Fathom Holdings Inc ((FTHM)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Fathom Holdings Inc’s recent earnings call painted a mixed picture, with a strong emphasis on growth and strategic success, yet acknowledging some financial challenges. The company reported impressive revenue and transaction growth, alongside a return to adjusted EBITDA profitability, which highlights robust operational performance. However, the call also addressed concerns such as a decreased gross profit margin, increased net loss, and declines in specific business segments.
Significant Revenue and Transaction Growth
Fathom Holdings reported a remarkable 36% growth in revenue and a 25% increase in transaction volume for Q2 2025. This substantial growth underscores the company’s expanding market presence and successful execution of its business strategies.
Return to Adjusted EBITDA Profitability
The company achieved a return to adjusted EBITDA profitability, marking a significant milestone in its operational performance. This return to profitability reflects the effectiveness of Fathom’s business model and strategic initiatives.
Success of the Elevate Program
The Elevate program has been a key driver of Fathom’s success, enhancing agent productivity and satisfaction while generating high-margin recurring revenue. Agents enrolled in the program averaged eight transactions per year, supported by strong lead generation capabilities.
Record-Breaking Performance in Ancillary Services
Verus Title, part of Fathom’s ancillary services, delivered a record-breaking month in June, contributing significantly to the company’s growth in this segment.
Strategic Partnership and Expansion
Fathom’s strategic partnership with Sovereign Realty Partners and the acquisition of My Home Group have strengthened its presence in the Arizona market, showcasing the company’s commitment to expansion and market penetration.
Recognition of Agent Satisfaction
Fathom was recognized for having the highest agent satisfaction rating, with a churn rate of less than 1.6%, indicating strong agent loyalty and satisfaction with the company’s offerings.
Decline in Ancillary Business Revenue
Despite successes, Fathom reported a 10.5% decline in revenue from ancillary businesses, primarily due to the sale of its insurance business, which impacted overall revenue figures.
Decreased Gross Profit Margin
The gross profit margin decreased from 8.5% to 7.7%, attributed to competitive pricing pressures and higher commission splits, posing a challenge to maintaining profitability.
Increased Net Loss
Fathom reported a net loss of $3.6 million for Q2 2025, compared to $1.3 million in Q2 2024. This increase was primarily due to the absence of contributions from the divested insurance business.
Decrease in Technology Segment Revenue
The technology segment experienced a decline in third-party revenue, as brokers and agents reduced expenses, reflecting broader industry trends.
Forward-Looking Guidance
Looking ahead, Fathom Holdings is optimistic about its growth trajectory. The company aims to surpass 300 fully on-boarded agents in the Elevate program by year-end, with expectations of generating up to 10,000 leads per month by December. This strategic focus on the Elevate program is anticipated to drive sustained growth and profitability into 2026.
In summary, Fathom Holdings Inc’s earnings call highlighted a dynamic balance of growth and challenges. While the company celebrated significant revenue and transaction growth, along with strategic successes, it also acknowledged areas needing improvement, such as gross profit margins and net loss. The forward-looking guidance suggests a positive outlook, with strategic initiatives poised to support continued growth and profitability.