Fathom Holdings Inc. Reports 79% Revenue Growth for 2021 Fourth Quarter; 87% for Full Year 2021
Fathom Holdings reported a 79% increase in fourth-quarter revenue for 2021, totaling $95.5 million compared to $53.4 million in Q4 2020. The company completed approximately 10,800 real estate transactions, a 43% rise year-over-year, and grew its agent network by 48% to 8,100 agents. GAAP net loss for Q4 was $3.6 million, or $0.24 per share, reflecting increased operational costs. Full-year revenue reached $330.2 million, an 87% growth, while total net loss for 2021 was $12.5 million. The guidance for 2022 projects revenue between $425 - $435 million.
- Total revenue grew 79% to $95.5 million in Q4 2021.
- Completed approximately 10,800 real estate transactions, a 43% increase.
- Agent network expanded 48% to 8,100 agents.
- Full-year revenue rose 87% to $330.2 million.
- Cash and cash equivalents increased to $37.8 million.
- GAAP net loss of $3.6 million in Q4 2021, up from $1.3 million in Q4 2020.
- Full-year GAAP net loss of $12.5 million, compared to a $1.3 million loss in 2020.
- Adjusted EBITDA loss increased to $8.2 million for 2021, from $0.4 million in 2020.
CARY, N.C., March 8, 2022 /PRNewswire/ -- Fathom Holdings Inc. (Nasdaq: FTHM), a national, technology-driven, end-to-end real estate services platform integrating residential brokerage, mortgage, title, insurance, and SaaS offerings for brokerages and agents, today announced financial results for the 2021 fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 Financial Results
Total revenue increased
Segment revenue for the 2021 fourth quarter was as follows:
Three months ended | ||
(Revenue $ in million) | ||
Real Estate Brokerage | ||
Mortgage | ||
Technology | ||
Other* | ||
*Other primarily includes revenue generated from Fathom's title and insurance businesses. | ||
"Quarter after quarter and year after year, Fathom's results have continued to demonstrate the power of what I believe is our truly disruptive business model," said Fathom CEO Joshua Harley. "We have been successful in increasing revenue, expanding our agent network, maintaining strong agent retention, entering new geographic markets, and completing numerous strategic acquisitions designed to enhance our business and create new revenue streams.
"Fathom is winning through innovation and consistent growth, and by delivering real, long-term value to our agents, employees, clients, and shareholders," Harley said. "We believe Fathom is on track to continue our strong revenue, agent, and transaction growth, and with the strategic investments we are making in each of our business lines, we look forward to demonstrating profitability in the near future."
GAAP net loss for the 2021 fourth quarter was
General and Administrative expense (G&A) totaled
Adjusted EBITDA, a non-GAAP measure, was a loss of approximately
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.
Full Year 2021 Financial Results
Total revenue for 2021 grew
Segment revenue for the 2021 full year compared with the prior-year period was as follows:
Twelve months ended | ||
December 31, 2021 | ||
(Revenue $ in million) | ||
Real Estate Brokerage | ||
Mortgage | ||
Technology | ||
Other* | ||
*Other primarily includes revenue generated from Fathom's title and insurance business. | ||
GAAP net loss for 2021 was
Adjusted EBITDA loss was
Cash and cash equivalents at December 31, 2021 increased to
"We believe Fathom can achieve strong profits over time, while continuing to grow our business at high rates," added Fathom President and CFO Marco Fregenal. "Our cash position is strong, and operational cash flow generation remains a significant priority as we continue to be mindful stewards of the money with which shareholders have entrusted us."
2021 Highlights
- Acquired Naberly Solutions, a cloud-based technology company that adds significant CRM and website functionality to Fathom's intelliAgent platform.
- Acquired the real estate brokerage business of Georgia-based Red Barn Real Estate, a growing regional brokerage with more than 200 agents.
- Acquired LiveBy, a robust hyperlocal data and technology platform.
