Fathom Holdings Reports Second Quarter 2024 Results

Core Insights - Fathom Holdings has made significant progress in achieving its goals for the year, including positive Adjusted EBITDA for the quarter and positive Adjusted EBITDA from its real estate, mortgage, and title brands [1] - The company launched innovative revenue share programs aimed at empowering agents to retain more earnings, with two options available: a split model and a flat fee model [1] - Fathom aims to return to 30% agent growth in the coming quarters, supported by a strong value proposition and a robust pipeline of opportunities [1] Financial Performance - Fathom's real estate agent network grew by 12% to approximately 12,224 agent licenses as of June 30, 2024, compared to 10,930 licenses a year earlier [2] - The company completed approximately 10,137 transactions in Q2 2024, an 8% decrease from Q2 2023, primarily due to high mortgage interest rates [2] - Total revenue for Q2 2024 decreased by 11% to $89.2 million from $100.1 million in Q2 2023, with brokerage revenue down by 12% [2][3] - Other service revenue increased by 11%, driven by improved performance in mortgage and title businesses, offset by the absence of insurance business revenue [2] Segment Revenue - For Q2 2024, segment revenues were as follows: Real Estate Brokerage at $83.1 million, Mortgage at $3.7 million, Technology at $1.1 million, and Corporate and other services at $1.3 million [3] - For the first six months of 2024, total revenue was $159.7 million, down from $177.6 million in the same period of 2023 [3][6] Profitability Metrics - The gross profit percentage for the brokerage business remained constant at 6% for Q2 2024 compared to Q2 2023 [5] - Overall gross profit percentage improved to 9% in Q2 2024 from 8% in Q2 2023, excluding the insurance business [5][6] - GAAP net loss for Q2 2024 was $1.3 million, or $0.07 per share, an improvement from a loss of $4.3 million, or $0.27 per share, in Q2 2023 [5][7] Strategic Initiatives - In August 2024, Fathom introduced two new agent commission plans, Fathom Max and Fathom Share, to enhance agent recruitment and retention [8] - The company sold its insurance subsidiary for approximately $15 million in cash, strengthening its financial position [8] - Fathom launched a joint venture, Verus Title Elite, to drive increased revenue and profitability in the title services sector [8] Financial Outlook - The company has withheld guidance for Q3 2024 due to the recent introduction of new revenue share models and their uncertain impact on future revenues [9]