Fathom Holdings Inc.

Good afternoon, everyone, and welcome to the Fathom Holdings 3Q21 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note that today's event is being recorded. At this time, I'd like to turn the conference call over to Roger Pondell, investor relations for Fathom Holdings. Sir, please go ahead.

Thank you very much, Jamie, and welcome everyone to Fathom Holdings 2021 third quarter conference call. I'm Roger Pondell with Pondell Wilkinson, Fathom's investor relations firm. It will be my pleasure momentarily to introduce the company's founder and chief executive officer, Josh Harley. and Fathom's President and Chief Financial Officer, Marco Frisianol. Before I turn things over to Josh, I want to remind all listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factor section of Fathom's IPO registration statement, its latest Form 10-K and subsequent Form 10-Qs, and other company filings made with the SEC, copies of which are available on the SEC's website at www.sec.gov. As a result of those forward-looking statements, Actual results could differ materially. Fathom undertakes no obligation to update any forward-looking statements after today's call except as required by law. But please also note that during today's call, management will be discussing adjusted EBITDA, which is a non-GAAP financial measure as defined by SEC Regulation G, and a reconciliation of this non-GAAP financial measure to the most comparable gap measure is included in today's press release, which is now posted on Fathom's website. And with that, it's my pleasure to turn the call over to Josh Harley. Josh?

