Joining us today is the company's CEO, Marco Fresenov and VP of Finance, Daniel Weinman. 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 Factors section of the company's Form 10 ks and other company filings made with the SEC. Copies of which are available on 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 note that during the call, we will discuss adjusted EBITDA, a non GAAP financial measure as defined by SEC Regulation G. Reconciliation of this non GAAP financial financial measure to the most directly comparable GAAP measure is included in today's press release, which is now posted on Fathom's website. And with that, I will now turn the call over to Fathom's CEO, Marco Fresenal. Please proceed. Thank you, Paul. Good afternoon, everyone, and thank you for joining us on today's call.

I am pleased to welcome you to Fathom Holdings First Quarter twenty twenty five Earnings Before diving into the numbers, I want to begin by recognizing the dedication and perseverance of our entire Fathom team our agents, employees and leadership. The first quarter brought ongoing economic headwinds from elevated mortgage rates to shifting global economic uncertainty, all impacting buyer behavior. But through it all, our team remained focused and our strategy remained clear. The results we are sharing today are a direct reflection of that discipline and execution. We enter 2020 with measure optimism and I'm proud to say we exceeded public expectations Revenue growth was strong, transaction volume increased, agent count continued to rise and we beat analyst estimates by a meaningful margin. We also continue our cost cutting initiatives, reducing expenses by approximately $750,000 per quarter going forward. These efforts are helping us build what we believe will be a more efficient and scalable business. We now expect to achieve adjusted EBITDA profitability in the second quarter. A significant milestone and a testament to the progress we've made over the past year. Now let's take a look at our earnings for Q1. Total revenue rose $32,100,000 32.1% to 93,100,000.0 compared to 70,500,000.0 the same period last year.

The performance exceeded analyst expectations by roughly 12% demonstrating our ability to grow despite broader economic and industry uncertainty. Brokerage revenue climbed nearly 36% to $88,900,000 up from $65,400,000 last year. We entered the quarter with approximately 14,715 licensed agents, a 22.8% increase over Q1 of twenty twenty four. Transactions increased by 26% reaching approximately 9,715 closings this quarter. Gross profit improved to $8,100,000 up 13% year over year. Excluding Daggle Insurance, which we divested in 2024, our gross profit growth was 34% from $6,000,000 in Q1 of twenty twenty four. Highlighting the strength of our core brokers engine. Now let me shift to elevate our most significant strategic initiative to date. [indiscernible] intelligent platform is a high margin growth program designed to enhance agent productivity, scale our platform and drive long term profitability. It is a concierge level, Optane that provides a comprehensive services including robust marketing, and lead generation, lead conversion, transaction coordination, expert coaching recruiting support and much more. All of this is delivered by a dedicated team so our agents can focus entirely on serving their clients. Agents who enroll contribute 20% commissions split along with the standard transaction fee. That's incredibly competitive when you consider that many agents already pay similar or higher splits at traditional brokerages just to hang their license with limited support behind it.

Our goal with Elevate is to bridge the gap that so many agents experience While most want to reinvest in their own growth, many simply don't have the time tools or the know how to do so. Elevate is designed to remove that friction by giving them the infrastructure marketing resources, and business coaching they need to scale their business [indiscernible] and affordably. Since our soft launch just four weeks ago, we have seen over a 20 agents sign up for the program. While we're required that an agent must have completed at least four transactions in the past twelve months to qualify for the program, The agents who have signed up so far have an average annual production of between nine to 10 closings per year. Participating agents are projected to generate a significant increase in gross profit per transaction and EBITDA per transaction. By the fourth quarter, we aim to be onboarding around 100 new agents per month into the program. We're also developing targeted extensions of the program such as Elevate for Teams and Elevate for Partners. To meet growing demand. Additionally, we are an early stage conversation with external organizations interested in licensing ELEVATE further underscoring the industry wide potential of this program.

What makes all of this possible is IntelliAgent. As the engine behind Elevate, It streamlines operations, minimizes overhead, and enable us to deliver high touch, high impact services at a price point that most traditional brokers simply cannot match. Combined with our overall low cost business model, we believe that gives a significant competitive edge and creates a sustainable and scalable path for growth. Both for Fathom and for our agents. Although the program is in infancy, we believe the Elevate may also have some positive impact in our ancillary businesses as we build a much closer relationship with agents participating in the program. Now let's turn briefly to review market conditions. While mortgage rates remain elevated, they have begun to show signs of stabilizing. As the housing market shift from a seller's market toward a more balanced or buyer's market. One clear indicator of this shift is the increase in housing inventory across key markets. For example, in March, inventories rose by 16% in California, 20% in Utah, 28% in Colorado, and 18% in Georgia. As inventories levels climb, we're seeing a rise in the number of list with price reductions and extended days on the market. This has led to home prices flattening or experiencing modest year over year declines.

