[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) SmartRent reported a 21% YoY revenue decrease to $38.3 million in Q2 2025, with increased net loss, while expanding cost reduction and maintaining strong liquidity [Second Quarter 2025 Overview](index=1&type=section&id=1.1.%20Second%20Quarter%202025%20Overview) SmartRent reported Q2 2025 financial results, with total revenue decreasing 21% YoY to $38.3 million, primarily due to a strategic shift away from bulk hardware sales. Net loss increased to $(10.9) million, and Adjusted EBITDA was $(7.3) million. The company expanded its cost reduction program to $30 million in annualized savings, targeting cash flow neutrality by the end of 2025, and maintains a strong liquidity position with $105 million in cash and no debt Key Financial and Operational Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Total Revenue | $38.3 million | $48.5 million | -21% | | Annual Recurring Revenue (ARR) | $56.9 million | N/A | +11% | | Net Loss | $(10.9) million | $(4.6) million | Increased by $6.3 million | | Adjusted EBITDA | $(7.3) million | $0.9 million | Decreased by $8.2 million | | Cash Balance | $105.0 million | N/A | N/A | | Undrawn Credit Facility | $75 million | N/A | N/A | - Company expanded its cost reduction program to **$30 million in annualized savings**, aiming for Adjusted EBITDA and cash flow neutrality exiting 2025[4](index=4&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=1.2.%20Management%20Commentary) CEO Frank Martell emphasized SmartRent's compelling opportunities for profitable growth in an expanding market with a differentiated SaaS platform. He highlighted aggressive steps taken in Q2 to reset the cost structure, drive productivity, and invest in growth acceleration through new products and AI integration. CFO Daryl Stemm noted the strong liquidity position and flexibility to drive profitable growth, despite the impact of ceasing bulk hardware sales on 2025 growth trends - SmartRent is a hardware-enabled SaaS company with a differentiated platform, operating in a large, expanding market[3](index=3&type=chunk) - The company is investing in growth acceleration through innovative new products, capabilities, and the progressive infusion of AI into products and operations[4](index=4&type=chunk) - The deliberate decision to cease bulk hardware sales, made in the second half of last year, impacted Q2 2025 revenue and growth trends, but the impact is expected to normalize later this year[5](index=5&type=chunk) [Company Overview](index=3&type=section&id=2.%20Company%20Overview) SmartRent, founded in 2017, delivers smart community and operations solutions to the rental housing industry, automating operations and serving top multifamily operators [About SmartRent](index=3&type=section&id=2.1.%20About%20SmartRent) Founded in 2017, SmartRent, Inc. is a leading provider of smart communities and smart operations solutions for the rental housing industry. Its end-to-end ecosystem automates operations, protects assets, and reduces energy consumption, serving 15 of the top 20 multifamily operators with purpose-built software and hardware, and comprehensive implementation and support - SmartRent provides smart communities and smart operations solutions to the rental housing industry[16](index=16&type=chunk) - The company's ecosystem automates operations, protects assets, and reduces energy consumption, leveraging purpose-built software and hardware with end-to-end implementation and support[16](index=16&type=chunk) - SmartRent serves **15 of the top 20 multifamily operators**[16](index=16&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=3.%20Second%20Quarter%202025%20Financial%20Results) This section details SmartRent's Q2 2025 financial performance, including revenue, gross profit, operating expenses, net loss, and liquidity [Revenue Performance](index=1&type=section&id=3.1.%20Revenue%20Performance) Total revenue for Q2 2025 decreased by 21% year-over-year to $38.3 million, primarily due to a strategic shift away from bulk hardware sales. Hosted services revenue, including SaaS, increased by 5% to $18.8 million, with SaaS revenue growing 10% YoY and representing 37% of total revenue (up from 26% in prior year). Hardware revenue declined 39% to $15.1 million, and professional services revenue decreased 26% to $4.3 million [Total Revenue](index=1&type=section&id=3.1.1.%20Total%20Revenue) Total revenue for the second quarter of 2025 was $38.3 million, a 21% decrease compared to $48.5 million in the prior year quarter, mainly attributed to lower hardware revenues following a strategic shift from bulk hardware sales Total Revenue Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Total Revenue | $38.3 million | $48.5 million | -21% | - The decline in total revenue primarily reflects the Company's strategic move away from bulk hardware sales not aligned with customer implementation timelines[7](index=7&type=chunk) [Revenue by Segment](index=2&type=section&id=3.1.2.%20Revenue%20by%20Segment) Hosted services revenue, which includes SaaS, increased by 5% year-over-year to $18.8 million. SaaS revenue specifically grew 10% YoY and now constitutes approximately 37% of total revenue, up from 26% in the prior year. Conversely, hardware revenue saw a significant 39% decrease to $15.1 million, and professional services revenue declined by 26% to $4.3 million Revenue by Segment Breakdown | Revenue Segment | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------- | :--------------------- | :--------------------- | :----------- | | Hardware | $15,143 | $24,676 | -39% | | Professional services | $4,327 | $5,816 | -26% | | Hosted services | $18,838 | $18,026 | +5% | | SaaS revenue (part of Hosted) | $14.2 million | N/A | +10% | - SaaS revenue represented approximately **37% of total second quarter revenue in 2025**, up from 26% in the prior year[8](index=8&type=chunk) [Gross Profit and Margin](index=2&type=section&id=3.2.