Fathom Realty announced financial results for the 2021 second quarter, including year-over-year revenue growth of 118%.
Second Quarter 2021 Financial Results
Total revenue for the second quarter of 2021 rose to $84.2 million, from $38.7 million for the same period last year. Fathom completed 10,100 real estate transactions for the 2021 second quarter, a 74% increase from the 2020 second quarter. Fathom’s real estate agent network grew approximately 53% to 6,950 agents, up from 4,554 agents one year ago.
During the 2021 second quarter, primarily due to its acquisition activity, the company began reporting selected financial results for its vertically integrated segments, with revenue as follows:
– Real estate brokerage revenue, which includes real estate brokerage services, was $80.2 million for the second quarter of 2021, compared with $38.7 million in the prior year period.
– Mortgage revenue, which includes residential loan origination and underwriting services, was $1.5 million for the second quarter of 2021. There was no revenue generated from mortgage services in the second quarter of 2020.
– Technology revenue, which includes SaaS solutions and data mining for third-party customers, was $530,000 for the second quarter of 2021. There was no revenue generated from technology services in the second quarter of 2020.
GAAP net loss for the 2021 second quarter was $2.1 million, or a loss of $0.15 per share, compared with GAAP net income of approximately $161,000, or $0.02 per diluted share, for the 2020 second quarter. Weighted average diluted shares outstanding increased approximately 40% for the 2021 second quarter, compared with the same quarter last year.
The year-over-year change in GAAP net income (loss) resulted primarily from strategic investments in future growth related to enhancing operations, marketing and G&A, partially offset by an approximate $2.6 million income tax benefit attributable to the discrete release of the valuation allowance against the company’s historical deferred tax assets, and recognition of a portion of its current period deferred tax asset in connection with its acquisition activity in the second quarter of 2021.
G&A as a percentage of revenue declined for the 2021 second quarter, compared with the 2021 first quarter, and is expected to continue declining as a percentage of revenue over time as revenue increases. G&A expense totaled $9.4 million for the 2021 second quarter, compared with $2.0 million for last year’s second quarter. The increase in G&A principally related to acquisitions, public company costs and continued investments in growth. It is anticipated that G&A expense will increase on an absolute dollar basis going forward, driven by acquisitions, public company costs and costs related to scaling and integrating the company’s vertical business lines.
Adjusted EBITDA loss, a non-GAAP measure, was $2.3 million for the 2021 second quarter, versus an Adjusted EBITDA profit of approximately $329,000 a year ago. By segment, adjusted EBITDA was as follows:
– Real estate brokerage adjusted EBITDA profit was $496,000 for the 2021 second quarter, compared with $329,000 for the same period last year.
– Mortgage adjusted EBITDA loss was $890,000 for the 2021 second quarter. Mortgage did not contribute to Adjusted EBITDA for the same period last year.
– Technology adjusted EBITDA loss was $307,000 for the 2021 second quarter. Technology did not contribute to adjusted EBITDA for the same period last year.
“Quarter after quarter, our results continue to demonstrate the power of our truly disruptive business model. In fact, we more than doubled revenue for the second quarter. Fathom’s second quarter last year showed the strongest revenue growth of all publicly traded real estate companies, and we weren’t even public yet. We are very proud to have this level of revenue growth stacked on top of a previous stellar performance,” said Fathom CEO Joshua Harley.
“It is important to note the incredible runway for future growth that we have as a result of our very recent entry into additional vertical business lines. We’re just getting started,” added Harley. “One of the best parts of our story is that we now fully own mortgage, title, insurance, lead generation and lead nurturing businesses, as well as two technology businesses, all helping us attract more home buyers and sellers, which, in turn, also helps us attract more agents—one of the key pillars in our growth strategy.”
“With all of the puzzle pieces now in place, we are focused on leveraging the elite team we’ve built to make real, significant and lasting change in the real estate space,” Harley said. “I believe the addition of these capabilities gives Fathom the potential to significantly increase our revenue and profitability per transaction, over time. Without a doubt, growing our revenue, transactions and agent network is important, but growing profitability is our No. 1 priority. Although many companies sacrifice profitability for growth, I believe we can achieve both through our proprietary technology platform, streamlined operations and great value proposition for agents.”
“We may still be small on a comparative basis, but we are mighty, and I strongly believe we have an incredible path ahead of us. Our ability to attract an ever-increasing number of real estate agents by providing them with greater income potential, and the robust technology, training and support they need to grow their businesses is even more important during these unprecedented times. We look to the future with enthusiasm, optimism and excitement as we continue to quickly take market share from the old-school real estate companies with outdated commission models,” Harley concluded.
For more information, please visit www.fathomrealty.com.