Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the Fathom Holdings Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Alex Kovtun from Gateway Group.

Alex Kovtun

Thank you, operator, and welcome, everyone, to the Fathom Holdings 2023 Second Quarter Conference Call. Gateway Investor with firm. Kovtun Alex Group, Relations Fathom's I'm

statements Fathom over I today's Before XXXX. of forward-looking Act things Litigation the Private call the management Securities the include that I turn of listeners to team, Reform meaning remind want may within to

XXXX beyond in Form statements forward-looking at XX, the of www.sec.gov. and latest ended section the the company's are on Risk for our to control, the including December SEC's many of are numerous which made Factors well Such company's conditions, those XX-K Form year company subject website available other copies which with are as the as set forth of SEC, the XX-Q filings

undertakes call, EBITDA, no after a this to forward-looking measure result statements as that also be any except discussing obligation a adjusted which G. Regulation those actual of results Fathom As update today's by statements, we will during note as SEC is forward-looking law. required call, defined Please by financial could materially. non-GAAP differ

to press this GAAP in included A reconciliation now is measure financial today's comparable directly the which on non-GAAP Fathom's most posted is website. release, of measure

I'll that, Chairman CEO, call Harley. over turn to and Fathom's Josh? Founder, the Josh with So

Joshua Harley

welcome and Thanks, Alex. second earnings quarter XXXX to Good afternoon, everyone our call.

team estate work of continue the want we to market. advancing pleased businesses market dedication strategy. appreciates and in the throughout to I thanking real Our hard Fathom share navigate across as made encouragement entire to We're our really by and the overall to our growth the our family your for progress report quarter. quarter the and support their start compared another strong recent each we've as

communities honor anniversary listing our in others and ringing to to third date. we significant the the a and culture. opening had to We of growth, serving testament of celebrate our in to our our our vision supporting achievements Fathom the operate NASDAQ bell commitment recently is Their the public

rapidly effort collective and We drives our and have shaping to allows poured estate who hard tribute dedication, and adapt forward Fathom's a and to is the and residential employee the Fathom heartfelt every us a journey that into industry. unwavering milestone work in passion Fathom agent This evolving in real commitment success. to thrive gratitude their extend and

continue I'd brokerage addition to real also be great mention like Board estate briefly our few ago. a we experience the Steve market Steve Directors, the we industry has as Murray announced and Fathom to which friend disrupt our strategy. invaluable to should of the tremendous to that weeks and residential a execute in become brings of a asset growth

review President I'd turning what a few Fregenal, call in gives going confidence our Before like for key Marco the results, our a quarter the over to touch detailed of business us forward. CFO, during our to and on and highlights financial

to While the during mortgage challenging adjust of remains with we're well interest seeing market were while our rates. and remain of encouraged we're across the believe transactions signs real stabilization overall, rates quarter. across down, the trends to to for interest rates. And by second happens continue recent we the markets, to regardless markets, industry what estate moderation positioned quarter across we in residential by some continue we're higher share our Consumers along the growing encouraged

move rates, many plans talking currently to homeowners anytime sure so soon. they I'm state with no seen historically you've the have all that interest enjoying heads low

same to thing. circumstances or under rarely they what ideal real the people and do do plan what the in However, actually world personal

be there. get that God need There's for relocate sometimes need a family. we'll more everyone when space forbid, has of is or being family they fact divorced. People happens. Life rate not they the have a and luxury sensitive. get for or always and People The married work need arises, and

to Our our we're market disruptive to the model a this business of quarter difficult results succeed environment. demonstrate in how continue able truly and power

approximately transactions number the approximately comparing quarter, real down compares our Even our good estate second favorably We the overall and the residential about completed During and as mentioned, market. XX,XXX. XX,XXX to Fathom when entire prior real feel market it to decrease most second year's estate this well I XX.X% peers decline. then, quarter U.S. of from of the

of Associates in last According U.S. the XX.X% the saw to transactions to year. the market Realtors, overall of compared quarter estate residential decline real National XQ

markets. reflects, firms our As the share to take from in legacy transaction several continue volatile despite growth we volume and saw market year-over-year our brokerage environment of transaction actually

we'll count forward. that We end innovation approximately provide we which when compares all feel at to We also especially our optimistic but we continue an peers, through many public decline commission of compelling very to model favorably quarter, saw continues domestically. to a peers agent of continue network so increased well do proposition XX,XXX the agents a our to agent XX% that in our industry-leading of as the to and going in this and value believe environment, resonate one

