Fathom Holdings Inc.

Previous wording

During the three months ended March 31, 2026, the Company implemented several leadership and growth initiatives to support agent productivity, expansion, and long-term operational performance.

Current wording

During 2026, the Company implemented several leadership and growth initiatives to support agent productivity, expansion, and long-term operational performance.

Previous wording

As of March 31, 2026 and March 31, 2025, we had approximately 10,462 and 13,665 agents, respectively, representing decline of approximately 23.4%. The decrease in agent count during the period was primarily driven by a strategic review and rationalization of the Company’s agent base, including the removal of inactive and non-producing agents. Additionally, beginning in 2026, the Company transitioned from reporting agent licenses to reporting agent counts, which also contributes to the lower reported number and does not reflect a decline in underlying agent demand or engagement. As a result, the Company recast its agent count as of March 31, 2025 for comparative purposes.

Current wording

As of June 30, 2026 and June 30, 2025, we had approximately 9,768 and 13,931 agents, respectively, representing decline of approximately 29.9%. The decrease in agent count during the period was primarily driven by a strategic review and rationalization of the Company’s agent base, including the removal of inactive and non-producing agents. Additionally, beginning in 2026, the Company transitioned from reporting agent licenses to reporting agent counts, which also contributes to the lower reported number and does not reflect a decline in underlying agent demand or engagement. As a result, the Company recast its agent count as of June 30, 2026 for comparative purposes.

Previous wording

The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

Current wording

The Company's Chief Operating Decision Maker ("CODM") is its Interim Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

Previous wording

Commission and service costs consists primarily of agent commissions, less fees paid by the Company to agents, order fulfillment, share-based compensation for agents, title searches, and direct cost to fulfill the services provided for our brokerage, mortgage lending, title service, insurance services and other services provided.

Current wording

Commission and service costs consists primarily of agent commissions, less fees paid by the Company to agents, order fulfillment, share-based compensation for agents, title searches, and direct cost to fulfill the services provided for our brokerage, mortgage lending, title service and other services provided.

Previous wording

For the three months ended March 31, 2026, gross commission income decreased by approximately $7.5 million, or 8.5%, as compared with the three months ended March 31, 2025. This decrease was primarily attributable to a 12.0% decrease in transaction volume, with 8,550 real estate transactions during the three months ended March 31, 2026, compared to 9,715 transactions during the three months ended March 31, 2025. According to the NAR, total existing home sales declined 8.4% in January, and were 4.4% lower compared to the prior year period. While activity showed modest improvement in February and March, the increase was not sufficient to offset the earlier declines, resulting in overall lower transaction volumes during the period. During the three months ended March 31, 2026, average revenue per transaction was $9,513, a 4.0% increase compared to $9,148 during the three months ended March 31, 2025, primarily attributable to higher transaction volumes generated through the Fathom Elevate plan.

Current wording

For the three months ended June 30, 2026, gross commission income decreased by approximately $9.0 million, or 8%, as compared with the three months ended June 30, 2025. This decrease was primarily attributable to a 15.0% decrease in transaction volume; specifically, we had 10,808 real estate transactions during the three months ended June 30, 2026, compared to 12,710 transactions during the three months ended June 30, 2025. Our transaction volume decreased primarily due to a reduction in our agent count and continued softness in existing home sales. During the three months ended June 30, 2026, average revenue per transaction was $9,897, a 8.5% increase, as compared to $9,125 during the three months ended June 30, 2025, which is primarily attributable to higher transaction volumes generated through the Fathom Elevate plan, the Company's concierge-level plan.

Previous wording

For the three months ended March 31, 2026, other service revenue increased by approximately $0.8 million, or 18.8%, as compared with the three months ended March 31, 2025. This increase was primarily attributable to growth in title service transaction volume, reflecting organic expansion, increased walkover activity, and continued growth in the Company’s mortgage business.

