SmartRent, Inc. Q4 FY2025 earnings call

• 2025 was a critical year: spent time on organization development and workflow improvement; expanded executive leadership bench; enhanced go-to-market capabilities; invested in hardware and software for customer ROI and operating leverage; reset cost structure for over $30M annualized savings.
• 2026 outlook: expect to grow total revenues supported by double-digit ARR growth due to expanded deployed unit footprint; continue to capture productivity improvement benefits.
• Vision 2028: built around two value-creation priorities - accelerating growth by reinforcing/expanding competitive moat and increasing profitability via scalable operating model; operationalized through five strategic pillars: growing installed base at double-digit pace, scaling world-class go-to-market org, deepening platform integration with data/analytics/AI, simplifying hardware architecture and investing in generation capabilities, and strengthening internal operating rigor; targeting to grow installed base at double-digit CAGR through 2028 to over 1,200,000 units by year-end 2028.

For the fourth quarter, total revenue was $36.5 million, up ~3% from $35.4 million in 2024, with SaaS revenue growing 13%. ARR grew to just under $62 million, representing approx. 40% of total revenue. Operating expenses were down 22%. Adjusted EBITDA was positive, and net loss was significantly reduced from $11.4 million to $3.2 million. For the full year 2025, total revenue was $152.3 million, down 13% year-over-year. SaaS revenue was $57.8 million, up 12% year-over-year. Core revenue (total revenue less hub amortization) for the full year was approx. $136.9 million compared to $153.3 million in fiscal 2024.

• 2026: expect to grow total revenues supported by double-digit ARR growth from expanded deployed unit footprint; believe combination of revenue growth and productivity benefits will produce positive run rates of adjusted EBITDA and free cash flow on full-year basis; targeting to reach 1,000,000 installed units over next four to five quarters; expect to be adjusted EBITDA profitable and free cash flow positive for the whole year.
• Long-term: targeting to grow installed base at double-digit CAGR through 2028 to over 1,200,000 units by year-end 2028, with expanded hardware footprint generating additional software revenues at higher rates than current average revenue per unit.

• The discussion mentions that various factors could cause actual results to be materially different from future results expressed or implied by forward-looking statements, and these factors are discussed in the SEC filings including the Annual Report on Form 10-Ks and Quarterly Reports on Form 10-Q.

Q: Hi, everyone. Nice to see the 2028 targets. I guess, in terms of the unit deployment goals, how much of that is being driven by existing customers versus net new logos? And then in terms of the sales organization and installation—installation teams—how much wood is there still to chop in order to get that capacity built out to execute on these targets?

A: Frank Martell: In terms of the sales organization, we are making a significant investment, roughly doubling the size of the sales organization, with potential partnerships with other firms for local reach expected toward end of this year; we are penetrating additional customers, with about 600 currently and looking to expand into mid and mass market as we build sales organization. Daryl Stemm: Historically, most short-term growth in unit deployments comes from existing customers, and we have plenty of growth opportunity from existing approx. 600 customers, but also expecting to address the small and medium portion of the market with renewed rigor.

Q: In terms of SaaS ARPU, I know you are targeting higher attach rates to expand ARPU in these targets. But any color you can give around the types of growth rates and overall CAGR you think is achievable in SaaS ARPU over the next three years?

A: Daryl Stemm: No specific guidance given, but we believe investing in customer-facing technology to expand offerings will have a positive impact on expanding ARPU.

Q: And then last one for me. And forgive me, you might have mentioned some of this in your prepared remarks. But for 2026, just any broad commentary on what you think is achievable from a revenue and EBITDA standpoint? And then over the course of the next few years through your 2028 targets, how you are thinking about driving operating leverage and what the ramp in EBITDA could look like?

A: Daryl Stemm: Starting with 2026, we expect to reach a million deployed units within four or five quarters, with expanded installed base as primary revenue driver; our expectation is to be adjusted EBITDA profitable and free cash flow positive for the whole year. Long-term, expanding installed base and hardware footprint will generate additional software revenues at higher rates, leading to accelerating contribution from software revenues and higher margins, driving operating leverage and EBITDA ramp.