yeah I hear you. Stock price is reflecting this I think. At some point profits will matter, but as you say, when? I think their ultimate goal is to unify all the elements in the real estate transaction process and monetize accordingly so they can offer lower $$ services and compete in different rev sectors outside transactionsIt seems like the higher Compass revenue the more money they lose. But they say they will be profitable soon. If they aren't profitable in the current crazy market with huge revenue growth what happens when things cool down?
I am expecting to see them raise various fees to agents and/or cut splits: I haven't seen any of their contracts but we have heard that agents were previously surprised by terms in them.
Compass nearly doubles losses in 2021
The massive net income loss comes amid revenue, market share leaps
How long can this last?
Compass lost $494 million in 2021, a historically robust year for U.S. real estate, as the New York City brokerage continues to burn through money amid its rapid expansion.
The net income loss is 83% greater than Compass’s $270 million loss in 2020, eight-year-old Compass’s final year as a private company.
Compass did report on an earnings call Wednesday another mammoth revenue gain, rocketing to $6.4 billion in yearly revenue from $3.7 billion, a 73% leap.
However, 83% of that is instantly lost to “commissions and other related expenses.” Compass has earned a reputation for paying higher commission splits than other full service real estate brokerages like the conglomerate Realogy or HomeServices of America. After commissions and other expenses, Compass posted $1.1 billion in yearly revenue.
The net income loss was not discussed by CEO and company co-founder Robert Reffkin.
“I am happy to announce that our strategy of achieving strong revenue growth while improving profitability and investing in our business is working exceptionally well,” Reffkin said on the earnings call.
Personally, I think they should be doing a few other "labs" type of thing on the side as well