Fathom Holdings Inc. (FTHM): Business Model Canvas [11-2024 Updated]

Fathom Holdings Inc. (FTHM) is revolutionizing the real estate landscape with its innovative business model that integrates technology and personalized service. By leveraging strategic partnerships and a robust technology platform, Fathom offers a comprehensive suite of services that cater to various customer segments, including residential buyers, agents, and investors. Discover how their unique approach to real estate brokerage and ancillary services sets them apart in a competitive market.

Fathom Holdings Inc. (FTHM) - Business Model: Key Partnerships

Collaborations with Mortgage Lenders

Fathom Holdings collaborates with various mortgage lenders to enhance its service offerings in the real estate market. In the third quarter of 2024, revenue from the mortgage segment reached $2.9 million, a significant increase from $1.9 million in the same quarter of 2023. This partnership allows Fathom to provide integrated mortgage services to its clients, fostering a seamless transaction experience.

Alliances with Title Companies

Fathom has established alliances with title companies to streamline the closing process for real estate transactions. This collaboration supports Fathom’s goal of providing a comprehensive suite of services, which contributed to a 44% increase in revenue from ancillary businesses in Q3 2024, primarily driven by improved performance from its title services.

Partnerships with Technology Providers

Fathom Holdings leverages technology partnerships to enhance its operational efficiency and service delivery. The technology segment reported revenue of $1.1 million in Q3 2024, up from $0.8 million in Q3 2023. These partnerships are crucial for maintaining Fathom's competitive edge in the rapidly evolving real estate technology landscape.

Relationships with Real Estate Agents and Brokerages

The backbone of Fathom's business model is its extensive network of real estate agents. As of September 30, 2024, Fathom's real estate agent network grew by 9%, totaling approximately 12,383 agent licenses. This growth is supported by strategic recruiting efforts and innovative commission plans introduced in August 2024, which aim to enhance agent retention and attract new talent.

Partnership Type	Q3 2024 Revenue ($ million)	Q3 2023 Revenue ($ million)	Growth (%)
Mortgage Lenders	2.9	1.9	52.6
Title Companies	Included in Ancillary Revenue	Not Specified	44 (Overall Ancillary Revenue Growth)
Technology Providers	1.1	0.8	37.5
Real Estate Agents	Not Direct Revenue	Not Applicable	9 (Agent Growth)

Fathom Holdings Inc. (FTHM) - Business Model: Key Activities

Real estate brokerage services

Fathom Holdings Inc. operates as a technology-driven real estate brokerage. As of September 30, 2024, the company had approximately 12,383 agent licenses, reflecting a 9% growth from the previous year. In the third quarter of 2024, Fathom completed 9,331 real estate transactions, which is a decrease of 9% compared to the same quarter in 2023. The total revenue from the real estate brokerage segment was $78.6 million in Q3 2024, down from $88.2 million in Q3 2023 .

Development of technology solutions

Fathom leverages its proprietary cloud-based software, intelliAgent, to enhance its service offerings. In Q3 2024, technology revenue reached $1.1 million, up from $0.8 million in Q3 2023. This reflects a growing investment in technology to streamline operations and improve agent services .

Agent recruitment and training

The company focuses on strategic recruitment initiatives to attract new agents. The introduction of new commission plans, such as Fathom Max and Fathom Share, aims to enhance agent retention and recruitment. Fathom's goal is to achieve a return to a 25% annual growth rate in agent recruitment .

Marketing and promotional activities

Fathom invests in marketing to promote its brand and services. In Q3 2024, marketing expenses totaled $767,000, slightly down from $796,000 in Q3 2023. The company aims to leverage its marketing efforts to support agent recruitment and enhance market presence .

Key Activity	Q3 2024 Data	Q3 2023 Data
Agent Licenses	12,383	11,333
Completed Transactions	9,331	~10,000
Revenue from Brokerage	$78.6 million	$88.2 million
Technology Revenue	$1.1 million	$0.8 million
Marketing Expenses	$767,000	$796,000

Fathom Holdings Inc. (FTHM) - Business Model: Key Resources

Proprietary technology platform (intelliAgent)

Fathom Holdings utilizes its proprietary cloud-based technology platform, intelliAgent, which serves as a comprehensive real estate management system. This platform integrates residential brokerage, mortgage, title, and software-as-a-service (SaaS) offerings, enhancing operational efficiency and agent productivity.

