SmartRent Inc
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
SMRT$1.59-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-121840
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000950170-25-065034
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 163 previous paragraphs and 170 current paragraphs.
86 unchanged; 54 reworded; 25 added; 20 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 11 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
In January 2025, we announced the appointment of Michael Shane Paladin as President and Chief Executive Officer and member of the Board.
Current report
On May 2, 2025, we received a written notification from the NYSE that as of May 2, 2025, we are not in compliance with the continued listing standard set forth in Section 802.01C of the NYSE Listed Company Manual because the average closing price of our Class A common stock was less than $1.00 per share over a consecutive 30 trading-day period. Pursuant to Section 802.01C, we can regain compliance with the minimum share price requirement if, on the last trading-day of any calendar month during the cure period, the company has (i) a closing share price of at least $1.00 and (ii) an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. If we do not regain compliance within six months, the NYSE may commence suspension and delisting procedures with respect to our Class A common stock. We intend to notify NYSE that we intend to cure the continued listing standard deficiency and to return to compliance with Section 802.01C. We intend to monitor the closing price of the Class A common stock and to consider available alternatives, including, but not limited to, a reverse stock split, subject to stockholder approval, if necessary to cure the stock price non-compliance.
Current report
SaaS Revenue
Current report
We define SaaS Revenue as monthly subscription revenue from fees paid by customers for access to one or more of SmartRent's software applications, including access controls, asset monitoring and related services, and our Community WiFi solution. We believe that SaaS Revenue growth demonstrates our ability to acquire new customers and to maintain and expand our relationships with existing customers. More specifically, we monitor our SaaS Revenue to assess the general health and trajectory of our Hosted Services business. Arrangements with customers do not provide the customer with the right to take possession of SmartRent's software at any time. Customers are granted continuous access to the services over the contractual period. As of March 31, 2025, approximately 35% of our ARR had prepaid payment terms. We believe that our customer base is inherently sticky given the barriers to entry associated with rolling out an integrated enterprise solution across a portfolio of rental units. For the three months ended March 31, 2025 and 2024, we generated SaaS Revenue of $14.0 million and $11.9 million, respectively.
Current report
Property Net Revenue Retention
Current report
Customer Net Revenue Retention
Current report
(1) For the three months ended March 31, 2025 and 2024, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $4,658 and $6,043, respectively.
Current report
Impairment Charge
Current report
Impairment charge consists of goodwill impairment. See Note 2 - Significant Accounting Policies for more information.
Current report
Professional services revenue increased by $0.4 million, or 13%, to $3.9 million for three months ended March 31, 2025, from $3.5 million for the three months ended March 31, 2024. The increase in professional services revenue was driven by $1.1 million related to the installation of upgraded Hub Devices, which are not counted as New Units Deployed. This was partially offset by a $0.8 million decrease in revenue related to our Smart Apartments solutions. New Units Deployed decreased by 39% to 18,114 units for the three months ended March 31, 2025 from 29,710 units for the three months ended March 31, 2024.
Current report
(1) Q1 2025 amount is actuals.
Current report
Professional services cost of revenue increased by $0.9 million, or 13%, to $7.3 million for the three months ended March 31, 2025, from $6.4 million for the three months ended March 31, 2024. The increase in professional services cost of revenue is primarily attributable to an increase of approximately $1.4 million in third-party direct labor costs primarily related to the installation of upgraded Hub Devices, partially offset by a decrease of $0.5 million in personnel-related costs and travel driven by a 39% decrease in New Units Deployed.
Current report
Research and development expenses decreased by $0.1 million, or 1%, to $8.3 million for the three months ended March 31, 2025, from $8.4 million for the three months ended March 31, 2024, primarily related to an decrease of $0.5 million in personnel-related expenses, partially offset by an increase of $0.2 million in stock compensation and an increase of $0.2 million third-party consultants.
Current report
General and administrative expenses increased by $0.2 million, or 1%, to $16.9 million for the three months ended March 31, 2025 from $16.7 million for the three months ended March 31, 2024. This was primarily driven by a $1.7 million increase related to legal matters, partially offset by a $0.8 million decrease in the provision for expected credit losses. and a $0.7 million decrease in stock compensation.
Current report
Impairment Charge
Current report
During the three months ended March 31, 2025, we identified certain indicators of impairment, which resulted in a goodwill impairment charge of $24.9 million. See Note 2 - Significant Accounting Policies for additional information.
Current report
(2) Refer to Note 2 "Significant Accounting Policies"
Current report
Cash Flow Summary - Three Months Ended March 31, 2025 and 2024
Current report
Critical Accounting Estimates
Current report
Goodwill
Current report
Goodwill represents the excess of cost over net assets of our completed business combinations. We test for potential impairment of goodwill on an annual basis as of September 30 to determine if the carrying value is less than the fair value. We will conduct additional tests between annual tests if there are indications of potential goodwill impairment. During the three months ended March 31, 2025, we experienced a sustained decline in stock price, resulting in a significant decrease in market capitalization. As a result, we conducted an interim impairment test utilizing the qualitative approach and determined that impairment is more likely than not. As a result, we then performed an interim quantitative impairment test which resulted in an indication of impairment.
Current report
The fair value of the reporting unit used in this impairment test was determined using a combination of an income approach and market-based approach. The mix between the two approaches requires significant judgement. As a result of these tests, we recorded a goodwill impairment charge of $24,929.
Current report
The significant assumptions used in determining the fair value of the reporting unit under the income approach primarily relate to revenue growth rate, forecasted EBITDA and the selected discount rate used in the discounted cash flow model. The significant assumptions used in the market-based approach primarily relate to the forecasted EBITDA margin, the selected control premium, and selected revenue and EBITDA multiples, which require significant judgement.
Current report
To the extent that inputs and assumptions used in the analysis change, such as an increased discount rate, updated cash flow projections, or decreases to Guideline companies’ multiples, additional impairment charges may be recorded in the future. In addition, a further decrease in our common stock share price and market capitalization could be an indicator of a decrease in the fair value of our equity.
Current report
As noted above, the estimates and assumptions regarding expected future cash flows, discount rates, and revenue and EBITDA multiples require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical experience. These estimates have inherent uncertainties, and different assumptions could lead to materially different results. Our goodwill balance was $92.3 million and $117.3 million as of March 31, 2025 and December 31, 2024, respectively.
Removed paragraphs (20)
Previous report
For the three months ended September 30, 2024 and 2023, Units Booked SaaS ARPU was $9.73 and $9.04, respectively. For the nine months ended September 30, 2024 and 2023, Units Booked SaaS ARPU was $9.48 and $7.19, respectively.