Thank you, Roger. And of course, thank you to everyone who's on today's call. Our entire team really appreciates your support and your faith in us. We're proud that you're a part of our Fathom family. Now, quarter after quarter, our results continue to demonstrate the power of our truly disruptive business model. And I'm proud to be here to share our significant growth. We're winning through innovation and by delivering real long-term value to our agents, employees, clients, and of course, our shareholders. For the third quarter, year over year, revenue grew by 81%. Our agent count grew by 50%. and our transactions grew by 42%. We also reduced adjusted EBITDA losses by over 20% from Q2 to Q3, getting us even closer to adjusted EBITDA breakeven. And while we're continuing to invest in enhancing our foundation for the sustained long-term growth of our newer business lines, those investment dollars are quickly becoming a smaller percentage of our ongoing expenses. There are some who don't really know who we are yet. But with time, I believe more investors will truly understand our business and value us accordingly. If you really dig into our story, you'll realize that not only has Fathom generated impressive performance to date, but we still have an extraordinary path ahead of us. A lot of companies sacrifice profitability for growth. But I'm proud to say that we do not have to operate that way. We can do both. Our cash position remains strong, and we plan to continue to focus on operational cash flow generation Our steadfast discipline allows us to be good stewards of the money with which you've entrusted us. We believe Fathom is on track to more than double its revenue for the foreseeable future, and we look forward to proving it. The question is, how do we get there? Now, since going public, we've substantially increased revenue, continued the expansion of our agent network, improved agent retention, entered new geographic markets, and completed strategic acquisitions designed to further solidify our market position. That's an awful lot to accomplish in just one year, but it demonstrates our focus, our commitment, and our ability to get things done. With the recent addition of our own in-house mortgage, title, and insurance companies, along with additional SaaS product offerings, we now have the potential to dramatically increase our revenue and, importantly, our profitability per transaction. I want to reiterate that these companies are not joint ventures. We fully own each of them. That means that we're not giving up any of the revenue and profitability, and it means we have complete control over the quality of service. That matters a lot. It matters to our clients. It matters to our agents. And it should matter to you because that's how we believe that we can achieve a greater attach rate for these new businesses. Now, as you know, we also recently acquired a lead generation and nurturing company and two technology companies, one specializing in big data aggregation and content creation, and the other specializing in home search and CRM tools to help us attract more buyers and sellers, which in turn also helps to attract more agents. Now, speaking of attracting more agents, we believe that Fathom continues to have one of the most attractive agent commission plans and overall offerings in the industry. I truly believe our comp plan for agents is superior to every other publicly traded brokerage, hands down. Our focus is not just in adding more agents, though, but also helping those agents become more productive, close more sales, and ultimately earn more money. We believe we're accomplishing that by providing more training and more technology to help our agents get in front of more buyers and sellers. As well, we're helping agents reduce the amount of time required to manage the transaction process, giving them more time to network and sell. To prove that point, agents who join Fathom increase their sales by an average of nearly 49% after four years. Many of our agents report doubling their sales after the first year of Fathom. We often hear our agents say that they join Fathom to earn more commission, but they stay for the culture. And I'm proud that we still have one of the lowest agent attrition rates in the industry. And if you want a true representation of whether Fathom agents are happy, our low agent attrition rate is the best indicator. I'm extremely proud that our retention of higher producing agents improved greatly between 2019 and 2020. And we're seeing continued improvements throughout 2021. This quarter, our agent attrition rate remained at less than 1.4%. Digging deeper, agents who close less than one sale per year make up over 75% of the agent attrition, and only 2.5% of our agent attrition comes from agents who close 10 sales per year or more. Said differently, with over 7,500 agents, only nine, nine of those agents closed 10 or more transactions per year in less than Q3, right? It's a very small number. We're very proud of that fact. As some of you know, our agents are quickly becoming evangelists for the company, which we believe should further accelerate our growth over time. Now, as I mentioned, for Q3, We experienced 50% growth in agent count ending the quarter with more than 7,500 agents. One of the beautiful things about this growth is that our cost to acquire one agent during the period was approximately $985, making our breakeven on each agent close to what we make on just their first sale alone. I also want to point out that the average lifetime value of an agent is over $18,000 on just the real estate side of the business. the ratio of that lifetime value to our cost of agent acquisition is over 20X. And that doesn't take into account the revenue from a recently acquired mortgage, title, and insurance companies, or the potential revenue from the leads that we can generate for our agents. Now, we believe that Fathom is in a unique position to grow even faster at a time when the real estate market is turbulent, even if house prices decline. it should not be a headwind for Fathom Realty. In fact, it could actually prove to be a tailwind for Fathom's growth. I want to spend just a minute on this point because I think it's more important than most people realize. While other real estate companies may see strong headwinds as home prices fall or rise, for that matter, as mortgage rates rise and housing remains in low supply, I strongly believe that Fathom could benefit significantly, and here's why. there's only two ways for real estate agents to make more money. One, increase their revenue by selling more homes or decrease their costs. And the biggest cost an agent has is usually their brokerage fees and splits. In a market, where it's hard to find homes to sell or buy, we believe that due to our financial model, agents will be attracted to Fathom in order to make up for any lost income by decreasing the fees they pay. In fact, if an agent closes 20% fewer homes due to the shifting market conditions, but moves to Fathom from a brokerage who's charging them 30% split, they'll actually earn approximately 9% more income. Again, 20% fewer sales, but 9% more income. That sounds like a win to me. And of course, most agents would agree. In fact, we're already seeing some of that benefit through our site traffic. Our careers website traffic is