SmartRent, Inc.
For the period ended Dec 31, 2025. Filed Mar 4, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 4, 2026
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-K
Period ended 2024-12-31; filed 2025-03-05.
0000950170-25-033086
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-04.
0001193125-26-089953
Item 7. 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 156 previous paragraphs and 173 current paragraphs.
101 unchanged; 47 reworded; 23 added; 8 removed; 0 previous and 2 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 (23)
Current report
Earlier in 2025, the U.S. government announced tariffs on goods imported from various countries to the U.S. Countries subject to such tariffs have imposed or may in the future impose reciprocal or retaliatory tariffs and other trade measures. An increase in tariffs could have an adverse impact on our cost structure, supply chain, and broader economic environment.
Current report
In June 2025, we introduced an AI-powered intelligence layer and enhanced energy management tools designed to empower operators. Our energy management tools are powered by real-time thermostat and device data, which can help operators identify energy waste and make smarter energy decisions without adopting new systems or undergoing extra training.
Current report
Impairment Charge
Current report
Impairment charge consists of goodwill impairment. See Note 2 - Significant Accounting Policies for more information.
Current report
Hardware revenue decreased by approximately $24.8 million, or 30%, to $58.0 million for the year ended December 31, 2025, from $82.8 million for the year ended December 31, 2024. This decrease in hardware revenue was driven by a 35% decrease in Units Shipped to 110,011 for the year ended December 31, 2025 from 169,476 for the year ended December 31, 2024.
Current report
Hosted Services cost of revenue decreased by $1.1 million, or 4%, to $23.5 million for the year ended December 31, 2025, from $24.6 million for the year ended December 31, 2024. The decrease resulted from a $3.0 million decrease in hub amortization partially offset by an increase in capitalized software amortization costs of $1.2 million due to the completion of projects related to internal processes that drive efficiencies and customer-facing enhancements. These increases were primarily driven by a 10% increase in the aggregate number of Units Deployed resulting in a greater number of active subscriptions for our software service applications.
Current report
Research and development expenses decreased by $3.1 million, or 11%, to $26.2 million for the year ended December 31, 2025, from $29.4 million for the year ended December 31, 2024, primarily related to a decrease of $2.0 million in personnel-related expenses and $1.0 in stock compensation.
Current report
For the year ended December 31, 2025, general and administrative expenses decreased by $11.1 million, or 20%, to $43.2 million, from $54.3 million for the year ended December 31, 2024, resulting primarily from a $6.8 million decrease in legal fees and settlements, a $2.5 million decrease in severance, a $2.3 million decrease related to the impairment of an investment in a non-affiliate in the prior year, and a $0.8 million decrease in business insurance, partially offset by a $2.6 million increase in personnel-related expenses.
Current report
Goodwill Impairment Charge
Current report
During the year ended December 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
Interest expense was flat at $0.4 million for the years ended December 31, 2025 and 2024.
Current report
Other (expense) income, net decreased by $0.6 million to approximately $(0.4) million for the year ended December 31, 2025, from $0.2 million for the year ended December 31, 2024. The decrease in other (expense) income, net is primarily attributable to an increase in legal settlement expenses of $0.5 million.
Current report
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have benefited from the restoration of 100% bonus depreciation and the favorable treatment of research and development expenditures under Section 174 enacted by the OBBBA, and the effects of the legislation have been reflected in our income tax provision.
Current report
(2) Refer to Note 2 "Significant Accounting Policies".
Current report
(3) Inventory write-offs related to the sunsetting of our parking management solution.
Current report
For the year ended December 31, 2025, our operating activities used $21.6 million in cash resulting primarily from our net loss of $60.6 million and $6.8 million used in changes in our operating assets and liabilities, partially offset by approximately $45.8 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $31.7 million decrease in deferred revenue and an $11.3 million decrease in accrued expenses and other liabilities, partially offset by a $12.9 million decrease in accounts receivable, $8.6 million decrease in deferred cost of revenue, a $6.6 million decrease in prepaid expenses and other assets, a $4.5 million decrease in inventory and a $4.2 million increase in accounts payable. Non-cash expenses consisted primarily of goodwill impairment of $24.9 million - refer to Note 2 Significant Accounting Policies, stock compensation of $8.8 million, depreciation and amortization of $8.4 million and provision for excess and obsolete inventory of $4.2 million.
