SmartRent, Inc. Financial Report Summary and Analysis

Overview

SmartRent, Inc. is an enterprise real estate technology company that provides a comprehensive management platform designed for property owners, managers, and residents. The company’s suite of products and services, including cloud-based SaaS solutions and smart building hardware, enable seamless visibility and control over real estate assets. SmartRent’s platform aims to lower operating costs, increase revenues, mitigate operational friction, and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents.

As of March 31, 2025, SmartRent had 827,611 Units Deployed and over 650 customers, including many of the largest multifamily residential owners in the United States. The company’s customers owned an aggregate of approximately 7.6 million rental units, representing approximately 15% of the United States market for institutionally owned multifamily rental units and single-family rental homes.

Financial Performance

Revenue

SmartRent’s total revenue decreased by approximately $9.1 million, or 18%, to $41.3 million for the three months ended March 31, 2025, from $50.5 million for the three months ended March 31, 2024. The decrease was primarily driven by a $9.1 million decrease in revenue related to the company’s Smart Apartments solution, which resulted from a decrease in New Units Deployed and a decrease in Units Shipped.

Hardware revenue decreased by $10.2 million, or 35%, to $18.8 million, primarily due to the decrease in Units Shipped and a decrease in Hardware ARPU. Professional services revenue increased by $0.4 million, or 13%, driven by revenue related to the installation of upgraded Hub Devices. Hosted Services revenue increased by $0.6 million, or 4%, due to a 10% increase in the aggregate number of Units Deployed and an increase in SaaS ARPU.

Cost of Revenue

Total cost of revenue decreased by $3.3 million, or 11%, to $27.8 million, primarily due to the decrease in New Units Deployed and Units Shipped. Hardware cost of revenue decreased by $4.7 million, or 25%, while Professional Services cost of revenue increased by $0.9 million, or 13%, and Hosted Services cost of revenue increased by $0.6 million, or 10%.

Operating Expenses

Research and development expenses decreased by $0.1 million, or 1%, to $8.3 million. Sales and marketing expenses increased by $0.2 million, or 5%, to $4.8 million. General and administrative expenses increased by $0.2 million, or 1%, to $16.9 million, primarily due to an increase in legal matters expenses, partially offset by a decrease in the provision for expected credit losses and stock compensation.

During the three months ended March 31, 2025, SmartRent recorded a goodwill impairment charge of $24.9 million.

Other Income and Taxes

Interest income, net decreased by $1.3 million to $1.2 million, primarily due to a lower cash balance and a decrease in interest rates. The income tax expense was $0.1 million, related to foreign and state taxes offset by a change in the valuation allowance.

Non-GAAP Measures

SmartRent presented EBITDA and Adjusted EBITDA as non-GAAP measures. EBITDA was $(39.3) million, and Adjusted EBITDA was $(6.4) million for the three months ended March 31, 2025.

Strengths and Weaknesses

Strengths:

• Comprehensive smart home and property management platform
• Significant customer base, including many of the largest multifamily residential owners in the U.S.
• Recurring revenue model with long-term customer contracts
• Ongoing investment in research and development to enhance product offerings

Weaknesses:

• Decline in revenue and profitability due to macroeconomic conditions and changes in leadership/sales organization
• Goodwill impairment charge of $24.9 million
• Negative EBITDA and Adjusted EBITDA

Outlook

SmartRent faces several challenges, including the impact of macroeconomic conditions on customer demand and the recent changes in executive leadership. The company is working to address these issues and continue investing in product development to maintain its competitive position in the enterprise smart home solutions industry.

The company’s ability to grow its customer base, expand its product offerings, and improve the leverage of its business model will be key to its future success. Continued investment in research and development and effective management of the global supply chain will also be critical factors.

Overall, SmartRent’s financial performance in the first quarter of 2025 was mixed, with declines in revenue and profitability, but the company remains focused on addressing the challenges it faces and positioning itself for long-term growth.