%20Gross%20Profit%20and%20Margin) Total gross margin decreased by 260 basis points to 33.1% in Q2 2025, down from 35.7% in the prior year, mainly due to changes in the product mix of hardware shipments. SaaS gross margin also decreased by 490 basis points to 70.2%. However, professional services gross loss improved to $(1.9) million from $(3.1) million, driven by increased operational efficiencies. Hosted services gross profit increased slightly to $12.3 million [Total Gross Margin](index=2&type=section&id=3.2.1.%20Total%20Gross%20Margin) Total gross margin for Q2 2025 was 33.1%, a decrease of approximately 260 basis points from 35.7% in the prior year quarter, primarily influenced by changes in the product mix of hardware shipments. Total gross profit was $12.7 million, down from $17.3 million Total Gross Margin and Profit | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Total Gross Margin | 33.1% | 35.7% | -260 bps | | Total Gross Profit | $12.7 million | $17.3 million | -$4.6 million | - The decrease in total gross margin was primarily driven by changes to product mix of hardware shipments[11](index=11&type=chunk) [Gross Profit by Segment](index=2&type=section&id=3.2.2.%20Gross%20Profit%20by%20Segment) SaaS gross margin decreased by 490 basis points to 70.2% from 75.1% in the prior year. Hardware gross profit significantly decreased by $6.1 million to $2.3 million, reflecting lower shipment volume due to the shift from bulk sales. Professional services gross loss improved to $(1.9) million from $(3.1) million, while Hosted services gross profit increased to $12.3 million from $12.0 million Gross Profit and Margin by Segment | Segment Gross Profit/Margin | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------ | :------ | :------ | :----------- | | SaaS Gross Margin | 70.2% | 75.1% | -490 bps | | Hardware Gross Profit | $2.3 million | $8.4 million | -$6.1 million | | Professional Services Gross Loss | $(1.9) million | $(3.1) million | Improved by $1.2 million | | Hosted Services Gross Profit | $12.3 million | $12.0 million | +$0.3 million | - Professional services gross loss improved due to increased operational efficiencies and improved unit economics on SmartRent installations[11](index=11&type=chunk) [Operating Expenses](index=2&type=section&id=3.3.%20Operating%20Expenses) Operating expenses in the second quarter of 2025 were $24.4 million, which included approximately $2 million of severance and legal expenses that had no prior year counterpart Operating Expenses Breakdown | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :----- | :--------------------- | :--------------------- | :----------- | | Total Operating Expense | $24,353 | $24,223 | +$130 | | Research and development | $6,465 | $7,484 | -$1,019 | | Sales and marketing | $6,375 | $4,716 | +$1,659 | | General and administrative | $11,513 | $12,023 | -$510 | - Operating expenses included approximately **$2 million of severance and legal expenses** in Q2 2025 that were not present in the prior year[10](index=10&type=chunk) [Net Loss and Adjusted EBITDA](index=1&type=section&id=3.4.%20Net%20Loss%20and%20Adjusted%20EBITDA) Net loss increased to $(10.9) million in Q2 2025 from $(4.6) million in the prior year, and Adjusted EBITDA was $(7.3) million, a decrease of $8.3 million from $0.9 million in Q2 2024. These increased losses were primarily due to lower hardware revenue and the aforementioned severance and legal expenses Net Loss and Adjusted EBITDA Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Net Loss | $(10.9) million | $(4.6) million | Increased by $6.3 million | | Adjusted EBITDA | $(7.3) million | $0.9 million | Decreased by $8.2 million | - Increased losses were principally attributable to lower hardware revenue and severance and legal expenses incurred in 2025[12](index=12&type=chunk) [Liquidity and Capital Management](index=1&type=section&id=3.5.%20Liquidity%20and%20Capital%20Management) SmartRent ended Q2 2025 with a strong liquidity position, including $105.0 million in cash and an undrawn credit facility of $75 million, with no debt. The company repurchased approximately 4.1 million shares at an aggregate cost of $3.7 million during the quarter under its $50 million share repurchase program, with $16.8 million remaining available Liquidity and Capital Position | Metric | Q2 2025 | | :----- | :------ | | Cash Balance | $105.0 million | | Undrawn Credit Facility | $75 million | | Debt | None | | Shares Repurchased (Q2) | 4.1 million | | Cost of Repurchases (Q2) | $3.7 million | | Remaining Share Repurchase Authorization | $16.8 million | [Key Operating Metrics](index=2&type=section&id=4.%20Key%20Operating%20Metrics) This section presents SmartRent's key operational performance indicators for Q2 2025, including units deployed, bookings, and average revenue per unit [Units Performance](index=2&type=section&id=4.1.%20Units%20Performance) As of June 30, 2025, Units Deployed increased by 10% year-over-year to 847,956, reflecting continued expansion of the installed base. However, New Units Deployed during the quarter decreased by 6% to 21,068 Units Deployed and Shipped | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Units Deployed (as of June 30) | 847,956 | 771,870 | +10% | | New Units Deployed (Q2) | 21,068 | 22,469 | -6% | | Hardware Units Shipped (Q2) | 26,543 | 48,780 | -46% | [Bookings](index=2&type=section&id=4.2.