[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]

Financial Performance - Q4 2024 total revenue was $354 million, a 41% year-over-year decrease, primarily due to lower volumes in Units Shipped and New Units Deployed[11, 14] - Full year 2024 total revenue was $1748 million, a 26% year-over-year decrease, also due to lower New Units Deployed[15] - Q4 2024 SaaS revenue grew 17% year-over-year, reaching $516 million[11, 19] - Full year net loss was $(329) million[11] - Full year Adjusted EBITDA improved to $(99) million from $(192) million in the prior year, reflecting operational efficiencies[11] - The company repurchased approximately 30 million shares for $51 million in Q4, with $216 million remaining in the authorized program[21] - Cash reserves as of December 31, 2024, were $143 million[11, 21] Operational Metrics - Units Deployed grew by 12% year-over-year, reaching approximately 809K units at the end of 2024[11, 17] - Q4 SaaS ARPU improved from $550 in the same quarter of the prior year[11] - Customer Net Revenue Retention was 111% as of December 31, 2024[17] - Customer Churn was 007% as of December 31, 2024[17] Strategic Initiatives - The company welcomed Shane Paladin as the new CEO to lead the next phase of growth and accelerate the SaaS transformation[18]

Market Presence - As of December 31, 2024, SmartRent had 809,497 units deployed and over 650 customers, representing approximately 15% of the U.S. market for institutionally owned multifamily rental units and single-family rental homes [28]. - The company sees significant growth potential in both residential and commercial real estate sectors, including international markets [36]. Revenue Generation - The company generated revenue primarily from sales of smart home systems, including monthly subscription fees for hosted services, smart home devices, and installation services [29]. - Substantially all revenue is generated in U.S. dollars, while expenses are primarily in local currencies of operational jurisdictions [332]. Strategic Growth Initiatives - SmartRent defined four strategic pillars for growth: Sustainable Annual Recurring Revenue (ARR) Growth, Platform Superiority, Operational Excellence, and Collaborative Innovation [30]. - The near-term product roadmap includes new leasing solutions, resident experience solutions, home IoT solutions, building IoT solutions, and property operations solutions [55]. Technology and Solutions - The demand for smart home technology is driven by network effects, with many residents viewing it as a necessity, although few communities currently offer it [31]. - SmartRent's solutions include Smart Apartments, Access Control, Community WiFi, and Package Management, enhancing operational efficiency and resident experience [39][40][41]. - The Hub Devices are essential for the smart home operating system, allowing remote control of connected devices and enhancing the living experience for residents [42][43]. Competitive Advantages - SmartRent's competitive strengths include an integrated solution, hardware agnosticism, open architecture, and in-house professional services [34][35]. - The residential technology market remains fragmented, requiring owners to source solutions from multiple vendors, which SmartRent aims to address with its integrated smart home operating system [32]. Operational Factors - Seasonal factors impact SmartRent's business, with higher demand for deployments in Spring and Summer and lower demand in Fall and Winter [37]. - The company utilizes multiple sourcing methods to mitigate supply chain risks, although it relies on single source suppliers for some components [56]. Financial Position - The company had approximately $142.5 million in cash, cash equivalents, and restricted cash as of December 31, 2024, primarily in institutional money market funds, indicating exposure to interest rate risk [331]. - A hypothetical 10% change in interest rates could increase annual interest income by $14.3 million or decrease it by $8.2 million based on the cash position as of December 31, 2024 [331]. Employee Relations - The company has not experienced any work stoppages and maintains a good relationship with its 494 full-time employees as of December 31, 2024 [51]. - The total rewards program includes a 100% employer-paid medical option for employees and dependents, along with other competitive benefits [54]. Intellectual Property and Compliance - The company protects its intellectual property through trademarks, trade secrets, and patents, which are critical to its brand development [57]. - The company is subject to various federal and state regulations related to data privacy and security, including the California Consumer Privacy Act and the General Data Protection Regulation [59]. Currency and Foreign Operations - The company's operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates [332]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on historical consolidated financial statements [332]. - The company has not engaged in any hedging strategies to manage currency risk to date [332]. - As international operations grow, the company will reassess its approach to manage currency rate fluctuations [332].

