Fathom Realty(FTHM) - 2025 Q2 - Quarterly Results

Executive Summary This section provides a high-level overview of Fathom Holdings' strong Q2 2025 financial and operational performance, strategic initiatives, and outlook for sustained profitability Q2 2025 Performance Overview Fathom Holdings reported strong second-quarter 2025 results, achieving significant year-over-year growth in revenue, transactions, and agent count, alongside a return to adjusted EBITDA profitability Q2 2025 Key Performance Indicators (YoY Growth) | Metric | Q2 2025 Performance | | :--------------------- | :------------------ | | Revenue Growth | 36% | | Transaction Growth | 25% | | Agent Count Increase | 23% | | Adjusted EBITDA | Return to profitability | CEO's Strategic Outlook CEO Marco Fregenal highlighted the strength of Fathom's platform and diversified growth strategy, emphasizing the success of the Elevate program and the expansion of the intelliAgent platform through licensing agreements, aiming for sustained adjusted EBITDA profitability - The Elevate concierge program has onboarded over 70 agents, averaging eight closings per year, and aims to scale to more than 300 agents by year-end[3] - Fathom successfully implemented its first intelliAgent platform and Elevate program licensing agreement with Sovereign Realty Partners, operating under the Fathom Elite brand, marking the beginning of a broader platform expansion strategy[4] - Fathom is committed to scaling topline revenue and gross profit to achieve sustained adjusted EBITDA profitability, leveraging a growing agent network, expanding ancillary services, and new intelliAgent licensing partnerships[5] Second Quarter 2025 Financial and Operational Highlights This section details Fathom Holdings' financial and operational performance for the second quarter of 2025, highlighting key metrics, segment revenue, and profitability Key Financial Metrics Fathom reported a 36.1% year-over-year increase in total revenue to $121.4 million, primarily driven by the acquisition of My Home Group, with real estate transactions also growing significantly by 25.4% to 12,710 Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----------------------- | :-------- | :-------- | :--------- | | Real Estate Transactions | 12,710 | 10,137 | +25.4% | | Total Revenue (in millions) | $121.4 | $89.2 | +36.1% | | Gross Profit (excl. insurance, in millions) | $9.4 | $7.5 | +24.7% | Revenue by Segment Brokerage revenue saw substantial growth, increasing by 39.6%, while Title revenue nearly doubled, with Mortgage revenue experiencing a slight decline and Technology revenue remaining stable Q2 2025 Segment Revenue (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | YoY Change | | :----------------------- | :-------------- | :-------------- | :--------- | | Real Estate Brokerage | $116.0 | $83.1 | +39.6% | | Mortgage | $3.3 | $3.7 | -10.8% | | Technology | $1.1 | $1.1 | 0% | | Corporate and other services | $1.0 | $1.3 | -23.1% | | Total Revenue | $121.4 | $89.2 | +36.1% | Profitability Analysis (GAAP & Non-GAAP) Fathom reported a GAAP net loss of $3.6 million for Q2 2025, an increase from the prior year, primarily due to a gain recognized from the sale of its insurance business in Q2 2024, but achieved positive Adjusted EBITDA of $0.03 million, marking its first positive Adjusted EBITDA quarter since Q2 2024 Q2 2025 Profitability (in millions, except per share) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--------------- | :-------- | :-------- | :--------- | | GAAP Net Loss | $(3.6) | $(1.3) | -176.9% | | GAAP Net Loss/Share | $(0.13) | $(0.07) | -85.7% | | Adjusted EBITDA | $0.03 | $0.2 | -85% | - The year-over-year increase in GAAP net loss was primarily attributable to the gain recognized from the sale of the Company's insurance business in May 2024, which favorably impacted the prior year's results[11] - The second quarter of 2025 marked the Company's first positive Adjusted EBITDA quarter since the second quarter of 2024, with a commitment to remaining Adjusted EBITDA positive moving forward[12] Operational Achievements Fathom's agent network expanded significantly, and key strategic initiatives like the Elevate program and intelliAgent platform licensing began to yield results - Fathom's real estate agent network grew 22.6% to approximately 14,981 agent licenses at June 30, 2025, up from approximately 12,224 agent licenses at June 30, 2024[9] - Successfully onboarded 70 agents to the Elevate program[9] - Began licensing of the proprietary intelliAgent software platform to Sovereign