Fathom Holdings at The Gateway Conference: Strategic Tech Moves in Real Estate

On Thursday, 04 September 2025, Fathom Holdings (NASDAQ:FTHM) took center stage at The Gateway Conference 2025, presenting a robust strategic overview amidst a challenging real estate market. The company showcased significant revenue growth and introduced innovative services, despite facing market volatility. The focus on technology and strategic acquisitions was highlighted as both a strength and a potential risk due to market uncertainties.

Key Takeaways

• Fathom Holdings reported a 36% increase in Q2 revenue year-over-year.
• The company emphasized its technology platform, likened to an ERP system for real estate.
• Fathom launched "Elevate," a service to boost agent efficiency by handling non-sales tasks.
• The company aims to expand its agent count to 100,000 through organic growth and technology licensing.
• Fathom plans to license its technology platform to other brokerages starting next year.

Financial Results

• Q2 2025 Revenue Growth: 36% year-over-year
• Transaction Growth: 25% year-over-year
• Agent Growth: 23% year-over-year
• Adjusted EBITDA: Positive in Q2, with expectations for Q3
• Mortgage Business Growth (Jan-Jun): 65%
• Title Business Growth (Jan-Jun): 89%
• My Home Group EBITDA projection for the next year: $1.2 million

Operational Updates

• Technology Investment: $20 million invested in their ERP-like system for real estate
• Technology Licensing: Set to begin early next year, opening a new revenue stream
• Elevate Concierge Service: Recently launched, with 70 agents currently using it, aiming for 300 by year-end
• Agent Turnover: Less than 1.5% monthly, significantly lower than the industry average of 3%
• Cost per Transaction: $270, considerably lower than competitors
• Geographic Expansion: Operating in 43 states

Future Outlook

• Projected Overall Market Growth: Transactions expected to rise to 4.5 million next year
• Long-Term Market Growth: Close to 5 million transactions by 2027
• Home Prices: Anticipated 10% decrease over the next year
• Interest Rate Expectations: Predicted to drop to 6.25%
• SaaS Model Growth: Targeting 40,000-60,000 agents through the SaaS platform

Q&A Highlights

• Closing Process Efficiency: Complexity acknowledged due to multiple stakeholders
• Elevate Commission Structure: 20% commission for the service; EBITDA per transaction is approximately $1,000
• Fathom’s Unique Proposition: Ability to work with agents at any stage of their career

Readers are encouraged to refer to the full transcript for a detailed understanding of Fathom Holdings’ strategic plans and insights shared at the conference.

Full transcript - The Gateway Conference 2025:

Operator: We’re going to get started here. Next to present is Fathom Holdings. Fathom is a national technology-driven end-to-end real estate services platform integrating residential, thoroughbred mortgage, title, and SaaS offerings for brokers and agents. Here to present is CEO Marco Fregenal.

Marco Fregenal, CEO, Fathom Holdings: Thank you. Morning, everyone. Good morning. Let’s get started. Just to start with a few highlights from this year thus far, which is only 2025, actually, but 36% growth in Q2 year over year. As we know, the real estate industry has had some tough times the last two and a half years because of interest rates. We’re pretty proud that even in difficult times, we grew 36% year over year in terms of revenue, 25% growth year over year in transactions, and 23% agent growth. We grow our business in several ways. One is certainly by adding more agents, more transactions, by helping our agents actually close more transactions as well, and then through ancillary services that I’ll discuss a little bit later. We invested about $20 million in technology. The reason I highlight that is because at the core, we are a technology company.

I actually joined the company 12 years ago to really build a technology company. We act like a real estate company because we have to, but really, at the core, we are a technology company. We have 40 developers. The best way to think about technology, and I’ll talk more in detail in a few minutes, is to think of it as an ERP system for the real estate industry. In a sense, we have two customers. We have the real estate agent, who is our customer, and that has been really what we have built thus far, which is fairly comprehensive. Now we’re working on the second part, which is the interaction between the agent and the consumer, which is a portal that’s coming early next year. We’ve done a lot of acquisitions.

