Fathom Holdings Inc. (NASDAQ:FTHM) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Despite strong revenue growth and agent count increase, the company faces challenges like economic headwinds, profitability issues, and competitive pressures. The lack of share repurchase and unclear guidance on partnerships weigh negatively. However, optimistic guidance on adjusted EBITDA profitability and transaction volume, along with successful cost-cutting and agent onboarding, balance the sentiment. Therefore, the stock price reaction over the next two weeks is likely to remain neutral, with potential for volatility due to market conditions and uncertainties.
Key Financial Performance
Total Revenue $93.1 million, a 32.1% increase year-over-year from $70.5 million, primarily due to a 36% increase in brokerage revenue and growth in ancillary businesses.
Brokerage Revenue $88.9 million, a 36% increase from $65.4 million year-over-year, attributed to the addition of My Home Group.
Gross Profit $8.1 million, up 13% year-over-year; excluding Dagley Insurance, gross profit growth was 34% from $6 million in Q1 2024.
Gross Profit Margin 8.7%, consistent year-over-year.
Net Loss $5.6 million or $0.24 per share, improved from a loss of $5.9 million or $0.31 per share in Q1 2024, primarily due to cost-saving efforts.
Adjusted EBITDA Loss $1.5 million, unchanged compared to Q1 2024.
Real Estate Transactions 9,715 transactions, a 26.1% increase from 7,703 transactions in Q1 2024, attributed to the addition of My Home Group.
Agent Count 14,715 licensed agents, a 22.8% increase from 11,986 agents in Q1 2024.
Mortgage Revenue $2.6 million, a 13% increase from $2.3 million in Q1 2024, due to an expected increase in mortgage starts.
Title Revenue $1 million, a 43% increase from $700,000 in Q1 2024, driven by organic growth.
Cash Position $8 million, including $2.7 million in net proceeds from a public offering in March.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Elevate Program: Elevate is a high margin growth program designed to enhance agent productivity, scale the platform, and drive long-term profitability. It offers comprehensive services including marketing, lead generation, transaction coordination, and coaching. Since its soft launch, over 120 agents have signed up.
Market Conditions: Mortgage rates are stabilizing, with a shift from a seller's market to a more balanced market. Housing inventory has increased significantly in key markets, leading to price reductions and modest year-over-year declines in home prices.
Cost-Cutting Initiatives: Fathom has reduced expenses by approximately $750,000 per quarter, contributing to a more efficient and scalable business model.
Agent Growth: The company ended the quarter with approximately 14,715 licensed agents, a 22.8% increase over Q1 of 2024.
Adjusted EBITDA Profitability: Fathom expects to achieve adjusted EBITDA profitability in the second quarter of 2025, marking a significant milestone.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Economic Headwinds: The company faces ongoing economic headwinds from elevated mortgage rates and shifting global economic uncertainty, which could impact business performance.
Market Conditions: The housing market is transitioning from a seller's market to a more balanced or buyer's market, leading to increased inventory and price reductions, which may affect revenue.
Regulatory Risks: The company acknowledges that forward-looking statements are subject to numerous conditions beyond its control, including regulatory issues outlined in SEC filings.
Competitive Pressures: Fathom Holdings is competing against traditional brokerages that may offer similar or higher commission splits, which could impact agent recruitment and retention.
Cost Management: While the company has implemented cost-cutting initiatives, ongoing management of expenses is crucial to achieving profitability, especially in a volatile market.
Profitability Challenges: Despite revenue growth, the company reported a net loss of $5.6 million, indicating challenges in achieving consistent profitability.
Agent Performance: The success of the Elevate program relies on agents meeting transaction requirements, which may pose a risk if agent performance does not align with expectations.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Elevate Program: Elevate is a high margin growth program designed to enhance agent productivity, scale the platform, and drive long-term profitability. It offers comprehensive services including marketing, lead generation, transaction coordination, and coaching. Since its soft launch, over 120 agents have signed up, with a goal of onboarding around 100 new agents per month by Q4.
Cost-Cutting Initiatives: Fathom has implemented cost-cutting initiatives, reducing expenses by approximately $750,000 per quarter, contributing to a more efficient and scalable business.