Previous report
Net Revenue Retention
Previous report
Hardware revenue decreased by approximately $28.2 million, or 28%, to $72.5 million for the nine months ended September 30, 2024, from $100.7 million for the nine months ended September 30, 2023. This decrease in hardware revenue was driven by a decrease in revenue related to our Smart Apartments Solutions and resulted from a 18% decrease in Units Shipped to 145,287 for the nine months ended September 30, 2024 from 176,760 for the nine months ended September 30, 2023, and a Hardware ARPU decrease of 12% to $499 for the 2024 period from $570 for the 2023 period. The Hardware ARPU decrease was primarily attributable to a change in product mix which was more heavily weighted to our Alloy SmartHome hardware. The impact of the decrease in hardware revenue was mitigated by an increase in hardware gross margin, primarily driven by the product mix change in the current period.
Previous report
Professional services revenue decreased by $2.7 million, or 45%, to $3.3 million for three months ended September 30, 2024, from $6.0 million for the three months ended September 30, 2023. Of the $2.7 million decrease, $2.6 million was driven by our Smart Apartments Solution. New Units Deployed decreased by 53% to 15,168 units for the three months ended September 30, 2024 from 32,308 units for the three months ended September 30, 2023. This was partially offset by an increase in Professional services ARPU of 75% to $443 for the three months ended September 30, 2024 from $253 for the three months ended September 30, 2023. The increase in ARPU is primarily attributable to professional services that generate revenue but do not result in a New Unit Deployed such as Access Control and WiFi. During the three months ended September 30, 2024, these services generated $1.5 million of revenue, or 45% of total professional services revenue, compared to $0.9 million of revenue, or 15% of total professional services revenue during the three months ended September 30, 2023.
Previous report
Professional services revenue decreased by $16.2 million, or 56%, to $12.6 million for nine months ended September 30, 2024, from $28.8 million for the nine months ended September 30, 2023. Of the $16.2 million decrease, $15.2 million was driven by our Smart Apartments solution. New Units Deployed decreased by 50% to 67,347 units for the nine months ended September 30, 2024 from 135,436 units for the nine months ended September 30, 2023. This was partially offset by an increase in Professional services ARPU of 22% to $310 for the nine months ended September 30, 2024 from $255 for the nine months ended September 30, 2023.
Previous report
Hosted Services revenue increased by $7.4 million, or 16%, to $54.5 million for the nine months ended September 30, 2024, from approximately $47.1 million for the nine months ended September 30, 2023. Of the $54.5 million revenue in 2024, $38.0 million is related to SaaS revenue and $16.5 million is related to hub amortization. Revenue decreased from hub amortization by $1.1 million and increased from SaaS by $8.5 million from the nine months ended September 30, 2023 to the nine months ended September 30, 2024. The increase of Hosted Services revenue resulted primarily from a 15% increase in the aggregate number of Units Deployed, primarily of our Smart Apartment solution, from 682,632 units at September 30, 2023 to 787,038 units at September 30, 2024 and an increase in SaaS ARPU of 5% to $5.61 for the nine months ended September 30, 2024 from $5.33 for the nine months ended September 30, 2023.
Previous report
(1) Q1, Q2, and Q3 2024 amounts are actuals
Previous report
Total cost of revenue decreased by $54.7 million, or 38%, to $89.4 million for the nine months ended September 30, 2024, from $144.1 million for the nine months ended September 30, 2023. The decrease in cost of revenue resulted primarily from a favorable product mix of our hardware devices (more heavily weighted to Alloy SmartHome hardware), a 50% decrease in New Units Deployed and a 18% decrease in Units Shipped of our Smart Apartment solution hardware devices.
Previous report
Hardware cost of revenue decreased by $33.3 million, or 41%, to $48.8 million for the nine months ended September 30, 2024, from $82.1 million for the nine months ended September 30, 2023. This decrease in hardware cost of revenue was primarily attributable to a favorable product mix, resulting in improved hardware gross margin compared to the prior period, and a 18% decrease in Units Shipped.
Previous report
Professional services cost of revenue decreased by $4.3 million, or 39%, to $6.8 million for the three months ended September 30, 2024, from $11.1 million for the three months ended September 30, 2023. The decrease in professional services cost of revenue is primarily attributable to a decrease of approximately $2.6 million in third-party direct labor costs due to a 53% decrease in New Units Deployed, and a decrease of $1.6 million in personnel-related costs, and related travel. Additionally, we have invested in technology initiatives to allow our teams to be more efficient and furthered our collaboration with third-party partners to augment our professional services resulting in improved professional services gross margin compared to the previous period. We believe we will continue to improve efficiency in future periods.
Previous report
Professional services cost of revenue decreased by $22.4 million, or 50%, to $22.2 million for the nine months ended September 30, 2024, from $44.6 million for the nine months ended September 30, 2023. The decrease in professional services cost of revenue is primarily attributable to a decrease of approximately $17.3 million in third-party direct labor costs due to a 50% decrease in New Units Deployed, and a decrease of $4.1 million in personnel-related costs, and related travel. Additionally, we have invested in technology initiatives to allow our teams to be more efficient and furthered our collaboration with third-party partners to augment our professional services resulting in improved professional services gross margin compared to the previous period. We believe we will continue to improve efficiency in future periods.
Previous report
Hosted Services cost of revenue increased by approximately $0.9 million, or 6%, to $18.3 million for the nine months ended September 30, 2024, from $17.4 million for the nine months ended September 30, 2023. The increase resulted from a 15% increase in the aggregate number of Units Deployed and the resulting increase in the number of active subscriptions for our software service applications and an increase in personnel-related costs of $0.6 million, partially offset by a $1.1 million decrease in hub amortization. Our Hosted Services gross margin improved when compared to the same period in the prior year primarily driven by economies of scale related to our SaaS products. Additionally, Hosted Services attributable to hub amortization, which has a lower margin than our SaaS products, continues to represent a smaller portion of our Hosted Services cost of revenue.
Previous report
Research and development expenses decreased by $1.0 million, or 13%, to approximately $6.6 million for the three months ended September 30, 2024, from $7.6 million for the three months ended September 30, 2023, resulting primarily from a decrease of approximately $1.1 million in personnel-related expenses.
Previous report
Research and development expenses increased by $1.1 million, or 5%, to approximately $22.4 million for the nine months ended September 30, 2024, from $21.3 million for the nine months ended September 30, 2023, primarily related to an increase of $1.1 million in personnel-related expenses. The increase was primarily related to the employee retention credits recorded in the nine months ended September 30, 2023, which were refundable employment tax credits provided by The Coronavirus Aid, Relief, and Economic Security Act. These employment tax credits did not recur during the nine months ended September 30, 2024. We believe our research and development costs will increase in absolute dollars as we increase our investment in product development to enhance the capabilities of our solutions and introduce new products and features.
