SmartRent, Inc.

Previous wording

SmartRent is a category leader in the enterprise smart home solutions industry. As of March 31, 2026, we had 911,244 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 March 31, 2026, 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.

Current wording

SmartRent is a category leader in the enterprise smart home solutions industry. As of June 30, 2026, we had 929,487 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 June 30, 2026, we believe our customers owned an aggregate of approximately 6.8 million rental units. This represents approximately 14% 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 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.

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 more 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 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, 2026 and 2025, we had an aggregate of 911,244 and 827,611 Units Deployed, respectively. For the three months ended March 31, 2026 and 2025, we had 20,662 and 18,114 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 June 30, 2026 and 2025, we had an aggregate of 929,487 and 847,956 Units Deployed, respectively. For the three months ended June 30, 2026 and 2025, we had 18,857 and 21,068 New Units Deployed, respectively. For the six months ended June 30, 2026 and 2025, we had 39,519 and 39,182 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 March 31, 2026 and 2025, we had 33,466 and 43,418 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 June 30, 2026 and 2025, we had 23,249 and 26,543 Units Shipped, respectively. For the six months ended June 30, 2026 and 2025, we had 56,715 and 69,961 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 March 31, 2026 and 2025 there were 16,592 and 18,210 Units Booked, respectively. For the three months ended March 31, 2026 and 2025, ARR related to Units Booked was $1,895 and $2,246, 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 the 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 June 30, 2026 and 2025, there were 48,254 and 24,319 Units Booked, respectively. For the six months ended June 30, 2026 and 2025, there were 64,846 and 42,529 Units Booked, respectively. We have a long sales cycle, and the timing of customer decisions and orders doesn’t always align with our reporting periods. As a result, we are increasingly focused on trailing twelve-month Units Booked, which we believe provides a more meaningful view of underlying customer demand and the progress we’re making in executing our go-to-market strategy. For the trailing twelve months ended June 30, 2026 and 2025, there were 112,560 and 80,218 Units Booked, respectively. For the three months ended June 30, 2026 and 2025, ARR related to Units Booked was $3,227 and $2,397, respectively. For the six months ended June 30, 2026 and 2025, ARR related to Units Booked was $5,122 and $4,643, 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 three months ended March 31, 2026 and 2025, Bookings were $18,471 and $27,180, 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 June 30, 2026 and 2025, Bookings were $48,194 and $30,460, respectively. For the six months ended June 30, 2026 and 2025, Bookings were $66,665 and $57,640, respectively. For the trailing twelve months ended June 30, 2026 and 2025, Bookings were $124,676 and $107,203, respectively.

Previous 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 March 31, 2026, approximately 33% 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, 2026 and 2025, we generated SaaS Revenue of $15.2 million and $14.0 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 June 30, 2026, approximately 31% 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 June 30, 2026 and 2025, we generated SaaS Revenue of $16.1 million and $14.2 million, respectively. For the six months ended June 30, 2026 and 2025, we generated SaaS Revenue of $31.3 million and $28.2 million, 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 March 31, 2026 and 2025, ARR was $60.9 million and approximately $55.9 million, respectively.

