FTHM - Earnings call transcript Q2 2024

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Operator

Good afternoon, everyone, and welcome to the Fathom Holdings Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded.

At this time, I'd like to turn the floor over to Matt Glover with Gateway Group. Please go ahead, sir.

Unknown Attendee

Thank you, Jamie, and welcome to the Fathom Holdings Second Quarter 2024 Conference Call. Gateway Investor with firm. Glover Matt Group, Relations Adam's I'm

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

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

as a obligation as non-GAAP law. Please in As could now the no to reconciliation results update Fathom's financial this the actual a also note any non-GAAP financial required is by that after forward-looking posted GAAP which is we'll by comparable EBITDA, measure of A G. except adjusted which website. SEC result is during of be forward-looking press release, directly measure discussing to Regulation statements, measure on defined call, undertakes differ materially. most call, Fathom statements today's those included today's

and call now CEO, I'll Fathom's With that, Marco over to Marco? turn the Fregenal. President

Marco Fregenal

for Matt, and thank us Thank you, QX you, joining call. our everyone, earnings for

my fail to the gratitude our Before I want we results QX and heart review to Fathom our developments, exciting express new team.

greater remarkable, challenging a particularly commitment building our in these for objectives. conditions. towards been XXXX. unwavering of efforts foundation been in XXXX have solid in you instrumental us Your even driving and exceptional Each market has success And

our have outstanding. real the estate year, team's and resilience adaptability hurdles, been the market presented Despite this

our of week's to standards cornerstones weathered for saw have maintaining from just one and forward. dedication been our service while to announcement, as progress. you push haven't the the but tireless Their of We high continue execute innovate storm, last

Today, results. we're just not sharing our quarterly

growth journey a unveiled business potential X Fathom's sharing with on We're redefine X our industry week, and will is and aging opportunities. and transformative position and program sustainable boost model. evolution commission plans. plans designed Fathom agent embarking that Share. Last also This the reimagined Max creating we profitability feature improve innovative in success to are the unprecedented growth believe We share revenue new retention of program. while Realty for recruitment new Fathom company. an long-term further and the accelerating Fathom These

industry nature. all has of share handful Our a an who in revenue of Each witnessed are very small model. similar a are models companies' growth offering impressive for companies these

mission listen we is took revenue approach what looking to is are our greatest share empowering and this agents industry to this our to has earn more innovative as low retain been with we commission agents agents always to One do Fathom, At the to As plan. merit way closely for, their what the value. provide we believe of concept it by to we money. hard-earned most

plans new of are a commitment. extension share natural revenue this Our

with explain Fathom margin best a affordability offers with flat our legacy attracts compared agents highly improves $X,XXX a plants fee $XXX combined of potential fee both flat plan. to new cap. profit the gross only competitive [ fee also The Our not our annual This worlds. but ] the

than share $XX,XXX any over split the potential share twice a our greater an even commission earnings first-level For XX% percentages revenue traditional new only load and Fathom MAX opportunity plan of annual seeking potential, and offers cap of that peers. features plans a our industry higher share the with revenue

participate revenue are building simpler model our allowing apart new can agents benefits agents agents agents our plan, transactions refer, our In of program. all industry, Fathom. on models and of from of to their offers they based potential program revenue in highly peer significantly sets number own to the of on What also week, share our share rest choose. to the a inclusivity. passive our grows competitive the within our last increase share. have their X terms, unlock This earnings their Regardless Starting their revenue income network there while as flexibility additional

Our try stage our founder, innovation real and offering the share we for transforming through at this believe their positions envisioned Joshua culture income a and the and while our we share. trends, strategic radical setting increased our potential, division. of of and higher growth believe business new to choice the our sustainable in agents. revenue The By market flexibility, industry caring for agents Harley careers. estate programs grow empowering fostering Fathom forefront We also professionals move industry body

future are not just estate. real to of the adapting We

We are it. actively shaping

do win-win directly where create that we of is success scenario and We so, we our the As Fathom to success vice a this estate. approach future contributes agent believe dual real versa.

