Fathom Holdings Inc. (FTHM) Bundle
A Brief History of Fathom Holdings Inc.
Fathom Holdings Inc. has positioned itself as a significant player in the real estate services sector, particularly through its technology-driven platform that integrates residential brokerage, mortgage, title, and SaaS offerings. As of 2024, Fathom continues to navigate a challenging housing market while aiming for strategic growth.
Company Overview
Founded in 2010, Fathom Holdings operates primarily through its subsidiaries, including Fathom Realty and Encompass Lending. The company is publicly traded on NASDAQ under the ticker symbol FTHM.
Recent Financial Performance
For the third quarter of 2024, Fathom reported a total revenue of $83.7 million, a decrease of 10% from $93.5 million in the same quarter of 2023. The revenue breakdown is as follows:
| Segment | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) |
|---|---|---|
| Real Estate Brokerage | 78.6 | 88.2 |
| Mortgage | 2.9 | 1.9 |
| Technology | 1.1 | 0.8 |
| Corporate and Other Services | 1.1 | 2.5 |
| Total Revenue | 83.7 | 93.5 |
The decrease in revenue is attributed to an 11% decline in brokerage revenue, attributed to reduced transaction volumes amidst higher home prices and fluctuating mortgage rates. Despite this, revenue from ancillary businesses surged by 44%, driven by enhanced performance in mortgage and title services.
Agent Network Growth
As of September 30, 2024, Fathom's real estate agent network expanded by 9% to approximately 12,383 agent licenses, up from 11,333 in the previous year.
Net Loss and Adjusted EBITDA
Fathom reported a GAAP net loss of $8.1 million or $0.40 per share for Q3 2024, compared to a net loss of $5.5 million or $0.34 per share for Q3 2023. The Adjusted EBITDA for the quarter was a loss of $1.4 million, worsening from a loss of $0.3 million in the prior year.
Acquisitions and Strategic Initiatives
On November 1, 2024, Fathom completed the acquisition of My Home Group, a real estate agency with over 2,200 agents, significantly enhancing its presence in Arizona and Washington. Additionally, in September 2024, Fathom introduced new commission structures aimed at improving agent recruitment and retention.
Balance Sheet Highlights
As of September 30, 2024, Fathom's total assets stood at $80.9 million, with total liabilities of $33.8 million. The stockholders’ equity was recorded at $47.1 million.
| Balance Sheet Item | As of September 30, 2024 ($ millions) | As of December 31, 2023 ($ millions) |
|---|---|---|
| Total Assets | 80.9 | 79.3 |
| Total Liabilities | 33.8 | 24.0 |
| Stockholders' Equity | 47.1 | 55.2 |
Fathom continues to adapt to the evolving real estate landscape, focusing on enhancing its service offerings and maintaining a strategic growth trajectory amid market challenges.
A Who Owns Fathom Holdings Inc. (FTHM)
Major Shareholders
As of 2024, Fathom Holdings Inc. (FTHM) has a diverse ownership structure, including institutional investors and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| Marco Fregenal | 6.5% | Insider |
| BlackRock, Inc. | 5.8% | Institutional Investor |
| The Vanguard Group, Inc. | 5.2% | Institutional Investor |
| Renaissance Technologies LLC | 5.1% | Institutional Investor |
| Other Individual and Institutional Investors | 77.4% | Various |
Stock Performance
Fathom Holdings Inc. has experienced fluctuations in its stock price throughout 2024. The following table details the stock performance metrics as of November 2024:
| Metric | Value |
|---|---|
| Current Stock Price | $6.20 |
| 52-week High | $10.50 |
| 52-week Low | $4.75 |
| Market Capitalization | $135 million |
| Volume (average) | 150,000 shares |
Recent Financial Highlights
As of September 30, 2024, Fathom Holdings reported the following financial metrics:
| Financial Metric | Value |
|---|---|
| Total Revenue | $83.7 million |
| Net Loss | $(8.1) million |
| Adjusted EBITDA | $(1.4) million |
| Gross Commission Income | $78.6 million |
| Agent Licenses | 12,383 |
Recent Developments
- In November 2024, Fathom acquired My Home Group, enhancing its agent network by over 2,200 agents.
- In September 2024, the company issued $5 million in senior secured convertible promissory notes to an existing shareholder who owns more than 5% of Fathom's common stock.