Previous report
Sales and marketing expenses decreased by $0.9 million, or 6%, to $13.7 million for the nine months ended September 30, 2024 from $14.6 million for the nine months ended September 30, 2023, resulting primarily from a decrease of approximately $1.0 million in personnel-related expenses. We believe our sales and marketing expenses will increase in future periods as we invest in building a scalable sales team, beginning with our new CRO, Natalie Cariola.
Previous report
For the three months ended September 30, 2024, general and administrative expenses increased by $2.9 million, or 26%, to $14.2 million, from $11.3 million for the three months ended September 30, 2023, resulting primarily from $2.8 million of severance and related expenses attributable to the departure of our former CEO.
Previous report
For the nine months ended September 30, 2024, general and administrative expenses increased by $9.0 million, or 26%, to $42.8 million, from $33.9 million for the nine months ended September 30, 2023, resulting primarily from a $9.7 million increase in third-party consultants. This was largely driven by a $5.3 million legal accrual recorded as of June 30, 2024, in which the Company agreed to settle a dispute with a supplier by returning $5.0 million of inventory and paying a portion of the supplier’s costs and fees. Additionally, we incurred $2.8 million of severance and related expenses attributable to the departure of our former CEO.
Previous report
Interest income, net increased by approximately $0.6 million to $6.7 million for the nine months ended September 30, 2024, from $6.1 million for the nine months ended September 30, 2023. The increase in net interest income for both periods is primarily attributable to interest earned on interest-bearing cash balances.
Previous report
Cash Flow Summary - Nine months ended September 30, 2024 and 2023
Previous report
Critical Accounting Policies and Estimates
Reworded paragraphs (54)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included herein and the consolidated financial statements and notes thereto for the year ended December 31, 2023 contained in our Annual Report on Form 10-K filed with the SEC.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included herein and the consolidated financial statements and notes thereto for the year ended December 31, 2024 contained in our Annual Report on Form 10-K filed with the SEC.
Previous wording
We are an enterprise real estate technology company that provides a comprehensive management platform designed for property owners, managers and residents. Our suite of products and services, which includes both smart building hardware and cloud-based SaaS solutions, provides seamless visibility and control over real estate assets. Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents.
Current wording
We are an enterprise real estate technology company that provides a comprehensive management platform designed for property owners, managers and residents. Our suite of products and services, which includes cloud-based SaaS solutions many of which are enabled by smart building hardware, provide seamless visibility and control over real estate assets. Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents.
Previous wording
Through a Hub Device, we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces. We use an open-architecture, brand-agnostic approach that allows owners, operators, and residents to manage their smart home systems through a single connected interface. Our Smart Community solutions include (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as, asset protection and monitoring, parking management and self-guided tours. Our Smart Operations solutions include work order management, the automation of leasing and resident call handling, audit management, and the automation of the inspection process. We also have a professional services team that provides customers with training, installation, and support services.
Current wording
Through a Hub Device, we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces. We use an open-architecture, brand-agnostic approach that allows owners, operators, and residents to manage their smart home systems through a single connected interface. Our Smart Community solutions include software and devices that power (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as asset protection and monitoring, parking management and self-guided tours. Our Smart Operations solutions include work order management, the automation of leasing and resident call handling, audit management, and the automation of the inspection process. We also have a professional services team that provides customers with training, installation, and support services.
Previous wording
SmartRent is a category leader in the enterprise smart home solutions industry. As of September 30, 2024, we had 787,038 Units Deployed (as defined below) and over 600 customers, including many of the largest multifamily residential owners in the United States. As of that date, we believe our customers owned an aggregate of approximately 7.3 million rental units. This represents approximately 17% of the United States market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners, our customers include some of the leading homebuilders, single-family rental homeowners, and iBuyers in the United States.
Current wording
SmartRent is a category leader in the enterprise smart home solutions industry. As of March 31, 2025, we had 827,611 Units Deployed (as defined below) and over 650 customers, including many of the largest multifamily residential owners in the United States. As of that date, we believe our customers owned an aggregate of approximately 7.6 million rental units; this represents approximately 15% of the United States market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners, our customers include some of the leading single-family rental homeowners, homebuilders, and iBuyers in the United States.
Previous wording
We generate revenue primarily from sales of smart home systems which enable property owners and property managers to have visibility and control over assets, while providing all-in-one home control offerings for residents. The majority of our revenue is generated from the direct sale to our customers of hardware smart home devices, which devices generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches. We also generate professional services revenue from installing smart home hardware devices and hosted services revenue from monthly subscription revenue earned from the fees collected from customers to provide access to one or more of our software applications (“Hosted Services”) including access controls, asset monitoring, WiFi, and related services. Subscription arrangements have contractual terms ranging from one month to eight years; the majority of our recurring revenue contracts range from one month to one year and our median recurring revenue contract term is one year.
Current wording
We generate revenue primarily from sales of smart home systems that enable property owners and property managers to have visibility and control over assets, while providing all-in-one home control offerings for residents. Our revenue is generated from: (1) the direct sale to our customers of hosted services from monthly subscription fees collected from customers to provide access to Hosted Services including access controls, asset monitoring, WiFi, and related services; (2) the sale and delivery of smart home devices, which generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches; and (3) installation and implementation of smart home devices that enable our Hosted Services. Subscription arrangements have contractual terms ranging from one month to ten years and the weighted average length of our recurring revenue contracts is 4.3 years.
Previous wording
The incremental improvements in the global supply chain are evidenced by our reduction of backlogged Units Deployed for Access Control and made-to-order locks. We believe that this positive trend will continue through the current year.
Current wording
The incremental improvements in the global supply chain are evidenced by our reduction of backlogged Units Deployed for Access Control and made-to-order locks.
Previous wording
Our future growth depends in part on the continued consumer adoption of hardware and software products which improve the resident experience and the growth of this market. We need to deliver solutions that enhance the resident experience and deliver value to our customers, rental property owners and operators, as well as homebuilders and developers, by providing products and solutions designed to enhance visibility and control over assets while providing additional revenue opportunities.
Current wording
Our future growth depends in part on the continued consumer adoption of software and hardware products which improve the resident experience and the growth of this market. We need to deliver solutions that enhance the resident experience and deliver value to our customers, rental property owners and operators, as well as homebuilders and developers, by providing products and solutions designed to enhance visibility and control over assets while providing additional revenue opportunities. During the year ended December 31, 2024, we experienced headwinds to adoption as certain customers deferred capital expenditures, driven by broader macroeconomic conditions, which resulted in a decrease in Units Shipped and New Units Deployed. In addition, changes in our executive leadership and the structure of our sales organization have impacted sales and overall volumes.
