SmartRent(SMRT) - 2024 Q3 - Quarterly Report

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]