Fathom logged a net loss of $4.3 million during the second quarter, an improvement over the $5.7 million loss logged during the first quarter, according to its earnings report released Wednesday.
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Fathom Realty cut its losses during the second quarter, but the 100 percent commission brokerage remains well in the red.
Its revenues improved from the previous quarter as well, with the second quarter bringing in $100.1 million in revenue compared to $77.5 million during Q1. It was, however, down from the $128.2 million it brought in during the second quarter of 2022 as the market has slowed to a standstill.
That growth in revenue was aided by a further boost in its agent count, with Fathom growing its network 14.3 percent to approximately 10,930 agent licenses by June 30, up from approximately 9,560 agent licenses at the same point a year ago. Fathom completed approximately 11,010 during the second quarter, a 16.7% decrease compared to the second quarter of 2022 contrasted against an overall market decline of about 18.6 percent, according to the National Association of Realtors.
“We’ve made significant progress this year in advancing our growth strategy while continuing to adapt and thrive in the rapidly evolving residential real estate industry,” Fathom CEO Joshua Harley said in a statement.
Harley previously predicted that the company would remain in the red until the third quarter of 2023, but admitted Wednesday that it may in fact take longer for the firm to achieve cash-flow positivity.
“During the second quarter, we achieved our goal of Adjusted EBITDA breakeven. We are proud of the tremendous progress we made in reducing our cash burn from over $5 million in Q4 of 2022 to less than $1 million in Q2 of 2023,” he said.
“We continue to be committed to maintaining positive Adjusted EBITDA going forward and ultimately achieving positive cash flow, although the latter may not be reached in Q3. We anticipate continued cash investments to fuel the growth of our mortgage division, agent recruiting, and potential acquisitions.”
For the third quarter, Fathom predicted revenue in the range of $93 million–$95 million and Adjusted EBITDA in the range of $200K–$350K. The company predicted, without giving a specific timeline, that it will eventually generate Adjusted EBITDA exceeding $40.0 million per year at 100,000 to 110,000 transactions per year.
“Our balance sheet remains strong and now that we have achieved breakeven Adjusted EBITDA we can start to show the operating leverage in our businesses going forward,” Fathom President and Chief Financial Officer Marco Fregenal said.
“During the second quarter, we continued to see the benefits from the cost-reduction measures we’ve implemented along with improved performance across all of our divisions, which we believe positions us for profitable growth ahead.”