The most recent one was My Home Group, which is one of the largest companies in the country, and it was 2,200 agents. That gives you a few of the achievements so far this year. The market has been a very tough market. There’s no question about that. Interest rates have significantly changed. What most people don’t talk about, which is a bigger impact, is the prices of homes. Five years, four years ago, the average home in the U.S. was $330,000. Today it’s $440,000. When we think about interest rates, and everybody kind of freaks out about interest rates of 6.5%, if you go back and look at the last 20, 30 years, 6.5% was actually a pretty good rate. I bought my first house many years ago, I think at 12%. What really has affected the industry is the price of a house.

We call it the affordability index, which is interest rate times the price of the house. What has to happen, and we’ll talk a little bit more in detail, is that we’re already beginning to see that home prices are coming down. That’s going to be the biggest factor. I know everybody’s really excited about the rates coming down and the Fed and all that, and it’s going to happen at some point. Really, what’s going to drive this industry for the next few years is home prices beginning to come down. We’re already seeing that in the West Coast. If you look at California, for example, year over year, home prices are down 3%, which is funny because you have a lot of real estate in the industry who have never seen home prices come down year over year. It’s an interesting anomaly. We’re already beginning to see that.

The other trend that’s interesting in this industry is that whatever starts happening in the West Coast, it sort of navigates throughout the whole country. When we see these trends in California and Arizona, Nevada, that’s going to continue. What I believe is going to happen is that prices are going to come down 10% over the next year, which is roughly from a $440,000 transaction to about a $400,000 transaction. Interest rates will come down to 6.25%. Now that becomes much more affordable, and therefore, you’re going to start seeing an increase in the number of transactions. We grew 36% in a tough market. We believe that when the market comes back up, even a little, we could see 50% growth year over year. This is just a list of the things that I think makes us different.

We are a different kind of real estate company because we don’t even look at ourselves like a real estate company. We think of ourselves as a technology company. We have what we believe is one of the best values for real estate agents. I’ll talk a little bit more in detail. We own our technology. We started investing in technology many years ago. I come from the software space and technology. We wanted to be different. We wanted to build a technology company, and we needed to own that. Certainly, ancillary services are nice to add on, mortgage, title. When we think about other revenue streams, now that we are big enough, we’re going to start adding all kinds of other revenue streams to our business. Our growth strategy is both an organic growth as well as an acquisition growth.

I’ll get a little bit more into the acquisition growth because there’s some interesting economies of scale on that. We have, I think, performed fairly well over the years. Certainly, the last two years have been difficult, and we’ve still grown. We grew Q4, we grew Q1, we grew Q2. We certainly expect to grow 35%+ this year and beyond. We have a really great management team. I think the mark of a great management team is when you go through difficult times. I was just talking to somebody earlier that said it’s very easy to run a business when things are going well, as Warren Buffett says, right? Anybody can run a business when things are going well. I think the mark of a great leadership team is when things are difficult, right? You have to endure and deal with that.

We’ve gone through two and a half tough years. Okay, so real estate reinvented. There are many things that make us different from a traditional. I’m sure some of you who bought and sold houses, you work with very traditional companies who have been around for, you know, there’s some that have been around for 50 years, there’s some that have been around for 100 years, right? Very similar models from day one that they started. Our model is very different. First of all, the model itself is very different than a legacy model. We charge a flat fee. The agent commission is different. We have a whole concierge service, which is there’s nobody in the industry that does that. In a sense, if you think about a real estate agent, it’s probably the only industry that asks a salesperson to do all this non-sales work.

