Fathom Holdings Inc.

Good afternoon and welcome to Fathom Holdings' third quarter 2024 conference call. Joining us today are the company's CEO, Marco Freginal, and CFO, Joanne Zack. Before I turn the call over to management, I want to remind listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to numerous conditions many of which are beyond the company's control, including those outlined in the risk factors section of the company's Form 10-K for the year ended December 31, 2023, 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. Please also note that during this call, we will discuss adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure is included in today's press release, which is now posted on Fathom's website. With that, I'll turn the call over to Fathom's president and CEO, Marco Fragino. Sir, you may proceed.

Thank you, operator. Good afternoon, everyone, and welcome to Fathom Holdings' third quarter 2024 conference call. Before diving into our results and new developments, I want to express my deepest gratitude to the Fathom family. You have shown unwavering commitment and resilience in a year filled with considerable challenges marked by fluctuating mortgage rates, shifts in buyer behavior, economic pressures, lawsuits, and new rules that have changed the industry. Your exceptional efforts have propelled us forward, building a strong foundation that positions us for even greater success in 2025. Our team's adaptability and innovative spirit have set us apart despite its lower housing market shape by persistent affordability issues, tighter lending standards, and a highly competitive landscape. We haven't simply weathered these conditions. We have leveraged them as opportunities to refine our strategy, seek new growth avenues, and evaluate our standards. Your dedication to executing critical initiatives and maintaining high levels of service has been the cornerstone of our progress. Together, we have not only adapted to market changes, but we position Fathom to capture growth and conditions improve, setting the stage for sustained long-term success. Before we review our third quarter results, let's discuss the significant development of the acquisition of My Home Group. As discussed in prior quarters, One of our goals is to return agent growth to 25% plus annually. My home group is a TAP Arizona-based brokerage ranked 27th in the nation by transaction volume. This acquisition makes a significant step in expanding our national footprint and in strengthening our presence in Arizona's rapidly growing real estate market. With over 2,200 agents joining from my home group, The Fathom family has grown to approximately 14,500 agents nationwide. Completing over 12,000 transactions annually, My Home Group has built a strong reputation in Phoenix and surrounding markets. Given their established and highly respected local brand and reputation, we have retained the My Home Group name. The founders, Jeremy Cliven and Mark Hutchins, will continue to lead their talented team. Founded in 2005, my home group has consistently been recognized for growth and innovation, appearing on the Inc. 5000 list of the fastest-growing companies for seven consecutive years. They have fostered a collaborative, growth-oriented culture that aligns closely with Fathom's values, empowering agents to expand their networks, strengthen their brands, and advance their careers. For competitive reasons, we will not discuss what we paid for the acquisition, but I will share that the cash portion of the purchase price had a minimal impact on our balance sheet. Arizona's strong economy, high quality of life, and population growth makes it one of the fastest-growing housing markets in the U.S., presenting exceptional potential for this acquisition. This move will also enable cross-selling opportunities for Tatham's mortgage and title services. enhancing transaction experiences for my home group's clients, which we believe will drive additional revenue across our service platforms. Together, we believe we'll build on our Southwest expansion, develop a robust network of agents, and work towards sustainable nationwide growth. Many reasons led Jeremy and Mark to join the Fathom family, such as our shared values, revenue shared capabilities, technology, and the opportunity to integrate ancillary services into their operation. Going forward, we believe this acquisition will add approximately $100 million in annual revenues in 2025 and significant EBITDA for our company. Strategic acquisitions like My Home Group, which expand our geographic footprint and provide cross-selling opportunities, will continue to play an essential role in our company growth. Our objective is to integrate partners who will see substantial transaction and revenue growth as they join Fathom platform while adding positive EBITDA. Total revenue for third quarter was $83.7 million, a decrease of about 10% from $93.5 million in Q3 of 2023. While comparing the quarters without revenue from DAGLI insurance agents, the decrease in revenue was about 9%. Adjusted EBITDA and non-GAAP measure for the third quarter of 2024, total loss of $1.4 million compared to a loss of $250,000 in the third quarter of 2023. FATM completing approximately 9,331 transactions in the third quarter, a decrease of approximately 9.5% compared to third quarter of 2023. Fathom's real estate agent network grew by 9.3% to approximately 12,383 agent licenses as of September 30, 2024, from approximately 11,333 on September 30, 2023. Of course, after the quarter, we added an additional 2,200 agents from my home group, bringing Fathom's total agent base to over 14,500. During Q3, we made a strategic decision to invest in sales and marketing to promote our new commission plans, FADMX and FADM