SmartRent(US:SMRT)2022-11-14 00:41Financial Data and Key Metrics Changes - Total revenue for Q3 2022 was $47.5 million, up 12% from $42.4 million in Q2 2022 [15] - Adjusted EBITDA loss improved by over $2 million to $17.6 million compared to the previous quarter [20] - Total gross margin increased from 2.3% to 2.5%, marking the third consecutive quarter of improvement [18] - Net loss for the quarter was $26 million, slightly higher than the $25.6 million loss in Q2 2022 [20] - Cash position as of September 30, 2022, was approximately $217.4 million with no outstanding debt [21] Business Line Data and Key Metrics Changes - SaaS revenue reached approximately $8 million, a 4% increase from $7.6 million in Q2 2022 [17] - Average organic SaaS ARPU increased by 6.3% from $3.29 to $3.50 [17] - Hardware revenue grew by 28%, while Hosted Services revenue increased by 8% [15] - Professional Services revenue decreased by 18% due to lower unit deployments [15] Market Data and Key Metrics Changes - Over 53,000 units were deployed in Q3 2022, contributing to a total of over 500,000 units deployed [10][11] - The committed units pipeline reached an all-time high with over 800,000 units expected to come under the platform in the next two years [11] Company Strategy and Development Direction - The company is focused on increasing revenue from higher-margin sources and reducing dependency on new unit growth [16] - SmartRent aims to achieve positive adjusted EBITDA on an intra-quarter basis in 2023 while maintaining growth [23] - The company is well-positioned in the real estate ecosystem, leveraging strong relationships with top multifamily owners and operators [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, stating it remains robust despite macroeconomic pressures [10][12] - Supply chain constraints are easing, allowing for improved hardware procurement [13] - The company anticipates achieving $10 million in SaaS revenue from SightPlan this year [17] Other Important Information - The company has a liquidity position that supports organic growth plans and potential non-organic growth initiatives [21] - Updated guidance for 2022 revenue is now $165 million to $180 million, with unit deployments expected to be between 200,000 to 220,000 [22] Q&A Session Summary Question: Update on competitive front and market share shifts - Management noted no significant changes in competitive dynamics, maintaining a strong market position with more units deployed than competitors combined [29] Question: Resilience of the business in a potential recession - Management highlighted that the company's offerings help reduce costs and labor needs for property owners, making the business resilient [30] Question: Supply chain constraints and potential unit deployments - Management indicated that supply chain issues have been the primary constraint, but improvements are being seen [35] Question: Cash burn and inventory levels - Cash burn for the quarter was approximately $46 million, attributed to higher accounts receivable [42] Question: 2023 revenue and adjusted EBITDA guidance - Management reaffirmed the goal of achieving intra-quarter positive adjusted EBITDA in 2023, with guidance to be provided early in the year [44] Question: Professional Services breakeven point and capacity - Management estimated the maximum capacity for Professional Services at around 75,000 units per quarter [62] Question: Impact of new suppliers on hardware margins - Management indicated that new suppliers would likely have a net neutral impact on hardware margins, with expectations for continued margin improvement [66]