Buying a house or selling a house is a complex process, right? We create a whole concierge service that helps the agent do all of that. It’s called Elevate. I’ll talk a little bit more in detail. There’s nobody doing this right now at the level that we’re doing it. We’re virtual. We don’t have office spaces where agents hang out. We have a couple of exceptions from acquisitions. For example, we have 2,500 agents in Dallas. We don’t have one single office space. Same thing in other cities. It is a virtual model because, if you’re thinking about buying or selling a house, you’re not going to go hang out in the office space. You’re going to tell the agent, "I want to go look at these houses," right? You go look at them. This whole concept of office space, I think, is archaic. Certainly, technology is very different.

We own it. We built it. It’s very focused on building and running our business. We own our mortgage company, title company. We do not hold paper, so we don’t have paper risk, right? We basically sell the mortgage by the time we close the mortgage. The growth potential is enormous. We are the 10th largest company in the country. We have 1% market share. Enormous. It’s a very fragmented market with enormous opportunities. The parts of our value, again, our commission splits are incredibly attractive. We have revenue share. Our agents can do revenue share, our technology. We do all kinds of other services for agents like real estate leads. Certainly, our training and agent support is really second to none. The reason I say that, and I believe that, and I can confirm that, we have half of the turnover of the average in the industry.

The average industry turnover rate is around 3% a month. We are less than 1.5% a month. 85% of the agents that leave us don’t really close any business. When you look at the percentage of people that actually leave us that impact our P&L, it’s a very small number. That is because of our culture, technology, support, and all of that. When it comes to commission splits, you know, most real estate companies, what they do is they charge a percentage of the commission. Let’s say, for example, you buy or sell a house, $10,000 commission for the agent. The agent typically is paying 20%, 30% to some of the legacy brokers. For us, we charge a flat fee, so the agent makes a lot more money.

It’s kind of a SaaS model in a sense, but it’s a SaaS model in the sense that we get paid when the transaction closes, right? We have an annual fee for the agent to participate in our technology and our platform. Elevate is probably one of the most revolutionary things we’ve ever done. I think it’s going to change the industry. In the same way that revenue share changed the industry, if you look at the industry for the last 30 years, there are about five or six different milestones that significantly changed the industry. Concierge and Elevate is going to do that. Because at the core, what we’re doing is I am taking all that work from a real estate agent that they shouldn’t be doing. They don’t want to do it. It’s too expensive for them to do it.

Because of economy of scales and technology, I can do it for them for a lot less money, right? They can focus on their business. We charge 20% for that. It’s incredibly profitable for us. Our gross profit is about over 4x on that business because of our technology and because of our economies of scale. It’s a very different model. I think I always say that I know I’m doing something right when some of my peers call me complaining that I should have never done this. I got about six, seven phone calls when I launched this. What is the old saying? Competitive advantage is when you’re willing to do something your competitor is not willing to do. I think you’re going to find as a common denominator here, we kind of like to rock the boat. Elevate, we just launched it. We already have about 70 agents.

We have about 300 by the end of the year. We think about 1,000 next year. Incredibly profitable for us. Revenue share, we do revenue share as well. It’s a big thing in the industry. Only about 5% of agents really want to do revenue share, but we have it. We have the whole technology. We can help agents do that. The thing that makes Fathom unique, one of the many things, is that we can work with any agent, wherever they are in their life cycle as a profession. Whether they’re starting their career, whether they want to do revenue share because they want to recruit a lot of agents, whether they want to significantly increase their business and, in a sense, focus on that so we can do the work for them through Elevate.

We build this platform in order to help our agents, wherever they are in their life cycle. That’s a very unique thing in our company. We work with teams and helping develop teams as well. That’s how we look at our relationship with our real estate agents. This is just a brief slide on technology, but you can see it really does everything the agent needs, from agent websites that can be incredibly customized to a CRM to transaction management, neighborhood reports. We’ve segmented the entire country by 140,000 neighborhoods. We can help our agents market themselves as an expert in the neighborhood. If you don’t think that’s important, go to homes.com. They built their entire platform on neighborhoods and are their biggest portal now in the country because of neighborhoods.