Current 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 June 30, 2026 and 2025, ARR was $64.5 million and approximately $56.9 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 March 31, 2026 and 2025, Hardware ARPU was $460 and $434, 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 June 30, 2026 and 2025, Hardware ARPU was $586 and $571, respectively. For the six months ended June 30, 2026 and 2025, Hardware ARPU was $511 and $486, 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 March 31, 2026 and 2025, Professional Services ARPU was $378 and $427, 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. For the three months ended June 30, 2026 and 2025, Professional Services ARPU was $580 and $365, respectively. For the six months ended June 30, 2026 and 2025, Professional Services ARPU was $475 and $392, 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 three months ended March 31, 2026 and 2025, SaaS ARPU was $5.63 and $5.69, 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 June 30, 2026 and 2025, SaaS ARPU was $5.84 and $5.66, respectively. For the six months ended June 30, 2026 and 2025, SaaS ARPU was $5.74 and $5.67, 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 three months ended March 31, 2026 and 2025, Units Booked SaaS ARPU was $9.52 and $10.28, 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 three months ended June 30, 2026 and 2025, Units Booked SaaS ARPU was $5.57 and $8.21, respectively. For the six months ended June 30, 2026 and 2025, Units Booked SaaS ARPU was $6.58 and $9.10, respectively. For the trailing twelve months ended June 30, 2026 and 2025, Units Booked SaaS ARPU was $7.09 and $9.08, 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 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. For the three months ended March 31, 2026 and 2025, our Customer Churn for our Smart Communities Solutions was 0.05% and 0.02%, 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. For the three months ended June 30, 2026 and 2025, our Customer Churn for our Smart Communities Solutions was 0.00% and 0.08%, respectively. For the six months ended June 30, 2026 and 2025, our Customer Churn for our Smart Communities Solutions was 0.05% and 0.10%, 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 106% as of March 31, 2026 compared to 102% as of March 31, 2025.

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 99% as of June 30, 2026 compared to 102% as of June 30, 2025.

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 105% as of March 31, 2026 compared to 114% as of March 31, 2025.

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 111% as of June 30, 2026 compared to 108% as of June 30, 2025.

Previous wording

(1) During the three months ended March 31, 2026, we revised the presentation of the above table by aggregating Community WiFi revenue in Other as revenue from our Community WiFi solution is becoming less significant. The revised presentation has been applied retrospectively for the comparative period ended March 31, 2025. For the three months ended March 31, 2026, total revenue attributable to Community WiFi was $190. For the three months ended March 31, 2025, revenue attributable to Community WiFi was $3 related to Hardware, $219 related to Professional Services and $193 related to Hosted Services.

Current wording

(1) During the first quarter of 2026, we revised the presentation of the above table by aggregating Community WiFi revenue in Other as revenue from our Community WiFi solution is becoming less significant. The revised presentation has been applied retrospectively for the comparative periods ended June 30, 2025. For the three months ended June 30, 2026 and 2025, total revenue attributable to Community WiFi was $262 and $304, respectively. For the three months ended June 30, 2025, revenue attributable to Community WiFi was $54 related to Hardware, $41 related to Professional Services and $209 related to Hosted Services. For the six months ended June 30, 2026 and 2025, total revenue attributable to Community WiFi was $452 and $718, respectively. For the six months ended June 30, 2025, revenue attributable to Community WiFi was $57 related to Hardware, $259 related to Professional Services and $402 related to Hosted Services.

Previous wording

(2) For the three months ended March 31, 2026 and 2025, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $2,050 and $4,658, respectively.

Current wording

(2) For the three months ended June 30, 2026 and 2025, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $1,456 and $4,619, respectively. For the six months ended June 30, 2026 and 2025, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $3,506 and $9,277, respectively.

Previous wording

The income tax expense on the Condensed Consolidated Statement of Operations and Comprehensive Loss is primarily related to the foreign and state taxes. 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. 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.

Current wording

The income tax benefit on the Condensed Consolidated Statement of Operations and Comprehensive Loss is primarily related to current year foreign losses offset by foreign and state taxes. We established a full valuation allowance for net deferred U.S. federal and state tax assets, including U.S. net operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of the U.S. federal and state deferred tax assets will be realized in future periods if we report U.S. 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 Months Ended March 31, 2026 and 2025

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Comparison of the three months ended March 31, 2026 and 2025

Current wording

Comparison of the three and six months ended June 30, 2026 and 2025

Previous wording

Hosted Services revenue decreased by approximately $1.3 million, or 7%, to $17.3 million for the three months ended March 31, 2026, from $18.6 million for the three months ended March 31, 2025. Of the $17.3 million revenue in 2026, $15.2 million is related to SaaS Revenue and $2.1 million is related to hub amortization. Revenue from hub amortization decreased by $2.6 million and revenue from SaaS increased by $1.2 million, or 9%, from the three months ended March 31, 2025 to the three months ended March 31, 2026. The increase of SaaS revenue resulted primarily from a 10% increase in the aggregate number of Units Deployed from 827,611 units at March 31, 2025 to 911,244 units at March 31, 2026, partially offset by decreased SaaS revenue earned for Smart Operations solutions.