- Acquired E4:9 Holdings, which includes Encompass Lending, Dagley Insurance Agency, and Real Results, to allow Fathom to better participate in the full lifecycle of home buying and selling, as well as generate important new revenue streams.
- Acquired Epic Realty, a fast-growing regional brokerage in Idaho with more than 350 agents.
- Added The Woodhouse Group, a 50-agent, full-service brokerage that is consistently ranked among the top-ten residential real estate companies in Boise.
- Ranked among 2021's "Top Workplaces" in Dallas, Houston and San Antonio.
- Launched Fathom Academy to foster collaboration and access to national and local training, professional development and marketing resources across Fathom Realty and all of Fathom's business units.
- Created Fathom's Hispanic Division to better serve a large and growing segment of the market that had been largely ignored, and yet believed to represent over
50% of home buyers by 2040.
Q1 2022 Highlights To Date
- Opened Fathom Realty Montana.
- Opened Fathom Realty New Hampshire.
- Acquired Utah-based iPro Realty Network, a full-service residential real estate brokerage with 435 agents.
- Fathom Holdings subsidiary, Encompass Lending Group, acquired Cornerstone First Financial, a Washington, D.C.-based provider of mortgages for home purchase, debt consolidation and refinancing, as well as home loans for veterans and first-time home buyers.
- Revised agent commission structure to include higher annual and transaction fees for agents.
Guidance/Long-Term Targets
The Company reiterated that it believes it can generate Adjusted EBITDA exceeding
For the first quarter of 2022, Fathom expects total revenue in the range of
For the full year 2022, Fathom is raising its total revenue guidance to the range of
2021 Fourth Quarter Financial Results Conference Call | |
Date: | Tuesday, March 8, 2022 |
Time: | 5:00 p.m. ET/2:00 p.m. PT |
Phone: | 833-685-0908 (domestic); 412-317-5742 (international) |
Replay: | Accessible through March 22, 2022; 877-344-7529 (domestic); 412-317-0088 (international); replay access code 3819627 |
Webcast: | Accessible at www.FathomInc.com; archive available for approximately one year |
About Fathom Holdings Inc.
Fathom Holdings Inc. is a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, insurance, and SaaS offerings to brokerages and agents by leveraging its proprietary cloud-based software, intelliAgent. The Company's brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, and Verus Title. For more information, visit www.FathomInc.com.
Cautionary Note Concerning Forward-Looking Statements
This press release contains "forward-looking statements," including, but not limited to, the ability of the Company to demonstrate solid profitability in the near future. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including: risks associated with making and integrating acquisitions; technology risks; risks in effectively managing rapid growth in our business; reliance on key personnel; competitive risks; our need to attain profitability and/or raise additional funds for operations and future growth; and the others 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 our 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 Relations Contacts: | |
Roger Pondel/Laurie Berman | Marco Fregenal |
PondelWilkinson Inc. | President and CFO |
Fathom Holdings Inc. | |
(310) 279-5980 | |
(888) 455-6040 |
(Financial tables follow)
FATHOM HOLDINGS INC. | ||||||||
Three Months Ended December 31, | Years Ended December 31, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue | ||||||||
Gross commission income | $ 89,670 | $ 53,256 | $ 314,373 | $ 176,631 | ||||
Other revenue | 5,791 | 153 | 15,857 | 153 | ||||
Total revenue | 95,461 | 53,409 | 330,230 | 176,784 | ||||
Operating expenses | ||||||||
Commission and other agent-related costs | 86,117 | 50,429 | 300,509 | 166,344 | ||||
Operations and support | 1,689 | 21 | 5,470 | 21 | ||||
Technology and development | 1,796 | 251 | 3,911 | 372 | ||||
General and administrative | 9,112 | 3,627 | 32,733 | 10,316 | ||||