%20Bookings) Units Booked for Q2 2025 reached 24,319, marking the highest quarterly booking performance in the past year, despite a 35% year-over-year decrease primarily due to the cessation of bulk hardware sales. Total Bookings (in thousands) also decreased by 33% to $30,460 Bookings Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Units Booked | 24,319 | 37,691 | -35% | | Bookings (in 000's) | $30,460 | $45,511 | -33% | - Units Booked for the quarter was the Company's **highest quarterly booking performance in the past year**[9](index=9&type=chunk) [Average Revenue Per Unit (ARPU)](index=2&type=section&id=4.3.%20Average%20Revenue%20Per%20Unit%20%28ARPU%29) SaaS ARPU for Q2 2025 increased by 2% year-over-year to $5.66. Hardware ARPU increased by 13% to $571, and Professional Services ARPU increased by 12% to $365. Units Booked SaaS ARPU also saw a 2% increase to $8.21 Average Revenue Per Unit (ARPU) by Segment | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | SaaS ARPU | $5.66 | $5.63 | +2% | | Hardware ARPU | $571 | $506 | +13% | | Professional Services ARPU | $365 | $327 | +12% | | Units Booked SaaS ARPU | $8.21 | $8.07 | +2% | [Condensed Consolidated Financial Statements](index=8&type=section&id=5.%20Condensed%20Consolidated%20Financial%20Statements) This section provides SmartRent's condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods [Statements of Operations and Comprehensive Loss](index=8&type=section&id=5.1.%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The condensed consolidated statements of operations show a net loss of $(10.9) million for the three months ended June 30, 2025, compared to $(4.6) million in the prior year. For the six months, net loss was $(51.0) million in 2025 versus $(12.3) million in 2024, significantly impacted by a $24.9 million goodwill impairment charge in 2025 Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------ | :------ | :------------ | :------------ | | Total Revenue | $38,308 | $48,518 | $79,652 | $99,007 | | Total Cost of Revenue | $25,640 | $31,213 | $53,422 | $62,279 | | Total Operating Expense | $24,353 | $24,223 | $54,275 | $53,805 | | Impairment charge | $- | $- | $24,929 | $- | | Loss from operations | $(11,685) | $(6,918) | $(52,974) | $(17,077) | | Net loss | $(10,860) | $(4,605) | $(51,044) | $(12,297) | | Basic and diluted Net loss per common share | $(0.06) | $(0.02) | $(0.27) | $(0.06) | [Balance Sheets](index=9&type=section&id=5.2.%20Balance%20Sheets) As of June 30, 2025, total assets were $354.0 million, down from $420.2 million at December 31, 2024, primarily due to a decrease in cash and cash equivalents and a goodwill impairment charge. Total liabilities decreased to $115.1 million from $130.7 million, while total stockholders' equity decreased to $238.8 million from $289.4 million Condensed Consolidated Balance Sheets | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $105,044 | $142,482 | | Total current assets | $217,543 | $257,650 | | Goodwill | $92,339 | $117,268 | | Total assets | $353,969 | $420,176 | | Total current liabilities | $80,059 | $71,032 | | Total liabilities | $115,120 | $130,741 | | Total stockholders' equity | $238,849 | $289,435 | [Statements of Cash Flows](index=10&type=section&id=5.3.%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities increased to $(27.1) million from $(17.2) million in the prior year. Net cash used in investing activities was $(5.9) million, and net cash used in financing activities was $(5.3) million. The company experienced a net decrease in cash, cash equivalents, and restricted cash of $(37.4) million, ending the period with $105.0 million Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------------ | :------------ | | Net cash used in operating activities | $(27,099) | $(17,214) | | Net cash used in investing activities | $(5,850) | $(1,997) | | Net cash used in financing activities | $(5,266) | $(8,839) | | Net decrease in cash, cash equivalents, and restricted cash | $(37,438) | $(28,027) | | Cash, cash equivalents, and restricted cash - end of period | $105,044 | $187,682 | - Goodwill impairment of **$24.9 million** was a significant non-cash adjustment in operating activities for the six months ended June 30, 2025[37](index=37&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=6.%20Non-GAAP%20Financial%20Measures) This section defines and reconciles SmartRent's non-GAAP financial measures, such as EBITDA and Adjusted EBITDA, to their GAAP equivalents [Definition and Rationale](index=4&type=section&id=6.1.%20Definition%20and%20Rationale) SmartRent uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to assess financial and operating performance, identify trends, and make strategic decisions. These measures are not recognized under GAAP and should not be considered substitutes for GAAP financial information. Adjusted EBITDA specifically excludes items such as non-recurring legal matters, stock-based compensation, goodwill impairment, and acquisition-related expenses - Non-GAAP measures (EBITDA and Adjusted EBITDA) are used by management to assess financial and operating performance, identify trends, and make decisions, believing they provide useful information to investors[22](index=22&type=chunk) - Adjusted EBITDA is defined as EBITDA before non-recurring legal matters, stock-based compensation expense, non-employee warranty expense, non-recurring warranty provisions, goodwill impairment, compensation and other expenses in connection with acquisitions, asset impairment, and other non-recurring or unusual events[19](index=19&type=chunk) [Reconciliation to GAAP Measures](index=11&type=section&id=6.2.