Experienced management team

The management team at Fathom Holdings has a wealth of experience in the real estate and technology sectors. This team is pivotal in driving the company's strategic direction and operational execution. The leadership includes CEO Marco Fregenal, who has led various initiatives aimed at enhancing agent recruitment and retention.

Established agent network

As of September 30, 2024, Fathom Holdings' real estate agent network has grown to approximately 12,383 agent licenses, marking a 9% increase from the previous year (11,333 licenses). This established network is crucial for market penetration and service delivery.

Metric	Q3 2024	Q3 2023
Number of Agent Licenses	12,383	11,333
Total Transactions	9,331	10,200
Brokerage Revenue ($ millions)	78.6	88.2

Financial resources for acquisitions

Fathom Holdings has demonstrated its capability to leverage financial resources for growth through strategic acquisitions. In November 2024, the company acquired My Home Group, significantly enhancing its brokerage presence in Arizona and Washington. Additionally, in September 2024, Fathom issued senior secured convertible promissory notes amounting to $5.0 million to bolster its financial positioning.

Acquisition	Date	Details
My Home Group	November 1, 2024	Real estate agency with over 2,200 agents
Convertible Promissory Notes	September 2024	Issued for $5.0 million

Fathom Holdings Inc. (FTHM) - Business Model: Value Propositions

Integrated real estate services (brokerage, mortgage, title)

Fathom Holdings Inc. provides a comprehensive suite of integrated real estate services, combining brokerage, mortgage, and title services under one umbrella. For the third quarter of 2024, the company reported total revenue of $83.7 million, with $78.6 million derived from its real estate brokerage segment, reflecting a decrease from $88.2 million in the same quarter of the previous year. The mortgage segment also showed growth, generating $2.9 million in revenue, up from $1.9 million in Q3 2023.

Flexible commission structures for agents

Fathom offers flexible commission structures designed to attract and retain agents. The introduction of the Fathom Max and Fathom Share commission plans in August 2024 aims to enhance agent recruitment and retention. This strategic initiative is part of Fathom's commitment to providing competitive compensation options that align with agents' needs and market dynamics.

Access to advanced technology tools

Fathom employs proprietary technology, such as the intelliAgent platform, which integrates various services and provides agents with advanced tools to manage their operations effectively. The technology segment generated $1.1 million in revenue in Q3 2024, up from $0.8 million in the same period last year. This technological infrastructure supports agents in delivering superior service to clients while enhancing their productivity.

Strong support for agent success and growth

The company is dedicated to fostering agent success through comprehensive support and resources. As of September 30, 2024, Fathom's agent network grew by 9%, reaching approximately 12,383 agent licenses. This growth is attributed to Fathom's focus on strategic recruiting efforts and its commitment to creating an environment that nurtures agent development, ultimately aiming for a 25% annual growth rate in agent recruitment.

Value Proposition	Details	Q3 2024 Revenue ($ million)	Q3 2023 Revenue ($ million)
Integrated Real Estate Services	Brokerage, mortgage, and title services	78.6	88.2
Flexible Commission Structures	Fathom Max and Fathom Share plans	N/A	N/A
Access to Advanced Technology Tools	Proprietary intelliAgent platform	1.1	0.8
Support for Agent Success and Growth	Comprehensive resources and training	N/A	N/A

Fathom Holdings Inc. (FTHM) - Business Model: Customer Relationships

Personalized support for agents

Fathom Holdings Inc. places a strong emphasis on personalized support for its agents. As of September 30, 2024, Fathom's real estate agent network grew to approximately 12,383 agent licenses, a 9% increase from 11,333 licenses a year earlier. The company has implemented innovative commission plans, such as Fathom Max and Fathom Share, to provide tailored support and incentives for agents. This focus on personalized service is designed to enhance agent satisfaction and retention, contributing to Fathom's goal of returning to 25% annual agent growth.

Ongoing training and development programs

Fathom Holdings prioritizes continuous training and development for its agents. The company offers workshops and resources to equip agents with the necessary skills to navigate the evolving real estate landscape. In 2024, Fathom's operational support expenses reached $7.1 million, reflecting its commitment to enhancing agent capabilities. This investment in training not only improves agent performance but also strengthens customer relationships by ensuring agents can provide excellent service to clients.