When people look for homes, they’re looking at neighborhoods, mostly because of schools, but also because they want to live with people that are similar to them, whether it’s how many kids I have or income or age. Neighborhood is really important. We license this data, and it’s our data, to about 300 other brokers. It’s a very unique competitive advantage that we have with that. We do lead generation for our agents. We have all kinds of marketing campaigns, portal to print, all kinds of materials. Hopefully it gives you a feel for how comprehensive this platform is to help our agents become really successful. In the real estate industry, agents want leads, right? A lot of them don’t know how to market themselves. We do a variety of different leads.

Leads typically tend to work better when it’s a specific program focused on a specific audience, whether it’s Hometown Heroes, which is a program that helps our local heroes, first responders, nurses, teachers buy their first home. We do a lot of stuff with AI, which everybody’s doing AI now. I think it’s interesting. I was in the dot-com space many, many years. I’m dating myself now. It’s interesting to see a different kind of change in the world. Although I think AI is much more meaningful and impactful than the whole dot-com thing. Go Social Agent, first-time buyers. We do a lot of stuff for first-time buyers. We’re just developing our whole Latino program. In about five, six years, the Latino market will be the number one buyer in the U.S.

The number one buyer, the highest percentage of any buyer in this country is going to be Latino buyers, first generation, second generation. We have a whole program focused on that as well. We certainly do a lot of training and support. Every company does that. The difference between us is that because we are virtual from day one, we built the entire platform being virtual. It’s real-time. We have hundreds of different programs and training programs and all of that. That’s really important for agents. We talk about technology. What I want to talk here is not so much from the agent perspective, but what is the benefit to us? Why do we care about this technology? Because this technology allows us to run the business in a much more effective way. We have the lowest cost, the direct cost of transaction to close a transaction, less than $270.

Our competitors are three to four times. The reason we can perform close our entire transaction for $270 is because of our technology. We eliminated all the waste of the processes and all the things that happen in the transaction. By having one comprehensive platform, it’s a much smoother process. You may say, a lot of companies should have that. It’s not true. Most real estate companies have five or six different technology products, all sort of trying to work together. Because again, we build this from the ground up and we build this thinking very more like an, you know, my background is ERP systems, workflow, business process automation. I came from that background of how do we make this process more streamlined. It does a lot of different things. Now, here’s an interesting part of this. We’ve had some agents leave. It’s typical. It’s normal.

When they leave, they call us up and say, "Hey, can I continue to use your platform?" What’s happening now is that starting early next year, we’re going to start licensing our platform to other companies. There’s an entire revenue stream that we haven’t even seen yet, which I believe is going to be bigger than actually our regular business. There are 80,000 small brokerages who all need technology. What’s unique about our technology is a combination of technology and services. We combine offshore services to really reduce the cost of doing a transaction. Think of it as, you know, tech-enabled services, right? In a sense that you, so we can go to a, and I’ll give you an example when I talk about My Home Group. We can go to a company and save them thousands of dollars in technology costs and in processing a transaction.

I’ll give you an example when I talk about My Home Group. This is coming. This is the future. Probably sometime early next year. We already have done three or four deals already, you know, because people come to us. This will probably be a significant and meaningful part of our business going forward is licensing this technology to other companies. Ancillary services can be very profitable. It certainly is something that we do. Just if you think about January of this year to June of this year, we have grown our mortgage business by 65% and our title business by 89%. Incredibly profitable, and we’ll continue to do that. Again, on the mortgage side, we don’t hold paper. We don’t take paper risk, right? We’re not holding any paper.