Current wording

Hosted Services revenue decreased by approximately $1.2 million, or 7%, to $17.6 million for the three months ended June 30, 2026, from $18.8 million for the three months ended June 30, 2025. Of the $17.6 million revenue in 2026, $16.1 million is related to SaaS Revenue and $1.5 million is related to hub amortization. Revenue from hub amortization decreased by $3.1 million and revenue from SaaS increased by $1.9 million, or 13%, from the three months ended June 30, 2025 to the three months ended June 30, 2026. The increase of SaaS revenue resulted primarily from a 10% increase in the aggregate number of Units Deployed from 847,956 units at June 30, 2025 to 929,487 units at June 30, 2026.

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. As noted above, revenue from hub amortization decreased by $2.6 million from the three months ended March 31, 2025 to the three months ended March 31, 2026. During the remainder of 2026, hub amortization is expected to further decrease by $8.1 million compared to the same periods in 2025. 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 approximately $5.7 million from the six months ended June 30, 2025 to the six months ended June 30, 2026. During the remainder of 2026, hub amortization is expected to further decrease by $4.8 million compared to the same periods in 2025. The table below shows the expected revenue contribution from hub amortization.

Previous wording

Total cost of revenue decreased by $4.2 million, or 15%, to $23.6 million for the three months ended March 31, 2026, from $27.8 million for the three months ended March 31, 2025. The decrease in cost of revenue resulted primarily from a $1.4 million decrease in professional services personnel-related expenses, a $1.2 million decrease in hub amortization, and a 23% decrease in Units Shipped, partially offset by an unfavorable product mix related to locks.

Current wording

Total cost of revenue decreased by $6.2 million, or 12%, to $47.2 million for the six months ended June 30, 2026, from $53.4 million for the six months ended June 30, 2025. The decrease in cost of revenue resulted primarily from a $2.7 million decrease in hub amortization, and a 19% decrease in Units Shipped.

Previous wording

Hardware cost of revenue decreased by $1.4 million, or 10%, to $12.6 million for the three months ended March 31, 2026, from $14.0 million for the three months ended March 31, 2025. This decrease in hardware cost of revenue was primarily attributable to a 23% decrease in Units Shipped partially offset by an unfavorable product mix related to locks.

Current wording

Hardware cost of revenue decreased by $2.3 million, or 9%, to $24.5 million for the six months ended June 30, 2026, from $26.8 million for the six months ended June 30, 2025. This decrease in hardware cost of revenue was primarily attributable to a 19% decrease in Units Shipped partially offset by an unfavorable product mix related to locks.

Previous wording

Professional services cost of revenue decreased by $1.4 million, or 19%, to $5.9 million for the three months ended March 31, 2026, from $7.3 million for the three months ended March 31, 2025. The decrease in professional services cost of revenue is primarily attributable to a decrease of $1.4 million in fixed, personnel-related costs resulting from actions executed in the second half of 2025 and improved installation efficiencies.

Current wording

Professional services cost of revenue decreased by $0.7 million, or 6%, to $12.8 million for the six months ended June 30, 2026, from $13.5 million for the six months ended June 30, 2025. The decrease in professional services cost of revenue is primarily attributable to a decrease of $2.6 million in fixed, personnel-related costs resulting from actions executed in the second half of 2025, partially offset by an increase of $2.3 million in third-party direct labor costs.

Previous wording

Hosted Services cost of revenue decreased by $1.4 million, or 22%, to $5.1 million for the three months ended March 31, 2026, from $6.5 million for the three months ended March 31, 2025. The decrease resulted from a $1.2 million decrease in hub amortization expense.

Current wording

Hosted Services cost of revenue decreased by approximately $1.6 million, or 26%, to $4.9 million for the three months ended June 30, 2026, from $6.5 million for the three months ended June 30, 2025. The decrease resulted from a $1.4 million decrease in hub amortization expense.

