Greetings. Welcome to the Fathom Holdings, Inc., Fourth Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, [Paul Kuntz] (ph). You may begin.

Thank you, and good afternoon. Welcome to Fathom Holdings' fourth quarter and full-year 2024 conference call. Joining us today is the company's CEO, Marco Fregenal. 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 factor section of the company's Form 10-K and other company filings made with the SEC, copies of which are available at 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. The 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 will now turn the call over to Fathom's CEO, Marco Fregenal. Please proceed.

Thank you, Paul. Good afternoon, everyone, and welcome to Fathom Holdings' fourth quarter 2024 conference call. Thank you for joining us today. Before I go into the details of our performance, I want to acknowledge the remarkable commitment, adaptability, and resilience of our entire Fathom team, our agents, staff, and leadership team. This past year has challenged all of us with the high mortgage rates, victim-buyer behavior, regulatory changes, and of course, ongoing litigation. The broader market headwinds have certainly made it difficult for last year. However, I want to stress that we remain confident about our future. We believe 2025 will be a breakout year for Fathom, and that we have laid out a strong foundation to help us push through the market volatility. Let me start by reviewing our fourth quarter results for 2024. Our total revenue grew approximately 24%, reaching $91.7 million, up from $74.1 million in Q4 of 2023. Gross profit increased by 25%, growing from $5.3 million in Q4 of 2023 to $6.7 million this quarter. Excluding Dagley Insurance, which we sold in May of 2024, gross profit rose 59%, from $4.2 million to $6.7 million. GAAP net loss for 2024 fourth quarter was $6.2 million, or $0.29 per share, compared with a loss of $8.4 million, or $0.50 per share for the 2023 fourth quarter. While we're pleased with the revenue gross profit growth, our EBITDA loss is not where we would like it to be. Adjusted EBITDA loss and non-GAAP measure came in at $2.9 million for the fourth quarter of 2024, matching the loss of $2.9 million from the same period in 2023. Rising mortgage rates in the last quarter of 2024, combined with an approximately $1.3 million one-time expenses, kept us from moving into positive EBITDA territory. Despite these challenges, we…

Thank you. [Operator Instructions] The first question is from Darren Aftahi with Roth Capital. Please proceed.

Hi, Marco. How are you? Thanks for taking my questions. I have just two, if I may. Can you talk a little bit about how Max and Share commission plans have affected agent recruitment retention since they launched, and then just any measurable improvement from agent satisfaction retention?

Hey, there. Good to hear from you. Thank you for your questions. So, from Fathom's share really if you think about Fathom Max is, every new agent is joining Fathom Max, right, or in Fathom Share. What we see is about 5% of our new agents joining Fathom Share and 95% of our agents joining Fathom Max. So, it's a little early to tell the impact. So, Q4 didn't really have much impact in revenue from those because those agents are enjoying typically very few closed transactions in Q4. They will start closing transactions in Q1. So, we'll begin to see the impact of the agents joining Fathom Share in Q1 and, of course, even more in Q2 and Q3 as we go forward. In terms of retention, we are still seeing a little higher turnover. But 90% of our turnover is still on either zero production agents or agents that have very little production. So, not unlike most of other companies in the market, I think everyone is seeing turnover a little higher. But I think the higher turnover is specifically focused on either zero producing agents or low producing agents. And we continue to have about 90% of agents leaving Fathom doing zero and one transactions. So, that percentage hasn't changed, but definitely a higher number of low producing agents leaving the industry.

I've got a couple of things. There's one more if I could. Can you just talk about any strategic initiatives and programs that are being implemented or will be implemented in 2025 that are going to help accelerate adoption on mortgage and title? And then are there any specific challenges outside of just broader market softness and interest rates that are going to be impacting adoption in that space? Thanks.

So, we have seen in our mortgage, ancillary business has really outperformed our real estate brokers growth, right? Both now mortgage, not so much in Q4, but certainly for the year they have. And title, I believe, again, in Q4 grew by 86%. So, we believe that we're going to continue to have a higher growth rate in terms of mortgage and title in 2025. We're doing a lot of work. One of the programs that we are running is called the Ambassador Program. We're already seeing some great results from that. We have a pilot program that it will soon be announced that we believe also have an increase in the rate of adoption in terms of mortgage and title, more specifically in title than mortgage. So, we estimate that our growth rate next year in terms of mortgage growth and title growth is going to continue to outpace real estate brokers' growth. And so, and as you know, this is going to significantly positively affect gross profit. And that's one of the ways that we're going to -- that we expect to achieve a positive in Q2. So, those are the programs that we have implemented that are already running in 2024. And that's why we've seen that increase, especially for title. And again, we're going to continue to see that increase in 2025 and beyond.

Thanks.

[Operator Instructions] We have no further questions in queue. I'd like to turn the floor back to management for any closing remarks.

Thank you, all of you for joining our call today. We appreciate your time. We look forward to continue to update you as our progress to 2025. And as always, I'm available for individual meetings. So, I hope you guys have a great day and thank you for joining us.

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.