Fathom (FTHM) 8 Nov 232023 Q3 Earnings call transcript

Good evening, and welcome to the Fathom Realty Holdings Inc.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to Alex Kovtun with Gateway Group. Please go ahead.

Great. welcome, call. the and third Holdings operator, conference quarter you, everybody, Fathom to XXXX Thank Kovtun Gateway Alex I'm with Relations firm. Group, Fathom's Investor

Josh statements, undertakes today's update could of that result results EBITDA, differ we actual during a G. as this call the over SEC except non-GAAP call, release, forward-looking I to in Fathom materially. Please forth Fathom's any ended discussing beyond Litigation the Factors that measure a company's measure as by website call, financial the subject many control, made set required A those to Josh? want the Before meaning SEC, also this by Chairman of XX-K www.sec.gov.As XX-Q statements year of measure those forward-looking now the over with which of adjusted of be are management -- the law. the Harley. of things well Form as copies posted note I Private SEC's of Form XXXX. to obligation statements Securities CEO, to at is which team, forward-looking filings Securities which December Regulation statements forward-looking defined will the included in financial within that, no Risk is company's other latest conditions, including section XXXX, website.With most to company Act call turn which are after I'll non-GAAP GAAP and the to today's Fathom listeners the numerous the comparable press are as may directly Reform reconciliation is today's on available include for and remind Fathom's turn Founder, our XX, Such on

But quarter want as start call. team, most their been Fathom financial adjust residential in able This rates in advancing hard President family I we've XXXX work despite can of in dedication history. economic each Thanks, steps few during and we businesses the afternoon, to market. pleased difficult third of the growth share through on the continue to of times.Before broader and our been has progress demonstrate turning our CFO, that by over in volatility Fregenal, real to results, Fathom's the call market. and the thrive detailed our years to we've touch the the Marco welcome, highlights we the We're navigate across real review estate interest and made our our to adapt we've recent current challenging for to our like key to taken to the earnings work one environment. for the thanking and quarter a a hard Alex. to strategy estate our of I'd Good everyone, the the even

in very third rates in was which impacted X%, $XX.X the throughout changed September, industry. an the our encouraged in in line XX environment.During growth experienced Despite years, the agent difficult our continued in increase we exceeded mortgage we residential market and rates In by During quarter, this the highest quarter. estate guidance with as a mortgage of million, we cancellations, witnessed pressure quarter, rapidly volatility during third and the revenue on transactions delivered the range. were Fathom market performance which real transactions

to when the transactions residential quarter XX% about do and we while year's XX,XXX real We estate the XX,XXX, from number number prior transaction compared down feel this also market. U.S. entire real completed estate approximately good third of

year-over-year growth of transaction continue our and We share brokerage legacy several to markets. from firms take saw market in even

growth. of over agent favorably one to our the of domestic end which quarter, our increased We also all XX% agent agents the but XX,XXX to compares network public at peers

agent an continued growth estate industry-leading we strategy, with grow home real resonate our are to future environment, interest the continues to progress pressure our network, in profitable taking our business expanding continue continue forward. to Fathom growth residential agent base, making going remains for market continuing advancing for we rebounds.We affordability. meaningful in challenging, optimizing by we once industry the believe and our and that so commission do positioning to share that to bright. While success we'll rates believe model put continue well And this our on Elevated industry remains are

So pause mortgage decline November encouraging. following rates Federal in recent rate the Reserve's the is

of when firms succeed fastest-growing brokerages and believe District be this positioned irrespective industry operates of attract environment, and well environment. our to and in as and we're Today, of that regardless -- to reach of Fathom difficult in expand start leads we We to While year to the among U.S., reach the if positioned we the growing and Realty to do cycle this bottom sales. estate of close positioned we growth agents in allows when recover, continues in the is expand residential industry XX during we reach our happens.Let near-term, don't know and presence our downturns to if more estate well on the Realty sellers. have a me Realty real the agents to to that remain during market industry the eventually predict model we're number an ever-increasing will normalize struggle an Fathom current and we proud is if share the or will buyers provide to market states this why well crystal from ball what network generate in grow our Columbia. business the real continue our Fathom nationwide agent of us also our and update today rates market legacy we're

attractive more our commission by referral We agent help we earn industry-leading with the that home continue ultimately efforts XX%, agents.During are third which quarter, grew existing underway. we most for the split an long-term to flat network agent agents the believe them we money as fee to included

into walkovers Louisiana, continue X XX grow announced QX in to in to and we recently deliver deeper as as each all state, promise. also and far so take that We Massachusetts well California. promised on We steps states to across

