Fathom Holdings Inc ((FTHM)) has held its Q4 earnings call. Read on for the main highlights of the call.
Fathom Holdings Inc. recently held its earnings call, revealing a balanced sentiment with notable achievements and ongoing challenges. The company reported significant revenue growth and strategic acquisitions, alongside strong increases in agent count and transactions. However, challenges persist with EBITDA loss and a decline in full-year revenue.
Strong Revenue Growth
Fathom Holdings Inc. reported a robust 24% increase in total revenue for Q4 2024, reaching $91.7 million, up from $74.1 million in Q4 2023. The company’s gross profit also saw a substantial rise of 25%, and an impressive 59% increase when excluding the sold insurance business.
Agent and Transaction Growth
The company experienced a 21% increase in agent count, reaching approximately 14,300, while transactions rose by 22% to 9,903. This growth indicates continued strong activity and expansion within Fathom’s agent network.
Successful Title Division Expansion
Verus Title, a division of Fathom Holdings, saw its revenue soar by 80% to $1.3 million in Q4 2024. This significant increase highlights the strong demand for title services within the market.
Cost Management Achievements
Fathom Holdings successfully reduced its general and administrative expenses to $8.4 million for Q4 2024, down from $10 million in Q4 2023. This reduction was achieved through cost savings and the absence of costs related to the insurance segment sale.
Strategic Acquisitions
In November 2024, Fathom Holdings acquired My Home Group, a strategic move expected to contribute approximately $110 million in revenue in 2025. This acquisition aligns with the company’s growth strategy.
Continued EBITDA Loss
Despite the positive revenue growth, Fathom Holdings reported an unchanged adjusted EBITDA loss of $2.9 million for Q4 2024, with a full-year loss of $5.7 million. This was attributed to lower brokerage revenues and higher expenses.
Full-Year Revenue Decline
The company faced a 3% decline in total revenue for the full-year 2024, amounting to $335 million compared to $345 million in 2023. This decline was primarily due to challenging market conditions.
GAAP Net Loss
Fathom Holdings reported a GAAP net loss of $6.2 million, or $0.29 per share, for Q4 2024. This is an improvement from the $8.4 million loss, or $0.50 per share, in Q4 2023.
Technology and Marketing Expenses Increase
The company increased its investment in technology and marketing, with technology and development expenses rising to $1.8 million and marketing expenses to $1.9 million for Q4 2024. These investments aim to enhance Fathom’s technology platforms and marketing for ancillary businesses.
Forward-Looking Guidance
Looking ahead, Fathom Holdings aims for EBITDA profitability by Q2 2025, supported by a projected 26% increase in brokerage revenue and a focus on cost reductions. The company also highlighted growth in its mortgage and title divisions, with Verus Title’s revenue increasing by 80% year-over-year. Fathom’s competitive advantage is underscored by its low direct cost per transaction of $264, compared to peers averaging $1,200-$1,800.
In summary, Fathom Holdings Inc.’s earnings call presented a mixed sentiment with strong revenue and agent growth, alongside strategic acquisitions. However, challenges remain with EBITDA losses and a decline in full-year revenue. The company is optimistic about achieving EBITDA profitability by mid-2025, driven by increased brokerage revenue and cost management efforts.