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Fathom Realty’s flat-fee and revenue-sharing commission models — along with a big acquisition — helped it grow its agent count by 21 percent last year, even as transactions declined and losses mounted.
Cary, North Carolina-based Fathom Holdings on Wednesday reported a $21.6 million 2024 loss, including a $6.2 million net loss for the final three months of the year. Changes to the brokerage’s commission structure helped boost Q4 2024 revenue by 24 percent from a year ago, to $91.7 million.
In November, Fathom Realty announced it was acquiring the third-biggest real estate brokerage in Arizona, My Home Group, a deal that boosted the brokerage’s agent count by 2,200.
Fathom finished the year with 14,300 agents — 2,505 more than it started with. But last year was the real estate industry’s slowest year for existing-home sales since 1995, and Fathom’s transaction count shrank by 3 percent, to 37,000.
“We expect 2025 to remain challenging for the real estate industry,” Fathom Holdings CEO Marco Fregenal said in a statement. “However we see meaningful improvement ahead and are encouraged about our prospects” of reaching positive adjusted earnings in Q2 2025.
Fregenal said increased revenues from the My Home Group deal “and smaller brokerage walkovers,” combined with $2 million in annual cost reductions, have Fathom on track to achieve positive earnings before interest, taxes, depreciation and amortization (EBITDA) in the next quarter.
But Fathom executives withheld guidance for Q1, saying, “management plans to reassess and potentially reinstate guidance expectations in the second quarter of 2025.”
Double-digit growth in Fathom Realty agent count
Source: Fathom Holdings Inc. earnings reports.
Fathom executives have said the brokerage’s flat-fee and revenue-sharing commission models have helped it continue to grow its agent count in a difficult period for the industry.
Although growth in agent count has slowed since hitting 48 percent in 2021, Fathom Realty has consistently posted double-digit increases in agent count for the past five years.
Agents who work for Fathom pay an annual fee of $700 a year, and can choose to pay either a $465 transaction fee per sale (capped at $9,000) or a 12 percent commission split (capped at $12,000). Agents in both plans pay fees of $165 per transaction after hitting their caps, but agents who pay a commission split can earn bigger revenue shares.
While Fathom’s real estate brokerage business generated 94 percent of its $335 million in 2024 revenue, mortgage revenue grew by 51 percent, to $10.9 million. Fathom sold its insurance subsidiary, Dagley Insurance, back to founder Nathan Dagley last year for $15 million.
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