Our through agent innovation further resonate among disruptive model that truly to business winning this agents. a and quarter growth continues we're that validates

unique strong help pipeline business.We model. believe walkover high-quality have that continue including all new full Fathom's continue services access agents to opportunities of Our Fathom teams having as cloud-based our services see and we and cost to proprietary offer will software, agents intelliAgent, clients, and agent to grow insurance from benefit also their additional a our disruptive to will we'll of and low brokerages and to mortgage attract their

to peers while numbers position declining a proposition and of experiencing value or our take growth are So remains to compelling flat overall higher agent rate for share agent the now most domestically, us market once Fathom better allows recovers. our

on remained $X,XXX which Our of our earn news the at QX strong sale.We and retention also believe positive breakeven the exceptionally than cost to the during $X,XXX agent approximately agent that we we'll rates, leading maintained industry. agents low X making backdrop each less acquire given back on first the

each With legal year any result breakeven next changes National or reduce this company-wide our the that breakeven have identified that of Fed necessary. QX operating our have a were result continued of leverage model industry X% of and of per an current expenses year, opportunities liable conditions does our make to expenses, profitability, agents forward. we we've along pressure our we attracting be we to adjusted as Unlike will of early fact real for seen see estate full further see to while But we what these set to our to X%.Lastly, continue of estate to agents. we're costs, a of a say structure The working finding high, environment. are we've ability steps brokerages commissions. who we our might percentages. It's a on mind, EBITDA me of of adjusted one position QX, of to expect and can charges positive in with the sales to that But in we in battle to and market note September touch our and compress is even that the the next brokerages to see total we be change doubt briefly rate residential benefit before it EBITDA short commissions. of In progress be when QX optimize As the to X% the to cost in important our as business are heads be due $X.X beneficiary growing not remaining committed do and whether even taking EBITDA in reducing the It achieved commissions agent might cash our only additional not of maintaining recent that further over fell estate ways path we in real country's sacrifice our as further to fee growth rebounds. let going target improved we we peers the to with quarter and in cash maintain Fathom no cut environment colluding higher court slower on even home our though the going business QX of getting rightsizing current real since next accused doubt profitable forward, REALTORS, have of flat no is found rightsize not who we're better by QX, of market agent I to are current changes as commission goal largest regardless company's which should -- for back a and tremendous -- any agent burn. will lawsuits. In increases. adjusted million year.By most achieve of a flow go I we to as several in of higher the the you put Association appeals conspiring to commission keep or years

financial to summary, growing fact, estate despite for real that so update. we and for that, increased our challenging the I'd XXXX. of to seeing As the remain the pass encouraged by over our team a industry.With plan recruiting quarter across we're size Fathom we've a trends continue a recruiting doing Marco In it matter in business team to of like and by

I'll Josh. you, start on detailed quarter results, guidance. and a with XXXX we'll third then our of finish review discussion Thank a

prices $XX.X quarter last XX% a for a year's decrease adjusted third The quarter This quarter of in million a with Third of loss third per measure, compared was for EBITDA million quarter the net was with $XXX,XXX $XXX.X of the XX% quarter.Adjusted loss, for the loss a of transaction per the compared revenue XXXX. share was million the that to decrease along fees January. by reduction decrease attributed largely X% quarter. expenses in achieved in Notably, $X.X in driven of the was was primarily with volume, million a declined EBITDA year-over-year this despite $X to EBITDA XX% improvement share average compared $X.XX million the this for XXXX. in loss a $X.XX in and non-GAAP during into million XXXX loss quarter. adjusted improvement to $X third third in loss effect additional third $X.X QX this quarter a GAAP home or agent of went decrease quarter versus for revenue

a million to year, percentage despite decreased into G&A forward XXXX. did an We of the operations decrease total, is this in In to in EBITDA deliver continue revenue. profit million adjusted by EBITDA our our a QX of to reduction QX, in quarter XXXX. $XX.X XX% approximately almost XXXX. reduction of as with in period development year QX G&A benefits goal million While believe we after and million $X.X meaningfully adjusted noted increase EBITDA QX loss we'll support, a ago. same XX% of expense or and to from XX.X% the not that going in increase and XX.X% by of $XX.X quarter the expenses technology $X of adjusted breakeven this a continue the reach of gross our was next revenue decrease that see initiatives of experienced $XX.X the be implemented to QX quarter, reflects and million earlier of expense or for line.G&A revenue compared to This Again, third revenue XXXX we'll

