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Fathom Realty(FTHM) - 2022 Q1 - Quarterly Report
FTHMFathom Realty(FTHM)2022-05-09 10:04
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Company Growth and Acquisitions - As of March 31, 2022, the company had 9,006 agents, representing a 49% increase from 6,045 agents in the same period of 2021[100] - The company completed the acquisition of Cornerstone in January 2022, aimed at expanding its reach in the Washington DC market[86] - Other service revenue surged by 1,132% to 6,038,000,attributedtoacquisitionsofVerus,E4:9,andLiveBy[119]FinancialPerformance−ForthethreemonthsendedMarch31,2022,totalrevenueincreasedby816,038,000, attributed to acquisitions of Verus, E4:9, and LiveBy[119] Financial Performance - For the three months ended March 31, 2022, total revenue increased by 81% to 90,082,000 compared to 49,646,000forthesameperiodin2021[118]−Grosscommissionincomeroseby7149,646,000 for the same period in 2021[118] - Gross commission income rose by 71% to 84,044,000, driven by a 47% increase in transaction volume and a 24% increase in average revenue per transaction[118] - Total operating expenses increased by 80% to 95,717,000,withsignificantrisesincommissionandagent−relatedcosts(7195,717,000, with significant rises in commission and agent-related costs (71% increase) and technology and development expenses (283% increase)[120] Expenses and Costs - The company expects commission and other agent-related costs to rise in proportion to the anticipated growth in operations[111] - The company’s technology and development expenses include personnel costs and amortization of capitalized software, which are expected to increase with ongoing development[113] - General and administrative expenses rose by 87% to 10,854,000, primarily due to recent acquisitions and increased stock compensation expenses[122] - Marketing expenses increased by 189% to 1,163,000,reflectingexpansionintonewregionsandpromotionofnewlyacquiredbusinesses[123]CashFlowandLiquidity−AsofMarch31,2022,cashtotaledapproximately1,163,000, reflecting expansion into new regions and promotion of newly acquired businesses[123] Cash Flow and Liquidity - As of March 31, 2022, cash totaled approximately 30,500,000, a decrease of 7,300,000fromDecember31,2021[126]−Netcashprovidedbyoperatingactivitieswas7,300,000 from December 31, 2021[126] - Net cash provided by operating activities was 1,641,000 for the three months ended March 31, 2022, compared to a net cash used of 981,000inthesameperiodin2021[128]−Thecompanyanticipatesthatexistingcashbalancesandfuturecashflowswillbesufficienttomeetoperatingrequirementsforatleastthenexttwelvemonths[126]AccountingandValuation−TheestimatedfairvalueofnetassetsacquiredduringthethreemonthsendedMarch31,2022,involvedsignificantmanagementjudgmentsandestimates,particularlyindeterminingfuturerevenuesandcosts[141]−Thevaluationofacquiredbusinessesreliesonassumptionsbelievedtobereasonableattheacquisitiondate,withpotentialadjustmentsallowedwithinoneyearbasedonchangesincircumstances[142]−Management′sassumptionsforfairvaluemeasurementsarebasedonhistoricalbusinessknowledgeandprojectedfinancialinformation,whichmayvarysignificantlyduetoexternalfactors[141]RegulatoryandReportingStatus−ThecompanyhasirrevocablyelectednottotakeadvantageoftheextendedtransitionperiodundertheJOBSAct,committingtoadoptnewaccountingstandardsasrequiredforpubliccompanies[144]−Thecompanyremainsclassifiedasanemerginggrowthcompanyuntilitmeetsspecificrevenueormarketvaluethresholds,includingtotalannualgrossrevenuesofatleast981,000 in the same period in 2021[128] - The company anticipates that existing cash balances and future cash flows will be sufficient to meet operating requirements for at least the next twelve months[126] Accounting and Valuation - The estimated fair value of net assets acquired during the three months ended March 31, 2022, involved significant management judgments and estimates, particularly in determining future revenues and costs[141] - The valuation of acquired businesses relies on assumptions believed to be reasonable at the acquisition date, with potential adjustments allowed within one year based on changes in circumstances[142] - Management's assumptions for fair value measurements are based on historical business knowledge and projected financial information, which may vary significantly due to external factors[141] Regulatory and Reporting Status - The company has irrevocably elected not to take advantage of the extended transition period under the JOBS Act, committing to adopt new accounting standards as required for public companies[144] - The company remains classified as an emerging growth company until it meets specific revenue or market value thresholds, including total annual gross revenues of at least 1.07 billion[145] - The company is not required to provide certain disclosures about market risk as a smaller reporting company[146]