Share, which we introduced in Q2 of 2024. Second, we invested in additional employee talent to help with our acquisition of My Home Group. Finally, the swing in interest rates during the last month of the quarter significantly negatively impacted our real estate transactions and mortgage profitability. Our transaction volume has improved through October, and we have closed a similar number of transactions in October of this year compared to October of 2023. This is due to the improved quality of our recruiting agents this year. Moreover, adding my home group should significantly increase real estate transactions in Q4, increasing revenue and EBITDA starting in Q1 of 2025. This past quarter, Fathom Realty opened operations in New York, which plans to expand into all 50 states by the end of 2025. Fathom Realty is now in 43 states and Washington, D.C. With renewed energy and focus, our agent growth moving forward thanks to a stronger balance sheet and even more attractive commission plans and revenue share. We're excited about how this could positively impact our revenue and EBITDA growth in 2025. I would like to turn to our ancillary businesses, which offer significant cross-selling opportunities for our agents and drive incremental growth and margin expansion for FAFSA. Our mortgage division, Encompass Lending, maintained a strong growth trajectory in the third quarter of 2024, with revenues rising by 52% year-over-year from $1.9 million in Q3 of last year to $2.9 million this year. This growth reflects the impact of our strategic initiatives implemented over recent quarters and reinforces the division's contribution to our overall performance and our focus on a tax rate. In Q3, mortgage file starts rose by approximately 6% compared to last year's period, demonstrating the strong momentum within our mortgage division and fueling our optimism for sustained growth in the coming quarters. In the third quarter, just a little bit, that was a loss of 319,000 compared to a loss of 219,000 the same quarter last year. Looking ahead into 2025, which you see our mortgage business increase as we leverage growth in transactions for my home group acquisition. Now let's turn to our title division, which saw notable growth in the third quarter. Varus title generated 1.5 million in revenue compared to 834,000 in Q3 of last year. This represents a 71% increase in revenue reflecting steady momentum in this critical segment and reinforcing our value and our ongoing investments in ancillary services. Adjusted EBITDA this quarter was a $93,000 loss compared to a $23,000 loss in the same period last year. We continue to make investments and changes in various titles to prepare the company for anticipated growth in 2025. Adding seasoned industry leaders, Monica Schroeder as president, and Penelope Voelkel as chief operating officer of Varus Title, further reinforces our commitment to Varus Title's growth. Monica brings over 20 years of experience, including leadership in scaling a national title agency. Her expertise in technology and client-focused solutions aligns perfectly with our mission at Varus Title, and we are confident her leadership will drive new levels of operational excellence and expand reach. Penelope, now Vera's title COO, has played an instrumental role in our growth across the Northeast, Midwest, and the D.C. metro region. With a strong legal background and over a decade of industry experience, Penelope brings a strategic perspective that has already proven invaluable. Together, Monica and Penelope are well-positioned to lead Vera's to its next phase of growth, fostering innovation and advancing our service standards. The success we're seeing in our title division demonstrates how Fathom's integrated real estate services platform not only enhances the experience for agents and clients, but also expands and diversifies our revenue streams. By offering a cohesive suite of services, we create multiple touch points to engage clients and reinforce agent satisfaction strengthening our entire ecosystem. We are confident the Veristatus performance in Q3, coupled with our expanded leadership and market reach, points to this division's potential. As we refine operations and continue growing, our strategy of building a fully integrated, full-service real estate platform is providing its value. Our business segments, supported by a strong leadership team, contribute meaningfully to Fathom's financial health and growth trajectory. These achievements exemplify the long-term opportunities to create and retain our service offerings as we build sustained value for agents, clients, and shareholders. At the beginning of 2024, we outlined several key objectives, including strengthening our balance sheet. We strengthened our balance sheet in May by selling Dago Insurance Agency, adding $8 million of cash immediately, and another $7 million over the next 24 months, as proceeds from the sale. In September, we completed a $5 million private placement, a convertible note, within an existing shareholder and our board chairman, enabling us to fast-track target acquisitions and agent walkovers. This capital injection reflects strong shareholder confidence in our vision, a low-fee model, and reimagined revenue share programs. We ended Q3 with $13.4 million in cash, and given that our position of my home group did not significantly impact our balance sheet, we feel very confident about our cash position going forward. In August, we launched our two dual revenue share commission plan, FATM-X and FATM-Share. These two new plans were designed to boost agent recruitment and retention while fostering sustainable growth, and long-term profitability. Fathom's Max plan offers an industry-low $465 transaction fee with a $9,000 annual