Fathom Holdings Reports First Quarter 2025 Results

Fathom achieved a 32% year-over-year revenue increase in the first quarter, beating analyst expectations by 12%-

Fathom Holdings Inc.(Nasdaq: FTHM) (“Fathom” or the “Company”),a national, technology-driven, end-to-end real estate services platformintegrating residential brokerage, mortgage, title, and SaaS offerings for brokerages and agents, today reported financial results for the first quarter ended March 31, 2025.

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“Fathom achieved a 32% year-over-year revenue increase in the first quarter, beating analyst expectations by 12%,” said Marco Fregenal, CEO of Fathom Holdings. “We also increased our agent network by 22% and closed transactions increased by 26% over Q1 2024.”

“Although we expect 2025 to remain challenging for the real estate industry, we expect Fathom's positive momentum to continue.We are, in fact, currently expecting to be EBITDA positive in Q2 of 2025. Our mission remains steadfast: to build a best-in-class, technology-driven platform that empowers agents, streamlines transactions, and delivers long-term value for our shareholders. We are confident these efforts will foster ongoing success, even in a dynamic market environment.We are focused on driving higher gross profit from ancillary services, increased efficiencies in the My Home Group operation, and higher margins from the recently launched Elevate program.”

During the first quarter, Fathom successfully launched its innovative “Elevate” program, a concierge-level initiative designed to significantly enhance agent productivity, transaction efficiency, and overall profitability. Elevate offers agents a powerful suite of services, including comprehensive marketing, lead generation and conversion, dedicated transaction support, personalized coaching, recruiting assistance, and priority customer service.

“We believe Elevate will enhance agent growth by helping agents increase their business as they become more productive. More importantly, we anticipate the program will significantly enhance long-term profitability by increasing gross profit per transaction,” Fregenal added. “Our goal is to ramp up the program to 100 new agents per month by Q4 of 2025.”

First Quarter 2025 Financial Results

— Fathom's total revenue increased 32.1% to $93.1 million for the first quarter of 2025, up from $70.5 million in the first quarter of 2024.

— Brokerage revenue increased by 35.9% to $88.9 million for the first quarter of 2025, up from $65.4 million in the first quarter of 2024.

— Mortgage revenue increased 13% to $2.6 million for the first quarter of 2025, up from $2.3 million in the first quarter of 2024.

— Title revenue increased 43% to $1.0 million for the first quarter of 2025, up from $0.7 million in the first quarter of 2024.

— Gross profit increased 13% to $8.1 million for the first quarter of 2025, up from $7.2 million in the first quarter of 2024.

First Quarter 2025 Operational Highlights

— Fathom's real estate agent network grew 22.8% to approximately 14,715 agent licenses at March 31, 2025, up from approximately 11,986 agent licenses at March 31, 2024.

— Fathom's real estate transactions grew 26% to approximately 9,715 in the first quarter of 2025, up from approximately 7,703 transactions in the first quarter of 2024.

— Successfully launched the Elevate program.

— On March 10, 2025, the Company issued and sold shares of its common stock to certain investors and members of the Company's Board in a registered direct offering (the “2025 Offering”). The cash proceeds to the Company from the issuance of the shares of common stock in the 2025 Offering were approximately $2.7 million after deducting the offering expenses.

Segment revenue for the 2025 first quarter, compared with the 2024 first quarter was as follows:

Revenue Three months ended March 31,(Revenue $ in millions) 2025 2024 UNAUDITEDReal Estate Brokerage $ 88.9 $ 65.4Mortgage 2.6 2.3Technology 1.1 1.1Corporate and other services (a) 0.5 1.7Total revenue $ 93.1 $ 70.5(a) Transactions between segments are eliminated in consolidation. Such amounts are eliminated through the Corporate and other services line.

GAAP net loss for the 2025 first quarter was $5.6 million, or $0.24 per share, compared with a loss of $5.9 million, or $0.31 per share, for the 2024 first quarter. This decrease was primarily due to a reduction in agent recruiting commissions.

General and Administrative expense totaled $8.6 million for the 2024 first quarter, or 9.3% of revenue, compared with $9.0 million or 12.8% of revenue for the first quarter of 2024. This was primarily due to our continued focus on reducing expenses.

Driven by many of the factors discussed above, Adjusted EBITDA loss, a non-GAAP measure, was relatively constant at $1.5 million in the first quarter of 2025 compared with an Adjusted EBITDA loss of approximately $1.5 million for the 2024 first quarter. Fathom is committed to achieving and remaining Adjusted EBITDA positive moving forward.

