With 10,628 agents on board as of March 31, Fathom grew by 258 agents in the first three months of the year but posted a $5.7 million Q1 net loss, according to an earnings call Wednesday.

In these times, double down — on your skills, on your knowledge, on you. Join us August 8-10 at Inman Connect Las Vegas to lean into the shift and learn from the best. Get your ticket now for the best price.

Fathom Realty’s growing agent count helped insulate the company from the impact of declining home sales during the first quarter, but the company expects to remain in the red until third quarter of this year.

Parent company Fathom Holdings Inc. reported a $5.7 million first quarter loss Wednesday, as revenue fell 14 percent from a year ago, to $77.5 million. That’s an improvement from the $9.9 million Q4 2022 loss the company reported in March, and a $6 million Q1 2022 loss.

Fathom’s agent network continued to grow in Q1, albeit at a slower pace than in recent quarters. With 10,628 agents on board as of March 31, Fathom grew by 258 agents in the first three months of the year and agent count was up 18 percent from a year ago. Fathom reported 33 percent annual growth in agent count during Q3 2022, and 28 percent growth in Q4.

Growth in agent count has helped Fathom weather the slowdown in the real estate business overall. The company noted that while Fathom saw Q1 transactions decline 15 percent from a year ago, to 8,532, that was a smaller drop than the 25 percent decline for the industry as a whole.

Josh Harley | Fathom Realty

“March brought us our strongest growth through agent referrals in our company’s history,” Fathom CEO Josh Harley said in a statement. “We are encouraged by some recent signs of stabilization across our markets along with the moderation in interest rates during the quarter.”

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved by $700,000, for an adjusted EBITDA loss of $1.4 million.

Harley said Fathom has “a long and positive runway ahead” and Q1 results “give us confidence in reaching total company adjusted EBITDA breakeven in the second quarter of 2023 and generating positive cash flow in the third quarter of 2023.”

Positive cash flow would mean more money is coming in than the company is spending. Last month, Fathom disclosed that it had borrowed $3.5 million from an existing investor at a minimum interest rate of 8 percent on a senior secured convertible promissory note that matures in two years. As of March 31, Fathom reported having $6.72 million in cash and cash equivalents on hand, down 19 percent from $8.32 million at the end of the year.

Once Fathom hits 100,000 to 110,000 transactions a year, the company projects it will generate more than $40 million a year in adjusted EBITDA — without giving a timeline for hitting that target.

Fathom expects to generate $88 million to $90 million in revenue in Q2, with adjusted EBITDA between zero and $200,000 — breakeven.

Shares in Fathom Holdings, which in the last year have traded for as little as $3.25 and as much as $11.85 over the last 12 months, closed at $5.75 Thursday before earnings were announced.

Fathom Holdings’ goal is to build an end-to-end real estate services platform integrating services from brands including Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title and Cornerstone. Verus Title expanded its operations into Utah during the second quarter, the company said.

Fathom Holdings revenue by source: Q1 2022 versus Q1 2023

But real estate brokerage services are still far and away Fathom’s main source of income, accounting for 94 percent of the company’s revenue in Q1, followed by title insurance (2.8 percent), mortgage (1.9 percent) and technology (1 percent).

Mortgage revenue fell more steeply than Fathom’s other segments, dropping 49 percent to $1.5 million. Technology was the only Fathom segment to post year-over-year growth (17 percent), but the $756,000 in revenue it generated made only a small contribution to the company’s bottom line.

Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

Email Matt Carter

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription