Fathom Realty(US:FTHM)2025-11-12 13:03Financial Performance - For the three months ended September 30, 2025, gross commission income increased by approximately $30.7 million, or 39.0%, compared to the same period in 2024, driven by a 23.0% increase in transaction volume[159]. - The total revenue for the three months ended September 30, 2025, was $115.3 million, reflecting a 37.7% increase from $83.7 million in 2024[159]. - Operating expenses for the three months ended September 30, 2025, totaled $119.4 million, an increase of 30.4% from $91.5 million in 2024[161]. - For the nine months ended September 30, 2025, gross commission income rose by approximately $87.0 million, or 38.3%, compared to the same period in 2024, with a total of 33,904 real estate transactions[168]. - The total revenue for the nine months ended September 30, 2025, was $329.9 million, a 35.5% increase from $243.4 million in 2024[168]. - Adjusted EBITDA for the nine months ended September 30, 2025 was $(1.437) million, an improvement from $(2.777) million in 2024[195]. - Stock-based compensation expense for the nine months ended September 30, 2025 was $3.0 million, down from $7.1 million in 2024[195]. - Depreciation and amortization for the nine months ended September 30, 2025 was $4.4 million, slightly higher than $4.0 million in 2024[195]. - The company reported a $2.9 million gain on the sale of a business in 2024, which did not recur in 2025[185]. Cash Flow and Working Capital - Net cash used in operating activities for the nine months ended September 30, 2025, was $(8.6) million, a 97.5% increase in cash outflow compared to $(4.4) million in 2024[183]. - Net cash used in operating activities for the nine months ended September 30, 2025 was $13.6 million, compared to a net loss of $15.3 million for the same period in 2024[184][185]. - Current assets as of September 30, 2025, increased by 50.3% to $37.5 million from $25.0 million at December 31, 2024[179]. - The company had net working capital of approximately $10.9 million as of September 30, 2025, representing a 94.8% increase from $5.6 million at December 31, 2024[179]. - Net cash provided by investing activities for the nine months ended September 30, 2025 was $4.0 million from the sale of Dagley Insurance Agency, down from $7.8 million in 2024[186][187]. - Net cash provided in financing activities for the nine months ended September 30, 2025 included $9.5 million from the issuance of common stock, compared to a net cash used of $4.9 million in 2024[188][189]. Business Operations and Strategy - 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[126]. - The company’s flat fee per real estate transaction model allows agents to negotiate their own fees, which is expected to provide a competitive advantage amid changes in industry practices[131]. - The company’s strategic recruiting and acquisition strategy, supported by a new competitive revenue share program, is positioned for profitable growth in the future[132]. - The company’s operating segments include Real Estate Brokerage, Mortgage, and Technology, with Adjusted EBITDA used to evaluate financial performance[136][137]. - General and administrative expenses are expected to increase in absolute dollars due to business growth and compliance requirements, but are anticipated to decrease as a percentage of revenue over time[154]. - The company sold its home and other insurance agency services business on May 3, 2024[149]. - The company is monitoring ongoing antitrust litigation that could impact the real estate industry, but does not expect to change its compensation model adversely[131]. Licensing and Growth - As of September 30, 2025, the company had approximately 15,371 agent licenses, representing a growth of approximately 24.1% compared to 12,383 licenses as of September 30, 2024[134]. - Mortgage loan originations for the nine months ended September 30, 2025 totaled $184.2 million, slightly lower than $192.2 million in 2024[184][185]. - Accounts receivables increased by $5.0 million in 2025, while accounts payable increased by $4.6 million, indicating a timing difference due to increased transaction volume[184]. - The company remains classified as a smaller reporting company as of September 30, 2025, allowing for reduced disclosure requirements[200][201].