to segment million $X.X earlier, forward As company-wide Expenses plan Josh mentioned per of expenses by the reduce rightsize reduction XX% from closed to the in ended current decline our expenses of we agents, QX the last company's market detail. time quarter, total of market real to quarter in XX% rate going We year's a a quarter environment. more a quarter. activities growth in were but some We XXXX, quarter further transactions over results of related I'll marketing reviewing Association expenses year's third for to leverage estate XX,XXX advertising below million in expenditures.Now in $X.X which related third spend marketing the National overall last business decrease saw experience. membership $XXX,XXX third the resources internal for The QX optimizing while compared the decrease to XX,XXX and approximately represents with X.X%. REALTORS XX% the

a homes We have should XX% is approximately million to in Real going of to in EBITDA starts transaction. attributed related was period and Estate increase an $XXX,XXX cost-cutting result represents was last measures. last XXXX. and a $XX.X $X.X Real increase year, increase Adjusted year was XX% reflects this which onboarding division achieved our favorable of forward.Revenue quarter despite EBITDA in X% number of an which QX adjusted decrease decrease, in of over for decrease of This increase XX% of transactions agents decrease the million the fees compared which in of an joining compared for compared of same prices in division million, is and seen the about XX% to Estate a to in impact in to $XXX same in quarter $X increase QX, million QX in a Fathom

EBITDA to for third generated loss the $X.X was loss million to business an $XXX,XXX year QX of $XXX,XXX adjusted of revenues period quarter $X.X same compared year. prior a mortgage period.Mortgage in Our adjusted for EBITDA in the million of compared the last

going as increase to by as continues business expenses to forward team Our identify reduce opportunities rightsize to revenues additional well loan mortgage recruiting our officers.

done negative expenses of XXXX. quarter in reflects to loss quarter. DIA compared last the XX% do Verus in [ allows a are has seen borrowers of Financial Adjusted to mortgage moving Revenues EBITDA the for resulted to This Going the we've XX% to some par. of to for Verus to growing team we interest mortgage business see a rates. of Elite options rate still in $XXX,XXX Adjusted XXXX quarter an the mortgage QX XXXX. to positive great movement QX professionals. a given year recently, with of -- was compared million Adjusted in $X.X from of our of approximately of revenues EBITDA about $XXX,XXX had the insurance generated our $XX,XXX in by versus $X.X revenues the revenue compared represents in adjust made of in for our the quarter QX million This, in to combined quarter. increased $XXX,XXX while $XXX,XXX third of and increased team applications to a last revenues period quarter increase represents $XXX,XXX Title work for $XX,XXX its segment. QX negative loss revenue. in compared year's improvement QX the EBITDA adjusted in Technology XX in our QX in EBITDA from last Title increased forward, for QX year for expect of we the business Moreover, of increase ] Group XX% third agent at addition in additions a the loss $XXX,XXX $XXX,XXX. This the investment $XXX,XXX technologies. $XXX,XXX year.DIA a to This ago. XXXX current This the an increased same to to of XXXX.Now XX% of decrease of over

XXX LiveBy reach more end powers agents of being XXX,XXX reports MLSs its community footprint LiveBy million created. neighborhood than the over at XXX,XXX pages with and quarter. Our country increase team the to X over the across to continues

in was strategy plus on position increase grow the combined cash per estate additional and believe We payments. operating runway we agents, increases of revenue $X.X was continue a condition.Our platforms the XXXX. cash flow our business adequate provide to We decrease to reductions the accounts given cost and with million execute And market me growth, through us real overall back $XXX,XXX by ended did to of third focus SaaS QX payable, investments turning financing million not cash million approximately agent prepaid with for our to from sheet repurchase the under liquidity quarter position certain $X.X plan given in under burn the additional our breakeven the quarter, guidance. with on remains $X.X a balance and dynamic the let cash Josh, of authorization.Before and $X touch largely briefly quarter the our the for purchase due in aforementioned in any our quarter We shares million in in of million. the call $X.X the stock and

guidance Given the the the XXXX. we continued environment, fourth quarter be uncertainty providing ending XX, macro will not in December for