objectives, Our X to of in businesses our least growing agents restating launching agent while additional plans professionals. addresses further to initiatives high-quality and agent XXXX prioritizing growth new commission support our key their at directly XX%

we recall, may XXXX. strategic in March, goals introduced for you X As

the Insurance. the our sheet next parallel the over our X giving XX our about strengthen add million our our plans sale $XX.X successfully balance that in in with closing initiatives, Fathom's position. sale added to would and strategic $X not We growth. our $X.X about at new achieving for May folks months. align EBITDA In and the in balance million to with sustainable ended sheet the market. These enhance operational cash, just with another cash in enhanced financial to agent sheet [ position Beyond us smart, ] financial confidence of are We and objectives positive They're agent QX The million Dagley committed objectives. balance flow. We're also growth

significant I'm that strides pleased continue make towards profitability to our to report we goals.

generated $XXX,XXX a gross adjusted X.X%. we achievement notable by solid of profit quarter, EBITDA, driven This in margins

compared quarter. EBITDA Fathom More second from completed $XXX,XXX quarter, Fathom Total totaled importantly, revenue EBITDA grew of is million to XX,XXX adjusted for approximately of the second XX,XXX Adjusted ] title $XXX,XXX the approximately as our a non-GAAP $XXX.X June approximately agent XXXX. decrease of XXXX. [ quarter transactions approximately quarter real million, in XX, divisions XXXX, QX for XX.X% $XX.X this XX% real was XX% positive estate, the XXXX. measure to quarter a state licenses agent quarter for all in mortgage second quarter of on XXXX. a decrease the and XXXX network compared from to XX,XXX XX, of reached June

new sharing program, profitability. these revenue We with comply sustainable and believe growth plans results increase commission our to us well and position

top and profitable can more efficient operation long-term are growth on agents just We we value believe focused that a line not are our clients. deliver shareholders, we to building robust, and

and forward, wisdom continue As prudent that to we remain to the drive understand move we will I in our while areas success. management and committed future financial invest need

base, margins Our the of our the and flow cash managing our model leadership team's dedication entire ability our strength profit organization. of fronts multiple our speaks team, to agent improving growing and our execute on to business our

comment me will more Joanne briefly on then businesses, our and ancillary Let provide detail. financial

seen This has an million the from $X.X of business, result growth million have or in last in team revenues growth to by of initiatives million strategic increasing this QX XX% $X.X with We our at lending mortgage segment, year. $X quarter. launched The we of the our division working our our with a exceptionally implemented an year QX past is alignment communities. positive, Encompass results with close impressive over the a the collaboration dedicated of this to serving Latino of in Recognizing Latino diverse growing have division Fathom. reinforcing direct been demand commitment in

local also veterans, This have home encompass positive growth for I'm We contributes tower our continued program, but of to expand particularly responders commitment first our it profitability all business milestone only and validates teachers. a segments. Use direction, significant to also share pleased not QX strategic ] to lending as improving across EBITDA. our our support achieved the our accomplishment [ building marked overall

our developments in exemplify our value agents mortgage and commitment our enhancing These clients. streams to our diversifying revenue to both and proposition division

is and continue integrated expand to drive offerings, share pleased reached we our in second which results estate XX% of on increase XXXX. to our quarter over QX. improvements of business make ability our of But to market million, across from the we to XX% QX synergies Elite capture a and Revenues encouraging. Verus in I'm represent a real Title increase also an platform. that continue is we're innovate the larger prior report confident services As $X.X mortgage which our quarter,

Elite paying off, Title generated growth clear are in Verus successfully we importantly, for ancillary is optimizing and More business indication are performance our EBITDA, our this that a profitability. initiatives $XX,XXX strategic adjusted

impressive also start seen in those increase detail a minutes. We will in and Joanne file few have

spend market me trends. a overall few Let to discuss minutes the

interest significant seen swings The second quarter of in rate. mortgage XXXX the has

to buyers about X.X%. to translate mortgage However, improvement the more we rates some believe have recently, back in market. to could rates decreased seen We this coming

buyers. in We have small a seen to the also from shift power sellers

due to a and of should over to home seen XX% states the median payments. have the recent [ XX%, In some ultimately, sold all market mortgage and by have while interest lower X% X% reduction number by lower Florida decreased have lower on homes mortgage Colorado, like ] and months, and increased of prices days prices combination of home Texas, in a listed positive rates over in effect price

