How Residential Brokerages Stacked Up in Q1

Residential brokerages staged a comeback this earnings season, spurred by a rebound in home sales.

Agents at Compass, Douglas Elliman and Anywhere Real Estate pushed more deals across the finish line in the first quarter than in the previous year, adding to an uptick in revenues across the three publicly-traded firms.

Anywhere — driven by its luxury brands Sotheby’s International and the Corcoran Group — grew its income a modest 3 percent year-over-year, while Elliman’s revenue increased roughly 27 percent. Compass brought in 29 percent more revenue, with only 9 percent coming from its acquisition of @properties.

The transaction and revenue gains weren’t enough to lift the companies back into the black, though they managed to significantly narrow their losses. Anywhere reported a $32 million annual improvement in its net loss in the first quarter, while Compass and Elliman shaved $82 million and $36 million from their 2024 totals.

Though all the firms benefited from a boost in the market, each company notched slightly different wins.

A closer look at the firms’ cash

Compass once again touted its free cash flow positivity during the period, a benchmark it’s been chasing since going public in 2021. Coming off its first full year of being free cash flow positive, the brokerage reported it finished the quarter with a record $19.5 million in free cash flow.

“The gap between Compass and the industry continues to widen,” Compass CEO Robert Reffkin said on the company’s earnings call last week.

But the firm sustained a calculated hit to its cash stores with a $105 million payout to @properties as part of its deal to buy the firm and the Christie’s International Real Estate brand. The acquisition closed in January, triggering the nine-figure payout.

Still, Compass held its ground despite its major purchase and that of another luxury brokerage in Washington, D.C. The firm closed March with $127 million in cash, and the expectation that its latest purchase would raise its revenue by $500 million by the end of the year.

Elliman beat both Compass and Anywhere with its cash on hand, ending the period with $137 million. Executives at the firm have hailed its cash position over the last several quarters, even as the company lost millions and sought to boost its reserves with a $50 million loan from Kennedy Lewis.

However, Elliman appeared to stifle most of the bleeding in the first quarter, narrowing its losses to just $6 million from $42 million.

“We are building on the momentum we established last year,” Elliman’s CEO Michael Liebowitz said on the earnings call earlier this month. “This growth reflects the strength of our historic brand.”

But it’s lost a chunk of its star power with some of its top producers leaving the firm for Compass. Last quarter, Holly Parker took her New York-based team to Compass, and on the West Coast, “Million Dollar Listing” star Tracy Tutor jumped from Elliman to Compass.

On the company’s earnings call earlier this month, Liebowitz again said he planned to push the firm toward revenue diversification by buying up ancillary businesses, a move he’s touted since assuming the role late last year. Though the firm created a strategic M&A business development unit, it has yet to announce any major acquisitions.

Elliman has leaned heavily on its development market business to differentiate itself from its competitors. Executives reported that the firm’s pipeline of projects was worth $28 billion in gross transaction value, with roughly $19 billion in Florida alone. The firm expects to earn revenue from sales of these projects between 2025 and 2030.

The battle over private exclusive listings took center stage in Compass’ and Anywhere’s first quarter earnings calls.

While Reffkin again doubled down on his resolve to promote Compass’ so-called 3-Phased Marketing Strategy, which starts with marketing listings as private exclusives, Anywhere’s CEO Ryan Schneider appeared to reverse his stance. Though he again promoted his company’s likely advantageous position if the industry continued to pivot toward private listings, this time, Schneider threw his weight behind what he called “broad distribution.”

“The more listings I can do exclusively, my brokerage makes more money,” Schneider said on the earnings call in April. “But you know, that may not be the best thing for the customer.”

Anywhere’s chief financial officer Charlotte Simonelli also said the firm is pushing hard to deleverage its debt moving forward, including plans to refinance its more than $400 million loan that will mature next year.

Earlier this month, Anywhere also tapped Steve Capezza, the former president of Side, as the senior vice president of growth and M&A. The hire could signal that Anywhere is planning to ramp up its merger and acquisition activity in the near future.

For Elliman and Anywhere, first quarter earnings results drove their stock prices marginally higher. Elliman’s stock price rose from $1.68 on May 1, the night before its call, to $1.83 per share by the close of the following day. Anywhere’s rose from $3.21 to $3.46.

However, Compass’ stock price fell following its earnings announcement. The firm closed Friday, May 9th at $6.25 per share, down from $7.73 at the end of the previous day.