We year.With back to closing call the will review that, the next Josh guidance expectations remarks. for I'll turn

Marco. execution once current Fathom team hard we this work you, want remain thank the We recovers. clients.With navigate the up that, position questions. in and to better steps to for focused to let's and Thank entire open their market are serve taking environment the and necessary as market on on our Fathom I call operator, continue the

[Operator Davidson. from of first is White Instructions] Tom The D.A. question

round platforms where brokerages a broader Josh. My Wyatt agents of and targeting one to? Tom. hang license for or which meaningful NAR is on lawsuits they any to their think you is decide first in result more guys Curious set and for this might the This whether of migrate latest recently, shakeup

and monitoring on a think the fantastic guys seeing it. I've been top started question. of news watching actually lawsuits That's you long before the a -- I in and it's

the unfair. going a that of of think long shouldn't strange.I that as I away share appeals. allowed little a call, that the first in to have yet the I share. it's I the actually time we're mean, to be that And allowed the look you I we're Missouri, mean that any were bias were, while to where from of commissions made, about level. into defense they we changes with idea some going say arguments, happening. that is and legal. unethical and state one was I a in for unfortunately, the share The one this going probably in is lawsuit to plaintiffs go attorneys -- to to share thing the next we're jury. to think at of things think mentioned the If judge not when there, allowed things It's lose there to was were go when actually example, And would were of completely a being this, lot books, the claims I in that was I But was that were which things allowed allow defense sharing lawsuits yet the would not mean the it's claims the been it's the the

was that thought strange. I incredibly So

going the I how there's already will much things going we're the and difference trial actually redo, listing and see in think I look if then agent blank though negotiable basically are buyer's even sellers if the a listen, pay it's think that's it things changes. that very the commissions turn agent, are there, the is, of sellers, what already you has think a going clear negotiable. and is if is to don't, to that think to difference here's my to differently. listing says we're they we're probably it commissions make a couple happened I the probably at to the happen ultimately need we is it, get at agent, of the redo of I But the the day, able between lot negotiable.I agreements end even that that of out to One, the think a

You do have to not pay buyer's the agents.

shame. I think lawsuit lot we from make two, about, think the changes, industry the to what then I going think that, Number it's number a be those we'll So I that's one. satisfy think if if is commission this I goes some away of of idea sharing, -- of a

it to think be hurts think not the hurts biased I I'm do consumer. trying but I actually the consumer. it here,

on the we're it's very careful and and we laws think rules very along the make consumer sure need way. I So be -- change protecting very thoughtful the we to to

going oh, pay though, So the agreement at that to the agree day amount or works right to the if the currently less.But whatever have agent, that it seller this it minute, and way, to happens, buyer number the negotiable. a looked X.X% the now, to commission always that does the going actually I has with, that wait is always is been the buyer's And or I'm way by pay of to end the says, don't way X% buyer's upon if X% liable signs seller agent the pay for you're with says, me an then you if too the has agreed not that amount. then be

try the just think idea of to don't things is have got a that's difference to so that, people that the negotiate. I the are used people lot way

the to I them. if sorry, ultimately that to this there change. So the oh, buyer client agent. my steering, to that and The agent different and agent property consumer be decide to the because is is willing paying to go this less. I'm pay hook going that my that going what's on commission.So properties one of might got steer one not steering Therefore, that to going on cost some going to is it's crap, them that happens. because say, not I'm ones pay willing with X for the well, DOJ, look pay based may at to changes, If steer agents may be seller realizes, not pay, buyer's consumer think the some But I've the will might

there steering. So I be might think some

since may there What pay let's same when where is idea, more. don't XX%, might same to okay, even that now I mean, this none from is thing commission I go happens. been Fathom, pay say, our agents say regards, directly if see on commission the may of that their can that because see the to of more to Fathom, down this some because If a -- much The as been too the they that buyer have I actually have will and happens buyer's the and they this long. agents, down buyer's before, does you started we the that. have not beginning, has I commission. for has on to to that agent thesis buyer that costs act get agent else, XX%. if lost a buyer's income. said Fathom So back money the I they'll income.Well, happen mean everything that to thesis is sellers X% is we'll come simply make closing and means moving say recoup is for true come and paid go if their They compression compression recoup

So it's work smarter, not harder.

