Fathom Holdings Inc. Files 2023 Annual Report (10-K)

TL;DR

<b>Fathom Holdings Inc. has filed its 2023 annual report (10-K), detailing its financial performance and operational segments.</b>

AI Summary

Fathom Holdings Inc. (FTHM) filed a Annual Report (10-K) with the SEC on March 19, 2024. Fathom Holdings Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The company is incorporated in North Carolina and operates in Real Estate Agents & Managers. Key acquisitions mentioned include CornerstoneFinancial on January 24, 2022, and IproRealtyNetwork on February 8, 2022. The filing details operating segments for Real Estate Brokerage, Mortgage, and Technology. Financial data for the fiscal year 2023 and comparative periods are included.

Why It Matters

For investors and stakeholders tracking Fathom Holdings Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Fathom Holdings' financial health, operational structure, and strategic activities for the fiscal year 2023, which is crucial for investors to assess the company's performance and future prospects. Understanding the company's segment performance (Real Estate Brokerage, Mortgage, Technology) and key acquisitions like CornerstoneFinancial and IproRealtyNetwork is vital for evaluating its market position and growth strategy within the real estate industry.

Risk Assessment

Risk Level: medium — Fathom Holdings Inc. shows moderate risk based on this filing. The company's financial performance and future outlook are subject to the inherent risks and cyclical nature of the real estate market, as indicated by its operational segments and the need for detailed financial reporting in its 10-K.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-K to assess Fathom Holdings' performance and potential risks in the real estate sector.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-03-19 — Filing Date (Date of submission)
• 2022-01-24 — CornerstoneFinancial Acquisition Date (Key acquisition event)
• 2022-02-08 — IproRealtyNetwork Acquisition Date (Key acquisition event)

Key Players & Entities

• Fathom Holdings Inc. (company) — Filer name
• 2000 Regency Parkway Drive, Suite 300, Cary, NC 27518 (address) — Business and mailing address
• 8884556040 (phone) — Business phone number
• CornerstoneFinancial (company) — Acquisition mentioned
• IproRealtyNetwork (company) — Acquisition mentioned

FAQ

Risk Factors

• Real Estate Market Fluctuations [high — market]: The company's performance is significantly tied to the cyclical nature and fluctuations of the real estate market, impacting sales volume and property values.
• Integration of Acquisitions [medium — operational]: Successfully integrating acquired companies like CornerstoneFinancial and IproRealtyNetwork is critical for realizing synergies and achieving strategic objectives.
• Revenue Generation and Profitability [medium — financial]: The company's ability to generate consistent revenue and maintain profitability across its diverse business segments is subject to various economic and competitive factors.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-03-19: 10-K Filing Date — Date Fathom Holdings Inc. filed its annual report.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), which gives a comprehensive summary of a company's financial performance. (This filing provides the detailed financial and operational information for Fathom Holdings Inc. for the fiscal year 2023.)

Key Financial Figures

• $7.14 — ed on the registrant's closing price of $7.14 as quoted on the NASDAQ Capital Market
• $500 — we maintained a flat transaction fee of $500 per transaction and the remainder of an
• $99 — per agent's anniversary year, and then $99 per sale for the rest of their annivers
• $85 — r agents and landlords, and we retained $85 per transaction with the remainder paid
• $600 — to the agent. Every agent also pays a $600 annual fee on their first sale (recogni
• $550 — d oversight. In 2023, our agents paid $550 for each of their first 15 completed sa
• $150 — after the first 15, our agents will pay $150 for the rest of their anniversary year,
• $200 — had provided for our agents to receive $200 in stock grants for every five transact
• $1,050 — average cost to recruit a new agent was $1,050 and our annual cost associated with eac
• $1,150 — ual cost associated with each agent was $1,150 so we break even in an agent's first ye
• $700 — n of each anniversary year from $600 to $700. A second change includes a new fee whi
• $600,000 — which affects sales of properties over $600,000 and will be in addition to the agent's
• $999,999 — properties priced between $600,000 and $999,999. Then, there will be an additional fee
• $250 — hen, there will be an additional fee of $250 charged for each $500,000 tier range ov
• $500,000 — additional fee of $250 charged for each $500,000 tier range over a $1,000,000 property p

