Acquisition and Growth - Fathom Holdings Inc. acquired My Home Group, increasing its presence in Arizona and Washington with over 2,200 agents [266]. - Fathom's real estate agent licenses grew by 21% to approximately 14,300 at December 31, 2024, up from approximately 11,795 at December 31, 2023 [285]. Financial Performance - For the year ended December 31, 2024, total revenue decreased by approximately $10.0 million or 2.9% to $335.2 million compared to $345.2 million in 2023, primarily due to a decrease in transaction volume caused by historically high house prices [307]. - Gross commission income for 2024 was $314.7 million, a decrease of $10.7 million or 3.3% from 2023, with transaction volume down 3.0% to approximately 37,000 transactions [307]. - Other service revenue increased by approximately $0.6 million or 3.1% to $20.4 million in 2024, driven by growth in mortgage loans and title service transactions [308]. - Total operating expenses decreased by approximately $9.8 million or 2.7% to $358.6 million in 2024, with significant reductions in commission and service costs, general and administrative expenses, and marketing expenses [309]. - General and administrative expenses decreased by approximately $2.5 million or 6.9% to $33.6 million in 2024, primarily due to the elimination of costs related to the insurance business sold in May 2024 [312]. - Adjusted EBITDA for 2024 is $(5,710) thousand, compared to $(4,111) thousand in 2023, indicating a decline in operational performance [333]. - Net loss for 2024 is $(21,577) thousand, slightly improved from $(23,981) thousand in 2023 [333]. - Stock-based compensation decreased to $8,839 thousand in 2024 from $12,994 thousand in 2023, reflecting a reduction in equity-related expenses [333]. - Depreciation and amortization expenses were $5,423 thousand in 2024, down from $5,947 thousand in 2023, indicating a slight decrease in asset-related costs [333]. - Other net expenses rose to $2,094 thousand in 2024 from $580 thousand in 2023, highlighting increased operational costs [333]. Market Trends - Existing home sales declined by 6.2% in 2023 and an additional 0.7% in 2024, marking the lowest market levels since 1995 [272]. - The average sales price for existing homes in December 2024 was $404,400, a 6% increase from $382,600 in December 2023 [276]. - The company anticipates a 9% increase in existing home sales transactions in 2025, projecting sales to rise from 4.06 million to 4.5 million [276]. Operational Efficiency - Fathom's efficient operating model, driven by a cloud-based approach, supports lower fixed costs and positions the company for growth despite market challenges [273]. - Net cash used in operating activities for 2024 was $4.7 million, a significant improvement from $10.6 million used in 2023, indicating better operational efficiency [324]. Legal and Compliance - The NAR settlement involved a payment of $418 million over four years, resolving claims against the company related to antitrust violations [282]. - Litigation contingency expenses increased to $3,491 thousand in 2024, with no such expenses reported in 2023, suggesting potential ongoing legal challenges [333]. Financial Position - As of December 31, 2024, the company had current assets of $25.0 million, an increase of 7.6% from $23.2 million in 2023, while current liabilities increased by 18.5% to $19.4 million [317]. - The company raised approximately $2.7 million in net proceeds from a registered direct offering of common stock in March 2025, enhancing its liquidity position [317]. Reporting and Transparency - The company continues to exclude significant recurring expenses from Adjusted EBITDA, which may mask underlying performance trends [332]. - The company is committed to transparency in financial reporting by providing Adjusted EBITDA as a supplemental measure for investors [330]. - Goodwill is subject to annual impairment testing, with management believing that the estimated fair value of reporting units exceeds their carrying values [338]. - The company is classified as an emerging growth company and a small reporting company, allowing for reduced reporting requirements under the JOBS Act [346].
Fathom Realty(FTHM) - 2024 Q4 - Annual Report