Fathom (NASDAQ:FTHM) executives highlighted revenue growth, expanding ancillary businesses, and new pricing initiatives designed to improve unit economics during the company’s fourth-quarter and full-year 2025 earnings call. Management also discussed ongoing housing-market volatility, technology investments, and leadership changes at the brokerage unit.
2025 results: revenue rose 25% as transactions grew, while Q4 reflected market softness
President and CEO Marco Fregenal said Fathom generated $420 million in revenue in 2025, up 25% year over year, with total transactions increasing nearly 15%, “driven in part by the addition of My Home Group and the continued addition of strong agents to our network.” He added that gross profit rose 20.8% to $34.2 million and adjusted EBITDA improved by $1.7 million to a loss of $4 million.
On the financials, the company reported fourth-quarter revenue of $90.6 million, down 1.2% from $91.7 million a year earlier, which management attributed to softer brokerage activity. Operator commentary during the call came from Daniel (speaking as management), who said the decline was “primarily driven by a 3.2% decrease in brokerage revenue,” partially offset by ancillary businesses that grew an average of 54.2% year over year.
Fourth-quarter gross profit increased to $7.1 million from $6.7 million and gross profit margin improved to 8.1% from 7.2%, driven by higher-margin ancillary services and the expansion of the company’s Elevate program, according to management. For the full year, gross profit margin decreased to 8.1% from 8.4%, which management said reflected revenue mix changes including the addition of My Home Group and investments in growth initiatives.
Profitability metrics: net loss and adjusted EBITDA improved for the year
Fathom reported a GAAP net loss of $6.7 million, or $0.21 per share, for the fourth quarter of 2025, compared with a net loss of $6.2 million, or $0.29 per share, in the fourth quarter of 2024. Management attributed the year-over-year increase in net loss primarily to a lower income tax benefit and the recognition of an approximately $900,000 loss on the sale of a business.
For the full year 2025, GAAP net loss was $20.3 million, or $0.72 per share, compared with a net loss of $21.6 million, or $1.07 per share, in 2024. Management said the improvement was driven by higher revenue and expense reduction initiatives, partially offset by a $900,000 loss on the sale of a business and approximately $2 million in accrued legal expenses.
Adjusted EBITDA loss improved to $2.6 million in Q4 from $2.9 million a year earlier. For the full year, adjusted EBITDA loss improved to $4 million from $5.7 million in 2024, which management said reflected higher revenue, growth in ancillary businesses, and expense reductions, partially offset by higher technology and development investment.
Expense items discussed included:
- Technology and development: $1.7 million in Q4 2025 vs. $1.8 million a year earlier; $7.3 million for full-year 2025 vs. $6.6 million in 2024.
- General and administrative: $8.2 million in Q4 2025 vs. $8.4 million a year earlier; $33.1 million for full-year 2025 vs. $33.6 million in 2024.
- Marketing: $1.4 million in Q4 2025 vs. $1.9 million a year earlier; $5.2 million for full-year 2025 vs. $5.8 million in 2024.
Segment performance: brokerage volume fell in Q4 while mortgage and title grew
In the brokerage segment, Fathom closed approximately 8,501 real estate transactions in Q4, down 14.2% from 9,903 in the prior-year quarter, which management said reflected elevated mortgage rates, affordability constraints, and limited inventory. Management also cited broader market cancellation data, noting that U.S. home purchase agreements canceled in December were about 16.3% of homes that went under contract during the month, “the highest December level recorded since tracking began in 2017.”
For the full year, the company closed approximately 42,405 transactions, up 14.6% year over year, which management attributed primarily to the My Home Group acquisition. The company ended Q4 with approximately 14,135 agent licenses, down 1.2% from 14,300 at the end of the prior year, with management citing market softness and a focus on “improving agent productivity and overall network quality.”
Real estate division revenue was $84.9 million in Q4, down from $87.7 million a year earlier, while full-year real estate revenue rose 26.8% to $399 million. Brokerage gross profit margin was 5.4% in Q4, flat year over year, and improved to 6.1% for the full year from 5.8%.
Ancillary businesses were a key growth driver in management’s commentary. The mortgage business generated $3.4 million of revenue in Q4, up from $2.0 million, while full-year mortgage revenue rose 17.4% to $12.8 million. Mortgage adjusted EBITDA loss improved to approximately $200,000 in Q4 from a $600,000 loss, and to approximately $500,000 for the year from a $1.5 million loss.
Title revenue rose to $1.8 million in Q4 from $1.3 million, and increased to $6.2 million for full-year 2025 from $4.5 million. Verus Title’s adjusted EBITDA loss was approximately $300,000 in Q4, consistent with the prior year, but the full-year adjusted EBITDA loss widened to approximately $1.2 million from $500,000. Management said the increased loss reflected investment in hiring, market expansion, and infrastructure “intended to support increased attach rates and improve profitability over time.”
