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. >>>Continued on HousingWire.com
This article was originally published by HousingWire. The full article is available on HousingWire.com for HW+ Members.