We said by the time we close the loan with you, we’re selling the mortgage to at least two other banks. Our growth strategy, I talked, you know, earlier I mentioned that $270 per transaction is very unique in this industry. No one has this cost basis. When we think about growth strategy, it certainly is not only increasing the revenue and sort of more agents to the platform, but also increasing gross profit. How to increase gross profit? Elevate was an example of that, right? We grow our revenue by adding more agents. We grow our revenue by adding more transactions. Now we’re sort of adding the next leg, which is how do we increase gross profit dollars, right? How do we make more money per transaction, which is Elevate, which is also mortgage and title.

We will add licensing our technology as a true SaaS product sometime early next year. We think we can get to about 100,000 agents. We have 15,000. We have about 1% market share. I think this 100,000 would be the combination of, you know, 40,000, 50,000 at Fathom and, you know, 40,000, 50,000, 60,000 at our SaaS model, right? While we license our technology, a lot of small brokers, they don’t want to really sell their business. What they want is how do I, you know, how do I improve my operating efficiency, right? They don’t have the capital, the knowledge. In a sense, I can take this model, right, and license to them because what they have, which is a significant competitive advantage, is a local culture. They have a local brand with a local history. They have credibility. How do you marry the two?

How do you marry a small broker who has that to the technology, best processes, economies of scale, AI? They don’t have time to go figure all that stuff out. Package it, sell it to them, right? They become much more profitable. Acquisitions, there’s an enormous roll-up strategy. We’ve done probably seven or eight. My Home Group was the one we did last year. This is an operation with 2,200 agents. It was probably, I think last year was the third largest M&A deal in real estate in terms of brokerages. I believe it was the third. This is a business that we basically paid about $3 million, $3.5 million for. This year we’ll do about $600,000 EBITDA. Next year we’ll do $1.2 million. Basically, within three years we break even in that.

Now, how do we take a business that basically was break even and in two years can do $1.2 million EBITDA? By eliminating all the waste, all the processes, all the tech. They were paying half a million dollars a year in technology costs. I’m taking all that out. I already have the product here. I’m adding all the processes, all the redundancies, all the things that they do, which is again very typical in this industry, right? We’re automating all of that. There are thousands of small brokerages out there that can benefit from this. Thousands of small brokers out there. Performance, again, certainly 2023 and 2024 are difficult years, right? If you look at prior, we’re growing very quickly. Having said that, we grew Q4, Q1, Q2, 36% year over year.

We hit adjusted EBITDA positive in Q2, which we’re very proud of, and we believe we’re going to do the same thing in Q3, right? Then gross profit increase, agents, and transactions. I think the point I want to drive here is that, again, even in a very difficult market, we’re still growing 35%, 36%. When things get a little better, and they’ll get a little better next year, they’re not going back to 2021 and 2022. That was an anomaly that’s never going to happen again. They’ll probably increase to about 4.5 million transactions next year. Just to give you a sort of a relative, in 2021, we’re doing about 6.5 million. It has decreased significantly, right? It’ll probably go to 4.5 million, which is about 10% higher than this year. By 2027, you’ll probably look into, you know, close to 5 million.

We believe when that will happen, we will get a significant share of that, right? Which then we’ll head to with our growth. We are in 43 states and continue to grow the business. There’s nothing that’s holding us from opening those states except for just finding the right person, right? That can help us run. Mortgage and title continues to grow. I think at the end, we’re going to be licensed in every state. New York, for those of you who live in New York, mortgage in New York is a nightmare. It takes two years to get licensed in New York, right? Continue to build title. I talk about agent turnover. We have one of the lowest in the industry. I’m not going to spend more time here. Agent satisfaction. This is a survey that was done by Career.io. They reviewed 500,000 reviews, independent company.

They looked at every profession in the country. When they looked for real estate agents, Fathom was the one in the country. Again, independent company, interviewing agents, looking at reviews. Now, why is that important? Because agents want to tell other agents that they’re happy where they are, right? That helps and has an effect in terms of agent turnover. I’m not going to spend time using the presentation. I think the significant milestone is 36% revenue growth. We hit adjusted EBITDA positive, which is a significant change from last year and then certainly Q1. We have a great management team who’s been around this industry. I think the most important thing about our management team, I would say, we have scars. We’ve gone through bad and good and survived. There’s nothing like surviving.

