Fathom Holdings Experiences Preliminary Fourth Quarter and Full 12 months 2022 Outcomes; Achieves Robust 12 months-over-12 months Income, Agent, and Transaction Progress

CARY, N.C., March 13, 2023 /PRNewswire/ — Fathom Holdings Inc. (Nasdaq: FTHM) (“Fathom” or the “Firm”), a nationwide, technology-driven, end-to-end actual property companies platform integrating residential brokerage, mortgage, title, insurance coverage, and SaaS choices for brokerages and brokers, at present reported preliminary unaudited monetary outcomes for the fourth quarter and full yr ended December 31, 2022.

Full 12 months 2022 Monetary and Operational Highlights

• Accomplished roughly 44,700 actual property transactions in 2022, up roughly 14% in comparison with 2021. The double-digit share enhance in transactions on Fathom’s platform compares favorably to your entire U.S. residential actual property market, which noticed total transactions decline 18% in 2022 (Supply: Nationwide Affiliation of Realtors as of December 31, 2022).
• Fathom’s actual property agent community grew roughly 28% to 10,370 brokers at December 31, 2022, up from 8,100 at December 31, 2021.
• Complete income for the complete yr of 2022 is predicted to vary between $411.0 million and $413.0 million, a 24% to 25% enchancment in comparison with $330.2 million in 2021.
• GAAP internet loss for the complete yr of 2022 is predicted to vary between $28.6 million and $27.6 million, which compares to a lack of $12.5 million in 2021. The elevated losses occurred primarily as a result of unprecedented fast enhance in rates of interest and the following decline in houses gross sales and mortgage functions.
• Adjusted EBITDA, a non-GAAP measure, for the complete yr of 2022 is predicted to vary between a lack of $12.7 million and $12.2 million, which compares to a lack of $8.2 million in 2021. For vital disclosures about this non-GAAP measure, see “Non-GAAP Monetary Measure” beneath.

Administration Commentary
“Regardless of the difficult macro surroundings and subdued actual property market situations within the fourth quarter, Fathom delivered strong ends in year-over-year income development, agent development, and transaction development relative to the home outcomes of our public friends who’ve reported to this point and much more so compared to the true property trade as a complete. These outcomes validate our perception that our mannequin gives the best worth to brokers in all market situations,” mentioned Fathom CEO Joshua Harley. “We consider that our aggressive agent fee construction together with our enhanced agent referral incentive program, which we applied within the third quarter of 2021, present a aggressive worth proposition to assist appeal to brokers, develop their e-book of enterprise, and put extra money of their pockets, even in a market downturn. Traditionally, the common agent who joins Fathom will increase their gross sales transactions by 49% inside 4 years of becoming a member of, demonstrating the ability of our mannequin.”

“The fourth quarter was tough for the true property trade and Fathom was not proof against the pressures throughout our trade. I began Fathom 12 years in the past over the past housing recession as a result of I needed to construct an organization that might endure all market environments whereas empowering brokers to understand their full potential,” continued Harley. “As an asset-light enterprise mannequin constructed on know-how, we’ve the power to thrive in a down market and obtain profitability at a smaller variety of transactions than any of our public friends have been capable of obtain. Furthermore, there are over 750 brokerages licensing our know-how and knowledge, touching over 100,000 brokers, and serving to to distinguish our know-how throughout the trade.”

“Trying forward, we stay centered on reaching whole firm Adjusted EBITDA breakeven within the second quarter of 2023 and producing constructive money circulation within the third quarter of 2023, even in at present’s market surroundings. We proceed to establish alternatives to streamline our overhead and, as of December 31, 2022, have already lowered bills by roughly $3.0 million per quarter which we are going to see the complete good thing about within the first quarter of 2023. Importantly, these value reductions have been made with out sacrificing our potential to proceed to develop. That is effectively forward of our preliminary plan to scale back bills by $1.5 million per quarter. We consider that these value discount initiatives, mixed with the rise in agent transaction charges that turned efficient in January of this yr have positioned our enterprise for worthwhile development and we stay on observe to succeed in Adjusted EBITDA breakeven within the second quarter of 2023.”