Revenue Performance - Total Revenue for Q4 2024 was $35.4 million, a 41% decrease year-over-year, while full-year revenue was $174.9 million, down 26% from the prior year[4] - SaaS Revenue increased by 17% year-over-year in Q4 2024 to $13.6 million, and for the full year, it rose by 26% to $51.6 million[4] - Total revenue for the year ended December 31, 2024, was $174.885 million, a decrease of 26.1% compared to $236.838 million in 2023[33] - Professional services revenue for the full year decreased by 47% to $18.8 million, primarily due to reduced volume in New Units Deployed[6] Profitability and Loss - Net loss for Q4 2024 increased to $(11.4) million from $(3.3) million in the same quarter last year, while the full-year net loss improved to $(33.6) million from $(34.6) million[4] - Net loss for the year ended December 31, 2024, was $33.643 million, compared to a net loss of $34.587 million in 2023, showing a slight improvement[33] - Net loss for 2024 was $33,643 thousand, a slight improvement from a loss of $34,587 thousand in 2023[37] - Adjusted EBITDA for 2024 was $(9,882) thousand, an improvement from $(19,187) thousand in 2023[39] Assets and Liabilities - Total current assets decreased to $257.650 million as of December 31, 2024, down from $340.340 million in 2023, reflecting a reduction in cash and cash equivalents[35] - Total liabilities decreased to $130.741 million as of December 31, 2024, compared to $167.308 million in 2023, indicating improved financial stability[35] - Cash and cash equivalents were $142.482 million as of December 31, 2024, down from $215.214 million in 2023, highlighting liquidity challenges[35] - Total cash, cash equivalents, and restricted cash decreased to $142,482 thousand at the end of 2024 from $215,709 thousand at the end of 2023[37] Operating Expenses - Operating expenses for Q4 2024 were $23.1 million, a 1% increase year-over-year, while full-year operating expenses rose by 10% to $102.1 million[10] - Research and development expenses for the year ended December 31, 2024, were $29.369 million, slightly increasing from $28.805 million in 2023, indicating continued investment in innovation[33] Units Deployed and Market Metrics - Units Deployed reached 809,497, a 12% increase year-over-year, despite a 39% decrease in New Units Deployed during Q4[7] - Units Deployed includes the total number of Hub Devices installed with active subscriptions, which is a key metric for assessing market penetration[23] - Customer Net Revenue Retention measures SaaS revenue retention from existing customers, reflecting the company's ability to maintain and grow its customer base[31] - Average Revenue per Unit (ARPU) is used to assess the growth and health of the overall business, reflecting the company's ability to monetize its customer base effectively[27] - SaaS ARPU increased by 3% to $5.68 in Q4 2024, compared to $5.50 in the same quarter last year[5] Share Repurchase and Stock Compensation - The company repurchased 3.0 million shares at a cost of $5.1 million in Q4 2024, with a total of 15.2 million shares repurchased for $28.6 million throughout the year[4] - Payments for repurchases of Class A common stock amounted to $28,566 thousand in 2024[37] - The company incurred stock-based compensation expenses of $10,766 thousand in 2024, down from $13,271 thousand in 2023[39] Other Financial Metrics - Depreciation and amortization increased to $6,495 thousand in 2024 from $5,533 thousand in 2023[37] - Net cash used in operating activities was $32,913 thousand in 2024, compared to a cash provided of $5,981 thousand in 2023[37] - Cash used in investing activities was $7,599 thousand in 2024, compared to $6,023 thousand in 2023[37] - The company recorded a provision for expected credit losses of $1,436 thousand in 2024, up from $819 thousand in 2023[37] - The company reported a provision for excess and obsolete inventory of $2,606 thousand in 2024, compared to $2,494 thousand in 2023[37]