changes don't beneficiary those do So changes. those to I will that I a will think -- Fathom be see long-term, of want be made. there

our do clients. if I ends changes. do, the it beneficiary those up that a I think So they and being of will But Fathom hurt buyers think

just maximizes capture happen? I its independents some to teams move there does year these businesses the smaller make faced smaller the for another brokerages and of been how the appreciate in How total of may independent that to decide Fathom fact, this prospect lower-cost some it. you over guys Thank turnover virtual it. or their And Got chatter others. do some of these if, offerings Fathom with like sure finally follow-up. There's really or sales about out you low detail. of of one

Yes, it's a question. fantastic

right? just number an week what moving The we probably you saw so. think acquiring actually but acquisition, shutting kind is press last out their business broker the press operations, like owner their their of just put I recent down We over. agents the So of in releases. basically walkovers or call of releases that X instead Walkovers

under managing Sometimes up they'll end being Fathom. broker the

more these opportunities. lot just up starting number end team ever-increasing more We're just to us.Now of to the the just they'll Fathom. see and small well. of part broker to We've running and reaching a owners agents of an we rest of are got are Sometimes a out as coming

Some to what for. it comes these Now a sense? opportunities, to have pay obviously, it make dollar down of cost. Does we single opportunity don't was

of and them a lot we actual -- larger of in we but to making than little diligence, acquisition. that to the got have do less of cost There's we've regards they're -- kind operations the go, don't a lot moving the over Some term. there of bit leasing do, and business due the a you

in So a there's lot process. have we to less do that

our bit But happening, just is is small alone, the more and seeing where one recipients people actually of lower do investing the that as we're that's biggest your that indicated our to come recruiting of so reaching what we've been been earlier, as Marco let's the little broker agents, in lot and to team.We XXX you make all to actually team of over and they well. to don't our this point, it, do I are built broker agents Fathom to part you're this orders -- agents, So and part of saying, listen, we XXX we've do we're with on. going out XX to a agents, costs have a -- sure and you XX small there is more and come dedicated to owners they're through, together. are, know That us

-- coming make them for Fathom, to probably it as something of have actually it together, continue allows making to And resonates probably the or over the thriving, and forget with money on surviving, wall, forget lot to moving them they're allows broker people so just broker, to their they're a they struggling, so up by managing us. they either that keep a who a see writing as close over who right And to barely are now message shop. if family do they're

a to can for real win-win move Fathom. over be And them so if they it

The Campbell next John question is from Inc. of Stephens

Look next seeing guys you forward week. to

that been additions, your On fire the let's lately. fast. on press machine topic Obviously, real stay brokerage has on

those as to cash flurry equity least walkovers. no the You've additions, of you ones payouts. late, of referred had those are or organic all so I'm a assuming at additions. those Josh,

going to it. I'm let of speak Marco to that part

Yes.

cases, a some So some we John, of acquisition. In the depends compared full some But is question. signing size. significant larger a do part to implement it acquisitions. on -- the are make We and the are move. lower there it making -- ones It But again, not amount great bonus for can we some some depends to small stock. cash a

both for so the very cost And us. sides, them advantageous is for and for

I seen beginning quarter. we're we've onboarding XX% this starts increase so our as earlier, by mentioned -- And

And single a a as so as it's combination smaller of just companies. combination of well agents

-- we that interest going having and is already this significantly pretty conversations. -- across that increase, and Josh is in So country. do much the I the from to seeing And both this do I believe we're

Okay. Makes sense.

guys, bit sure, at given point. this little want probably to of additions. agent price the count the touch You I'm more But a conditions, also I a on maker

additions those think the the press But over third have you agent outlined agents in those could those. in us maybe much I how of coming release, quarter hit might XQ? if shortcut versus couple you a of into

press we made announcements all those releases on QX. were The

QX. All

Okay.

that's So coming.

growing it exactly as ways kind and seeking bit just of to a or maybe what this to around ways Is point changes? landscape is on driven, costs, as get better but are macro where hit you that technology fears little the potential industry help and Josh, a to? find then, grow couple would point, of large-scale of pressures far the their you And Great. ways, mostly maybe legal different Okay. people also reduce prolonged trigger business

point move referring specific the of trigger you to would like over? they walkovers Are the why

Right.

be the really going of have themselves owners agents if these lot broker a It -- these -- to A if we're down real. of broker to there's be owners owner broker well. as that comes are to lot producing