Previous wording

Research and development expenses decreased by approximately $2.2 million, or 26%, to $6.1 million for the three months ended March 31, 2026, from $8.3 million for the three months ended March 31, 2025, primarily related to a decrease of $1.4 million in personnel-related expenses and a $0.5 million decrease in stock compensation. We believe our research and development expenses will increase in future periods in connection with expenses required to execute Vision 2028.

Current wording

Research and development expenses decreased by $0.9 million, or 14%, to $5.6 million for the three months ended June 30, 2026, from $6.5 million for the three months ended June 30, 2025, primarily related to a decrease of $1.2 million in personnel-related expenses. We believe our research and development expenses will increase in future periods in connection with expenses required to execute Vision 2028.

Previous wording

Sales and marketing expenses decreased by approximately $0.4 million, or 7%, to $4.4 million for the three months ended March 31, 2026 from $4.8 million for the three months ended March 31, 2025, resulting primarily from a decrease of $0.2 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 organization in connection with fulfilling the objectives of Vision 2028.

Current wording

Sales and marketing expenses decreased by $1.2 million, or 18%, to $5.2 million for the three months ended June 30, 2026 from $6.4 million for the three months ended June 30, 2025, resulting primarily from a decrease of $1.3 million in third-party marketing expenses. We believe our sales and marketing expenses will increase in future periods as we continue to invest in building a scalable sales organization in connection with fulfilling the objectives of Vision 2028.

Previous wording

General and administrative expenses decreased by $7.3 million, or 43%, to $9.6 million for the three months ended March 31, 2026 from $16.9 million for the three months ended March 31, 2025. This was primarily driven by a $7.1 million decrease in legal fees and settlements.

Current wording

General and administrative expenses decreased by $6.9 million, or 24%, to $21.5 million for the six months ended June 30, 2026 from $28.4 million for the six months ended June 30, 2025. This was primarily driven by a $6.3 million decrease in legal matters.

Previous wording

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. No such charges were recorded during the remainder of 2025 or during the three months ended March 31, 2026. See Note 2 - Significant Accounting Policies for additional information.

Current wording

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. No such charges were recorded during the remainder of 2025 or during the three or six months ended June 30, 2026. See Note 2 - Significant Accounting Policies for additional information.

Previous wording

Interest income decreased by $0.4 million to $0.9 million for the three months ended March 31, 2026, from $1.3 million for the three months ended March 31, 2025. The decrease in interest income is primarily attributable to a lower cash balance on which we are earning interest, and a decrease in interest rates.

Current wording

Interest income decreased by $0.3 million to $0.8 million for the three months ended June 30, 2026, from $1.1 million for the three months ended June 30, 2025. The decrease in interest income is primarily attributable to a lower cash balance on which we are earning interest, and a decrease in interest rates.

Previous wording

Interest expense was flat at $0.1 million for the three months ended March 31, 2026 and 2025 with no significant variances.

Current wording

Interest expense was flat at $0.1 million for the three months ended June 30, 2026 and 2025.

Previous wording

Other (expense) income, net decreased by $0.1 million to $(0.1) million for the three months ended March 31, 2026, from $13 thousand for the three months ended March 31, 2025. The decrease in other (expense) income, net is primarily attributable to changes in foreign exchange rates.

Current wording

Other expense, net decreased by approximately $0.1 million to $(0.1) million for the three months ended June 30, 2026, from $(0.2) million for the three months ended June 30, 2025. The decrease in other expense, net is primarily attributable to changes in foreign exchange rates.

Previous wording

The income tax expense is related to the foreign and state taxes offset by a change in the valuation allowance.

Current wording

The income tax benefit is related to foreign losses offset by foreign and state taxes.

Previous wording

(3) During the three months ended March 31, 2026 other non-operating expenses includes capitalized software implementation amortization of $145. During the three months ended March 31, 2025 other non-operating expenses includes severance expense of $169.