Current report
For the year ended December 31, 2025, we used $8.6 million of cash for investing activities, resulting primarily from cash paid of $5.1 million for capitalized internal-use software development costs and $3.6 million for the purchase of property and equipment, including $3.3 million related to tenant improvements at our Phoenix office headquarters.
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 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 $24.9 million during the three months ended March 31, 2025.
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 as they may be based on varying assumptions which could lead to materially different results. Our goodwill balance was $92.3 million and $117.3 million as of December 31, 2025 and December 31, 2024, respectively.
Removed paragraphs (8)
Previous report
On July 30, 2024, we announced the departure of Lucas Haldeman, the Company’s Chief Executive Officer and Chairman of the Board, effective July 29, 2024. As part of the transition, Mr. Haldeman resigned as a member of the Board, effective July 29, 2024. We appointed Daryl Stemm, the Company’s Chief Financial Officer, as the Interim Principal Executive Officer, effective as of July 29, 2024. John Dorman, the Board’s lead independent director, was appointed Chairman of the Board, and the Board formed an Operating Committee of independent directors and a Management Committee of current executives to guide us through the transition period.
Previous report
Hardware revenue decreased by $54.4 million, or 40%, to $82.8 million for the year ended December 31, 2024, from $137.2 million for the year ended December 31, 2023. This decrease in hardware revenue was driven by a decrease in revenue related to our Smart Apartments Solutions and resulted from a 25% decrease in Units Shipped to 169,476 for the year ended December 31, 2024 from 226,722 for the year ended December 31, 2023, and a Hardware ARPU decrease of 19% to $489 for the 2024 period from $605 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
Hosted Services cost of revenue increased by approximately $1.6 million, or 7%, to $24.6 million for the year ended December 31, 2024, from $23.0 million for the year ended December 31, 2023. The increase resulted from a 12% 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 $0.8 million, partially offset by a $1.4 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 increased by $0.6 million, or 2%, to $29.4 million for the year ended December 31, 2024, from $28.8 million for the year ended December 31, 2023, primarily related to an increase of $0.3 million in business applications and software and $0.2 million in personnel-related expenses. 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
For the year ended December 31, 2024, general and administrative expenses increased by $9.6 million, or 22%, to $54.3 million, from $44.7 million for the year ended December 31, 2023, resulting primarily from $11.3 million in legal fees and settlements during the year ended December 31, 2024, including $5.0 million from the settlement of a dispute with a supplier which resulted in returning $5.0 million of inventory to the supplier. See Note 12. "Commitments and Contingencies" - Legal Matters for a discussion of legal proceedings in which we are involved. Additionally, severance expense increased by $2.5 million. These increases were partially offset by a decrease of $4.5 million in personnel-related expenses.
Previous report
We do not currently expect the Inflation Reduction Act to have a material impact on our financial results, including on our annual estimated effective tax rate.
Previous report
For the year ended December 31, 2022, our operating activities used $77.8 million in cash resulting primarily from our net loss of $96.3 million and $4.9 million used in changes in our operating assets and liabilities, partially offset by $23.4 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $42.8 million increase in inventory, $15.9 million increase in accounts receivable, and $9.9 million increase in deferred cost of revenue, partially offset by a $43.7 million increase in deferred revenue, a $12.4 million increase in accounts payable, and a $3.2 million increase in accrued expenses and other liabilities. Non-cash expenses consisted primarily of stock-based compensation of $13.7 million, compensation expense related to acquisitions of $5.0 million, $4.4 million of asset impairment, and depreciation and amortization of $4.3 million, partially offset by a deferred tax benefit of $5.7 million resulting from the SightPlan acquisition.
Previous report
For the year ended December 31, 2022, we used $134.0 million of cash for investing activities, resulting primarily from $129.7 million used for the SightPlan acquisition, net of cash acquired.
Reworded paragraphs (47)
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 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.
Current wording
Through Hub Devices, which integrate our enterprise software with third party smart devices, 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 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 December 31, 2024, we had 809,497 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 7.4 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.
Current wording
SmartRent is a category leader in the enterprise smart home solutions industry. As of December 31, 2025, we had 890,870 Units Deployed (as defined below) and approximately 600 customers who either have an active subscription or have purchased any SmartRent product in the past twelve months, including many of the largest multifamily residential owners in the United States. As of December 31, 2025, we believe our customers owned an aggregate of approximately 6.6 million rental units. This represents approximately 13% 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 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 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 4.4 years.
