SmartRent, Inc. Q3 FY2025 earnings call

• Third quarter was a period of substantial progress with growth in annual recurring revenue and narrowed operating loss.
• Completed $30 million cost structure reset, unlocking over $30 million of annualized expense reductions, leading to adjusted EBITDA and cash flow neutrality on a run rate basis exiting 2025.
• Exited Q3 with unrestricted cash of $100 million.
• Added a seasoned expert to simplify and automate key internal processes over 18 months, expecting financial and operational benefits from 2026.
• Operate in a large expanding market with a differentiated platform, growing SaaS footprint, and strong customer relationships with net revenue retention rate above 100%.

For Q3 2025, total revenue was $36.2 million, down 11% year-over-year. SaaS revenue reached $14.2 million, up 7% year-over-year and representing 39% of total revenue. Hardware revenue totaled $11.5 million, a 38% decline year-over-year. Professional Services revenue increased by 113% year-over-year to $7 million. Annual recurring revenue was $56.9 million, up 7% year-over-year. As of September 30, the installed base reached 870,000 units, up 11% from the prior year, with 83,000 net new units added since the same quarter prior year.

• Expect to continue significantly expanding installed base by capitalizing on investments in sales organization and expanding platform capabilities.
• Aim for adjusted EBITDA and cash flow neutrality on a run rate basis exiting 2025.
• Positioned to exit 2025 with accelerating momentum and drive durable, profitable growth in 2026 and beyond.

• Macro environment challenges creating friction in unit deployment.
• Uncertainty related to accounting estimates adjustments which can affect financial statements' representation of true results.

Q: Looking at SaaS revenue growth of 7%, that came in lower than deployed unit growth of 11%. What's the drivers?

A: The adjustments were around some accounting estimates used in calculations, a bit larger than typical this quarter.

Q: Frank, can you elaborate on progress in sales organization and annual unit deployment capacity?

A: Company has settled in 20,000 to 25,000 unit level, can do more with current capacity. Added leader driving expansion, expanded key account management structure, launched customer council.

Q: Yi Fu Lee asked about bulk hardware sales normalization and cash flow neutrality going forward?

A: Hardware revenues muted due to past bulk sales, expect hardware revenue to increase as cadence aligns with deployment. Will remain disciplined in cash use to make best decisions with $100 million cash.