Previous wording
On July 30, 2024, the Company announced the departure of Lucas Haldeman, the Company’s Chief Executive Officer and Chairman of the Company’s board of directors, effective July 29, 2024. As part of the transition, Mr. Haldeman resigned as a member of the board of directors, effective July 29, 2024. The Company has appointed Daryl Stemm, the Company’s Chief Financial Officer, as the Company’s Interim Principal Executive Officer, effective as of July 29, 2024. John Dorman, the Board’s lead independent director, has been appointed Chairman of the Board, and the Board has formed a Management Committee of current executives to guide the Company through the transition period. The Board has initiated a search to identify the next CEO of SmartRent and is working with a leading executive search firm to assist in the process of identifying and evaluating candidates.
Current wording
In April 2025, we announced the departure of Mr. Paladin, effective April 9, 2025. As part of the transition, Mr. Paladin resigned as a member of the board of directors, effective April 9, 2025. We have appointed John Dorman, our Board Chair, as our Interim CEO, effective as of April 9, 2025. Alison Dean, an independent member of the Board, has been appointed lead independent director of the Board. The Board has initiated a search to identify the next Chief Executive Officer of SmartRent and is working with a leading executive search firm to assist in the process of identifying and evaluating candidates.
Previous wording
We regularly monitor a number of operating metrics in order to evaluate our operating performance, identify trends affecting our business, formulate business plans, measure our progress and make strategic decisions. Our key metrics are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our key metrics may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. The numbers that we use to calculate our key metrics are based on internal data. While these numbers are based on what we believe to be reasonable judgments and estimates for the applicable period of measurement, there are inherent challenges in measuring usage of our SaaS platform. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy.
Current wording
We regularly monitor a number of operating metrics in order to evaluate our operating performance, identify trends affecting our business, formulate business plans, measure our progress and make strategic decisions. Our key metrics are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our key metrics may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. The numbers that we use to calculate our key metrics are based on internal data. While these numbers are based on what we believe to be reasonable judgments and estimates for the applicable period of measurement, there are inherent challenges in measuring such information. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy.
Previous wording
We define Units Deployed as the aggregate number of Hub Devices that have been installed (including customer self-installations) and have an active subscription as of a stated measurement date. We utilize the Units Deployed metric to assess the health of our business and measure the trajectory of our growth. We define New Units Deployed as the aggregate number of Hub Devices that were installed (including customer self-installations) and resulted in a new active subscription during a stated measurement period. Although our revenue is primarily driven by New Units Deployed and the number of Units Deployed, due to the expansion of our products and services that don't require a Hub Device, and Hub Device upgrades that do not result in net new active subscriptions, the correlation between New Units Deployed and revenue is not as strong as it was historically.
Current wording
We define Units Deployed as the aggregate number of Hub Devices that have been installed (including customer self-installations) and have an active subscription as of a stated measurement date. We utilize the Units Deployed metric to assess the health of our business and measure the trajectory of our growth. We define New Units Deployed as the aggregate number of Hub Devices that were installed (including customer self-installations) and resulted in a new active subscription during a stated measurement period. Although our revenue is primarily driven by New Units Deployed and the number of Units Deployed, due to the expansion of our products and services that don't require a Hub Device, and Hub Device upgrades that do not result in net new active subscriptions, the correlation between New Units Deployed and revenue is not as strong as it was historically. Although the correlation has decreased, New Units Deployed is still an indicator of our ability to acquire new customers and expand our relationships with our current customers. As of March 31, 2025 and 2024, we had an aggregate of 827,611 and 749,401 Units Deployed, respectively. For the three months ended March 31, 2025 and 2024, we had 18,114 and 29,710 New Units Deployed, respectively.
Previous wording
We define Units Shipped as the aggregate number of Hub Devices that have been shipped to customers during a stated measurement period. Units Shipped is used to assess the trajectory of our growth and is an indicator of our ability to acquire new customers and expand our relationships with our current customers. However, we caution that Units Shipped also includes Hub Devices for upgrades and out of warranty replacements and may not be an indicator of New Units Deployed in future periods. For the three months ended September 30, 2024 and 2023, we had 44,763 and 62,585 Units Shipped, respectively. For the nine months ended September 30, 2024 and 2023, we had 145,287 and 176,760 Units Shipped, respectively.
Current wording
We define Units Shipped as the aggregate number of Hub Devices that have been shipped to customers during a stated measurement period. Units Shipped is used to assess the trajectory of our growth and is an indicator of our ability to acquire new customers and expand our relationships with our current customers. However, we caution that Units Shipped also includes Hub Devices for upgrades and out of warranty replacements and may not be an indicator of New Units Deployed in future periods. For the three months ended March 31, 2025 and 2024, we had 43,418 and 51,744 Units Shipped, respectively.
Previous wording
We define Units Booked as the aggregate number of Hub Device units subject to binding orders executed during a stated measurement period that will result in a New Unit Deployed. We utilize the concept of Units Booked to measure estimated near-term resource demand and the resulting approximate range of post-delivery revenue that we will earn and record. Units Booked represent binding orders only. For the three months ended September 30, 2024 and 2023 there were 17,048 and 46,272 Units Booked, respectively. For the nine months ended September 30, 2024 and 2023 there were 101,029 and 131,347 Units Booked, respectively. For the three and nine months ended September 30, 2024, ARR (as defined below) related to Units Booked was $1,991 and $7,301, respectively.
Current wording
We define Units Booked as the aggregate number of Hub Device units subject to binding orders executed during a stated measurement period that will result in a New Unit Deployed. We utilize the concept of Units Booked to measure estimated near-term resource demand and the resulting approximate range of post-delivery revenue that we will earn and record. Units Booked represent binding orders only. For the three months ended March 31, 2025 and 2024 there were 18,210 and 46,290 Units Booked, respectively. For the three months ended March 31, 2025 and 2024, ARR (as defined below) related to Units Booked was $2,246 and $3,980, respectively.
Previous wording
We define Bookings as the contract value of hardware, professional services, and the first year of ARR for binding orders executed during a stated measurement period. We utilize Bookings to measure revenue expected to be earned in future periods from orders contracted during the current period. For the three months ended September 30, 2024 and 2023, Bookings were $19,582 and $49,661, respectively. For the nine months ended September 30, 2024 and 2023, Bookings were $103,864 and $118,505, respectively.