adjusted to in goal QX. EBITDA We of excited our are achieve breakeven

quarter, we the divisions. implemented see reduction of the with the continued cost to second along measures improved all performance our During we the from across benefits

than from over less In XXXX in million million of reducing we tremendous quarter. cash made progress $X fact, our in $X this QX to burn

our estate residential continuing to as have ability believe cost and we platform. current these structure We're fact, for to cost that environment our And returns. Fathom our of for our technology some strengthen to and were further operating efforts without allocated position real recruitment market in these grow. we better the sacrificing optimize leverage Importantly, made reductions savings improved

cash to recruiting fuel until positive investments the may not achieving profitability be going potential latter ultimately EBITDA maintaining continue division, QX. be our committed acquisitions. as adjusted mortgage flow our continued and anticipate in reached although the agent cash well, and forward growth We We to to

growth estate time by happen Realty U.S. accident. brokerages Let real a that of me across residential for does some one the Fathom not our in fastest-growing discussing now spend over been businesses. progress the and decade, has the

We dedicated talented, who incredibly our every guiding our team principles truly support live and have day. unique culture an

estate residential and we in Today, our ahead market to and innovate real Realty Fathom network At capture firms. years states disrupt operates Colombia. in District share Fathom, continue as that we'll agent still industry continue us legacy from grow are of XX our of to the believe and the best

and continue the reach agents to model and industry-leading real our a residential an with agents. technology, as we expand training tools, We traditional to our the offer but peers unique to estate commission do, resources business larger split all market support at fee flat the

believe positioned to of allows model attract estate well of struggle irrespective times us the ever-increasing and sales. agents leads number agents business an succeed generate to Our and we these real to close unprecedented market during environment, we're when

they that more for culture. earn they We join often to the commission, hear stay say but agents

unique enjoy agents a cost and number we agent their than average. national business Our other all model can low small rates believe of our peers. charge allowed that charge and be approximately the twice Even Realty disruptive business attract transactions fraction of has agents, to we retention high-quality Fathom though smaller profitable brokerages what with

it agents savings we point of than a and by outright. also owning less charge can long-term generate and far remains technology key ultimately others our differentiation, Our

differentiation model a high-margin also recurring industry. enhancing subscription of We brand drives to incremental that brokerages proprietary -- the license XXX our while awareness through our revenue revenue and within technology over of

update we're provide to and an now Let Fathom grow taking our network. on agent steps trends me

QX first acquire cost $XXX, at Our breakeven sale. on to on that than one agent remained our $X,XXX each low agent the their making during less approximately earn still we'll

the twice are the which We approximately strong the given industry. exceptionally strong national agents retention also leaving rates, of maintained and remain average backdrop

the second XXXX, industry During over attrition our of compares per rate of X%. again to the month, averaged approximately quarter X.XX% which favorably average

from or sale trends, left per we attrition year. the importantly, did year low producing an agents. will in Fathom continue agents the More anticipate Based historic X XX% be X to coming additional of who on primarily

For program we've and and our and agents, referral environment enhanced agent stronger to is this fostering Free win-win. announce a a to show program rewarding agent see continued that structure revised Our referral our to commission for agent continue Life The a testament our agents, to and traction rate. a For commitment Life pleased to supportive Free among we're called is true program

earning in an to transformation in dramatic reach potential. success opportunities with heights we unrivaled benefits. potential new by them never experience substantially of At paying business again worry agent Fathom to achieves enhancing have Once transaction Free Realty believe Fathom a our they will agents Realty, their For their and providing empowering fees at while status, Life and about

why downturn a We Now on to do more impact closing by which income, this in remember, can for have our this to is to do both their our increase is a agents agent their only or more in hard program net X And environment. efforts. decrease real estate ways recruiting referral there's revenue sales, expenses. continues help a agent positive

in to illustrates which project and of the can our difference local charity. favorite excited company's and allow with charitable The to of announce areas the local organizations give community a Fathom service, also aligns beyond event We're tangible choosing our of our agents Fathom Serves unite in estate. to support August, real that a and staff week-long back guiding by service make X principles Event will inaugural how

committed change event. see and excited our we impacting meaningful we serve to positively make to through We're what can the areas are annual