For instance, average home prices have dropped year over year by 2.4% in Florida, 4% in Colorado, 8% in Kansas, and 5% in Illinois. While there are still many uncertainties we believe Fathom is well positioned to benefit from even a modest improvement in market activity. Driven by our lean cost structure and compelling value proposition to our agents. Now let's review our ancillary businesses. Mortgage revenue increased 13% to 2,600,000.0 for the first quarter of twenty twenty five up from $2,300,000 in the first quarter of twenty twenty four. We have seen an expected increase in fire starts for the month of April which typically indicates the early stage of a seasonal increase on the market. Title revenue increased 43% to 1,000,000 for the first quarter of twenty twenty five up from $700,000 for the first quarter of twenty twenty four. File starts for the month of April thus far have increased by over 45% year over year. Together we believe these businesses are enhancing our margins increase agent retention contributing to a more diverse and durable revenue stream. With that, let me turn the call to Daniel Wyman, our VP of Finance to review our results in greater detail.

Daniel? Thank you, Marco. I will discuss our consolidated financial results before reviewing our business segment results in more detail.

First quarter total revenue was $93,100,000 a 32.1% increase year over year compared to 70,500,000.0 for last year's first quarter. The increase in revenue was primarily due to a 36% increase in brokerage revenue, as well as an increase in revenue from our ancillary businesses. Excluding the impact of the company's divested insurance business, total gross profit increased by 34% in the first quarter of twenty twenty five compared to the same period in 2024. Gross profit margin remained consistent at 8.7% year over year on the same basis. Technology and development expenses were approximately 1,900,000.0 for the first quarter of twenty twenty five compared with $1,600,000 for the first quarter of twenty twenty four. The approximate $300,000 increase was primarily due to our continued investment in our technology platforms including the build out for our new direct to agent program at Lift Buy and our ELEVATE program. General and administrative expenses totaled 8,600,000.0 for the first quarter of twenty twenty five compared with $9,000,000 for the first quarter of twenty twenty four. The decrease was primarily due to our cost cutting initiatives. Marketing expenses totaled $1,400,000 for the first quarter of twenty twenty five compared with $1,200,000 for the quarter of twenty twenty four.

The increase was primarily due to investments in our ancillary businesses. GAAP net loss for the first quarter of twenty twenty five totaled $5,600,000 or $0.24 per share compared with a loss of $5,900,000 or $0.31 per share for the first quarter of twenty twenty four. The decrease in net loss was primarily due to our cost saving efforts. Adjusted EBITDA loss a non GAAP measure for Q1 twenty twenty five, remained unchanged at 1,500,000.0 compared to Q1 twenty twenty four. Now I will spend some time reviewing our business segment results in more detail. We start with our brokerage business. We've closed approximately 9,715 real estate transactions during the first quarter, an increase of 26.1% compared to 7,703 transactions during the first quarter of twenty twenty four. The increase in real estate transactions is primarily attributed to the addition of My Home Group. We ended the first quarter with approximately 14,715 agent licenses an increase of 22.8% compared to 11,986 agents at the end of the first quarter of twenty twenty four. Revenue for the Real Estate Division was approximately 88,900,000.0 in the first quarter compared to 65,400,000.0 for the same period last year which represents an increase of 36% primarily attributed to the addition of My Home Group.

Gross profit margin for our real estate division improved to 7.1% from 6.5% in the first quarter of twenty twenty five, compared to the first quarter of twenty twenty four. This increase in margin was largely due to an increase in transactions from non cap agents and the impact of our agents' annual fee increase. Adjusted EBITDA gain in the Real Estate Division was approximately $1,600,000 in Q1 of twenty twenty five, an increase of 800,000 compared to adjusted EBITDA of $800,000 in Q1 of twenty twenty four, The improvement was primarily driven by increased revenue and the continued execution of cost cutting initiatives. Moving on to our mortgage business. Our mortgage business generated revenues of $2,600,000 in Q1 twenty twenty five, compared to $2,300,000 in Q1 of twenty twenty four. Mortgage adjusted EBITDA for Q1 twenty twenty five was a loss of 400,000 compared to an adjusted EBITDA loss of 500,000 for the same period last year. Adjusted EBITDA loss improved by 100,000 due to continued strategic cost cutting measures.