So bills. unfortunately, each, pay their year they XX, homes on are XX per may team that close close own, right? have them close year they XX don't XX, they've XX each their the business -- their agents their or on in for that so and to company XX that enough their homes X, who got a agents in And

pay to produce. our them pay business they're were to with also losing provide they And team, their because decent all where they're for themselves space. I've with XX technology money, that, provide an continue technology and pretty training, provide of agents. having office now And money them to and their my office a on is agents to them gosh, a them find actually making leads business got in to having and agents' money for some provide realize losing with I'm having down So team, actually XX space.They're down if they for XX%, that means an on they I'm them is position lot XX% because and have and my agents

presence a Stockton. those and a so can can of the managing compensate where over especially not move they in in can to that got markets broker like they Stockton. in for if be We've came to already them shed now those have all over in but Stockton, shutter, expenses and presence, And that nearby, we if we're Fathom, we don't group agents,

great we've now there. got a great So operation --

So more so is They or on own. And that years can't sense down shut been just they to forces the many versus giving makes make their And option just in money. the to it's joining worked -- down forces. up something most to it really coming build. join case

playing sense. kind last out takes lot a it unfortunately, like some out for the couple And of out. the you've in think of this come it's message makes But of out. see you've feel this a to years. Yes, macro I as I of called fall preached

And much you know year? gross change then as a of margin, it's can did? year, of out got indication but of the next the out it of I the got next if is you you hoping kind kind again, sequentially piece lot what of could declined fee margins you're maybe this surface, lot On you've Marco, as help and us was you've below increases just there, expecting broadly the whatnot. give moving a look some could why I but as out parts gross maybe for for

other to companies $XXX. Sure. businesses. down cap all certain volume, and $XXX And ancillary little transactions for because the more go agents Gross us then when as complex they from reach margin is because bit a you of than a recall,

XX%. XX% see continues right? of going think company we we -- year the a positive, the to that to bottom us of to before at Fathom, sort the country down market our as Because That agents a grow. right? that look and we we the get would continues see get X throughout -- So adjusted the to in gross now, profit adjusted gross we're increase. XX.X%, gross to we're right? gross Now -- be gross happens normal, back company And looking mentioned EBITDA we've will to we we to to QX, typically, across also XX%, profit mean EBITDA I get for once XX%, and drive So around million earlier, can work dollar goal right? and maybe margins should profit is like QX the going margin. $X.XX are positive, goes once mortgage to time, gross to year you help of back to But we That's line, number.If we're little kind XX%. margins to what joining get right? that to Fathom because see itself our get on bit over title to our said you're transactions they going they And going reduction out, to so that at able will

we're that, between number when of get term, kind that's really higher years, XX%. XX%, longer than we'll be about XX%, we -- to feel forecast, for, XX%, the that's we get that. of can and that, but think able -- something So the a We looking budget we we couple like and to comfortable might

Darren question next of is ROTH The Instructions] MKM. [Operator from Aftahi

for Dillon start giving with not wanted sort Darren. is guidance. and of This about I to on the commentary guidance

seasonally us XQ you lower year So the sort know to how your of of I transactions of of typically other a in QX from early cost just the to return million Just talked adjusted $X.X where are in sort and operations savings. puts as when you outlook about XQ EBITDA than they being get are takes, in of next XQ? and through cash as sort positive walk

Yes.

Okay.

talk QX. let's So

XXXX you negative number If our $X.X QX adjusted that's one. is for approximately so million, okay? EBITDA of recall, And QX,

combined -- gives operational million $X.X $X.X and reduction in this look Second, we at that right? combined QX look an then that now cuttings we in okay? right, improvement the our down cash confidence million, was reduction of mortgage that the seen in to in combination to our with EBITDA should $XXX,XXX, title in us throughout And million, had EBITDA business you are agents with adjusted we of expenses if see added this and when revenue we per implementing XXXX. will quarter, $X.X that of the at progress you so in our increase million, then of the And you implement hit of breakeven. the combined in cost to at XXXX.So gives cost continue keep of EBITDA negative us that million -- transactions, already and million, business XXXX, and and year positive and QX adjusted QX with $X.X insurance $X.X that then the a And you of in a this QX cutting hit XXXX, adjusted mind flow of $X.X year, agents, business for QX increase negative certainty then combined in

feel somewhat that, The is Now today. is we this having uncertain. all said still how market

