Q3 2021 Fathom Holdings Inc Earnings Call
Good afternoon, everyone and welcome to the Fathom Holdings, three Q21 earnings conference call.
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At this time I'd like to turn the conference call over to Roger Pando Investor Relations for Fathom Holdings. Sir. Please go ahead.
Thank you very much Jamie and welcome everyone to Fathom Holdings 2021.
Quarter of conference call and Roger Pinedale with Pando Wilkinson Fathoms Investor Relations firm it will be my pleasure momentarily to introduce the company's founder and Chief Executive Officer, Josh Harley and Fathoms, President and Chief Financial Officer Micro fishing, all before I turn things over to <unk>.
Josh I Wanna remind our listeners that today's call may include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, such statements are subject to numerous conditions, many of which are beyond the company's control, including those set for.
And the risk factors section.
Fathoms IPO registration statement is latest Form 10-K, and subsequent form 10 cues and other company filings.
Made with the SEC copies of which are available in the SEC's website at Www SEC Dot Gov. As a result of those forward looking statements actual results could differ materially and fathom undertakes no obligation to update any forward looking statements.
After today's call except as required by law, but please also note that during today's call management will be discussing adjusted EBITDA, which is a non-GAAP financial measure as defined by S. E C regulation G and regulate a reconciliation of this.
Non-GAAP financial measure to the most comparable gap measure is included in today's press release, which is now posted on fathoms website and with that is my pleasure to turn the call over to Josh Harley Josh.
Thank you Roger of course, thank you to everyone who's on today's call.
Tired team really appreciate your support and your faith in US we're proud that you're part of our fathom family a quarter after quarter. All results continue to demonstrate the power of are truly disruptive business model and I'm proud to be here to share our significant growth, we're willing to innovation and by delivering real long term value tour agents.
Employees clients and of course, our shareholders for the third quarter year over year revenue grew by 81 per cent. Our agent count grew by 50 per cent and our transactions grew by 42%. We also reduced adjusted EBITDA losses by over 20% from Q2 Q3 getting.
<unk>, even closer to adjusted EBITDA breakeven.
And while we continue to invest in enhancing our foundation for the sustained long term growth of our newer business lines. Those investment dollars are quickly, becoming a smaller percentage of an ongoing expenses.
There are some who who don't really know who we are yet but with time I believe more investors will truly understand our business and value. What's accordingly, if you really dig into our story, you'll realize that not only his fathom January impressive performance debate, but we still have an extraordinary path.
Head of US a lot of companies sacrifice profitability for growth, but I'm proud to say that we do not have to operate that way. We can do both our cash position remains strong and we plan to continue to focus on operational cash flow generation are steadfast discipline allows us to be good stewards of the money with <unk>.
<unk> you can trust us we believe fathom is on track to more than double its revenue for the foreseeable future and we look forward to proving it. The question is how do we get there assistant.
Assist going public we've substantially increased revenue continued the expansion of our agent network improved agent retention entered new geographic markets and completed strategic acquisitions designed to further solidify our market position, that's an awful lot to accomplish in just one year, but it demonstrates our focus.
Our commitment than our ability to get things done.
With a recent edition of our own in house mortgage title and insurance companies along with additional stashed product offerings. We now have the potential to dramatically increase our revenue and importantly, our profitability per transaction.
I want to reiterate that these companies are not joint ventures, we fully oh each of them that means that we're not giving up any of the revenue and profitability and it means we have complete control over the quality of service that matters a lot in matters to our clients it matters to our agents and it shouldn't matter to you but.
Because that's how we believe that we can achieve a greater attach rate for these new businesses.
As you know we also recently acquired a lead generation and nurturing company and two technology companies one specializing in the data aggregation of consecration and the other specializing in home search and see our and tools to help us attract more buyers and sellers, which in turn also helps to attract more agents now.
Speaking of attracting more agents, we believe the fathom continues to have one of the most attractive agent Commission plans and overall offerings in the industry I truly believe our comp plan for agents are superior.
