Q4 2022 Fathom Holdings Inc Earnings Call
Good day and welcome to the Fathom Holdings fourth quarter and year end 2022 earnings conference call.
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Oh sure sure.
Alex Kovtun with Gateway Group. Please go ahead Sir.
Thank you operator, and welcome everyone to the Fathom Holdings' 2022 fourth quarter and year end conference call.
Alex coupled with Gateway group Fathoms Investor Relations firm.
Before I turn things over to Fathom management team I want to remind listeners that today's call may include forward looking statements within the meaning of the private Securities Litigation Reform Act of 90 95.
Such forward looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factors section of the company's latest Form 10-Q and in upcoming Form 10-K, and other company filings made with the SEC copies of which are available on the SEC's website.
At Www Dot S E T dot Gov.
As a result of these forward looking statements actual results may differ materially.
<unk> undertakes no obligation to update any forward looking statements after today's call except as required by law. Please.
Please also note that during this call we will be discussing adjusted EBITDA, which is a non-GAAP financial measure as defined by SEC regulation G. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure is included in today's press release, which is now posted on fathoms website.
With that I'll turn the call over to <unk>, founder Chairman and CEO , Josh Harley Josh.
Thank you Alex good afternoon, and welcome everyone to our fourth quarter and full year 2022 earnings call I want to start by thanking our agents and our employees across each of our businesses for their ongoing hard work and dedication during this challenging time for our industry.
Their commitment to supporting our growth vision and serving others in the communities. We operate in is a testament to the south and culture. Our agents have worked hard to continue to grow and thrive even with all the market uncertainties and we're proud of how they have adjusted and overcome this constantly shifting market.
As a testament to their success Fathom Realty continued to climb in the latest resin media power broke report for 2020 to Fathom royalty ranked 12th and sales volume up from 16th in 2021, and we also ranked 10th in the total number of transactions in 2022.
Before turning the call over to our President and CFO Mark of Fresno for a detailed review of our financial results I'd like to touch on a few key highlights from our results and why we remain optimistic about the business in the year ahead, regardless of what happens in the housing market.
<unk> 22 was extremely challenging year for residential real estate as rapidly increasing mortgage rates combined with limited inventory led to an all time low and housing affordability and a double digit decline in transactions in the U S industry wide.
Although we felt this pressure within our business, we still managed to deliver solid financial results for the full year 'twenty 'twenty. Two total revenue grew 25% as fathom will to continue to take market share from legacy brokerage firms despite the volatile environment.
Fathom complete approximately 44700 real estate transactions in 2022 up approximately 14% compared to the prior year.
The double digit percentage increase in transactions on our platform compares favorably to the entire U S residential real estate market, which according to the National Association of Realtors. So on overall transaction declined 18% in 2022.
We also increased our agent network to over 10000 agents at the end of the year, which further validates that we're winning through innovation and a truly disruptive business model continues to resonate among agents, even with today's economic uncertainty and subdued real estate market conditions, we believe Saddam cause of loss.
Long positive runway ahead of us.
So let's start first with our royalty business during the last housing recession, specifically in 2010 I started fathom is an asset light technology enabled business because I wanted to build a company that can endure all market environments, which while empowering agents to realize their full potential today fathom realty operate.
In 37 states and that just has to Colombia, and we anticipate entering all 50 states within the next 18 months.
Our presence continues to grow across the country and I believe there are opportunities and ability to serve agents are greater than they ever have been.
Fathom Realty is among the fastest growing residential real estate brokerages in the United States. We are uniquely positioned to offer an industry, leading agent Commission model without having to sacrifice the agent experience, which is especially important for agents who are price sensitive during downturns the industry.
Our focus is not just on adding more agents, but also helping our agents become more productive with the right training and technology close more sales and ultimately earn more money.
Even though we charge a small fraction of what other brokerages charges their agents, our realty business delivered six consecutive quarters of adjusted either profitability. Prior to this last quarter, where we saw an increased number of real estate transactions terminate.
On a positive note existing home sales in United States increased 14, 5% in February and then a 12 month streak of declines.
While we are hopeful that trends continue to move in the right direction. We remain focused on what we can control and we believe we are positioned to thrive both today.
And into the future.
The technology that powers, our Realty operations remains a key point of differentiation that sometimes gets overlooked.