Agent Growth: The company entered Q1 2025 with approximately 14,715 licensed agents, a 22.8% increase over Q1 2024, indicating strong growth in agent count.
Adjusted EBITDA Profitability: Fathom expects to achieve adjusted EBITDA profitability in Q2 2025, marking a significant milestone.
Revenue Growth: Total revenue for Q1 2025 was $93.1 million, a 32.1% increase year-over-year, with expectations for continued growth driven by the Elevate program and increased transaction volume.
Market Outlook: While mortgage rates remain elevated, there are signs of stabilization in the housing market, which Fathom believes positions them well for future growth.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase Program: We did not purchase any shares in the first quarter under the stock repurchase plan.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you talk more about how Elevate enhances profitability on gross profit and adjusted deposit for transactions?
A:Because we’re charging 20% and because of the efficiencies of IntelliAgent, we are going to see a higher gross profit margin per transaction. We can see gross profit margins grow by 3-4x compared to our traditional gross profit margin.
Q:What is the cadence of the onboarding pipeline of agents?
A:We launched this internally about four weeks ago and quickly had about 120 agents sign up. We are onboarding them and will start marketing externally next week. We aim to onboard about 100 agents a month by the end of the year.
Q:Have you held discussions with similar sized agent teams to join Fathom post-launch of Elevate?
A:Yes, we have had many conversations with different brokerages and technology partners since launching Elevate. We expect to see more partnerships and announcements in the next 6 months.
Q:Review of Unclear Management Responses
A:Management did not provide specific details on the expected timeline for partnerships or the nature of the conversations with brokerages, which lacked clarity.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Agents commission
Brokers agent
CEO Fregenal
California Utah
Colorado Georgia
Colorado Kansas
Finance Weinmann
Finance result
Florida Colorado
Fregenal VP
Georgia inventory
Group agent
Group margin
Illinois
Teams Partners
Title
Transcript Holdings
VP Finance
Weinmann result
addition Home
agent increase
agent tool
analyst
coaching
cost effort
cost measure
detail Weinmann
engine
expectation day
housing
increase estate
initiative
lead
month program
offering
program Teams
stage
uncertainty
FTHM Transcript
Fathom Holdings Inc. (FTHM) Q3 2025 Earnings Call Transcript
Unknown11-11
The earnings call showed strong financial metrics with a 37.7% revenue increase and improved EBITDA, but the lack of share repurchases and a $2 million litigation expense weigh negatively. Strategic plans like Elevate and partnerships could support growth, yet uncertainties in real estate and execution risks persist. Q&A insights were positive with clear management responses, but no groundbreaking news. Given these mixed factors, the stock price is likely to remain stable, leading to a neutral sentiment.
Fathom Holdings Inc. (FTHM) Q2 2025 Earnings Call Transcript
Unknown8-12
The earnings report shows strong revenue growth and strategic partnerships, but competitive pricing pressures, high interest rates, and increased operating expenses are concerning. The absence of Q&A insights limits clarity on management's outlook. Given these mixed signals and the lack of market cap data, the stock is likely to remain neutral over the next two weeks.
Fathom Holdings Inc. (NASDAQ:FTHM) Q1 2025 Earnings Call Transcript
Unknown5-14
Despite strong revenue growth and agent count increase, the company faces challenges like economic headwinds, profitability issues, and competitive pressures. The lack of share repurchase and unclear guidance on partnerships weigh negatively. However, optimistic guidance on adjusted EBITDA profitability and transaction volume, along with successful cost-cutting and agent onboarding, balance the sentiment. Therefore, the stock price reaction over the next two weeks is likely to remain neutral, with potential for volatility due to market conditions and uncertainties.
Fathom Holdings, Inc. (FTHM) Q1 2025 Earnings Call Transcript
Positive5-13
The earnings call presents a positive outlook with strong revenue growth, improved agent growth, and effective cost management. The Elevate program is expected to significantly enhance profitability. However, economic headwinds and competitive pressures pose risks. The Q&A suggests optimism with potential partnerships, but lacks detail. The absence of share repurchases is a minor concern. Overall, the financial performance and strategic initiatives suggest a positive stock price movement, despite some uncertainties.
FTHM Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