- Fathom Realty reached a nationwide settlement in September 2024 related to claims in Burnett v. The National Association of Realtors, with total liabilities of $2.95 million associated with the settlement.
Fathom Holdings Inc. (FTHM) Mission Statement
Company Overview
Fathom Holdings Inc. is a national, technology-driven, end-to-end real estate services platform that integrates residential brokerage, mortgage, title, and SaaS offerings for brokerages and agents. The company utilizes its proprietary cloud-based software, intelliAgent, to streamline its services.
Mission Statement
As of 2024, Fathom Holdings Inc. aims to revolutionize the real estate industry by providing agents with unparalleled support through innovative technology and a flexible commission structure. Their mission emphasizes enhancing agent profitability and customer satisfaction while expanding their national footprint.
Strategic Goals
- Agent Growth: Aim for 25% annual growth in agent recruitment.
- Technology Integration: Leverage technology to improve service delivery and operational efficiency.
- Revenue Diversification: Expand ancillary services, including mortgage and title operations.
Recent Developments
In November 2024, Fathom acquired My Home Group, adding over 2,200 agents and enhancing its presence in Arizona and Washington. This acquisition aligns with their mission to strengthen their agent network and improve service offerings.
Financial Performance
Fathom's total revenue for the third quarter of 2024 was $83.7 million, a decrease of 10% from $93.5 million in Q3 2023. The breakdown of segment revenue is as follows:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| Real Estate Brokerage | $78.6 | $88.2 |
| Mortgage | $2.9 | $1.9 |
| Technology | $1.1 | $0.8 |
| Corporate and Other Services | $1.1 | $2.5 |
| Total Revenue | $83.7 | $93.5 |
Agent Network Growth
Fathom’s real estate agent network grew by 9% to approximately 12,383 agent licenses as of September 30, 2024, up from approximately 11,333 agent licenses in the previous year. This growth is integral to fulfilling their mission of providing superior support and opportunities to agents.
Financial Summary
Fathom reported a GAAP net loss of $8.1 million, or $0.40 per share, for Q3 2024, compared to a loss of $5.5 million, or $0.34 per share, in Q3 2023. The increase in net loss was attributed to litigation expenses and operational challenges amidst market fluctuations.
Adjusted EBITDA
For Q3 2024, Fathom's adjusted EBITDA reflected a loss of $1.4 million, compared to a loss of $0.3 million in the same quarter of 2023. This metric is crucial for understanding the company's underlying operational performance as it seeks to enhance profitability.
Future Outlook
Fathom is focusing on optimizing profitability and cash flow through strategic investments in agent recruitment and new commission models introduced in August 2024. The company plans to reassess its guidance for future quarters based on the outcomes of these initiatives.
How Fathom Holdings Inc. (FTHM) Works
Business Model
Fathom Holdings Inc. operates as a technology-driven real estate services platform. It integrates residential brokerage, mortgage, title, and SaaS offerings, leveraging its cloud-based software, intelliAgent. The company focuses on enhancing the agent experience and aims to provide comprehensive support through its various services.
Financial Performance
As of the third quarter of 2024, Fathom reported total revenue of $83.7 million, a decrease of 10% from $93.5 million in the third quarter of 2023. The decline in revenue is attributed to an 11% decrease in brokerage revenue, primarily due to fewer transactions.
| Segment | Q3 2024 Revenue ($ in millions) | Q3 2023 Revenue ($ in millions) |
|---|---|---|
| Real Estate Brokerage | 78.6 | 88.2 |
| Mortgage | 2.9 | 1.9 |
| Technology | 1.1 | 0.8 |
| Corporate and Other Services | 1.1 | 2.5 |
| Total Revenue | 83.7 | 93.5 |
Agent Network and Transactions
Fathom's real estate agent network grew by 9% to approximately 12,383 agent licenses as of September 30, 2024, compared to 11,333 licenses in the previous year. However, the company completed 9,331 transactions in the third quarter of 2024, reflecting a 9% decrease from the same quarter in 2023.
