Fathom Holdings, Inc. Q1 2024 Earnings Overview: Progress and Strategic Growth

May 14, 2024
8:00 am

In the first quarter of 2024, Fathom Holdings, Inc. continued its steadfast pursuit of strategic goals, achieving notable progress amidst seasonal fluctuations and ongoing industry challenges. Marco Fregenal, Fathom CEO, highlighted the company’s resilience and forward momentum. “Despite broader industry challenges, we are pleased with our progress toward achieving our 2024 goals,” said Fregenal. The company’s gross margin improved significantly, reaching 10.3% during the quarter, setting a robust foundation for future operational cash flow and positive EBITDA.

Financial Highlights

Fathom’s first quarter ended on a high note with several financial successes despite a dip in revenue. The gross margin’s increase to 10.3% marks a pivotal development in the company’s financial trajectory. Although revenues saw a downturn, the Adjusted EBITDA loss remained stable at approximately $1.5 million, consistent with the previous year’s figures of about $1.4 million. This stability is pivotal as Fathom strives to achieve and maintain a positive Adjusted EBITDA in subsequent quarters.

Strategic Developments

One of the quarter’s significant highlights was the sale of Dagley Insurance Agency, a strategic move that fortified Fathom’s financial position and supported its agent growth strategy. The transaction, completed for $15 million in cash, provided Fathom with crucial capital to navigate potential challenges and explore new opportunities within its core operations. 

Operational Achievements

Fathom’s real estate agent network experienced robust growth, expanding by 12.8% year-over-year to approximately 11,986 licensed agents. This growth underscores the strength of Fathom’s agent value proposition, which continues to attract high-quality teams and brokerages. 

Expansion and Promotions

In a strategic expansion, Fathom Realty launched operations in Rhode Island, further broadening its geographic footprint. Additionally, the company announced key promotions within its leadership team, elevating DeJane Kerr to Senior Vice President of Operations and Daniel Lang to Regional Director. These promotions are set to enhance operational efficiency and regional leadership.

New Ventures

Q1 also saw the establishment of Verus Title Elite, a strategic joint venture with top-producing agents and teams throughout Texas. This initiative is anticipated to significantly boost Verus’s and Fathom’s revenue and profitability, marking another strategic expansion to enhance the company’s market position.

Looking Forward

Moving forward in 2024, Fathom remains committed to leveraging its strengthened financial foundation and strategic initiatives to enhance shareholder value and expand its market presence. Fathom is poised for continued growth and success in the dynamic real estate market with a robust pipeline of opportunities and a compelling value proposition for agents.

Fathom is dedicated to providing transparent financial metrics, such as Adjusted EBITDA, to better illustrate the company’s financial health and operational performance. This measure, while non-GAAP, offers crucial insight into the company’s ongoing cash flow management and strategic financial planning. Fathom’s leadership remains optimistic about the future, driven by strategic initiatives and a clear vision for sustained growth and profitability.

Review the full press release HERE.