up over 300% year over year as we continue to see interest and fathom growth. Last quarter, I talked about how we were beginning to see home sales and prices normalizing and that we may even see home prices in some areas come down. And that's exactly what we saw this quarter. Prices have come down in many of our markets with homes sitting in the market a little bit longer. But again, I truly believe that this is positive for Fathom long term. It's also important to note that as home prices fall, many of our competitors may see a strain on our profitability because they take a percentage fee on every single transaction, but that would not be the case for Fathom. We earn the same transaction fee from the agent regardless of whether the agent earns a $10,000 commission or an $8,000 commission. This should allow us to continue to capture more market share from real estate companies with the old traditional commission models. As our agent base grows, those agents bring more transactions with them. As we add more transactions, we have more opportunities to capture mortgage, title, and insurance revenue. Fathom's ability to attract an ever-increasing number of real estate agents by providing them with greater income potential along with the technology, training, and support they need to grow their businesses is even more evident today, especially during these unprecedented and changing times. As I mentioned earlier, our results for Q3 were outstanding. Clearly, Fathom is moving in a very positive direction, attracting higher-producing agents and selling more homes in higher-priced markets, which, by the way, should significantly benefit our mortgage title insurance operations as well as the lead business that we're building. In Q3, Fathom Realty added New Mexico and Minnesota, and so now we're actually licensed in 34 states and D.C. We plan to open several more markets in the coming months with longer-term plans to be in all 50 states and eventually move into Canada as well. Now, part of our secret sauce is the advantage that our IntelliAgent platform creates. The obvious being that it helps us attract new agents while helping them become more productive. We're very excited that our technology also allows Fathom to reduce our cost per agent over time while improving our operational efficiencies. We're continuing to work hard in the development of a national real estate search portal as well, Neighborly, which we believe will play a significant role in helping us attract even more agents, as well as homebuyers, while generating greater revenue and profitability from the leads that we generate, along with the mortgage title and insurance business that comes with it. Now, ultimately, our technology platform allows us to eliminate our reliance on third-party tech providers. which reduces our costs significantly. At the same time, provides more robust technology to our agents, employees, and our clients. Intel Agent gives us the power to control the full lifecycle of the home buyer and the seller, gain a greater understanding of our data and how to use it to further improve our offerings while generating leads for our agents. Plus, we can now begin to identify potential clients for our mortgage, insurance, and title companies long before they're under contract. Our SaaS company, LiveBuy, is also making some incredible headway. We now provide tech and or data to more than 750 companies across the country with over 100,000 agents. Some of our customers include CoreLogic, Berkshire Hathaway Home Services, Sotheby's, and App Properties. For encompassed lending, we increased the number of loan officers by 17% with plans to continue adding more loan officers each month to help grow our mortgage operation across the 41 states in which we're currently licensed for mortgage. We've also made significant investments in a mortgage operation, and we're already seeing a great return on that investment in the form of improved tax rate and market share. Our title company, Veris Title, is growing exceptionally as well and i could not be more proud of our team's efforts various is licensed in 29 states now and we're seeing impressive improvements in our attach rate every single month in fact our q3 title revenue alone was almost as high as what we made what they generated in all of 2020 before acquisition industry-wide online notarization was up 547 percent in 2020 And while 2021 numbers for this online trend are not out yet, the industry is seeing that trend continue. Important to note, that trend benefits our title model as more agents accept this new normal. Our insurance company, Dagley Insurance, is currently licensed in 47 states and D.C., and we're gaining traction with Fathom agents every single month as well. one amazing important statistic is that over 43 percent of the insurance quotes that go out are converted in policies we believe that over time our insurance operation could help us improve our revenue and profitability during the seasonally slower winter months and help us through the cyclical nature of the real estate industry total personal lines grew by over 26 percent in the third quarter year over year and total premiums grew by over 12%, rather. This is essentially recurring revenue, and we're just getting started there. As you know, our mortgage, title, and insurance operations were all added through strategic acquisitions, and we've also made several strategic brokerage acquisitions as well in a very short period of time. I bring this up because I think it's important to clarify that at this point, we have all the puzzle pieces we need to build a solid and profitable company. We're working diligently to integrate each business fully to ensure strong attach rates. Moving forward, we expect that any future acquisition we consider will primarily be focused around opening new markets or expanding in the smaller current markets to hit critical mass faster, which also helps growth through name recognition and agent referrals in those new markets. markets that would normally take years to get to a solid foothold. We intend to continue growing quickly and we will use acquisitions strategically as opportunities arise. Now, last quarter, we were able to demonstrate that at only 10,000 real estate transactions, our real estate business achieved adjusted EBITDA breakeven. If we had not made the extra strategic investments into our ancillary businesses, we would have been able to demonstrate adjusted EBITDA breakeven for the whole company. But again, We're playing to win long term, and that requires investments in the business, investments that are already proving to be the right moves. On our last call, we shared that assuming we reach between 100,000, 110,000 transactions per year, we believe we can generate adjusted EBITDA exceeding $40 million. While we're not prepared to provide a timeline for this transaction milestone, we do feel confident we can maintain the strong agent and transaction growth that we've demonstrated since our IPO a year ago, July, and over the last 12 years since our inception. In addition to this, we have decided it's time to provide some additional guidance, which Marco will share shortly. As you can tell, we believe Fathom has a great future, and we're incredibly excited and proud. So with that, I'll turn the call over to Marco. Marco, it's all yours.