Two every other publicly traded brokerage hands down.
Our focus is not just an add them oh, eight or so but also helping those agents become more productive close more sales and ultimately earn more money. We believe we're accomplishing that by providing more training and more technology to help her I just get in front of more buyers and sellers as well, we're helping agents, we do see them.
Mt of time required to manage the transaction process, giving them more time to network himself to prove that point agents, who joined fathom increase their sales by an average of nearly 49% got the four years. Many have already just report doubling their sales after the first year with fathom.
We often hear agent say that they joint fathom to earn more commission, but they stay for the culture and I'm proud that we still have one of the lowest aimed attrition rate in the industry.
And if you want a true representation of whether fathom agents are happy hour low age attrition rate is the best indicator I'm extremely proud the retention of higher perusing agents improved greatly between 2019 and 2020 and we're seeing continued improvements throughout 2021.
This quarter, our agent attrition rate remained less than 1.4% digging deeper agents.
Agents, who clothes left in one cell per year make up over 75 per cent of the agent attrition and only 2.5% of our agent Tricia comes from agency closed 10 sales per year or more said differently with over 7500 agents only nine nine.
Of those agents closed 10 or more transactions per year and left fathom in Q3, right. It's very small number we're very proud of that fact as some of you know our agents are quickly becoming evangelists for the company, which we believe should further accelerate our growth over time now.
Now as I mentioned for Q3, we experienced 50 per cent growth an agent count ending the quarter with more than 75, 870, 500 agents one of the beautiful things about this growth is that our cost to acquire one agent during the period was approximately $985, making a breakeven on each agent close to.
What we make them just the first name alone.
I also want to point out the average lifetime value of an agent is over $18000 on just the real estate side of the business.
The ratio that lifetime value to our cost of agent acquisition is over 20 X and that doesn't take into account the revenue from a recently acquired mortgage title and insurance companies or the potential revenue from the lead so we can generate for our agents.
Now we believe the fathom is a unique in a unique position to grow even faster at a time when the real estate market is turbulent.
Even if house prices decline it.
It should not be a headwind for fathom Realty in fact, it could actually prove to be a tailwind for fathoms growth.
Gonna spend just a minute on this point because I think it's more important than most people realize.
<unk> other real estate companies may see strong headwinds as home prices fall or rise for that matter as as mortgage rates wise and and housing remains in low supply I strongly believe it fathom could benefit significantly and here's why.
There's only two ways for real estate agent to make more money one might increase the revenue by selling more homes or decrease their costs.
And the biggest costs an agent has is usually the brokerage fees and splits in a market, where it's hard to find homes to sell or buy we believe that due to our financial model agents will be attracted to fathom in order to make up for any lost income by decreasing the fees. They pay in fact, it's an agent closest 20 per cent fewer ho.
Ohms due to the shipping market conditions, but moves to fathom from a brokerage who's charging them, 30% split they'll actually earn approximately 9% more income.
Again 20 per cent fewer sales, but nine per cent more income that sounds like a window <unk> and of course, most agents would agree in fact, we're already seeing some of that benefit through our site traffic or cruise website traffic is up over 300% year over year as we continue to see interest in fathom growth.
Last quarter I talked about how we will begin to see home sales and prices normalizing and that we may even see home prices in some areas come down and that's exactly what we saw this quarter prices have come down and many of our markets with homes sitting in the market a little bit longer but again I truly believe that this is positive for fathom longterm.
It's also important to note that as home prices fall many of our competitors may see a strain on my profitability because they take a percentage fee on every single transaction, but that would not be the case for fathom. We are in the same transaction fee from the agent regardless of whether the agent Orange a 10000 dollar commission for an $8000.
<unk> <unk>.
This should allow us to continue to capture more market share from real estate companies with the old traditional commission models.
As our agent based grows those agents bring more transactions with them as we add more transactions, we have more opportunities to capture mortgage title and insurance revenue.
Thousands ability to attract an ever increasing number of real estate agents by providing them with greater income potential along with the technology training and support they need to grow their businesses is even more evident today, especially during these unprecedented in changing times.