%20Reconciliation%20to%20GAAP%20Measures) The report provides a reconciliation of net loss (GAAP) to EBITDA and Adjusted EBITDA (non-GAAP). For Q2 2025, Adjusted EBITDA was $(7.3) million, compared to $0.9 million in Q2 2024. For the six months ended June 30, 2025, Adjusted EBITDA was $(13.7) million, compared to $1.3 million in the prior year, with significant adjustments including a $24.9 million goodwill impairment in 2025 Reconciliation of Net Loss to Adjusted EBITDA | Metric (in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------ | :------ | :------------ | :------------ | | Net loss (GAAP) | $(10,860) | $(4,605) | $(51,044) | $(12,297) | | EBITDA | $(9,839) | $(5,242) | $(49,172) | $(13,797) | | Goodwill impairment | $- | $- | $24,929 | $- | | Stock-based compensation | $2,161 | $3,284 | $4,997 | $6,565 | | Adjusted EBITDA | $(7,349) | $902 | $(13,721) | $1,299 | [Financial and Operating Metrics Definitions](index=5&type=section&id=7.%20Financial%20and%20Operating%20Metrics%20Definitions) This section provides detailed definitions for key financial and operating metrics used by SmartRent to evaluate performance and make strategic decisions. These include Units Deployed, New Units Deployed, Units Shipped, Units Booked, Bookings, Annual Recurring Revenue (ARR), SaaS Revenue, and various Average Revenue per Unit (ARPU) calculations (Hardware, Professional Services, SaaS, Units Booked SaaS). It also defines Property Net Revenue Retention and Customer Net Revenue Retention - **Units Deployed:** Aggregate number of Hub Devices that have been installed (including customer self-installations) and have an active subscription as of a stated measurement date[24](index=24&type=chunk) - **Annual Recurring Revenue ("ARR"):** The annualized value of our SaaS revenue earned in the current quarter[27](index=27&type=chunk) - **SaaS ARPU:** Total SaaS Revenue during a given period divided by the average aggregate Units Deployed in the same period divided by the number of months in the period[29](index=29&type=chunk) [Additional Information](index=3&type=section&id=8.%20Additional%20Information) This section includes important disclosures regarding forward-looking statements and details for the conference call and investor contacts [Forward-Looking Statements](index=4&type=section&id=8.1.%20Forward-Looking%20Statements) This section contains forward-looking statements regarding SmartRent's future business and financial performance, including expectations for growth, cost reduction, and the stock repurchase program. It highlights that these statements involve risks and uncertainties that could cause actual results to differ materially, such as the ability to accelerate product adoption, manage macroeconomic conditions, and retain key personnel. The company disclaims any obligation to update these statements - Forward-looking statements address expected future business and financial performance, areas of focus, cost reduction, expected growth, strategy, and the stock repurchase program[17](index=17&type=chunk) - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including factors like product adoption, macroeconomic conditions, and managing third-party suppliers[17](index=17&type=chunk) [Conference Call and Contacts](index=3&type=section&id=8.2.%20Conference%20Call%20and%20Contacts) SmartRent hosted a conference call on August 6, 2025, to discuss its financial results, with presentation materials available on its investor relations website. Contact information for Investor Relations and Media Relations is also provided - SmartRent hosted a conference call on **August 6, 2025**, to discuss financial results, with presentation available on the investor relations website[15](index=15&type=chunk) - Contact information for Investor Relations (Kelly Reisdorf) and Media Contact (Amanda Chavez) is provided[40](index=40&type=chunk)

Financial Performance - Total revenue decreased by 18% year-over-year to $41.3 million, primarily due to a strategic shift away from hardware-led growth towards SaaS [13, 16] - Annual Recurring Revenue (ARR) grew by 17% year-over-year to $55.9 million, representing approximately 34% of total revenue [4, 17, 30] - Net loss was $(40.2) million, including a goodwill impairment charge of $24.9 million [13] - Adjusted EBITDA decreased to $(6.4) million, compared to $0.4 million in the same quarter of the prior year, mainly due to expenses related to a legal matter [13] - The company repurchased approximately 1.0 million shares at an aggregate cost of $1.2 million in Q1, with $20.4 million remaining in the authorized program [27] Operational Metrics - Units Deployed increased by 10% year-over-year to over 827,000 [6, 13, 22] - SaaS Average Revenue Per Unit (ARPU) improved by 5% year-over-year to $5.69 [13, 25] - Customer Net Revenue Retention was 114%, and Customer Churn was 0.02%, indicating strong customer loyalty [22, 30] Strategic Initiatives - The company is focused on driving adjusted EBITDA profitability through recurring revenue, platform differentiation, and operational excellence [10] - Over $10 million in cost reductions have been completed [7, 26] - The company has a strong cash position with $125.6 million in cash and no debt, along with a $75 million undrawn credit facility [7, 13]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $41.3 million, down 18% year over year [23] - Hardware revenue decreased by 35% year over year to $18.8 million, reflecting a strategic shift away from hardware sales [23] - SaaS revenue grew by 17% year over year to $14 million, supported by improved average revenue per user (ARPU) and strong customer retention [24] - Gross margin for Q1 was 32.8%, down from 38.5% in the prior year, primarily due to lower hardware volume [24] - Net losses increased to $40.2 million, compared to $7.7 million in the same period last year, largely due to a non-cash goodwill impairment charge of $24.9 million [25] Business Line Data and Key Metrics Changes - SaaS ARPU increased to $5.69, up 5% from the prior year, while units booked SaaS ARPU reached $10.28, a 44% increase year over year [24] - SaaS gross margin remained strong at 70.7%, with expectations