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 subscription fees collected from customers to provide Hosted Services including access controls, asset monitoring, 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 3.9 years.
Previous wording
We believe that our success is dependent on many factors, including those further discussed below. Our operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our ability to grow our customer base in a cost-effective manner, expand our hardware and hosted service offerings to generate increased revenue per Unit Deployed (as defined below), and provide high quality hardware products and hosted service applications to maximize revenue and improve the leverage of our business model. While these areas represent opportunities for us, they also represent challenges and risks that we must successfully address in order to operate our business.
Current wording
We believe that our success is dependent on many factors, including those further discussed below. Our operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our ability to grow our customer and installed base in a cost-effective manner, expand our hardware and hosted service offerings to generate increased revenue per Unit Deployed (as defined below), and provide high quality hardware products and hosted service applications to maximize revenue and improve the leverage of our business model. While these areas represent opportunities for us, they also represent challenges and risks that we must successfully address in order to operate our business.
Previous wording
We continue to experience improvements in the challenges related to the global supply chain. In prior periods, the increased demand for electronics as a result of the COVID-19 pandemic, U.S. trade relations with China and certain other factors in recent periods led to a global shortage of semiconductors, including Z‑wave chips, which are a central component of our Hub Devices. Due to this shortage in prior periods, we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. We also experienced shortages and shipment delays related to components for Access Control and made-to-order specialty locks.
Current wording
We continue to experience improvements in the challenges related to the global supply chain. In prior periods, the increased demand for electronics as a result of the COVID-19 pandemic, U.S. trade relations with China and certain other factors in recent periods led to a global shortage of semiconductors, including Z‑wave chips, which are a central component of our Hub Devices. Due to this shortage in prior periods, we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. We also experienced shortages and shipment delays related to components for access control systems and made-to-order specialty locks.
Previous wording
We are evolving our business into a more diverse platform with new products, features and functionality that enhance the value of our smart home operating system. We have introduced a number of SaaS product enhancements and features, including Answer Automation and Work Management solutions, that streamline property management operations. We have also introduced Community WiFi, which provides communities with a private, device-dedicated WiFi network to power Hub Devices and other in-home smart devices, and Smart Package Room, which is a smart package management solution that transforms package visibility, reduces labor demands, optimizes storage space and enhances resident satisfaction. Our Smart Operations Solutions enhance our overall platform offering and customer value proposition by providing a comprehensive one-stop platform that broadens our support of property operations, enhancing the experience for residents, property owners and managers. We offer an open-API architecture that enables a myriad of third-party partner integrations, resulting in a multi-functional platform that enhances property management workflow efficiencies, empowers teams to get more done, elevates resident interactions, and improves resident living experiences. In the future, we intend to continue to release new products and solutions and enhance our existing products and solutions, and we expect that our operating results will be impacted by these releases.
Current wording
We are evolving our business into a more diverse platform with new products, features and functionality that enhance the value of our smart home operating system. We have introduced a number of SaaS product enhancements and features, including Answer Automation and Work Management solutions, that streamline property management operations. We have also introduced other in-home smart devices, and Smart Package Room, which is a smart package management solution that transforms package visibility, reduces labor demands, optimizes storage space and enhances resident satisfaction. Our Smart Operations Solutions enhance our overall platform offering and customer value proposition by providing a comprehensive one-stop platform that broadens our support of property operations, enhancing the experience for residents, property owners and managers. We offer an open-API architecture that enables third-party partner integrations, resulting in a multi-functional platform that enhances property management workflow efficiencies, empowers team productivity, elevates resident interactions, and improves resident living experiences. In the future, we intend to continue to release new products and solutions and enhance our existing products and solutions, and we expect that our operating results will be impacted by these releases.
Previous wording
On January 27, 2025, we announced the appointment of Michael Shane Paladin as President and Chief Executive Officer and member of the Board. Mr. Paladin’s employment commenced on February 24, 2025 (the "Start Date"). Mr. Paladin replaces Daryl Stemm who had been serving as Interim Principal Executive Officer since July 29, 2024. Mr. Stemm will continue to serve as our Chief Financial Officer. The Management Committee of SmartRent and the Operating Committee of the Board dissolved effective as of the Start Date.
Current wording
In June 2025, we announced the appointment of Frank Martell as President and Chief Executive Officer. Mr. Martell replaced John Dorman, who had been serving as Interim Chief Executive Officer and President. Mr. Dorman will continue to serve as our Board Chair.