I'm lot proud of profitable companies touch say to that We on have both. briefly operate we let But sacrifice growth. profitability to me Lastly, that to growth. do can our way. don't for A path

for EBITDA on operating his today's difficult really XXXX will profitability year pivotal which We achieved strive the show will believe Fathom start even be turn our to in we corner in breakeven adjusted to leverage Mark a as we quarter, that cover in environment. remarks. This the business, market and

increase dramatically and time. businesses have potential ancillary profitability the over Our revenue transaction to our per

this across market, giving in confidence strategy. continuing to And growth those tough us even our businesses, we're see progress increased in

which second continue attach go businesses and quarter, the in the we saw we within improved mortgage we to in as During our markets deeper rates operate. title

To that, transactions close, I'd like to financial remainder we that positioned for well over believe With the grow XXXX. to agents and Marco update. a revenue, of to pass through we're

Marco Fregenal

a Josh. second you, finish results, review detailed guidance. discussion of we'll XXXX on start a quarter our and then with I'll Thank

along the the revenue declined attributed primarily by first quarter This a in million decrease volume, average a Second last $XXX.X transaction in X% million prices year's to decrease was for quarter. compared quarter. decrease with during to home XX% XX.X% with year-over-year $XXX.X

GAAP EBITDA net share second $X.X XXXX $X.X expenses $X.X in reduction into adjusted and adjusted $X The quarter million of went second loss million this agent by quarter additional effect of XXXX. EBITDA improvement that a or quarter driven in per was was loss share EBITDA, for in January. the for versus the second Adjusted $XXX,XXX $X.XX per largely a million loss fees measure, the million compared was with for quarter. a of in quarter $X.XX or the second non-GAAP

Notably, to decrease was in achieved XX% despite this quarter revenues improvement XXXX. this the of compared QX

of the One important our from quarter profit gross in in of flowed company achievements line. operational EBITDA most the quarter. adjusted This approximately this highlights the leverage this reached that XX% the has QX increase to is

believe XX.X% XX.X% $XX.X revenue a or G&A drive of of profit going we year the similar same contribution On the from basis, to or revenue million in improved the XX.X% of XX.X% to revenue that bottom increase quarter ago. line. $XX.X period continue of a compared gross in revenue. expense a with will sequential percentage for of million to We was forward, second the G&A

initiatives reflects $X.X the million for activities to million decreased the commenced year. XXXX. earlier in that In $XX expense for our quarter. million reduction our last reduction G&A compared marketing quarter related million and year's this QX development in $XX.X $XXX,XXX expenses $X.X QX to and operational of with Expenses of This technology benefits by were total, from XXXX support, of almost second

decrease resources related to The and advertising in expenditures. marketing leverage optimizing internal expenses

real the me closed time Now from a more business some quarter, the the overall second but quarter, market. in below our last We XX,XXX segment estate XX.X% transactions detail. reduction let year's results XX.X% in decrease spend reviewing approximately in

membership related compared growth to division $XX.X with for decline to of of estate million million XX%, of rate decrease agents, and period was same to the Revenue attributed This decrease of XX% while XX.X% approximately transactions. represents Association over is X.X%. in a saw decrease X% the in QX is a the real price which National last a for which QX of $XXX Realtor We XXXX, is XX,XXX the a year. a approximately of about homes ended

quarter was last quarter XXXX. transactions fees adjusted approximately this decrease increase division same to Adjusted the EBITDA EBITDA in measures. real the increase estate the $X.X million, of an of cost-cutting year favorable our $X.X to compared of The was in million in in achieved QX compared impact and increase despite $XXX,XXX and XX.X% of reflects

of breakeven the adjusted reached operating we've can show begin to business. that leverage EBITDA, we a Now our

we the in forward, increase to estimate line. the flow of Going bottom profit that gross XX% will

business generated in million period. compared mortgage the Our million in revenues the $X.X to prior quarter of second year $X

an for the adjusted Mortgage QX to EBITDA loss year. adjusted period same a was last for compared EBITDA of of $XXX,XXX $XXX,XXX loss

forward Our $X.X recruiting loan team to million additional our continues year expenses to revenues increased a $X.X of revenues for going to mortgage generated as period , compared business the same as identify opportunities business, for by insurance of revenues to officers. the rightsize reduce our The well quarter million ago.

leadership our team Nathan's to have significantly adjusted revenue increased $XXX,XXX $XX,XXX $XXX,XXX increase of revenue. QX Adjusted for an for XXX% to Verus reflects of was EBITDA Title great of of DIA XXXX $X This compared work EBITDA compared of the in QX X% of XXXX. million quarter. done EBITDA XXXX. has QX represents in in This QX under EBITDA of from increase negative quarter to XXXX. positive in $XXX,XXX about adjusted revenues this the $XX,XXX Adjusted to