cap, while Fathom's Share plan offers a highly competitive traditional commission split of only 12% with a $12,000 cap. Both plans offer revenue share for our agents, with FADM's shared plans revenue share opportunity being twice as lucrative as FADM's next plan. This model aligns well with our high commission approach and adds a compelling income structure for agents seeking flexible and increased earnings potential. Since the launch, feedback from both earnings perspective agents has been overwhelmingly positive. While it has been less than three months since we launched a new plan, We have seen 95% of new agents joining the FADMX plan and 5% joining the FADM share plan. However, we've seen significant interest in their share plan from top agents and team leaders who have historically been slower to move due to open transactions with their current brokerage. We believe we will see increased participation in their share plan as we move into 2025. One of the many aspects that make our commission model attractive is the flexibility for agents to choose between the two plans and the ability to change plans once per year as their business changes. In many other brokerages, if an agent wants a better split, they must leave the company for another lower-priced competitor. Our new Revenue Share Commission plan addresses this issue, which we believe will help us improve agent retention going forward. As discussed earlier, the revenue share program was a pivotal to my home group acquisition. I have personally spent the last few days with the my home team agents, and they are excited about the revenue share opportunities. They look forward to helping us grow in the Arizona market and across the country by referring other agents from their professional networks. I most ecstatically share that Fathom Realty recently achieved the highest satisfaction rating among the top 40 real estate companies in the U.S., according to a recent Career.io survey. With an impressive 4.7 rating on Glassdoor, highlighting the risk media, this accomplishment reflects our commitment to fostering a supportive and empowering environment for agents and employees. I am grateful to Fathom Realty's COO, Samantha Giugio, her team, and our managing brokers, whose dedication to agent success has made a positive impact company-wide. This recognition is a testament to our agent-first business model, which includes industry-leading compensation plans like Fathom Max and Fathom Share, unparalleled training, innovative technology, and a collaborative culture that equips our agents to succeed, and deliver exceptional client service. By investing in agents' satisfaction and professional growth, we're creating a win-win environment where agent success directly contributes to Fathom's success, helping us build a brand that stands out in the industry. I'd like to take a moment to discuss an important recent development for Fathom Realty in our ongoing focus on transparency and integrity in our business operations. In September, FADM reached the nationwide settlement related to the Brunette versus the National Association of Realtors case. Although we believe this settlement amount is immaterial in GAAP terms, we felt it was important to disclose this information to ensure transparency with our investors and stakeholders. As part of this settlement, Fathom Realty will contribute $500,000 to a settlement fund and another $500,000 by October 1, 2025, with the final payment $1,950,000 by October 1, 2026. We're confident in our ability to make these payments without impacting ongoing operations or our financial health. Our decision to settle reflects our commitment to our agents and their clients. Fathom Realty has built on the principle of delivering the highest level of support to our agents, and we see the settlement as the most responsible path forward. It will enable our agents to focus fully on their clients without distraction of prolonging litigation. To be clear, this settlement is not an admission of liability or acknowledgement of any claims against us. We maintain that Fathom did not participate on any conspiracy to inflate commissions. and given our fluffy model, we had no incentive to do so. Resolving this matter now allows us to avoid ongoing legal costs and the time demand of the executive team, freeing us from continuing growing our business and supporting our agent's success. As always, our focus remains on delivering excellent service to our agents, clients, and customers. We're moving forward. We're needing stronger dedication to empower our agents to ensuring that they have the resources to excel. Before we return to the financials, I want to recognize and congratulate Joanne Zak on her well-deserved promotion to Chief Financial Officer. Joanne has been a vital part of Fathom team since joining as Senior Vice President of Finance in 2021. And her impact on our financial strategies has been nothing short of exceptional. With over 25 years of experience in finance, spanning in public and private sectors, and industries ranging from life science to manufacturing, Joanne brings a wealth of knowledge and leadership that aligns perfectly with our vision of Fathom's growth. Having worked closely with Joanne over the past three years, I have heard dedication, strategic insight, and commitment to advancing Fathom's goals firsthand. Her contributions have not only enhanced her financial efficiency, but also position us to better navigate an ever-evolving market. As we move forward, I'm confident in Joanne's leadership as CFO will straighten our financial framework and drive continued success. Joanne, thank you for your hard work and partnership. I could not be more thrilled to see you in this new role. With that, I'll turn the call to Joanne.

