Management is proactively decoupling financial performance from transaction volume by transitioning from flat-fee models to a 7% commission split under the new 'Edge' plan.

The shift to a $75 monthly fee for new agents aims to increase revenue consistency and predictability, while the company also introduced a monthly fee specifically targeting agents who have historically closed zero transactions to improve unit economics.

Revenue growth of 25% in 2025 was largely inorganic, driven by the acquisition of My Home Group, while organic volumes faced headwinds from 20% contract cancellation rates in key markets.

The company is intentionally purging non-productive agents, having already removed 1,100 individuals who contributed to costs without generating revenue or EBITDA.

Strategic focus has shifted toward high-margin concierge programs like 'Elevate' and 'START', which carry gross margins between 20% and 50% compared to the lower-margin core brokerage.

Ancillary business scaling is a primary margin driver, with mortgage revenues increasing 70% and title services maintaining 58% gross margins through improved internal referral attach rates.

The new 'Edge' plan and $250 transaction fee are expected to increase gross profit per pre-cap transaction by 116% compared to the legacy Fathom One plan.

Management expects the 'Elevate' and 'START' programs to represent at least 10% of total transaction volume by year-end 2026, rising to over 15% by 2027.

Lead generation is projected to scale from 4,000 to more than 20,000 leads per month by the end of 2026, supported by the ByOwner.com partnership.

The 'START' concierge program is scheduled to expand from 5 states to 10 states by the end of 2026 to capture more first-time buyer market share.

2026 plans include the launch of an integrated consumer portal to improve buyer/seller transparency, which is expected to drive repeat business, alongside separate investments in AI-driven initiatives to modernize offerings and improve efficiency.

A $2 million financing arrangement was entered into on March 18, 2026, to provide additional liquidity and financial flexibility during volatile market conditions.

Full-year 2025 GAAP net loss included a $900,000 loss on the sale of a business and $2 million in accrued legal expenses.

Significant leadership transition noted with the appointment of Lori Muller as President of Fathom Realty, replacing 14-year veteran Samantha Giuggio.

Market volatility remains a risk, evidenced by December 2024 cancellation rates exceeding 20% in markets like Atlanta, Jacksonville, and San Antonio.

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Management aims to reach approximately 1,000 agents on the Elevate platform by year-end, up from the current base of roughly 260-275 agents.

The platform will evolve into multiple tiered offerings, including the START program, to cater to different agent segments and lead generation needs.

The Edge plan launches April 1, 2026, for all new agents, while existing agents are grandfathered into legacy plans to ensure a low-disruption transition.

Management expects a natural shift toward the Edge plan over time through organic attrition and voluntary opt-ins from agents attracted to the new cap structure.

The partnership focuses on converting the 90% of 'for sale by owner' sellers who eventually hire an agent, providing Fathom agents with high-intent listing leads.

Fathom will serve as the real estate partner for ByOwner.com, leveraging their 500,000 monthly visitors to drive volume starting in Q2 2025.

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