LATCH(LTCH) - 2025 Q1 - Quarterly Report

Financial Performance - Software revenue for Q1 2025 was $5,159,000, a 2.4% increase from $5,037,000 in Q1 2024[149] - Total revenue for Q1 2025 reached $15,774,000, representing a 31.1% increase from $12,035,000 in Q1 2024[149] - Net loss for Q1 2025 was $11,250,000, a reduction of 17.5% compared to a net loss of $13,637,000 in Q1 2024[149] - Adjusted EBITDA for Q1 2025 was $(7,384,000), compared to $(6,077,000) in Q1 2024, reflecting a 21.5% increase in losses[149] - Total revenue for the three months ended March 31, 2025, increased by $3.7 million, or 31.1%, compared to the same period in 2024, driven primarily by a $4.2 million increase in professional services revenue[172] - The net loss for the three months ended March 31, 2025, was $11.3 million, a decrease of $2.4 million, or 17.5%, compared to the same period in 2024[172] Revenue Breakdown - Hardware revenue is generated from the sale of smart access and smart home devices, recognized upon transfer of control to customers[154] - Professional services revenue includes project-based hardware installation, technology services through HelloTech, and property management services[157] - Professional services revenue rose by 179.3% to $6.6 million for the three months ended March 31, 2025, largely due to the acquisition of HelloTech[173] Costs and Expenses - Total cost of revenue increased by $2.7 million, or 48.6%, for the three months ended March 31, 2025, primarily due to a $2.2 million rise in professional services costs[175] - Research and development expenses increased by $1.4 million, or 34.1%, for the three months ended March 31, 2025, mainly due to a rise in third-party expenses[176] - General and administrative expenses decreased by $3.9 million, or 33.1%, for the three months ended March 31, 2025, due to reductions in various non-ordinary course expenses[178] Cash Flow and Liquidity - As of March 31, 2025, the company's unrestricted cash and cash equivalents were approximately $64.7 million[182] - The company had approximately $33.5 million in net inventory as of March 31, 2025[183] - Net cash used in operating activities for Q1 2025 was $(10,137) thousand, a decrease of $21.0 million compared to $(31,100) thousand in Q1 2024[197] - Net cash used in investing activities was $(935) thousand in Q1 2025, a significant decrease of $46.1 million from net cash provided of $45,162 thousand in Q1 2024[198] - Net cash used in financing activities was $(223) thousand in Q1 2025, with no financing activities reported in Q1 2024[199] - The company experienced a $20.6 million reduction in cash outflows related to litigation and restructuring activities in Q1 2025[197] - Management is focusing on cost discipline, inventory management, and liquidity preservation to reduce operating cash usage[197] - The company expects to use its current cash and cash equivalents and available-for-sale securities to fund operational cash requirements for at least 12 months from the date of the report[189] Legal and Regulatory Matters - The company is involved in ongoing litigation and legal disputes, with non-ordinary course legal fees impacting financial results[156] - There were no off-balance sheet arrangements as of March 31, 2025, that could materially affect the company's financial condition[201] - No material changes were reported in critical accounting estimates since the 2024 Annual Report[202] - The company did not incur any significant market risk disclosures as it qualifies as a smaller reporting company[204] Leadership Changes - The company has appointed new executive leadership, including David Lillis as CEO and Jeff Mayfield as CFO, effective February 6, 2025[147] Supply Chain and Cost Expectations - The company expects hardware costs to align with revenue, influenced by supply chain constraints and shipping cost volatility[161]