Matterport, Inc./DE (MTTR)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 delivered total revenue of $42.216M, up 6.7% year-over-year, with subscription revenue a record $24.155M (+16% YoY) and ARR reaching a record $96.6M; GAAP diluted EPS was $(0.45) while non-GAAP diluted EPS improved to $(0.02), a 71% YoY improvement .
• Gross profit improved YoY and gross margin expanded versus Q2 2023; however, GAAP results were significantly impacted by a $95M litigation expense in Q2, which management excludes in non-GAAP results to show core operating performance .
• Matterport suspended guidance and did not host an earnings call due to the pending acquisition by CoStar; stockholders approved the transaction on July 26, 2024, with closing subject to remaining regulatory approvals. Terms value MTTR at $5.50 per share (cash and CoStar stock mix) referenced to April 19, 2024 CoStar price .
• Operational KPIs remained strong: subscribers 1.06M (+28% YoY), spaces 13.0M (+24% YoY), and square feet under management 44.0B (+33% YoY), underscoring subscription mix expansion and platform engagement .

What Went Well and What Went Wrong

What Went Well

• Subscription growth and mix: “Subscription revenue increased by 16% year-over-year, reaching a record $24.2 million, and now accounts for over 57% of our total revenue” — RJ Pittman, CEO .
• Non-GAAP performance improved: “Steady subscription revenue growth, gross margin expansion, and continued operating expense discipline drove our non-GAAP loss per share to $0.02, which is a 71% year-on-year improvement” — JD Fay, CFO .
• Product innovation momentum: Management highlighted AI initiatives including Project Genesis and Property Intelligence from the Winter Release, positioning Matterport for future product breakthroughs in the Fall Release .

What Went Wrong

• GAAP loss widened sharply due to one-time litigation expense: Q2 included $95M litigation expense, driving GAAP net loss per share to $(0.45) despite improved non-GAAP EPS .
• No earnings call and guidance suspended amid transaction: The company did not hold a Q2 call and withdrew guidance given the CoStar transaction, limiting near-term visibility for investors .
• Product revenue declined YoY: Product revenue fell to $7.180M from $7.988M YoY, reflecting hardware demand variability and mix shift toward SaaS .

Financial Results

Segment revenue mix shows steady subscription expansion and robust services in Q2. Gross margin percent is calculated from reported gross profit and revenue in each period.

KPIs

Non-GAAP reconciliation notes: Non-GAAP net loss excludes stock-based compensation-related charges, fair value changes of warrants, amortization of acquired intangibles, acquisition-related transaction costs, and Q2 litigation expense; diluted share counts provided in the reconciliation tables .

Guidance Changes

Company stated it would not provide quarterly or full-year guidance due to the pending CoStar transaction and did not host a Q2 earnings call .

Earnings Call Themes & Trends

Note: No Q2 2024 call was held due to the pending acquisition; themes reflect press-release commentary.

Management Commentary

• RJ Pittman, CEO: “Subscription revenue increased by 16% year-over-year, reaching a record $24.2 million… This growth highlights our strategic focus on expanding the recurring subscription revenue within our business… Our latest AI initiative, Project Genesis… have been well received… We are actively developing the future of the digital twin and look forward to unveiling more breakthroughs in our Fall Release later this year.”
• JD Fay, CFO: “Steady subscription revenue growth, gross margin expansion, and continued operating expense discipline drove our non-GAAP loss per share to $0.02, which is a 71% year-on-year improvement.”
• Transaction update: “Matterport will not be holding a conference call… and will not be providing financial guidance for the upcoming fiscal quarter… Stockholders approved the transaction… completion remains subject to HSR waiting period expiration/termination and other closing conditions.”

Q&A Highlights

• No Q2 earnings call or webcast was held due to the pending CoStar acquisition; no Q&A session occurred .

Estimates Context

• Wall Street consensus (S&P Global) was unavailable via the SPGI tool mapping for MTTR; therefore, a formal comparison to consensus revenue and EPS cannot be provided at this time. As a result, estimate-based beat/miss analysis is omitted. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

• Core subscription strength and ARR records continue to validate the SaaS mix shift; services momentum contributed to Q2 revenue outperformance versus prior quarters .
• The sharp GAAP loss is driven by a $95M litigation expense; non-GAAP results strip this out and show significant YoY improvement, aligning with management’s profitability focus. Expect investors to focus on non-GAAP trajectory while assessing one-time legal impacts .
• With guidance suspended and no call, near-term visibility is limited; focus shifts to transaction milestones and regulatory approvals as primary stock catalysts .
• Product innovation and AI initiatives (Project Genesis; Property Intelligence) plus enterprise integrations (AWS IoT competency, MLS integrations) strengthen the strategic moat and potential cross-sell within CoStar’s ecosystem post-close .
• KPIs (subscribers, spaces, square feet) show robust engagement growth, which should sustain ARR momentum into the transaction closing period .
• Investors should monitor: timing and conditions of the CoStar closing (HSR status), any further legal developments tied to the Q2 litigation expense, and continuity of customer adoption trends through the transition .
• Short term: Trading likely anchored by merger arbitrage dynamics around the $2.75 cash + CoStar stock exchange ratio mechanics; medium term: integration prospects with CoStar’s platforms may expand monetization of digital twins and AI-driven property intelligence at scale .