Moving to our title business. Verus Title had revenues of $1,000,000 for the first quarter of twenty twenty five compared to $700,000 for the first quarter of twenty twenty four an increase of 43% The increase in revenue was driven by organic growth and walkovers. Verus Title's adjusted EBITDA for the twenty twenty four first quarter was a loss of $400,000 compared to an adjusted EBITDA loss of 200,000 for Q1 twenty twenty four. Moving to our technology segment, third party revenues decreased to $600,000 in Q1 twenty twenty five, compared to 800,000 in Q1 twenty twenty four. Adjusted EBITDA income for the first quarter of $20.25 50,000 compared to an adjusted EBITDA loss of 30,000 for the first quarter of twenty twenty four. Adjusted EBITDA income improved by $80,000 due to continued strategic cost cutting measures. We continue to keenly focus on our balance sheet given the dynamic real estate market conditions. We ended the quarter with a cash position of 8,000,000 which includes the $2,700,000 in net proceeds from the public offering in March. We did not purchase any shares in the first quarter under the stock repurchase plan. Marco, back to you for final remarks.

Thank you, Daniel. Before I close, I want to reiterate that we remain focused on three core drivers of long term profitability. First, expanding revenue through strategic growth, Second, enhancing gross margins through agent programs such as Elevate, and Ancillary Services. And third, continue cost discipline across all areas of the business. In summary, Q1 was a strong start of the year with outperformed analyst expectations grew across every key metric, launched a high potential new program in Elevate, and continue executing against our plan to reach adjusted EBITDA by Q2. While we remain cautious about broader volatility and global economic uncertainties, we are in encouraged by the momentum we are seeing and confident in our ability to adapt and thrive. Regardless of what rest of the year brings. Thank you again for your continued support and belief in Fathom and operator we're now ready to take any questions.

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. Once again, if you have any questions or comments, please press 1 Thank you. Your first question is coming from Aftahi from ROTH Capital Partners. Your line is live.

Hi, guys. Thanks for taking my questions. Nice to see the growth here. [indiscernible] two if I may. I guess you just talk a little bit more in-depth about how Elevate enhances the profitability on both gross profit and adjusted EBITDA per transaction with Elevate versus some of your traditional programs. And I know you kind of laid out the goal of a hundred agents per month exiting the fourth quarter or into the fourth quarter. Just trying to understand kind of the cadence of the onboarding pipeline of agents that I know you'd made a commentary that there could be a positive impact on ancillary business. I'm kind of curious to learn more about that. [indiscernible] Hey, Darren. Thank you for your questions. So the because we're charging 20%, and because of the efficiencies of IntelliAgent, we are going to see a higher gross profit margin per transaction. I think we can see gross profit margin grow by [indiscernible] Compared to our traditional gross profit margin. And that's really because of the efficiency of our platform and what we can deliver. Second, we launched this internally about four weeks ago, and it really was a soft launch. And pretty quickly there were about 120 agents that signed up.

We are already onboarding them into the program. And starting, I think next marketing externally, even though we already have some external agent joining the program. And you think we'll continue to ramp up with the ultimate goal of the end of the year, onboarding about 100 agents. We want to be careful about the growth. It is a complex [indiscernible] And so we wanna make sure that, we are firing all cylinders but we think that by the end of the year, we can be at about a hundred new agents a month. And then of course, into next year, growing that even farther. And so, and given that the financial results of the program thus far, we feel incredibly positive about the impact of going to have in gross profit and adjusted EBITDA. That's helpful. There's one more if I may. Outside of my host group, have you guys held discussions with similar size agent teams to join Fathom and has any of that accelerated the launch of ELEVATE? You talked about some teams and partners in the pipeline. Thanks.

Yeah, actually, once we launch Elevate, absolutely had a lot more conversations with different brokerages. Not only brokerages, but technology partners, brokerages, and we're having a great deal of number of conversations about ELEVATE. So I do think going forward, we're going to see potentially perhaps into more into Q3 more walkovers, And then I think that within the next six months, you'll see some announcements in terms of potential partnerships. Of companies that want to not only partner with Elevate, but license And so that has been a significant interest from a lot of different companies on what Elevate is. And, you know, we're looking forward to continue to expand the program. Not only into other companies, but into other types of agents. For example, Teams, is one in which that we are going to create Elevate for Teams, for example. So I think there's a lot of opportunity around Elevate. And I think we are in this very early stages. And I think that we could going to have some significant results in the next twelve to eighteen months.

Great, thank you. Best of luck.

Thank you.

Thank you. Once again, everyone, if you have any questions or comments, please Thank you. There are no further questions in the queue.

Okay. Thank you everyone for joining us today. As always, I look forward to our next update. I hope everyone has a good evening. Thank you for joining us.

Thank you everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.