Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ____________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 001-39790 ____________________________ MATTERPORT, INC. (Exact n ...

Matterport, Inc. (NASDAQ:MTTR) Q4 2022 Results Conference Call February 22, 2023 4:30 PM ET Company Participants Mike Knapp - Vice President of Investor Relations Raymond Pittman - Chairman and Chief Executive Officer James Fay - Chief Financial Officer Conference Call Participants Elizabeth Porter - Morgan Stanley Yun Kim - Loop Capital Markets Bhavin Shah - Deutsche Bank Operator Good day and welcome to the Matterport Fiscal Fourth Quarter 2022 Results Conference Call. [Operator Instructions]. Please note ...

Matterport, Inc. (NASDAQ:MTTR) Q3 2022 Earnings Conference Call November 10, 2022 4:30 PM ET Company Participants Lindsay Savarese - Investor Relations Raymond Pittman - Chairman & CEO James Fay - CFO Conference Call Participants Bhavin Shah - Deutsche Bank Hannah Rudoff - Piper Sandler Yun Kim - Loop Capital Markets Elizabeth Elliott - Morgan Stanley Gal Munda - Wolfe Research Operator Hello, and welcome to the Matterport Inc. Fiscal 2022 Third Quarter Results Conference Call. [Operator Instructions]. I'd ...

Matterport." 1 November 10, 2022 | Third Quarter 2022 Financial Results Disclaimers 2 Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of federal securities laws. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "forecast," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and simila ...

[Part I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q3 2022 show total assets decreased to $660.4 million, net loss narrowed to $51.0 million, and cash used in operations increased to $99.4 million, primarily due to liability changes and revenue growth [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $660.4 million, while total liabilities significantly reduced to $54.6 million due to earn-out settlement, leading to increased stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $81,852 | $139,519 | | Short-term investments | $405,599 | $264,931 | | Total current assets | $535,779 | $437,703 | | Goodwill | $69,593 | $0 | | Total assets | $660,413 | $719,176 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $46,509 | $33,327 | | Warrants liability | $1,691 | $38,974 | | Contingent earn-out liability | $0 | $377,576 | | Total liabilities | $54,586 | $451,013 | | Total stockholders' equity | $605,827 | $268,163 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 total revenue grew 37% to $38.0 million, and net loss significantly improved to $58.3 million, primarily due to reduced non-cash charges from warrant and earn-out liabilities Financial Performance (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$37,993** | **$27,655** | **$94,984** | **$84,087** | | Subscription Revenue | $18,981 | $15,677 | $54,508 | $44,758 | | Gross profit | $16,391 | $14,181 | $40,013 | $48,723 | | Loss from operations | $(58,986) | $(44,356) | $(213,118) | $(52,488) | | **Net loss** | **$(58,259)** | **$(167,989)** | **$(50,989)** | **$(177,070)** | | Net loss per share | $(0.20) | $(0.86) | $(0.18) | $(1.90) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $99.4 million, while investing activities provided $43.1 million, a reversal from prior year's usage, and financing activities used $1.2 million Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(99,358) | $(21,091) | | Net cash provided by (used in) investing activities | $43,063 | $(473,235) | | Net cash provided by (used in) financing activities | $(1,212) | $591,670 | | **Net change in cash** | **$(57,507)** | **$97,344** | [Notes to the Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes detail accounting policies, the 2021 reverse recapitalization, 2022 acquisitions of Enview and VHT adding $69.6 million goodwill, settlement of earn-out shares, and $128.2 million in stock-based compensation - The company completed the acquisition of VHT, Inc. on July 7, 2022, for a total preliminary purchase consideration of **$22.7 million**, resulting in **$15.6 million** of goodwill[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - The company completed the acquisition of Enview, Inc. on January 5, 2022, for a total purchase consideration of **$64.3 million**, consisting of cash and common stock, resulting in **$54.0 million** of goodwill[93](index=93&type=chunk)[95](index=95&type=chunk) - All six Earn-out Triggering Events occurred as of January 18, 2022, resulting in the issuance of **21.5 million** Earn-out Shares and the reclassification of the **$242.4 million** liability