (the “Put Right liability”) and monitor the potential timing and magnitude of this obligation as part of our liquidity planning. Refer to Note 6 — “Fair Value of Financial Assets and Liabilities” to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further information on the determination of the Put Right liability's fair value.
We believe we will continue to meet our cash flow needs over the next twelve months through the sources outlined above. The issuance of the Convertible Notes supplements our cash flow from operations, providing additional liquidity to support seasonal working capital needs without reliance on our variable-rate Revolving Credit Facility.
For more information regarding our indebtedness as of September 30, 2026, see Note 10 — “Debt” in our condensed consolidated financial statements included elsewhere in this Quarterly Report.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in millions):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 282 | $ | 171 | |||||||
| Net cash used in investing activities | (465) | (189) | |||||||||
| Net cash provided by (used in) financing activities | 826 | (36) | |||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 643 | $ | (54) | |||||||
Operating Activities
For the nine months ended September 30, 2026, net cash provided by operating activities was $282 million. This inflow was primarily driven by net income of $177 million, adjusted for $233 million of net non-cash items, primarily $461 million of depreciation and amortization and $185 million of stock-based compensation, partially offset by a $408 million deferred income tax benefit. These items were partially offset by a $128 million outflow from changes in operating assets and liabilities, which included cash payments for Anywhere Merger transaction and integration expenses, as well as payments on liabilities assumed in the Anywhere Merger that became payable after the January 9, 2026 close date.
For the nine months ended September 30, 2025, net cash provided by operating activities was $171 million. The inflow was primarily due to a $16 million net loss adjusted for $222 million of non-cash charges, partially offset by cash outflows due to changes in operating assets and liabilities of $35 million.
Investing Activities
During the nine months ended September 30, 2026, net cash used in investing activities was $465 million primarily consisting of $443 million in payments for acquisitions, net of cash acquired, and $30 million of capital expenditures, partially offset by cash inflows due to distributions from equity method investments in excess of cumulative earnings of $8.0 million.
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During the nine months ended September 30, 2025, net cash used in investing activities was $189 million consisting of $175 million in payments for business combinations, net of cash acquired, $10 million of capital expenditures, and $4 million of investments in unconsolidated entities.
Financing Activities
During the nine months ended September 30, 2026, net cash provided by financing activities was $826 million primarily consisting of $977 million in net proceeds from the issuance of the Convertible Notes partially offset by $97 million in cash payments to purchase the capped call transactions related to the Convertible Notes and $83 million in taxes paid related to the net share settlement of equity awards.
During the nine months ended September 30, 2025, net cash used in financing activities was $36 million, primarily consisting of $47 million in taxes paid related to the net share settlement of equity awards, partially offset by $14 million in proceeds from the exercise of stock options and $5 million in net proceeds from drawdowns and repayments on the Concierge Facility.
Contractual Obligations and Commitments
The following table summarizes the material changes to contractual obligations and commitments as of September 30, 2026 resulting from the addition of Anywhere as a result of the Merger in January 2026 (amounts in millions):
Payments Due by Period | |||||||||||||||||||||||||||||||||||||||||
Total | Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||||||||||||||||||||||
9.75% Senior Secured Second Lien Notes | $ | 500 | $ | — | $ | — | $ | — | $ | — | $ | 500 | $ | — | |||||||||||||||||||||||||||
7.00% Senior Secured Second Lien Notes | 640 | — | — | — | — | 640 | — | ||||||||||||||||||||||||||||||||||
| 5.75% Senior Notes | 559 | — | — | — | 559 | — | — | ||||||||||||||||||||||||||||||||||
| 5.25% Senior Notes | 449 | — | — | — | — | 449 | — | ||||||||||||||||||||||||||||||||||
| Interest payments on long-term debt | 549 | 59 | 149 | 149 | 133 | 59 | — | ||||||||||||||||||||||||||||||||||
Apple Ridge Securitization | 160 | — | 160 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Leases (including imputed interest) (1) | 482 | 34 | 129 | 101 | 79 | 48 | 91 | ||||||||||||||||||||||||||||||||||
Purchase obligations (2) | 299 | 24 | 51 | 30 | 13 | 7 | 174 | ||||||||||||||||||||||||||||||||||
Total | $ | 3,638 | $ | 117 | $ | 489 | $ | 280 | $ | 784 | $ | 1,703 | $ | 265 | |||||||||||||||||||||||||||
(1)The lease amounts included in the above table are not discounted and do not include variable costs.