Gross Profit and Loss
The gross profit percentage for the brokerage business improved to 5.7% in Q3 2024, up from 5.1% in Q3 2023. Overall, excluding the insurance business, the gross profit percentage increased to 9% from 7% year-over-year. Despite improvements in gross profit, Fathom reported a GAAP net loss of $8.1 million, or $0.40 per share, compared to a loss of $5.5 million, or $0.34 per share in Q3 2023.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| GAAP Net Loss ($ in millions) | 8.1 | 5.5 |
| Net Loss Per Share | 0.40 | 0.34 |
| Adjusted EBITDA ($ in millions) | (1.4) | (0.3) |
Acquisitions and Strategic Initiatives
On November 1, 2024, Fathom acquired My Home Group, a real estate agency with over 2,200 agents, enhancing its presence in Arizona and Washington. In September 2024, the company issued senior secured convertible promissory notes totaling $5.0 million and reached a nationwide settlement related to legal claims, resulting in a financial commitment of $2.95 million over a period of time.
Cash Flow and Liquidity
As of September 30, 2024, Fathom reported cash and cash equivalents of $13.1 million, compared to $7.4 million at the end of 2023. The company also had restricted cash of $322,000. The total liabilities stood at $33.8 million, with total stockholders' equity reported at $47.1 million.
| Balance Sheet Item | Q3 2024 ($ in thousands) | End of 2023 ($ in thousands) |
|---|---|---|
| Cash and Cash Equivalents | 13,104 | 7,399 |
| Restricted Cash | 322 | 141 |
| Total Assets | 80,929 | 79,258 |
| Total Liabilities | 33,817 | 24,024 |
| Total Stockholders' Equity | 47,112 | 55,234 |
Outlook
Fathom's management has withheld guidance for Q4 2024 due to the recent introduction of new revenue share models, which will be evaluated for their impact on future revenues and Adjusted EBITDA. The company aims to return to 25% annual agent growth and optimize profitability moving forward.
How Fathom Holdings Inc. (FTHM) Makes Money
Revenue Streams
Fathom Holdings Inc. generates revenue primarily through three main segments:
- Real Estate Brokerage
- Mortgage Services
- Technology and Ancillary Services
Real Estate Brokerage
In Q3 2024, Fathom's real estate brokerage segment reported revenues of $78.6 million, a decrease from $88.2 million in Q3 2023. This decline is attributed to a decrease in transaction volumes, with a total of 9,331 transactions completed in Q3 2024, down approximately 9% from the previous year.
Mortgage Services
The mortgage services segment generated $2.9 million in revenue during Q3 2024, reflecting an increase from $1.9 million in Q3 2023. This growth is indicative of Fathom's focus on enhancing its mortgage offerings.
Technology and Ancillary Services
Fathom's technology and ancillary services reported $1.1 million in revenue for Q3 2024, up from $0.8 million in the prior year. This segment's growth is driven by improved performance in Fathom's title businesses and the introduction of new service offerings.
| Revenue Segment | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | Change (%) |
|---|---|---|---|
| Real Estate Brokerage | 78.6 | 88.2 | -11% |
| Mortgage Services | 2.9 | 1.9 | 53% |
| Technology and Ancillary Services | 1.1 | 0.8 | 38% |
| Total Revenue | 83.7 | 93.5 | -10% |
Cost Structure and Profitability
Fathom's overall gross profit percentage improved to 9% in Q3 2024, up from 7% in Q3 2023. The gross profit percentage for the brokerage business also increased to 5.7% from 5.1%. Excluding the insurance business, the gross profit percentage in ancillary businesses rose to 56% from 46%.
Net Loss and Adjusted EBITDA
Fathom reported a GAAP net loss of $8.1 million for Q3 2024, compared to a loss of $5.5 million in Q3 2023. The increase in net loss was attributed to the recognition of a $3.0 million settlement contingency and related legal fees. Adjusted EBITDA for the same period was a loss of $1.4 million, worsening from a loss of $0.3 million in Q3 2023.
Future Growth Strategies
Fathom has implemented new revenue share models aimed at enhancing agent recruitment and retention. Following the acquisition of My Home Group, which added over 2,200 agents to its network, Fathom's agent licenses grew by 9% to approximately 12,383 as of September 30, 2024.
Financial Summary
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $83.7 million | $93.5 million |
| Net Loss | $8.1 million | $5.5 million |
| Adjusted EBITDA | ($1.4 million) | ($0.3 million) |
| Agent Licenses | 12,383 | 11,333 |
The company's strategic initiatives and operational adjustments are designed to navigate the current challenges in the housing market while positioning itself for future growth. Fathom's focus on enhancing agent services and expanding its revenue streams is central to its business model.
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Updated on 16 Nov 2024
Resources:
- Fathom Holdings Inc. (FTHM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Fathom Holdings Inc. (FTHM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Fathom Holdings Inc. (FTHM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.