Current wording

For the three months ended June 30, 2026, other service revenue increased by approximately $2.2 million, or 40%, as compared with the three months ended June 30, 2025. This increase was primarily attributable to growth in title service transaction volume, reflecting organic expansion, increased walkover activity, and continued growth in the Company’s mortgage business.

Previous wording

For the three months ended March 31, 2026, commission and service costs decreased by approximately $5.2 million, or 6.2%, as compared with the three months ended March 31, 2025. Commission and service costs primarily includes costs related to agent commissions, net of fees paid to us by our agents. These costs generally correlate with recognized revenues. As such, the decrease in commission and service costs compared to the same period in 2025 was primarily attributable to a decrease in agent commissions.

Current wording

For the three months ended June 30, 2026, commission and service costs decreased by approximately $7.4 million, or 6.6%, as compared with the three months ended June 30, 2025. Commission and service costs primarily includes costs related to agent commissions, net of fees paid to us by our agents. These costs generally correlate with recognized revenues. As such, the decrease in commission and service costs compared to the same period in 2025 was primarily attributable to a decrease in agent commissions.

Previous wording

For the three months ended March 31, 2026, total marketing expenses decreased by approximately $0.1 million, or 3.7%, as compared with the three months ended March 31, 2025. The decrease was primarily due to lower marketing personnel costs following organizational efficiency initiatives.

Current wording

For the three months ended June 30, 2026, total marketing expenses increased by approximately $0.2 million, or 13%, as compared with the three months ended June 30, 2025. The increase was primarily due to the Company's investment in growth.

Previous wording

For the three months ended March 31, 2026, total technology and development expenses decreased by approximately $0.5 million, or 25.5%, as compared with the three months ended March 31, 2025. The decrease was primarily attributable to the Company’s divestiture of its LiveBy business in November 2025.

Current wording

For the three months ended June 30, 2026, total technology and development expenses decreased by approximately $1.1 million, or 59.4%, as compared with the three months ended June 30, 2025. The decrease was primarily attributable to the Company’s divestiture of its LiveBy business in November 2025.

Previous wording

The Company recorded income tax expense of approximately $0.02 million for each of the three months ended March 31, 2026 and 2025. This tax expense is primarily the result of current state income tax liabilities and deferred tax expense related to deferred tax liabilities that cannot be fully offset by deferred tax assets.

Current wording

The Company recorded income tax (benefit) expense of approximately $0.02 million and $0.06 million for the three months ended June 30, 2026 and 2025, respectively. This tax expense is primarily the result of current state income tax liabilities and deferred tax expense related to deferred tax liabilities that cannot be fully offset by deferred tax assets.

Previous wording

For the three months ended March 31, 2026, general and administrative expenses increased by approximately $2.2 million, or 25.7%, as compared with the three months ended March 31, 2025. The increase was primarily attributable to higher bad debt expense associated with agent fees.

Current wording

For the six months ended June 30, 2026, general and administrative expenses increased by approximately $3.3 million, or 20.1%, as compared with the six months ended June 30, 2025. The increase was primarily attributable to higher bad debt expense associated with agent fees.