Thank you, Marco, for the kind words and the confidence you have placed in me. I'm truly honored and dedicated to take on this role at Fathom. Working alongside Marco and the incredibly talented and committed Fathom team, I look forward to building on the solid foundation we've created together to date. As we enhance our financial strategies and leverage our technology, I'm excited to drive Fathom's growth, innovation, and value creation for our clients, agents, partners, employees, and shareholders. Today, I'll walk you through our financial performance this quarter, highlighting the key drivers that continue to propel us forward and share updates on the strategic priorities that are setting the stage for our future success. With that, let's dive into our financial results. Third quarter total revenue was $83.7 million, a 10% decline year over year, compared to $93.5 million for last year's third quarter. The decrease in total revenue was primarily due to an 11% decrease in brokerage revenue and to the absence of revenue from our insurance business, which we sold on May 3rd, 2024. Offsetting the decline in total revenue was a 1.6 million or 44% increase in revenue from our ancillary businesses, as well as the positive impact from our newly implemented high value property fee. Despite the decrease in total revenue, Our total gross profit percentage for the 2024 third quarter, excluding our sold insurance business, increased to 9% from 7% for the 2023 third quarter. Technology and development expenses were approximately $2 million for the 2024 third quarter, compared to $1.7 million for the third quarter of 2023. The approximate $0.3 million increase was primarily due to our continued investment in our technology platforms, including the build out for our new revenue share program. General administrative expense totaled 8.7 million for the 2024 third quarter, compared to 9.8 million for the third quarter of 2023. The decrease was primarily due to the absence of costs attributable to the sale of our insurance segment business effective May 3rd, 2024. Marketing activity expense stayed consistent at approximately 0.8 million for both the third quarter of 2024 and the third quarter of 2023. Gas net loss for the third quarter of 2024 totaled 8.1 million or a loss of 40 cents per share compared to a loss of 5.5 million or a loss of 34 cents per share for the third quarter of 2023. The increase in net loss was primarily due to recognizing the 3.5 million NARA settlement contingency and related fee, legal fee expense. Adjusted EBITDA loss, a non-GAAP measure for the third quarter of 2024, totaled a loss of 1.4 million compared to a loss of 0.3 million in the third quarter of 2023. The decline in adjusted EBITDA is primarily due to a decrease in brokerage revenue and increased costs in growing our ancillary businesses. Now I'll spend time reviewing our business segment results in more detail. Revenue for the real estate division was approximately $78.6 million in the third quarter, compared to $88.2 million for the same period last year, which represents an 11% decline, primarily attributable to a 9% decrease in transaction volume. There were 9,331 real estate transactions during the three months ended September 30, 2024, compared to 10,303 transactions during the three months ended September 30, 2023. Real estate transactions decreased due to the continuation of higher home prices and uncertainty surrounding mortgage interest rates. Fathom is resolved to address this decline and return to meaningful growth by continuing its strategic recruiting efforts powered by its most recently announced new revenue share models and its service commitment to its agents. Growth profit margin for our real estate division improved to 5.7% from 5.1% for the third quarter of 24 compared to the third quarter of 23. The increase in margin was largely due to our increasing our agent's annual fee from $600 to $700 and to implementing our new high-value property fee commencing January 1, 2024. Adjusted EBITDA income in the real estate division was approximately $0.8 million in Q3 of 2024, a decrease of 0.8 million compared to adjusted EBITDA of 1.6 million in Q3 of 2023. This is largely due to the decrease in transactions in 2024 and to the commencement of internal charges from our technology division to Fathom Realty for transaction management and CRM services provided. We are very excited about the significant improvement made in our mortgage business's revenue. Revenue grew to $2.9 million in Q3 2024 compared to $1.9 million in Q3 of 2023. This revenue growth was essentially driven by our strategic increase in our loan officer base. Mortgage adjusted EBITDA loss for Q3 2024 of $0.3 million was relatively consistent with Q3 of 2023 due to our strategic investments in planned future growth. Various titles had revenues of $1.4 million for the third quarter of 2024 compared to $0.8 million for the third quarter of 2023, an increase of 71%. The increase in revenue was driven by organic growth and walkovers. Various titles adjusted EBITDA for the 2024 third quarter with a loss of $0.1 million versus close to breakeven for Q3 2023. This is again due to our strategic investments in planned future growth. Varus Tidal heads into Q4, still very much in the growth model. With the acquisition of My Home Group, Varus expects Q4 to start to record revenues from transactions in Arizona. Varus has also recently expanded operations into Oregon and has planned expansion increase for the rest of the West, including Utah, Nevada, and Colorado. Moving to our technology segment, Third-party revenues remain relatively constant at $0.8 million in Q3 of 2024. We are unceasingly building enhancements to our technology platform to better serve our agents and drive revenues. LiveBuy has made significant strides in product development and customer engagement. The company launched a new version of its website, showcasing its commitment to improving user experience and increasing inbound leads. We continue to keenly focus on our balance sheet, given the dynamic real estate market conditions. In September 2024, the company issued senior security convertible promissory notes in the aggregate principal amount of $5.1 million to an existing shareholder who owns more than 5% of Fathom's common stock and to the chairman of the company's board of directors. We ended the quarter with a cash position of approximately $13.4 million, which combined with the $0.7 million in cash to be received over the next 24 months from our sale of DIA strongly positions us for implementing our growth strategy. Regarding our financial outlook, in light of the uncertainty of interest rates and the yet to be determined impact on future revenues and adjusted EBITDA from our recently completed and planned acquisitions, along with our new revenue model offerings, The company has elected to withhold guidance for the fourth quarter ending December 31, 2024. Management plans to reassess and potentially reinstate guidance expectations in the first quarter of 2025, allowing time to evaluate the performance of these new models and the impact of our acquisition. With that, I will turn the call back over to Marco for closing remarks.