for further expansion over time [25] Market Data and Key Metrics Changes - The total addressable market (TAM) is estimated to be between $11 billion and $13 billion, with a current target market of $3 billion to $4 billion for Class A and B buildings [18] - Customer retention rate has remained above 99.9% over the past three years, indicating strong customer loyalty [16] Company Strategy and Development Direction - The company is focusing on sustainable and predictable annual recurring revenue (ARR) growth, moving away from hardware sales to a hardware-enabled SaaS model [13] - Strategic pillars include platform superiority, operational excellence, and collaborative innovation [14] - The company is undergoing significant restructuring to enhance scalability and customer-centric operations [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to return to sustainable growth and profitability, despite current execution challenges [20] - The focus for 2025 is on building a foundation for future growth, with expectations for evidence of progress in the coming quarters [20] - Management remains cautious about macroeconomic factors impacting customer purchasing decisions [28] Other Important Information - The company has executed over $10 million in annualized cost savings to improve cash flow and return to profitability [26] - The company ended the quarter with $125.6 million in cash and no debt, providing a strong balance sheet for future operations [27] Q&A Session Summary Question: Do the $10 million savings represent the full benefit expected? - The $10 million in annualized savings were initiated in April, so the full effect will not be seen until Q3 [31] Question: Is the sales organization build-out sufficient for scalability? - The initial build-out of the sales organization is complete, but new hires will take time to ramp up [33] Question: What qualities are being sought in the new CEO? - The company is looking for a CEO with a proven track record in operational execution within a recurring revenue business at scale [40]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $41.3 million, down 18% year over year [20] - Hardware revenue decreased by 35% year over year to $18.8 million, reflecting a strategic shift away from hardware sales [20] - SaaS revenue grew by 17% year over year to $14 million, supported by improved ARPU and strong customer retention [21] - Gross margin for Q1 was 32.8%, down from 38.5% in the prior year, primarily due to lower hardware volume [21][22] - Net losses increased to $40.2 million, compared to $7.7 million in the same period last year, largely due to a non-cash goodwill impairment charge of $24.9 million [22] Business Line Data and Key Metrics Changes - SaaS ARPU increased to $5.69, up 5% from the prior year, while units booked SaaS ARPU reached $10.28, a 44% increase year over year [21] - SaaS gross margin remained strong at 70.7%, with expectations for further expansion over time [22] Market Data and Key Metrics Changes - The total addressable market (TAM) is estimated to be between $11 billion to $13 billion, with a target market of $3 billion to $4 billion for Class A and B buildings [15] - Customer retention rate has remained above 99.9% over the past three years, indicating strong customer loyalty [14] Company Strategy and Development Direction - The company is focusing on sustainable and predictable ARR growth, emphasizing a hardware-enabled SaaS model rather than hardware sales [11] - Strategic pillars include platform superiority, operational excellence, and collaborative innovation [12] - The company has initiated a significant restructuring to enhance scalability and customer focus [10] Management's Comments on Operating Environment and Future Outlook - Management believes that execution challenges are largely solvable and that improving operating effectiveness will unlock scalable long-term growth [14] - The company aims to achieve non-GAAP adjusted EBITDA profitability while maintaining long-term growth [17] - Management remains confident in the company's strategy and market position despite current challenges [26] Other Important Information - The company has executed over $10 million in annualized cost savings to improve cash flow and return to profitability [23] - The company ended the quarter with $125.6 million in cash and no debt, providing a strong balance sheet for future operations [24] Q&A Session Summary Question: Do the $10 million savings represent the full benefit expected? - The $10 million savings are actions taken in April, and the full effect will be seen in Q3 [28] Question: Is the sales organization build-out sufficient for scalability? - The initial build-out is complete, but new salespeople require time to ramp up [29] Question: How much of the organizational changes are on hold due to the CEO search? - The company is not pausing any changes; the strategy is well evolved and will continue to be executed [32] Question: What are the qualities sought in the new CEO? - The new CEO should have a proven track record in operational execution within a recurring revenue business at scale [37] Question: How is the company addressing potential tariff impacts? - The company has a potential $2 million exposure related to tariffs and is evaluating changes in manufacturing locations to mitigate costs [42] Question: When will the benefits of the go-to-market team be evident? - The timeline is uncertain due to various factors, but 2025 is expected to be a foundation-building year with some growth [44]