As we've highlighted before by owning our technology, we can generate long term savings and ultimately charge our agents far less than others with a competitive agent Commission structure.
While building a model to generate margins similar to or even better than our peers over time.
In addition, we license our proprietary technologies outside agents and brokerage through a recurring revenue subscription model further increasing the long term revenue potential for fathom and the differentiation of our brand within the industry. Today. There are over 750 brokerages licensing our technology and de.
Touching over 450000 agents.
Now, let me touch on our agent trends and steps were taken to grow the fiber network, we focused towards the great degree on serving our agents so that we attract and retain the best in the industry. When it comes to providing the greatest value to agents, we believe that fathom wins hands down.
When you combine our competitive agent Commission structure, New Asia referral program and the technology and training we offer to agents. We believe it's a very strong proposition that is resonating well in this environment last quarter, we launched an enhanced agent referral program called free for life and the revised agent.
<unk> structured those initiatives were well received and our agents referral program continues to have a positive impact on our recruiting efforts.
Even with the changes that we implemented on January 1st to the commission structure agents will still save an average of well over $2500 per cell versus the industry average Commission split.
We're also excited about our new agent referral program, which we believe is the most attractive incentive in the industry.
Based solely on an individual agency efforts.
So while the market isn't a downturn currently we remain well positioned to attract agents help grow their book of business and put more money in their pockets.
Especially in a time, where inflation is placing pressure on their bank accounts.
We can make this claim given our track record of supporting agents on our platform. Historically, the average 80, who joined spasm increases their sales transactions by 49% within four years of joining and the average lifetime value of an agent is currently over $21000 on just.
The real estate side of the business demonstrating the power of our model.
Our cost to acquire one agent during Q4 remained low at approximately $1000, making our breakeven on each agent less than the 1100 $50, which we'll earn back on their first sale. We also maintained our strong retention rates, which are approximately twice the national average and remain exceptionally strong given the.
Back drop of agents, leaving the industry over the last year.
During Q4 of 2022, our attrition rate averaged approximately 1.6% per month more importantly, 90% of the agents, who left out of them so for homes or less per year given.
Given the current market conditions and historical examples we do anticipate the industry attrition rate to increase as more Adas struggle.
We certainly will not be immune as as may and may see an increase as well, but we believe will continue to be primarily from low producing agents.
During 2022 we also launched several initiatives to bring together our agents, including our inaugural teams think take to discuss strategies for building and running successful real estate teams. We also launched our veteran division to provide specialized resources.
Port and opportunities for fathoms current and former military service members as well as better homebuyers and sellers and those still on active duty.
We've also received a lot of positive feedback from our chaplaincy program and we're exploring ways to expand it.
In ways to touch even more of our people.
These are just a few of the examples of the many ways in which we support agents and our communities.
Now in spite of the market conditions, we remain optimistic about the year ahead and believe that fathom as a whole is on track to four revenue agent transaction growth in 'twenty two 'twenty three as we look ahead, we expect to turn the corner towards profitable growth in the coming quarters, while starting to really show the operating leverage in our <unk>.
Yeah.
While our mortgage title and insurance companies are relatively small today, they have the potential to dramatically increase.
Revenue and profitability per transaction overtime as we navigate the current challenging market fabulous continuing to identify opportunities to optimize expenses across our business segments. We had already reduced expenses by approximately $3 million per quarter, which we should see the full benefit of in the first quarter.
2023 importantly, we believe these cost reductions were made without sacrificing our ability to grow fathom was built to thrive in both good times and challenging times, we remain focused to reaching total company adjusted EBITDA breakeven in the second quarter of 2023 and generate cash flow.
<unk>.
In the third quarter of 2023.
I Wonder if pretax I think it's important we remain focused on reaching total company adjusted EBIT breakeven in the second quarter of 2023, and generally cash flow positive in the third quarter of 2023.
Even in today's market environment with that I'd like to pass over to Marco.
For our financial update.
Okay.
Thank you Josh I'll start with a detailed review of our fourth quarter and full year 2022 results and then I'll finish with a discussion on guidance.
Fourth quarter revenue declined 12% year over year to $83 4 million compared with $95 5 million for last year's fourth quarter for the full year revenue increased 25% to $413 million compared to $330 2 million in the prior year.
As we all know the industry as a whole we experienced a significant decrease in revenues in Q4 due to the full impact of the increase in interest rates during the latter part of the year.
