Fathom reported a full-year loss of $24 million during its fourth-quarter and 2023 earnings call Thursday afternoon, with executives saying the brokerage’s volume fell less than the overall industry decline.
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Fathom Realty’s agent network added more than 1,400 agents last year and continues to make progress toward a return to profitability despite raising agent transaction fees, brokerage executives said Thursday when reporting fourth-quarter and 2023 results.
Reported fourth-quarter revenue of $8.4 million, Net loss of $24 million in 2023The Cary, North Carolina-based fixed-fee brokerage firm was able to contribute positively to those numbers. Driven by rising interest rates and home prices, transaction volume fell 15% to 38,139, below the industry average of 19%.
Marco Fregnall
Revenue fell 16.4% from a year earlier to $345.2 million, as Fathom also provides mortgages, titles, insurance and technology.
Adjusted EBITDA losses totaled $4.1 million in 2023, down from $12.2 million last year.
Marco Fregenal, CEO of Fathom, said: “While the residential real estate industry remains challenging, we firmly believe our future remains bright, and by continuing to expand our agent base and optimize our cost structure, we will position Fathom as the industry rebounds. and continued success.” in a statement. “We believe we will continue to attract high-quality agency teams and brokerage firms as our agency value proposition remains compelling in the current environment and our pipeline of opportunities remains strong.”
However, Fathom said “guidance for the coming quarters will not be provided as uncertainty remains over the timing of expected rate cuts and other macroeconomic factors such as changes in inflation and its impact on homebuyers.”
Fathom’s stockThe company, which has traded as low as $2.10 and as high as $8.20 over the past 12 months, fell 4% to $2.37 in after-hours trading following Thursday’s earnings report.
Fathom will increase agency transaction fees by 10% to $550 for the first 15 completed transactions starting in 2023. After the first 15 transactions, agents now pay $150, up from $99 before the price increase.
But that didn’t stop Fathom’s real estate agent network from growing 14% in 2023 to 11,795 agents, with agent headcount increasing by 462 in the fourth quarter and 1,425 for the full year.
In December last year, Fathom announced that it hoped to bring in another $3 million in revenue this year by increasing agency fees for the second consecutive year.
The revised 2024 agent commission structure, effective Jan. 1, adds a new “high value property fee” for sales of properties worth more than $600,000 and increases Fathom’s annual agent fee by $100 to $700.
Fathom Holdings revenue sources, 2022 and 2023
Source: Fathom Holdings earnings reports.
Fathom Realty’s parent company, Fathom Holdings, generates more than 90% of its revenue from real estate brokerage operations, but it is also a provider of mortgages, title insurance, insurance and agent technology.
Earlier this week, Fathom Holdings declare Its subsidiary, Verus Title Inc., has a joint venture with various teams and high-volume Fathom agents throughout Texas.
The joint venture, Verus Title Elite Texas LLC, will be formed on April 1, and Fathom plans to expand the new joint venture model to additional states this year. The goal is to have joint ventures in most of the 30 states where Verus Title operates by the end of 2025.
Fregenal said the joint venture will provide a higher level of support for Fathom agents “and further enhance our already growing attach rates in Texas.”
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