Realty Partners[9] First Six Months 2025 Financial Highlights This section presents Fathom Holdings' financial performance for the first six months of 2025, detailing key metrics, segment revenue, and profitability Key Financial Metrics For the first six months of 2025, Fathom reported a 34.4% increase in total revenue to $214.6 million, driven by a 28.5% rise in real estate transactions, largely due to the My Home Group acquisition H1 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | YoY Change | | :----------------------- | :-------- | :-------- | :--------- | | Real Estate Transactions | 22,425 | N/A | +28.5% | | Total Revenue (in millions) | $214.6 | $159.7 | +34.4% | Revenue by Segment Brokerage revenue significantly increased by 38.0% in the first half of 2025, primarily due to the My Home Group acquisition, which was partially offset by a decline in other service revenue following the sale of the insurance business H1 2025 Segment Revenue (in millions) | Segment | H1 2025 Revenue | H1 2024 Revenue | YoY Change | | :----------------------- | :-------------- | :-------------- | :--------- | | Real Estate Brokerage | $204.9 | $148.5 | +38.0% | | Mortgage | $5.9 | $5.9 | 0% | | Technology | $2.1 | $2.2 | -4.5% | | Corporate and other services | $1.7 | $3.1 | -45.2% | | Total Revenue | $214.6 | $159.7 | +34.4% | Profitability Analysis (GAAP & Non-GAAP) Fathom's GAAP net loss for the first six months of 2025 increased to $9.2 million, primarily due to the absence of a gain from the insurance business sale recognized in the prior year, while Adjusted EBITDA loss also slightly increased to $1.4 million, attributed to lower contributions from ancillary businesses H1 2025 Profitability (in millions, except per share) | Metric | H1 2025 | H1 2024 | YoY Change | | :--------------- | :-------- | :-------- | :--------- | | GAAP Net Loss | $(9.2) | $(7.2) | -27.8% | | GAAP Net Loss/Share | $(0.36) | $(0.37) | +2.7% | | Adjusted EBITDA Loss | $(1.4) | $(1.3) | -7.7% | - The increase in GAAP net loss for the first six months was primarily due to the gain recognized from the sale of the Company's insurance business in May 2024, which benefited the prior year's results[16] - The Adjusted EBITDA loss for the first six months of 2025 was primarily attributable to the lower total contribution of ancillary businesses[17] Guidance and Outlook This section outlines Fathom Holdings' guidance and future outlook, specifically addressing the company's approach to Q3 2025 guidance Q3 2025 Guidance Fathom Holdings has elected to withhold guidance for the third quarter ending September 30, 2025, with management planning to reassess and potentially reinstate guidance expectations in the fourth quarter of 2025 - The Company has elected to withhold guidance for the third quarter ending September 30, 2025[19] - Management plans to reassess and potentially reinstate guidance expectations in the fourth quarter of 2025[19] Company Information This section provides essential information about Fathom Holdings Inc., including its business description, cautionary notes on forward-looking statements, and investor relations contact details About Fathom Holdings Inc. Fathom Holdings Inc. is a national, technology-driven real estate services platform that integrates residential brokerage, mortgage, title, and SaaS offerings through its proprietary cloud-based software, intelliAgent - Fathom Holdings Inc. is a national, technology-driven, end-to-end real estate services platform integrating residential brokerage, mortgage, title, and SaaS offerings for brokerages and agents[22] - The Company leverages its proprietary cloud-based software, intelliAgent, and its brands include Fathom Realty, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title, and Cornerstone[22] Cautionary Note Concerning Forward-Looking Statements This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may impact Fathom's business, financial condition, and results of operations, including general economic conditions, profitability, and litigation risks - The press release contains forward-looking statements subject to numerous conditions and risks beyond the Company's control[23] - Key risks include general economic conditions (e.g., rising interest rates), ability to generate positive operational cash flow, achieving significant growth and profitability, and ongoing litigation[23] - The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law[24] Investor Relations Contact Contact information for investor inquiries is provided through Gateway Group, Inc - Investor contact is Matt Glover and Clay Liolios of Gateway Group, Inc., reachable at 949-574-3860 or FTHM@gateway-grp.com[25] Financial Statements This section presents Fathom Holdings' condensed consolidated financial statements, including the balance sheet, statement of operations, and cash flows for relevant periods Condensed Consolidated Balance Sheet The balance sheet shows Fathom's financial position, with total assets increasing to $80.4 million at June 30, 2025, from $75.4 million at December 31, 2024, primarily driven by an increase in current assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Total Assets | $80,446 | $75,397 | | Total Liabilities | $39,746 | $30,716 | | Total Stockholders' Equity | $40,700 | $44,681 | - Current assets increased from $24,956 thousand at December 31, 2024, to $33,946 thousand at June 30, 2025, largely due to increases in accounts receivable and mortgage loans held for sale[27] Condensed Consolidated Statement of Operations The statement of operations details Fathom's revenue and expenses, showing a net loss of $3.6 million for Q2 2025 and $9.2 million for the first six months of 2025, with significant revenue growth offset by increased commission and service costs Condensed Consolidated Statement of Operations Highlights (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------- | :---------- | :---------- | :---------- | :---------- | | Revenue | $121,423 | $89,207 | $214,558 | $159,710 | | Commission & Service Costs | $112,025 | $81,072 | $197,071 | $144,709 | | Loss from Operations | $(2,379) | $(3,629) | $(6,804) | $(9,282) | | Net Loss | $(3,592) | $(1,294) | $(9,238) | $(7,221) | | Net Loss per Share | $(0.13) | $(0.07) | $(0.36) | $(0.37) | Condensed Consolidated Statements of Cash Flows Fathom's cash flow statement indicates net cash used in operating activities of $11.7 million for the first six months of 2025, while investing activities provided $2.4 million and financing activities provided $7.0 million Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Net cash used in operating activities | $(11,671) | $(4,041) | | Net cash provided by investing activities | $2,441 | $6,100 | | Net cash provided by financing activities | $6,962 | $1,181 | | Net increase (decrease) in cash | $(2,268) | $3,240 | | Cash, cash equivalents, and restricted cash at end of period | $5,121 | $10,780 | - Proceeds from the sale of business contributed $4,000 thousand to investing activities in H1 2025, compared to $7,435 thousand in H1 2024[31] Non-GAAP Financial Measures This section explains Fathom Holdings' use of non-GAAP financial measures, providing a reconciliation of GAAP to Adjusted EBITDA and a note on its purpose and limitations Reconciliation of GAAP to Non-GAAP Measures This section provides a reconciliation of GAAP net loss to Adjusted EBITDA, a non-GAAP measure, for both the second quarter and first six months of 2025 and 2024, detailing adjustments for items like stock-based compensation and depreciation Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | :---------- | :---------- | | Loss before income tax | $(3,530) | $(1,300) | $(9,160) | $(7,210) | | Gain on sale of business | - | $(2,958) | - | $(2,958) | | Stock based compensation | $945 | $2,499 | $2,450 | $5,151 | | Depreciation & amortization | $1,458 | $1,319 | $2,897 | $2,799 | | Litigation contingency | $6 | - | $10 | - | | Other expense, net | $1,151 | $629 | $2,356 | $886 | | Adjusted EBITDA | $29 | $189 | $(1,447) | $(1,332) | Note about Non-GAAP Financial Measures Fathom uses Adjusted EBITDA as a non-GAAP financial measure to provide additional insight into its core operating performance, excluding specific non-cash and non-recurring items, emphasizing that this measure should not replace GAAP financial information and acknowledging its limitations - Adjusted EBITDA is used to understand and evaluate core operating performance, enhancing investors' overall understanding of financial performance[34][36] - Adjusted EBITDA is defined as net income (loss) excluding other expense, income tax benefit, depreciation and amortization, share-based compensation expense, gain on sale of business benefit, NAR related litigation contingency expenses, and transaction-related costs[35] - Limitations of Adjusted EBITDA include the exclusion of significant recurring expenses like share-based compensation, transaction-related costs, and non-cash charges such as depreciation and amortization, as well as non-recurring items like gain on sale of business and NAR related litigation expenses[38][39]