Previous wording

To date, our principal sources of liquidity have been the net proceeds we received through public offerings and private sales of our common stock, the sale of one of our businesses, as well as proceeds from loans. As of March 31, 2026, our cash and cash equivalents (including restricted cash) totaled approximately $4.5 million, which represented a decrease of approximately $1.4 million compared to December 31, 2025. As of March 31, 2026, we had negative net working capital of approximately $3.0 million, which represented a decrease of $5.0 million compared to December 31, 2025. As noted above, in May 2024 we sold our wholly-owned subsidiary Dagley Insurance Agency for approximately $15.0 million in cash, $7.4 million of which we received at closing. The Company received $4.0 million during 2025. Of the balance the Company is owed related to the sale of its insurance business, the Company received $2.0 million in the first seven months of 2026 and expects to receive the remaining $1.0 million in September 2026. On April 7, 2025, the Company repaid its $3.5 million convertible note (the “2023 Note”) in full. In March 2025, the Company completed a public offering of common stock (the "March 2025 Offering"), which resulted in the issuance and sale by the Company of 3,505,364 shares of common stock at an offering price of $0.68 per share and 832,639 shares of common stock at an offering price of $0.72 per share, generating gross proceeds of $3.0 million, of which the Company received total net proceeds of $2.9 million, after deducting underwriting discounts and other offering costs. In September 2025, the Company completed a public offering of common stock (the "September 2025 Offering"), which resulted in the issuance and sale by the Company of 3,450,000 shares of common stock at an offering price of $2.00 per share, generating gross proceeds of $6.9 million, of which the Company received total net proceeds of $6.5 million, after deducting underwriting discounts and other offering costs. The Company received $3.0 million in November 2025 related to the sale of its LiveBy business. In March 2026, the Company received $2.0 million in proceeds from a subordinated secured promissory note maturing in April 2027. The Company has short-term obligations totaling $8.7 million, consisting of a $5.0 million promissory note due in October 2026 and $3.7 million in liabilities related to legal settlements. In September 2024, the Company completed a private placement of senior secured convertible promissory notes with an aggregate principal amount of $5.0 million (the “2024 Notes”). The 2024 Notes were issued to an existing shareholder who beneficially owned more than 5% of the Company’s common stock and to the Chairman of the Company’s Board of Directors (the “2024 Offering”). The 2024 Notes mature in October 2026. In March 2026, the Company entered into a subordinated secured promissory note in the original principal amount of $2.0 million (the “Bridge Note”), wh…

Excerpt shortened here; the source contains the full paragraph.