Thank you, Josh. I'll start with a review of our third quarter results in some detail. Third quarter revenues grew 81% year over year, reaching more than $100 million. for the first time in our history. Third quarter 21 revenues were $100.9 million compared to $55.8 million for third quarter 2020. This increase resulted from growth in real estate transactions, average revenue for real estate transactions, and revenue contributions from our newly acquired businesses. Gap in that loss for the quarter was $3.4 million, or a loss of $0.24 per share. compared with a loss of 184,000 or a loss of two cents per share for the 2020 third quarter. This Delta from last year's third quarter was due primarily to increasing costs related to operations, marketing, and GNA. The GetNet loss for the third quarter was 3.4 million or a loss of 24 cents per share compared with a loss of 184,000 or a loss of two cents per share for the 2020 third quarter. This delta from last third quarter is primarily due to increasing costs related to operations and marketing G&A. Adjusted EBITDA loss, a non-GAAP measure of 1.8 million versus adjusted EBITDA profit of $5,800 for last year's third quarter. As Josh mentioned, we saw an improvement in the adjusted EBITDA loss on a sequential basis. Once again, our real estate segment had positive adjusted EBITDA as our technology segment. In the third quarter, G&A increased on an absolute basis and as a percentage of revenue. G&A was 9.8 million or 9.7% of revenue compared with 2.9 million or 5.2% of revenue for a year ago. However, on a sequential basis, G&A as a percentage of revenue declined from 11.2 in Q2 of 2021 to 9.7 in Q3. We continue to believe that while G&A expenses will increase going forward, as a percentage of revenue should decrease as we continue to scale and integrate our vertical businesses. Expenses related to marketing activities were 591,000 versus 218,000 for last year's third quarter, mostly driven by an increase in overall marketing activities related to opening some of our new markets. Now I'll review some of our results from our business units. Our real estate division continued to perform very well. As Josh mentioned, we finished the quarter with 7,536 agents, a 50% increase from the same period last year. We closed almost 11,500 real estate transactions for the quarter, a 42% increase from last year's third quarter, while maintaining positive adjusted EBITDA of about $200,000. Continued investments in our mortgage business that were made in Q2 resulted in revenues of $2.6 million, almost double what we generated in the second quarter. The EBITDA loss in the business was approximately $100,000, again, a significant sequential improvement. As I said last quarter, we believed that we had made the necessary investments to grow this business, and expect to deliver rapid growth going forward. Now, turning to our technology segment, third quarter revenues totaled about $700,000 with a slight adjusted EBITDA profit. During the quarter, we launched Live by Local, our hyper-local content offer, and believe that that launch will result in increased SaaS revenues going forward. Our insurance and title business also continue to grow. The combined revenues are $2.4 million for the quarter, compared to $1.9 million in the second quarter of 2021, which is an increase of 26% on a sequential basis. I just stated that that increased to a profit of $13,000 from a loss of $21,000. Now, as we continue to grow both businesses, we plan to provide separate breakouts for our title business next year. We are extremely proud of our third quarter results, and we're very excited about the long-term growth runaway ahead of us. In addition to the milepost Josh discussed regarding long-term adjusted EBITDA, we're now providing revenue and adjusted EBITDA guidance for the coming fourth quarter and full year of 2022. We expect revenues in the range of 82 to 84 million for the fourth quarter. Adjusted EBITDA loss is expected in the range of 1.9 to 2.1 million for the fourth quarter. Full year guidance of 2022, we expect revenues in the range of 410 to $420 million. Adjusted EBITDA is expected in the range of a loss of a million to break even. Now, obviously, guidance consists of forward-looking statements in which, as Roger noted in the beginning of our call, are subject to risks and uncertainty. Now, before I turn the call back to Josh, I'd like to say how proud I am of our team and what we have accomplished in this quarter. Even with the strong third quarter results, I believe there are teams' vision and passion will allow us to continue revolutionizing the residential real estate industry. Now, with that, I'll turn the call back to Josh so we can take your questions.