we are all new that started from committed of the Fathom, helping that ensure the At to commission's have agents, rules. our geared the are were to to and lawsuit effects settlement classes training have agents already seeing implement and begun rules We some early we and our to also imposed. seminars the

turn final call announcing the me before exceptionally positive. agent new Since let our Now response regarding one the make plan. new to been has I commission Joanne, the point plan,

teams XX% feel We are interest even from in revenue there non demonstrated regarding plans have new agents, that as to or our higher. with as commission offering. sharing well small will and us lead We have capacity growth agents back brokers agent new heard strongly Fathom

also take a on team. early see walkovers the learn agents full through from our quarters few But the we to and program and it as to the all of benefit plant how work discuss we us conversations for small more new believe will brokerages

Joanne, like call Finance, to over With President she more results so to that, Joanne? I detail. in discuss would Vice can the of financial Senior our our pass

Darren Aftahi

was of Total The the start decreased in million Thank $XX.X will the quarter and a which results our in to second quarter provide in mortgage to XX% you, performance and revenue, decrease was Offsetting XXXX million for segment. from XXXX. compared an X, XX% to insurance quarter of revenue, title was and decrease in revenue the increase then by resulting transactions the review Marco. on improved total an overview service second Fathom's transactions. of absence total increase XX% from lease sale XXXX compared I the by the decline a detailed company's businesses more revenue sold May will business, due in second driven $XXX.X to of primarily XXXX. general other in of a brokerage transactions for fewer revenue by with offset

decreased selling Overall, the insurance for was million million XXXX, profit X.X% for the XXXX, impact primarily second the attributable of quarter approximately from second to to $X.X gross quarter. decrease This the company's business. $X.X

our quarter a of XXXX, overall business to in However, up businesses. our contributions and mortgage XXXX of X% in higher quarter and improved primarily insurance excluding as percentage, of profit second from second result X% from gross our title the the

Our second XXXX. second quarter XXXX business to X% relatively the remained constant gross brokerage the compared for profit at percentage of quarter of

second will XXXX. million second and the million X.X% and technology and XX% to our totaled of costs likely XXXX business, XXXX from relatively million dipped at compared or quarter slightly $X.X these mindfully expansion for development revenue in related and XXXX XX% ancillary and primarily of to costs businesses of the our expense platform continue Excluding over of to XX% revenue XXXX. our quarter with we $X.X administrative for or profit percentage growth. of as quarter constant ramp-up approximately These of enhance of associated of businesses. drive Technology the revenue second gross increased second time quarter the $X.X in to in remained insurance quarter increase second our spend expenses with General XXXX for the

$X.XX second of quarter our quarter per net related to $X.XX expenses resources GAAP million with million optimizing business primarily was associated such the compared reductions in This the to the as decrease share million in XXXX. improvement quarter $X and addition in million a $X.X second to loss or was primarily XXXX million cost the leveraging decrease expense totaled the expenditure. costs second The second an absence marketing $X.X for 'XX. loss advertising per insurance. was net for XXXX business quarter of of of $X.X internal XX% $X.XX compared for due Marketing of share with or to of insurance other activities

reduction the of partially to the significant the generated an measure, adjusted and a offset to a EBITDA, the second $X.X gain business $X.X quarter company's loss in XXXX. primarily positive was by totaled in the due insurance results, second expenses, net XXXX nonoperating quarter million in non-GAAP from The of operating net improved sale increase compared for million of

first the of the XXXX. The positive adjusted quarter second second quarter marked quarter since company's XXXX EBITDA

X% some spend in results I'll for for to which period Estate an XX% represents the decrease in reviewing same million compared transaction detail. Now time decline business the segment primarily division XXXX year, a million volume. second was Real $XXX.X our Revenue $XX.X the quarter approximately to more of in attributable last

X to the XXXX. ] the ended compared [ X Marco ended XX,XXX June XX, As and we noted, XX,XXX during estate transactions during XXXX, months months transactions XX, June completed real

to Our rates the high 'XX. of in primarily interest mortgage continuation second transaction volume due quarter the decreased