Thank you, Joanne. Looking forward, our focus remains squarely on increasing revenue, agent count, and transactions by over 25% annually. We believe we can accomplish this by attracting top-tier agents, teams, and brokerages to a stronger-than-ever value proposition with our new agent commission plan. Tailored to the current market dynamics, these plans aren't just about reshaping Fathom. They're poised to influence the entire industry. At Fathom, we have worked hard to create a premier destination for agents, and our Fathom Max and Fathom Share plans exemplify that commitment. These offerings allow agents to maximize their earnings, combine an industry-leading flat fee commission structure with an innovative revenue share program. Our vision is clear. Established Fathom Realty is a leading brand in every market we serve. reaching 50 states by 2025, with our new plans as a critical driver of this expansion. Execution is essential to achieving this vision. Our industry-leading commission structure and revenue share program are a source of competitive advantage and remain at the core of our growth strategy. They equip us to drive profitability. We provide a powerful value proposition for agents and clients with our scalable and asset-line model, proprietary technology platform, and integrated mortgage and title and SaaS services. These advantages, along with our experienced management team's strategic insight, position us well for sustained growth in the real estate industry. I'd like to express my gratitude to the entire Fathom team. Your dedication and hard work, particularly around implementing our transformative plans and essential to our growing success. Together, we're not just adapting to change, we're driving it with a clear strategy, commitment to innovation, and unwavering agent-focused approach. We're positioned to lead the real estate industry into new era of growth and profitability. Over the past months, I've doubled down on bringing and promoting the right people. As Jim Collins wrote in his excellent book, Good to Great, Building a resilient, high-performing organization, it starts with getting the right people on the bus. With the recent promotions of Joanne and Penelope and additions as John, Monica, Mark, and Jeremy, our new agents, I believe we have a strong team that can lead during our anticipated growth in 2025 and beyond. We remain committed to prudent financial management, strategic investments in growth, and operational excellence. Our ability to execute on multiple fronts, growing our agent base, enhancing profit margins, and managing cash flow is a testament to the strength of our business model. As we move forward, we are laser focused on driving results or a new commission model and integrating the My Home Group team into the Fathom family and future team and brokerage acquisitions as we occur in discussions with. With planned investments in these areas, we anticipate modest transaction growth in Q4, and given the positive impact of my home group and other future transactions, we anticipate 25% agent growth in 2025, and we believe we should lead to adjusted EBITDA profitability in 2025. We're confident that these initiatives, backed by the resilience and commitment of our team, should deliver long-term value to our shareholders. Operator, we're ready to take questions.

