Up-and-coming tech-focused brokerage Fathom is still red hot after reporting huge revenue growth in its Q1 earnings report on Wednesday, crushing projections by almost 15% at $90.1 million while continuing to add agents and build market share.
With over 9,000 agents now nationwide—which translates to 49% year-over-year growth—Fathom is angling to join the big names in national real estate and is confident in further expansion even against market headwinds, according to CEO and founder Josh Harley.
“We are demonstrating the power of our truly disruptive business model quarter-after-quarter through innovation, and by delivering real, long-term value to our agents, employees and clients,” Harley said in a statement.
Wall Street investors were seemingly impressed as Fathom’s stock spiked over 6% to $9.00 in after-hours trading Wednesday, though it opened up-and-down Thursday morning. The company’s board also authorized a $10 million stock buyback plan following the earnings report, and adjusted its guidance for 2022 upward from $435 million to $455 million.
Transactions were also up 47% year-over-year, a little over 10,000 for the quarter.
Founded in 2010, Fathom is an independent brokerage, offering a “cloud-based, technology driven” model and with a focus on supporting agents through scholarships, stocks and health care. In Q1 2023, the company acquired Utah-based iPro Realty Network and expanded its footprint to two new states, now with a presence in 38 and the District of Columbia..
Harley again emphasized the goal of making Fathom profitable in the near-term as the company reported a net loss of just under $6 million this quarter, even while remaining on a rapid growth path.
“I believe we can continue on that growth trajectory while achieving strong profits over time,” said Harley. “Our cash position is strong, and we plan to continue to focus on achieving positive operational cash flow.”
“We are continuing to strategically invest capital to enhance our solid foundation for the sustained long-term growth of our newer business lines,” added Fathom president and CFO Marco Fregenal in a statement. “I believe Fathom remains on track to continue strong revenue, agent, and transaction growth, and with the thoughtful investments we’re making in each of our business lines, we look forward to demonstrating sustainable profitability, one of our key priorities.”
The brokerage side of Fathom’s business accounted for $84.1 million of its revenue this quarter, with $6 million from mortgage, tech and other sources. The company ended the quarter with $30.5 million cash on hand, compared to $37.8 million last quarter as it invested in tech and the stock repurchase program.