to additional paid-in capital[66](index=66&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Costs of revenue | $912 | $978 | $3,819 | $1,040 | | Research and development | $6,362 | $6,695 | $27,246 | $6,929 | | Selling, general, and administrative | $22,231 | $23,065 | $85,673 | $24,028 | | **Total Stock-based compensation** | **$32,306** | **$32,070** | **$128,202** | **$33,523** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2022 revenue growth of 37% to $38.0 million, key metric changes including subscriber growth and net dollar expansion rate decline, gross margin compression, and increased operating expenses, while addressing macroeconomic impacts [Key Metrics](index=48&type=section&id=Key%20Metrics) Key metrics show spaces under management at 8.7 million and total subscribers at 657,000, while the net dollar expansion rate decreased to 106% due to macroeconomic pressures Key Performance Indicators | Metric | As of Sep 30, 2022 | As of Sep 30, 2021 | | :--- | :--- | :--- | | Spaces under management (millions) | 8.7 | 6.2 | | Total subscribers (thousands) | 657 | 439 | | Paid subscribers (thousands) | 63 | 54 | | Net dollar expansion rate | 106% | 114% | [Results of Operations](index=57&type=section&id=Results%20of%20Operations) Q3 2022 total revenue grew 37% to $38.0 million, driven by services and subscription growth, while gross margin declined to 43% and operating expenses increased, leading to a net loss of $58.3 million Revenue by Type - Q3 2022 vs Q3 2021 (in thousands) | Revenue Type | Q3 2022 | Q3 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription | $18,981 | $15,677 | 21% | | License | $21 | $118 | (82)% | | Services | $10,015 | $3,292 | 204% | | Product | $8,976 | $8,568 | 5% | | **Total Revenue** | **$37,993** | **$27,655** | **37%** | - Gross margin decreased to **43%** in Q3 2022 from **51%** in Q3 2021, primarily due to lower product gross margins resulting from supply chain challenges and a decrease in subscription gross margin[284](index=284&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **28%** to **$56.3 million** in Q3 2022, primarily due to an **$11.1 million** increase in personnel-related costs and a **$2.4 million** increase in marketing programs[287](index=287&type=chunk) - Research and development (R&D) expenses increased by **32%** to **$19.1 million** in Q3 2022, mainly due to a **$3.7 million** increase in salary compensation from increased headcount[285](index=285&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2022, the company held **$495.2 million** in cash and investments, deemed sufficient for 12 months, with net cash used in operations at **$99.4 million** and **$22.8 million** in purchase obligations - As of September 30, 2022, the company had approximately **$495.2 million** in cash, cash equivalents, and investments[296](index=296&type=chunk)[297](index=297&type=chunk) - Free cash flow for the nine months ended September 30, 2022 was negative **$110.7 million**, compared to negative **$26.9 million** for the same period in 2021[231](index=231&type=chunk) - The company has non-cancellable purchase obligations of approximately **$22.8 million** as of September 30, 2022, due through 2024[299](index=299&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, as a strengthening U.S. dollar could impact international revenue, and from inflation, which could harm results if costs cannot be offset - The company's results are subject to fluctuations from foreign currency exchange rates, as expenses are denominated in local currencies (primarily U.S., U.K., Singapore) while revenue is primarily in U.S. dollars; a strengthening dollar could adversely affect revenue[316](index=316&type=chunk) - The company does not believe inflation has had a material effect on its business but notes that an inability to offset significant inflationary pressures with price increases could harm operating results[317](index=317&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of September 30, 2022, due to material weaknesses in internal control over financial reporting, including personnel, reporting processes, and IT controls, for which a remediation plan is underway - Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to material weaknesses in internal control over financial reporting[319](index=319&type=chunk) - Identified material weaknesses include: not maintaining a sufficient complement of personnel with appropriate accounting knowledge, ineffective design of controls over the period-end financial reporting process, and ineffective design of IT general