Fathom Realty(US:FTHM)2025-08-12 20:25Financial Performance - Total revenue for the six months ended June 30, 2025, was $214.6 million, an increase of $54.8 million, or 34%, compared to the same period in 2024[163]. - For the three months ended June 30, 2025, gross commission income increased by approximately $32.9 million, or 40%, compared to the same period in 2024, driven by a 25.4% increase in transaction volume[155]. - Commission and service costs for the six months ended June 30, 2025, increased by approximately $52.4 million, or 36%, compared to the same period in 2024, primarily due to higher agent commissions[165]. - Total operating expenses for the six months ended June 30, 2025, were $221.4 million, an increase of $52.4 million, or 31%, compared to the same period in 2024[165]. - Adjusted EBITDA for the three months ended June 30, 2025 was $29, compared to $189 for the same period in 2024, while for the six months ended June 30, 2025 it was $(1,447), compared to $(1,332) in 2024[184]. - Loss before income tax for the three months ended June 30, 2025 was $(3,530), compared to $(1,300) in 2024, and for the six months ended June 30, 2025 it was $(9,160), compared to $(7,210) in 2024[184]. - Stock-based compensation for the three months ended June 30, 2025 was $945, compared to $2,499 in 2024, and for the six months ended June 30, 2025 it was $2,450, compared to $5,151 in 2024[184]. - The company’s management believes that Adjusted EBITDA provides useful information about financial performance and helps identify underlying trends in the business[182]. Cash Flow and Financing - The company recorded a net cash used in operating activities of $11.7 million for the six months ended June 30, 2025, compared to $4.0 million for the same period in 2024, representing a 189% increase[174]. - Net cash provided by financing activities for the six months ended June 30, 2025, was $7.0 million, a significant increase of 490% compared to $1.2 million in 2024[174]. - The company expects existing cash balances and future cash flows to be sufficient to meet operating requirements for at least the next twelve months[172]. - The company anticipates future capital requirements will depend on factors such as acquisitions and technology investments, which may be affected by external market conditions[173]. - Net cash provided in financing activities for the six months ended June 30, 2025 included $3.0 million from common stock issuance and an $8.1 million change on warehouse lines of credit, with a $3.5 million convertible note repayment[179]. Business Operations - The company operates three reportable segments: Real Estate Brokerage, Mortgage, and Technology, with revenue primarily generated from real estate brokerage services[130]. - The company’s revenue streams include commissions from real estate transactions, mortgage lending, title insurance, and SaaS revenues[135]. - The company’s flat fee per real estate transaction model allows agents to negotiate their own commissions, providing a competitive advantage[125]. - The company launched "Elevate," a concierge-level service program aimed at enhancing agent productivity and improving transaction efficiency, which is expected to increase agent retention and profitability per transaction[120]. - The company sold its home and other insurance agency services business on May 3, 2024[144]. - The company is monitoring ongoing antitrust litigation that could impact the real estate industry, but does not expect to change its compensation model adversely[125]. - The company believes its strategic recruiting and acquisition strategy, supported by a competitive revenue share program, positions it for profitable growth in the future[126]. Assets and Liabilities - As of June 30, 2025, current assets increased by $8.99 million, or 36%, to $33.9 million compared to December 31, 2024[171]. - The company did not recognize any gain on the sale of business for the six months ended June 30, 2025, compared to a gain of $3.0 million for the same period in 2024[169]. - Net cash provided by investing activities for the six months ended June 30, 2024 was $7.8 million from the sale of Dagley Insurance Agency, offset by $1.2 million in technology development intangible asset purchases[178]. Regulatory and Compliance - The company has irrevocably elected not to take advantage of the extended transition period under the JOBS Act, meaning it will adopt new accounting standards as required for public companies[188]. - The company is classified as a small reporting company as of June 30, 2025, allowing for less extensive narrative disclosures compared to other reporting companies[190]. - Adjusted EBITDA excludes significant recurring expenses such as stock-based compensation and transaction-related costs, which are part of the company's growth strategy[187].