[PART I - Financial Information](index=5&type=section&id=PART%20I%20-%20Financial%20Information) [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) SmartRent reported Q1 2025 revenue of **$41.3 million**, a net loss of **$40.2 million** (including a **$24.9 million** goodwill impairment), and total assets of **$366.1 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$366.1 million** by March 31, 2025, driven by reduced cash and a goodwill impairment, while equity declined to **$250.7 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $125,600 | $142,482 | | Total current assets | $227,863 | $257,650 | | Goodwill | $92,339 | $117,268 | | **Total assets** | **$366,065** | **$420,176** | | **Liabilities & Equity** | | | | Total current liabilities | $75,873 | $71,032 | | Total liabilities | $115,395 | $130,741 | | Total stockholders' equity | $250,670 | $289,435 | | **Total liabilities and stockholders' equity** | **$366,065** | **$420,176** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 total revenue decreased **18%** to **$41.3 million**, leading to a **$40.2 million** net loss, significantly impacted by a **$24.9 million** goodwill impairment charge Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $41,344 | $50,489 | | Total cost of revenue | $27,782 | $31,066 | | Impairment charge | $24,929 | $- | | Loss from operations | $(41,289) | $(10,159) | | Net loss | $(40,184) | $(7,692) | | Net loss per share (Basic and diluted) | $(0.21) | $(0.04) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$12.2 million** in Q1 2025, contributing to a **$16.9 million** decrease in cash and cash equivalents for the quarter Summary of Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,169) | $(3,337) | | Net cash used in investing activities | $(3,469) | $(956) | | Net cash used in financing activities | $(1,505) | $(6,462) | | **Net decrease in cash and cash equivalents** | **$(16,882)** | **$(10,761)** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail a **$24.9 million** goodwill impairment, declining hardware sales, growing SaaS revenue, stock repurchases, and subsequent events including a CEO departure and NYSE non-compliance - The company conducted an interim goodwill impairment test during Q1 2025 due to a sustained decline in its stock price and a significant decrease in market capitalization, resulting in a goodwill impairment charge of **$24,929 thousand**[46](index=46&type=chunk)[47](index=47&type=chunk) Revenue by Type (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Hardware | $18,830 | $29,077 | | Professional services | $3,893 | $3,458 | | Hosted services | $18,621 | $17,954 | | **Total revenue** | **$41,344** | **$50,489** | - In March 2024, the Board authorized a stock repurchase program of up to **$50 million**, with **1,018 thousand shares** repurchased for **$1.2 million** during Q1 2025, leaving approximately **$20.4 million** available[115](index=115&type=chunk)[116](index=116&type=chunk) - Subsequent to the quarter end, the CEO departed in April 2025, and on May 2, 2025, the company received an NYSE non-compliance notice for its average closing stock price falling below **$1.00**[159](index=159&type=chunk)[164](index=164&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue declined **18%** due to macroeconomic factors and leadership changes, with hardware sales down **35%** but SaaS revenue up **17%**, resulting in an Adjusted EBITDA loss of **$6.4 million** [Key Metrics](index=37&type=section&id=Key%20Metrics) Q1 2025 saw a **39%** drop in New Units Deployed and **61%** in Units Booked, while total Units Deployed grew **10%** and Annual Recurring Revenue (ARR) increased to **$55.9 million** Key Operating Metrics Comparison | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | New Units Deployed | 18,114 | 29,710 | (39)% | | Hardware Units Shipped | 43,418 | 51,744 | (16)% | | Units Booked | 18,210 | 46,290 | (61)% | | Units Deployed (Total) | 827,611 | 749,401 | 10% | | SaaS ARPU | $5.69 | $5.41 | 5% | | Bookings (in thousands) | $27,180 | $38,761 | (30)% | - Annual Recurring Revenue (ARR) increased to approximately **$55.9 million** as of March 31, 2025, up from **$47.6 million** as of March 31, 2024, demonstrating growth in the recurring revenue base despite declines in new hardware deployments[187](index=187&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Total revenue decreased **18%** to **$41.3 million**, primarily from a **35%** drop in hardware revenue, while hosted services grew **4%**, leading to a higher operating loss due to a **$24.9 million** impairment - The decrease in total revenue was primarily driven by a **$10.2 million (35%)** decline in hardware revenue, attributed to a **16%** decrease in Units Shipped and a **23%** decrease in Hardware ARPU due to a change in customer mix[217](index=217&type=chunk)[219](index=219&type=chunk) - Hosted Services revenue increased by **4%**, with SaaS revenue growing by **$2.1 million (17%)**, while revenue from hub amortization decreased by **$1.4 million**, and future amortization revenue is expected to decline further[221](index=221&type=chunk)[222](index=222&type=chunk) - General and administrative expenses increased slightly by **$0.2 million**, primarily due to a **$1.7 million** increase in legal matters, largely offset by decreases in the provision for expected credit losses and stock compensation[231](index=231&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q1 2025 was a loss of **$6.4 million**, a significant decline from prior year profit, after adjusting for a **$24.9 million** goodwill impairment and other non-cash items Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net loss** | **$(40,184)** | **$(7,692)** | | Interest income, net | $(1,200) | $(2,409) | | Income tax expense | $108 | $45 | | Depreciation and amortization | $1,943 | $1,501 | | **EBITDA** | **$(39,333)** | **$(8,555)** | | Legal matters | $5,105 | $5,300 | | Stock-based compensation | $2,836 | $3,281 | | Goodwill impairment | $24,929 | $- | | **Adjusted