GAAP net loss for the fourth quarter was $9 9 million compared with a loss of $3 6 million for the 2021 and fourth quarter.
But the full year GAAP net loss was $27 6 million compared to a loss of $12 5 million in 2020 one.
Adjusted EBITDA loss, a non-GAAP measure was $5 9 million in the fourth quarter versus adjusted EBITDA loss of $2 million for the fourth quarter 2021.
For the full year adjusted EBITDA loss was $12 2 million compared with a loss of $8 2 million in 2021.
GAAP expansion was I'm, sorry, G&A expense was eight and a half million for the quarter or 10.2% of revenue compared with $9 1 million or nine 5% of revenue for the same period a year ago.
For the full year G&A expense was $43 2 million or $10 4 million of revenue 10, 4% of revenue compared to $32 7 million or nine 9% of revenue in 2021.
On a sequential basis G&A was reduced by 3 million from $11 5 million in the third quarter of 2022.
Our gross profit was $6 4 million in the fourth quarter down from $9 3 million for the fourth quarter of 2021.
Gross profit decreased to seven 7% of revenue in the fourth quarter compared to 9.8 for the same period a year ago.
For the full year gross profit grew to $49 7 million, which is about nine 9% of revenue compared to $29 7 million or 9% of all full revenue for 2021.
Expenses related to marketing activities were $1 3 million for the 2022 fourth quarter and five point you're building in for the full year the increase in marketing expenses related to the increase in recruiting activity opening new markets and launching the ancillary businesses.
Now I'll spend some time to review our business segment results in more detail.
As with all real estate companies Q4 is a difficult quarter for our real estate Division. We closed approximately 9250 real estate transaction in the fourth quarter, a 14% decrease from last year's fourth quarter.
While our full year include approximately 44700 real estate transactions.
A 14% increase relative to the prior year.
Now to add some additional color to that why we're all in and saw an increase of 14% there overall real estate market was down 16%.
Revenue for the quarter was $79 5 million in revenue for the full year was 396 million.
Adjusted EBITDA in the real estate that Asia was a loss of $1 3 million box, making the first time in the last seven quarters that we had a negative adjusted EBITDA. This was primarily due to the negative impact from the increase in real estate intra.
And interest rates.
Our mortgage business generated revenues of $1 3 million in the fourth quarter compared to $2 7 million in the prior year period.
The mortgage adjusted EBITDA for Q4 was a negative one point to a million.
Our team has done a great deal of work in reducing expenses to rightsize the expenses for the mortgage business going forward.
<unk> also done a great deal of work in launching new marketing programs to increase the attach rate and look forward to sharing those results in Q1.
D I E. Our insurance business generated revenues of $1 3 million in Q4, and a total of $6 1 million for the year with adjusted EBITDA of negative 55000 for the quarter and a positive adjusted EBITDA of 530000 for the year.
In Q4, we've seen an increase in the attach rate of our insurance business exceeding 7% all fathoms buy side transactions in North Carolina and Texas.
Theres Tyler had revenues up six 614000 for the quarter and $3 9 million for the year.
Titled Adjusted EBITDA for the quarter was a negative 266000, and a negative 218000 for the full year.
We have seen an increase in pilot starts in Q1, mostly related to an increase in the market activities as well as attach rate.
Now moving to our technology segment revenues in the fourth quarter totaled 705000, which is consistent with Q4 of 2021.
Adjusted EBITDA loss for the quarter in our technology segment was 350000 compared with the loss of 225000 in the fourth quarter of 2021.
Our live by team has significantly increased its footprint across the country to reach 400, MLS and 450000 agents.
By powers more than three and a half million community pages with over 100000 neighborhood reports created.
We continue to focus on our balance sheet and ended the quarter with a cash position of $8 3 million, which we believe provide us with the adequate runway to grow the business and execute our strategy through profitability.
Given that we're laser focused on our goal to reach adjusted EBITDA positive by Q2 of 2023.
We did not purchase any shares in the fourth quarter under our stock repurchase plan and approximately $40 million remains under the authorization.
Now before turning the call back to Josh Let me briefly touch on guidance.
Given the uncertainty in the macro environment, we are only providing guidance for the first quarter ending March 31 2023.
But the first quarter, we expect revenues in the range of 75 million to 77 million and adjusted EBITDA loss in the range of $1.3 million to $1 5 million.
