We have Marco Fregenal from Fathom Holdings at 9:00 A.M. Good morning. Okay, I think we can get started, right? Okay, let's go. Fathom Holdings is, in a sense, we are a real estate company. We have to act like a real estate company, but in reality, we are a platform. We really are a technology platform. When I joined the company 12 years ago, the thought process was that the real estate industry really made no sense, the way it works and the way it operates. In a sense, real estate agents are independent contractors, are really running a small business. The idea was to create a platform that would actually change the way real estate agents work and actually improve the productivity and do a lot of the work that, so that's what we create in terms of intelliAgent. We do behave like and act like a real estate company, but the reality is we're really more like a platform. The last few years in this industry, as you can imagine, have been very difficult with the change in interest rates. The interest rates significantly affected this industry, and the last two years, transactions have decreased significantly, right? About 40%-50%. That impacted the industry. Having said that, Q4 for us was a turning point. You know, prior to the significant changes in interest rates, this company was growing around 30%-40% a year. Interest rates came in that significant change really caused havoc in the industry. We were pretty much down for the first year and then flat, and we'll go over that. Again, Q4 of last year was an inflection point for us, where we began to increase again. We grew revenue by 24% in Q4 year- over- year. We grew transactions by 22% and engine growth by 21%, and we made a significant acquisition. What I'm trying to demonstrate to you is that, again, I think the industry has bottomed out. There will be some increase this year, but for us as a company, Q4 is the return to growth. We are almost in every state in the country. One of the things that makes us unique is that we're also a mortgage company and a title company. We try to take advantage of those transactions. What makes our business unique in terms of mortgage and title is that roughly 50% of our business in mortgage and title comes from Fathom agents. We don't spend a lot of money in advertising like a lot of mortgage and title companies do because we're getting that business as an add-on. As I mentioned earlier, the last two years have been incredibly difficult for this industry. Having said that, we're beginning to see the light at the end of the tunnel. I think if you look at March numbers, the transactions I think went up 6%-7%, and NAR, the National Association of REALTORS, is predicting somewhat of an increase this year. We think this year the industry will grow number of transactions by about 6%-7%, and then another 10% next year. As I mentioned earlier, last two years have been difficult, but we're beginning to see the industry recovering. In terms of the company, you know, we believe that we offer a complete solution to agents, and we offer a great deal of value in terms of the value that we offer in terms of technology, in terms of services. What we try to do is really offer the complete solution for agents. It is similar to a company like Shopify, for example. If you think about a real estate agent, a real estate agent is running his or her own business, and you know, and they are looking for products and services that can help her run their business. That is what Shopify does. Our idea of Fathom, when we initially created it, was to create a company similar to Shopify that continues to create products and services. I will illustrate some of these in the next few slides. A couple of things that make us unique. We are a virtual company. We actually have very few offices, and so we do not have the expenditure that the legacy brands have. As you drive around the neighborhood, you see different office spaces from different brokerages. We do not have that. You know, we work in a virtual environment. The other thing that is unique about us is that we own our entire technology platform. We built a product called intelliAgent, which is a product that really runs the entire life cycle of a transaction. It is similar to an ERP system, if you will. When we started creating technology, unlike most of our competitors that create technology for the consumer, we created technology for the agents because the agent is our customer. We want to facilitate the process and help those agents grow their business. In terms of our value, again, we offer the complete solution. Not only we talk about the best splits, and I'll get into a little bit of what the splits mean and how agents are compensated, but in terms of technology, we offer leads and, of course, training and support and all that. Even though we are a platform, we offer everything that the typical real estate company offers. In some cases, we offer a great deal more. Let's talk about the splits, which is one of the key differentiators. Most agents that work for traditional real estate or legacy companies pay their brokers a percentage, or we call a split, of their commission. For example, that could vary anywhere from 15%-50% of their revenue, depending on where they work and how many years and how much business they do. What's unique about Fathom is that in our Fathom Max plan, is that we charge a flat fee of $500. And so that's roughly the average transaction for us is roughly around $360,000, $370,000. It's roughly around 5% or 6%. So you can see the difference in savings from 6% all the way to 15%-50%. Historically, this company that has been our model, the 100% commission, which basically tells the agent, "Look, you're paying 