(2)Purchase commitments include a minimum licensing fee that the Company is required to pay to Sotheby’s through 2054. The annual minimum licensing fee is approximately $2 million. Purchase commitments also include a minimum licensing fee to be paid through 2058 for the licensing of the Better Homes and Gardens Real Estate brand. The annual minimum fee is generally between $4 million and $5 million.
Excluding the impact of the contractual obligations and commitments assumed from Anywhere, the most significant change in our contractual obligations and commitments related to issuance of the Convertible Notes in early 2026. Please refer to Note 10 — “Debt” included elsewhere in this quarterly report for further details.
We administer escrow and trust deposits which represent undistributed amounts for the settlement of real estate transactions. These deposits are not assets of the Company and therefore are excluded from the accompanying condensed consolidated balance sheets. However, the Company remains contingently liable for these escrow and trust deposits totaling approximately $1.1 billion and $300 million as of September 30, 2026 and December 31, 2025, respectively.
CRITICAL ACCOUNTING ESTIMATES AND POLICIES
Critical Accounting Estimates and Policies
Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our
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estimates and assumptions on an ongoing basis. Actual results may differ from these estimates and therefore, if material, our future financial statements will be affected.
There have been no material changes to our critical accounting policies and estimates disclosed in our 2025 Form 10-K. For additional information about our critical accounting policies and estimates, see the disclosure included in our 2025 Form 10-K, as well as Note 1 and Note 2 to our condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report.
Business Combinations
Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the condensed consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal, advisory and consulting fees, are expensed as incurred.
RECENT ACCOUNTING PRONOUNCEMENTS
For a description of our recently adopted accounting pronouncements and accounting pronouncements issued but not yet adopted, see Note 2 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of potential changes in interest rates.
Interest Rate Risk
Our cash and cash equivalents as of September 30, 2026 were $841 million. Certain of our cash and cash equivalents are interest-earning instruments that carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and we do not use derivative financial instruments to manage interest rate risk. Due to the short-term nature of these instruments, changes in interest rates would not have a material impact on their fair value.
We are also subject to interest rate exposure on our Revolving Credit Facility. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors, and other factors beyond our control. Our Revolving Credit Facility bears interest at Term SOFR plus an applicable rate between 1.50% and 2.25% per annum, based on a pricing grid in which the levels are set based on the Company’s Total Net Leverage Ratio (as defined in the underlying agreement). As of September 30, 2026, we had no borrowings outstanding under the Revolving Credit Facility. Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would not result in a material change in interest expense.
The Secured Notes, Unsecured Notes and Convertible Notes do not expose us to material interest rate risk because the interest rates are fixed. We also do not believe the Apple Ridge Securitization exposes us to material interest rate risk, as the variable rates earned on relocation receivables and advances are highly correlated with the rates incurred on the related borrowings, which largely offsets the exposure.
Foreign Currency Exchange Risk
We do not have significant exposure to foreign currency risk, nor do we expect to have significant exposure to foreign currency risk in the foreseeable future.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In January 2025, we completed our acquisition of At World Properties Holdings, LLC and its consolidated subsidiaries. The scope of management’s assessment of the effectiveness of our disclosure controls and procedures as of September 30, 2026 includes the internal control over financial reporting specific to At World Properties Holdings, LLC and its consolidated subsidiaries.
In January 2026, we completed our acquisition of Anywhere Real Estate Inc. and its consolidated subsidiaries. The scope of management’s assessment of the effectiveness of our disclosure controls and procedures as of September 30, 2026 did not include the internal control over financial reporting specific to Anywhere Real Estate Inc. and its consolidated subsidiaries given the election available under the SEC staff’s guidance that an assessment of internal control over financial reporting specific to a recently acquired business may be omitted from the scope of management’s assessment for one year from the date of acquisition. Excluding intangible assets, net and goodwill, Anywhere Real Estate Inc. and its consolidated subsidiaries represented approximately 19% of our consolidated assets as of September 30, 2026 and approximately 45% of our consolidated revenue for the nine months ended September 30, 2026.
Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Inherent Limitation on the Effectiveness of Internal Control over Financial Reporting and Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information relating to legal proceedings contained in Note 11 to our condensed consolidated financial statements included elsewhere in this Quarterly Report is incorporated herein by this reference.