As I mentioned earlier are results for two three were outstanding Ah clearly fathom is moving at a very positive direction, attracting higher proofing agents and selling more homes in higher priced markets, which by the way should significantly benefit our mortgage Tyler insurance operations as well as the lead business that we're building.
And two three found him guilty added new Mexico in Minnesota, and so now we're in we're actually licensed in 34 states in D. C. We plan to open several more markets in the coming months with longer term plans to be in all 50 states and eventually moving to Canada as well.
A part of our secret sauce is the advantage that our Intel agent platform crates, the obvious being that it helps to attract new agents, while helping them become more productive. We're very excited that our technology also allows fathom to reduce our cost per agent overtime, while improving our operational efficiencies.
We're continuing to work hard and the development of a national real estate search portal as well neighbourly, which we believe will play a significant role in helping us attract even more agents as well as homebuyers, while gender in greater revenue and profitability from elite that we generate along with the mortgage title an insurance business that comes with it now.
Ultimately all technology platform allows us to eliminate our reliance on third party tech providers.
Which reduces the cost significantly at the same time provides more robust technology tore agents employees and our clients and.
Until agent gives us the power to control the full life cycle of the home buyer and the seller gain a greater understanding of of our data and how to use it to further improve our offerings, while generating leads for agents plus we can now begin to identify potential clients for a mortgage insurance and title companies long before they're under contract.
Our <unk> our SaaS company live by is also making some incredible headway, we now provide tech and or data to more than 750 companies across the country with over 100000 agents.
Some of our some of our customers include Corelogic, Berkshire, Hathaway, Homeservices, Sotheby's and that properties.
Four encompass lending, we we increase the number of loan officers by 17% with plans to continue adding more loan officers each month to help grow our mortgage operation across the 41 states in which we're currently licensed for mortgage we've also made significant investments and a mortgage operation and we're already seeing.
Great return on that investment in the form of improved tache right in market share.
Or title company various title is growing exceptionally as well and I could not be more proud of our team's efforts various his license in 29 States now and we're seeing impressive improvements in our tax rate every single month in fact, our Q3 title revenue alone was almost as high as what we make <unk>.
<unk> and all of 2020 before acquisition <unk>.
Industry wide online notation was up 547% in 2020, and while 2021 numbers for this online trend or not out yet the industry is seeing that trend continue important to note that trend benefits are titled model as more agents accept this new normal.
Our insurance company Dagley insurance is currently licensed in 47 states in D C and we're getting trashed with Fathom agents every single month as well one amazing and important statistic is that over 43% of the insurance quotes. The go out are converted and policies, we believe that over time, our insurance operation.
Help us improve our revenue and profitability during the seasonally slower winter months and help us through the cyclical nature of the real estate industry.
Total personal lines grew by over 26% in the third quarter year over here in total premiums grew by over 20, <unk> <unk> I'm, sorry by over 12% rather than.
This is essentially recurring revenue and we're just getting started there.
As you know our mortgage title and insurance operations role added through strategic acquisitions, and we've also made several strategic brokerage acquisitions as well and a very short period of time I bring this up because I think it's important to clarify that at this point, we have all the puzzle pieces, we need to build a solid and profitable comes.
<unk>.
We're working diligently to integrate each business fully to ensure strong attach rights moving forward. We expect it any future acquisition. We can say there will primarily be focused around opening new markets or expanding in the smaller current markets to hit critical mass faster, which also helps growth through name recognition in Asia referrals and those.
New markets.
Markets that would normally take years to get to a solid foothold we intend to continue growing quickly and we will use acquisition strategically as opportunities arise.
My last quarter, we were able to demonstrate that I'd only 10000 real estate transactions I'll real estate business achieved adjusted EBITDA break even if.
If we had not made the extra strategic investments into our ancillary businesses, we would've been able to demonstrate adjusted to give it a break even for the whole company, but again, we're playing to win longterm and that requires investment in the business investments that are already proving to be the light move.