controls[320](index=320&type=chunk)[326](index=326&type=chunk) - The company is executing a remediation plan that includes hiring a Chief Accounting Officer and other experienced finance personnel, formalizing its internal control framework, and implementing enhanced IT general controls with the help of third-party consultants[327](index=327&type=chunk)[328](index=328&type=chunk)[331](index=331&type=chunk) [Part II. OTHER INFORMATION](index=68&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in an ongoing lawsuit with a former employee regarding share transfer restrictions and is indemnifying Redfin in a patent infringement case where a jury found non-infringement and invalidity - A lawsuit by former employee William J. Brown regarding share transfer restrictions is ongoing, with some claims pending after a court ruled in his favor on the invalidity of the restrictions as applied to him[333](index=333&type=chunk) - The company is indemnifying Redfin in a patent lawsuit from Surefield; a jury found Redfin had not infringed and the patents were invalid, though post-trial motions are pending, and Matterport has also filed a related declaratory judgment action against Surefield[334](index=334&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors emphasize potential negative impacts from international geopolitical conflicts, such as Taiwan-China tensions and the war in Ukraine, and adverse macroeconomic conditions like inflation and recession - The company identifies risks from international geopolitical conflicts, including escalating tensions between Taiwan and China, which could impact suppliers and lead to increased costs from tariffs or other trade restrictions[338](index=338&type=chunk) - The war in Ukraine may exacerbate global supply chain issues, inflation, and energy prices, which could negatively affect business, operations, and financial condition[339](index=339&type=chunk) - Adverse macroeconomic conditions, including inflation, slower growth or recession, and higher interest rates, can reduce consumer confidence and spending, which could materially affect demand for the company's products and services[340](index=340&type=chunk)[341](index=341&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds during the reporting period - None [Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports no defaults upon senior securities - None [Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not Applicable [Other Information](index=69&type=section&id=Item%205.%20Other%20Information) This section reports no other information - None [Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including certifications by key officers and XBRL data files

Matterport." 1 August 10, 2022 | Second Quarter 2022 Earnings Disclaimers 2 Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of federal securities laws. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "forecast," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressi ...

Matterport, Inc. (NASDAQ:MTTR) Q2 2022 Results Conference Call August 10, 2022 4:30 PM ET Company Participants Soohwan Kim - VP, IR RJ Pittman - Chairman and CEO JD Fay - CFO Conference Call Participants Brent Bracelin - Piper Sandler Bhavin Shah - Deutsche Bank John Walsh - Credit Suisse Elizabeth Porter - Morgan Stanley Yun Kim - Loop Capital Market Operator Good afternoon everyone and welcome to the Matterport Incorporated Fiscal 2022 Second Quarter Results Conference Call. All participants will be in a ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Q2 2022 and 2021, including balance sheets, statements of operations, cash flows, and detailed notes on accounting policies and significant events [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets were $689.5 million, total liabilities decreased to $58.3 million, and stockholders' equity increased to $631.2 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $512,596 | $437,703 | | **Total Assets** | $689,532 | $719,176 | | **Total Current Liabilities** | $50,215 | $33,327 | | **Total Liabilities** | $58,325 | $451,013 | | **Total Stockholders' Equity** | $631,207 | $268,163 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2022, total revenue was $28.5 million with a net loss of $64.6 million, while the six-month period saw $7.3 million net income due to a contingent earn-out gain Q2 2022 vs. Q2 2021 Statement of Operations (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | **Total Revenue** | $28,481 | $29,503 | | Subscription Revenue | $18,386 | $15,281 | | Gross Profit | $11,713 | $17,814 | | Loss from Operations | $(69,190) | $(5,777) | | **Net Loss** | **$(64,634)** | **$(6,209)** | | Diluted Net Loss Per Share | $(0.23) | $(0.15) | H1 2022 vs. H1 2021 Statement of Operations (in thousands, except per share data) | Metric | H1 2022 | H1 2021 | | :--- | :--- | :--- | | **Total Revenue** | $56,991 | $56,432 | | Gross Profit | $23,622 | $34,542 | | **Net Income (Loss)** | **$7,270** | **$(9,081)** | | Diluted Net Income (Loss) Per Share | $0.02 | $(0.22) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities was $58.3 million, with net cash provided by investing activities at $34.2 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(58,278) | $(2,631) | | Net cash provided by (used in) investing activities | $34,155 | $(4,582) | | Net cash used in financing activities | $(1,612) | $(2,252) | | **Net change in cash, cash equivalents, and restricted cash** | **$(25,735)** | **$(9,465)** | [Notes to the Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes detail significant accounting policies, the Enview acquisition, contingent earn-out settlement, warrant redemption, and revenue disaggregation, showing subscription revenue growth - On January 5, 2022, the company acquired Enview, Inc. for a total purchase consideration of **$64.4 million**, which resulted in **$54.1 million of goodwill**[83](index=83&type=chunk)[85](index=85&type=chunk) - All six contingent earn-out triggering events occurred as of January 18, 2022, resulting in the issuance of **21.5 million earn-out shares** to eligible holders, net of tax withholding[62](index=62&type=chunk)[157](index=157&type=chunk) - The company redeemed all outstanding public warrants on January 14, 2022. The exercise of public and private warrants generated aggregate proceeds of **$104.4 million**[150](index=150&type=chunk) Revenue by Geography for Six Months Ended June 30 (in thousands) | Region | 2022 | 2021 | | :--- | :--- | :--- | | United States | $32,877 | $35,135 | | International | $24,114 | $21,297 | | **Total Revenue** | **$56,991** | **$56,432** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, highlighting subscriber growth, Q2 2022 revenue of $28.5 million, a widened net loss of $69.2 million due to higher operating expenses, and strategic investments [Key Metrics](index=46&type=section&id=Key%20Metrics) The company tracks Spaces Under Management, Total Subscribers, and Net Dollar Expansion Rate, showing growth in spaces and subscribers but a decrease in expansion rate Key Metrics Comparison | Metric | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Spaces under management (millions) | 8.0 | 5.6 | | Total subscribers (thousands) | 616 | 404 | | Paid subscribers (thousands) | 62 | 51 | | Net dollar expansion rate (for Q2) | 107% | 132% | [Results of Operations](index=55&type=section&id=Results%20of%20Operations) Q2 2022 revenue decreased 3% to $28.5 million, with subscription growth offset by product and license declines, gross margin fell to 41%, and operating expenses surged 243% due to compensation Revenue by Type - Q2 YoY Change (in thousands) | Revenue Type | Q2 2022 | Q2 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription | $18,386 | $15,281 | 20% | | License | $26 | $2,099 | (99)% | | Services | $5,013 | $2,879 | 74% | | Product | $5,056 | $9,244 | (45)% | | **Total Revenue** | **$28,481** | **$29,503** | **(3)%** | - Gross margin decreased to **41%** in Q2 2022 from **60%** in Q2 2021, primarily due to lower product gross margins from supply chain issues, a decrease in subscription gross margin, and minimal license revenue[270](index=270&type=chunk) - Operating expenses for Q2 2022 increased by **243%** YoY to **$80.9 million**. This was driven by a **$14.4 million** increase in R&D and a **$42.9 million** increase in SG&A, largely due to higher stock-based compensation and personnel costs[271](index=271&type=chunk)[272](index=272&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company had $562.1 million in cash and investments, with $58.3 million net cash used in operations, and expects sufficient liquidity for the next 12 months Liquidity Position (in thousands) | Item | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $113,923 | $139,519 | | Investments | $448,142 | $528,590 | | **Total cash, cash equivalents, and investments** | **$562,065** | **$668,577** | - Management believes that its current financial resources are sufficient to continue operating activities for at least one year past the issuance date of the financial statements[281](index=281&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies foreign currency exchange and inflation as