ITEM 1A. RISK FACTORS
We are subject to various risks and uncertainties, which could materially affect our business, results of operations, financial condition, future results, and the trading price of our common stock. You should read carefully the information appearing in Part I, Item 1A, Risk Factors in our 2025 Form 10-K. There have been no material changes to the risk factors set forth in our 2025 Form 10-K. However, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)Unregistered Sales of Equity Securities
From July 1, 2026 through November 6, 2026, we offered, sold and issued the following unregistered securities:
(1) On July 2, 2026, August 11, 2026, September 1, 2026, September 21, 2026, October 2, 2026 and October 30, 2026, we issued an aggregate of 5,310,067 shares of our Class A common stock as original consideration and as earnout consideration in connection with certain transactions.
The offer, sale and issuance of the securities described above were exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) as transactions by an issuer not involving any public offering. The recipients of the securities in these transactions represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, and appropriate legends were placed upon the securities issued in these transactions.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER
On August 7, 2026 , Robert Reffkin Founder and Chief Executive Officer adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 3,840,743 shares of the Company's common stock at various limit prices. This arrangement replaces a prior Rule 10b5-1 trading plan adopted on March 3, 2026 covering up to 3,411,111 shares, which was terminated on August 6, 2026 , after 70,368 shares were sold. The trading arrangement is set to end on October 29, 2027 .
On September 15, 2026 , Scott Wahlers , Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 718,259 shares of the Company's common stock at various limit prices. The trading arrangement is set to end on February 9, 2030.
On August 6, 2026 , Ethan Glass , Chief Legal Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 151,399 shares of the Company's common stock at various limit prices. The trading arrangement is set to end on December 31, 2027 .
On August 6, 2026 , Timothy Gustavson , Chief Accounting Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 66,569 shares of the Company's common stock at various limit prices. The trading arrangement is set to end on November 5, 2027 .
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ITEM 6. EXHIBITS
Exhibit Index
| Incorporated by Reference | Filed or Furnished Herewith | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4.1 | 10-Q | 001-40291 | 4.7 | 05/08/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.1 | 10-Q | 001-40291 | 10.4 | 05/08/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.2 | 10-Q | 001-40291 | 10.6 | 05/08/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.3 | 8-K | 001-40291 | 10.1 | 04/15/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.4+ | 10-Q | 001-40291 | 10.9 | 05/08/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.5 | 10-Q | 001-40291 | 10.5 | 08/06/26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10.6 | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 31.1 | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Incorporated by Reference | Filed or Furnished Herewith | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 31.2 | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 32.1* | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 32.2* | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
____________
+ Management contract or compensatory plan.
*The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COMPASS, INC. | ||||||||
Date: November 6, 2026 | By: | /s/ Robert Reffkin | ||||||
| Robert Reffkin | ||||||||
| Chairman, Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Date: November 6, 2026 | By: | /s/ Scott Wahlers | ||||||
Scott Wahlers | ||||||||
| Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
i
EXECUTION VERSION TWENTY-THIRD OMNIBUS AMENDMENT (Apple Ridge Funding LLC) This Twenty-third Omnibus Amendment (this “Amendment”) is entered into this 27th day of October, 2026 for the purpose of making amendments to the documents described in this Amendment. WHEREAS, this Amendment is among (i) Cartus Corporation, a Delaware corporation (“Cartus”), (ii) Cartus Financial Corporation, a Delaware corporation (“CFC”), (iii) Apple Ridge Services Corporation, a Delaware corporation (“ARSC”), (iv) Apple Ridge Funding LLC, a limited liability company organized under the laws of the State of Delaware (the “Issuer”), (v) U.S. Bank National Association, a national banking association (“U.S. Bank”), as indenture trustee (the “Indenture Trustee”), paying agent, authentication agent, and transfer agent and registrar, (vi) the Managing Agents party to the Note Purchase Agreement defined below, (vii) the Purchasers party to the Note Purchase Agreement defined below, (viii) Crédit Agricole Corporate and Investment Bank (“CA-CIB”), as Administrative Agent and Lead Arranger (the “Administrative Agent”) and (ix) Compass, Inc. (“Compass”), as performance guarantor (“Performance Guarantor”). WHEREAS, this Amendment relates to the following documents (as such documents have previously been amended): (i) Purchase Agreement, dated as of April 25, 2000 (the “Purchase Agreement”), by and between Cartus and CFC; (ii) Transfer and Servicing Agreement, dated as of April 25, 2000 (the “Transfer and Servicing Agreement”), by and among ARSC, as transferor, Cartus, as originator and servicer, CFC, as originator, the Issuer, as transferee, and the Indenture Trustee; (iii) Receivables Purchase Agreement, dated as of April 25, 2000 (the “Receivables Purchase Agreement”), by and between CFC and ARSC; (iv) Master Indenture, dated as of April 25, 2000 (the “Master Indenture”), by and between the Issuer and U.S. Bank, as indenture trustee, paying agent, authentication agent and transfer agent and registrar; (v) Series 2011-1 Indenture Supplement dated as of December 16, 2011 (the “Indenture Supplement”; and the Master Indenture as supplemented by the Indenture Supplement, the “Indenture”) by and between the Issuer and U.S. Bank, as indenture trustee, paying agent, authentication agent and transfer agent and registrar; (vi) Note Purchase Agreement, dated as of December 14, 2011 (the “Note Purchase Agreement”), among the Issuer, Cartus, as Servicer, the financial
