SMARTRENT, INC. (Exact name of Registrant as specified in its charter) FORM 10-K

Press release·03/05/2025 21:13:01

Listen to the news

SmartRent, Inc. filed its annual report (Form 10-K) for the fiscal year ended December 31, 2024. The company reported total revenue of $445.8 million, with a net loss of $123.4 million. As of December 31, 2024, the company had cash and cash equivalents of $143.2 million and total assets of $1.1 billion. The company’s Class A Common Stock is listed on the New York Stock Exchange under the ticker symbol SMRT, with 192,701,270 shares outstanding as of March 3, 2025. The report also includes information on the company’s management’s assessment of its internal control over financial reporting and its auditor’s report.

Overview of SmartRent’s Financial Performance

SmartRent is an enterprise real estate technology company that provides smart home and property management solutions. The company generates revenue primarily from selling smart home hardware, professional installation services, and subscription-based software services.

For the year ended December 31, 2024, SmartRent reported total revenue of $174.9 million, a 26% decrease from the prior year. This decline was driven by a 40% drop in hardware revenue and a 47% decrease in professional services revenue, partially offset by a 14% increase in hosted services (software) revenue.

The decrease in hardware and professional services revenue was primarily due to a 48% drop in new units deployed, as some customers deferred capital expenditures amid broader macroeconomic conditions. Changes in the company’s sales leadership and organization also impacted volumes. However, the growth in hosted services revenue was driven by a 12% increase in the total number of units deployed and a 4% rise in average revenue per user (ARPU) for these software subscriptions.

Overall, SmartRent reported a net loss of $33.6 million for 2024, a 3% improvement from the prior year’s net loss of $34.6 million. The company was able to reduce its cost of revenue by 39% year-over-year, primarily through favorable product mix and decreased hardware and professional services costs. However, operating expenses increased 10%, largely due to higher legal fees and severance costs.

Analysis of Revenue and Profit Trends

SmartRent’s revenue is generated from three main sources: hardware sales, professional services, and hosted software services. The company has experienced mixed trends across these revenue streams.

Hardware revenue, which includes the sale of smart home devices like hubs, locks, and sensors, declined 40% in 2024. This was driven by a 25% decrease in units shipped and a 19% drop in hardware average revenue per unit (ARPU). The decline in hardware sales was primarily due to customers deferring capital expenditures.

Professional services revenue, which comes from installation and implementation of smart home systems, decreased 47%. This was a direct result of the 48% drop in new units deployed, as fewer installations were required. However, professional services ARPU increased 35%, as the company became more efficient in delivering these services.

In contrast, hosted services revenue, consisting of subscription fees for SmartRent’s software applications, grew 14% year-over-year. This was driven by a 12% increase in the total number of units deployed and a 4% rise in SaaS ARPU. The company’s software offerings, which provide property owners and managers with visibility and control over their assets, continue to see strong demand.

While revenue trends were mixed, SmartRent was able to improve its profitability by reducing its cost of revenue by 39%. This was achieved through a favorable product mix shift towards higher-margin software offerings, as well as decreased hardware and professional services costs. However, operating expenses increased 10%, primarily due to higher legal fees and severance costs, limiting the company’s overall profit improvement.

Strengths and Weaknesses

One of SmartRent’s key strengths is its position as a category leader in the enterprise smart home solutions industry. As of December 31, 2024, the company had over 809,000 units deployed and more than 650 customers, including many of the largest multifamily residential owners in the United States. This large customer base and installed base of smart home devices provide the company with a strong foundation for growth.

Additionally, SmartRent’s hosted services revenue, which includes subscription-based software applications, has been a bright spot, growing 14% in 2024. The company’s software offerings, which provide property owners and managers with enhanced visibility, control, and operational efficiency, have been well-received by the market. The recurring nature of this revenue stream and its higher margins compared to hardware sales are positive indicators for the company’s long-term profitability.

However, SmartRent has faced some challenges in recent periods. The decline in hardware and professional services revenue, driven by customers deferring capital expenditures and changes in the company’s sales organization, has put pressure on overall financial performance. Additionally, the company has incurred higher legal fees and severance costs, which have weighed on its operating expenses and profitability.

Another potential weakness is the company’s reliance on the continued adoption of smart home technology in the real estate industry. While SmartRent has been a pioneer in this space, the broader market acceptance of these solutions is crucial for the company’s long-term success.

Outlook and Future Prospects

Looking ahead, SmartRent’s future prospects will depend on its ability to navigate the current macroeconomic environment, continue to innovate and expand its product offerings, and drive further adoption of its smart home and property management solutions.

The company’s recent leadership changes, with the appointment of a new CEO, may provide an opportunity to reevaluate its strategy and operational execution. Addressing the challenges that led to the decline in hardware and professional services revenue will be a key focus area.

Continued investment in research and development to enhance the capabilities of SmartRent’s platform and introduce new products and features will be crucial. The company’s open-API architecture, which enables integration with a wide range of third-party partners, is a strength that should be leveraged to expand the platform’s functionality and appeal to customers.

Additionally, the company’s focus on growing its recurring hosted services revenue will be important for improving profitability and cash flow. Maintaining high customer retention rates and expanding the average revenue per user for these software subscriptions will be critical.

Overall, while SmartRent has faced some headwinds in recent periods, the company’s strong market position, innovative product offerings, and growing software revenue stream provide a solid foundation for future growth, provided the company can effectively navigate the current challenges and continue to execute on its strategic priorities.