Here is why: We are an Agent Oriented non-competing Company; You know that's a different approach. Rory Golod, chief of staff at Compass… The company said in its funding announcement that it had three consecutive months of “record revenue” and an annual revenue increase of 250 percent over the second quarter of last year. Cushman & Wakefield Employee and office space expense alone totals $200 million. Stock Bonus, Profit Sharing, Tips have not been reported for this role. The ultimate transaction resource, it allows all who encounter it to access property images and neighborhood details via a QR code, and in turn relays invaluable insights regarding prospective buyers to the agent and their seller. I’ve used three different methodologies in order to provide a range of data points:Compass has four publicly listed peers with similar business models: Realogy, eXp Realty, Redfin, and Purplebricks. This major event happened in 2014. The question for all growth-stage businesses is whether they can ever achieve profitability. Subscribe to GeekWire's free newsletters to catch every headlineSeattle engineer arrested in Capital One hack that affected 106M peopleVacation rental platform Vacasa will pay $162M to acquire Wyndham Vacation RentalsSeattle engineer arrested in Capital One hack that affected 106M peopleVacation rental platform Vacasa will pay $162M to acquire Wyndham Vacation Rentals To reduce expenses, Compass would need to trim its full-time headcount or slow the hiring of support staff, or consolidate and close a number of its offices — both of which run the risk of making Compass a less attractive brokerage partner for agents.The options available to Compass — optimizing the commission split and generating revenue by selling mortgages — are the same available to other real estate brokerages, and in fact, what they have been doing for years. Compass makes the bulk of its revenue through commissions it splits with brokers. One example of that at Compass is a dashboard that lets agents post to a variety of online sources all from one place, saving the time of jumping back and forth between platforms.One of the first big tech initiatives under Sirosh’s watch is a revamped search experience that will launch next month. Leading them is Sirosh referred to Compass’ technology in an interview with GeekWire earlier this year as “artificial intelligence to empower agent intelligence — AI to empower AI.” The overall goal is to simplify and automate some of the day-to-day tasks that take agents away from money-making activities such as meeting with clients and showing homes. Can Compass keep up its aggressive — and expensive — acquisition strategy? To refine my thinking for this analysis I’ve spoken to dozens of industry executives and insiders, including leaders of top brokerages, independent analysts, and current and former Compass employees and agents.Compass ended 2018 with around $900 million in revenue (source: High producing agents typically command more favorable commission splits as high as 90/10 — with only 10 percent retained by the brokerage. And perhaps most importantly, can the company generate a profit?Compass is not profitable. Real Estate Agent salaries at Compass can range from $1 - $120,000.
Going down that path is an old game plan, which is why it’s unlikely to be Compass’ destination. Profitability is a Catch 22: reducing commission splits for agents increases gross profit for Compass, but makes the company a less appealing home for agents.Compass must look elsewhere for new sources of revenue — but it’s unclear where.To grow revenues, Compass needs more agents closing more deals, and — unless something radically changes — those agents will require more, not less, support staff and office space. Using the Compass Real Estate app, our agents can program this proprietary smart sign from the palm of their hand. Each company reports and breaks out operating expenses into various categories, including technology, marketing, and general and administrative. The options available to Compass — optimizing the commission split and generating revenue by selling mortgages — are the same available to other real estate brokerages, and in fact, what they have been doing for years. https://therealdeal.com/la/issues_articles/probing-paychecks “It’s a very wide ecosystem.”Subscribe to GeekWire's free newsletters to catch every headlineHave a scoop that you'd like GeekWire to cover? Nor should it be (yet).Compass is a growth stage business, investing today for a more powerful and profitable tomorrow.
Real estate tech startup Compass has raised $370 million in fresh funding at a valuation of $6.4 billion, the company said today (July 30).
The typical Compass Real Estate Agent salary is $57,104. Learn more at sign.compass.com. Will agents, without whom Compass wouldn’t generate any revenue, remain happy and stay under the Compass banner? It’s straightforward to calculate each company’s operating expenses as a percentage of overall revenue, and as a percentage of gross profit.On average, the four industry peers’ operating expenses are 32 percent of revenue and 113 percent of gross profit (Redfin and eXp Realty are unprofitable).
Because no situation is the same, giving blanket advice simply won’t work. Applying those same averages to Compass suggests operating expenses of between $122 million and $288The build-up approach for operating expenses focuses on known data: employee headcount and office expenses. Taking a mid-point average (150 offices and 1,000 employees) yields an employee plus office cost expense of $132 million for 2018.Based on rough industry benchmarks, Compass’ operating expenses could range anywhere between $122 million and $288 million in 2018Operating expenses of between $150 million and $200 million in 2018 are nearly double Compass’ gross profit.
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