Fathom Holdings Inc. (FTHM): BCG Matrix [11-2024 Updated]
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Fathom Holdings Inc. (FTHM) Bundle
As we dive into the performance of Fathom Holdings Inc. (FTHM) in 2024, we uncover the dynamics of its business through the lens of the Boston Consulting Group Matrix. This strategic tool categorizes Fathom's offerings into Stars, Cash Cows, Dogs, and Question Marks, providing a clear snapshot of where the company stands in a challenging real estate market. Discover how Fathom's robust growth initiatives and operational challenges shape its future prospects below.
Background of Fathom Holdings Inc. (FTHM)
Fathom Holdings Inc. is a national, technology-driven real estate services platform that integrates residential brokerage, mortgage, title, and software-as-a-service (SaaS) offerings. The company leverages its proprietary cloud-based software, intelliAgent, to enhance the efficiency and effectiveness of real estate transactions. Fathom operates under several brands, including Fathom Realty, Encompass Lending, LiveBy, Real Results, Verus Title, and Cornerstone.
As of September 30, 2024, Fathom's real estate agent network comprised approximately 12,383 agent licenses, reflecting a growth of 9% from the previous year. The company completed 9,331 transactions during the third quarter of 2024, although this represented a decrease of approximately 9% compared to the same period in 2023, attributed to higher home prices and uncertainty in mortgage interest rates.
Fathom's revenue for the third quarter of 2024 totaled $83.7 million, down 10% from $93.5 million in the third quarter of 2023. The decline was primarily driven by an 11% decrease in brokerage revenue, which was partially offset by a 44% increase in revenue from ancillary businesses, particularly the mortgage and title segments.
In November 2024, Fathom made a significant move by acquiring My Home Group, a real estate agency with over 2,200 agents. This acquisition is intended to bolster Fathom's presence in key markets like Arizona and Washington, aligning with its growth strategy.
Despite challenges in the real estate market, Fathom is focused on enhancing its service offerings and agent recruitment through innovative commission plans, such as Fathom Max and Fathom Share. These initiatives aim to drive sustainable growth and improve long-term profitability.
Fathom Holdings Inc. (FTHM) - BCG Matrix: Stars
Significant growth in agent network
Fathom Holdings Inc. reported a 9% increase in its agent network, reaching approximately 12,383 agent licenses as of September 30, 2024, up from approximately 11,333 agent licenses at the same time in 2023.
Improved gross profit percentage in brokerage business
The gross profit percentage in Fathom's brokerage business improved to 5.7% in Q3 2024, up from 5.1% in Q3 2023. Excluding the insurance business, the overall gross profit percentage improved to 9% from 7% during the same period.
Successful acquisition of My Home Group
On November 1, 2024, Fathom acquired My Home Group, a real estate agency with over 2,200 agents. This acquisition enhances Fathom's market presence in Arizona and Washington.
Launch of innovative commission plans
Fathom introduced two new commission plans, Fathom Max and Fathom Share, in August 2024. These plans are designed to enhance agent recruitment and retention, supporting Fathom's growth strategy.
Revenue from ancillary businesses increased by 44%
Revenue from Fathom's ancillary businesses surged by 44% in Q3 2024, primarily driven by improved performance in its mortgage and title services.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Agent Licenses | 12,383 | 11,333 | 9% |
| Gross Profit Percentage (Brokerage) | 5.7% | 5.1% | 11.76% |
| Overall Gross Profit Percentage | 9% | 7% | 28.57% |
| Ancillary Revenue Growth | 44% | - | - |
| Acquisition - My Home Group | 2,200 Agents | - | - |
Fathom Holdings Inc. (FTHM) - BCG Matrix: Cash Cows
Consistent revenue generation from real estate brokerage, despite a 10% decline in total revenue to $83.7 million in Q3 2024
Total revenue for the third quarter of 2024 decreased 10% to $83.7 million, compared to $93.5 million in the third quarter of 2023. This decline was primarily due to an 11% decrease in brokerage revenue, which amounted to $78.6 million in Q3 2024, down from $88.2 million in the same period of 2023. The decrease in transactions was attributed to higher home prices and uncertainty surrounding mortgage interest rates.
Established brand recognition and operational efficiencies in residential real estate services
Fathom's real estate agent network grew by 9% to approximately 12,383 agent licenses as of September 30, 2024, compared to approximately 11,333 agent licenses a year earlier. This growth reflects the company's efforts to maintain its competitive position in the residential real estate market.
Strong cash position with cash and equivalents totaling $13.1 million as of September 30, 2024
As of September 30, 2024, Fathom Holdings reported cash and cash equivalents of $13.1 million, an increase from $7.4 million as of December 31, 2023.
