CARY, N.C., March 23, 2021 /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 fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 Financial Results

Revenue for the 2020 fourth quarter increased 61% to $53.4 million, from $33.2 million for the prior-year period. Fathom completed approximately 7,500 real estate transactions for the fourth quarter of 2020, an increase of 50% from the same period last year. Fathom's real estate agent network grew 37% to 5,471 agents at December 31, 2020, up from 4,006 compared with the year prior.

GAAP net loss for the 2020 fourth quarter was $1.3 million, or a loss of $0.09 per share, compared with a GAAP net loss of $1.3 million, or a loss of $0.14 per share, for last year's fourth quarter. Weighted average shares outstanding increased 36% for the 2020 fourth quarter, versus the same period last year.

Adjusted EBITDA loss, a non-GAAP measure, narrowed to $850,000 for the 2020 fourth quarter, from an Adjusted EBITDA loss of $1.2 million a year ago. 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.

"Our fourth quarter and full-year results reflect the power of our unique model and Fathom's ability to attract real estate agents by providing them with greater income potential along with the technology and tools they require to grow their businesses even further, which, in turn, drives our growth. Moreover, I'm extremely proud that our retention of higher producing agents, or agents closing more than 10 transactions per year, improved significantly from 10% of the overall attrition in 2019 to only 2.5% of the overall attrition in 2020," said Fathom CEO Joshua Harley. "Since going public, we have substantially increased revenue, continued the expansion of our agent network, improved agent retention, entered new geographic markets and completed strategic acquisitions that further solidify our market position.

"We are continuing to identify additional revenue-generating opportunities to accelerate," Harley said. "These opportunities, including adding mortgage and insurance, expanding our geographic footprint, launching a national real estate portal, improving our technology offerings, and acquiring smaller residential real estate brokerages, will allow us to continue providing a growing number of Fathom agents with everything they need to succeed, while becoming advocates for Fathom and helping us accelerate our organic growth through their agent referrals.

"2020 was a watershed year for us, and we are extremely proud of all we have accomplished. We look forward to taking additional actions that will add value to our Company and benefit all of our stakeholders."

2020 Full Year Financial Results

Total revenue for 2020 increased 59% to $176.8 million, from $111.2 million for 2019. GAAP net loss for 2020 was reduced to $1.3 million, or a loss of $0.12 per share, compared with a GAAP net loss of $4.1 million, or a loss of $0.42 per share, for the previous year. Weighted average shares outstanding increased 16% in 2020 from 2019. Adjusted EBITDA loss totaled $381,000 for the 2020 full year, an improvement over an adjusted EBITDA loss of $2.3 million for the 2019 full year.

The Company had cash and cash equivalents of $28.6 million at December 31, 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 proceeds of $31.1 million, net of offering costs.

"We have built a strong balance sheet that allows us to fund additional growth as we execute on our long-term strategy," added Fathom President and CFO Marco Fregenal. "Despite normal fourth quarter seasonality, we generated solid total revenue growth and increased revenue per transaction. The residential real estate market remains strong, and we believe Fathom will continue to play a significant role well into the future."

Recent Highlights

• Acquired Verus Title Inc., expanding Fathom's residential real estate offerings to include title insurance services.
• Entered Michigan market. Fathom now operates in 27 states and 113 local markets, with plans to expand to additional states and Canada.
• Partnered with zavvie to provide residential real estate services to consumers to help them sell their homes more quickly.
• Introduced an expanded referral program to reward Fathom agents for bringing new agents to the Company. Approximately one-third of all agents joining Fathom come through referrals.
• Subsequent to the end of the fourth quarter:
• Acquired the technology platform of Naberly Solutions, through Fathom's intelliAgent subsidiary, to reduce Fathom's reliance on third-party technology providers and offer more robust technology to agents to help them grow their businesses.
• Added to the Company's Board of Directors with the appointment of Ravila Gupta, a seasoned executive with a successful track record in strategic planning, business development, leadership development, marketing and culture.
• Acquired the real estate brokerage business of Red Barn Real Estate, a growing Atlanta metro area brokerage with approximately 230 agents.

Fiscal 2020 Fourth 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, the type of new revenue-generating opportunities, as well as the timing of identifying and completing them. 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.

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SOURCE Fathom Realty