Current wording
We define Bookings as the contract value of hardware, professional services, and the first year of ARR for binding orders executed during a stated measurement period, including renewals and upgrades. We utilize Bookings to measure revenue expected to be earned in future periods from orders contracted during the current period. For the three months ended March 31, 2025 and 2024, Bookings were $27,180 and $38,761, respectively.
Previous wording
We define Annual Recurring Revenue (“ARR”) as the annualized value of our SaaS revenue earned in the current quarter, which we calculate by taking the total amount of SaaS revenue in the current quarter and multiplying that amount by four. We believe that ARR growth demonstrates our ability to acquire new customers and to maintain and expand our relationships with existing customers. More specifically, we monitor our ARR to assess the general health and trajectory of our Hosted Services business. As of September 30, 2024 and 2023, ARR was approximately $53.2 million and $43.3 million, respectively.
Current wording
We define Annual Recurring Revenue ("ARR") as the annualized value of our SaaS Revenue earned in the current quarter, which we calculate by taking the total amount of SaaS Revenue in the current quarter and multiplying that amount by four. We believe that ARR growth demonstrates our ability to acquire new customers and to maintain and expand our relationships with existing customers. More specifically, we monitor our ARR to assess the general health and trajectory of our Hosted Services business. As of March 31, 2025 and 2024, ARR was approximately $55.9 million and $47.6 million, respectively.
Previous wording
We define Hardware ARPU as total hardware revenue during a given period divided by the total Units Shipped during the same period. Hardware ARPU is used to evaluate the effectiveness of our hardware pricing and assess our ability to market and sell our hardware offerings. For the three months ended September 30, 2024 and 2023, Hardware ARPU was $418 and $569, respectively. For the nine months ended September 30, 2024 and 2023, Hardware ARPU was $499 and $570, respectively.
Current wording
We define Hardware ARPU as total hardware revenue during a given period divided by the total Units Shipped during the same period. Hardware ARPU is used to evaluate the effectiveness of our hardware pricing and assess our ability to market and sell our hardware offerings. For the three months ended March 31, 2025 and 2024, Hardware ARPU was $434 and $562, respectively.
Previous wording
We define Professional Services ARPU as total professional services revenue during a given period divided by the total New Units Deployed, excluding customer self-installations, during the same period. Professional Services ARPU is used to assess our ability to effectively price our installation services. For the three months ended September 30, 2024 and 2023, Professional Services ARPU was $443 and $253, respectively. For the nine months ended September 30, 2024 and 2023, Professional Services ARPU was $310 and $255, respectively.
Current wording
We define Professional Services ARPU as total professional services revenue during a given period divided by the total New Units Deployed, excluding customer self-installations, during the same period. Professional Services ARPU is used to assess our ability to effectively price our installation services. During the year ended December 31, 2024, we updated the denominator of the calculation to exclude self-installations as self-installations don't materially contribute to professional services revenue. For the three months ended March 31, 2025 and 2024, Professional Services ARPU was $427 and $223, respectively, per the new definition of Professional Services ARPU. Under the previous definition, Professional Services ARPU was $215 and $221 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
We define SaaS ARPU as total SaaS revenue during a given period divided by the average aggregate Units Deployed in the same period. Average aggregate Units Deployed is calculated as the Units Deployed as of the current period plus the Units Deployed as of the previous period divided by two. SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions. For the three months ended September 30, 2024 and 2023, SaaS ARPU was $5.70 and $5.41, respectively. For the nine months ended September 30, 2024 and 2023, SaaS ARPU was $5.61 and $5.33, respectively.
Current wording
We define SaaS ARPU as total SaaS Revenue during a given period divided by the average aggregate Units Deployed in the same period divided by the number of months in the period. Average aggregate Units Deployed is calculated as the Units Deployed as of the current period plus the Units Deployed as of the previous period divided by two. SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions. For the three months ended March 31, 2025 and 2024, SaaS ARPU was $5.69 and $5.41, respectively.
Previous wording
We define Units Booked SaaS ARPU as the first year ARR for binding orders executed during the stated measurement period divided by the total Units Booked in the same period. Units Booked SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions for orders executed during the period.
Current wording
We define Units Booked SaaS ARPU as the first year ARR for binding orders with Units Booked executed during the stated measurement period divided by the total Units Booked in the same period divided by the number of months in the period. Units Booked SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions for orders executed during the period. For the three months ended March 31, 2025 and 2024, Units Booked SaaS ARPU was $10.28 and $7.16, respectively.
Previous wording
We define Customer Churn as cancelled deployed units during the measurement period divided by Units Deployed as of the beginning of the measurement period. Cancelled deployed units are the previously deployed units that have been cancelled during the same measurement period in which a customer cancels all product subscriptions. Our Hosted Services growth is driven by our ability to retain our customers and minimize Customer Churn. Our Customer Churn for our Smart Communities Solutions is 0.01% for the three months ended September 30, 2024 and 2023. Our Customer Churn for our Smart Communities Solutions is 0.06% for the nine months ended September 30, 2024 compared to 0.02% for the nine months ended September 30, 2023.
Current wording
We define Customer Churn as cancelled deployed units during the measurement period divided by Units Deployed as of the beginning of the measurement period. Cancelled deployed units are the previously deployed units that have been cancelled during the same measurement period in which a customer cancels all product subscriptions. Our Hosted Services growth is driven by our ability to retain our customers and minimize Customer Churn. Our Customer Churn for our Smart Communities Solutions was 0.02% for the three months ended March 31, 2025 and March 31, 2024.
Previous wording
We define Net Revenue Retention as SaaS revenue at the end of the current period related to properties which had SaaS revenue at the end of the same period in the prior year, divided by SaaS revenue at the end of the same period in the prior year for those same properties. Net Revenue Retention includes additions to revenue from price increases on existing products, and additions of new products at existing properties, offset by any reductions in revenue caused by cancellations or downgrades. Net Revenue Retention was 101% as of September 30, 2024.
Current wording
We define Property Net Revenue Retention as SaaS Revenue at the end of the current period related to properties which had SaaS Revenue at the end of the same period in the prior year, divided by SaaS Revenue at the end of the same period in the prior year for those same properties. Property Net Revenue Retention includes additions to revenue from price increases on existing products, additions of new products at existing properties and transfers of ownership, offset by any reductions in revenue caused by cancellations or downgrades. Property Net Revenue Retention was 102% as of March 31, 2025 compared to 105% as of March 31, 2024.