Current wording

To date, our principal sources of liquidity have been the net proceeds we received through public offerings and private sales of our common stock, the sale of one of our businesses, as well as proceeds from loans. As of June 30, 2026, our cash and cash equivalents (including restricted cash) totaled approximately $4.7 million, which represented a decrease of approximately $1.2 million compared to December 31, 2025. As of June 30, 2026, we had net working capital of approximately negative $10.2 million, which represented a decrease of $12.2 million compared to December 31, 2025. As noted above, in May 2024 we sold our wholly-owned subsidiary, Dagley Insurance Agency for approximately $15.0 million in cash, $7.4 million of which we received at closing. The Company received $4.0 million during 2025. Of the balance the Company is owed related to the sale of its insurance business, the Company received $2.6 million in the first eight months of 2026 and received the outstanding $0.4 million from BBBY as part of debt purchase. On April 7, 2025, the Company repaid its $3.5 million convertible note (the “2023 Note”) in full. In March 2025, the Company completed a public offering of common stock (the "March 2025 Offering"), which resulted in the issuance and sale by the Company of 3,505,364 shares of common stock at an offering price of $0.68 per share and 832,639 shares of common stock at an offering price of $0.72 per share, generating gross proceeds of $3.0 million, of which the Company received total net proceeds of $2.9 million, after deducting underwriting discounts and other offering costs. In September 2025, the Company completed a public offering of common stock (the "September 2025 Offering"), which resulted in the issuance and sale by the Company of 3,450,000 shares of common stock at an offering price of $2.00 per share, generating gross proceeds of $6.9 million, of which the Company received total net proceeds of $6.5 million, after deducting underwriting discounts and other offering costs. The Company received $3.0 million in November 2025 related to the sale of its LiveBy business. The Company has short-term obligations totaling $8.7 million, consisting of a $5.0 million promissory note due in October 2026 and $3.7 million in liabilities related to legal settlements. In September 2024, the Company completed a private placement of senior secured convertible promissory notes with an aggregate principal amount of $5.0 million (the “2024 Notes”). The 2024 Notes were issued to an existing shareholder who beneficially owned more than 5% of the Company’s common stock and to the Chairman of the Company’s Board of Directors (the “2024 Offering”). The 2024 Notes mature in October 2026. In March 2026, the Company entered into a subordinated secured promissory note in the original principal amount of $2.0 million (the “Bridge Note”), which was increased to $3.0 million on May 29, 2026 when the Company and the original party agreed to amend and restate t…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 consisted of a net loss of $8.2 million, non-cash charges of $3.3 million, including $0.6 million of stock-based compensation expense, $1.4 million of depreciation and amortization and $2.6 million of provision for credit losses, partially offset by $1.6 million in gains on the sales of mortgages. Changes in assets and liabilities were primarily driven by $62.2 million in mortgage loan originations, partially offset by $66.4 million in proceeds from the sales and principal payments on mortgage loans held for sale. Accounts receivables increased $1.7 million, partially offset by a $2.0 million increase in accounts payable, primarily due timing difference for agent payments resulting from increased transaction volume and related revenue growth.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026 consisted of a net loss of $14.4 million, non-cash charges of $6.9 million, including $1.0 million of stock-based compensation expense, $3.9 million of depreciation and amortization and $2.6 million of provision for credit losses, partially offset by $4.3 million in gains on the sales of mortgages. Changes in assets and liabilities were primarily driven by $177.5 million in mortgage loan originations, partially offset by $180.0 million in proceeds from the sales and principal payments on mortgage loans held for sale.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 consisted of a net loss of $5.6 million, non-cash charges of $1.8 million, including $1.5 million of stock-based compensation expense and $1.4 million of depreciation and amortization, partially offset by $1.5 million in gains on the sales of mortgages. Changes in assets and liabilities were primarily driven by $54.7 million in mortgage loan originations, partially offset by $51.4 million in proceeds from the sales and principal payments on mortgage loans held for sale.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 consisted of a net loss of $9.2 million, non-cash charges of $6.1 million, including $2.5 million of stock-based compensation expense and $2.9 million of depreciation and amortization, partially offset by $3.2 million in gains on the sales of mortgages. Changes in assets and liabilities were primarily driven by $120.0 million in mortgage loan originations, partially offset by $115.0 million in proceeds from the sales and principal payments on mortgage loans held for sale.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 primarily consisted of $0.5 million for purchases of intangible assets related to technology development.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 primarily consisted of $0.8 million purchases of intangible assets related to technology development.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 primarily consisted of $0.7 million for purchases of intangible assets related to technology development.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2025 primarily consisted of proceeds from the sale of Dagley Insurance Agency completed in May 2024 of $4.0 million, partially offset by the purchases of intangible assets related to technology development of $1.4 million.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 was primarily driven by a net decrease of approximately $2.5 million in warehouse lines of credit, partially offset by $2.0 million in proceeds from the Bridge Note.

Current wording

Net cash provided in financing activities for the six months ended June 30, 2026 was driven by a net decrease of approximately $1.7 million in warehouse lines of credit, offset by $3.0 million in proceeds from the Bridge Note.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 consisted primarily of the $3.0 million in proceeds from the issuance of common stock in connection with a public offering and the change of $4.7 million on our warehouse lines of credit.

Current wording

Net cash provided in financing activities for the six months ended June 30, 2025 consisted primarily of the $3.0 million in proceeds from the issuance of common stock in connection with a public offering and the change of $8.1 million on our warehouse lines of credit, and the repayment of a $3.5 million convertible note.

Previous wording

The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

Current wording

The Company's Chief Operating Decision Maker ("CODM") is its Interim Chief Executive Officer (CEO), who is responsible for evaluating the performance of the Company's operating segments and allocating resources. The Company identifies an operating segment as a component: (i) that engages in business activities from which it may earn revenues and incur expenses; (ii) that has available discrete financial information; and (iii) whose operating results are regularly reviewed by the CODM. The Company does not conduct business outside of the United States and no single customer accounts for more than 10% of total revenue in any reporting period.

Previous wording

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our critical accounting estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these estimates during the three months ended March 31, 2026.

Current wording

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our critical accounting estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these estimates during the six months ended June 30, 2026.