The start to 2021 appears to have been kind to Compass, Inc., which posted an increase in revenue in its first quarterly report since going public in April.
The New York-based real estate startup reportedly earned $1.1 billion in the first quarter of 2021, showing an 80% increase in revenue from the same period last year—up from roughly $620 million in 2020.
Compared with other industry leaders featured on the stock exchange, Compass outpaced RE/MAX and Fathom Realty, which posted $72.3 million and $49.6 million in revenue respectively. However, the New York firm was overshadowed by real estate powerhouse Realogy, which earned $1.5 billion last quarter—up 32% from the same period in 2020.
Compass, which touted itself as a “leading real estate technology company” in its report couldn’t catch Zillow, which reported revenue of $1.2 billion last quarter as well.
“I am thrilled by Compass’ outstanding first quarter financial and operational results,” said Robert Reffkin, founder and CEO of Compass, in the report. “In Q1, we executed against our growth strategy, thoughtfully expanded our business geographically and added new functionality to our end-to-end platform for agents.”
Despite the increased earnings, Compass also reported a net loss of $212 million, up from the $132.7 million in Q1 2020. That was mainly due to a one-time, non-cash charge of $149 million for stock-based compensation associated with the IPO Compass launched on April 1.
Like other players in the real estate industry, Compass has reaped the benefits of a buzzing housing market boom, according to Bloomberg reports. The New York brokerage’s spike in earnings was tied to the 40,268 total transactions valued at approximately $43.8 billion overall.
Compass attributed the uptick in transactions and earnings primarily to an increased usage of the company’s proprietary platform. Total sessions on the platform grew by 120% year-over-year.
The company also introduced a new transaction management system while also improving its “Likely-to-Sell” AI-powered recommendation engine.
“Throughout the quarter, our platform has allowed Compass agents to close more transactions and sell homes in fewer days than the industry average,” Reffkin said in the report. “Our platform is driving these outsized results as it helps our agents grow their business.”
Compass’ IPO joined a growing list of real estate companies that have gone public, including Zillow, Realogy, eXp World Holdings, RE/MAX, Redfin and, most recently, Fathom Realty.
The SoftBank-backed real estate startup debuted on the New York Stock Exchange in April, offering 25 million shares at a price between $18 and $19—down from the company’s original plans to offer 36 million shares for $23 to $26 per share.
Compass’ Q1 performance and projected boost in the New York real estate market has the company optimistic for the future. Compass is expecting to earn up to $1.6 billion next quarter and roughly $5.55 billion for the fiscal year.
“This quarter, we saw notable strengths in Florida, California and the New York region, including early signs of a strong recovery in New York City,” said Compass CFO Kristen Ankerbrandt, in an earnings call on May 13. “That’s a nice lift in New York should be good for margins over the foreseeable future.”
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to firstname.lastname@example.org.