Current wording

(3) During the three months ended June 30, 2026 other non-operating expenses includes capitalized software implementation amortization of $152 and capitalized software impairment of $132. During the three months ended June 30, 2025 other non-operating expenses includes severance expense of $1,247. During the six months ended June 30, 2026 other non-operating expenses includes capitalized software implementation amortization of $297 and capitalized software impairment of $208. During the six months ended June 30, 2025 other non-operating expenses includes severance expense of $1,416.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $98.8 million, which were held for working capital and general corporate purposes. Our cash equivalents are comprised primarily of money market funds. To date, our principal sources of liquidity have been the net proceeds received as a result of the business combination with SmartRent.com, Inc., and payments collected from sales to our customers.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $92.7 million, which were held for working capital and general corporate purposes. Our cash equivalents are comprised primarily of money market funds. To date, our principal sources of liquidity have been the net proceeds received as a result of the business combination with SmartRent.com, Inc., and payments collected from sales to our customers.

Previous wording

In March 2024, the Board authorized a stock repurchase program pursuant to which we may repurchase up to $50 million of our Class A common stock. Repurchases under the program may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate us to acquire any particular amount of our Class A common stock and may be suspended at any time at our discretion. The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

Current wording

Repurchases under the program may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate us to acquire any particular amount of our Class A common stock and may be suspended at any time at our discretion. The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

Previous wording

During the three months ended March 31, 2025, we repurchased 1.0 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $1.18 per share for a total of $1.2 million. There was no such activity during the three months ended March 31, 2026.

Current wording

During the three and six months ended June 30, 2026, we repurchased 2.8 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $1.21 per share for a total of $3.4 million. As of June 30, 2026, approximately $13.4 million remained available for stock repurchases pursuant to our stock repurchase program.

Previous wording

For the three months ended March 31, 2026, our operating activities used $4.5 million in cash resulting primarily from our net loss of $4.4 million and $4.9 million used in changes in our operating assets and liabilities, partially offset by $4.8 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $9.6 million decrease in deferred revenue, a $4.5 million decrease in accounts payable, and a $4.5 million decrease in accrued expenses and other liabilities, partially offset by a $10.8 million decrease in accounts receivable and a $2.5 million decrease in inventory. Non-cash expenses consisted primarily of $3.1 million of stock compensation and $2.2 million of depreciation and amortization.

Current wording

For the six months ended June 30, 2026, our operating activities used $6.2 million in cash resulting primarily from our net loss of $10.1 million and $7.2 million used in changes in our operating assets and liabilities, partially offset by $11.1 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $16.3 million decrease in deferred revenue, and a $4.5 million decrease in accounts payable, partially offset by a $9.2 million decrease in accounts receivable and a $5.0 million decrease in inventory. Non-cash expenses consisted primarily of $6.3 million of stock compensation and $4.5 million of depreciation and amortization.

Previous wording

For the three months ended March 31, 2025, our operating activities used $12.2 million in cash resulting primarily from our net loss of $40.2 million and $2.6 million used in changes in our operating assets and liabilities, partially offset by approximately $30.6 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $16.1 million decrease in deferred revenue and a $2.6 million decrease in accrued expenses and other liabilities, partially offset by a $9.4 million decrease in accounts receivable, a $2.8 million decrease in deferred cost of revenue, a $2.5 million increase in accounts payable and a $1.9 decrease in inventory. Non-cash expenses consisted primarily of a $24.9 million goodwill impairment - refer to Note 2 Significant Accounting Policies, $2.8 million of stock compensation and $1.9 million of depreciation and amortization.

Current wording

For the six months ended June 30, 2025, our operating activities used $27.1 million in cash resulting primarily from our net loss of $51.0 million and $11.5 million used in changes in our operating assets and liabilities, partially offset by approximately $35.4 million provided by non-cash expenses. Changes in our operating assets and liabilities primarily resulted from a $21.3 million decrease in deferred revenue, partially offset by a $5.1 million decrease in deferred cost of revenue, and a $2.6 increase in accrued expenses and other liabilities. Non-cash expenses consisted primarily of a $24.9 million goodwill impairment - refer to Note 2 Significant Accounting Policies, $5.0 million of stock compensation and $4.0 million of depreciation and amortization.