This is for all the people who said it would never work – which includes a shocking number of industry insiders who didn’t give Compass any chance of making it.

Compass says it brought in $51 million more than it spent in the second quarter, the first time the residential brokerage has been cash-flow positive since going public in 2021.

The company still posted a net loss – which includes stock-based compensation and other expenses – of $48 million, according to its second-quarter earnings. That loss, however, was a big improvement from the same period last year, in which it lost $101 million.

Reaching cash-flow positivity was a key target the company had declared for itself last year, and Compass said it met the goal while still growing market share and agent count, according to its earnings report. It posted an adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — of $30 million, up from $4 million a year ago.

“We have made up most of the free cash flow deficit from Q1 2023 and we believe we are in position to achieve our goal of being free cash flow positive for 2023,” said Compass CFO Kalani Reelitz.

Second-quarter operating expenses came in at $1.5 billion, down roughly $600 million from a year ago. Compass has a goal of getting to $900 million in operating expenses, which Reelitz said it will hit in the fourth quarter.

The company’s commissions payable also increased to $98 million last quarter, an increase of $41 million over the prior quarter but in line with the $96 million figure a year ago.

The firm’s revenue fell 26 percent year-over-year to $1.5 billion, with transactions falling by a fifth and fewer deals in luxury home markets such as California.

Compass finished the second quarter with $335 million in cash and cash equivalents, but in July paid back the $150 million draw it had taken on its revolver loan.

The results reflect efforts from a year-long cost cutting campaign announced in the earnings call this time last year, when Compass pledged to cut $320 million from its budget. As part of that pledge, it stopped offering new agents cash and equity incentives, one of its most effective recruiting tools.

Compass was the top residential brokerage in the country by sales volume in 2022, according to RealTrends. As losses mounted — the firm lost over $600 million last year, up from $500 million in 2021 — critics and rivals seemed to relish in the company’s struggles and questioned its viability.

This is a developing story. Check back in for updates.

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