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Fathom Holdings Inc. (FTHM)·Q1 2025 Earnings Summary

Executive Summary

  • Fathom delivered strong top-line growth: revenue of $93.1M (+32.1% y/y) and slightly above Q4 ($91.7M), beating S&P consensus by ~12% on revenue; EPS was a loss of $0.24, better than Q4’s $0.29 loss but wider than the S&P consensus loss of $0.13 [functions.GetEstimates]*.
  • Management reaffirmed a near-term profitability milestone, stating they “expect to be EBITDA positive in Q2 2025,” while formally suspending 2025 guidance as a new Strategy Committee refines the outlook .
  • Execution drivers: Elevate launched in April with >120 agents signed up in four weeks and a goal to onboard ~100/month by Q4; ancillary services (Title +43% y/y; Mortgage +13% y/y) supported gross profit expansion .
  • Key catalyst: Revenue beat, visible Elevate traction, and the reiterated Q2 EBITDA-positive target could re-rate sentiment as investors look for proof of operating leverage in Q2 and attach-rate gains in mortgage/title .

What Went Well and What Went Wrong

  • What Went Well

    • Material revenue beat and mix tailwind: $93.1M (+32.1% y/y) vs S&P consensus $83.0M (≈+12% beat), with Brokerage +35.9% y/y and Title +43% y/y supporting growth [functions.GetEstimates]*.
    • Brokerage unit economics improving: Real Estate division gross margin improved to 7.1% in Q1; leadership also highlighted efficiency gains and cost reductions of ~$0.75M per quarter run-rate .
    • Elevate momentum: >120 agents signed within 4 weeks; management targets ~100 new Elevate agents per month by Q4 and expects 3–4x higher gross profit margin per Elevate closing vs traditional model .

  • What Went Wrong

    • EPS missed S&P consensus: reported diluted EPS of $(0.24) vs S&P consensus $(0.13); net loss remains substantial despite y/y improvement [functions.GetEstimates]*.
    • Adjusted EBITDA remained negative at $(1.5)M, though improved sequentially vs Q4 $(2.9)M; EBITDA consensus (S&P) was also negative, reflecting ongoing profitability headwinds [functions.GetEstimates]*.
    • Formal guidance suspended for 2025 as the Board’s Strategy Committee reassesses outlook; while Q2 EBITDA-positive target stands, lack of detailed revenue/margin guidance reduces near-term visibility .

Financial Results

Headline results vs prior periods and S&P Global consensus

MetricQ3 2024Q4 2024Q1 2025Q1 2025 S&P Consensus
Revenue ($USD Millions)$83.7 $91.7 $93.1 $83.0 [functions.GetEstimates]*
Diluted EPS ($)$(0.40) $(0.29) $(0.24) $(0.13) [functions.GetEstimates]*

Profitability and gross profit

MetricQ3 2024Q4 2024Q1 2025
Adjusted EBITDA ($USD Millions)$(1.45) $(2.90) $(1.47)
Gross Profit ($USD Millions)—$6.7 $8.1

Operating KPIs

KPIQ3 2024Q4 2024Q1 2025
Transactions (#)9,331 9,903 ~9,715
Agent Licenses (#, period-end)~12,383 ~14,300 ~14,715

Segment revenue ($USD Millions)

SegmentQ3 2024Q4 2024Q1 2025
Real Estate Brokerage$78.6 $87.7 $88.9
Mortgage$2.9 $2.0 $2.6
Technology$1.1 $1.1 $1.1
Corporate & Other$1.1 $0.9 $0.5
Total$83.7 $91.7 $93.1

Notes:

  • S&P Global consensus values marked with an asterisk; Values retrieved from S&P Global.
  • Company-reported Q1 2025 GAAP net loss $(5.6)M; diluted EPS $(0.24) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Guidance (overall)FY 2025Withheld for Q1 2025 pending reassessment Suspended while Strategy Committee refines 2025 forecast Lowered visibility (withheld → suspended)
Adjusted EBITDA trajectoryQ2 2025“Encouraged” about reaching EBITDA positive in Q2 2025 “Expecting to be EBITDA positive in Q2 2025” Maintained/strengthened phrasing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Macro/housing conditionsQ4: Rates spiked late 2024; inventory rising; potential H2 2025 volume lift if rates ease . Q3: Market headwinds pressured brokerage revenue .Elevated but stabilizing rates; inventory up across key markets; increased price reductions; positioning to benefit from modest activity improvement .Improving setup from inventory/rates; cautious optimism
Elevate (agent concierge)Q4: Forthcoming agent-focused program referenced .Launched in April; >120 sign-ups in 4 weeks; 20% split; targeted 100/month onboardings by Q4; potential 3–4x gross profit per Elevate closing .New growth lever with early traction
Ancillary services (Mortgage/Title)Q4: Mortgage +11% y/y; Title +86% y/y; attach-rate initiatives (ambassador) . Q3: Ancillary rev +44% y/y .Mortgage +13% y/y; Title +43% y/y in Q1; file starts up in April; margin accretive .Continued outperformance vs brokerage
My Home Group integrationQ3/Q4: Acquisition closed 11/1/24; major contributor to brokerage revenue and transactions .Cited as a key driver of y/y brokerage growth .Integration supporting scale
Cost disciplineQ4: Targeting >$2M annualized reductions .Additional ~$750k per quarter run-rate savings discussed .Incremental savings enhancing operating leverage
Regulatory/legal (NAR settlement)Q3/Q4: Accrued $2.95M related to settlement; timing laid out through 2026 .No new accruals in Q1 noted; ongoing monitoring .Largely in background; watch cash timing

