Fathom (FTHM) Q4 2024 earnings summary

Executive summary

• Revenue for Q4 2024 grew 24% year-over-year to $91.7 million, with gross profit up 25% to $6.7 million; excluding the sold insurance business, gross profit rose 59%.

• GAAP net loss for Q4 2024 was $6.2 million ($0.29/share), improved from $8.4 million ($0.50/share) in Q4 2023, driven by cost savings.

• Adjusted EBITDA loss for Q4 2024 was $2.9 million, unchanged from Q4 2023; full-year adjusted EBITDA loss increased to $5.7 million from $4.1 million in 2023.

• Agent count rose 21% to 14,300, and transactions increased 22% to 9,903 in Q4 2024.

• Full-year 2024 revenue declined 3% to $335 million, with a net loss of $21.6 million, improved from a $24 million loss in 2023.

Financial highlights

• Q4 2024 brokerage revenue up 26.3% to $87.7 million; mortgage revenue up 11.1% to $2 million; title revenue up 92% to $1.3 million; technology revenue up 38% to $1.1 million.

• Gross profit margin for Q4 2024 (excluding insurance) increased to 7.2% from 5.4% in Q4 2023; full-year margin rose to 8% from 7%.

• General and administrative expense in Q4 fell to $8.4 million (9.2% of revenue) from $10.1 million (13.6%) year-over-year.

• Technology and development expenses for 2024 were $6.6 million, up from $6.3 million in 2023, reflecting ongoing tech investments.

• Marketing expenses for 2024 increased to $5.8 million from $3.3 million, driven by investments in ancillary businesses.

Outlook and guidance

• Management targets sustainable positive adjusted EBITDA as early as Q2 2025, supported by acquisitions, higher gross profit, and $2 million in annualized cost reductions.

• Anticipates continued growth in mortgage and title segments, with new programs to accelerate adoption and cross-selling.

• Expects industry transaction volumes to improve in the second half of 2025 if mortgage rates remain stable or decline.

• Annualized cost reductions of over $2 million anticipated; focus on returning to 25% annual revenue growth.

• No formal guidance for Q1 2025; management to reassess in Q2.