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. 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 December 31, 2024, 2023 and 2022, we had an aggregate of 809,497, 719,691 and 547,196 Units Deployed, respectively. For the years ended December 31, 2024, 2023 and 2022, we had 89,806, 172,495 and 207,711 New Units Deployed, respectively.
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 December 31, 2025, 2024 and 2023, we had an aggregate of 890,870, 809,497 and 719,691 Units Deployed, respectively. For the years ended December 31, 2025, 2024 and 2023 we had 82,626, 89,806 and 172,495 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 years ended December 31, 2024, 2023 and 2022, we had 169,476, 226,722 and 200,169 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 years ended December 31, 2025, 2024 and 2023 we had 110,011, 169,476 and 226,722 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 years ended December 31, 2024, 2023 and 2022 there were 121,670, 173,195 and 282,512 Units Booked, respectively. For the year ended December 31, 2024, ARR (as defined below) related to Units Booked was $8,410.
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 years ended December 31, 2025, 2024 and 2023 there were 90,243, 121,670 and 173,195 Units Booked, respectively. For the years ended December 31, 2025 and 2024, ARR (as defined below) related to Units Booked was $9,102 and 8,410, 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, 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 years ended December 31, 2024, 2023 and 2022, Bookings were $133,836, $158,453 and $242,957, 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 years ended December 31, 2025, 2024 and 2023 Bookings were $115,650, $133,836 and $158,453, respectively.
Previous wording
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 December 31, 2024, 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 years ended December 31, 2024, 2023 and 2022, we generated SaaS Revenue of $51.6 million, $41.1 million and $27.8 million, respectively.
Current wording
We define SaaS Revenue as 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 December 31, 2025, approximately 34% 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 years ended December 31, 2025, 2024 and 2023, we generated SaaS Revenue of $57.8 million, $51.6 million and $41.1 million, respectively.
Previous wording
We define 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 December 31, 2024, 2023 and 2022, ARR was approximately $54.4 million, $46.2 million and $32.3 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 December 31, 2025, 2024 and 2023, ARR was approximately $61.6 million, $54.4 million and $46.2 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 years ended December 31, 2024, 2023 and 2022, Hardware ARPU was $489, $605 and $436, 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 years ended December 31, 2025, 2024 and 2023, Hardware ARPU was $527, $489 and $605, 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. 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 years ended December 31, 2024, 2023 and 2022, Professional Services ARPU was $344, $255 and $182, respectively, per the new definition of Professional Services ARPU. Under the previous definition, Professional Services ARPU was $209, $206 and $156 for the years ended December 31, 2024, 2023 and 2022, 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 years ended December 31, 2025, 2024 and 2023, Professional Services ARPU was $413, $344 and $255, respectively, per the new definition of Professional Services ARPU. Under the previous definition, Professional Services ARPU was $256, $209 and $206 for the years ended December 31, 2025, 2024 and 2023, 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 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 years ended December 31, 2024, 2023 and 2022, SaaS ARPU was $5.63, $5.40 and $5.32, 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 years ended December 31, 2025, 2024 and 2023, SaaS ARPU was $5.67, $5.63 and $5.40, respectively.
Previous 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 years ended December 31, 2024, 2023 and 2022, Units Booked SaaS ARPU was $6.44, $8.32 and $4.60, respectively.
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 years ended December 31, 2025, 2024 and 2023, Units Booked SaaS ARPU was $8.40, $6.44 and $8.32, 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 0.07% for the year ended December 31, 2024 compared to 0.02% and 0.01% for the years ended December 31, 2023 and 2022, respectively.
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 previous Units Deployed 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 0.15% for the year ended December 31, 2025 compared to 0.07% and 0.02% for the years ended December 31, 2024 and 2023, respectively.
Previous 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 101% as of December 31, 2024 compared to 105% as of December 31, 2023.
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 108% as of December 31, 2025 compared to 101% as of December 31, 2024 and 105% as of December 31, 2023.
Previous wording
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 111% as of December 31, 2024.
Current wording
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 110% as of December 31, 2025 compared to 111% as of December 31, 2024.
Previous wording
(1) For the years ended December 31, 2024, 2023, and 2022, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $21,600, $23,097, and $20,360, respectively.