seen -- April, last bond the have cuts futures, the interest market Fed I in in futures, in year. week next rates.The some think the progress at you they're if projecting -- so or of We May look in

that business. to that indication rates, see to increase said is beginning a the mortgage which compared mortgage we business par Our big are of in our

increase done all together, you in confident all of cash when goals breakeven we QX, cash cuts, the put breakeven our flow breakeven fairly in -- business, the this what the flow can achieve in it feel together, in So and we QX. EBITDA operational adjusted put we we've that QX

obviously, consumers provide color sequentially, want see define is being of down you ancillary your as on second the to And at rates question, but are from of however on into able sort attach services number using your where any rates, those or a Are could interest take transaction more them agents you live? talked some to some of least services? being from you

rate in mortgage start The attach shopping interest is to they stuck the X%, and had Sure. bump to on especially X.XXX possible right because no buyers again we there's a that, that in terminate all Sure. transactions, over every question October. business buyers now way rates of end tough ]. went are Look, had it's variety the [ now -- a September, at the of got

become in there's we've has in So more seen the no mortgage the question the as business attach rate that increase rate. interest difficult

can X.XXX certainly decent [ close actually ] a can or the continue So for whether Verus house not.We to be factor, and for the deciding attach someone rate see DIA.

while profit, our same. If they've at the DIA, adjusted by XX% increase EBITDA to the keeping you mortgage look able revenues been business,

to spend DIA right Verus, from on would insurance, really our So a a because X% will is attach reality good business tough on of additional happens it's rates tough. the attach from think X.XXX Once say the very but benefited in because rate very of rate more rate attach rate. us I sorry, [ operational. in shopping everyone It's insurance I'm don't getting around is business I has -- a rate would generation, And the that.So And that can is what have ]. it's mortgages. Fathom, interest to mortgage help decline we Xs, good dollars terms on attach now so -- just And attach on we're in right? lead

B. Riley. Raj Instructions] The next [Operator is question of from Sharma

guys doing? How you are

are Raj. Good, you? How

well doing you're Hope well. great. doing as We're

and had measuring growth a of And been the agent already And can And Yes. doing comment be referral percentage rates, on of programs XX% how how them? you then of answered. well they're questions, referrals? I can on I talk to which referral what churn? couple kind attributed your can you're have am. about also, the you and

The company, refer, front We know, is we're that they of or know what referrals. more -- the me agents what of let right? shared got in sure agents has percentage, encourage publicly agents will program him. -- as first touch to not they our detail program, not into X you itself. of Well, haven't the to to detail -- refer sure I'm the is he Yes. designed rather get if to transactions, actual $XXX become the let as I numbers agents, far there, I'll I'm X in willing company that they close to when But the then the -- that get it's from what at Marco as long stock go what to least if CAPXLife. the I all are that we something they on how grants. once Marco, X as fourth they came kind as And much agent, the

got to in rest. their transaction the sorry, at But X fees they down once transactions year, -- still other least referrals, before down come X go have then FREEXLife. up as So annual per $XXX I'm from joined to and pay fee and well, that they've they transaction a closing commercial transaction.Now to any to X fees $XXX per go their one get again, they they transactions may each

have to X, to, a achieving more compared more to big of have would how X that X least We them at the Now encourage to achieves I get to XXX CAPXLife least have encourage X to X unfortunately, X was will never and one never may that that whatsoever. a agents before if group CAPXLife, referred we was people human than we excited referring already get want go never how they them the referred a referred idea have year. agents CAPXLife, try. before, I anyone X, many right? will want who will actually about thought, would for will to The for FREEXLife again, try someone is will like never per roll the were that have actually try, program fees someone CAPXLife win actually How every program. we more and many agent idea it's and end a least and add okay, or win from have We up because -- But or achieve them nature actually the many us. may from may many who person that's will to at no right?So this, for at now people to X, referred and how

and that to through Some look then got end agents will CAPXLife, FREEXLife, and refer quite you few who many. up will push I referrals share. know up with long the not getting CAPXLife. me to Marco don't know I has the that if achieved X, but don't few X if not I up it's dramatically. top of others happened, exact have shared But have give who is. a number and We've too has that achieved ago, a but gone head. of that have I'm Marco at my sure not number

it. So I'll to turn Marco to that speak more over to

after program, between program, rate. over the XX% Yes. we getting were and implementing referral and XX% the rate, Prior XX% we're referral to implementing

a late in But the recruiting significant to last seen yes... program due have we the due year. implementing So increase to --