On our last call we shared that assuming we reach between 100000 110000 transactions per year. We believe we can generate adjusted EBITDA exceeding $40 million, while we're not prepared to provide a timeline for this transaction milestone we do feel confident we can maintain the strong agent and <unk>.
Transaction growth that we've demonstrated since our I P O a year ago July.
And over the last 12 years since our assumption.
In addition to this we have decided it's time to provide some additional guidance, which market will share shortly as.
As you can tell we believe fathom has a great future and we're incredibly excited and proud so with that I'll turn the call over Marco Marco It's all yours.
Thank you Josh Uhm I'll start with the reveal all of our third quarter results in some detail.
So a quarter revenues grew 81% year over year, we can more than 100 million for the first time in our history third quarter, 21 revenues or 100.9 million compared to 55.8 million for third quarter of 2020.
These increase resulted from growth in real estate transactions to average revenue for a real estate transaction and revenue contributions from from our newly acquired businesses.
Gasping that last for the quarter was 320 40 million or a loss of 24 cents per share compared with the loss of 184000 or a loss of two cents per share for the two <unk> the 2020th third quarter.
Does delta from last year's third quarter was due primarily to increase in costs related to operations marketing and G N a.
They get net loss for the third quarter was 3.4 million or a loss of 24 cents per share compared with the loss of 184000 or a loss of two cents per share for the two of 2020th third quarter.
It's delta from electric quarters, primarily due to increasing costs related to operations and marketing Janet.
Just any bit that loss of non-GAAP measure, but 1.8 million versus adjust that you've made a profit of $5800 for the last few years third quarter.
Is Joshua mentioned, we saw an improvement in the adjusted EBITDA loss on a sequential basis. Once again I'll real estate segment had positive adjust that he did that as our technology segment.
In the third quarter G&A increase on an absolute basis and as a percentage of revenue J, a was 9.8 million or 9.7% of revenue compare with 2.9 million or 5.2% of revenue for a year ago.
However, on a sequential basis J as a percentage of revenue decline from 11.28 Q2 of 2021 297 Q3.
We continue to believe that while G&A expenses will increase gone forward as a percentage of revenue should decrease as we continue to scale and integrate our vertical businesses.
Expenses related to marketing activities or 591000 versus 208 18000 for last year's third quarter, mostly driven by an increase in overall marketing activities related to Albany, some of our new markets.
Now I'll reveal some results from our business units.
R. S. A division continued to perform it very well is Joshua mentioned, we finished the quarter with 7536 agents at 50 per cent inquiries from the same period last year, we close almost 11500 real estate transactions 40 for the quarter, a 42% increase from last year's third quarter, while maintaining.
<unk> positive adjusted EBITDA of about $200000.
Continued investment in our mortgage business that were made in Q2, resulting revenues of 2.6 million almost double what would generate in the second quarter.
<unk> EBIT that lost it in the business. It was approximately 100000 again AC significant sequential improvement I as I said last quarter. We believe that we had made the necessary investment. So grilled this business and expected to live a rapid growth going forward.
I'm turning towards technology segment third quarter revenue stolen about $700000 with a slight adjust that you've made that profit during the quarter would launch live by local all hyper local content offer and we'll leave that that launch will result in equally fast revenues bowling forward.
Our insurance entitled Business also continues to grow combined revenues of 2.4 million for the quarter compared to 1.9 million in the second quarter of 2021, which is an increase of 26% on a sequential basis.
Just a bit that increase for it to a profit of $13000 from my last at 21000.
Now as we continue to grow with both businesses, we plan to provide separate breakout for our title business next year.
We are extremely proud of our third quarter results and we're very excited about the longterm girls runaway ahead of us.
In addition to the milepost, Josh discuss with your guard longterm adjusted EBITDA, We're now providing revenue and adjust that you've made the guidance for the coming fourth quarter and full year of 2022.
We expect revenues in the range of 82 to 84 million for the fourth quarter. Adjusted he did that loss is expected in the range of 1.92 2.1 million for the fourth quarter.