Current wording
(1) For the years ended December 31, 2025, 2024, and 2023, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $15,396, $21,600, and $23,096, respectively.
Previous wording
We generate revenue 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. These hardware devices provide features that function independently without subscription to our software, and the performance obligation for hardware revenue is considered satisfied and revenue is recognized at a point in time when the hardware device is shipped to the customer. Certain Hub Devices do not function independently without the subscription, and therefore, the revenue is recognized in Hosted Services revenue. We generally provide a one-year warranty period on hardware devices that are delivered and installed. We record the cost of the warranty as a component of cost of hardware revenue.
Current wording
We generate revenue 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. These hardware devices provide features that function independently without subscription to our software, and the performance obligation for hardware revenue is considered satisfied and revenue is recognized at a point in time when the hardware device is shipped to the customer. Certain previous versions of our Hub Devices do not function independently without the subscription, and therefore, the revenue for those Hub Devices is recognized in Hosted Services revenue. We generally provide a one-year warranty period on hardware devices that are delivered and installed. We record the cost of the warranty as a component of cost of hardware revenue.
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 ten years and include recurring fixed plan subscription fees. The weighted average length of our recurring revenue contracts is 4.4 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.
Current wording
We generate hosted services revenue from (1) the direct sale to our customers of hosted services from 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. These 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 3.9 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
Cost of revenue consists primarily of direct costs of products and services together with the indirect cost of estimated warranty expense and customer care and support over the life of the service arrangement. We expect the cost of revenue to increase in absolute dollars in future periods. We record any change to cost of job performance and job conditions in the period during which the revision is identified.
Current wording
Cost of revenue consists primarily of direct costs of products and services together with the indirect cost of estimated warranty expense and customer care and support over the life of the service arrangement. We expect the cost of revenue to increase in absolute dollars in future periods commensurate with increases in revenue. We record any change to cost of job performance and job conditions in the period during which the revision is identified.
Previous wording
Cost of hardware revenue consists primarily of direct costs of products, Hub Devices, hardware devices and supplies purchased from third-party providers, shipping costs, warehouse facility (including depreciation and amortization of capitalized assets and right-of-use assets) and infrastructure costs, personnel-related costs associated with the procurement and distribution of our products and estimated warranty expenses together with the indirect cost of customer care and support. We expect an increase in cost of hardware revenue in absolute dollars in future periods.
Current wording
Cost of hardware revenue consists primarily of direct costs of products, Hub Devices, hardware devices and supplies purchased from third-party providers, shipping costs, warehouse facility (including depreciation and amortization of capitalized assets and right-of-use assets) and infrastructure costs, personnel-related costs associated with the procurement and distribution of our products and estimated warranty expenses together with the indirect cost of customer care and support. We expect an increase in cost of hardware revenue in absolute dollars in future periods commensurate with increases in revenue.
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 and new presidential 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. We continue to monitor the change in tariffs.
Current wording
Tariffs imposed by the U.S. government since 2019, especially with respect to China, have subjected certain SmartRent products manufactured overseas to additional import duties. The amount of the import tariff has changed numerous times based on actions by the U.S. government. The U.S. government has implemented and threatened further increases to tariffs in 2025 on imports from countries such as Canada, Mexico and China. Such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future. We continue to monitor and evaluate changes in policy impacting global trade, including tariff regulations.
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 Consolidated Statement of Operations and Comprehensive Loss is primarily related to state minimum and franchise taxes. We have 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 our federal and state deferred tax assets will be realized. We believe that we have established an adequate allowance for our 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.
Current wording
The income tax expense on the Consolidated Statement of Operations and Comprehensive Loss is primarily related to state minimum and franchise taxes. We have 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 our federal and state deferred tax assets will be realized in future periods. We believe that we have established an adequate allowance for our 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
Total revenue decreased by approximately $61.9 million, or 26%, to $174.9 million for the year ended December 31, 2024, from $236.8 million for the year ended December 31, 2023. The decrease was primarily driven by a $66.0 million decrease in revenue related to our Smart Apartments solution and resulted primarily from a decrease in New Units Deployed to 89,806 units for the year ended December 31, 2024 from 172,495 units for the year ended December 31, 2023 and a 25% decrease in Units Shipped to 169,476 for the year ended December 31, 2024 from 226,722 for the year ended December 31, 2023, partially offset by a 12% increase in the number of cumulative active subscriptions for our Hosted Services during the year ended December 31, 2024 compared to the year ended December 31, 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 $22.6 million, or 13%, to $152.3 million for the year ended December 31, 2025, from $174.9 million for the year ended December 31, 2024. The decrease was primarily driven by a 35% decrease in Units Shipped to 110,011 for the year ended December 31, 2025 from 169,476 for the year ended December 31, 2024, an 8% decrease in New Units Deployed to 82,626 for the year ended December 31, 2025 from 89,806 for the year ended December 31, 2024, and a $6.2 million decrease in hub amortization, partially offset by a 20% increase in Professional Services ARPU to $413 for the year ended December 31, 2025 from $344 for the year ended December 31, 2024. The decrease in Units Shipped is primarily attributable to our decision to discontinue bulk hardware shipments. In addition, changes in leadership and the structure of our sales organization have adversely impacted sales and overall volumes.