primary market risks, noting that a strengthening U.S. dollar could impact international revenue, but inflation has not been material - The primary market risks are foreign currency exchange rates and inflation[298](index=298&type=chunk) - Foreign currency risk exists as expenses are denominated in currencies like the British Pound and Singapore Dollar, while revenue is primarily in U.S. dollars. A hypothetical **10% change** in exchange rates is not expected to have a material impact[299](index=299&type=chunk) - Management does not believe that inflation has had a material effect on the business, financial condition, or results of operations[300](index=300&type=chunk) [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of June 30, 2022, due to material weaknesses in personnel, financial reporting controls, and IT general controls, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of June 30, 2022[302](index=302&type=chunk) - Material weaknesses were identified in three areas: insufficient personnel with appropriate accounting knowledge, ineffective design of period-end financial reporting controls, and deficiencies in IT general controls[303](index=303&type=chunk)[309](index=309&type=chunk) - A remediation plan is in progress, which includes hiring additional finance personnel (including a Chief Accounting Officer), formalizing processes, and engaging an IT consulting firm to improve controls[310](index=310&type=chunk)[311](index=311&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a lawsuit from a former employee regarding stock transfer restrictions and is involved in a patent infringement case where it indemnified Redfin, with a favorable jury outcome - A lawsuit by former employee William J. Brown concerning stock transfer restrictions resulted in a court ruling in his favor, which was affirmed on appeal. Other claims in the suit are still pending[316](index=316&type=chunk) - In a patent case where Matterport indemnified Redfin against Surefield, a jury found no infringement and invalidated the asserted patents. Matterport has since filed its own declaratory judgment action against Surefield[317](index=317&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, adding specific concerns about international geopolitical conflicts, including tensions between Taiwan and China and the war in Ukraine, and their potential impact on business - An updated risk factor was added concerning the potential negative impact of international geopolitical conflicts, specifically escalating tensions between Taiwan and China and the Russian invasion of Ukraine[320](index=320&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2022, Matterport issued 31,840 shares of Class A common stock to a customer as consideration for achieving milestones under a development agreement, exempt from registration - In Q2 2022, the company issued **31,840 shares** of Class A common stock to a customer as part of a development agreement, utilizing an exemption from registration[318](index=318&type=chunk) [Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[321](index=321&type=chunk) [Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[322](index=322&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[323](index=323&type=chunk) [Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the merger agreement, corporate governance documents, warrant agreements, and officer certifications - Lists exhibits filed with the report, including certifications from the Principal Executive Officer and Principal Financial Officer[326](index=326&type=chunk)

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Matterport's unaudited Q1 2022 financial statements, showing $28.5 million revenue, $71.9 million net income, and $25.5 million cash used in operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$721,901** | **$719,176** | | Cash and cash equivalents | $92,996 | $139,519 | | Short-term investments | $308,813 | $264,931 | | **Total Liabilities** | **$62,263** | **$451,013** | | Warrants liability | $6,405 | $38,974 | | Contingent earn-out liability | $0 | $377,576 | | **Total Stockholders' Equity** | **$659,638** | **$268,163** | Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Total Revenue | $28,510 | $26,929 | | Gross Profit | $11,909 | $16,728 | | Loss from Operations | ($84,942) | ($2,355) | | Total other income (expense) | $157,450 | ($498) | | **Net Income (Loss)** | **$71,904** | **($2,872)** | | Diluted EPS | $0.23 | ($0.07) | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($25,478) | $1,056 | | Net cash used in investing activities | ($18,242) | ($2,506) | | Net cash used in financing activities | ($3,226) | ($903) | | **Net change in cash, cash equivalents, and restricted cash** | **($46,946)** | **($2,353)** | [Notes to the Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details Q1 2022 accounting policies and events, including the $64.4 million Enview acquisition, earn-out liability elimination, warrant redemption, and a surge in stock-based compensation to $61.1 million - On January 5, 2022, the company completed the acquisition of Enview, Inc. for a total purchase consideration of **$64.4 million**, consisting of **$35.0 million** in cash and **$19.1 million** in common stock, plus unpaid consideration, resulting in **$54.1 million** in goodwill[79](index=79&type=chunk)[81](index=81&type=chunk) - All six Earn-out Triggering Events occurred as of January 18, 2022, resulting in the issuance of an aggregate of **21.5 million** Earn-out Shares and the elimination of the contingent earn-out liability of **$377.6 million** by March 31, 2022[61](index=61&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - The company redeemed all outstanding Public Warrants as of January 14, 2022, issuing **9.1 million** shares upon exercise of public and private warrants, generating aggregate proceeds of **$104.4 million**, with **1.7 million** Private Warrants remaining outstanding as of March 31, 2022[144](index=144&type=chunk)[145](index=145&type=chunk) Stock-based Compensation Expense (in thousands) | Expense Category | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Costs of revenue | $1,809 | $25 | | Research and development | $12,943 | $138 | | Selling, general, and administrative | $40,525 | $495 | | **Total Stock-based Compensation** | **$61,097** | **$740** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Matterport's market position, Q1 2022 revenue growth to $28.5 million, widening operating loss to $84.9 million due to stock-based compensation, and strong $600 million liquidity - Matterport is focused on several growth vectors: scaling the enterprise across industry verticals, expanding internationally, investing in R&D, and expanding partner integrations and third-party developer platforms[183](index=183&type=chunk) Key Business Metrics | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Spaces Under Management (millions) | 7.3 | 4.9 | | Total Subscribers (thousands) | 562 | 331 | | Paid Subscribers (thousands) | 58 | 49 | | Net Dollar Expansion Rate | 107% | 129% | Non-GAAP Loss from Operations (in thousands) | Line Item | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | GAAP loss from operations | $(84,942) | $(2,355) | | Add back: stock based compensation expense, net | $56,088 | $658 | | Other adjustments | $1,596 | $0 | | **Non-GAAP loss from operations** | **$(27,258)** | **$(1,697)** | [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Q1 2022 total revenue increased 6% to $28.5 million, driven by subscription growth, while gross margin contracted to 42% and operating expenses surged to $96.9 million due to stock-based compensation Revenue by Type (in thousands) | Revenue Type | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Subscription | $17,141 | $13,800 | 24% | | License | $23 | $2,260 | (99)% | | Services | $3,973 | $2,689 | 48% | | Product | $7,373 | $8,180 | (10)% | | **Total Revenue** | **$28,510** | **$26,929** | **6%** | - Gross margin decreased to **42%** from **62%** year-over-year, primarily due to minimal high-margin license revenue and lower product gross margins from using alternative suppliers to mitigate supply chain shortages[260](index=260&type=chunk) - Research and development expenses increased **332%** to **$26.0 million**, largely due to a **$12.8 million** increase in stock-based compensation and a **$5.5 million** increase in salary expenses from higher headcount[261](index=261&type=chunk) - Selling, general and administrative expenses increased **443%** to **$70.8 million**, driven by a **$40.0 million** increase in stock-based compensation and a **$10.9 million** increase in personnel-related costs[262](index=262&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) Matterport maintained a strong $600 million liquidity position as of March 31, 2022, primarily from equity issuances and warrant exercises, despite using $25.5 million in operating cash Liquidity Position (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $92,996 | $139,519 | | Investments | $506,991 | $528,590 | | **Total cash, cash equivalents, and investments** | **$599,987** | **$668,577** | - Net cash used in operating