Minder guidance as a local it's forward looking which as we noted in the beginning of the call is subject to risks and uncertainties.
I would like to thank the entire team across all our companies.
Q4 was a difficult quarter for everyone and I could not be more grateful and proud of their leadership and hard work demonstrated by our leaders and team members. During these challenging times with that I'll turn the call back to Josh.
Thank you Marco and despite the volatile markets, we remain focused on execution and getting to cash flow profitability in the third quarter of 2023 as.
As we turn the corner on profitability, we believe that 2023 will be a pivotal year for pharma with that operator, let's open the call for questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you're using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question will come from John Campbell with Stephens You May now go ahead.
Hey, John .
Can you hear me okay.
Good.
It's Jonathan bass on for John Campbell, I've got a two part question here.
Both in relation to the New agent Commission model that was implemented on January 1st.
Since the implementation of higher fees have you guys seen any notable attrition due to the higher cost of the agents and then on the flip side. What are you seeing on the the new referral program on the last earnings call. You mentioned September being the best referral month ever as a result of the cap for life testing.
Is there any update you can give there.
Or as far as the aging of cushion goes yes I.
I can count on two hands the number of agents, who reached out to me directly and to senior leadership about.
Complaining about a fee increase but we didn't really raise the season very much it's such a small amount that it didn't really affect a lot of agents I mean, no one wants to see the fees go up that's true, but compared to our peers, who saw I think over the last several year period saw their fees increased by $450 per transaction.
We really raised our fees about $50 per transaction.
During that same time period. So you know when you put things in perspective, I think most agents realize that you know yet stinks, but it's far better than the alternatives. So we I think we fared really well I don't believe we saw an uptick in overall attrition due to that mark or do you want to touch on the question regarding the recruiting numbers.
And what we've seen in regards to the patient referral program sure.
Yeah. So we continue to see an increase in recruiting due to that I think that when we update Q1 will have a greater deal of visibility into that program. As you. If you may recall for the program agents need to re recruit for agents and then or eight agents, depending on which level. They want to reach so I think.
When we do our Q1.
Our earnings fall.
We'll be able to shed more light on on on the programming and how that's cool.
Now I'd like to add a little more color to that because I think it's important to understand that if this is one of those programs. It just doesn't you can't flick, a switch and all of a sudden overnight you see the numbers and you know double or triple because ultimately it takes time for agents to start sharing with other agents across transaction. So if an agent closes 10 transactions a year and they made it.
One or two opportunities every single month to share fathom with another agent and.
They may have shared several times in a row before the agent fiery becomes receptive or that agent close a transaction realizes they just gave their broker $4000 versus they could've given us five $550. So it takes a little bit of time, but we can already we're already starting to see some very positive momentum from that so we feel very encouraged.
Okay. Thank you for the color there.
One more if I could.
Is there anything you're hearing from agents anecdotally or otherwise about how the spring selling season is shaping up.
Yeah in fact literally right before I got on this call I was talking to one of our agency a messenger and she was very encouraged because she has been seeing a pick up on both listings when people finally getting off the fence and putting their home in the market as well as more buyers getting a sense as well you know I think it's gotten to a point where a lot of.
The buyers are realizing that the 6%, 7% range, 6% to 10% range is probably here to stay for quite some time.
And you know that there, even though it's not ideal for them.
Finally got the sense, Okay, I need to pull the trigger you know a lot of them are waiting thinking okay, we're going to drop back down to 4% or 3%, which none of us really believe is going to happen.
So I think it's really a matter of just getting the right perspective, if people realizing okay. This isn't going to change we got to move even in the worst time period. During the last housing recession, we really went down about 15% and the total number of homes. The fact is people still need to buy himself, there's never going to be a zero sum.
We're just no one moves.
But the fact is we saw I think I mentioned that in my call that in the already reported.
Uptake of fiscal 14% and the number of homes. So we feel very positive our agents are starting to see some momentum as well I tried to talk about one to two agents every single day and days they could talk to three agents every single day and I'm, just I'm seeing a lot of positive feedback and definitely some some new energy from agents since the spring starts.
Coming around.
That's great. Thank you guys.
Again, if you have a question. Please press Star then one.
Our next question will come from ARIA Cole with Cole capital.
You May now go ahead.