20%-30% somewhere else. Come to Fathom, you're going to pay 5% or 6%, and primarily you're going to get everything you get somewhere else," right? And so that has been the value, and we have grown significantly from that. What we just announced about three weeks ago is Elevate. So Elevate is the total opposite of that, right? Elevate is, "Come to Fathom, you're going to pay the same 20% that you're paying somewhere else, but we're going to run the business for you. We're going to do all the activities that agents honestly should not be doing because they're salespeople." The real estate industry is very unique. It asks salespeople to do all kinds of activities that typical salespeople don't do. What Elevate is, is that Elevate is, in a sense, Shopify. In a sense, we do all the work in which agents really should not be doing. For example, we do all the lead generation for them. We have an ISA team that calls on those leads for them. We do all the social media. We do the transaction coordination, all the paperwork, all the scheduling. We take all that work from them, right? We charge the 20%, which typically they're paying in other brokerages. We launched this three weeks ago, and in three weeks already signed up 120 agents. The difference about this is that the gross profit on this activity, on this model, is over 460% greater than the gross profit in our regular traditional model. The EBITDA is five to six times greater. Two different models, right? One model is we tell agents, "Come and join us. You're going to pay very little, and you're going to get basically what you're getting somewhere else." The other model is, "Come and join Fathom. We're going to charge you the same, or in some case, a little less, but we're going to help you run your business. We already have a waiting list on this, and we think that within 18 months, we could add 2,000-3,000, at least 2,000-3,000 agents on this. The average transactions per agent in this program is over 10, which is probably one of the highest, probably the second highest in the industry, as we continue to add agents. This is about the continuation of development of our product and services. First was to offer the agent a lower cost, and the second is offer the agent the same cost, but offer them a greater deal of value. Think of it as a concierge service. "Come and join Fathom, and we'll help you run your business for you." We have enormous economies of scale in technology, and we believe that this is the future of the industry. If you look at the real estate industry for the last 50 years, there have been four or five different inflection points that really changed the industry from ownership of brokerages to revenue share to the creation of teams and mega teams. There are about three or four different inflection points. We believe this is the future of the industry, that a significant percentage of agents are going to want to do this. We mentioned technology. We actually own and built our own technology. I've been in the technology industry and software for many, many years. When I joined the company 12 years ago, we began the process of building our own technology and managed the entire life cycle of a transaction. Now, why is that important? It's important for a few reasons. One, competitive advantage. When we did not have our technology, and we came up with new features in that, basically, the software provider would offer those to everyone. Second is the cost to run the business. We have the lowest cost in the industry per direct cost per transaction, $264. So it costs us $264 to put a transaction through our system. Most companies out there are paying $1,200, and we will talk in a little more detail. Having our own technology is a significant differentiator. As you can see, the technology does all kinds of things, right? We offer our agents the complete solution in terms of running their business for them, from websites to marketing, lead generation, transaction management. It helps run the business. We also offer them a variety of leads programs. I get asked the question a lot, so I included a slide because I was asking, "Can you generate leads for your agents?" Absolutely, we do. That is part of the Elevate program. We help our agents continue to increase their business. There are many that believe that virtual companies cannot offer, you know, comprehensive training and support. That is actually incorrect. I believe that we probably offer better support because we are built on on-demand support and on-demand training, where agents can get those anytime they want. We built an entire platform to help agents become more successful, not only from support, but for training as well. I mentioned earlier that we are a mortgage and title company as well. One of the great benefits about having mortgage and title is that we actually make a lot more money from those as well. Our gross profit margin on mortgage is about 30%, and title is over 60%. When you look at real estate, it's only 7%, right? You can see the great advantage of having mortgage and title as well. Now, when we look at Elevate, the gross profit on Elevate is four to five times, so it's around 25%-30%. Elevate is significantly going to change our financials going forward. Mortgage and title continue to grow faster than our regular business. We grew about 25%-26% in Q4 overall. Mortgage and title grew over 51% and 48%. We'll continue to grow in our business much faster than mortgage and title, which is also much more profitable. Let's talk about agent growth. Even though we are a transaction business and we want transactions, we get transactions by agents. Continuing to grow our agent base is certainly important. Our agent growth primarily