Community engagement and networking events

Fathom actively engages in community outreach and hosts networking events to foster relationships among agents and clients. By hosting these events, Fathom strengthens its brand presence and enhances the community connection. The company is committed to integrating its services with local markets, which is evident from its strategic acquisition of My Home Group, a real estate agency with over 2,200 agents, enhancing its footprint in Arizona and Washington.

Feedback mechanisms for continuous improvement

Fathom utilizes feedback mechanisms to facilitate continuous improvement in its customer relationships. The company actively seeks input from its agents and clients to refine its service offerings. The introduction of new revenue share models in 2024 is an example of how feedback directly influences strategic decisions. This proactive approach to gathering and implementing feedback supports Fathom's objective of enhancing overall customer satisfaction and loyalty.

Category	Details
Agent Network Size	12,383 agent licenses as of September 30, 2024
Year-over-Year Growth	9% increase from 11,333 licenses in 2023
Operational Support Expenses	$7.1 million in 2024
Strategic Acquisitions	Acquisition of My Home Group with over 2,200 agents
New Revenue Share Models	Introduced in 2024 to enhance agent recruitment and retention

Fathom Holdings Inc. (FTHM) - Business Model: Channels

Direct sales through real estate agents

Fathom Holdings operates a robust network of real estate agents, which has grown by 9% to approximately 12,383 agent licenses as of September 30, 2024, compared to about 11,333 licenses in the previous year. The company completed 9,331 transactions in the third quarter of 2024, reflecting a 9% decrease from the prior year, attributed to higher home prices and mortgage rate uncertainties. The brokerage segment generated $78.6 million in revenue during the same period.

Online platforms for service offerings

Fathom utilizes its proprietary cloud-based platform, intelliAgent, to provide integrated real estate services, including residential brokerage, mortgage, title, and SaaS offerings. The technology segment reported revenues of $1.1 million in the third quarter of 2024, up from $0.8 million in the same period of 2023. The online platform enhances operational efficiency and facilitates communication between agents and clients, contributing to the company’s overall service delivery.

Social media and digital marketing

Fathom leverages social media and digital marketing strategies to attract both agents and clients. Recent marketing expenditures totaled $767,000 in the third quarter of 2024. The company actively promotes its agent commission plans, such as Fathom Max and Fathom Share, through various digital channels, aimed at enhancing agent recruitment and retention. This digital approach is crucial in a competitive real estate market, especially as the company seeks to increase its market presence following strategic acquisitions.

Industry events and trade shows

Participation in industry events and trade shows is a vital channel for Fathom to connect with potential agents and clients. The company actively engages in networking opportunities to showcase its services and recruit talent. Attendance at these events helps Fathom to maintain visibility in the real estate sector, fostering relationships that can lead to new business opportunities and partnerships.

Channel Type	Details	Revenue Contribution (Q3 2024)	Growth Rate (Year-over-Year)
Direct Sales	Real estate agents network	$78.6 million	9%
Online Platforms	intelliAgent SaaS	$1.1 million	37.5%
Social Media Marketing	Digital marketing efforts	$767,000	N/A
Industry Events	Networking and recruitment	N/A	N/A

Fathom Holdings Inc. (FTHM) - Business Model: Customer Segments

Residential real estate buyers and sellers

Fathom Holdings Inc. serves a diverse group of residential real estate buyers and sellers. In the third quarter of 2024, Fathom completed approximately 9,331 transactions, reflecting a decrease of about 9% compared to the same quarter in 2023. The decline in transactions was attributed to higher home prices and uncertainty surrounding mortgage interest rates.

Real estate agents and brokers

Fathom's network of real estate agents and brokers is a critical customer segment. As of September 30, 2024, Fathom had approximately 12,383 agent licenses, representing a 9% growth from 11,333 licenses a year earlier. The company has introduced new commission plans, such as Fathom Max and Fathom Share, to attract and retain agents.

Investors in real estate markets

Real estate investors represent a significant segment for Fathom, as they seek opportunities in a fluctuating market. The company's integrated services, including brokerage and mortgage offerings, appeal to investors looking for streamlined solutions. Fathom's revenue from its ancillary businesses, which includes services for investors, increased by 44% year-over-year, underscoring its commitment to this segment.

Mortgage and title service clients

Fathom also targets clients seeking mortgage and title services. In the third quarter of 2024, revenue from the mortgage segment reached $2.9 million, up from $1.9 million in the same period of 2023. This growth indicates increasing demand for comprehensive real estate services that include financing and title support, critical for home buyers and investors alike.