Previous wording
Hosted Services primarily consist of monthly subscription revenue earned from the fees collected from customers to provide access to one or more of our software applications including access controls, asset monitoring and related services. These subscription arrangements have contractual terms ranging from one month to eight years and include recurring fixed plan subscription fees. The majority of our recurring revenue contracts range from one month to one year and our median recurring revenue contract term is one year. Our arrangements do not provide the customer with the right to take possession of our software at any time. Customers are granted continuous access to the services over the contractual period. Accordingly, fees collected for subscription services are recognized on a straight-line basis over the contract term beginning on the date the subscription service is made available to the customer.
Current wording
We generate hosted services revenue from (1) the direct sale to our customers of hosted services from monthly subscription fees collected from customers to provide access to one or more of our software applications including access controls, asset monitoring, WiFi, and related services (“Hosted Services”) and (2) the amortization of non-distinct Hub Devices. The subscription arrangements have contractual terms ranging from one month to ten years and include recurring fixed plan subscription fees. The weighted average length of our recurring revenue contracts is 4.3 years. Our arrangements do not provide the customer with the right to take possession of our software at any time. Customers are granted continuous access to the services over the contractual period. Accordingly, fees collected for subscription services are recognized on a straight-line basis over the contract term beginning on the date the subscription service is made available to the customer.
Previous wording
We sell certain Hub Devices, which only function with the subscription to our software applications and related hosting services. We consider those devices and hosting services subscription as a single performance obligation, and therefore we defer the recognition of revenue for those devices that are sold with application subscriptions. The estimated average in-service life of those devices is four years. When a Hub Device without independent functionality is included in a contract that does not require a long-term service commitment, the customer obtains a material right to renew the service because purchasing a new device is not required upon renewal. If a contract contains a material right, proceeds are allocated to the material right and recognized over the period of benefit, which is generally four years.
Current wording
We sold certain Hub Devices, which only function with the subscription to our software applications and related hosting services. We consider those devices and hosting services subscription as a single performance obligation, and therefore we defer the recognition of revenue for those devices that are sold with application subscriptions. The estimated average in-service life of those devices is four years. When a Hub Device without independent functionality is included in a contract that does not require a long-term service commitment, the customer obtains a material right to renew the service because purchasing a new device is not required upon renewal. If a contract contains a material right, proceeds are allocated to the material right and recognized over the period of benefit, which is generally four years. We do not expect to deploy any more non-distinct Hub Devices.
Previous wording
In 2019, the U.S. administration imposed significant changes to U.S. trade policy with respect to China. Tariffs have subjected certain SmartRent products manufactured overseas to additional import duties. The amount of the import tariff has changed numerous times based on action by the U.S. administration. We continue to monitor the change in tariffs. If tariffs are increased, such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future.
Current wording
In 2019, the U.S. administration imposed significant changes to U.S. trade policy with respect to China. Tariffs have subjected certain SmartRent products manufactured overseas to additional import duties. The amount of the import tariff has changed numerous times based on action by the U.S. administration. We continue to monitor changes in policy impacting global trade, including tariff regulation. For example, the U.S. administration recently announced additional tariffs on imports from Canada, Mexico and China. Such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future.
Previous wording
Research and development expenses consist primarily of personnel-related costs directly associated with our research and development activities. Our research and development efforts are focused on enhancing and developing additional functionality for our existing products and on new product development. We account for the cost of research and development by capitalizing qualifying costs, which are incurred during the product development stage, and amortizing those costs over the product’s estimated useful life, which generally ranges from three to five years depending on the type of application. Costs incurred and capitalized during the product development stage generally include the costs of software configuration, coding, and testing. Such costs primarily include payroll and payroll-related expenses for employees directly involved in the product development. We expense preliminary evaluation costs as they are incurred before technological feasibility is achieved, as well as post development implementation and operation costs, such as training, maintenance and minor upgrades. We begin amortizing capitalized costs when a project is ready for its intended use, and we periodically reassess the estimated useful life of a project considering the effects of obsolescence, technology, competition and other economic factors which may result in a shorter remaining life. We believe our research and development costs will increase in absolute dollars as we increase our investment in product development to broaden the capabilities of our solutions and introduce new products and features - in particular as we enhance our WiFi offering.
Current wording
Research and development expenses consist primarily of personnel-related costs directly associated with our research and development activities. Our research and development efforts are focused on enhancing and developing additional functionality for our existing products and on new product development. We account for the cost of research and development by capitalizing qualifying costs, which are incurred during the product development stage, and amortizing those costs over the product’s estimated useful life, which generally ranges from three to five years depending on the type of application. Costs incurred and capitalized during the product development stage generally include the costs of software configuration, coding, and testing. Such costs primarily include payroll and payroll-related expenses for employees directly involved in the product development. We expense preliminary evaluation costs as they are incurred before technological feasibility is achieved, as well as post development implementation and operation costs, such as training, maintenance and minor upgrades. We begin amortizing capitalized costs when a project is ready for its intended use, and we periodically reassess the estimated useful life of a project considering the effects of obsolescence, technology, competition and other economic factors which may result in a shorter remaining life. We believe our research and development costs will increase in absolute dollars as we increase our investment in product development to broaden the capabilities of our solutions and introduce new products and features.
Previous wording
Our sales and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include personnel-related costs, sales commissions, marketing programs, trade shows, and promotional materials. Our sales and marketing expenses may increase over time as we hire additional sales and marketing personnel, increase our marketing activities, grow our operations, and continue to build brand awareness.
Current wording
Our sales and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include personnel-related costs, sales commissions, marketing programs, trade shows, and promotional materials. Our sales and marketing expenses may increase over time as we hire additional sales and marketing personnel, increase our lead generation activities, grow our operations, and continue to build brand awareness.
Previous wording
General and administrative expenses consist primarily of personnel-related costs associated with our general and administrative organization, professional fees for legal, accounting and other consulting services, office facility, insurance, information technology costs, and expenses incurred as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and stock exchange listing requirements, additional insurance expense, investor relations activities and other administrative and professional services. We may also increase the size of our general and administrative staff in order to support the growth of our business but at a rate that is lower than the corresponding increase in total revenue.
Current wording
General and administrative expenses consist primarily of personnel-related costs associated with our general and administrative organization, professional fees for legal, accounting and other consulting services, office facility, insurance, information technology costs, legal settlements, and expenses incurred as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and stock exchange listing requirements, additional insurance expense, investor relations activities and other administrative and professional services. We may also increase the size of our general and administrative staff in order to support the growth of our business but at a rate that is lower than the corresponding increase in total revenue.
Previous wording
The income tax expense on the Condensed Consolidated Statement of Operations and Comprehensive Loss is primarily related to the federal, state, and foreign taxes offset by a change in the valuation allowance. The Company established a full valuation allowance for net deferred U.S. federal and state tax assets, including net operating loss carryforwards. The Company expects to maintain this valuation allowance until it becomes more likely than not that the benefit of the federal and state deferred tax assets will be realized in future periods if it reports taxable income. The Company believes that it has established an adequate allowance for uncertain tax positions, although it can provide no assurance that the final outcome of these matters will not be materially different. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.