comes from three different ways. First, organic growth. We actually market through hundreds of thousands of agents on a daily basis. Second, agent referrals. We incentivize our agents to refer other agents. About 50% of our growth comes from agent referrals. Third, acquisitions. We just began somewhat a roll-up strategy. November 1st of last year, we acquired My Home Group, which is the 27th largest company in the country. We are currently about number nine or ten, depending on how you look at it, whether it's transactions or revenue. We acquired My Home Group, 27th largest company, about 2,200 agents. I'll talk a little bit more about the dynamics of that. When we look at an acquisition, we look for companies that are going to be highly accredited. We acquired this company just to give you a feel for how our methodology on acquisitions. We acquired this company for about $3.5 million. It basically was break-even last year. By implementing our technology, our products, our services, this year we'll do about $1.2 million in EBITDA, and next year we'll do $2 million in EBITDA. Our break-even on that acquisition is roughly two years, okay? There are dozens and dozens and dozens of companies out there that we can help become a lot more profitable by implementing our technology, our products, and our services. As I mentioned earlier, one of the great benefits of our technology and services is that we can run a transaction for $270. They were running a transaction about $500 or $600, right? We basically cut that in half. I mentioned earlier, $264 is our direct cost per transaction, where the average in the industry is roughly $1,200-$1,800, depending on how they run their business. You know, we are looking to grow our business not only from top side, but continue to increase the gross profit and profitability. How are we going to do that? An example is Elevate, right? Elevate is going to significantly increase our gross profit and our profitability. We estimate that Q2 of this year, we'll hit adjusted EBITDA positive. Once we hit adjusted EBITDA positive, we believe that for every additional dollar gross profit, 60%-65% will flow to the bottom line. The company is at an inflection point where once we pass break-even, adjusted EBITDA break-even, we should see a significant growth in terms of EBITDA as we continue to grow the business. This is a historical chart in terms of our financials. You can see that prior to 2023, the company was growing 30%-40%. Certainly, in 2023 and 2024, we're affected by interest rates. Again, in Q4 of 2024, we hit that inflection point and began growing again. We grew revenue by 24% in Q4. We grew gross profit by 59%, agents by 21%, and transactions by 22%. The point I'd like to highlight is that if you look at the growth in revenue, look at the growth in gross profit, you can see the gross profit grows 59% versus revenue in 2024. What that means is that the company is hitting that inflection point. The gross profit is growing faster than revenue is, right? The management team these are the people that really run the business. You know, I have lots of other key important players in the team, but the way I look at the business is that I have someone that runs real estate, which is Samantha, who's been in the industry for 20 years. Then Jon Gwin runs the mortgage and title business for me. He's been in the industry for 25 years, and he ran a very large mortgage company. I run mostly the technology and the other services. We try to run the business in a very cohesive way. We are very lean. If you just look, for example, our entire corporate team is seven people. We do a great deal of offshoring. We have over 100 employees in Vietnam and 50 in Brazil. I've been offshoring since, you know, 30 years ago. That is one of the benefits we have in terms of running a business and how efficient it can be in terms of cost- effectiveness. Our board, you know, we have a great board that really helps us run the business. I will highlight two individuals. Scott Flanders has run multiple public companies and high-growth businesses. Adam Rothstein just joined the company. Also, a great deal of experience in running high-growth businesses and public companies. I feel pretty blessed about having individuals that understand, you know, what has gone the last two years, understand where we are in the cycle, and understand the potential for this industry. With that, I will stop, and I will take any questions you may have. Yes, sir. Yeah, it is a great question. In our EBITDA numbers that I already gave earlier, when you look at the Elevate program, the Elevate, again, this is only about 120 agents, right? In about two and a half weeks, there's an enormous runway. The Elevate program is only for agents that close a minimum of four transactions a year. When you look at the addressable market, we're talking about 450,000 agents across the country that do at least four transactions. The cost structure for that is already built into the program. When you look at the typical Elevate agent that right now is averaging around 10 transactions per year, our EBITDA per transaction should be greater than $1,000 per transaction, right? That's already built into the plan. Part of the cost structure of Elevate is our technology, which we already own, so there's very limited. The other part of the cost is working with several partners, in which we negotiated significant discounts for volume. Those are fixed. The majority of our costs for Elevate are fixed costs in the sense that, or fixed in the sense that they are directly related to a transaction, and they are variable in the sense they go directly with our growth. There is no really fixed cost that we have to have