Customer Segment	Key Metrics	Revenue (Q3 2024)	Transaction Volume
Residential Real Estate Buyers and Sellers	9,331 transactions (down 9% YoY)	N/A	9,331 transactions
Real Estate Agents and Brokers	12,383 agent licenses (up 9% YoY)	N/A	N/A
Investors in Real Estate Markets	44% increase in ancillary revenue	N/A	N/A
Mortgage and Title Service Clients	$2.9 million (up from $1.9 million YoY)	$2.9 million	N/A

Fathom Holdings Inc. (FTHM) - Business Model: Cost Structure

Commission payments to agents

Fathom Holdings Inc. incurred commission and other agent-related costs of $74.2 million for the third quarter of 2024, compared to $83.8 million in the same period of 2023. This reduction reflects a decrease in gross commission income, which amounted to $78.6 million in Q3 2024 versus $88.2 million in Q3 2023.

Technology development and maintenance costs

The technology and development expenses for Fathom Holdings totaled $2.0 million in the third quarter of 2024, up from $1.8 million in Q3 2023. This increase is indicative of the company's ongoing investment in enhancing its technology-driven real estate services.

Marketing and advertising expenses

Marketing expenses for Fathom Holdings were approximately $767,000 in Q3 2024, slightly down from $796,000 in Q3 2023. This reflects the company's strategy to optimize its marketing spend while focusing on agent recruitment and retention.

Operational costs including staffing and support

Operational costs, which include staffing and support, totaled $2.3 million in the third quarter of 2024, compared to $1.9 million in Q3 2023. Additionally, general and administrative expenses were $8.7 million in Q3 2024, down from $9.8 million in the same quarter of the previous year.

Cost Category	Q3 2024	Q3 2023
Commission payments to agents	$74.2 million	$83.8 million
Technology development and maintenance costs	$2.0 million	$1.8 million
Marketing and advertising expenses	$767,000	$796,000
Operational costs (staffing and support)	$2.3 million	$1.9 million
General and administrative expenses	$8.7 million	$9.8 million

Fathom Holdings Inc. (FTHM) - Business Model: Revenue Streams

Commissions from Real Estate Transactions

The primary revenue stream for Fathom Holdings Inc. is generated through commissions from real estate transactions. In the third quarter of 2024, the company reported gross commission income of $78.6 million, a decrease from $88.2 million in the same quarter of 2023. This decline is attributed to a 9% decrease in completed transactions, totaling 9,331 in Q3 2024 compared to the previous year. The overall gross profit percentage for the brokerage business improved to 5.7% from 5.1% year-over-year.

Fees from Ancillary Services (Mortgage, Title)

Fathom also earns revenue from ancillary services, which include mortgage and title services. In Q3 2024, revenue from the mortgage segment was reported at $2.9 million, up from $1.9 million in Q3 2023, reflecting a 53% increase. Additionally, revenue from other service-related fees was approximately $5.2 million, contributing to the overall ancillary services revenue growth of 44%. This growth is primarily driven by improved performance in the mortgage and title businesses.

Revenue Stream	Q3 2024 Revenue ($ millions)	Q3 2023 Revenue ($ millions)	Year-over-Year Growth (%)
Gross Commission Income	78.6	88.2	-6.8%
Mortgage Revenue	2.9	1.9	53%
Other Service Revenue	5.2	5.3	-1.9%

Technology Subscription Services

Fathom Holdings provides technology subscription services, contributing to its revenue model. In Q3 2024, the revenue from technology services was reported at $1.1 million, an increase from $0.8 million in Q3 2023. This reflects a growing demand for Fathom's proprietary technology solutions, which support real estate transactions and agent operations.

New Revenue Share Models for Agents

In 2024, Fathom introduced innovative revenue share models aimed at enhancing agent recruitment and retention. The new commission plans, named Fathom Max and Fathom Share, are designed to increase agent earnings and promote sustainable growth. While the specific financial impact of these new models has yet to be fully realized, they are anticipated to drive future revenue growth by attracting and retaining more agents within the Fathom network.

As of September 30, 2024, Fathom's real estate agent network had grown to approximately 12,383 agents, a 9% increase from 11,333 agents in the previous year. This growth strategy is crucial for enhancing the company’s market presence and increasing transaction volume.

Updated on 16 Nov 2024

Resources:

1. 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.
2. 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.