activities was **$25.5 million** for Q1 2022, compared to net cash provided by operating activities of **$1.1 million** in Q1 2021[273](index=273&type=chunk)[274](index=274&type=chunk) - Net cash used in investing activities was **$18.2 million**, primarily for business acquisitions (**$30.0 million**) and capitalized software (**$3.6 million**), partially offset by maturities of investments (**$46.2 million**)[276](index=276&type=chunk) - Net cash used in financing activities was **$3.2 million**, reflecting a **$33.3 million** payment for taxes on net settlement of equity awards, largely offset by **$27.8 million** in proceeds from warrant exercises[278](index=278&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies foreign currency and inflation as primary market risks, noting no material impact from a hypothetical 10% currency change or current inflation - The company's results are subject to fluctuations from foreign currency exchange rates as expenses are denominated in currencies of jurisdictions where it operates, primarily the U.S., U.K., and Singapore[285](index=285&type=chunk) - Management does not believe inflation has had a material effect on the business but notes that an inability to offset higher costs through price increases could harm future results[286](index=286&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2022, due to material weaknesses in internal control over financial reporting, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2022, due to material weaknesses in internal control over financial reporting[288](index=288&type=chunk) - Identified material weaknesses include: (1) not maintaining a sufficient complement of personnel with appropriate accounting and internal controls knowledge; (2) ineffective design of controls over the period-end financial reporting process; and (3) ineffective IT general controls for relevant information systems[290](index=290&type=chunk)[291](index=291&type=chunk) - The company has initiated a remediation plan that includes hiring additional accounting and finance resources, designing and implementing improved controls, and engaging a third-party IT consulting firm[293](index=293&type=chunk) [PART II. OTHER INFORMATION](index=64&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing legal matters, including an appeal against a former employee's lawsuit, indemnifying Redfin in a patent case, and responding to an SEC information request - A former employee and shareholder, William J. Brown, sued the company over stock transfer restrictions; a Delaware court ruled against the company, which filed a notice of appeal on February 8, 2022[297](index=297&type=chunk)[298](index=298&type=chunk) - The company is indemnifying Redfin Corporation in a patent infringement lawsuit filed by Surefield concerning Redfin's use of Matterport's 3D-Walkthrough technology, with the case tentatively set for trial in May 2022[127](index=127&type=chunk) - In January 2021, Legacy Matterport received a voluntary request for information from the SEC's Division of Enforcement related to certain secondary market securities sales and repurchases, with which the company states it has fully complied[128](index=128&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In February 2022, the company issued 99,501 unregistered Class A common shares to a customer as consideration for development agreement milestones - In February 2022, **99,501** shares of Class A common stock were issued to a customer for achieving milestones under a development agreement, unregistered and relying on the exemption in Section 4(a)(2) of the Securities Act[299](index=299&type=chunk) [Other Items (Items 3, 4, 5 & 6)](index=64&type=section&id=Other%20Items) This section confirms no defaults on senior securities, no mine safety disclosures, no other material information, and lists filed exhibits - The company reported no defaults upon senior securities, no mine safety disclosures, and no other material information required to be disclosed under Item 5[300](index=300&type=chunk)[301](index=301&type=chunk)

Matterport, Inc. (NASDAQ:MTTR) Q1 2022 Earnings Conference Call May 10, 2022 4:30 PM ET Company Participants Soohwan Kim - Vice President, Investor Relations RJ Pittman - Chairman & Chief Executive Officer JD Fay - Chief Financial Officer Conference Call Participants John Walsh - Credit Suisse Bhavin Shah - Deutsche Bank Elizabeth Porter - Morgan Stanley Yun Kim - Loop Capital Market Wayne Trinh - Piper Sandler Operator Hello and welcome to the Matterport Inc. Fiscal 2022 First Quarter Earnings Conference C ...