Fathom provides Adjusted EBITDA, a non-GAAP financial measure, because it offers additional information for monitoring the Company's cash flow performance. A table providing a reconciliation of Adjusted EBITDA to its most comparable GAAP measure, as well as an explanation of, and important disclosures about, this non-GAAP measure, is included in the tables at the end of this press release.

Guidance/Long-Term Targets

Given the initial success of Elevate, the Company has elected to temporarily suspend guidance while it works with its newly formed Strategy Committee of the Board of Directors to forecast 2025.

Conference Call

Fathom management will hold a conference call today (May 13, 2025) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these financial results.

Toll Free: 888-506-0062 International: 973-528-0011 Passcode:518591 or 'Fathom Holdings'

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.

A live audio webcast of the conference call will be available in listen-only mode simultaneously and available via the investor relations section of the Company's website atwww.FathomInc.com.

A telephone replay of the call will be available through May 27, 2025.

Toll Free: 877-481-4010 International: 919-882-2331 Replay Passcode:52105

About Fathom Holdings Inc.

Fathom Holdings Inc. is a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, and SaaS offerings to brokerages and agents by leveraging its proprietary cloud-based software, intelliAgent. The Company's brands include Fathom Realty, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title, and Cornerstone. For more information, visitwww.FathomInc.com.

Cautionary Note Concerning Forward-Looking Statements

This press release contains “forward-looking statements” that involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including: risks associated with general economic conditions, including rising interest rates; its ability to generate positive operational cash flow; risks associated with the Company's ability to continue achieving significant growth; its ability to continue its growth trajectory while achieving profitability over time; risks related to ongoing and future litigation; and other risks as set forth in the Risk Factors section of the Company's most recent Form 10-K as filed with the SEC and supplemented from time to time in other Company filings made with the SEC. Copies of Fathom's Form 10-K and other SEC filings are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:

Dave Gentry, CEO RedChip Companies, Inc.1-407-644-4256 FTHM@redchip.com

FATHOM HOLDINGS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share data) Three Months Ended March 31, 2025 2024 UNAUDITEDRevenue $ 93,135 $ 70,503Commission and service costs 85,047 63,637General and administrative 8,647 9,000Marketing 1,370 1,201Technology and development 1,937 1,590Litigation contingency 4 -Depreciation and amortization 554 728Loss from operations (4,424) (5,653)Other expense (income), netInterest expense, net 156 105Other nonoperating expense 1,049 152Other expense, net 1,205 257Loss before income taxes (5,629) (5,910)Income tax expense 17 17Net loss $ (5,646) $ (5,927)Net loss per share:Basic $ (0.24) $ (0.31)Diluted $ (0.24) $ (0.31)Weighted average common shares outstanding:Basic 23,407,905 19,178,474Diluted 23,407,905 19,178,474The accompanying notes are an integral part of the condensed consolidated financial statements.FATHOM HOLDINGS INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share data) March 31, December 31, 2025 2024 (UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents $ 7,976 $ 7,127Restricted cash 195 263Accounts receivable 3,133 3,147Other receivable – current 3,000 4,000Mortgage loans held for sale, at fair value 9,508 4,772Prepaid and other current assets 6,962 5,647Total current assets 30,774 24,956Property and equipment, net 1,783 1,854Lease right of use assets 4,370 3,781Intangible assets, net 19,561 20,234Goodwill 21,498 21,498Other receivable – long-term 3,000 3,000Other assets 31 74Total assets $ 81,017 $ 75,397LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 5,199 $ 4,305Accrued and other current liabilities 5,862 4,894Warehouse lines of credit 9,269 4,556Lease liability – current portion 1,483 1,237Long-term debt – current portion 4,158 4,389Total current liabilities 25,971 19,381Lease liability, net of current portion 3,818 3,522Long-term debt, net of current portion 5,086 5,087Other long-term liabilities 2,727 2,726Total liabilities 37,602 30,716Commitments and contingencies (Note 18)Stockholders' equity:Common stock (no par value) – -Additional paid-in capital 142,224 137,844Accumulated deficit (98,809) (93,163)Total stockholders' equity 43,415 44,681Total liabilities and stockholders' equity $ 81,017 $ 75,397The accompanying notes are an integral part of the condensed consolidated financial statements.FATHOM HOLDINGS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)(in thousands) Three Months Ended March 31, 2025 2024CASH FLOWS FROM OPERATING ACTIVITIES:Net loss $ (5,646) $ (5,927)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization 1,440 1,480Non-cash lease expense 357 529Deferred financing cost amortization 25 -Gain on sale of mortgages (1,491) (1,215)Stock-based compensation 1,506 2,652Deferred income taxes 1 5Change in operating assets and liabilities:Accounts receivable 15 356Prepaid and other current assets (315) (901)Other assets 43 8Accounts payable 893 434Accrued and other current liabilities 1,089 1,112Operating lease liabilities (404) (566)Mortgage loans held for sale originations (54,687) (49,598)Proceeds from sale and principal payments on mortgage loans held for sale 51,441 50,684Net cash used in operating activities (5,733) (947)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment (25) (1)Purchase of intangible assets (670) (534)Amounts paid for business and asset acquisitions, net of cash acquired (120) -Other investing activities – -Net cash used in investing activities (815) (535)CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on debt (257) (148)Deferred acquisition consideration payments – (83)Borrowings from warehouse lines of credit 54,959 49,440Repayment on warehouse lines of credit (50,247) (49,277)Proceeds from the issuance of common stock in connection with a public offering 3,043 -Payment of offering cost in connection with issuance of common stock in connection with public offering (169) (28)Net cash provided by (used in) financing activities 7,329 (96)Net increase (decrease) in cash, cash equivalents, and restricted cash 782 (1,578)Cash, cash equivalents, and restricted cash at beginning of period 7,389 7,540Cash, cash equivalents, and restricted cash at end of period $ 8,171 $ 5,962Supplemental disclosure of cash and non-cash transactions:Cash paid for interest $ 90 $ 90Right of use assets obtained in exchange for new lease liabilities $ 946 $ 1,284Reconciliation of cash and restricted cash:Cash and cash equivalents $ 7,976 $ 5,682Restricted cash 195 280Total cash, cash equivalents, and restricted cash shown in statement of cash flows $ 8,171 $ 5,962The accompanying notes are an integral part of the condensed consolidated financial statements.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(UNAUDITED)(in thousands) Three Months Ended March 31, 2025 2024Net loss $ (5,646) $ (5,927)Stock based compensation 1,506 2,652Depreciation and amortization 1,440 1,480Litigation contingency 4 -Other expense, net 1,205 257Income tax expense 17 17Adjusted EBITDA $ (1,474) $ (1,521)