Strategic changes: new pricing plan, transaction fee, and agent base actions
Fregenal detailed a series of changes aimed at improving margins and reducing reliance on transaction volume. He described continued buildout of Elevate, a “concierge-level offering,” as well as START, a first-time buyer concierge program added through an acquisition. He said the company had added more than 100 agents to Elevate in Q4 and expanded START into five states so far in 2026, with an expectation to operate in 10 states by year-end.
Fregenal said the company’s goal is for Elevate and START to represent at least 10% of total transaction volume by year-end, increasing to over 15% by the end of 2027, adding that these programs carry higher gross profit margins “typically ranging from 20% to 50%.”
He also described a new commission plan called Edge. Under Edge, new agents will pay a $75 monthly fee, replacing a prior $700 annual fee that was collected on an agent’s first transaction of each anniversary year. Fregenal said the change addressed the fact that approximately 35% of agents “never closed a transaction,” which made the annual fee harder to collect. He added that the annual amount increases to $900 and that the monthly structure should increase predictability and consistency. “We believe this change could add over $1 million in additional gross profit over a full year,” he said.
Under Edge, Fathom is also moving from a flat transaction fee to a 7% split while maintaining a $9,000 annual cap that resets on the agent’s anniversary. Fregenal said the shift allows economics to scale with home prices, and that the 7% split remains below “brokerages which typically charge from 20% to 30% or even more.”
In addition, Fregenal announced a new $250 transaction fee applied to every transaction in Fathom Realty. He said that on the prior Fathom One and Fathom Max plans, “this fee alone will increase our per transaction gross profits by between 45% to 54% on transactions that have not yet reached the annual cap.” He added that on 10,000 transactions, that would represent an additional $2.5 million in gross profit.
Fregenal said existing agents are being grandfathered into their current plan and Edge will apply to new agents joining the platform, with the mix expected to shift over time through attrition and new recruiting. He also said the company is applying a monthly fee to agents who have historically closed zero transactions and expects some to leave. “To date, we have already removed approximately 1,100 of these agents,” he said, adding he expects a similar number to follow and that removing these agents will have “zero negative impact” on net income or EBITDA.
Outlook themes: leads, consumer portal, AI initiatives, leadership changes, and liquidity
Fregenal emphasized that the company is “not counting on a market recovery” and said the pricing and fee changes are intended to improve results “at any level of transaction volume.” He outlined four priorities for 2026: margin expansion, agent experience, customer experience, and AI-driven technology.
On agent initiatives, he said Elevate and START were generating more than 4,000 leads per month, creating over 200 “active customer opportunities,” and that Fathom expects to scale to more than 20,000 leads per month by year-end, including from a partnership with byowner.com. He also discussed Fathom Business Services, a coaching program intended to improve collaboration between agents and loan officers, saying more than 500 agents have completed training and over $10 million in mortgage transactions are in process.
On the customer experience, Fregenal said the company plans to launch an integrated consumer portal in Q2 to provide buyers and sellers with greater visibility “throughout and after the transaction.” He also discussed HOMESTAR, a credit-improvement program, saying more than 600 potential buyers have enrolled and approximately 40% have “graduating towards beginning the homeownership process.”
On technology, he said the company continues to enhance its intelliAgent platform and is leaning further into AI-driven initiatives to streamline workflows and improve efficiency across recruiting, training, lead management, and transaction support.
Fregenal also addressed leadership changes, saying Samantha Giuggio stepped down as President of Fathom Realty. He announced that Lori Muller joined in February as the new President of Fathom Realty, noting her more than 30 years of experience and her most recent role as President of EXIT Realty, where she oversaw a network of more than 25,000 agents.
In the Q&A, Roth Capital Partners analyst Tom Hayes asked about Elevate growth and the Edge program. Fregenal said the company’s goal is to have about 1,000 agents on the “entire Elevate platform” by year-end, up from roughly 260 to 275 currently. He also clarified that Edge would go live on April 1, along with the $250 broker fee, and said the company has heard from some agents interested in moving to Edge even though existing agents are grandfathered.
Discussing the byowner.com partnership, Fregenal said Fathom is already connected and receiving leads, and expects the platform to be “meaningful” as the company moves into Q2, including generating listings. He added that byowner.com “currently get about 500,000 visitors a month.”
On liquidity, management said the company ended the quarter with $5.7 million in cash and did not repurchase shares in Q4 under its existing repurchase program. Management also said that on March 18, 2026, the company entered into a $2 million financing arrangement to provide additional liquidity and flexibility.
About Fathom (NASDAQ:FTHM)
Fathom Holdings Inc provides a real estate services platform that integrates residential brokerage, mortgage, title, and insurance services in the United States. It operates through three segments: Real Estate Brokerage, Mortgage, and Technology. The Real Estate Brokerage segment provides real estate brokerage services. The Mortgage segment offers residential loan origination and underwriting services. The Technology segment provides Software as a Service solutions and data mining for third party customers.