EBITDA** | **$(6,372)** | **$397** | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$125.6 million** in cash and has a **$75.0 million** undrawn credit facility, deemed sufficient for the next 12 months, despite **$12.2 million** cash used in operations - The company's primary sources of liquidity are its cash balance of **$125.6 million** and an undrawn **$75.0 million** senior secured revolving credit facility[245](index=245&type=chunk)[246](index=246&type=chunk) - Cash used in operating activities increased to **$12.2 million** in Q1 2025 from **$3.3 million** in Q1 2024, primarily due to a higher net loss, partially offset by non-cash charges like the goodwill impairment[253](index=253&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate fluctuations on cash and foreign currency exposure, with a 10% interest rate change having a notable impact, and no hedging strategies currently employed - The company's main market risk exposures are interest rate risk on its **$125.6 million** cash balance and foreign currency risk from its international operations[279](index=279&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Management, including the Interim CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[283](index=283&type=chunk) [PART II - Other Information](index=54&type=section&id=PART%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=54&type=section&id=Item%201%20-%20Legal%20Proceedings) The company is involved in various legal claims in the ordinary course of business, which management does not expect to have a material adverse effect on its financial condition - The company states that it is subject to various legal proceedings but does not expect them to have a material adverse effect on its financial condition or results of operations[285](index=285&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A%20-%20Risk%20Factors) New risk factors include potential adverse impacts from the CEO's departure and the risk of NYSE delisting due to non-compliance with the minimum share price requirement - A new risk factor was added regarding the April 2025 departure of the CEO, Michael Shane Paladin, as the leadership transition could create uncertainty and negatively impact business operations[287](index=287&type=chunk) - The company disclosed it is not in compliance with the NYSE's minimum share price requirement as of May 2, 2025, and failure to regain compliance could result in the delisting of its stock, adversely impacting trading volume, liquidity, and market price[288](index=288&type=chunk)[289](index=289&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202%20-%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased **1,018 thousand** shares for approximately **$1.2 million** as part of its **$50 million** stock repurchase program Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | Total Value (thousands) | | :--- | :--- | :--- | :--- | | Jan 2025 | - | $- | $- | | Feb 2025 | - | $- | $- | | Mar 2025 | 1,018 | $1.18 | $1,201* | | **Total** | **1,018** | **$1.18** | **$1,201*** | *Calculated from shares and average price. [Item 6. Exhibits](index=57&type=section&id=Item%206%20-%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the CEO severance agreement, Interim CEO employment agreement, and officer certifications

Group 1 - SmartRent, Inc. (SMRT) has experienced significant selling pressure, resulting in a 37.6% decline in stock price over the past four weeks, but it is now considered to be in oversold territory with potential for recovery [1] - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - SMRT's current RSI reading is 27.16, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5] Group 2 - Analysts have raised earnings estimates for SMRT, with a 53.3% increase in the consensus EPS estimate over the last 30 days, indicating potential price appreciation [7] - SMRT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the likelihood of a turnaround [8]

Group 1 - SmartRent (NYSE: SMRT) is a provider of smart home and smart property solutions specifically for the multifamily industry [1] - The company has faced challenges since its IPO via SPAC in 2021, primarily due to a lack of clarity regarding its vision [1] Group 2 - The article mentions notable investment coverage, including two "Buy" ratings for ADTH in September and November 2023, with an acquisition price of $3.21 per share in June 2024 [1] - LUMN also received two "Buy" ratings in September and November 2023, with a downgrade noted after selling the full position in October 2024 at $6.08 [1]

Financial Results - SmartRent, Inc. announced preliminary financial results for Q1 2025, with specific figures to be detailed in the press release[4]. - The company plans to issue a press release detailing the CEO transition and financial results on April 10, 2025[15]. - The press release regarding the financial results and CEO transition is attached as Exhibit 99.1[18]. - The company has not disclosed specific user data or future product developments in this report[4]. CEO Transition - Michael Shane Paladin, the former President and CEO, departed effective April 9, 2025, and will receive a total of $168,648.20 in cash payments as part of his separation agreement[13]. - John Dorman has been appointed as the interim President and CEO, effective April 9, 2025, with a monthly salary of $54,166.67[10]. - Dorman will receive a bonus of $162,500 if he remains in the interim role through June 30, 2025[10]. - The interim CEO's restricted stock units (RSUs) will have a total intended value of $250,000, vesting in 2027[10]. - There are no arrangements or understandings regarding Dorman's appointment with other parties[9]. Company Classification - The company is classified as an emerging growth company under the Securities Act[3].