2 institutions and commercial paper conduits party thereto and the Administrative Agent, relating to the Series 2011-1 Secured Variable Funding Notes; and (vii) Performance Guaranty, dated as of January 8, 2026 (the “Performance Guaranty”), executed by Compass, as Performance Guarantor, in favor of CFC and the Issuer. WHEREAS, the Indenture Supplement, the Note Purchase Agreement and the Transfer and Servicing Agreement are collectively referred to in this Amendment as the “Affected Documents”; and WHEREAS, terms used in this Amendment and not defined herein shall have the meanings assigned to such terms in the Master Indenture, and, if not defined therein, as defined in the Indenture Supplement: NOW, THEREFORE, the parties hereto hereby recognize and agree: 1. Amendments to Purchase Agreement. Upon satisfaction of the conditions precedent set forth in Section 6 hereof, the Purchase Agreement (including the exhibits and schedules attached therein) is hereby amended as to delete the red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and (b) to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: double-underlined text and double-underlined text), in each case, as set forth in the marked copy of the Purchase Agreement attached hereto as Exhibit A hereto and made a part hereof for all purposes. 2. Amendments to Master Indenture. Upon satisfaction of the conditions precedent set forth in Section 6 hereof, the Master Indenture (including the exhibits and schedules attached therein) is hereby amended as to delete the red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and (b) to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: double-underlined text and double-underlined text), in each case, as set forth in the marked copy of the Receivables Purchase Agreement attached hereto as Exhibit B hereto and made a part hereof for all purposes. 3. Waiver of Delivery. Each of the Managing Agents signatory hereto waives any prior notice or delivery requirement set forth in the Transaction Documents with respect to this Amendment (including, without limitation, pursuant to Section 10.02 of the Master Indenture and Sections 2.05(a), 2.05(b) and 2.11 of the Note Purchase Agreement). 4. Consents. To the extent that any consent of any party hereto is required under any other agreement to which it is a party for any of the transactions to be effected hereby, such party hereby grants such consent and waives any notice requirements or condition precedent to the effectiveness of any such transactions set forth in any agreement to which it is a party that has not been satisfied as of the date hereof (other than any requirements or conditions precedent set forth in this Amendment).
3 5. Further Assurances. The Issuer hereby reaffirms its agreements and obligations under Section 3.04 of the Master Indenture and Clause 6 of the Deed of Charge dated 16 December 2011 between the Issuer and the Indenture Trustee (the “Deed of Charge”), including, without limitation, with respect to the Charged Property (as defined in the Deed of Charge). 6. Conditions Precedent. This Amendment shall be effective upon the Indenture Trustee’s receipt of counterparts to this Amendment. 7. Payment of Costs and Expenses. The Issuer’s shall pay and/or reimburse, promptly upon demand and to the extent invoiced, of the Administrative Agent’s, each Managing Agent’s and each Purchaser’s reasonable costs and expenses incurred in connection with this Amendment and the other Transaction Documents. 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. 9. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 10. References to and Effect on Affected Documents. On and after the date hereof: (i) all references in any Affected Document to “this Agreement,” “hereof,” “herein” or words of similar effect referring to such Affected Document shall be deemed to be references to such Affected Document as amended by this Amendment; (ii) each reference in any of the Affected Documents to any other Affected Document and each reference in any of the other Transaction Documents among the parties hereto to any of the Affected Documents shall each mean and be a reference to such Affected Document as amended by this Amendment; and (iii) each reference in any Transaction Document among the parties hereto to any of the terms or provisions of an Affected Document which are redefined or otherwise modified hereby shall mean and be a reference to such terms or provisions as redefined or otherwise modified by this Amendment; provided, that, notwithstanding the foregoing or any other provisions of this Amendment, the amendments contained in this Amendment shall not be effective to (x) modify on a retroactive basis any representations or warranties previously made under any Affected Document with respect to Receivables transferred or purported to have been transferred prior to the date hereof, which representations and warranties shall continue to speak as of the dates such Receivables were transferred and based on the terms and provisions of the Affected Documents as in effect at such time or (y) otherwise modify the terms of any transfer or purported transfer of any Receivable transferred or purported to be transferred pursuant to an Affected Document prior to the date hereof.