Current wording
The income tax expense on the Condensed Consolidated Statement of Operations and Comprehensive Loss is primarily related to the foreign and state taxes offset by a change in the valuation allowance. We established a full valuation allowance for net deferred U.S. federal and state tax assets, including net operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of the federal and state deferred tax assets will be realized in future periods if it reports taxable income. We believe that we have established an adequate allowance for uncertain tax positions, although we can provide no assurance that the final outcome of these matters will not be materially different. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.
Previous wording
Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Results of Operations for the Three Months Ended March 31, 2025 and 2024
Previous wording
Comparison of the three and nine months ended September 30, 2024 and 2023
Current wording
Comparison of the three months ended March 31, 2025 and 2024
Previous wording
Total revenue decreased by $17.6 million, or 30%, to $40.5 million for the three months ended September 30, 2024, from $58.1 million for the three months ended September 30, 2023. The decrease was primarily driven by a $17.4 million decrease in revenue related to our Smart Apartments solution. The decrease in revenue resulted primarily from a 53% decrease in New Units Deployed to 15,168 units for the three months ended September 30, 2024 from 32,308 units for the three months ended September 30, 2023 and a 28% decrease in Units Shipped to 44,763 for the three months ended September 30, 2024 from 62,585 for the three months ended September 30, 2023, partially offset by a 15% increase in the number of cumulative active subscriptions for our Hosted Services during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Overall decreases in New Units Deployed and Units Shipped are primarily attributable to our customers' decisions to defer capital expenditures, driven by broader macroeconomic conditions. In addition, changes in leadership and the structure of our sales organization have impacted sales and overall volumes.
Current wording
Total revenue decreased by approximately $9.1 million, or 18%, to $41.3 million for the three months ended March 31, 2025, from $50.5 million for the three months ended March 31, 2024. The decrease was primarily driven by a $9.1 million decrease in revenue related to our Smart Apartments solution which resulted primarily from a decrease in New Units Deployed to 18,114 units for the three months ended March 31, 2025 from 29,710 units for the three months ended March 31, 2024 and a 16% decrease in Units Shipped to 43,418 for the three months ended March 31, 2025 from 51,744 for the three months ended March 31, 2024, partially offset by a 10% increase in the number of cumulative active subscriptions for our Hosted Services during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Overall decreases in New Units Deployed and Units Shipped are primarily attributable to our customers' decisions to defer capital expenditures, driven by broader macroeconomic conditions. In addition, changes in leadership and the structure of our sales organization have adversely impacted sales and overall volumes.
Previous wording
Hardware revenue decreased by $16.9 million, or 47%, to $18.7 million for the three months ended September 30, 2024, from $35.6 million for the three months ended September 30, 2023. This decrease in hardware revenue was driven by a decrease in revenue related to our Smart Apartments Solutions and primarily resulted from a 28% decrease in Units Shipped to 44,763 for the three months ended September 30, 2024 from 62,585 for the three months ended September 30, 2023.
Current wording
Hardware revenue decreased by $10.2 million, or 35%, to $18.8 million for the three months ended March 31, 2025, from $29.1 million for the three months ended March 31, 2024. This decrease in hardware revenue was driven by a decrease in revenue related to our Smart Apartments Solutions which resulted from a 16% decrease in Units Shipped to 43,418 for the three months ended March 31, 2025 from 51,744 for the three months ended March 31, 2024, and a Hardware ARPU decrease of 23% to $434 for the 2025 period from $562 for the 2024 period. The Hardware ARPU decrease was primarily attributable to a change in customer mix.
Previous wording
Hosted Services revenue increased by $2.0 million, or 12%, to $18.5 million for the three months ended September 30, 2024, from $16.5 million for the three months ended September 30, 2023. Of the $18.5 million revenue in 2024, $13.3 million is related to SaaS revenue and $5.2 million is related to hub amortization. Revenue increased from SaaS by $2.5 million and decreased from hub amortization by $0.5 million from the three months ended September 30, 2023 to the three months ended September 30, 2024. The increase of Hosted Services revenue resulted primarily from a 15% increase in the aggregate number of Units Deployed, primarily of our Smart Apartment solution, from 682,632 units at September 30, 2023 to 787,038 units at September 30, 2024 and an increase in SaaS ARPU of 5% to $5.70 for the three months ended September 30, 2024 from $5.41 for the three months ended September 30, 2023.
Current wording
Hosted Services revenue increased by $0.6 million, or 4%, to $18.6 million for the three months ended March 31, 2025, from $18.0 million for the three months ended March 31, 2024. Of the $18.6 million revenue in 2025, $14.0 million is related to SaaS Revenue and $4.6 million is related to hub amortization. Revenue from SaaS increased by $2.1 million, or 17%, and revenue from hub amortization decreased by $1.4 million from the three months ended March 31, 2024 to the three months ended March 31, 2025. The increase of Hosted Services revenue resulted primarily from a 10% increase in the aggregate number of Units Deployed, primarily of our Smart Apartment solution, from 749,401 units at March 31, 2024 to 827,611 units at March 31, 2025 and an increase in SaaS ARPU of 5% to $5.69 for the three months ended March 31, 2025 from $5.41 for the three months ended March 31, 2024.
Previous wording
Total cost of revenue decreased by $17.5 million, or 39%, to $27.1 million for the three months ended September 30, 2024, from $44.6 million for the three months ended September 30, 2023. The decrease in cost of revenue resulted primarily from a 53% decrease in New Units Deployed and a 28% decrease in Units Shipped of our Smart Apartment solution hardware devices.
Current wording
Total cost of revenue decreased by $3.3 million, or 11%, to $27.8 million for the three months ended March 31, 2025, from $31.1 million for the three months ended March 31, 2024. The decrease in cost of revenue resulted primarily from a 39% decrease in New Units Deployed and a 16% decrease in Units Shipped of our Smart Apartment solution hardware devices.
Previous wording
Hardware cost of revenue decreased by approximately $13.8 million, or 50%, to $13.8 million for the three months ended September 30, 2024, from $27.6 million for the three months ended September 30, 2023. This decrease in hardware cost of revenue was primarily attributable to a favorable product mix, resulting in improved hardware gross margin compared to the prior period, and a 28% decrease in Units Shipped.
Current wording
Hardware cost of revenue decreased by $4.7 million, or 25%, to $14.0 million for the three months ended March 31, 2025, from $18.7 million for the three months ended March 31, 2024. This decrease in hardware cost of revenue was primarily attributable to a 16% decrease in Units Shipped.