so much already put in. Even if we close zero business, it's all variable and direct in terms of the growth. We built a pretty good model that's very cash flow efficient. As a matter of fact, within the first three months of Elevate, we'll be cash flow positive just from the program. Any other questions? Yes, sir. If you, next time you drive around, go to see if you see a real estate office, go in there, and you're going to see there's nobody there. The world has changed a great deal. The closings now are done almost virtual. In a sense, a lot of our title company, for example, will go directly to your house or your job to close on the transaction. You don't have to go to an office to close a transaction anymore. Most companies already offer that. When you're looking for houses, typically today, if you think about how the world has changed, it used to be a long time ago, they'd go to an agent and say, "I'm looking for these houses," and they'd come back and tell you, "Okay, these are the houses that I see." Today, most people, when they call an agent, they already search on the internet, and they already said, "These are the houses I want to see." The world has really changed that. Individuals don't want to go to an office anymore. They want to go see, "These are the houses I want to go see." When it comes to the closing, again, for us, we actually do the closing virtually, or we actually come to your office or come to your house for you to sign the document. Very few clients go to an office. Our home office, for example, in Cary, North Carolina, that's where our home office is. We have about 700 agents in Raleigh. We've been there four years. I don't think I have ever seen a client come to the office. That has really changed in terms of how clients behave. I think that's one of the challenges for the legacy brands is that they have all this office infrastructure that they have to pay for, that we don't have to pay for. It is very rare that an individual or a client wants to go to an office. Yes, sir. Yep. Sure. Sure. The question is, how did the world change, or how did Fathom's affected by the change in the buyer side compensation? I think that's what you mean, right? Yeah. Honestly, it hasn't changed much. It really has not. I know it sounds good, but it really has not changed much. I think that, and the reason part of sell is, look what is happening in the market now. You go back two years, a house was sold in about three minutes. Literally three minutes, and people buy a house, sign, and see. Today, we are getting back to more a balanced market where it is taking 60-90 days to sell a house. If you are selling your house and it is taking 60-90 days, are you going to lower what you are going to contribute to the buyer side agent? Probably not. We are not really seeing, you know, some people anticipated that the buyer side's commission is going to decrease significantly. We have not seen that. We really have not seen that. They're still pretty much flat, especially because the market has transitioned to more a balanced market. Honestly, it hasn't really changed. Now, I cannot say that we gain any competitive advantage of that, and the reason is because the market hasn't changed. If the market did change indeed, then we probably would have gained competitive advantage on that, but we really haven't. That's not such a bad thing, given that, you know, if the market's still, you know, in a sense that the sellers are still contributing to the buyer side. We have not seen a change in that. It doesn't mean it's not going to happen in the future. I believe that once you hit a balanced market, an equilibrium balance between buyers and sellers, and that it takes 60, 90, 120 days to sell a house, which historically, if you take, you know, the last two years out of the equation, I don't think that the market's going to change. Any other questions? It will be, the next couple of years are going to be really interesting in the real estate. The market is going to become, I get asked this question, are we ever going to see 7 million transactions like we saw in, you know, 2022? The reality is no, right? Those interest rates, we're never going to see them again. It's going to take some time for people who have 2%. Like my son has a 2.5% mortgage, and he told me the other day he's never going to sell his house. I told him, of course, he will. When you start having kids, you're going to need a bigger house. You're going to sell your house. It's just going to take some time for that to evolve. We're going to see a balanced market. You know, we're probably going to see markets growing at 5%-10% a year for the next three, four years, which is a healthy thing. What happened in 2022 and 2021 was not a good thing for the market. It really threw everything out of whack. Now we're paying the price, you know, to get things back on track again. Any other questions? Yes, sir. I don't think so. I think, you know, we raised this data around for $3 million. We feel pretty strong about hitting adjusted EBITDA positive in Q2. Remember the Q2, basically the market increases. The Elevate program is going to be cash flow positive fairly quickly for us. At this point, I do not anticipate us needing cash. The cash that we needed, we raised in Q2. Certainly, you know, given our stock price, it's highly diluted for us, right? One of the things that makes Fathom interesting is that when you look at the founder, myself, and some board members, we own roughly 60% of the company, right? We feel the pain as well, right? We are very careful about diluting our stockholders because, you know, we are as well, right? Yes, sir. I think we got one more. One more? Yes, sir. I'm sorry, can you say.