EBITDA and business and the decrease is due to higher to revenue in decrease rates. the adjusted due significant The interest purchase primarily in

in However, which Indiana, improve we an EBITDA the Carolina, North of markets, continue we forward. adjusted will agents increase going to in believe starting Utah Dallas, files from and Fathom see number

of technology loss the from $XXX,XXX $XXX,XXX $XXX,XXX $XXX,XXX XX% quarter last segment. to loss second in last our by year's compared to in the to increased of quarter. Moving quarter Revenues XX% quarter. loss to Adjusted a increased year of second EBITDA current the for a for

increase over the to country, continues at team to XXX the end the quarter. Our its across agents footprint reach and MLSs of XXX

LiveBy XX million than powers neighborhood with pages created. more community XXX,XXX reports

cash on and progress estate from than with to million sheet over market We of our on million. burn continue $X tremendous position the this conditions, million to balance less our given quarter in QX the ended have dynamic We made focus we XXXX $X quarter. real cash reducing a of $X.X

cash breakeven. the in shares and operating not our the and provide any business repurchase our $XX to execute cash the remain million us authorization. plan overall grow strategy We We under position under second adequate approximately did through liquidity believe purchase runway stock with the and flow quarter

me Before briefly touch turning guidance. the Josh, to on call let back

XXXX. the in ending quarter we're only Given providing for guidance third the continued uncertainty environment, macro the September XX,

the we million revenues For range to the expect $XX in $XX third range EBITDA and of adjusted of million quarter, the in $XXX,XXX to $XXX,XXX.

of guidance risks reminder, beginning as in call, which forward-looking, thank to team As positive a I is we entire adjusted noted congratulate achieving the uncertainties. in subject the to EBITDA. and and is the want

Josh the very hard remarks. a Our to has team that, some milestone very call back challenging achieve worked period. economic in to entire I'll turn important for With closing

Joshua Harley

Thank you, Marco.

where market our our open growth doubling the employees, of victory greatest down to agents can we success that, Sometimes operator, on long-term shareholders. ultimately and dedicated and in you long-term We the bring delay value have and to our our short-term remain to executing course, to With a questions. let's up order call plans deliver domination. to to

Operator

Instructions]. [Operator

with from first ROTH comes Our question Dillon Capital Heslin Partners.

Dillon Heslin

is Dillon Darren. This for on

add base sort their agents? you more quarter, I level as compare some in to adjacent sort of First, not acquisition of guess, you boat of variance? and agents housing that, I talk from for to they how what to stabilization them you a of to on does the rock the agent there's put demand side, to question staying could the of might agents where about productivity your as as like the sort an given the and be point environment? then guess Are sort And seeing the supply get did

Joshua Harley

great are Those questions.

first understand thing I is a So saw of think the to market decline X.X%.

So the of based, whether U.S. increase saw overall an we industry, XX%.

and So we something our important. we definitely even numbers. really market, the then, kind about touched you really I feel is good But think of outproduced on

a to a substantial way as happens, when that don't agent know. what a have personal make that times I this now right that an in -- is change to agents change don't of reduction there's of to something always when concern a wants know the When And lot well. their in XX% business. that business, along lot a learning we're seen There's their XX% and you make I

one get they're a we're seeing me a struggling deals and now. under make to And What got couple working up in I've I whatever my too? brokerage. if got if What change, I've And while out set a takes doesn't that. so or on the because contract. it of new business right pay might miss or that's broker I --

talking lot of I come we're over, to sense. a makes story. to agents a we're to It So I agents, as want love talking the of lot

on fruition. want worried contract. getting I a here But closed, I'm I've It's and come into maybe got not the get deal it to under sidelines that about paid.

time So and deal, we've That's we that a but again. course, time not heard that every lot. hear of

As if agents who lot my declines, worried a I too about just are business what happens there's make of I mentioned, a move, right?

