Matterport(US:MTTR)2025-02-26 21:23Financial Performance - Total revenue increased by $12.0 million, or 8%, to $169.7 million for the year ended December 31, 2024, from $157.7 million for the year ended December 31, 2023[324]. - Subscription revenue grew by $12.2 million, or 14%, to $99.6 million in 2024, compared to $87.3 million in 2023[324]. - Services revenue increased by $3.6 million, or 10%, to $41.3 million in 2024, up from $37.6 million in 2023[324]. - Product revenue decreased by $3.9 million, or 12%, to $28.8 million in 2024, down from $32.8 million in 2023[324]. - Gross profit rose by $12.4 million, or 18%, to $82.9 million in 2024, with a gross margin of 49% compared to 45% in 2023[324]. - Loss from operations widened by $59.6 million, or 28%, to $273.9 million in 2024, compared to a loss of $214.2 million in 2023[324]. - Net loss for 2024 was $256.6 million, an increase of $57.5 million, or 29%, from a net loss of $199.1 million in 2023[324]. - Total revenue for 2024 increased to $169.699 million, up 7.3% from $157.748 million in 2023[408]. - Subscription revenue rose to $99.590 million, a 14.3% increase from $87.348 million in 2023[408]. - The net loss for the year ended December 31, 2024, was $256.6 million, compared to a net loss of $199.1 million in 2023, reflecting an increase of 29%[416]. Revenue Composition - Subscription revenue accounted for approximately 59%, 55%, and 54% of total revenue for the years ended December 31, 2024, 2023, and 2022, respectively[274]. - Services revenue represented approximately 24%, 24%, and 20% of total revenue for the years ended December 31, 2024, 2023, and 2022, respectively[276]. - Product revenue accounted for approximately 26% of total revenue in 2022, 21% in 2023, and 17% in 2024, indicating a declining trend in product revenue contribution[281]. Market and Growth Potential - The company estimates its total addressable market to exceed $240 billion, with potential expansion beyond $1 trillion as digitization efforts grow[258][259]. - The company estimates a market opportunity exceeding $240 billion in property digitization and datafication, with potential growth to over $1 trillion as the spatial data library expands[291]. - Subscribers outside the United States accounted for approximately 43% of subscription revenues for the year ended December 31, 2024, highlighting the company's international market penetration[299]. Operational Changes and Strategy - The 2023 restructuring plan resulted in a workforce reduction of approximately 30% and was completed by December 31, 2023, with total restructuring charges of $4.296 million in 2023[268][269]. - The company is focused on scaling execution across various growth vectors, including international expansion and increased R&D investment[260]. - The company aims to enhance sales efficiency and recurring revenue growth from large enterprises while serving customers of all sizes[272]. - The company is focused on expanding its AI-powered spatial data platform globally, with significant partnerships established in Latin America and the Middle East[299]. - The company aims to deepen market penetration by leveraging its comprehensive solutions across various industries, including real estate, facilities management, and travel[298]. Cash Flow and Financial Position - Free cash flow improved to $(30.9) million for the year ended December 31, 2024, compared to $(68.6) million in 2023[347]. - Total cash, cash equivalents, and investments decreased from $423.0 million in 2023 to $304.2 million in 2024, a decline of approximately 28.1%[349]. - Net cash used in operating activities improved from $58.7 million in 2023 to $21.3 million in 2024, a reduction of approximately 63.7%[354][355]. - Net cash provided by investing activities increased significantly from $19.5 million in 2023 to $89.8 million in 2024, an increase of approximately 359.5%[356][357]. - Cash provided by financing activities decreased from $4.8 million in 2023 to $2.6 million in 2024, a decline of approximately 45.8%[358][359]. - The company reported a significant increase in cash, cash equivalents, and restricted cash at the end of the period, totaling $153.6 million, up from $82.9 million in 2023[416]. Merger and Acquisition Activity - Matterport entered into a merger agreement with CoStar Group, with each Matterport share to be converted into $2.75 in cash plus shares of CoStar Group common stock[261][262]. - The merger is expected to be completed in the first quarter of 2025, pending regulatory approvals and other closing conditions[264]. - Transaction costs related to the CoStar Group Merger were approximately $15.9 million for the year ended December 31, 2024, primarily included in selling, general, and administrative expenses[428]. Risks and Challenges - Macroeconomic and geopolitical conditions, including inflation and supply chain challenges, are impacting demand for Matterport's products[267]. - The company is subject to market risk primarily related to potential losses from adverse changes in foreign currency exchange rates[384]. - The strengthening of the U.S. dollar may decrease revenue, particularly for prices fixed in foreign currencies[385]. - The company has not engaged in any hedging strategies to manage foreign currency risk[385]. - Inflation has not had a material effect on the company's business or financial condition[386]. - A material weakness in internal control over financial reporting was identified as of December 31, 2024[392]. Research and Development - Research and development expenses decreased by $6.4 million, or 9%, to $60.9 million for the year ended December 31, 2024, primarily due to a decrease in salary and stock-based compensation expenses[335]. - The company plans to focus on in-house innovation while considering opportunistic acquisitions to enhance platform functionality[301].