Preliminary Fourth Quarter and Full 12 months 2022 Monetary Outcomes
Primarily based on preliminary unaudited outcomes, the Firm expects whole income for the complete yr of 2022 to vary between $411.0 million and $413.0 million, which compares to $330.2 million in 2021. Complete income for the fourth quarter of 2022 is predicted to vary between $82.0 million and $84.0 million. This compares to $111.3 million of income within the third quarter of 2022 and $95.5 million of income within the fourth quarter of 2021.

Towards the backdrop of a difficult macro surroundings, Fathom accomplished roughly 44,700 actual property transactions in full yr 2022, a 14% enhance relative to the prior yr. The Firm accomplished roughly 9,250 actual property transactions within the fourth quarter of 2022, a lower of 14% from the identical quarter of 2021, though an enchancment over its public friends who’ve reported and the true property trade as a complete.

Fathom’s actual property agent community grew roughly 28% to 10,370 brokers at December 31, 2022, up from 8,100 at December 31, 2021.

GAAP internet loss for the complete yr of 2022 is predicted to vary between $28.6 million and $27.6 million, which compares to a lack of $12.5 million in 2021. GAAP internet loss for the fourth quarter of 2022 is predicted to vary between $10.9 million and $9.9 million. This compares to a internet lack of $6.0 million within the third quarter of 2022 and a internet lack of $3.6 million within the fourth quarter of 2021.

Adjusted EBITDA, a non-GAAP measure, for the complete yr of 2022 is predicted to vary between a lack of $12.7 million and $12.2 million, which compares to a lack of $8.2 million in 2021. Adjusted EBITDA for the fourth quarter of 2022 is predicted to vary between a lack of $6.4 million and $5.9 million. This compares to a lack of $2.3 million within the third quarter of 2022 and a lack of $2.0 million within the fourth quarter of 2021.

The Firm expects to launch monetary outcomes for the complete yr and fourth quarter ended December 31, 2022 after the market shut on March 22, 2023.

Convention Name
Fathom administration will maintain a convention name on Wednesday, March 22, 2023 at 5:00 p.m. Japanese time (2:00 p.m. Pacific time) to debate its monetary outcomes for the fourth quarter and full yr ended December 31, 2022.

Name Date: Wednesday, March 22, 2023
Time: 5:00 p.m. Japanese time (2:00 p.m. Pacific time)
U.S. dial-in: 833-685-0908
Worldwide dial-in: 412-317-5742

Please name the convention phone quantity 5 minutes previous to the beginning time. An operator will register your identify and group.

A dwell audio webcast of the convention name might be out there in listen-only mode concurrently and out there through the investor relations part of the Firm’s web site at www.FathomInc.com.

A phone replay of the decision might be out there by means of March 29, 2023.

U.S. replay dial-in: 877-344-7529
Worldwide replay dial-in: 412-317-0088
Replay ID: 2712492

About Fathom Holdings Inc.
Fathom Holdings Inc. is a nationwide, technology-driven, actual property companies platform integrating residential brokerage, mortgage, title, insurance coverage, and SaaS choices to brokerages and brokers by leveraging its proprietary cloud-based software program, intelliAgent. The Firm’s manufacturers embody Fathom Realty, Dagley Insurance coverage, Embody Lending, intelliAgent, LiveBy, Actual Outcomes, and Verus Title. For extra info, go to www.FathomInc.com.

Non-GAAP Monetary Measure
To complement Fathom’s consolidated monetary statements, that are ready and introduced in accordance with GAAP, the Firm makes use of Adjusted EBITDA, a non-GAAP monetary measure, to know and consider our core working efficiency. This non-GAAP monetary measure, which can be totally different than equally titled measures utilized by different corporations, is introduced to boost buyers’ total understanding of our monetary efficiency and shouldn’t be thought of an alternative choice to, or superior to, the monetary info ready and introduced in accordance with GAAP.

