Fathom Holdings' Q3 2025 Earnings Call: Contradictions Emerge on IntelliAgent Licensing Strategy, Start Real Estate Attach Rates, Elevate Expansion, and Agent Retention

Date of Call: November 11, 2025

Financials Results

• Revenue: $115.3M, up 37.7% YOY (vs $83.7M in Q3 2024)
• EPS: GAAP net loss of $0.15 per share, improved from a $0.40 loss per share in Q3 2024
• Gross Margin: 8.3%, consistent with prior year (8.3% in Q3 2024)

Guidance:

• Target operational cash-flow breakeven by Q2 2026.
• Expand Elevate concierge program and scale Start Real Estate nationwide to drive higher-margin transactions.
• Strengthen mortgage and title attach rates to boost revenue per transaction.
• Accelerate IntelliAgent licensing go-to-market to address ~18,000 small/mid brokerages, beginning with ~300–400 existing relationships; ramp in Q1 2026.
• Continue diversifying into higher-margin ancillary services while maintaining disciplined expense management.

Business Commentary:

* Revenue Growth and Market Performance: - Fathom Holdings reported revenue of $115.3 million for Q3 2025, up 37.7% year-over-year. - The growth was driven by the addition of My Home Group, expanded brokerage network, and strong performance in ancillary businesses such as mortgage and technology.

• Agent Base Expansion and Retention:
• The company's agent base grew to more than 15,300 licensed agents, a 24% increase year-over-year.

• This was supported by low turnover rates, averaging just 1% of agents per month in Q3, which was below the industry average.

• Encompass Lending, the mortgage company, increased revenues by 20.7% with adjusted EBITDA of $160,000 for the quarter.

• Veras Title achieved 28.6% revenue growth, and the technology segment posted an 18% increase, contributing significantly to the company's performance.

• Elevate Program and Strategic Acquisitions:

• The Elevate concierge-level growth program onboarded over 165 agents, with an additional 45 in the pipeline.
• Acquisition of Start Real Estate is expected to generate over 1,500 additional transactions next year, leveraging strong margins and high mortgage attachment rates.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 37.7% YOY revenue growth, “another quarter of adjusted EBITDA profitability,” expanding agent base +24% YOY, and stated they are “entering 2026 with confidence and focus,” pointing to continued margin expansion and cash-flow breakeven guidance.

Q&A:

• Question from Dylan Heslen (Roth Capital Partners): To start on IntelliAgent licensing, you talked about 18,000 brokerages you identified. Could you go into more detail on your go-to-market strategy — how many are you potentially in talks with or have approached you? Also, could you comment on attach rates this quarter and the potential to maintain Start Real Estate’s high attach rates as you scale?
  Response: They already have relationships with roughly 300–400 small brokerages (including ~200 via LiveBy) to seed IntelliAgent, will begin broader outreach to the ~18,000 market and accelerate in Q1; Start’s attach rate is >70% and they expect to replicate and sustain similarly high attach rates as they expand.

Contradiction Point 1

Go-to-market Strategy for IntelliAgent Licensing

It involves the strategy for expanding and targeting brokers, which is crucial for the growth and revenue expectations of the company.

Can you elaborate on your go-to-market strategy for IntelliAgent licensing and how many brokers are in discussions? - Dylan Heslen (Roth Capital Partners)

2025Q3: We have relationships with roughly 300-400 small brokers and will initially focus on these. Our go-to-market strategy will then expand to the remaining 18,000 identified brokerages. We have already begun discussions, which will accelerate in Q1 of next year. - Marco Fregenal(CEO)

Regarding IntelliAgent, could you discuss the go-to-market strategy? - Brad Olesen (Citigroup)

2025Q2: IntelliAgent is primarily a B2B licensing model, and it's a B2B marketplace. We will begin to commercialize this product with brokers in Q3. - Marco Fregenal(CEO)

Contradiction Point 2

Attach Rates for Start Real Estate Expansion

It pertains to the expected attach rates for Start Real Estate as it expands into more states, which directly affects the company's revenue growth expectations.

How likely is it that Start Real Estate can maintain attach rates as it expands into more states? - Dylan Heslen (Roth Capital Partners)

2025Q3: Start Real Estate has a high attach rate due to its hands-on process for first-time buyers. We believe we can maintain this high attach rate as we expand into more states, using this model as a key differentiator. We also expect to improve attach rates across our other businesses with initiatives like Elevate. - Marco Fregenal(CEO)

Any update on the attach rate improvement? - Brad Olesen (Citigroup)

2025Q2: Market share gains in homes is a priority. We believe we're getting to the point where we're getting our fair share of traffic. And the attach rate really kind of reinforces that. - Daniel Weinmann(CFO)

Contradiction Point 3

Elevate Agent Onboarding and Expansion

It involves differing statements regarding the pace of agent onboarding for the Elevate program and subsequent expansion plans, which could impact investor expectations and strategic planning.

Can you detail your go-to-market strategy for IntelliAgent licensing and how many brokers are in discussions with you? - Dylan Heslen(Roth Capital Partners)

2025Q3: We have relationships with roughly 300-400 small brokers and will initially focus on these. Our go-to-market strategy will then expand to the remaining 18,000 identified brokerages. We have already begun discussions, which will accelerate in Q1 of next year. - Marco Fregenal(CEO)

How does Elevate impact gross profit and adjusted deposit profitability? What is the cadence of the agent onboarding pipeline? - Darren Aftahi(Roth Capital Partners)

2025Q1: The program is in its early stages, with 120 agents already signed up and the goal of onboarding 100 agents per month by the end of the year. - Marco Fregenal(CEO)

Contradiction Point 4

Agent Retention and Turner

It involves changes in agent retention strategies and turnover rates, which are critical for understanding the company's growth and stability.

How likely is it to maintain attach rates as Start Real Estate expands into more states? - Dylan Heslen (Roth Capital Partners)

2025Q3: We believe we can maintain this high attach rate as we expand into more states. We are confident that through initiatives like Elevate and Start, we can continue to improve attach rates across our businesses. - Marco Fregenal(CEO)

How have the Max and Share commission plans impacted agent recruitment and retention since their launch, and are there any measurable improvements in agent satisfaction and retention? - Darren Aftahi (Roth Capital Partners)

2024Q4: About 5% of new agents join Fathom Share and 95% join Fathom Max. The impact on revenue is not visible yet due to the agents' recent joining and few closed transactions in Q4. Turnover is slightly higher, but 90% of it involves zero or low-producing agents. - Marco Fregenal(CEO)