I Fathom. save to to money. hear say people Yes, go have you don't

So just compared else. ridiculous that make argument to market the growth market they're there's rides our that in regards people fact everyone still the beat to scared always we us. is, because of in -- significantly the But

other us So that there's in regards agent company think only one growth. I beat to

of. more be either about fence, and good even think I getting of take that to more more seeing there's this which industry the we're finally -- agents more market, we but going really okay. time, altogether, They're obviously, feel to the out some feel finally more saying, we getting So it's seeing And number in good. and going off we're

okay, they're saying, a I'm make Or ready move. to

good, an accelerated of number our really We're coming see moving about to feel forward. progress over. agents we positive So starting

we good have little really feel QX. But bit part that. a question? was in the again, what So dip bit ADD, about second a there of still little a we saw I the

Dillon Heslin

new the your versus Just on of the existing added the base. quarter productivity side in agents

Joshua Harley

No, than seeing We're the us, agents we less in, we're to, agents are overall if transactions seeing different closing or reflective with closing sense, that -- then difference. not. any that's less of XX% but we're we're used So But lot of have a come in not than agents just if Obviously, down are agents lot to. seeing a any the of than agents we currently makes that the are individually, a we're our coming reduction the that again, right? not used market. XX%

So -- or the now. industry unfortunately, that's we're just right now we're it's the in right in market

Dillon Heslin

If guidance I line. more, could managing for like sort gross on of upon it. are of I it wiggle I the Got of flow-through the it maybe profit point staying where to the stay I So sort one as I that line sort goals of is adjusted sort estate side there color still positive, bottom of much EBITDA the ask mean, much to how breakeven? on the side? EBITDA tight to of real how Marco. room is positive, pretty to OpEx in sort guess goes things the but the guess of near based the managing but you your on appreciate right of actual? Or

Marco Fregenal

Yes, great question.

increased think that's that And not that that's companies -- key be of -- that that. It's by QX XX% is and points the all So about we [indiscernible]. and $X.X QX one point. number's to of we inflection reached -- all have million companies for all so company-wide. about gross driving That's XX% and profit the I should is XX% just companies

Even our company. mortgage

-- is XX% QX wiggle have in used word we that right? the companies. QX reduction now the at -- to have the have of from loss the that the that. on some. line room. EBITDA across look it you I think we Yes, we mortgage, not is all crossed Yes, do you EBITDA We room from so And some If

people. business. to we're very investments -- do making have we our have carefully. manage It we our something still business, grow and to hire not But We that we certainly that something continue is carefully. to continue not to to watch We it grow continue it's to

to continue officers. loan We hire

I loan and loan officers we'll this think XX now. up about XX we're probably to more. hired past quarter, hire officers continue We to

have So is manage not extra care. to with something we it that

that run because, think that to business we continue our going to to the think way. continue we'll We passed bottom And XX% inflection gross forward, I again, I profit same point, the we drive that's -- And Dillon. of the increase why believe line.

Operator

next comes question Davidson. with White D.A. from Your Tom

Wyatt Swanson

positive This some adjusted some at of are is triggering brokerages a Wyatt seeing Swanson bit signs EBITDA. similar competitive to cloud-based other and the models of enjoying brokerages that on a for us Tom. larger the Congrats achieving yours. We're some other you momentum response on with

you about in mean, having financial prop sweeten to package. of the your terms think some agents, I value par or stay to of to the it you're ahead to about larger the Josh, competing So their on them of comes needing of prop with curious to hear brokerages when value or how appeal overall

Joshua Harley

we a exact Can give me commission you same have? with referring Are companies model other specific? you to the

Wyatt Swanson

referring cloud-based similar I'm brokerages. to like

Joshua Harley

Yes, think there's our two to about they're any cloud-based, fact now -- of not model they've of have They the aside brokerage and anywhere hard you only when as [indiscernible] are have of because both about cloud-based It's you're the they really while kind apples-to-apples. a it's from public think traditional comparing peers, [indiscernible] when they the hard, as a them, caps. public brands, basically I got peers guess, that you model. same brands,

or a XX-XX split XX-XX split charge XX-XX So still or split. they

So it's really apples-to-apples. not

that the as line the ends split. for about an to with the when little split, we're still think the has But attract. that one different. agent's even cloud-based, they're if they're XX-XX trying us, a an up far a agent, to That company XX-XX Now as what is bottom agent you brokerage

or in on commission, They're say, $X,XXX transaction. paying us one let's versus the $XXX still transaction paying XX% $X,XXX one of

And for training have the tools, rest basically provide resources. can't? monetary then to So technology, all them it's what in the that the We hard -- they it, be same value. to the we going compete can to of regards

I say do. while that not what is ours don't we provide to more going I'm So they better, is than say can

are only where whole thing So And model. business if equal, think compete, can't win I the down. all side, fundamentally without the and they commission that's things their left hands changing we is not

a profitability on. to as far see promoting And so as of decline what and all going a in been sudden, massive you're they've

