Why did FTHM's Q4 2024 earnings surprise analysts?

Fathom Holdings' (FTHM) Q4 2024 earnings surprised analysts for several reasons:

1. **Revenue Beat Expectations**: FTHM reported total revenues of $91.7 million for Q4 2024, surpassing the analyst expectations of $81.99 million. This marked a 24% year-over-year increase in revenue, driven by a rise in real estate transactions and strategic expansions.
2. **New Agent Network Growth**: The company's agent network expanded by 21%, reaching approximately 14,300 licensed agents. This growth reflects FTHM's successful agent-first philosophy and technology-driven platform, which has attracted real estate professionals seeking a flexible and innovative brokerage model.
3. **Diversified Service Revenue**: FTHM's diversified service revenue increased by 3.1% to $20.4 million, primarily due to growth in mortgage loans and title service transactions. This diversification has helped offset some of the challenges in the residential real estate market.
4. **Cost Management**: Despite the challenges, FTHM implemented cost management strategies that led to a slight improvement in net profit margin. The company reported a net loss of $21.6 million, an improvement from a net loss of $24.0 million in the previous year, primarily due to cost management and a gain on the sale of a business.

In conclusion, FTHM's Q4 2024 earnings exceeded expectations due to a combination of revenue growth, strategic expansions, cost management, and diversification of service offerings. These factors collectively contributed to the company's resilience in the face of a challenging market environment.