Stable revenue from technology solutions contributing to overall profitability
Revenue from technology solutions was reported at $1.1 million for Q3 2024, up from $0.8 million in Q3 2023. This segment, along with the ancillary businesses, has been crucial in offsetting declines in brokerage revenue.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $83.7 million | $93.5 million |
| Brokerage Revenue | $78.6 million | $88.2 million |
| Technology Solutions Revenue | $1.1 million | $0.8 million |
| Cash and Cash Equivalents | $13.1 million | $7.4 million |
| Agent Licenses | 12,383 | 11,333 |
Fathom Holdings Inc. (FTHM) - BCG Matrix: Dogs
Continued net losses
Fathom Holdings Inc. reported a GAAP net loss for Q3 2024 totaling $8.1 million, or $0.40 per share, compared to a loss of $5.5 million, or $0.34 per share, in Q3 2023.
Decline in transaction volume
Transaction volume for Fathom Holdings decreased by approximately 9% in Q3 2024, with a total of 9,331 transactions completed. This decline was attributed to ongoing high home prices and uncertainties surrounding interest rates.
Lack of significant growth in corporate services revenue
Revenue from corporate services fell to $1.1 million in Q3 2024, down from $2.5 million in the same quarter of the previous year.
High operational costs impacting overall profitability
The company's operational costs remain high, particularly in the brokerage segment. Total operating expenses for Q3 2024 were $91.5 million, compared to $98.9 million in Q3 2023. The gross profit percentage for the brokerage business improved slightly to 5.7% from 5.1% year-over-year, indicating ongoing challenges in achieving profitability.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Loss | $8.1 million | $5.5 million |
| Net Loss per Share | $0.40 | $0.34 |
| Transaction Volume | 9,331 transactions | 10,250 transactions |
| Corporate Services Revenue | $1.1 million | $2.5 million |
| Total Operating Expenses | $91.5 million | $98.9 million |
| Gross Profit Percentage (Brokerage) | 5.7% | 5.1% |
Fathom Holdings Inc. (FTHM) - BCG Matrix: Question Marks
New revenue share models introduced, uncertain impact on future revenues and profitability.
Fathom Holdings has recently launched two new revenue share models, Fathom Max and Fathom Share, aimed at enhancing agent recruitment and retention. The impact of these models on future revenues and profitability remains uncertain as the company has withheld guidance for the fourth quarter of 2024 .
Market conditions remain volatile, affecting the growth potential of the real estate sector.
The real estate market is currently facing challenges, including higher home prices and fluctuating mortgage interest rates, which have led to a decrease in transaction volume. Fathom completed 9,331 transactions in Q3 2024, a decline of approximately 9% compared to Q3 2023.
Potential for further acquisitions to enhance market share, but execution risks remain.
On November 1, 2024, Fathom acquired My Home Group, significantly increasing its presence in Arizona and Washington. This acquisition adds over 2,200 agents to Fathom's network, which now totals approximately 12,383 agent licenses, reflecting a 9% growth year-over-year . However, execution risks remain associated with integrating new acquisitions and achieving projected growth targets in a volatile market.
Need for strategic investments in technology and service differentiation to drive future growth.
Fathom's revenue from ancillary businesses increased by 44% in Q3 2024, driven primarily by improved performance in its mortgage and title services. To capitalize on growth opportunities, Fathom must continue to invest strategically in technology and differentiate its service offerings to enhance agent and customer experiences.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue ($ in millions) | 83.7 | 93.5 |
| Real Estate Brokerage Revenue ($ in millions) | 78.6 | 88.2 |
| Mortgage Revenue ($ in millions) | 2.9 | 1.9 |
| Technology Revenue ($ in millions) | 1.1 | 0.8 |
| Net Loss ($ in millions) | (8.1) | (5.5) |
| Adjusted EBITDA ($ in millions) | (1.4) | (0.3) |
| Agent Licenses | 12,383 | 11,333 |
| Transactions Completed | 9,331 | 10,254 |
As of September 30, 2024, Fathom Holdings 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, for the same period in 2023 . The company’s financial performance highlights the need for continued investment and strategic focus on its Question Marks to leverage growth opportunities in the evolving real estate landscape.
In summary, Fathom Holdings Inc. (FTHM) is navigating a complex landscape characterized by both promising opportunities and significant challenges. The company’s Stars—notable growth in its agent network and a successful acquisition—highlight its potential for continued expansion. However, the Cash Cows provide stable revenue despite recent declines, while the Dogs reveal pressing issues such as net losses and decreased transaction volume. Lastly, the Question Marks signify areas of uncertainty, particularly around new revenue models and market volatility. Moving forward, strategic decisions will be crucial in leveraging strengths and addressing weaknesses to secure sustainable growth.
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.