I about feel match do don't after really that, really I I And good a to that. I moving chaos they -- make today. that think about that that So feel that from I can good massive ensue they us. just don't can think forward. pivot not without, again, would

Marco Fregenal

Let unique. couple a add let all that me of are things well. couple companies, very a to me we public -- also as more -- We add the of

thousands this that. model look commission at very of are kind flat unfortunately, that right? you across realize us And kind the to of companies there I model, model, Our of you think different, like small have country. to is But the at XXX% when flat data look

the others significantly across all to are of across we public agents terms like the one. a private. a model, in think the like continue is of agents. percentage XXX% desire companies and a commission net only many have to to and growth model will the model is companies there who agents that just from us But us. I eventually like are the our And join it's significant will fastest-growing actually It's be going great model, country that the grow But us

model grow. local us who that is be thing for be growing such are continue no model like going and a models very that across regional model more There's are isn't question to or about a There or -- that. and the one as successful. lot we flat models, seen will everyone. quickly. there We've But to companies of see countries And different the there will XXX% more

that lot And and just they attention. so it's get of they're therefore, a not public don't

Joshua Harley

MLM-type the business growing because has because else one think have revenue sharing. to us, no seeing the I think necessarily similar that a of cloud-based growing that they're where -- not they're or you're they're cloud-based they profit I what exponentially, because other pitch aspect you're sharing or

less And model. there's now, becomes at where plateau, right to it some it's that it people its of really bottom exciting, kind more so benefit and from as point, no exciting. But grows business especially on to the point that a hits room for less

plateau we're one so see. to And you're stride and its cheering and seeing still seeing to fun and hit them other you're on. doing start the one fantastic, It's

I got great only day, a But the think CEO of team. at lasts great that so end a and they've for long. the

think have term, I this lip the be at this model that. believe service. we of will not long future That's and truly that I industry, Fathom,

Operator

question from Stephens. John with next The Campbell comes

Jonathan Bass

the outlook that? on speak John there? sale Bass Campbell. And Jonathan you the you for seeing It's if business? Could What to any you're gain on in margins mortgage have on

Marco Fregenal

and has quarter the buy banks And out. market quarters, squeeze mortgages place. it then significantly to It's QX last It -- Sure. Great big of -- go worst last question. over and really the the who basically last you the over year, all changed. started [indiscernible] the back all QX of year, the -- few sorry, probably it's

to so XXX XX-year is attention one will of challenges, happening -- And to gap be look of the basis that's historically, I of a about points. And at gap note having XXX longer banks, that been between are things is to think the has one of call cash right? the some the a things and a that and reasons rates. variety pay much for that mortgage to lot

we're now in cases, basis XXX probably points. XXX, And over, some

interest on mortgages the slow the increasing so in in -- -- and also happening. So we payout. intake of down mortgages, to already the that's do reducing a are sense some banks And rate cases, they're

from the on the compression some paying big absolutely for there's yes, commissions banks So mortgages.

and I would other are companies forces and quarter-to-quarter. say great And right? definitely learning some And that leadership adjusting to how compensation to us so And under are in from like company, others that. companies there's a And our varies us within and mortgage month-to-month done it costs really that compression. job. do pushing like the have our

in our for And few to reducing on that, look business, in business. compression significant forward EBITDA adjusted the If mortgage look, to quarters. But QX there's example, work within the mortgage comparison the some yes, compared QX. in our we've in of loss hopefully a breakeven you we commissions at definitely and done

Jonathan Bass

And helpful. very price in then home guys you seeing change That's dynamics? regional are and terms any of sales noteworthy differences

Marco Fregenal

Yes.

in trend Utah, the are in Coast. in and the this last West increase a so on increase seen Oregon, moves from greater in prices there many years, Nevada. to Idaho, the the we've starts prices And every seen this we've years and historically, East Coast houses XX ago, West So the the Coast for Certainly, trends. like of X California, markets West much Coast, industry,

we more increasing those saw so rapidly. And prices

seeing We more them decrease therefore are rapidly. now

And start a I And in guess, those to related that normal other country? the across we're West we've markets. the follow then just they're in the move prices so Coast and much the than greater will seen so there, past decrease things more West Coast reductions this will going prices because the the really in increase and trend question, Or to is adjust. these markets, that be, in seeing the

on the jury out is So that. still

more in some where the prices. the some as largest pockets we that really opposed have West the to that's trend. said Coast, trend decreases, Having seen smaller country in tend But primarily absolutely we're that, across seeing decrease West a Coast. in seeing greater to but be is they decreases The home are and we're pockets the there