Previous wording
Professional services revenue decreased by $16.7 million, or 47%, to $18.8 million for year ended December 31, 2024, from $35.5 million for the year ended December 31, 2023. The decrease in professional services revenue was driven by a $17.5 million decrease in revenue related to our Smart Apartments solution. New Units Deployed decreased by 48% to 89,806 units for the year ended December 31, 2024 from 172,495 units for the year ended December 31, 2023. This was partially offset by an increase in Professional services ARPU of 35% to $344 for the year ended December 31, 2024 from $255 for the year ended December 31, 2023.
Current wording
Professional services revenue increased by $2.3 million, or 12%, to $21.1 million for year ended December 31, 2025, from $18.8 million for the year ended December 31, 2024. The increase in professional services revenue was primarily driven by a 20% increase in Professional services ARPU to $413 for the year ended December 31, 2025 from $344 for the year ended December 31, 2024. The increase in ARPU was partially offset by an 8% decrease in New Units Deployed to 82,626 units for the year ended December 31, 2025 from 89,806 units for the year ended December 31, 2024.
Previous wording
Hosted Services revenue increased by $9.0 million, or 14%, to $73.2 million for the year ended December 31, 2024, from $64.2 million for the year ended December 31, 2023. Of the $73.2 million revenue in 2024, $51.6 million is related to SaaS Revenue and $21.6 million is related to hub amortization. Revenue from SaaS increased by $10.5 million and revenue from hub amortization decreased by $1.5 million from the year ended December 31, 2023 to the year ended December 31, 2024. The increase of Hosted Services revenue resulted primarily from a 12% increase in the aggregate number of Units Deployed, primarily of our Smart Apartment solution, from 719,691 units at December 31, 2023 to 809,497 units at December 31, 2024 and an increase in SaaS ARPU of 4% to $5.63 for the year ended December 31, 2024 from $5.40 for the year ended December 31, 2023.
Current wording
Hosted Services revenue was flat at $73.2 million for the years ended December 31, 2025 and December 31, 2024. Of the $73.2 million revenue in 2025, $57.8 million is related to SaaS Revenue and $15.4 million is related to hub amortization. Revenue from SaaS increased by $6.2 million, or 12%, and revenue from hub amortization decreased by $6.2 million from the year ended December 31, 2024 to the year ended December 31, 2025. The increase in SaaS revenue resulted primarily from a 10% increase in the aggregate number of Units Deployed from 809,497 units at December 31, 2024 to 890,870 units at December 31, 2025.
Previous wording
We don’t expect to deploy any more non-distinct Hub Devices, thus, the revenue contribution from hub amortization should continue to decrease in future periods until the non-distinct Hub Devices are fully amortized. The table below shows the expected revenue contribution from hub amortization.
Current wording
We don’t expect to deploy any more non-distinct Hub Devices, thus, the revenue contribution from hub amortization should continue to decrease in future periods until the non-distinct Hub Devices are fully amortized. As noted above, revenue from hub amortization decreased by $6.2 million from the year ended December 31, 2024 to the year ended December 31, 2025. In the year ending December 31, 2026, hub amortization is expected to further decrease by $10.6 million. The table below shows the expected revenue contribution from hub amortization.
Previous wording
Total cost of revenue decreased by $72.8 million, or 39%, to $114.5 million for the year ended December 31, 2024, from $187.3 million for the year ended December 31, 2023. The decrease in cost of revenue resulted primarily from a 48% decrease in New Units Deployed, a favorable product mix of our hardware devices (more heavily weighted to Alloy SmartHome hardware), and a 25% decrease in Units Shipped of our Smart Apartment solution hardware devices.