Thank you, Marco. We believe Fathom has a clear, visible, and long runway with tremendous growth prospects. We've been working hard to deliver on our promise to grow Fathom in an accelerated yet sustainable fashion for the long term. So thank you again for your trust in being part of the Fathom family. So with that, operator, we're now ready to open the call to questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset to ensure the best sound quality. Once again, in order to ask the question at a star and then one, we'll pause momentarily to assemble the roster. And our first question today comes from Tom White from DA Davidson. Please go ahead with your question.

Great. Thanks for taking my question, guys, and congrats on a really nice quarter. I guess, you know, first off on the 2022 outlook, could you maybe share a little bit of insight into, you know, what it might contemplate in terms of kind of organic versus inorganic, i.e., you know, is there kind of further brokerage M&A baked into that? And then I guess a follow-up on M&A, you know, I wanted to confirm that it's mostly or kind of other 100% commission brokerages that you guys are targeting and not kind of legacy incumbents. And maybe just kind of comment on what you're seeing in terms of valuation for those other kind of 100% commission, you know, targets out there.

Let me answer the second part of the question first. I'll let Marco answer the second part. When we're thinking about acquisitions, you're right in that the ones that tend to make the most sense are other 100% commission companies. With that said, though, we're not closed off to the idea of speaking with and acquiring companies who have the traditional split model. In fact, from an agent standpoint, our model is incredibly attractive to those agents. And so, you know, the idea of making that acquisition and any fear of any of the agents leaving because, you know, they're worried about getting a better deal, That goes off the table. You know, we're immediately offering every one of the agents a better deal than we've ever had before. And so those type of acquisitions make a lot of sense. However, you tend to have an issue with the ownership. The owners tend to think that they're worth more than they really are. And so that sometimes can be the struggle in having those conversations. On the other hand, you know, other brokerages that 100% model, They already speak our language. The agents are used to it. That's what they're familiar with. That's what they're interested in. We think about the reverse happening. No traditional company can buy a 100% commission company. If they did that, every single agent would just exodus immediately. I mean, there's no way they're going to go from paying $450 per transaction to a 20% split. or $2,000 or $3,000 per transaction, which is not going to happen. So, you know, us making acquisitions of other 100% commission companies makes a lot of sense. Typically, though, you know, we've been so focused on the business, a lot of these acquisitions are people who've approached us, not the other way around. You know, we have a lot of opportunities, a lot of people constantly approaching us for opportunities of, hey, we'd love to be part of Fountain. We love the vision. You know, we like what you're doing. We want to be part of that growth. And so the companies that tend to approach us tend to be in the 100% realm, which is honestly a much easier acquisition anyways. So hopefully that answers that second part of the question, but I'll let Marco address the first part.

Hey, Tom, great question. In terms of the guidance, it's primarily organic. We do not include any – in these numbers, we have not included any significant acquisitions. So these are organic numbers. In terms of your second part about the multiples, as you can manage for competitive advantage, we like not to discuss multiples as they will be sharing information. There's lots of activity out there. There are lots of companies out there. We definitely have seen an increase in activity from companies looking to make sort of an acquisition. but we typically don't disclose, you know, what the kind of terms are just for competitive advantage.