-- what what was we saw XX% than to an about seeing I yes, before. were increase XX% think I higher

been effective, worth be So it's effective they with squeeze been definitely see but think I say. we're well more the chat effective. It's to far. so as pleased it very the love I'd

that the higher, is number, same? sequentially then And Great. churn lower,

I just realized in this we didn't we? actually script, that did hit

we transactions, of higher, when X increase X.X%, saw that but did QX of little transactions year, this X QX to Yes. No. was agents increase X of closed of significant X a to the Churn for year so agents the that prior the quarter leaving. this from agents compared came from that XX% and an

typically to the about X.X% that ], close X.X%, to in that we increase. go came transactions, to increase X And from X of probably really if XX% X increase X transactions. it's X.X% in in to churn [ the XX% So to

agents, more yes, lost lower but were that we producing So typically is, we lost the message a few the agents agents.

to population right decrease saw industry, agent from September it's was way, in of right? Which, a X.X% XXXX. what line with happening the end September end of year-over-year Industry in by the in

that, And immune we're so that. can imagine to you not obviously,

saw that probably grew we same the -- saw even time, by at XX%. while we So same X.X% decrease

little if I higher pressure. been think that a that have could didn't number have we

QX. you next it said agent quarters? I tell. think any not know you you're is sense be a foreseeable sort guidance as happened Right. it on the we know -- guidance, then tough ongoing for closed this I And okay But to volatile give and to and assume would what which and walkovers should it's growth and mid-teens giving of and few Is But these period -- in assume in to sense also environment? that that any then it's there

we I safe quarter, this quarter, we look it's that -- last continue I XX%, XX%. mean at think

with we've going dramatically. that. with our to lot our by a means. we of our safe to we not. we're it, feel help I growth sharing, those I think what very mean We're been goal push confident can through with I be XX% walkovers. if but increase is we friends been to Obviously, least happy But to to know least goal, very continue working team [ not see can assume we're maintain any but to -- at move ultimately, the ] satisfied the I that is would these beyond maintain it's harder that goal at numbers harder can higher and that. I've

try XX%. have be that's to possible, transparent shared we We our starts the as also as that increased and onboarding why number by

to and the -- onboarding as as also think joined to starting can But model hopefully onboarding you to shared we And trying mean, they're even though business. That that -- XX% I why we're they I we're the not to give order that's process. starts. continue giving much help in we some indication. mean in you that so share guidance, And doesn't we're we're yet, trying increase share

month October is or... of for this the And

compared That's QX to QX.

it. Got Sequentially.

Yes.

be the And or Any you're good? Or assume transactions that in as would safe done? would rates productive accept your agency are a you walkovers that of try function you more to sort purely also agent share, do of the that referral help in Is market it is you go up, for agents your solve -- a is the transactions up? that's go acquire? the have where bigger number you transactions, of in to growth. the the And that

-- of QX know, QX, this quarter, of said makes as industry, a in so factor which you typically, QX of there reduction year, a is throughout So the did rates. And this it's year is that, interest Having -- is QX that And XX% to QX. QX. much play year you one so have seasonality not is right? roughly, lower the or interesting as kind that the we of things because the seasonality

well. So And what typical for that I you of at agents. think can us, look discount -- you industry, adding we the can some are more you of seasonality the as

are the very right very other indication that Anything there right? we're happen now right at of note agents that's QX, so be very in the to par And as a even us, So of we'll agents give right?And can this be perhaps business. to a we guidance factors it's world market and to now. that coming quarter-over-quarter the but who flat because there it's kept that why greater If for in running QX reduction see these net that whole affect is in think can I are in to happening market transactions hope number right? But not the from the kind have so important look from will from market so you this year, that of it's we increasing, the much joining right? number QX -- are it last year. And lot but definitely transactions difficult that this or in will -- that's fluid, well, other

world other guidance. What's We so have that to visibility many prudent are not on right? rate, interest in into even factors our more going business. just we felt the happening There besides give overall

will enough. take offline. Fair I Right. Right. this

questions at back for Harley to Josh Instructions] There remarks. session. to are This question-and-answer conference [Operator further would closing time. like turn I this no concludes the our over

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Thank today's The now conference has attending presentation. you for concluded.

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