Financial Data and Key Metrics Changes - For Q4 2024, total revenue was $35.4 million, down 41% from the same quarter last year, while full year revenue was $174.9 million, a 26% decrease from 2023 [19][20] - SaaS revenue grew 17% year over year in Q4, with annual recurring revenue (ARR) increasing to $54.4 million, up from $46.2 million in Q4 2023 [20][22] - SaaS gross margin remained strong at 74.1%, while total gross margin improved to 34.5% from 20.9% in the previous year [25][27] Business Line Data and Key Metrics Changes - In Q4 2024, 38% of revenue came from recurring SaaS subscriptions, up from 19% in the prior year [14] - Hardware revenue decreased to $10.4 million, down 72% year over year, while professional services revenue also decreased to $6.2 million, down 7% [32][33] Market Data and Key Metrics Changes - Units deployed reached 809,000, a 12% increase compared to December 2023 [24] - The total addressable market exceeds 50 million rental units, indicating significant growth potential for smart property technology adoption [12] Company Strategy and Development Direction - The company aims to deepen market penetration and expand reach, focusing on mid-market owners and operators [13] - Strategic investments are being made in enhancing the SaaS platform and improving operational efficiencies [25][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges faced during the transition but believes in the right strategy and leadership to complete the transformation into a SaaS-focused company [37][38] - There is a focus on aligning the cost structure with growth trajectory and monitoring key indicators for reinstating guidance [36][37] Other Important Information - The company repurchased approximately 3 million shares at a cost of $5.1 million in Q4, totaling $28.6 million for the full year [30][31] - Cash balance at the end of the quarter was approximately $143 million, with an undrawn credit facility of $75 million [31] Q&A Session Summary Question: Impact of SaaS focus on hardware strategy - Management clarified that the focus is on monetizing hardware insights through software, emphasizing a symbiotic relationship between hardware and SaaS [45][47] Question: Scaling unit deployments and channel partner program - Management is currently in analysis mode regarding customer journeys and plans to address other markets after understanding current processes [52][54] Question: Update on $10 million growth investment and macro environment - Initial emphasis on developing smart operation solutions, with ongoing development work to make data more usable for customers [59] - Management noted that customers are being pragmatic about ROI and expect tailwinds in the coming years [61]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was $35.4 million, down 41% from the same quarter last year, while full year revenue was $174.9 million, a 26% decrease from 2023 [19] - SaaS revenue grew 17% year over year in Q4, with annual recurring revenue (ARR) increasing to $54.4 million, up from $46.2 million in Q4 2023 [20][22] - SaaS gross margin remained strong at 74.1%, while total gross margin improved to 34.5% from 20.9% in the prior year [25][27] Business Line Data and Key Metrics Changes - 38% of revenue in Q4 2024 came from recurring SaaS subscriptions, up from 19% in the prior year [14] - Hardware revenue decreased to $10.4 million, down 72% from the same quarter last year, while professional services revenue decreased to $6.2 million, down 7% year over year [32][33] Market Data and Key Metrics Changes - Units deployed reached 809,000, a 12% increase compared to December 2023 [24] - The total addressable market exceeds 50 million rental units, indicating significant growth potential for smart property technology adoption [12] Company Strategy and Development Direction - The company aims to deepen market penetration and expand reach, focusing on mid-market owners and operators [13] - Strategic investments are being made in enhancing the SaaS platform and improving operational efficiencies [25][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges faced during the transition but believes in the right strategy and leadership to complete the transformation into a SaaS-focused company [38] - There is a focus on aligning the cost structure with growth trajectory and monitoring key indicators for reinstating guidance [36][37] Other Important Information - The company repurchased approximately 3 million shares at a cost of $5.1 million in Q4, totaling $28.6 million for the full year [30][31] - Cash balance at the end of the quarter was approximately $143 million, with an undrawn credit facility of $75 million [31] Q&A Session Summary Question: Impact of transitioning to a SaaS-first company on hardware strategy - Management clarified that the focus is on monetizing hardware insights through software, emphasizing a symbiotic relationship between hardware and SaaS [45][47] Question: Focus on scaling unit deployments and potential channel partner programs - Management is currently in analysis mode regarding customer journeys and plans to address other markets once the current processes are well understood [52][54] Question: Update on the $10 million incremental growth investment and macroeconomic conditions - Initial emphasis has been on developing smart operation solutions, with ongoing work to make data more usable for customers [59] - Management noted that customers are being pragmatic about ROI and expect tailwinds in the coming years [61] Question: Response from larger landlords regarding smart unit conversions - Management indicated that larger landlords have shown positive responses and an appetite for more, focusing on ROI discussions [72]