Executive Summary

Q4 2024 marked a difficult transition quarter: total revenue fell 41% YoY to $35.4M as hardware and deployments declined, while SaaS revenue grew 17% YoY and ARR reached $54.4M, evidencing the pivot to a SaaS-first model .
Gross margin held at 28.7% (+50 bps YoY), but operating expenses and mix shift drove a larger net loss of $(11.4)M (vs. $(3.3)M in Q4’23); Adjusted EBITDA was $(7.4)M (vs. $0.7M) .
Management withdrew financial guidance earlier in 2024 and did not reinstate it in Q4; they flagged Q1’25 cash usage at a similar pace to Q4 and targeted cost reductions beginning in Q2’25 as visibility improves .
New CEO Shane Paladin (joined Feb 24, 2025) emphasized accelerating a SaaS transformation and rebuilding sales execution; CFO cited channel partner underperformance, macro CapEx delays, and potential tariff risk as key near-term headwinds and catalysts to watch for sentiment inflection (reinstated guidance, sales rebuild traction, SmartOps roadmap) .

What Went Well and What Went Wrong

What Went Well
- SaaS momentum: Q4 SaaS revenue +17% YoY to $13.6M; ARR rose to $54.4M (from $46.2M), with SaaS ARPU +3% to $5.68, reflecting pricing leverage .
- Margin resilience in transition: Q4 total gross margin improved to 28.7% (from 28.2%); FY gross margin +1,360 bps to 34.5% on mix, cost controls, SmartOps scaling .
- Capital allocation: Repurchased 3.0M shares for $5.1M in Q4; $21.6M remains on the $50M authorization; ended Q4 with ~$142.5M cash and no debt .
- Quote (CEO): “I see tremendous untapped potential in our core SaaS offering... to accelerate our transformation into a true SaaS-first company” .
What Went Wrong
- Top-line contraction: Q4 total revenue down 41% YoY to $35.4M on lower units shipped/deployed; hardware revenue down 72% YoY to $10.4M .
- Profitability deterioration: Net loss widened to $(11.4)M in Q4 (vs. $(3.3)M); Adjusted EBITDA fell to $(7.4)M (vs. $0.7M) on mix and lower scale .
- Demand/visibility challenges: Units Booked down 51% YoY; New Units Deployed down 39% YoY; CFO cited failed channel partner program, sales rebuild, macro CapEx delays, and tariff policy uncertainty as headwinds to near-term bookings and visibility .

Financial Results

Overall P&L and Key Profitability Metrics

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$48.5	$40.5	$35.4
Net Loss ($M)	$(4.6)	$(9.9)	$(11.4)
EPS (Basic & Diluted)	$(0.02)	$(0.05)	$(0.06)
Total Gross Margin %	35.7%	33.2%	28.7%
Adjusted EBITDA ($M)	$0.9	$(3.8)	$(7.4)
Cash, Cash Eq. & Restricted Cash ($M)	$187.4	$163.7	$142.5

Revenue Mix (Segments)

Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
Hardware	$24.7	$18.7	$10.4
Professional Services	$5.8	$3.3	$6.2
Hosted Services (incl. SaaS)	$18.0	$18.5	$18.8
Total Revenue	$48.5	$40.5	$35.4

SaaS and Operating KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
SaaS Revenue ($M)	$12.8	$13.3	$13.6
ARR ($M)	$51.2	$53.2	$54.4
SaaS ARPU ($/mo)	$5.63	$5.70	$5.68
Units Deployed (period-end)	771,870	787,038	809,497
Average Aggregate Units Deployed	760,636	779,454	798,268
New Units Deployed	22,469	15,168	22,459
Hardware Units Shipped	48,780	44,763	24,189
Units Booked	37,691	17,048	20,641
Bookings ($M)	$45.5	$19.6	$30.0
Hardware ARPU ($)	$505.86	$418	$429
Prof. Services ARPU ($)	$333.45	$443	$450
Units Booked SaaS ARPU ($/mo)	$8.07	$9.73	$8.49

Notes:

Q4 SaaS represented ~38% of total revenue (vs. 19% in Q4’23), illustrating progress in recurring mix despite hardware-led declines .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance (revenue, profitability)	FY 2024 / FY 2025	Guidance suspended in Q2’24 due to leadership transition and macro uncertainty	Not reinstated in Q4’24; will monitor indicators before providing outlook	Suspended
Cash usage commentary	Q1 2025	N/A	Expect cash used through Q1’25 at a similar pace to Q4’24 (operating losses and deferred revenue effects)	New commentary
Cost structure	Starting Q2 2025	N/A	Targeted cost reductions planned to begin impacting from Q2’25 (process streamlining, org optimization, prioritizing SaaS initiatives)	New commentary
Balance sheet & liquidity	Ongoing	N/A	~$142.5M cash at 12/31/24; undrawn $75M revolver; no debt	Reiterated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
SaaS shift / ARR growth	Q2: SaaS +32% YoY; ARR $51.2M; emphasized SaaS ARPU and deployed units . Q3: SaaS +23% YoY; ARR $53.2M; reiteration of SaaS-first focus .	SaaS +17% YoY; ARR $54.4M; CEO prioritizes SaaS-first transformation .	Positive momentum in ARR; growth rate moderated as sales execution rebuilds.
Sales org & channel partners	Q2: Scaling back channel partner program; refocus on direct sales; CRO search . Q3: Hired CRO Natalie Cariola; share repurchases; $10M investment program .	Restructuring under CRO; four key hires in Jan ‘25; channel underperformance cited as revenue headwind .	Rebuild underway; execution risk near term.
Macro / CapEx timing	Q2: Customers deferring 2024 deployments to 2025; interest rate sensitivity . Q3: Election/interest rate angst; weak bookings/new deployments .	Continued CapEx caution; management expects Q1’25 cash use; targets cost actions .	Still a headwind; watch for easing rates/CapEx.
Hardware strategy	Q3: Focus hardware on enabling SaaS; de-emphasis on point-solution distractions .	CEO: not deprioritizing hardware; monetize hardware data via SmartOps; symbiotic HW/SaaS .	Aligning hardware to drive SaaS monetization.
SmartOps / product	Q2: Operational improvements; SmartOps as core value; margin gains . Q3: Platform superiority and upgrades; dashboards noted in Nov 2024 PR .	CFO: SmartOps enhancements in Q4 with more in H1’25; maintenance dashboards and AI features .	Active roadmap; supports ARPU expansion.
WiFi	Q2: WiFi opportunity remains compelling; limited 2024 impact .	No new details in Q4 call.	Stable long-term vector.
Guidance stance	Q2: Guidance suspended . Q3: Will monitor to reinstate .	Not reinstated; watching macro, sales rebuild, tariffs .	Unchanged; visibility constrained.
Tariffs / supply chain	Not highlighted in Q2/Q3.	Monitoring potential tariff changes impacting alloy products and components .	New risk introduced.
Capital returns	Q2: Active buybacks; $41.6M remaining . Q3: Repurchased 9.8M shares; $22.6M remaining .	Q4: Repurchased 3.0M shares; ~$21.6M remaining .	Ongoing capital allocation support.

Management Commentary

CEO Shane Paladin (Prepared): “I joined SmartRent because I see tremendous untapped potential in our core SaaS offering… accelerate our transformation into a true SaaS-first company” .
CEO (Q&A on hardware): “It’s not a de-emphasis [of hardware]… it’s actually monetizing it… taking all the insight that we garner from the hardware side… and being able to monetize that through the software side of the business” .
CFO Daryl Stemm (Prepared): “This quarter’s results reflect the challenging but necessary transition as we pivot toward a more sustainable business model… we’re positioning SmartRent for long-term success as a SaaS-company under Shane Paladin’s leadership” .
CFO (Outlook constraints): “We expect to see cash used through the first quarter of 2025 at the same pace… We don’t believe this trend will extend past the first quarter of 2025” and “potential tariff policy changes” reduce near-term visibility .
CFO (Cost actions): “We plan to implement targeted cost reductions… beginning to take effect in the second quarter of 2025” .

