CARY, N.C., Nov. 11, 2020 /PRNewswire/ -- Fathom Holdings Inc. (Nasdaq: FTHM), a holding company that primarily operates through its wholly owned subsidiary, Fathom Realty, LLC, a national, cloud-based, technology-driven, residential real estate brokerage, today announced financial results for the 2020 third quarter and year-to-date period ended September 30, 2020.

Third Quarter 2020 Financial Results

Revenue for the 2020 third quarter grew 74% to $55.8 million, from $32.1 million for the comparable period last year.  During the third quarter of 2020, Fathom completed approximately 8,100 real estate transactions, a 56% increase from approximately 5,200 transactions during the same period last year.  Average revenue per transaction expanded 12% to $6,895, from $6,171 for last year's third quarter.  Fathom's real estate agent network grew to 5,026 agents as of September 30, 2020, up 38% from 3,629 one year ago. 

GAAP net loss for the 2020 third quarter narrowed to $184,000, or a loss of $0.02 per share, compared with a GAAP net loss of $239,000, or a loss of $0.02 per share, for last year's third quarter.  Adjusted EBITDA, a non-GAAP measure, increased to $5,800 for the third quarter of 2020, from an adjusted EBITDA loss of $170,000 for the same period last year.  Fathom is providing adjusted EBITDA, a non-GAAP financial measure, because it provides additional information for monitoring the company's performance.  A table providing a reconciliation of adjusted EBITDA to its most comparable GAAP measure, as well as an explanation of this non-GAAP measure, is included in the tables at the end of this press release.

"By all accounts, the third quarter was a resounding success.  Our significant revenue growth reflected our expanded agent network, focus on increasing agent productivity, and improving market conditions, including continued rising home prices both in our mature and newer markets," said Fathom CEO Joshua Harley.  "I'm especially proud of our results, which exceeded expectations, as we were only public and funded for a little over half of the quarter.  Clearly, our growth is a result of our tenacity, amazing team, and disruptive model that is attracting hundreds of agents each month.

"We are prudently and strategically using our IPO funds to accelerate growth, including our planned acquisition of Verus Title, which we announced earlier this month, hiring new leaders to accelerate our growth, and geographic expansion into the Oklahoma and West Virginia markets.  We are continuing to identify additional opportunities to give us the ability to better serve our agents, including expanding our footprint and increasing our revenue through vertical integration," Harley continued.  "Fathom has built what we believe is an exceptional company dedicated to serving others, which is one of our key missions, and is reflected in both our agent and transaction growth.  Fathom is founded on a culture of service, which assists with our agent recruiting and retention efforts.  I believe our future is very bright.  Our team remains dedicated to proving that out, and we look forward to continued growth and sharing our progress with you."

First Nine Months 2020 Financial Results

Total revenue for the first nine months of 2020 increased 58% to $123.4 million, from $78.0 million for the same period of 2019.  GAAP net loss for the first nine months of 2020 was $66,000, or a loss of $0.01 per share, compared with a GAAP net loss of $2.7 million, or a loss of $0.28 per share, for the first nine months of last year.  Adjusted EBITDA totaled $469,000 for the 2020 period, versus an adjusted EBITDA loss of $1.1 million for the 2019 period.

The company had cash and cash equivalents of $31.0 million at September 30, 2020, up from $579,000 at December 31, 2019, primarily reflecting the completion of the company's initial public offering on August 4, 2020, which resulted in the issuance and sale of approximately 3.4 million shares at an offering price of $10.00 per share, providing net proceeds of $31.1 million, net of offering costs.

"Our balance sheet is strong and flexible, providing us the opportunity to execute our growth plans," added Fathom President and CFO Marco Fregenal.  "Despite the pandemic-related challenges of 2020, Fathom's market remains strong, we are recruiting new agents at a rapid pace, and at the same time, we are working to solidify and expand our market position."

Fiscal 2020 Third Quarter Financial Results Conference Call

About Fathom Holdings Inc.

Fathom Holdings Inc. is the parent company of Fathom Realty Holdings, LLC, a national, virtual, full-service real estate brokerage that leverages proprietary cloud-based software called intelliAgent to operate a Platform as a Service model (PaaS) for the residential real estate industry.  Fathom offers real estate professionals 100% commission, small flat-fee transaction costs, support, technology, and training, all powered by best in class operational efficiencies.  For more information visit www.fathomrealty.com.

Cautionary Note Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such "forward-looking statements" include, but are not limited to, accelerating growth.  Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including:  risks associated with the COVID pandemic; competition; management of growth; risks associated with making and integrating acquisitions; the costs and distractions of operating as a public company; and the others set forth in the Risk Factors section of the Company's registration statement for its initial public offering filed with the SEC, copies of which are available on the SEC's website at www.sec.gov, along with other Company filings made with the SEC made from time to time.  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 and Media Contacts:

Roger Pondel/Laurie Berman
PondelWilkinson Inc.
investorrelations@fathomrealty.com
(310) 279-5980

Marco Fregenal
President and CFO
Fathom Holdings Inc.
investorrelations@fathomrealty.com
(888) 455-6040

(Financial tables follow)

Note about Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company uses Adjusted EBITDA, a non-GAAP financial measure, to understand and evaluate its 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 the Company's 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 Adjusted EBITDA as net income (loss), excluding other expense (income), net, income tax expense (benefit), depreciation and amortization, and share-based compensation expense.

Fathom believes that Adjusted EBITDA provides useful information about the Company's 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 management for financial and operational decision-making.  The Company believes that Adjusted EBITDA helps identify underlying trends in its business that otherwise could be masked by the effect of the expenses excluded in Adjusted EBITDA.  In particular, Fathom believes the exclusion of share-based compensation expense related to restricted stock awards and stock options provides a useful supplemental measure in evaluating the performance of its operations and provides better transparency into its results of operations.

Adjusted EBITDA is being presented to assist investors in seeing the Company's financial performance through the eyes of management, and because it 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, including:

• 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 the Company's business and an important part of its compensation strategy; and
• Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation and amortization of property and equipment and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future.

View original content to download multimedia:http://www.prnewswire.com/news-releases/fathom-holdings-inc-reports-74-year-over-year-revenue-growth-for-2020-third-quarter-301171218.html

SOURCE Fathom Realty