Filing Documents

• fthm-20231231.htm (10-K) — 1408KB
• a10ksubsidiaries.htm (EX-21.1) — 3KB
• rep-00610kconsent1.htm (EX-23.1) — 3KB
• fthm-20231231xex311.htm (EX-31.1) — 9KB
• fthm-20231231xex321.htm (EX-32.1) — 6KB
• fathomholdingsinc-incentiv.htm (EX-99.7) — 32KB
• fthm-20231231_g1.jpg (GRAPHIC) — 43KB
• 0001628280-24-011953.txt (&nbsp;) — 7920KB
• fthm-20231231.xsd (EX-101.SCH) — 60KB
• fthm-20231231_cal.xml (EX-101.CAL) — 98KB
• fthm-20231231_def.xml (EX-101.DEF) — 219KB
• fthm-20231231_lab.xml (EX-101.LAB) — 743KB
• fthm-20231231_pre.xml (EX-101.PRE) — 498KB
• fthm-20231231_htm.xml (XML) — 986KB

Risk Factors

Item 1A. Risk Factors 14

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 32

Cybersecurity

Item 1C. Cybersecurity 32

Properties

Item 2. Properties 33

Legal Proceedings

Item 3. Legal Proceedings 33

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 34 PART II 35

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 35

Reserved

Item 6. Reserved 35

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 36

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 47

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46

Controls and Procedures

Item 9A. Controls and Procedures 46

Other Information

Item 9B. Other Information 47

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 47 PART III 47

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 47

Executive Compensation

Item 11. Executive Compensation 48

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 48

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 48

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 48 PART IV 49

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 49

Form 10-K Summary

Item 16. Form 10-K Summary 50 Table of Contents NOTES In this Annual Report on Form 10-K (this "Report"), and unless the context otherwise requires, "Fathom," "we," "us," "our," "the Company," "our Company" and "our business" refer to Fathom Holdings Inc. and its direct and indirect subsidiaries as of December 31, 2023, taken as a whole. We have a registered trademark with the United States Patent and Trademark Office ("USPTO") for the name and logo of "intelliAgent" and "Fathom Realty", as they relate to real estate and associated industries. All other trade names, trademarks and service marks appearing in this Report are the property of their respective owners. We have assumed that the reader understands that all such terms are source-indicating. Accordingly, such terms, when first mentioned in this Report, appear with the trade name, trademark or service mark notice and then throughout the remainder of this Report without trade name, trademark or service mark notices for convenience only and should not be construed as being used in a descriptive or generic sense. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Report contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Report regarding our strategy, future operations, future product research or development, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words "anticipate," "believe," "goals," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "forecast" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Report include, but are not limited to, statements about: t

Business

Item 1. Business. Overview Fathom Realty LLC was founded in January 2010 and later incorporated as Fathom Holdings Inc. in the state of North Carolina on May 5, 2017. We are a national, technology-driven, real estate services platform integrating residential brokerage, mortgage, title, insurance, and Software as a Service ("SaaS") offerings to brokerages and agents by leveraging intelliAgent, our proprietary cloud-based software. The Company's brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, and Verus Title. For Fathom Realty, our core business, our overhead business model leverages our proprietary software platform for management of real estate brokerage back-office functions, without the cost of physical brick and mortar offices or of redundant personnel. As a result, we can offer our agents significantly more of their commissions compared to traditional real estate brokerage firms; we do not split our agents' commissions, but instead charge a flat fee per real estate transaction. We believe we offer our agents some of the best technology, training, and support available in the industry. We also offer our agents valuable benefits, including equity in our Company if they achieve growth goals. We believe our commission structure, business model, advanced technology offerings, and our focus on treating our agents well attract more agents and higher producing agents to join and stay with our Company. Fathom Realty's commission model is designed to empower real estate agents to build a more profitable business by allowing them to keep a high percentage of their commission without sacrificing support, technology, or training. We believe that by simply joining our company, agents from traditional model brokerages can increase their income by over 25% on average. More importantly, agents are able to take that increase and reinvest it into their marketing thereby increasing their number of transactions and revenue w

View Full Filing

View this 10-K filing on SEC EDGAR