Yeah, we don't want to be selling against ourselves.

Yep, makes sense. Maybe I'll just slip in one follow-up if I could. Josh, you mentioned, you know, that you're increasingly seeing Fathom agents kind of become evangelists for the company. Curious if there's any kind of additional ways you guys can look to, I guess, incentivize that behavior or compensate agents for that behavior just to kind of accelerate it even more.

For sure. So one of the things that we rolled out last quarter was the idea of this – the compensation plan, the stock comp plan for the agents. So before it was the simple $500 for every agent we referred. And so we rolled out a new plan where, you know, the first five agents you refer is the 500, the next five agents you refer, and then is... I think Josh has lost sound.

So I think what you're saying is that the next agent is 1,000, and then so first agent is 500, two to five is 1,000, and then from there we'll continue to roll. So we implemented this in beginning or mid Q1, And we have seen an increase in the percentage of agents referring other agents. So we've definitely seen some uptake on that. And if you look at the agent growth, we've been averaging, if you look at Q2 and Q3, roughly around 50%, Q1 is 41%. So if you look at Q1 at 41% and you look at Q2 at 52% and then basically 50%, you can see that from Q1 to Q2 is about a 20% increase. So we definitely haven't seen an increase. And we are evaluating other things that we can do, Tom. So definitely there's upside for us to continue to leverage our agents. But having said that, you know, we feel very comfortable about our 50% growth, 50% growth year over year, and we feel that we can maintain the growth for many years to come. But certainly are there things that we can do, and we're evaluating those to perhaps increase that number. But we have seen an increase from Q1 when we implemented the new program.

Can you hear me now?

Yes, Jackson.

Okay. Going back to what I was saying, though, as far as the agent referral plan, the first agent to refer is $500. The second through fifth agent that is referred, the agent gets $1,000 in stock. These are stock grants. Six through ten agents is $1,500 in stock grants. And then 11 plus is $2,000 in stock grants. One thing I do want to say about that is that, you know, we really care about dilution. And so, you know, we look at this plan, we review this plan, we compare this plan with as well as the stock we give for transactions, the stock we give for executive compensation, board compensation. It's still an incredibly small amount of dilution. So we take dilution very seriously, especially with my own family owning about 49% of the company still. You know, we're very thoughtful about that dilution. We don't want to, you know, overextend that. But we think it's a great plan, and the agents have really taken to it. It's been a great incentive for them to, first of all, I want to make sure you understand that agents are referring to their agents because they love the company, not because we're giving them $500 in stock, right? It's not, you know, that's not enough. But we found it is enough to help get them off the fence. If they already love Fathom and they already want to share it, it gets them off the fence to take the next step and actually go out and share it. We've actually had several agents in a very short order, you know, refer over 10 agents in just a few months. And so clearly there's a lot of agents who have really taken to that plan. But even without that plan, we saw a really incredible agent referral program. It's not like we started this program and suddenly started having agent referrals. You know, about 35% of our growth is through agent referrals. And so we're very proud of that fact.

Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. Our next question comes from Darren Atahi from Roth Capital Partners. Please go ahead with your question.

Hey, guys. Thanks for taking my question. Nice quarter, and thanks for providing guidance. A few, if I may. So now that you've had these ancillary services under your belt for a little while, I'm just kind of curious if you can maybe talk high-level about attach rates. You're seeing kind of what's working, what's not, maybe where there's more work to do.

