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Fathom Realty continues to grow its agent count and keep losses in check with an eye toward an eventual rebound for the real estate industry as a whole, according to brokerage executives who revealed Q3 earnings results on Wednesday.
Parent company Fathom Holdings Inc. posted a $5.5 million third-quarter net loss and a 16% decline in revenue from a year ago, to $93.5 million. That’s an improvement from the $6 million net loss the company posted in Q3 2022, but up only slightly from a $4.3 million net loss in Q2 2023. While Fathom Realty’s Q3 transactions were down 15 percent from a year ago, to 10,303, that was significantly less than an industrywide decline of 20 percent, Fathom noted.
Fathom executives said the company continues to make steady progress toward a return to profitability, having cut general and administrative expenses by 15 percent from a year ago, to $9.8 million. Given “continued uncertainty in the macro environment,” the company did not provide fourth quarter guidance. But Fathom executives said they expect to achieve positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by Q1 2024.
“While the residential real estate market remains challenging, we continue to believe that our future remains bright and are positioning Fathom for continued success once the industry rebounds,” Fathom CEO Josh Harley said, in a statement. “We’re continuing to grow our agent network and believe we’ll continue to attract high quality agent teams and brokerages going forward as our agent value proposition remains compelling in the current environment and our pipeline of opportunities remains strong.”
Shares in Fathom Holdings, which in the last year have traded for as little as $2.58 and as much as $8.20, closed at $3.38 Wednesday before earnings were announced.
Fathom said its flat fee commission split model is helping it attract agents, growing its agent network by 13 percent from a year ago to 11,333 agents as of Sept. 30.
In recent weeks, Fathom has announced expansions of its agent network in Massachusetts (with the addition of Council Realty), California (Advance 1 McKeever Realty) and Louisiana (Team Adkins Real Estate).
In addition to providing “software-as-a-service” (SaaS) offerings for brokerages and agents, Fathom aims to be a technology-driven, end-to-end real estate services platform integrating residential brokerage, mortgage, title, and insurance.
In August, Fathom announced that its subsidiary, Encompass Lending Group, had expanded its operations in Texas with the acquisition of Austin-based residential mortgage lender Elite Financing Group.
Fathom Realty operates in 37 states, Encompass Lending Group is in 41 states, Verus Title in 28 states, and Dagley Insurance is in 47 states. All of those businesses also operate in Washington, D.C.