Q&A Highlights

Hardware vs SaaS monetization: CEO framed hardware as data-generative and symbiotic with SmartOps monetization; not a de-emphasis but a shift to monetize via software .
Scaling deployments and channel strategy: Sales restructuring underway under new CRO; CEO still evaluating channel/mid-market approach; focus first on fixing direct motion .
$10M investment priorities and macro: Funds targeting SmartOps development and ARR growth pillars; macro still ROI-centric, with customers pragmatic; potential tailwinds over next few years per customer dialogues .
Landlord engagement: Larger landlords’ appetite remains; focus on ROI and meeting customers “where they are”; positive responses to revamped sales motion, though early days .
Guidance and visibility: No guidance; monitoring macro, CapEx cycles, tariffs; expectation Q1’25 cash use similar to Q4 with improvement thereafter as cost measures take hold .

Estimates Context

Wall Street consensus (S&P Global/Capital IQ) was not available at run-time due to SPGI daily request limits, so we cannot quantify beats/misses for revenue or EPS for Q4 2024 at this time. We will update the comparison against S&P Global consensus once access is restored. Values retrieved from S&P Global could not be fetched due to request limits.

Key Takeaways for Investors

Mix shift is working: SaaS revenue, ARR, and SaaS ARPU are rising despite hardware/pro services contraction; long-term value hinges on executing the sales rebuild and SmartOps roadmap to accelerate ARR growth .
Near-term caution: Hardware units shipped, units booked, and new deployments fell materially; management still lacks visibility and has not reinstated guidance; watch for a bookings bottoming process .
Margin playbook: FY gross margin expanded >1,000 bps; Q4 margin stable; targeted cost actions from Q2’25 should aid cash burn trajectory as SaaS scales .
Liquidity and buybacks: ~$142.5M cash, undrawn $75M facility, no debt, and ongoing buybacks provide a floor for shareholder returns while transformation proceeds .
Catalysts: Evidence of sales execution under new CRO/CEO (sequential bookings inflection), SmartOps feature releases (H1’25), potential macro/CapEx improvement, and eventual guidance reinstatement could re-rate the stock narrative .
Risks: Prolonged CapEx caution, tariff impacts on hardware COGS/supply chain, and longer-than-expected sales rebuild could delay ARR acceleration .
Trading lens: With no guidance and deteriorated near-term profitability, shares may remain event-driven; monitor Q1’25 cash use, Q2’25 cost actions, and quarterly ARR/ARPU traction for directional signals .

Appendix: Additional Detail

Selected FY 2024 Highlights (from Q4 release)

Total revenue $174.9M (–26% YoY); hosted services $73.2M (+14% YoY); hardware $82.8M (–40% YoY); professional services $18.8M (–47% YoY) .
FY total gross margin 34.5% (from 20.9%); professional services gross loss narrowed to $(12.4)M (from $(20.0)M); hosted services gross profit $48.7M (from $41.1M) .
FY net loss $(33.6)M (vs. $(34.6)M); FY Adjusted EBITDA $(9.9)M (vs. $(19.2)M) .
Non-GAAP adjustments include legal matters, stock-based comp, non-recurring warranty provisions, acquisition-related items, and other non-recurring expenses (see reconciliation) .

Product/Platform Developments

Maintenance Dashboards and SmartOps enhancements (AI-powered dictation, centralized workflows, reliability improvements) launched in Nov 2024; more capabilities planned in H1’25 .
Alloy Deadbolt+ launched with Apple Wallet integration in Dec 2024, emphasizing frictionless access and operational savings .

All citations: Q4 Press/8-K and Exhibits ; Q4 standalone press -; Q4 call transcript -; Q3 press -; Q3 call -; Q2 press -; Q2 call -; Product PRs - -.

SmartRent, Inc. (SMRT)·Q4 2024 Earnings Summary