Follow your guidance of 2022, we expect revenues in the range of 410 to 420 million adjust that he'd been that is expected in the range of a loss of a millionth two breakeven.
Now, obviously guy to think cause they still forward looking statements and which is Roger noting the beginning of our call our subject to risks and uncertainties.
Before I turn to call back to Josh I would like to say, how proud I am of our team and while we have accomplished in this quarter evening with a strong third quarter results. I believe there are teams vision and passion will allow us to continue revolutionising the residential real estate industry now with that I'll turn to call back to Josh. So we can take your questions.
Thank you Mark we believe fathom is a clear visible in long one way with tremendous growth prospects, we've been working hard to deliver on our promise to grow fathom in an accelerated yes sustainable fashion for the long term. So thank you again for your trust and being part of the thousand families. So with that operator, we're now ready to open the call to questions.
Ladies and gentlemen at this time will begin the question and answer session too.
To ask a question you May press Star and then one using a touchtone telephone to withdraw your questions. You May press Star and two if you are using a speaker phone. We do ask that you. Please pick up the handset.
To ensure the best sound quality.
Once again in order to ask the question at a star and then one will pause momentarily to assemble the roster.
And our first question today comes from Palm White from D. Davidson. Please go ahead with your question.
Oh, great. Thanks for taking my question goes and congrats on a really nice quarter. I guess, just you know first off on the on the 20 twenty-two outlook could you maybe share a little bit of insight into what it might contemplate in terms of kind of organic versus inorganic I.
You know it was there kind of further brokerage M&A baked into that and then I guess a follow up on M&A, you know I I wanted to confirm that it it's mostly or kind of other 100 per cent Commission brokerages that you guys are are targeting and and and not kind of legacy incumbents and maybe just.
Comment on on what you're seeing in terms of valuation for those other kind of 100% Commission you know targets out there.
Yeah, Let me answer the second part of the question first I'll, let Marco after the second part.
When we were thinking about acquisitions, uhm, you're white and that the the ones that tend to make the most sense or other 100 per cent commission companies with that said, though we're we're not closed off to the idea of speaking with them in acquiring companies, who who have the traditional split mall in fact from the agent standpoint, our model is incredibly attractive to them.
Agents and so the idea of making that acquisition in any fear of any of the date is leaving because you know they're they're so worried about getting a better deal like that goes off the table. You know we were immediately offering every one of the agents better ever had before and so those type of accuracy would make a lotta sense. However, you tend to have an issue with the ownership of the other <unk>.
The owners tend to think that they're they're worth more than they really are.
So that that sometimes can be the struggle and have those conversations on the other hand, you know other brokerages at 100 per cent model. They they already speak our language. The agents are used to it that's what the familiar with that's what they're interested in <unk>. Let me think about the the reverse happening, but no traditional company can buy you 100% Commission companies. They did that every single agent will just <unk>.
<unk> immediately.
There's no way, they're gonna go from paying $450 per transaction to a 20% split or two or $3000 per transaction just not gonna happen. So you ought to make an acquisition of other 100 per cent Commission companies makes a lotta sense typically though we've been so focused on the business a lot of these acquisitions are people who've approached us not the other way around.
We have a lot of opportunities a lot of people constantly approaching us for opportunities of hey, we'd love to be part of fatherhood, We love the vision, we like what you're doing we wanted we want to be part of that growth and so the company that tend to approach us tend to be that in 100 per cent realm, which is honestly a much easier acquisition anyways, so hopefully the answer to that.
The second part of the question about what Marco address the first part.
Hey, Tom Great question in terms of the the the guidance. It's primarily organic we did not include any in these numbers. We have not include any significant acquisitions. So these are organic numbers in terms of your second part about the multiples as you can manage for competitive edge.
Vantage, we we'd like not to discuss multiples as as you know there would be sharing information there's lots of like Daisy out there. There are lots of companies out there. We we definitely have seen an increase in activity from companies looking to an email to to Jamaica, So what I'm Gonna acquisition.