June XXXX, commission XXXX, percentage. transactions slight X% compared compared During the $X,XXX, average due to in sale to June revenue decrease in a increase primarily transaction ended X and an to months X ended XX, months XX, decrease was transactions during per lease the a $X,XXX

charges second is by at service in relatively its these real agents. due $X.X of million of commencement approximately to EBITDA EBITDA efforts, Adjusted declines the in decrease decrease Estate Realt Real addressing profit million strategic to powered and remained of constant second was of in commitment the a Fathom our to to Gross division to the income second continuing the income $X.X by revenue quarter and the services estate for vision provided. from adjusted our its $XXX,XXX division its million second the XXXX. quarter in was internal share approximately quarter in XXXX. in XXXX, the revenue compared recently into compared new XXXX announced transaction second $X.X of management of in approximately Fathom recruiting X.X% for margin transaction quarter models CRM technology quarter of the its This

We significant has the revenue million made million business. and are driven $X compared about was almost year. our doubled QX to QX strategic increase grew loan primarily in Mortgage base, the approximately XXXX in This in our by pleased XX% revenue prior improvement to growth $X.X mortgage from which our in officer XXXX.

Mortgage recorded positive second was XXXX, up the loss for the million QX of file and $X.XX compared was start received months, due the QX significantly Title XXXX XX% a XXXX. was with Verus XXXX DIA, adjusted second $X for an XX our adjusted EBITDA to in in approximately closing loan for $XX for EBITDA negative XXXX. QX volume $XX,XXX to compared quarter quarter business million $X.X insurance of sheet. bolstering of million receivables as a the cash. XXXX XXXX. revenues of of million to compared May balance had XXXX was subsequent QX at Verus Title's quarter adjusted sold to for $X.X in million million EBITDA $X.X our And million of $X the second $XXX,XXX compared of second an XX%. over quarter XXXX increase for other

end currently at of pleased by XXXX. growth are Overall, the which our Texas Verus are were last orders in than open the joint We higher Title's they began XX% April in approximately quarter. new membership venture,

the are Colorado now Utah-based Traveling Virginia. Verus to LW Salt geographic in is traveling a strategic also and happy our say presence to Title Lake Title. is We that addition to title Utah,

segment. Moving to our Technology

period Realty of consistent transaction for attributable to charges quarter EBITDA remained improved services. management CRM in in compared Adjusted approximately Fathom primarily internal revenues in same XXXX. to $XXX,XXX and the XXXX to Third-party second the

better technology share enhancements being agents our revenue continuously We a and functionality revenues our drive to are to making our platform with serve new example. prime

than LiveBy has neighborhood significantly country the agents touching team second the over MLSs pages footprint the end LiveBy powers Our working XXX,XXX and quarter. reports XXX of more across community with its created. XXX,XXX over increased million at X.X with

unrestricted keenly XXXX, balance ended between approximately sheet in We million, million of with early position We given to and May combined with cash estate an cash the dynamic strengthens sheet. our significantly which our the real $X conditions. quarter be received focus balance continue to the $XX.X on market now

in Management to models. reinstate potentially light financial recent quarter new and XXXX, be guidance of guidance fourth plans to for are of expectations the there EBITDA, the yet impact these In the Regarding ending adjusted the The of XXXX. revenue our withhold future outlook. the on X models elected allowing of to introduction September and third has company share time new XX, determined evaluate quarter revenues performance reassess to and

that, With for Marco turn closing the back over to remarks. I call will

Marco Fregenal

Thank We success redefine will embarking believe opportunities. with our a creating and potential industry we're on you, of position growth unprecedented Joanne. that the journey

focus the greatest Our members. agents be their all I that agent our this implementing on work the team team past members and especially months, been want to will and has for few new continue providing value our tirelessly worked to commitment to plants. X members hard and thank our team

bright, to is the we're looking future ahead. forward challenges and Our

that, now. With take we'll your questions

Operator

[Operator Instructions] from today Stephens. Campbell Our first from question John comes

John Campbell

Okay.