Marketing | 524 | 383 | 1,895 | 970 | ||||
Depreciation and amortization | 453 | 12 | 1,817 | 36 | ||||
Total operating expenses | 99,691 | 54,723 | 346,335 | 178,059 | ||||
Loss from operations | (4,230) | (1,314) | (16,105) | (1,275) | ||||
Other (income) expense, net | ||||||||
Gain on the extinguishment of debt | (306) | - | (433) | - | ||||
Interest (income) expense, net | 4 | 3 | 7 | 84 | ||||
Other income, net | 125 | - | 59 | (10) | ||||
Other (income) expense, net | (177) | 3 | (367) | 74 | ||||
Loss from operations before income taxes | (4,053) | (1,317) | (15,738) | (1,349) | ||||
Income tax benefit | 427 | 42 | 3,247 | 8 | ||||
Net loss | $ (3,626) | $ (1,275) | $ (12,491) | $ (1,341) | ||||
Net loss per share | ||||||||
Basic and diluted | $ (0.24) | $ (0.09) | $ (0.88) | $ (0.12) | ||||
Weighted average common shares outstanding | ||||||||
Basic and diluted | 15,219,284 | 13,436,464 | 14,269,078 | 11,404,262 | ||||
FATHOM HOLDINGS INC. | |||
December 31, 2021 | December 31, 2020 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 37,830 | $ 28,577 | |
Restricted cash | 91 | 984 | |
Accounts receivable | 3,981 | 1,595 | |
Derivative assets | 53 | - | |
Mortgage loans held for sale, at fair value | 9,862 | - | |
Prepaid and other current assets | 2,633 | 1,700 | |
Total current assets | 54,450 | 32,856 | |
Property and equipment, net | 1,250 | 155 | |
Lease right of use assets | 4,353 | 437 | |
Intangible assets, net | 24,243 | 922 | |
Goodwill | 20,541 | 799 | |
Other assets | 93 | 56 | |
Total assets | 104,930 | 35,225 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | 5,303 | 2,596 | |
Accrued liabilities | 4,401 | 1,065 | |
Escrow liabilities | 90 | 933 | |
Warehouse lines of credit | 9,577 | - | |
Long-term debt - current portion | 831 | 256 | |
Lease liability - current portion | 870 | 140 | |
Total current liabilities | 21,072 | 4,990 | |
Long-term debt, net of current portion | 146 | 283 | |
Lease liability, net of current portion | 3,562 | 301 | |
Total liabilities | 24,780 | 5,574 | |
Stockholders' equity: | |||
Common stock, no par value, 100,000,000 authorized and 16,751,606 and | - | - | |
Treasury Stock, at cost, 5,683 shares as of December 31, 2021 and 2020 | (30) | (30) | |
Additional paid-in capital | 100,159 | 37,169 | |
Accumulated deficit | (19,979) | (7,488) | |
Total stockholders' equity | 80,150 | 29,651 | |
Total liabilities and stockholders' equity | 104,930 | 35,225 | |
FATHOM HOLDINGS INC. | |||
Year ended December 31, | |||
2021 | 2020 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (12,491) | $ (1,341) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 2,748 | 165 | |
Gain on the extinguishment of debt | (433) | - | |
Gain on sale of mortgages | (5,205) | - | |
Share-based compensation | 4,011 | 728 | |
Deferred income taxes | (3,339) | (46) | |
Bad debt expense | 248 | 133 | |
Other non-cash | 15 | (21) | |
Change in operating assets and liabilities: | |||
Mortgage loans held for sale | (179,297) | - | |
Proceeds from sale and principal payments on mortgage loans held for sale | 182,786 | - | |
Accounts receivable | (1,254) | (1,263) | |
Prepaid and other assets | (1,248) | (879) | |
Accounts payable | 1,674 | 1,468 | |
Accrued liabilities | 1,112 | (736) | |
Other liabilities | (1,001) | 608 | |
Operating lease right of use assets | 675 | - | |
Operating lease liabilities | (584) | 23 | |
Other assets | (31) | (55) | |
Derivative assets | 37 | - | |
Derivative liabilities | (120) | - | |
Net cash used in operating activities | (11,697) | (1,216) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (877) | (66) | |
Amounts paid for business and asset acquisitions, net of cash acquired | (11,081) | (257) | |
Issuance of loan receivable | - | (165) | |
Purchase of intangible assets | (2,602) | (422) | |
Net cash used in investing activities | (14,560) | (910) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Principal payments on long-term debt | (740) | (17) | |
Proceeds from the issuance of common stock pursuant to exercise of stock options | 80 | 83 | |
