SmartRent, Inc. (SMRT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $41.3M, down 18% YoY but up sequentially vs Q4 2024; SaaS revenue grew 17% YoY to $14.0M, with SaaS now 33.8% of mix, supporting the hardware-to-SaaS pivot .
• GAAP net loss widened to $(40.2)M due to a non-cash goodwill impairment of $24.9M; Adjusted EBITDA was $(6.4)M vs $0.4M in Q1 2024, reflecting lower hardware volumes and mix shift impacts .
• Against S&P Global consensus, revenue modestly beat, while EPS and EBITDA missed: Revenue $41.344M vs $40.104M*, EPS -$0.0523* vs -$0.04*, EBITDA -$10.053M* vs -$4.572M*; note definitional differences vs company-reported EBITDA/Adjusted EBITDA [Values retrieved from S&P Global].
• Management withheld sales guidance, cited tariff risk potentially up to ~$2M in 2H25, and expects cash burn to improve in 2H25 after cost actions; NYSE minimum price notice and CEO transition frame near-term stock narrative .

What Went Well and What Went Wrong

• What Went Well

  • SaaS momentum: SaaS revenue +17% YoY to $14.0M; SaaS ARPU up 5% to $5.69; SaaS gross margin 70.7% remains strong . “We continued to shift our revenue mix toward higher-margin, recurring SaaS streams” — CFO Daryl Stemm .
  • Mix shift execution: Hosted services gross profit rose to $12.1M (flat YoY), while professional services gross loss narrowed QoQ in Q4 and remains a focus area for improvement .
  • Cost discipline and liquidity: >$10M annualized cost savings executed; cash $125.6M, no debt, $75M undrawn revolver; repurchased ~1.0M shares for $1.2M, with $20.4M remaining under authorization .

• What Went Wrong

  • Hardware and bookings softness: Hardware revenue fell 35% YoY; Units Booked -61% YoY; Total Bookings $27.2M (-30% YoY), reflecting go-to-market transition and macro headwinds .
  • Margin compression: Total gross margin 32.8% vs 38.5% YoY, driven by hardware product/customer mix; SaaS gross margin edged down to 70.7% vs 74.4% YoY .
  • Goodwill impairment and estimate misses: $24.9M non-cash impairment drove net loss; S&P EPS/EBITDA missed consensus, underscoring near-term execution drag [Values retrieved from S&P Global].

Financial Results

Segment revenue breakdown:

KPIs and unit economics:

Consensus vs actual (S&P Global; Primary EPS basis; company EBITDA definitions differ):

Values retrieved from S&P Global.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic pivot: “Shift toward a hardware-enabled SaaS model that prioritizes recurring revenue, customer value, and long-term profitable growth.” — Interim CEO John Dorman .
• Cost focus and margin path: “We have now executed more than $10 million in cost reductions… enabling SmartRent to execute our growth strategy while driving improved margin performance and enhanced cash flow generation over time.” — CFO Daryl Stemm .
• Execution overhang, solvable: “The challenges we faced are largely execution related and solvable… anchored by a growing base of high-margin SaaS revenue and a more streamlined cost structure.” — Interim CEO John Dorman .
• Impairment context: “Goodwill impairment… reflects a GAAP accounting adjustment… and does not represent a change in the company’s view of the intrinsic or long-term value of the business.” — CFO Daryl Stemm .

Q&A Highlights

• Cost savings timing: $10M annualized savings taken in April; adjusted EBITDA benefit starts in Q2, full effect in Q3; Q2 cash flow neutral due to severance/one-time items .
• Sales org/customer success ramp: Initial build complete; customer-facing ops consolidated into success; ramp time needed; expect proof points over 2025 .
• CEO search: Board moved quickly; qualities sought include recurring revenue operational execution at scale; announcement expected in weeks .
• Tariff exposure: Potential ~$2M in 2H25; mitigation via relocating manufacturing and supplier negotiations; exposure subject to tariff changes and pass-throughs .
• Proof points: Sustainable acceleration in bookings is the principal evidence management is targeting .

Estimates Context

• Revenue beat consensus by ~$1.24M*; Primary EPS missed by ~$0.0123*; EBITDA missed by ~$5.48M* versus S&P Global consensus for Q1 2025 [Values retrieved from S&P Global].
• Low estimate counts (2 for revenue/EPS in Q1 2025) suggest sparse coverage; consensus likely to re-anchor post impairment and mix shift [Values retrieved from S&P Global].
• Company-reported Adjusted EBITDA of $(6.372)M differs from S&P’s normalized EBITDA; investors should focus on company’s non-GAAP trajectory and margin levers .

Key Takeaways for Investors

• Recurring revenue pivot is on track: SaaS +17% YoY and mix at 33.8% supports quality of revenue; watch SaaS ARPU and net revenue retention for durability .
• Hardware/Bookings softness and margin compression are the near-term headwinds; bookings acceleration is the critical proof point for demand recovery .
• Impairment-driven GAAP loss clouds optics; underlying liquidity remains strong with $125.6M cash and no debt, providing runway to execute .
• Cost actions should improve cash use in 2H 2025; Q2 is a transition quarter due to severance/one-time items — position sizing should reflect timing .
• Tariff risk (~$2M potential) and NYSE minimum price notice are external overhangs; mitigation plans are in motion but headline risk persists .
• Leadership transition is active; appointment of a permanent CEO with scaled SaaS execution experience is a potential catalyst for sentiment and bookings trajectory .
• Trade tactically on updates to bookings, CEO hire, and tariff mitigation; medium-term thesis hinges on SaaS margin scale, operating leverage, and customer success-led expansion .

Additional relevant Q1 period press releases:

• CEO resignation and interim CEO appointment (Apr 10, 2025) .
• NYSE continued listing notice (May 2, 2025), potential reverse split option under evaluation .