Current wording
Total cost of revenue decreased by $12.1 million, or 11%, to approximately $102.4 million for the year ended December 31, 2025, from $114.5 million for the year ended December 31, 2024. The decrease in cost of revenue resulted primarily from a 35% decrease in Units Shipped, an 8% decrease in New Units Deployed and a 27% decrease in hub amortization.
Previous wording
Hardware cost of revenue decreased by $50.0 million, or 46%, to $58.8 million for the year ended December 31, 2024, from $108.8 million for the year ended December 31, 2023. This decrease in hardware cost of revenue was primarily attributable to a favorable product mix (more heavily weighted to Alloy SmartHome hardware), resulting in improved hardware gross margin compared to the prior period, and a 25% decrease in Units Shipped.
Current wording
Hardware cost of revenue decreased by approximately $6.0 million, or 10%, to $52.8 million for the year ended December 31, 2025, from $58.8 million for the year ended December 31, 2024. This decrease in hardware cost of revenue was primarily attributable to a 35% decrease in Units Shipped, partially offset by an unfavorable product mix related to doorbells and inventory write-offs in connection with sunsetting our parking management solution.
Previous wording
Professional services cost of revenue decreased by $24.3 million, or 44%, to $31.2 million for the year ended December 31, 2024, from $55.5 million for the year ended December 31, 2023. The decrease in professional services cost of revenue is primarily attributable to a decrease of approximately $18.6 million in third-party direct labor costs due to a 48% decrease in New Units Deployed, and a decrease of $4.4 million in personnel-related costs including 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.
Current wording
Professional services cost of revenue decreased by $5.0 million, or 16%, to $26.2 million for the year ended December 31, 2025, from $31.2 million for the year ended December 31, 2024. The decrease in professional services cost of revenue is primarily attributable to a decrease of $3.3 million in personnel-related costs and travel and a $1.6 million decrease in third-party contractors driven by an 8% decrease in New Units Deployed.
Previous wording
Sales and marketing expenses decreased by $0.8 million, or 4%, to $18.4 million for the year ended December 31, 2024 from $19.2 million for the year ended December 31, 2023, resulting primarily from a decrease of approximately $1.2 million in personnel-related expenses, partially offset by an increase of $0.3 million in business applications and software. 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.
Current wording
Sales and marketing expenses increased by $1.0 million, or 5%, to approximately $19.4 million for the year ended December 31, 2025 from $18.4 million for the year ended December 31, 2024, resulting primarily from an increase of $1.0 million in third party consultants. 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 Chief Revenue Officer in September 2024.
Previous wording
Interest income, net decreased by approximately $0.4 million to $8.2 million for the year ended December 31, 2024, from $8.6 million for the year ended December 31, 2023. 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 throughout the year.
Current wording
Interest income decreased by $4.3 million to $4.3 million for the year ended December 31, 2025, from $8.6 million for the year ended December 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 throughout the year.
Previous wording
We provided a full valuation allowance on our net U.S. federal and state deferred tax assets as of December 31, 2024, and December 31, 2023. As of December 31, 2024, we had $222.9 million of U.S. federal and $215.4 million of state gross net operating loss carryforwards available to reduce future taxable income, which will be carried forward indefinitely for U.S. federal tax purposes and will expire between 2032 and 2044 for state tax purposes. The income tax expense is related to the federal, state, and international taxes payable offset by a change in the valuation allowance.
Current wording
We provided a full valuation allowance on our net U.S. federal and state deferred tax assets as of December 31, 2025, and December 31, 2024. As of December 31, 2025, we had $252.9 million of U.S. federal and $246.0 million of state gross net operating loss carryforwards available to reduce future taxable income, which will be carried forward indefinitely for U.S. federal tax purposes and will expire between 2032 and 2045 for state tax purposes. The income tax expense is related to the federal, state, and international taxes payable 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-employee warrant expense, non-recurring warranty provisions, asset impairment, 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, impairment of investment in a non-affiliate, goodwill impairment, inventory write-off, non-employee warrant expense, 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.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The table below summarizes our key metrics.
Current report — wording carried from elsewhere
During the year ended December 31, 2025, we repurchased 5.1 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $0.96 per share for a total of $4.9 million. As of December 31, 2025, approximately $16.8 million remained available for stock repurchases pursuant to our stock repurchase program.