Financial Performance - Total revenue for Q3 2024 was $40,510,000, a decrease of 30.3% compared to $58,104,000 in Q3 2023[14] - Hardware revenue decreased to $18,707,000 in Q3 2024 from $35,631,000 in Q3 2023, representing a decline of 47.5%[14] - Hosted services revenue increased to $18,495,000 in Q3 2024, up 12.0% from $16,511,000 in Q3 2023[14] - Net loss for Q3 2024 was $9,923,000, compared to a net loss of $7,723,000 in Q3 2023, reflecting an increase in losses of 28.5%[14] - Total revenue for the nine months ended September 30, 2024, was $139,517, a decrease of 21.0% from $176,585 for the same period in 2023[84] - Total revenue decreased by $17.6 million, or 30%, to $40.5 million for the three months ended September 30, 2024, from $58.1 million for the same period in 2023[185] Assets and Liabilities - Total current assets decreased to $284,986,000 as of September 30, 2024, down 16.3% from $340,340,000 as of December 31, 2023[10] - Total liabilities decreased to $143,452,000 as of September 30, 2024, down 14.3% from $167,308,000 as of December 31, 2023[11] - Cash and cash equivalents decreased to $163,403,000 as of September 30, 2024, down 24.1% from $215,214,000 as of December 31, 2023[10] - Total stockholders' equity decreased to $305,141,000 as of September 30, 2024, down 11.0% from $342,448,000 as of December 31, 2023[12] Stock and Equity - The company repurchased Class A common stock totaling $17,214 thousand during the quarter ending September 30, 2024[20] - The company repurchased 9,767 shares of Class A common stock at an average price of $1.75 per share for a total of $17,081 during the three months ended September 30, 2024[111] - The company has approximately $26,660 remaining available for stock repurchases under its stock repurchase program as of September 30, 2024[111] - The company has an authorized stock repurchase program of up to $50,000 for Class A common stock, with approximately $22,728 remaining available for repurchase as of November 1, 2024[144] Research and Development - Research and development expenses for Q3 2024 were $6,596,000, a decrease of 12.9% compared to $7,573,000 in Q3 2023[14] - The Company capitalized $3,209 in research and development costs for the three months ended September 30, 2024, compared to $822 for the same period in 2023, representing a 290.5% increase[69] - Research and Development expenses are anticipated to increase in absolute dollars as the company invests more in product development, particularly in enhancing WiFi offerings[177] Revenue Recognition - The Company recognized hardware revenue at the point in time when the hardware device is shipped to the customer, with a one-year warranty period[58] - Hosted Services revenue is recognized on a straight-line basis over the contract term, which can range from one month to eight years[60] - Revenue recognized from the balance of deferred revenue at the beginning of the period for the nine months ended September 30, 2024, was $(8,656,000), compared to $(14,505,000) in 2023, showing a reduction of 40.00%[88] Units and Shipments - The company shipped 44,763 Units for the three months ended September 30, 2024, down 28.5% from 62,585 Units shipped in the same period of 2023[160] - For the three months ended September 30, 2024, Units Booked were 17,048, a decrease of 63.3% compared to 46,272 Units Booked in the same period of 2023[161] - New Units Deployed decreased by 50% to 67,347 units for the nine months ended September 30, 2024, compared to 135,436 units for the same period in 2023[185] Expenses - General and administrative expenses for the three months ended September 30, 2024, were $1,499, down from $1,964 in 2023, reflecting a decrease of 23.6%[128] - General and administrative expenses increased by 26% to $14.154 million for the three months ended September 30, 2024, compared to $11.269 million for the same period in 2023[183] - The company incurred $23,462 thousand in payments for repurchases of Class A common stock during the nine months ended September 30, 2024[24] Legal and Compliance - The company recorded a legal accrual of $1,500 related to a collective action lawsuit as of September 30, 2024, which was not present as of December 31, 2023[141] - The company reported a total settlement amount of $1,500 for the overtime wages lawsuit, which includes all plaintiffs' attorneys' fees and costs[141] Leadership and Strategy - The company is in the process of transitioning leadership following the departure of its CEO, with an interim CEO appointed and a search for a new CEO underway[154] - The company aims to enhance its smart home operating system with new products and features, including Community WiFi and Smart Package Room solutions, to improve customer value[152] Market Conditions - The overall decreases in New Units Deployed and Units Shipped are attributed to customers deferring capital expenditures due to broader macroeconomic conditions[185] - Changes in leadership and the structure of the sales organization have impacted sales and overall volumes[185]