Fathom defines the non-GAAP monetary measure of Adjusted EBITDA as internet revenue (loss), excluding different revenue and expense, revenue taxes, depreciation and amortization, share-based compensation expense, and transaction-related value.

Fathom believes that Adjusted EBITDA gives helpful details about the Firm’s monetary efficiency, enhances the general understanding of its previous efficiency and future prospects, and permits for larger transparency with respect to a key metric utilized by Fathom’s administration for monetary and operational decision-making. Fathom believes that Adjusted EBITDA helps establish underlying developments in its enterprise that in any other case could possibly be masked by the impact of the bills that the Firm excludes in Adjusted EBITDA. Specifically, Fathom believes the exclusion of share-based compensation expense associated to restricted inventory awards and inventory choices, and transaction-related prices related to the Firm’s acquisition exercise, gives a helpful supplemental measure in evaluating the efficiency of its operations and gives higher transparency into its outcomes of operations. Adjusted EBITDA additionally excludes different revenue and expense, internet which primarily consists of nonrecurring objects, corresponding to, achieve on debt extinguishment and severance prices, if relevant.

Fathom is presenting the non-GAAP measure of Adjusted EBITDA to help buyers in seeing its monetary efficiency by means of the eyes of administration, and since the Firm believes this measure gives an extra software for buyers to make use of in evaluating Fathom’s core monetary efficiency over a number of intervals with different corporations in its trade.

Adjusted EBITDA shouldn’t be thought of in isolation from, or as an alternative choice to, monetary info ready in accordance with GAAP. There are a variety of limitations associated to using Adjusted EBITDA in comparison with internet revenue (loss), the closest comparable GAAP measure. A few of these limitations are that:

• Adjusted EBITDA excludes share-based compensation expense associated to restricted inventory and restricted inventory unit awards and inventory choices, which have been, and can proceed to be for the foreseeable future, vital recurring bills in Fathom’s enterprise and an vital a part of its compensation technique;
• Adjusted EBITDA excludes transaction-related prices primarily consisting {of professional} charges and some other prices incurred instantly associated to acquisition exercise, which is an ongoing a part of Fathom’s development technique and due to this fact prone to happen; and
• Adjusted EBITDA excludes sure recurring, non-cash costs corresponding to depreciation and amortization of property and gear and capitalized software program, and acquisition associated intangible asset prices, nonetheless, the belongings being depreciated and amortized could have to get replaced sooner or later.

The next desk presents a reconciliation of Adjusted EBITDA to internet revenue (loss), essentially the most comparable GAAP monetary measure, for the three and twelve months ended December 31, 2022:

Cautionary Be aware Regarding Ahead-Trying Statements
This press launch incorporates “forward-looking statements,” together with, however not restricted to, its potential to realize breakeven Adjusted EBITDA within the second quarter of 2023 and money circulation breakeven within the third quarter of 2023, its potential to proceed attracting brokers and producing greater income, and its potential to proceed to scale back prices by roughly $3.0 million per quarter commencing within the first quarter of 2023, amongst others. Ahead-looking statements are topic to quite a few situations, lots of that are past the management of the Firm, together with: dangers related to normal financial situations, together with rising rates of interest; its potential to generate constructive operational money circulation; dangers related to the Firm’s potential to proceed attaining vital development; its potential to proceed its development trajectory whereas attaining profitability over time; and different dangers as set forth within the Threat Components part of the Firm’s most up-to-date Type 10-Ok as filed with the SEC and supplemented now and again in different Firm filings made with the SEC. Copies of Fathom’s Type 10-Ok and different SEC filings can be found on the SEC’s web site, www.sec.gov. The Firm undertakes no obligation to replace these statements for revisions or adjustments after the date of this launch, besides as required by legislation.

Investor Contact:
Alex Kovtun and Matt Glover 
Gateway Group, Inc.
949-574-3860 
[email protected]

SOURCE Fathom Realty