Proceeds from note payable | 1,129 | - | |
Net borrowing on warehouse lines of credit | 1,618 | - | |
Proceeds from the issuance of common stock in connection with public offering | 35,000 | 34,300 | |
Payment of offering cost in connection with issuance of common stock in connection with | (2,471) | (3,183) | |
Purchase of treasury stock | - | (30) | |
Extinguishment of note payable | - | (500) | |
Proceeds from note payable | - | 454 | |
Net cash provided by financing activities | 34,616 | 31,107 | |
Net increase in cash, cash equivalents, and restricted cash | 8,360 | 28,982 | |
Cash, cash equivalents, and restricted cash at beginning of period | 29,561 | 579 | |
Cash, cash equivalents, and restricted cash at end of period | $ 37,921 | $ 29,561 | |
RECONCILIATION OF GAAP to NON-GAAP FINANCIAL MEASURES | ||||||||
Three Months Ended December 31, | Years Ended December 31, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Net loss | $ (3,627) | $ (1,275) | $ (12,491) | $ (1,341) | ||||
Depreciation and amortization | 970 | 58 | 2,748 | 166 | ||||
Other (income) expense, net | (177) | 3 | (366) | 74 | ||||
Income tax benefit | (428) | (42) | (3,247) | (8) | ||||
Stock based compensation | 1,177 | 406 | 4,011 | 728 | ||||
Transaction-related costs | 48 | - | 1,186 | - | ||||
Adjusted EBITDA | $ (2,037) | $ (850) | $ (8,159) | $ (381) | ||||
NON-GAAP FINANCIAL MEASURE
To supplement Fathom's consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses 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.
Fathom defines 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, and transaction-related cost.
Fathom believes that Adjusted EBITDA provides useful information about the Company's financial performance, enhances the overall understanding of its past performance and future prospects, and allows for greater transparency with respect to a key metric used by Fathom's management for financial and operational decision-making. Fathom believes that Adjusted EBITDA helps identify underlying trends in its business that otherwise could be masked by the effect of the expenses that the Company excludes in Adjusted EBITDA. In particular, Fathom believes the exclusion of share-based compensation expense related to restricted stock awards and stock options and transaction-related costs associated with the Company's acquisition activity provides a useful supplemental measure in evaluating the performance of its operations and provides better transparency into its results of operations. Adjusted EBITDA also excludes other income and expense, net which primarily includes nonrecurring items, such as, gain on debt extinguishment and severance costs, if applicable.
Fathom is presenting the non-GAAP measure of Adjusted EBITDA to assist investors in seeing its financial performance through the eyes of management, and because the Company believes this measure provides an additional tool for investors to use in comparing Fathom's core financial performance over multiple periods with other companies in its 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 and stock options, which have been, and will continue to be for the foreseeable future, significant recurring expenses in Fathom's business and an important part of its 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 Fathom's growth strategy and therefore likely to occur; and
- 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.
RECONCILIATION OF GAAP TO NON-GAAP FORWARD LOOKING GUIDANCE | ||||||||
Three Months Ended March 31, 2022 | Year Ended December 31, 2022 | |||||||
Low | High | Low | High | |||||
Net loss | $ (6,550) | $ (6,450) | $ (15,100) | $ (14,100) | ||||
Depreciation and amortization | 1,100 | 1,100 | 4,900 | 4,900 | ||||
Stock based compensation | 1,850 | 1,850 | 9,000 | 9,000 | ||||
Transaction-related costs | 300 | 300 | 700 | 700 | ||||
Adjusted EBITDA | $ (3,300) | $ (3,200) | $ (500) | $ 500 | ||||
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SOURCE Fathom Realty
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