Thank you. At this time, we will conduct the question and answer session. If you would like to ask a question, please press star 1 on your phone now, and you will be placed in the queue in the order received. Once again, to ask a question, press star 1 on your phone now. We are ready to begin. Our first question comes from Darren Ashati. Darren, you may ask your question.

Hey, this is Dylan for Darren. Thanks for taking my questions. First, to start on the My Home Group acquisition, could you give us some more color? Did you approach them? Did they approach you? And then, like, what else do you see that's out there on that front? It seems like that organization specifically skewed a bit higher than your existing agent base in terms of productivity. Do you think there's other options out there or Just how are you thinking about sort of your walkover approach or first acquisition?

Hey, Dylan, thank you for your question. We were introduced to the My Home Group by Rima, which is a real estate mergers and acquisitions company that we've been working with. And, you know, we introduced them about six, seven months ago. Initially, the conversation was just about getting to know each other. And after we continued that discussion, it was so clear that it would make sense for us to merge. And I described many of the reasons why they felt compelled to do that. They are a great organization. They have a higher productivity in terms of transactions per agent. And so we feel very blessed to be able to work with them now. We are seeing, since we launched the revenue share program, we certainly have seen an increase in the number of companies approaching us. And so, yes, we are definitely seeing an increase in number of companies. We are, as I discussed in the earnings call, we are in other discussions with other companies. And that's why we have confidence that we'll be able to grow agent count by 25% going forward, given that these discussions and the high interest from brokerages, teams, both in terms of walkovers and in terms of acquisitions.

Great, thank you. And as a follow-up, I know you're working on your recruiting efforts. Can you talk about a little bit what's working and what you're doing differently than before, and then Is there anything you think you can do maybe on the educational front or technology side of things that can help your existing agents continue to be productive despite some of the market trends?

Oh, absolutely. So, yes, we certainly have seen an increase in agents interested in learning about a revenue share model. As you know, a revenue share model is unique because we have two different plans, right? Unlike most companies out there that have revenue share models, it's just one plan, the traditional split. We have a program that has both a flat fee and a traditional split. And so a lot of agents are interested in learning, and we are spending a lot of time educating prospective agents on that. In terms of helping our agents grow their business, we are working on several programs that we are going to announce in the next 60 to 90 days. We have the Fathom Summit next week. Some of those will be announced next week. And all these programs are designed to help our agents increase their business. There are branding programs and marketing programs, and we certainly look forward to implementing these in the next 90 days. And we believe that they will be incredibly helpful to help our agents increase that. I'll also point out, as I did in an earnings call, that when we looked at October numbers, our October transactions compared to last year are pretty much right on in terms of the And so we are, the efforts that we began implementing in Q1 of this year to focus on higher producing agents is beginning to pay off. And so now that as we look into Q4, we believe that we'll see an increased number of transactions per agent because of the quality of the agents that we brought on in the beginning of this year. And so I think we sort of turned the tide in terms of agent productivity. We're about to launch some specific programs to do that, and certainly the addition of my home group, all those who contribute to an increased number of transactions in Q4 and beyond into next year.

Great, thank you. Thank you for your question, Dylan, from Roth Capital. Our next question comes from Raj Sharma with B. Reilly. Raj, you may ask your question.

Yeah, thank you, guys. Thank you for taking my question. I just wanted to understand, you know, congratulations on the acquisition. The addition of these agents you just briefly kind of touched upon, Marco, that, you know, can you talk about how much was paid or was it cash? Was it, you know, and how ongoing... compensation incentives are structured for agents, uh, agent groups coming on?