Where there’s a lot of management team out there that only have gone through good times, you need to go through bad times as well to really understand what it takes to do that. We have a great board. I highlight a few people real quickly. Steve Murray’s been in the industry 40-something years. He was probably the number one M&A guy in the industry. He has done 400, 500 transactions. He could have gone anywhere and retired. He joined us in our board. Scott Flanders ran multiple public companies, including running Playboy for several years, took it private. Adam Rothstein’s been in private equity and runs several companies and all that. We have a great board that really understands high growth, how you grow a business, how you deal with the ups and downs of a business. I’m very blessed to do that.

With that, I’ll stop and take your questions. I’m interested to see that people are interested in real estate again. Yes, sir.

Unidentified speaker: Efficiency to the closing process. Those of us who have watched the industry thought 10 years ago that the closing process would get more simplified.

Marco Fregenal, CEO, Fathom Holdings: Yeah. Great question. It doesn’t happen because there are so many different players that are part of the process, right? Let’s just think about that. First of all, you have a real estate commission that dictates how you do things in each state. Second, you have NAR, National Association of Realtors, that dictates how you do business. Now you had a lawsuit, and who also dictates on how you do certain things. You have a mortgage company. You have a title company, right, who’s also involved, or lawyers, right? You have inspectors, appraisers, and everybody else. It’s a very complex transaction. Just think about last time you bought a house. You went out and started looking for a house, right? Looked at it, found your house, made an offer, they accepted that offer. Now you want to do all of this work in 30 days.

It took us sometimes a year to find the right house, but now you have to compress in 30 days all of this. The average number of communications between the client and the agent in those 30 days is 100 times. 100 times an agent is communicating with their client about something, the appraisal, the mortgage, this document. I need tax returns. I need the, I need the, so it’s a complex process. We are not in charge of the whole thing. We have all these different parties. What we try to do is try to, as much as possible, optimize the process that we’re involved, right? We can optimize that. At the end of the day, we have to play with all these other players. Some of them are very local companies and small. The agent wants to work with a small mortgage company or a title company.

We do a lot. I wish we could do more, but we have to play by the rules of all these different organizations, and it’s not easy. They change the rules all the time on us as well. You have to abide by all that as well. MLSs, we work with 200 MLSs. Every MLS has different rules, right? And different integration points and all that. Not easy. We certainly have reduced a lot. I wish we could do more, but it’s just the reality of the business. Yeah. Yes, sir.

Unidentified speaker: Right. In charge of a flat-fee commission for your sort of original base business, but you chose to do a commission.

Marco Fregenal, CEO, Fathom Holdings: For Elevate. Because to do Elevate costs money. On the Elevate transaction, we charge about 20%. I’ll take a step back real quick. When we launched the company, we said, look, we’re going to charge less money so the agent can grow their business. The agent is going to invest their money and grow their business, right? It’s great. A lot of them do. There’s a significant % of agents who don’t know how. They don’t know where to invest their money. They don’t know where to buy leads. They don’t know what transaction coordinators. Agents have come to us and said, look, we love Fathom, how much we paid, but I don’t know where to get all this other stuff. Can you do it for me? I said, okay, but I’m going to have to charge you more, right?

That’s how that evolved, is that 95% of our agents are going to be in a traditional. There’s a percentage of agents that say, can you do it for me? Because we have economies of scale and technology, we can do it at a lower price than they can get it themselves and still make a significant... On an EBITDA per transaction on Elevate, it’s roughly $1,000 per transaction. The EBITDA on a traditional is about $200. We make 5x on that. We have a percentage of agents who are very happy that we’re doing that work for them.

Operator: This presentation has now finished. Please check back shortly for the.

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