But we typically don't disclose you know what would the kind of terms are just for competitive advantage.
Yeah, we we don't want to be selling and stuff sauce.
Yep makes sense, maybe I'll just slip in one follow up if I could Josh you mentioned, you know that you're increasingly seeing fathom agents kind of become evangelists for the company.
You know curious if there's any kind of additional ways. You guys can look to I guess incentivize that behavior or compensate agents for that behavior, just to kind of accelerated even more.
For sure. So one of the things that we rolled out last quarter was the the idea this.
Like the compensation plan to start <unk> plan for the agents. So before it was a simple $500 for every agent refer and so we rolled out a new plan, where you know the first five agency refers the 500. The next five agents you refer and then is is.
I think gestures lost down so I think what you're saying is that the next agent is is a thousand and then so so first I just 502 to five is a thousand and then and then from that we can.
Do you need to grow so we know we implemented that isn't beginning or made Q1, and we have seen a an increase in the percentage of agents refunding all their age and so we definitely seen some uptick on that and you can look at their at the agent growth, we being averaging if you look at your chewing two three roughly around 50 per se.
Thank you, 141%. So if you look at you 1% to 41% and you look at you. Two are 52, and then basically 50, you can see that from from Q1 222 is about a 20% inquiry. So we definitely haven't seen an increase and we are evaluating other things that we can do that so they're definitely there's upside for us to continue to.
Leveraged our agent, but having said that we feel very comfortable about 50 per cent growth 50 per cent grow you over a year and we feel that that we can maintain the grill for many years from calm and but certainly are there things that we can do and we're evaluating those too so perhaps increase that number but but we haven't seen any inquiries from from Q1.
When we implemented a new program.
But can you hear me so much.
Yeah, you don't really get it okay, okay, yeah going back to what I'm, saying, though just as far as the agent referral plan. The first agent to refer is $500. The second through fifth agent <unk> that is referred the agent gets a thousand dollars of stock.
They just talk grants six through 10 agents is $1500 stock rats, and then 11 plus is $2000 of stock grants one thing I do want to say about that is that we we really care about dilution and so you know we we look at this plan. We review this plane we compare this plan with as well just stop would give for.
Transactions stock, we give for executive compensation board compensation, it's still an incredibly small amount of dilution. So we would take dilution very serious, especially with my own family owning about 49% of the company's still we we're very we're very thoughtful about that dilution. We we don't want to overextend that but we think is.
Great plan and the agents have really taken to it it's been a great incentive for them to.
First of all I Wanna make sure you understand that pages, referring to that I'm, just gonna love the company not because we're giving them $500 of stock price, it's it's not that.
Not enough, but it we've found it is enough to help get them off the fence, if they're already love fathom and they already want to share. It it gets them off the fence to take the next step would actually go out and and shared we've actually had several agents are in a very short order refer over to an agent. So just a few months. So clearly there's a lot of agents, who have really taken to that plan.
Uhm, but even without that plane, we saw a really incredible eight a referral program. It's not like we started this program and suddenly started having agent referrals about 35% of our growth as the regional referrals and so we're very proud of that fact.
Once again, if you would like to ask a question. Please press star and then one.
Withdraw your questions you May press star and two.
Our next question comes from.
Sharon.
<unk> from Roth Capital Partners. Please go ahead with your question.
Hey, guys. Thanks for taking my question nice quarter, and thanks for providing guidance a few if I may so now that you've had these ancillary services under your belt for a little while I'm I'm just kind of curious if you can maybe talk high level about attach raise your your C kind of what's working what's not maybe where there's more work to do.
Yeah.
Yeah, Yeah, So hey, Derek great. Thank you good to talk to you and thank you for your question, there's still a little early right. I mean, we made this acquisitions made cute well it has been a rough since since the queue for a last year, but the other ones where do you make you two certainly title.
If you look at the growth rate I think Josh mentioned early right all of last <unk> three of this year titled <unk>, You know did almost all the revenue that they did last year. So we definitely are C. A very nice attach right in the markets are <unk> right and so so title is I would say titles done bowling pronouncing the patch right and.