Operator

comes Riley. question B. with from next Raj Sharma Our

Rajiv Sharma

have few a trying breakeven Yes. understand questions, just I your here. Congratulations Yes, here. to uniqueness on just getting

a when of of better you And upon share marketing? not they of are your the peers referral tiers? share market? lot how than touch in a Why there's market, assuming an can all, that type you referral does in MLM lot the gained impacted the get a of First

Joshua Harley

I investors over be The is you to had we've a that. First we say Why is or year business? fact of why do of don't wouldn't money. it's of MLM The don't lot able and all, not better. fact don't the that to do XX% ABC XX% the taking We're company do enough take saying, XYZ you do? commission

different. had to was with that come we So something up

said from are people you're or of never come barely plenty agents, made made just doing, it's say money just our not money other over being referred I it's they and any because and were company therefore, I So I one right? perform. people that what dependent who've to rewarded companies X for like people you're better, to not producing on any people in who other know the different. side, though, will

they to make scenario, have produce else's efforts. our efforts, rewarded someone for to for in you your So anything. not And you're

make I harder I there transactions the why it's more to work, that's they right? So to they number standpoint, can on think, from right? it, much the think related I'm how benefit I is So necessarily more the not from one, So close, get benefit. willing superior, money that a

You're not dependent you someone on business rewarded. to be for else financially closing

be Now comes to because financial to it to rewarded business you down close have savings.

in get a you've X issue of -- some just to what other we in lot those from you right? you to to that you've day give for just The agents is have cases, day X got with of like got X. what get to that agents we refer model XX to from XX, So breakeven X,

so to think important And with. start I that's

Fathom. refers people now to with an us, So X agent

say, of we average, through, that they close requirement Now they many minimum X have of but transactions a get close do, each. close on what X they on how transactions referred they people before let's average, course, can benefit,

life, their came pay still not company, That's have free. they're capped which transaction annual capped means $XXX to fee. their XX fee, They and still the transactions now that They have for the fee. into to they're pay

it's the day, though, of getting win-win So money, of because right? at huge transactions, the lot we're and saving end a they're a the --

the On become to agents, X free. refer right, Life, they've got For to Free

annual transactions But brought Now giving free. say, we're exchange no transactions close, who no There's they've kind. imagine for everyone's plus in fees once doing X transaction either. on. annual become X fee -- agents truly free, they each, transactions math, start X and you up They're in any the XX So of so there's right? fees can

well. for it's and them as So it's win a massive us, a for win

Rajiv Sharma

That's very it. Got helpful. it. Got

and new unique are on How I whether what a the referral also, of percentage working? referral tiers, they're as do the these -- what agent was is then the you very [indiscernible]. measure -- tiers. internally referral the And So mean,

Joshua Harley

I'm Marco. ahead, sorry, go

Marco Fregenal

Yes.

who transactions number close the are to by of -- by higher okay, other and of agents average coming a referring So between agent historically, okay? in agent XX% agents than XX% Second, historically the agents, out our we other typically referred average Fathom there. agents,

refers a so the agent that company, historically, of joined producing higher a agent when Fathom number who agent And non-Fathom has a transactions.

The of they're transaction. reason right? agents the side other know for They're working agents closing other that will on business, make Typically, sense, because the right?

us. last October, after program have for a introduced is in typically And we the agent new productive increased year. number that we more November So

about XX%, we we Now to even to we're to to about think as the as high we XX% be XX%. internally. market we're to continue And increasing up now used XX%. and program XX% get as We can

Joshua Harley

quarter we -- quarter. as Look, high XX% hit we as X I XX% -- one think actually

excited So if job better do get clearly, keeping benefit, to agents excited need about it's a it. there's We at it. about them a

that, become sure time capped we been we've directors, finding promote someone too. this, to activities working do For can so with our Free for and or And hey, does make life, saying, Every programs. you Life

Just engaged them and excited. keep keep them

it's So lot from a of great we've benefit -- seen it. coming

pleased. we're So

Rajiv Sharma

in Got the is There's month lower you're also you it. XXX% it's agent XX% Got about seems agent growth, infrastructure to ask it. your yearly attractive commission very then though -- so a -- if provide. of away. on or of an a still model -- could terms I is you the and even than the clearly, industry, the agent it's you X.X% also And churning churn, a

to possible rates what how much see for kind and it's you to what growth you -- So do it's think if think of forward kind what do What out there? of are or -- from rate on we net of kind of grab you growth -- kind that? going should you growth at comment

Marco Fregenal

Yes.