Yeah. Yeah. So, hey, Darren. Great. Thank you. Good to talk to you, and thank you for your question. You know, it's still a little early, right? I mean, we made these acquisitions mid-Q – well, TIDA's been around since – since Q4 of last year, but the other ones were mid-Q2. Certainly, title, if you look at the growth rate, I think Josh mentioned earlier, right? All of last – in Q3 of this year, title did almost all the revenue that they did last year. So we definitely are seeing a very nice attached rate in the markets around, right? And so title is – I would say title is the number one for us in the tax rate. And we're clearly not in the goal that we want to be, but we're making really great progress in the markets that we're fully, which are certainly Texas, North Carolina, Virginia, South Carolina, Georgia, and a few others. So in those – and I think that if the trend continues, I think we're going to be able to meet the numbers that we expect from title. Mortgage and insurance is, you know, it's not at the same level yet, but because, again, we only had one full quarter now, Q3. We are seeing very nice. I think Josh mentioned early that on insurance, we're closing 43% of quality, and we're already seeing a significant increase in the number of transactions that FATM agents are introducing our insurance company to, and we certainly are are very surprised about the closing ratio of 43%. And that's a very nice number. And so that has been a number that has surpassed our expectations. We now need to continue to go execute. We believe that it will take a full year to get the mortgage title insurance to the level that we want. And so this is why when we talk about giving sort of the $100,000 to $110,000 operational leverage to the business, you know, would take us to get there. And I think at that point, we're going to see all these ancillary services at the attached rate that we expect, and I think perhaps surpass that. But so to answer your question, I think that we are definitely on our way to reaching the numbers we expect, but certainly it's a little early to say that we're there. We still have a lot of work to do, but certainly we're very pleased with the results thus far.

Great. Maybe a couple more. On your 22 guidance, just taking the midpoint at 415 million, I think ancillary services were about 5% of mix this quarter. So how do we kind of extrapolate and think about ancillary services out of that sort of 410 to 420?

Yeah, great question. So that percentage will increase. So we believe that over time, ancillary services will continue to be a bigger percentage. And so, you know, if in 2021 we're at 5%, we certainly believe that number will continue to increase over time. So it certainly is a bigger percentage of that $450 million if you use that as a midpoint.

Great. And then this last one for me, and I don't know if Josh is having audio problems, but I think when you went public, you talked about potentially having a mobile application. I still don't see it in the App Store. I'm just kind of curious how strategic that is and if any, there's a timeline on that. Thanks.

No, I'm back. I had to change out AirPods, I think, for the solution. I love technology. Speaking of technology, yes, it is on our path, on our development path. However, it's not the first thing that we're focused on. The first thing we're focused on is finishing out the building out and rolling out our agent websites, brokerage website, the national portal, the CRM, getting it fully integrated. The next, you know, the next focus is what we're actually working on right now as well is making sure that we're fully integrating mortgage title insurance as well to help use that to improve the attach rate. And then from there, the focus is on the, on the, development side of the mobile app. You know, unfortunately, fortunately or unfortunately, I'd love to go out there and hire a bunch of mobile developers. But, you know, as we've said from the beginning, you know, we're really focused on, you know, reaching profitability, you know, certainly just even a profitability as quickly as we can. And so you can't do that when you go out and hire, you know, 50 new developers to build out a mobile site. So we want to do that. It's on our list of things to do. But we're actively building out the rest of it to really make sure we've got a strong product offering for our agents. And then eventually, of course, a strong offering that we can start providing other companies as well for additional SaaS revenue.

Thanks, guys. Congrats again. I'll pass it on. Thank you.

And once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. And ladies and gentlemen, at this time and showing no additional questions, I'd like to turn the floor back over to Josh Harley for any closing remarks.

Thank you, operator. Thanks to all of you for joining our call today and, of course, for your continued support. We're extremely proud of all we've accomplished, but we will never stand on our laurels again. and we'll continue to work diligently toward achieving our collective objective of adding value to our company for the benefit of all our stakeholders. With today being the Marine Corps birthday, I do have to give a shout-out and wish a happy birthday to my fellow Marines, Semper Fi. So thank you for being on the call, and have a wonderful upcoming Thanksgiving. Thank you, everybody.

Ladies and gentlemen, with that, we'll conclude today's conference call. We thank you for joining today's presentation. You may now disconnect your lines.