Fathom Holdings Inc.

We will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Paul Kuntz. Sir, the floor is yours.

Thank you, and good afternoon. Welcome to Fathom Holdings' first quarter 2025 conference call. Joining us today is the company's CEO, Marco Freshenoff, and VP of Finance, Daniel Weinman. 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 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 note that during the call, we will discuss adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. 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. And with that, I will now turn the call over to Fathom's CEO, Marco Fresnall. Please proceed.

Thank you, Paul. Good afternoon, everyone, and thank you for joining us on today's call. I am pleased to welcome you to Fathom Holdings' first quarter 2025 earnings conference. Before diving into the numbers, I want to begin by recognizing the continued dedication and perseverance of our entire Fathom team, our agents, employees, and leadership. The first quarter brought ongoing economic headwinds from elevated mortgage rates to shifting global economic uncertainty, all impacting buyer behavior. But through it all, our team remained focused and our strategy remained clear. The results we are sharing today are a direct reflection of that discipline and execution. We entered 2025 with measure optimism, and I am proud to say we exceeded public expectations. Revenue growth was strong, transaction volume increased, agent count continued to rise, and we beat analyst estimates by a meaningful margin. We also continue our cost-cutting initiatives, reducing expenses by approximately $750,000 per quarter going forward. These efforts are helping us build what we believe will be a more efficient and scalable business. We now expect to achieve adjusted EBITDA profitability in the second quarter, a significant milestone and a testament to the progress we've made over the past year. Now let's take a look at our earnings for Q1. Total revenue rose 32.1% to 93.1 million compared to 70.5 million the same period last year. The performance exceeded ANA's expectations by roughly 12%, demonstrating our ability to grow despite broader economic and industry uncertainty. Brokers' revenue climbed nearly 36% to 88.9 million, up from 65.4 million last year. We entered the quarter with approximately 14,715 licensed agents, a 22.8% increase over Q1 of 2024. Transactions increased by 26%, which approximately 9,715 closing this quarter. Gross profit improved to 8.1 million, up 13% year over year. Excluding baggling insurance, which we divested in 2024, Our gross profit growth was 34% from 6 million in Q1 of 2024, highlighting the strength of our core brokerage engine. Now let me shift to Elevate, our most significant strategic initiative to date. Elevate, powered by our proper target intelligent platform, is a high-margin growth program designed to enhance agent productivity, scale our platform, and drive long-term profitability. It is a concierge-level opt-in offering that provides comprehensive services, including robust marketing and lead generation, lead conversion, transaction coordination, expert coaching, recruiting support, and much more. All of this is delivered by a dedicated team, so our agents can focus entirely on serving their clients. Agents who enroll contribute a 20% commission split, along with the standard transaction fee. That's incredibly competitive when you consider that many agents already pay similar or higher splits at traditional brokerages just to hang their license with limited support behind it. Our goal with Elevate is to bridge the gap that so many agents experience. While most want to reinvest in their own growth, many simply don't have the time, tools, or the know-how to do so. Elevate is designed to remove that friction by giving them the infrastructure, marketing resources, and business coaching they need to scale their businesses efficiently and affordably. Since our soft launch just four weeks ago, we have seen over 120 agents sign up for the program. While we require that an agent must have completed at least four transactions in the past 12 months to qualify for the program, the agents who have signed up so far have an average annual production of between 9 to 10 closings per year. Participating agents are projected to generate a significant increase in gross profit per transaction and EBITDA per transaction. By the fourth quarter, we aim to be onboarding around 100 new agents per month into the program. We're also developing targeted extensions of the program, such as Elevate for Teams and Elevate for Partners to meet growing demand. Additionally, we are in early stage conversations with external organizations interested in licensing Elevate further underscoring the industry-wide potential of this program. What makes all of this possible is IntelliAgent, as the engine behind Elevate. It streamlines operations, minimizes overhead, and enables us to deliver high-touch, high-impact services at a price point that most traditional brokers simply cannot match. Combined with our overall low-cost business model, we believe that gives a significant competitive edge and creates a sustainable and scalable path for growth, both for FADM and for our agents. Although the program is in infancy, we believe the LFA may also have some positive impact in our ancillary businesses as we build a much closer relationship with agents participating in the program. Now let's turn briefly to review market conditions. While mortgage rates remain elevated, they have begun to show signs of stabilizing as the housing market shifts from a seller's market toward a more balanced or buyer's market. One clear indicator of this shift is the increase in housing inventory across key markets. For example, in March, inventories rose by 16% in California, 20% in Utah, 28% in Colorado, and 18% in Georgia. As inventories levels climb, we're seeing a rise in the number of listings with price reductions and extended days on the market. This has led to home prices flattening or experiencing modest year-over-year declines. For instance, average home prices have dropped year-over-year by 2.4% in Florida, 4% in Colorado, 8% in Kansas, and 5% in Illinois. While there are still many uncertainties, we believe Fathom is well-positioned to benefit from even modest improvements in market activity, driven by our lean cost structure and compelling value propositions to our agents. Now, let's review our ancillary businesses. Mortgage revenue increased 13% to $2.6 million for the first quarter of 2025, up from $2.3 million the first quarter of 2024. We have seen an expected increase in file starts for the month of April, which typically indicates the early stage of a seasonal increase in the market. Title revenue increased 43% to 1 million for the first quarter of 2025, up from 700,000 for the first quarter of 2024. File starts for the month of April thus far have increased by over 45% year over year. Together, we believe these businesses are enhancing our margins increased agent retention, and contributing to a more diverse and durable revenue stream. With that, let me turn the call to Daniel Wyman, our VP of Finance, to review our results in greater detail. Daniel?