Sure. Um, you know, for competitive reasons, given that we are, uh, in negotiations with several other companies, we certainly don't want to disclose, um, what the, the, the payment was. Uh, what I will share is that the cash component was minimal, uh, in terms of the total purchase price. Uh, both Jeremy and Mark, uh, believe in the future of the combined companies until the majority of the purchase price was in stock and it was paid over a couple of years. And so we feel, I think both parties feel very good about the transaction. And because again, we are engaged with several other companies, we prefer not to disclose what the total price is. So to answer your question in terms of potential future, acquisitions, yes, we are engaged in a variety of conversations with other companies. Since we announced revenue share, we've been approached by a great number of small brokers, large brokerages, teams, and those conversations will continue. This is critical to us as we return to 25% age and growth on an annual basis, and that's how we feel confident that we'll be able to get back to those numbers.

Yeah, thank you. That's very helpful. So is it fair to assume that the 25% growth in agents you are anticipating starts pretty soon and that the payment for the growth in agents would be similar, minimal cash and mostly stock?

Well, we certainly feel that way, right? I mean, I think when you enter negotiations, everyone's a little different. But we certainly want to bring in companies where the current owners believe in the long-term value that this will bring, right? Therefore, a significant higher percentage in stock is advantageous to both parties. In terms of 25% growth, you know, with the acquisition of my home group, we're probably pretty close to that kind of growth already this year. And so as we look for into 2025, I think starting in Q1, you're going to see an increase in agent count as well. And so we feel fairly confident that that 25% agent growth will continue as we enter into Q1 and beyond.

Got it. And then, Marco, you mentioned that this would add an incremental $100 million in revenues starting 2025. This is $100 million from the MyHome.

That's correct. Yeah, when you look at the total number of transactions and revenue per transaction, this acquisition would add roughly $100 million in revenue for 2025. Okay.

and spread in a similar cadence to the existing business through the year?

That's correct.

Also, the assumptions you're using for the $100 million are sort of similar transactions for agents and commission for transactions, or they seem to be higher?

No, my home group has a higher productivity. My home group has done a very good job of having a higher productivity transactions per agent. So that's incredibly attractive. Second, their transactions are a bit higher. The Arizona market is a hot market. And so revenue per transaction there, the average transaction there is a bit higher than ours because again, we're a national company, right? So we are in a lot of markets in which the transactions are, the average transaction is a bit lower. But focused on the Arizona market, they have a higher transaction price per transaction and a higher productivity transactions per agent. So both of those are going to have a significant positive impact in the overall performance of Fathom.

Got it. And then just lastly, Marco, is it too early to comment on or quantificate on the impact of the cuts today, you know, the earlier cut on your transactions?

Sure, the 25 basis cut that was done today. So it's probably a little too early, right? We know what happened after the 50 basis cut a couple months ago, and the 10-year note went up. And I think everyone anticipated it to go up a little. I don't think anyone, well, I shouldn't say anyone, but I think most of us did not anticipate rates to go up so much higher than And so, given that, I would hold judgment on what the impact will be on the 25 basis points. I think we have to see. I think that the 10-year came down a little bit after that. You know, I think that there's some recent comments about how the new administration is going to affect inflation. So I think there's a lot of moving parts to this. We are going to assume that rates are going to be where rates are, and our focus is going to be on growing transactions, therefore growing revenue, and consequently growing EBITDA. And we're going to do that by accelerating our growth, getting us focused on growing our business by 25% plus per year, and then the rest will take care of itself. We don't have control of interest rates, I only have control about the things that I can do, which is focus on our entire team on growing the business and getting us back to this 25% plus growth a year, which, you know, as we continue to do that, it will take care of profitability. So that's our focus.

Thank you so much for answering my questions. I'll take it offline again. Thanks.

Thank you, Raj. Great talking to you.

Thank you for your questions. With that, we will be concluding today's question and answer session. I'd like to turn the call over to Mr. Fresno for his closing remarks. Sir, please proceed.

Thank you everyone for joining us today. We appreciate everybody's focus. I certainly want to thank the entire team. for all their hard work and commitment. As always, I'm available for calls, and I hope everyone has a great rest of the week and weekend. Thank you all.

Ladies and gentlemen, with that, we'll conclude today's conference call. Thank you for joining. You may now disconnect your lines. Have a pleasant evening.