Previous wording
Hosted Services cost of revenue increased by $0.5 million, or 8%, to $6.4 million for the three months ended September 30, 2024, from $5.9 million for the three months ended September 30, 2023. The increase resulted from a 15% increase in the aggregate number of Units Deployed and the resulting increase in the number of active subscriptions for our software service applications partially offset by a $0.4 million decrease in hub amortization.
Current wording
Hosted Services cost of revenue increased by approximately $0.6 million, or 10%, to $6.5 million for the three months ended March 31, 2025, from $5.9 million for the three months ended March 31, 2024. The increase resulted from a 10% increase in the aggregate number of Units Deployed and the resulting increase in the number of active subscriptions for our software service applications and an increase in personnel-related costs of $0.4 million, partially offset by a $0.4 million decrease in hub amortization.
Previous wording
Sales and marketing expenses decreased by $0.2 million, or 4%, to $4.4 million for the three months ended September 30, 2024 from $4.6 million for the three months ended September 30, 2023, resulting primarily from a decrease in personnel-related expenses. We believe our sales and marketing expenses will increase in future periods as we invest in building a scalable sales team, beginning with our new Chief Revenue Officer ("CRO"), Natalie Cariola.
Current wording
Sales and marketing expenses increased by $0.2 million, or 5%, to $4.8 million for the three months ended March 31, 2025 from $4.6 million for the three months ended March 31, 2024, resulting primarily from an increase of $0.1 million in stock compensation and $0.1 million in advertising. We believe our sales and marketing expenses will increase in future periods as we continue to invest in building a scalable sales team, which began with hiring our new Chief Revenue Officer in September 2024.
Previous wording
Interest income, net decreased by $0.2 million to $2.0 million for the three months ended September 30, 2024, from $2.2 million for the three months ended September 30, 2023. The decrease in net interest income for both periods is primarily attributable to interest earned on interest-bearing cash balances.
Current wording
Interest income, net decreased by approximately $1.3 million to $1.2 million for the three months ended March 31, 2025, from $2.4 million for the three months ended March 31, 2024. The decrease in net interest income is primarily attributable to a lower cash balance on which we’re earning interest, and a decrease in interest rates.
Previous wording
We provided a full valuation allowance on our net U.S. federal and state deferred tax assets as of September 30, 2024, and September 30, 2023. As of December 31, 2023, the Company has gross NOLs of $204.6 million and $193.4 million for federal and state income tax return purposes, respectively. Federal NOLs can be carried forward indefinitely, while State NOLs will expire between 2032 and 2043. The Company also has $0.1 million of R&D credits available that expire in 2039.
Current wording
As of December 31, 2024, we had gross net operating losses of $222.9 million and $215.4 million for federal and state income tax return purposes, respectively. Federal net operating losses can be carried forward indefinitely, while State net operating losses will expire between 2032 and 2044. We also have $0.1 million of R&D credits available that expire in 2039.
Previous wording
The income tax expense is related to the federal, state, and foreign taxes offset by a change in the valuation allowance.
Current wording
The income tax expense is related to the foreign and state taxes offset by a change in the valuation allowance.
Previous wording
We define Adjusted EBITDA as EBITDA before expenses related to non-recurring legal matters, stock-based compensation, impairment of investment in a non-affiliate, non-recurring warranty provisions, compensation expense in connection with acquisitions, other acquisition expenses, and other expenses caused by non-recurring, or unusual, events that are not indicative of our ongoing business.
Current wording
We define Adjusted EBITDA as EBITDA before expenses related to non-recurring legal matters, stock-based compensation, goodwill impairment, non-recurring warranty provisions, other acquisition expenses, and other expenses caused by non-recurring, or unusual, events that are not indicative of our ongoing business.
Showing the first 40 of 54 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
We define Customer Net Revenue Retention as SaaS Revenue at the end of the current period related to customers which had SaaS Revenue at the end of the same period in the prior year, divided by SaaS Revenue at the end of the same period in the prior year for those same customers. A customer with SaaS Revenue is defined as an entity that has an active subscription during the stated period. Customer Net Revenue Retention includes additions to revenue from transfers of ownership, price increases on existing products and additions of new products at existing properties, offset by any reductions in revenue caused by cancellations or downgrades. Customer Net Revenue Retention was 114% as of March 31, 2025.
Current report — wording carried from elsewhere
The table below summarizes our key metrics.
Current report — wording carried from elsewhere
We provided a full valuation allowance on our net U.S. federal and state deferred tax assets at March 31, 2025 and 2024.
Current report — wording carried from elsewhere
During the three months ended March 31, 2024, we repurchased 1.6 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $2.74 per share for a total of $4.4 million. As of March 31, 2024, approximately $45.6 million remained available for stock repurchases pursuant to our stock repurchase program.
Current report — wording carried from elsewhere
For the three months ended March 31, 2025, our financing activities used $1.5 million of cash, resulting primarily from $1.2 million used for repurchases of Class A common stock, and $0.5 million used for taxes paid related to net share settlements of stock-based compensation awards.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Although the correlation has decreased, New Units Deployed is still an indicator of our ability to acquire new customers and expand our relationships with our current customers. As of September 30, 2024 and 2023, we had an aggregate of 787,038 and 682,632 Units Deployed, respectively. For the three months ended September 30, 2024 and 2023, we had 15,168 and 32,308 New Units Deployed, respectively. For the nine months ended September 30, 2024 and 2023, we had 67,347 and 135,436 New Units Deployed, respectively.
Previous report — wording carried elsewhere
Total revenue decreased by $37.1 million, or 21%, to $139.5 million for the nine months ended September 30, 2024, from $176.6 million for the nine months ended September 30, 2023. The decrease was primarily driven by a $38.9 million decrease in revenue related to our Smart Apartments solution. The decrease in revenue resulted primarily from a 50% decrease in New Units Deployed to 67,347 units for the nine months ended September 30, 2024 from 135,436 units for the nine months ended September 30, 2023 and a 18% decrease in Units Shipped to 145,287 for the nine months ended September 30, 2024 from 176,760 for the nine months ended September 30, 2023, partially offset by a 15% increase in the number of cumulative active subscriptions for our Hosted Services during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Overall decreases in New Units Deployed and Units Shipped are primarily attributable to our customers' decisions to defer capital expenditures, driven by broader macroeconomic conditions. In addition, changes in leadership and the structure of our sales organization have impacted sales and overall volumes.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2023, our financing activities used $1.5 million of cash, resulting primarily from $1.7 million used for earnout payments related to the iQuue acquisition.