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Fathom Holdings Financial Results for 2024

Fathom Holdings Inc. (Nasdaq: FTHM), a leading provider of technology-driven real estate services, released their financial results for the fourth quarter and full year ending December 31, 2024. The company reported significant growth, indicating a strong performance amidst a tumultuous economic landscape.

For Q4 2024, Fathom achieved an impressive 24% increase in total revenue, reaching $91.7 million, compared to $74.1 million in Q4 2023. This growth can be attributed to a 26.3% rise in brokerage revenue, which climbed to $87.7 million, and a notable 92% increase in title service revenue, which rose to $1.3 million. The company's gross profit for the quarter also saw a positive shift, increasing by 25% to $6.7 million from the previous year's $5.3 million.

However, challenges remain. The residential real estate market faced persistent headwinds in Q4, primarily due to unexpected interest rate increases following the Federal Reserve's past decisions. These challenges were exacerbated by one-time costs totaling $1.3 million, which impacted both the net loss figures and the Adjusted EBITDA loss. CEO Marco Fregenal noted these obstacles, stating that despite the growth, the entire industry could continue to face difficulties entering 2025.

Looking ahead, Fathom remains optimistic about its potential for recovering to historical growth rates of 25%, supported by anticipated increases in revenue from their recent acquisition of My Home Group (MHG) and efforts to reduce operational costs by over $2 million annually. Fregenal emphasized the company's ongoing commitment to innovation and its goals of achieving EBITDA positivity by Q2 2025.

Key Insights from the Full Year 2024 Results

For the entire year of 2024, total revenue slightly decreased by 3%, totaling $335 million, which is a reduction from $345 million in 2023. This decline primarily stemmed from a 2.2% decrease in total real estate transactions, totaling approximately 37,000 transactions, a reduction compared to the previous period. The GAAP net loss for 2024 was $21.6 million, a slight improvement over the $24.0 million loss recorded in 2023.

In terms of business strategy, Fathom made several significant moves throughout the year. They executed a notable acquisition of MHG, broadening their agent network and enhancing their service offerings in Arizona and Washington. Additionally, substantial advancements were seen in the technology sector, with the launch of Verus Title Elite, which aims to boost profitability and market presence.

Fathom also introduced innovative plans for agent commissions to strengthen recruitment efforts, including Fathom Max and Fathom Share, promoting long-term growth and improved profitability. These initiatives reflect a strategic shift that is aimed at solidifying Fathom’s competitive positioning in the dynamic real estate market.

Financial Outlook and Future Plans

As Fathom approaches the first quarter of 2025, the company has chosen to withhold guidance, instead opting to reassess metrics moving into Q2. Ongoing challenges from the national economic landscape will require vigilance and adaptability. Management continues to be proactive, emphasizing cost management and alternative revenue streams to drive future growth.

The ability to navigate these complexities will be crucial as Fathom Holdings Inc. seeks to establish a resilient foothold in a fluctuating market while providing valuable services to their agents and customers alike.

Overall, even amidst headwinds, Fathom Holdings Inc. demonstrates robust ambitions, innovative strategies, and a commitment to achieving sustainable growth for its stakeholders as they move deeper into 2025.