So it, understand mentioned are -- happening think still and you Josh is and of down the things -- agents if you can that's why. we about still sit one earlier,

they are the of fact, agents onboarding last, starts starts one filling of XX the a matter our right? As still the about right, out over, that over, to days want is that actually moving an Some say, right? onboarding move worried when in paperwork agent things that starts, seen we've

process. like join to would Fathom. So the I they're starting Yes, basically just

take Let stars day the X significantly, transactions. a last me can process happens the months, increased the they're XX have agents because close Our what in waiting can additional right? is are to take onboarding days but process, transactions doing an start right? the still And right? The less and parts so --

close to that important to really is transaction they're them. So extra about

a -- historical to the gap starts complete, in agent improve between delay terms a different that. working than onboarding seeing in we're delay so we're And variety a greater of the with agent an and ways of

good sign. that Onboarding increasing. a But are significantly starts is

that's significant So grown company settles once a year, right? company this market XX% -- historically, has again, the think rates, right? looking interest the were has in one. to year, grown change next number the sometime Look, that which prior at probably We

interest going some, The right? interest again, that's to to a interest I my see growth until again. in about see right? -- rate will coming we X%, okay? happen to coming lifetime, talking rate not I Now begin we'll -- don't down X% that down we're not we're little, going to interest settle, down see come don't think XX% then the think But I rates whatever

low to believe by as to their have in rate, the want see rate way, the past. growth low of going the others the sell interest we if XX% that's we low see seen high the to back to to some to to a have high that Xs, your and industry so Xs, Xs And to in open don't because answer the comes in believe we're try rates market in normal question, up, market we certainly, equilibrium, they and that's Xs, to interest -- once believe going close that X.X% But we segment right? houses down that XX% Xs, should for come Fathom

Rajiv Sharma

And these are churn, of net right?

Marco Fregenal

of correct. is Net That churn. That's correct.

Rajiv Sharma

lastly, And productive going it. indicative up? then Or agents these transactions of we... ticked should market? of percentage per the Got the How Are just Right. mix the in your is agent more up.

Joshua Harley

of who or us X of agents Part per seeing, left we're the I X mentioned, what sale XX% as year. closed

it's way, by It's So QX in us. usually that's -- normally X.X% the QX. pay -- That's while that for the for we to their something dues. we're higher people have what -- not when reserved see

agents see loss So X.X% increase in we did typically from an to X.X%. X.X%, of

very few transactions. agents those are again, But closing

of fact per business. of the like our just actually is the the of business, as you that they're them agent, So get more getting out calculate, out transaction it Part the of improves. that looks it

XX% we're because we're to spite We're could things companies. growth seeing a a want or potential address position growing do thing. of more I do of of lot tough. the in now growth, for is in the market. true not we One That's one right XX% The where for the XX% market

fact, for not true In companies it's most there. out

finding we're time. ourselves And story. and love us guys for you having saying, a been to watching we're I I've more people more a so your in position, reach long look, out

tend to Our consider call you business a an you is whatever, Would consider would they merger or it struggling, acquisition? entering acquisition.

to rate more The seeing more reaching we're accelerated out an of and out us. -- opportunity's We're there. people seeing

is potential So the fantastic.

them There's of be acquired the to some could acquire we some a and way, lot. see see shutter going -- a and -- lot we agents more they which or those happen may by actually So point, greater suddenly have else either if out of don't someone right? case are them, growth, by we at go that to just and business, even

a lot go of and to are lot We out scrambling see also a new find -- business, they of a unfortunately shutter of agents brokerages home.

beneficiary either the we through new acquisition through beneficiary looking the agents be just or So be it could an home. for a could

Operator

I the would This questions. Harley further closing for no question-and-answer are our session. concludes There remarks. conference Josh like turn Instructions]. to back over to [Operator any

Joshua Harley

Thank you call for joining Fathom. for our today interest in and your

for are Fathom your you those trust. you shareholders, thank of who For

future to We sharing you. will updates look hard continue with to work forward and

with wonderful that, week. a So have you. Thank

Operator

The presentation. for attending today's now you Thank conference concluded. is

disconnect. now may You

Fathom (FTHM) 9 Aug 232023 Q2 Earnings call transcript