Note about Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use Adjusted EBITDA, a non-GAAP financial measure, to understand and evaluate our core operating performance. This non-GAAP financial measure, which may be different than similarly titled measures used by other companies, is presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We define the non-GAAP financial measure of Adjusted EBITDA as net income (loss), excluding other expense, income tax benefit, depreciation and amortization, share-based compensation expense, gain on sale of business benefit, NAR related litigation contingency expenses and transaction-related cost.

We believe that Adjusted EBITDA provides useful information about our financial performance, enhances the overall understanding of our past performance and future prospects, and allows for greater transparency with respect to a key metric used by our management for financial and operational decision-making. We believe that Adjusted EBITDA helps identify underlying trends in our business that otherwise could be masked by the effect of the expenses that we exclude in Adjusted EBITDA. In particular, we believe the exclusion of share-based compensation expense related to restricted stock awards and stock options and transaction-related costs associated with our acquisition activity provides a useful supplemental measure in evaluating the performance of our operations and provides better transparency into our results of operations. Adjusted EBITDA also excludes other income and expense, net which primarily includes nonrecurring items, such as, gain on debt extinguishment, gain on sale of business, severance costs, and non-cash items representing reserves on certain agent fee collection, if applicable.

We are presenting the non-GAAP measure of Adjusted EBITDA to assist investors in seeing our financial performance through the eyes of management, and because we believe this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to net income (loss), the closest comparable GAAP measure. Some of these limitations are that:

— Adjusted EBITDA excludes share-based compensation expense related to restricted stock awards, restricted stock unit awards, and stock options, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy;

— Adjusted EBITDA excludes transaction-related costs primarily consisting of professional fees and any other costs incurred directly related to acquisition activity, which is an ongoing part of our growth strategy and therefore likely to occur;

— Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation and amortization of property and equipment and capitalized software costs, however, the assets being depreciated and amortized may have to be replaced in the future;

— Adjusted EBITDA excludes the gain on the sale of the business, as this item is non-recurring and not indicative of the company's core operating performance; and

— Adjusted EBITDA excludes NAR related litigation expenses, which could continue to be significant recurring expenses in our business until a final settlement has been approved by the court.

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