on the start just the half of year performance. maybe Let's first

or well. revenue versus higher expense like year. down looks interest of first got so Obviously, it you as $XX half last the So million is

pretty similar moving there's weren't and parts housing you You've that able here. rate thinking year. of But burn consider I to cash to been a recovery hold a to on as rate clearly a Marco, know lot last

you cash think just flow? best again, of do of of to what really to recovery, businesses holding kind mortgage see as see equal, need all really, as to looking doing positive get out else might free degree you well. back just housing But You've a got you kind can

Marco Fregenal

you few our months to going as impact be. buyers, in don't are coming you an that's market. housing Well, back I the do right, to I the recurve start a been of without is having from a plan When we We when think, equally improvements. back, beginning building to see seeing actually, I of perhaps think recovery, right? earlier, an improvement an mentioned the some know sellers, I

things I cautious house waiting so to to are to interest rates when going may are And that people things buying be think we they're feel when rates going going right? that the one decrease to is or come of buyers have rates of a down, for like withhold part one I because they to be interest cautious believe increase. interest of the that's to decrease have the

back revenue new your back revenue you very X going really programs, to share cash of traditional a flow these a and But increasing the certainly company, programs. public And share EBITDA we fee agents, adjusted believe only has that's question, flat that's to our we'll know, get because number we it's right? actually program. -- X think program I share that we're the and unique why and implemented company by different national as growth, that split revenue a positive a right, significant

the comes see for upside. really number But focused agents. on to we building some us, back, to when of So -- definitely continue the are we'll if agent market our grow network

second We recruiting the right focus of I of year, the agents. kinds mentioned I also I of of as the earlier, our at we are agent eye off took ball the the kind think, focused on of in terms last half think

better transactions decrease. at that that look if the see you quarter-over-quarter, you to improve in And continue decrease and we

of improvement primarily as think counting by a is QX QX, we really an the get back numbers estate real result that market. will in of And the positive joining industry, terms that in But company we additional to opposed our growth. as agents on and being to transaction in so

us, year. really to next agent so And going for that's I growth. think come focused more the on I it's think

John Campbell

in been That's flat mentioned, been that guys helpful. has Fathom then that's, the mean, I model always Share, fee Okay. obviously, of always the the a bit of And little have on more model as traditional splits hallmark you a model. you

arrive know I you that to conversations assess don't groups So guys focus Maybe it decision? at process of what to take expect that through it you I'm or about curious or surveys how maybe us did whatever of accomplish? the if you and was

Marco Fregenal

a the is question. company, XXX% Yes, we great and well, the of it's we industry future commission think XXX% Look, commission. the are a

be the implement agents so, the Fathom Even the last agent Max teens, of interested going percentage to individuals a the were these in XX% as the around or Share. of very as X some we that We XX% share not think X brokerages, Fathom spoke Fathom high-producing of of that we the joining. -- journey in our those What program. programs, plan, believe majority Share a probably agents found over new months we revenue significant be are is small with sort we to

brokers now with were in We limited small program. become very also And acquiring split. or were terms of attractive a walkovers or an XX-XX we that XX-XX home

listening of And agents our so small really just some it a brokerages was combination to of listening teams. and to and

we're the share revenue So interested program. in really

based we program the believe of we that actually So offers that commission choice. a on very -- a a have agents our to is ability but creating a have model, very we're XXX% innovative

the to to I that very makes that once one other our program other able change unique is from year agents think model. a the are thing

they another offers agent company that Fathom program because one in think and a And joins leaving so about an program. different

one same we having we flexibility. comments is the within heard the from of Now both the that And company. of that programs a lot agents offer that's

created actually teams, had So and we something significant response have non very look, past small that's believe a announced implemented that since agents. that this Fathom as brokerages, agents, we some up and our we that part we to we've program, brokers X,XXX something of from unique Wednesday,

with us us the line. perhaps conversations down a in That about interest have demonstrated significant having joining

after back getting this to is that that manifest growth. agent Fathom been we the announcement incredibly immediately has think response XX% we And in itself the going positive. our to So think

this create that think I main So are decided those hybrid the we model. why to reasons

Operator

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

Rajiv Sharma

the higher switching the how your could flat plans? that how you motivation that and see the is up profits out -- follow the to Max is between how revenue want lay now option gross And last more attracting does and behind agents Share an caller. or... I from in simply share, there if I The Again, make