Management Commentary

  • Strategic focus: “We expect Fathom’s positive momentum to continue. We are, in fact, currently expecting to be EBITDA positive in Q2 of 2025… focused on… higher gross profit from ancillary services… efficiencies in the My Home Group operation, and higher margins from the recently launched Elevate program.” – CEO Marco Fregenal .
  • Elevate economics: “Agents who enroll contribute 20% commission split… we believe… gross profit margin [per transaction] may grow by 3x to 4x compared to our traditional gross profit margin.” – CEO Marco Fregenal .
  • Operating discipline: “We… continue our cost-cutting initiatives, reducing expenses by approximately $750,000 per quarter going forward.” – CEO Marco Fregenal .
  • Mix and attach: “Together, we believe [Mortgage and Title] are enhancing our margins, increase agent retention and contributing to a more diverse and durable revenue stream.” – CEO Marco Fregenal .

Q&A Highlights

  • Elevate profitability and ramp: Management reiterated projected 3–4x gross profit margin per Elevate transaction vs traditional and a controlled ramp to ~100 agents/month by Q4 to preserve service quality; early demand strong with ~120 sign-ups within four weeks .
  • Pipeline and partnerships: Post-Elevate launch, increased discussions with brokerages/partners to join/license Elevate; potential for more walkovers into Q3 and partnership announcements over the next 6–18 months .
  • Ancillary attach: Emphasis on programs (e.g., ambassador) to accelerate Mortgage/Title adoption; expectation for those lines to outgrow brokerage and lift gross profit .

Estimates Context

  • Versus S&P Global consensus: Revenue $93.1M vs $83.0M consensus (≈+12% beat); Diluted EPS $(0.24) vs $(0.13) consensus (wider loss); S&P EBITDA consensus $(2.51)M vs S&P “actual” $(2.98)M; Company-reported Adjusted EBITDA was $(1.47)M [functions.GetEstimates]*.
  • Implications: Street likely raises revenue forecasts on volume/agent growth and Elevate adoption, but EPS paths may remain conservative until Q2 EBITDA-positive proof point and clearer 2025 guidance reinstatement .

Note: Asterisked values are from S&P Global; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Clear top-line momentum with a meaningful revenue beat; ancillary services and MHG integration are lifting scale and mix .
  • The Q2 2025 EBITDA-positive target is a near-term proof point; hitting it could shift the narrative toward sustainable profitability and multiple expansion .
  • Elevate is the core margin lever: early adoption is strong, unit economics are superior (20% split, 3–4x GP/transaction), and external licensing could add optionality .
  • Formal guidance suspension reduces visibility, but the Strategy Committee and Q2 milestone provide upcoming checkpoints; monitor reinstatement timing and depth of metrics (revenue, margins, OpEx) .
  • Watch operating KPIs: agent adds, Elevate onboarding cadence, transaction growth, and ancillary attach (April file starts trending positively) for leading indicators into Q2/Q3 .
  • Balance sheet stable post March equity raise ($~2.7M net proceeds); cash $8.0M at Q1-end; warehouse lines fund mortgage inventory as volumes rise .
  • Litigation settlement accruals are largely recorded; focus shifts to execution, cost discipline, and Elevate scale to drive sustained margin improvement .

Appendix: Additional Data Points

  • Q1 2025 highlights: Gross profit $8.1M (+13% y/y); net loss $(5.6)M; diluted EPS $(0.24); Adjusted EBITDA $(1.47)M .
  • Q4 2024 reference: Revenue $91.7M; gross profit $6.7M; net loss $(6.2)M; diluted EPS $(0.29); Adjusted EBITDA $(2.90)M .
  • Q3 2024 reference: Revenue $83.7M; diluted EPS $(0.40); Adjusted EBITDA $(1.45)M .

Citations:

  • Q1 2025 8-K/Press Release: ; Press Release duplicate: .
  • Q1 2025 Earnings Call Transcript: .
  • Q4 2024 Press Release/8-K and Call: .
  • Q3 2024 Press Release/8-K: .
  • Elevate launch PR: .
  • Registered direct offering PR: .
  • S&P Global consensus and actuals for estimates: [functions.GetEstimates]*.