Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $89.2 million, a decrease of 10.9% from $100.1 million in Q2 2023 [11][18] - Adjusted EBITDA for Q2 2024 was $189,000, down from $500,000 in Q2 2023 [11][21] - GAAP net loss for Q2 2024 was $1.3 million or $0.07 per share, an improvement from a net loss of $4.3 million or $0.27 per share in Q2 2023 [21] Business Line Data and Key Metrics Changes - Real estate division revenue was approximately $83.1 million in Q2 2024, a 12% decline from the same period last year [22] - Mortgage revenue grew 85% to $3.7 million in Q2 2024 compared to $2 million in Q2 2023 [24] - Verus Title revenues reached $1.1 million, a 10% increase from Q2 2023 [25] Market Data and Key Metrics Changes - The second quarter of 2024 saw mortgage interest rates decrease to about 6.5%, potentially bringing buyers back to the market [16] - Over 20% of all listings experienced price reductions, with median home prices decreasing by 3% to 5% in states like Texas, Florida, and Colorado [16] Company Strategy and Development Direction - The company is launching two new commission plans, Fathom Max and Fathom Share, aimed at boosting agent recruitment and retention [6][10] - The strategic focus is on sustainable growth and enhancing the agent experience through innovative revenue share models [9][12] - The company aims to achieve agent growth of at least 30% while enhancing its balance sheet and achieving positive EBITDA [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the real estate market but remains optimistic about the potential for recovery and growth through agent recruitment [30][32] - The company is focused on building its agent network and believes that the new commission plans will attract more agents [32][36] - Management plans to reassess guidance for Q3 2024 based on the performance of the new revenue share models [27] Other Important Information - The company sold its insurance business for approximately $15 million, significantly strengthening its balance sheet [24][27] - The mortgage division achieved positive EBITDA for the first time, indicating improved profitability across business segments [14][24] Q&A Session Summary Question: What degree of a housing recovery is needed for positive free cash flow? - Management is building plans without relying on a housing recovery and focuses on increasing the number of agents to achieve positive cash flow [30][31] Question: What motivated the switch to new commission plans? - The decision was based on feedback from agents and small brokerages expressing interest in revenue share programs [33][34] Question: How will the new plans impact gross profits? - The combination of attracting more agents and higher-producing agents is expected to increase gross profit margins [37][39] Question: What gives confidence in achieving 30% agent growth? - Confidence stems from ongoing discussions with potential agents and brokerages interested in the new revenue share models [44]
Fathom Realty(FTHM) - 2024 Q2 - Earnings Call Transcript