Compass CEO Robert Reffkin on growth, agent productivity
Reffkin looks back on Compass’ growth over the past decade and shares what he thinks will be the driving force behind the company moving forward, including a more agent-focused approach and the development of more core services.
Here is a small preview of the interview, which has been lightly edited for length and clarity:
Tracey Velt: Given the growth that you’ve achieved in less than 10 years, do you think that you’re still going to be as aggressive with agent and team acquisition and brokerage acquisition, as well?
Robert Reffkin: Brokerage acquisition is a small part of our growth. I would say that the growth that I’m most focused on is the growth of our agents’ businesses. And so far year to date, our agents grew their transactions three times faster than the market. So, year to date, our agents grew their business 37% while the market grew at 13%. The way we go about doing that is Compass as a company, we hire incredible agents from across the country and we observe and watch and ask what helps them grow their business. And we bring the best of those tools and services and marketing and support into Compass so that all agents can benefit.
Look, we’re proud to say that Compass is in the best place we’ve ever been financially as a company, that we were profitable in the last quarter on an adjusted EBITDA basis over the last 12 months. We’ve been profitable on an adjusted EBITDA basis. Adjusted EBITDA is the primary metric that investors and analysts use to measure profitability for a company.
Our company [is] investing hundreds of millions of dollars a year on research and development (R&D) — our in-house technology. So, over the life of the company, we’ve invested $600 million into building our in-house technology. We’re currently at a $300 million annual run rate of investment there. So to be able to cover all that is a pretty amazing thing.
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