4 11. Reaffirmation of Performance Guaranty. Effective as of the date hereof, Compass, in its capacity as the Performance Guarantor under the Performance Guaranty, hereby consents to this Amendment and acknowledges and agrees that the Performance Guaranty remains in full force and effect is hereby reaffirmed, ratified and confirmed. 12. No Waiver. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Affected Documents other than as set forth herein, each of which Affected Documents, as modified hereby, remains in full force and effect and is hereby reaffirmed, ratified and confirmed. 13. Issuer Representations re: Outstanding Series. As of the date hereof, the Issuer represents and warrants that the Series 2011-1 Notes are the only Notes outstanding under the Master Indenture. [SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. CARTUS CORPORATION By: /s/ Chris Mancuso Name: Chris Mancuso Title: VP, CFO CARTUS FINANCIAL CORPORATION By: /s/ Chris Mancuso Name: Chris Mancuso Title: VP, CFO APPLE RIDGE SERVICES CORPORATION By: /s/ Chris Mancuso Name: Chris Mancuso Title: VP, CFO APPLE RIDGE FUNDING LLC By: /s/ Chris Mancuso Name: Chris Mancuso Title: VP, CFO COMPASS, INC. By: /s/ Scott Wahlers Name: Scott Wahlers Title: CFO
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee, Paying Agent, Authentication Agent and Transfer Agent and Registrar By: /s/ Christopher Boemo Name: Christopher Boemo Title: Assistant Vice President
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Administrative Agent, a Managing Agent and a Committed Purchaser By: /s/ Leo Burrell Name: Leo BURRELL Title: Managing Director By: /s/ Felipe Tortoreto Machado Name: Felipe TORTORETO MACHADO Title: Director
ATLANTIC ASSET SECURITIZATION LLC, as a Conduit Purchaser By: Crédit Agricole Corporate and Investment Bank, As Attorney-in-Fact By: /s/ Leo Burrell Name: Leo BURRELL Title: Managing Director By: /s/ Felipe Tortoreto Machado Name: Felipe TORTORETO MACHADO Title: Director
THE BANK OF NOVA SCOTIA, as a Managing Agent and a Committed Purchaser By: /s/ Edward Ra Name: Edward Ra Title: Managing Director
LIBERTY STREET FUNDING LLC, as a Conduit Purchaser By: /s/ Kevin J. Corrigan Name: Kevin J. Corrigan Title: Vice President
Bank of America, N.A., as a Managing Agent and a Committed Purchaser By: /s/ Scott Bell Name: Scott Bell Title: SVP
Exhibit A Marked Purchase Agreement [Attached]
Exhibit B Marked Master Indenture [Attached]
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Reffkin, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Compass, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| By: | /s/ Robert Reffkin | |||||||
| Robert Reffkin | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Scott Wahlers, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Compass, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| By: | /s/ Scott Wahlers | |||||||
Scott Wahlers | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Reffkin, Chief Executive Officer of Compass, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1.the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.the information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company.
Date: November 6, 2026
| By: | /s/ Robert Reffkin | |||||||
| Robert Reffkin | ||||||||
Chief Executive Officer | ||||||||
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Scott Wahlers, Chief Financial Officer of Compass, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1.the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.the information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company.
Date: November 6, 2026
| By: | /s/ Scott Wahlers | |||||||
Scott Wahlers | ||||||||
| Chief Financial Officer | ||||||||