Marco Fregenal

higher-producing the per It's a on the agents number a attracting transactions It's question. new It's hear we right more our that company, to combination joining certainly we're agents from of well great now agent. of as me. XX% of XX% which who conversations joined combination -- also help Great believe will -- estimating based agents, to agents that the program. XX%

combine joining we'll you able of as a program when of number as the So percentage joining higher agents proper a the to group's well XX% our agents be margins. company increase

As inflection follow will where that right? also we right the line a significant a our EBITDA. percentage recall, profit to we are Fathom dollars is of in That at bottom you gross position point, in --

And our well the number gross have margin increasing effect of to we'll profit in quarters, response going this to our a few agents I announced the we have able by think significant as agents transactions coming we so of demonstrate that. going since it's Wednesday, And also as forward. a in, past a given within be level for had higher we'll EBITDA

Rajiv Sharma

X in transactions? cutoffs And are then through were X? What the the what levels

Marco Fregenal

is ]. I the forth go you Well you else else levels recruits terms if means it's of right? somebody [ terms It's recruiting. not sense much levels, so I levels so recruit recruit in And in in -- programs we that and a -- of not at transaction, and much in Which terms of mean, X X somebody right? so agents X both

the our plan higher you can XX% level So, compared XX% at the the that significant in we On release, look Max XX% revenue then the if of right? to programs, X first you on see the is levels a in share appropriate to number do Fathom that Fathom was felt point. share, that. order offers press and And level,

that we doing companies. -- some share after So and decided agents teams with what doing other we agree, research speaking and and revenue worry

number that as and We other with the numerous companies brokerages. had are levels like conversations well X of agents us. teams appropriate members as have We felt is small for

what we do. that's so And to decided

Rajiv Sharma

of still free it. agent are valid then or for Got to valid? older referral And not capped life, referral life the those programs for

Marco Fregenal

It's are until a great be going this question. of valid to year. December Those

X, life, So they January for or go free free life those X the becomes the any will life be capped life for reaches forever. share grandfather capped away. agent there'll for program. therefore, for And or and be revenue programs that program then life new On

We are be giving appropriate to for capped order to free another do. agents the felt X and months life thing We was in life. to reach for that able

And to opportunity their free Life life have the reach are, to so if XX. position for our either then not, agents If they that, all life. whatever grandfather and still every share. capped they agent for December until After reach for already one, continue can revenue earn

the you're joined agents in share any that plan at. company, regardless for revenue are which agent week, already of last earning As

significant creating And agents we work terms so we're our do enhancement of we to feel that refer how a areas. other in with

some advantage for to And are agents themselves significant take build I our families. think their and of going of some this revenue and stream

Rajiv Sharma

so the you just you agent need market it the last confidence growth changing of What gives indicated for to -- you the Got or you can Marco, walkovers get acquisitions? market -- in something or is XX% XX% Is it. looking you're next in is it that question, And quarters. growth? then that my Is several [indiscernible].

Marco Fregenal

mentioned years. has the had XX% Our growth at in for as go we always few last back, goal many to quarters, been,

said What get discussions that to under on this, teams had, I can announced brokerages, our other Since we've confidence in all of pipeline of in us agent within to that as agents. growth. we with agents XX% to regular terms medium-sized and share discussions we've revenue numerous program, been agent we has that, growth. organizations that number brokerages, that goal our had the so Wednesday, back companies get hopefully, X back quarters gives And is or X

confidence And given to feel the to gives more. XX% back X these make to and should that's existing able that within be us growth so that to X perhaps to announcement. able we quarters, But we be get and conversations pipeline that what

Operator

question Davidson. next Tom from our And from D.A. White comes

Wyatt Swanson

Wyatt have best about Tom. terms NAR just like you navigate is the industry approaches. things rep changes as on ways than buyer on August related talk this to agents is XX I any This does telling practices Fathom Can in of in one meaningful their differ what And peers? around to agreements for your settlement. how