And without would clear or not and the goal that we want to be but but we're making really great progress in the markets that uhm, we're fully which are certainly, Texas, North Carolina, Virginia, South Carolina, Georgia.
Clothes, and and I think that if the trend continues I think we're going to be able to meet the numbers that we expect from from title.
A mortgage any insurance is you know it's not at the same level you have it because again, we only had one full quarter. Now Q3, we are seeing very nice I think Josh mentioned early that on insurance on <unk>, we're closing 43% of quality and we're raising a significant increase in the number of transactions that.
At bottom agents are introducing our insurance company too and we're certainly are very surprise about the the closing ratio up 43% and and that's a very nice number in and so that has been a number that has surpassed our expectations. We now need to continue to go X.
We believe that will take a full year to get the mortgage title insurance to the level that that we want and so this is why don't we talk about giving sort of the hundred thousand to 110000 operational leverage it to the business you know would take us to to.
Get there and I think at that point, we went to see all business aviary services at the attach right that that we expect and I think perhaps surpassed that but so to answer. Your question I think that we are definitely in a in a way to reach to reach in the numbers. We expect but certainly is a little early to to say that word there we still have a lot of <unk>.
Work to do but certainly we're very pleased with the results thus far.
[noise] [noise] [noise] great.
Maybe a couple more on your 22 guidance just taken the midpoint of a 450 million.
I think ancillary services were about 5% of mixed this quarter. So how do we got up extrapolate and think about ancillary services.
Sort of 410 to 420.
Yeah, Great question, So uhm that percentage will increase so we believe that overtime ancillary services will continue to be a big a percentage.
And so you know what you've seen in 2021, where 5%. We certainly believe that number will continue to increase over time. So it separately certainly is a bigger percentage of that 450 million. If you use that as a as a mid point.
Great and then this last one for me and Ah and enough Josh is hoping audio problems, but I think when you went public talked about potentially having a mobile application still don't see in the App store I'm, just kind of curious how strategic that is and what if any of it as a timeline on that thanks.
Yeah, No I'm back at the change out there cause I think.
As a solution, but love technology Uhm speaking of technology.
Yes. It is an hour past uhm you know on a development.
However, it's not the first thing that we're focused on the first thing we're focused on is uhm.
Finishing out the building out and rolling out our agent websites brokerage website and national portal Uhm CRM getting it fully integrated the next the next Bill. This is why we're actually working on right now as well as making sure that we're fully integrating mortgage title insurance as well to help you use that to improve the attach right.
And then from there the focus is on the on the development side of the mobile App Uhm. Unfortunately.
Fortunately or unfortunately, I I'd love to go out there and hire a bunch of mobile developers, but you know as we've said from the beginning we're really focused on reaching profitability. You know certainly just give it a profitability as quickly as we can and so you can't do that when you go out and hire you know 52 developers to build on the mobile side. So we we what we want to do that it's on the.
It's on our list of things to do we're actively building up with the rest of it to really make sure. We've got a strong product offering for our agents and then eventually of course, a strong offering that we can start providing other countries as well for additional cash revenue.
Thanks, guys, Congrats again I'll pass it on.
Thank you.
And once again, if you would like to ask a question. Please press star and then one to withdraw your questions you May press star and too.
And ladies and gentlemen at this time and showing no additional questions I'd like to turn the floor back over to Josh Harley for any closing remarks.
Thank you all better thanks to all of you for joining a call today and of course for your continued support we're extremely proud of all we've accomplished but we will never stand on our laurels and will continue to work diligently toward achieving our collective objective and adding of adding value to our company for the benefit of all our stakeholders with today being the Marine Corps.
Birthday, I do have to give a shout out and we should happy birthday to my fellow Marines. The perfect. So thank you for being able to call and have a wonderful upcoming Thanksgiving. Thank you everybody.
Ladies and gentlemen, with that will conclude today's conference call. We thank you for joining today's presentation. You may now disconnect your lines.
Thank you.