Fathom Holdings Inc. (NASDAQ: FTHM)

Fathom Holdings Inc., a technology-driven real estate services platform, operates under the ticker symbol FTHM. The company is an active participant in the vast and dynamic U.S. residential real estate industry, which has a market size of over $2.5 trillion. Fathom has carved out a niche for itself by integrating various services such as residential brokerage, mortgage, title, insurance, and Software as a Service (SaaS) offerings to brokerages and agents through its proprietary cloud-based software, intelliAgent.

At the heart of Fathom's main business activities is its residential brokerage segment, Fathom Realty. This division operates with a unique overhead business model that leverages the company's proprietary software platform for managing real estate brokerage back-office functions. This approach eliminates the need for physical brick-and-mortar offices and redundant personnel, allowing Fathom to offer agents significantly more of their commissions compared to traditional real estate brokerage firms.

Fathom generates revenue primarily through its commission model, where it charges a flat fee per real estate transaction. The company's primary products and services include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, and Verus Title. These offerings cater to residential real estate agents, brokers, and homeowners, forming the core of Fathom's customer base.

In the mortgage sector, Fathom's Encompass Lending provides mortgage services to its agents and clients. Verus Title, the company's title services division, facilitates the closing process for real estate transactions. Furthermore, Fathom's SaaS segment, intelliAgent, provides a suite of brokerage and agent-level tools, technology, business processes, business intelligence, and reporting. The platform offers features such as consumer-facing websites, transaction management, personnel management, customer relationship management, accounting management, and marketing repository.

Operating in a highly competitive industry, Fathom's low-overhead business model, advanced technology, and competitive commission structure have enabled it to attract and retain high-producing agents. The company's key competitors include national independent real estate brokerages, franchisees of national and regional real estate franchisors, regional independent real estate brokerages, and discount and limited-service brokerages.

Fathom's technology platform, intelliAgent, provides a competitive edge with its suite of brokerage and agent-level tools, technology, business processes, business intelligence, and reporting. The platform offers features such as consumer-facing websites, transaction management, personnel management, customer relationship management, accounting management, and marketing repository. The company's technology roadmap includes its own fully-integrated e-signature platform, goal setting and accountability for agents, expense tracking for agents, and APIs for integration with additional third-party tools.

A significant factor contributing to Fathom's success is its lower overall cost of operating its business, which enables it to offer its agents a 100% commission model. The company charges each agent a flat fee per real estate transaction, allowing agents to retain a higher percentage of their commissions. However, Fathom's business is affected by seasons and weather, with poor weather or natural disasters negatively impacting listings and sales. The company's revenue and operating margins are subject to seasonal fluctuations, poor weather, natural disasters, and macroeconomic market changes.