Marco Fregenal

are and changed transactions. may the when there I the that think implemented all the back of to you about of approximately this, out I from work And gut government to to the recall a Look, HUD it of I out a lot closing go form to months towards X moving this, side King win, and of total Yes. all took for right? the right, just still process. when the this, CD new X think

the think happen thing here. is I to going same

think a lot of I there's confusion.

are ways. different think is going enforce in to I of that MLSs variety this a

of in they're locally. And board but not country is see going we're have working and to that. the the our . Certainly, buyer seeing in to the rules, analysis. enforce and sense, able and different so every boards MLSs only to then are our put that, going we're already That's to going where the given, side Fathom's already and across looking we MLS to set to a commission do agents own on at a at build And every enforce website we're things and have different not different. we look be to with

every creating every is in and of MLS the working with buyers' state own about different. process because everyone documents and our somewhat agreements, and every Board are in terms to in already doing going that, we're discussions We of be broker

do. to So progressing I specifically things about going speak We're all already think of to early this. we're totality the the still it's

We been this. on have working

of and sure our making kind to the do we is of work working take itself interpretation with going time to that. train a can agents out it to bit a But with implementing that and legal brokers take rules Realty Fathom message and our are adhering itself And team for by We work going while state a So to our our agents and our of to is little users order rules CEO working out. this. we're accordingly. little to it's the certainly and in

company a different. And and some -- to little it of is going do every things

documents. are companies creating their Some

or Some just state the using document companies are board documents. new

with we to the best this. -- our find So team try to to working are approach

fully already industry. all have it's time implement to quickly. rather think have before But everyone still are we'll documents probably go the on comprehends to and We some going in those the impact we working I

And so conclusions I jumping caution going everyone in to how terms change. to of everything about is

lot parts still, the team. moving our process and I of a think with working we're there's through

Wyatt Swanson

sense. any update losses? possible makes you have a the do settlement then That around And industry regarding

Marco Fregenal

Sure.

that that recent size figure that some given would you're be price. really Especially can't announcing And number quickly As at still an in settlement our of we of of we and -- company that we what companies. we But settlements everyone we with think disclose the can forward in you size, our is. I reason, imagine, and out amount to that to can of And reach I as think survive look the terms where kind that settlement are and that. those when can a able We are. look negotiations. for possible. as

soon. I discussions, we given look are still just that in forward rather announcing we on comment to So But leave that. this my

Wyatt Swanson

makes regarding I new models. final just Understood. like have share revenue the one That follow-up complete And sense. then

I more think you EBITDA over both margin margins? into for can and the margins gross missed color this, several just quarters give like I some impact the expected but next

Marco Fregenal

Sure.

a I little to of time. think it's going take bit

We new are to started -- models. already onboarding going agents in start and

QX, for work an take significant perhaps I going bought bit out, we're itself QX us little effect. to -- to their going agent month there if right? again, so first the where changes because, first think of take it's have this in certainly weeks, a And X to agent close to transaction, right? was think to not next a an that I in in I may from the think then actually agent it and see one a and to closing delay don't transaction for agent, a time positive the onboarding

margins, do business that We because our anticipate to little plant question see profit in the a of believe in the over not your do going We next for business. think over significant margins year improvement a the but see the new going of or EBITDA. margin only profit kind new of it's specifically time, margins to early years, we'll not next and change because we're profit or gross title within X so, about gross couple an teens. gross our of increase But models, back we're a I in mortgage continued probably also in terms I In -- because the would I EBITDA that the think have quarters. too to impact.

we'll and a is QX be -- in profit impact it in more going starting from where impact I next will -- QX higher we margins more be think that new to plant. believe have the experienced a gross That's year. of EBITDA that

Operator

will back turn session. call And remarks. for concluding and to to over closing I'd question-and-answer that, be gentlemen, we Fregenal the with Mr. today's ladies like

Now.

make may at this closing remarks time. You

Marco Fregenal

to Thank everyone's our thank you. appreciate everyone and trust. We I want call. for joining support

a you basis. As always, on all I I And you a to hope available week. one-on-one great am with have meet of

for us you joining thank So today.

Operator

concluding do joining. and We Ladies for thank and gentlemen, with that, conference you we'll call today's be presentation.

You lines. may now your disconnect

Fathom (FTHM) 12 Aug 242024 Q2 Earnings call transcript