Yes. Thank you very much and a best of luck to all of you are this year with all your efforts and innovating.
Question number one could you just kind of clarify it for me regarding the I Pro Realty network.
The 435 agents that work network all brought onboard in the December quarter or will the timing be different from that.
The Eiffel they actually brought in into Q1 of 2022, not the December quarter. They they own their April the Acro acquisition I believe is February and the agents were brought in in February and March of.
2020 to Q1 of 2022.
Got it so look the so it was resolved.
Your agent number at the end of the December quarter of 10370.
Correctly the growth there from September to December was all organic growth in terms of how they each of them.
Yes that is correct, yes, the last acquisition, we made in Q1 of 2022.
Some small work overs throughout the year, but the Q4 growth was 100% organic growth yes.
And we refuse to work you know when we use the word walkover weir's restaurant referencing a small brokerage sometimes was 15 agents 20 agents five agents or large team that's coming over so.
These aren't really necessarily acquisitions, but we will make sure we clarify when we say walk over there kind of an industry term about what that means.
Okay, and then recruiting regarding with the free for life, a recruitment program I'm trying to understand where you think agents had five of them are going to be able to source. The majority of agents to try to bring on board what I'm alluding to is the obviously.
Come in contact with agents, who are either buyers or on the other side of the transaction when they're selling a home. They also have agents. They probably just happened to know when the local community where they work and so what I'm just trying to understand is is it.
As in.
In addition to those two sources, you know where where will agents be finding other people who are prospects to be persuaded to join the fathom family.
Well I think you've nailed the two most important ones next relationships you know prior relationships as well as the new relationships, we have a set of transactions by the way that the.
The relation of new relationship on the other side of the transaction is probably the most important one because when you were at the transaction table and you're you're talking they sometimes they become friends, sometimes they don't sometimes they become friends and you start talking about because both sides are usually getting the same commission check right Commission rather paid to the brokerage is the same typically not always but.
Typically and you know you've got the Fathom NATO, saying, Hey, you know I used to be with the same company here with now and I remember on this I would probably pay them, what you're probably paying $4000 for 3000, almost commission I'm only paying five or 50 bucks or if they've kept only paid $150 you should really think about it and its desktop and one of them.
It was like that eye opening moment that Aha moment that agents have like are you serious that's what you really paid because they hear it and here. It may here like we beat them over the head, but it's not real to them Intel it's real to them right until the money is actually coming out of their checks and going to their broker.
Especially on the agents because they look at and I don't have to give up anything right. It's not what the broker tells you you know I keep you and I've got great support I've got everything I need all the tools technology or anything else I need so that tends to be the best conversation or getting agents over our relationships are obviously important as well.
We found that oftentimes on agent first comes over to solve them.
The most excited because you know that data is able to see that change they come over to fathom that sometimes its a real good opportunity because they'll tell you know five or 10 other agents that they worked with at the other brokerage when they come over like Hey, I, just want to fab and you should think about coming to especially now that we have this this cat for life and free for life opportunity for them.
So it's been a great now one other source and I see a lot of it just comes from majors get ultra motivated, which we've seen with one of our competitors as well and that's going to social media and so they like to put out there hey, they they're part of these different real estate.
<unk> networks.
Facebook and Instagram and others, playing all the other social media platforms and they will share their story. If you don't ask about you know if anyone complains about the broker sometimes a fallow maybe jump into how you should think about that or are they the pilot mechanism. So socially it tends to be a great source as well.
For anything that's outside of your relationships or outside of a business transaction.
Okay, and just two follow up questions regarding the recruitment.
What sort of other resources might fathom provide to help in essence close the deal and bring on the new agent because.
What are your father maintenance, let's say it can have a situation where they're able to get someone very interested in learning more but you don't make a change in your career instantaneous sleep people want to learn about your your software platform about other aspects of the job how easy the switching costs are and other things.
And the question is to what degree do your agents and with some sort of corporate support to help persuade the prospect to actually go from just thinking about joining fathom to actually doing it.
I Love that question you know there's a first time, we've had that question we've talked to hundreds of investors and potential investors. Your first person who were asking so thank you for that that's a great question. So yes number one I think our fathom cribs website is probably the best resource and so you have a lot of agents that will actually refer people hate checkout the fathom careers website.
But also we've got a marketing center behind behind the wall and where our agents can can go to get business cards. My order business cards order post cards download marketing buyer presentations lifting presentations.
We also have a whole section on recruiting as well and so if they want to go in there. They can they can print out or they can email you know.
Basically about fathom like here's the key benefits of joining fathom why fathom is different so we've got a lot of resources. The agents can I'm not a big fan of print, but they can print or they can share via email or they can share via social media.
Things that we have their social media might be.
It's a different leader to better fit social media platform. So we provide a lot from corporate for them to be able to access now it's it's free access right. So they can go and anytime they want it's available they don't have to reach out to us and asked us for something but again, everyone can go to establish fabric careers dot com and it has everything where were the only broker so I know that.
Literally lift everything we list every one of our fees, there's not a single fee that we charge that's not listed on a further Chris website and yet most companies you can't figure out what their fees are those fees are hidden.
I think we're very unique in that we're very transparent and we encourage everyone to look at those numbers.
Great and let me also add let me let me add one more thing. We also have between local leaders, what we call our digital directors and recruiters. We have a team of about 150 individuals which are located throughout the country, which agents can call upon them to help.
So to close the deal if you will okay. So there is a team of.
Our local digital directors, where are managing brokers and recruiters that can help an agent at any given time and they often do get involved to help the agent get sort of like across the inline there and so that's another thing that we provide across the across the country.
<unk> raised a great point and to add more color to that when they do reach out.
Seen other companies like Okay. If you reach out to us and we have to get involved we don't give you half of the benefit.
The agents took its full benefit even if we end up recruiting even if our person doing all of the recruiting efforts are they still get the full benefit of that so.
Got it. Thank you one last thing you had happening you would had an effort underway to be able to bring in leads for your agents internally, what's the status for that and what sort of efforts are you, making 2023 to move that forward so that in the future you'll actually be inter.
<unk>, finding leads and selling them to your agents and participating in on the back end on the home sale.
That's a fantastic question I'll tackle part of that local market would have to add some color as well.
This is an area that we're continuing to move forward, albeit slower than we'd like.
We've talked about the fact that we cut a lot of costs.
Unfortunately, some of those costs have to come from.
Employees and that's never heart is never an easy thing to do and these are people, we love and care about these people who knew their families and it's very hard to do but the bulk majority came from different initiatives trying to rightsize the business and that's one of the areas because with the lead Gen side. It requires a very large upfront investment.
Although the the return on investment you know 18 months later it could be significant and we're real excited about that during this time period as we were trying to make sure we're protecting people's jobs.
Les as many people off.
Protect the company make sure we achieve adjusted EBITDA breakeven and cash flow positive. These are all main focuses for us and so we've had to put a little bit of a backburner, but even with that it is still alive right. We're still putting an effort. We've got a great team that's generating leads for our insurance business. We've got they're also generally leads for our mortgage business.
They're also generating leads for agents as well not to the level, we'd like so we I won't say, we put it on hold but we definitely put.
Yeah, I'm not sure on a best put that but we didn't we haven't had much we'd like to.
Yeah, we have become more strategic in our approach.
And so we will be announcing sometime in the next few weeks, our a new program called hometown heroes, which is our exclusive relationship with hometown heroes.
We will provide at least two to start market. So I think the best way to describe our approach right now is more strategic and so we are definitely you have reduced the number of markets, but we'll continue to learn and build that program. So over time.
Then we can accelerate that growth right into that but I think the focus all being adjusted EBITDA positive is something that.
It's something that we really focus on and so the the Leach program has been decreased but again, it's just more of a an aspect of being strategic in our approach and I think that's very soon we will announce a new program called hometown heroes that we're very excited about.
Alright, well thanks.
Yeah.
Crystal Thank you Ware.
We're very eager to get to the point of being adjusted EBITDA breakeven and cash flow positive because where we want to move past the conversation with investors of.
Can you be truly cash flow positive or when can you be willing to move past the conversation to how profitable can be like that that's a much better coverage in the house and so that's really our focus right now.
Excellent.
Thank you.
Again, if you have a question. Please press Star then one.
It appears there are no further questions. This concludes our question answer session I would like to turn the conference back over to Josh Harley for any closing remarks.
Thank you. Thank you.
Of course, thank you for joining our call today and for your interest in <unk> for those of you who are fathom shareholders. Thank you for your trust. We will continue to work hard and look forward to sharing future updates with you have a wonderful week.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.