SmartRent

SmartRent Reports First Quarter 2026 Financial Results

SmartRent reported Q1 2026 financial results showing a 6% revenue decline to $38.7 million primarily due to lower hardware sales, but achieved a 9% increase in annual recurring revenue to $60.9 million, improved net loss by $35.8 million to $4.4 million, positive adjusted EBITDA of $0.4 million for the second consecutive quarter, a 10% increase in units deployed to 911,244, and strong liquidity with $99 million cash and a $75 million undrawn credit facility, while management emphasized ongoing investments in sales and technology and confidence in full-year profitability and positive cash flow.

First Quarter 2026 Highlights

  • Total Revenue: $38.7 million, down 6% year over year, mainly due to a large hardware order in the prior year. Core Revenue (excluding non-cash hub amortization): $36.6 million, essentially flat year over year.
  • Annual Recurring Revenue (ARR): Increased 9% year over year to $60.9 million, representing 39% of total first quarter revenue.
  • Net Loss: $4.4 million, an improvement of $35.8 million from the prior year, primarily due to a $24.9 million non-cash goodwill impairment charge in Q1 2025 and lower costs from productivity initiatives.
  • Adjusted EBITDA: $0.4 million, compared to $(6.4) million in the prior year, a $6.8 million improvement driven by ARR growth and productivity gains.
  • Units Deployed: 911,244 units, up 10% year over year.
  • Liquidity: $99 million in cash and an undrawn $75 million credit facility.

Management Commentary

Frank Martell, President and CEO, highlighted the company's momentum, noting reduced net loss and a second consecutive quarter of positive Adjusted EBITDA. He emphasized ongoing investments in sales, technology, and product solutions, including expanding the sales team, deepening account planning, renegotiating early-stage customer contracts, and targeting the small to medium rental housing market with a new Value Added Reseller (VAR) program.

CFO Daryl Stemm reported that Adjusted EBITDA was positive for the second consecutive quarter and total gross margin expanded by approximately 630 basis points year-over-year to 39.1%. SaaS gross margin reached 74.5%. The company ended the quarter with $99 million in cash, no debt, and an undrawn $75 million credit facility. Stemm expressed confidence in achieving full-year Adjusted EBITDA profitability and positive cash flow.

First Quarter 2026 Results Summary

  • Total revenue: $38.7 million (down 6% from $41.3 million in Q1 2025), mainly due to a $2.6 million decline in non-cash hub amortization revenue and a tough hardware comparison.
  • Core Revenue (excluding hub amortization): $36.6 million (flat vs. $36.7 million in Q1 2025).
  • Hosted services revenue: $17.3 million ($15.2 million SaaS, $2.1 million hub amortization). SaaS revenue grew 9% year over year.
  • Hardware revenue: $15.4 million (down 18% from $18.8 million in Q1 2025).
  • Professional services revenue: $6.0 million (up 55% from $3.9 million in Q1 2025).
  • SaaS ARPU: $5.63 (Q1 2026) vs. $5.69 (Q1 2025).
  • Units Deployed: 911,244 (up 10% from 827,611 in Q1 2025).
  • New Units Deployed: 20,662 (up 14% from 18,114 in Q1 2025).
  • Units Booked: 16,592 (down 9% from 18,210 in Q1 2025).

Gross Profit and Margins

  • Total gross profit: $15.1 million (up from $13.6 million in Q1 2025).
  • Total gross margin: 39.1% (up from 32.8%).
  • SaaS gross profit: $11.3 million (up 15% year over year), gross margin 74.5%.
  • Hosted services gross profit: $12.2 million (up from $12.1 million), gross margin 70.5%.
  • Professional services gross profit: $0.1 million (improved from a loss of $3.4 million), gross margin improved by over 89 percentage points.
  • Hardware gross profit: $2.8 million (down from $4.9 million), margin declined due to product mix and lower volume.

Operating Expenses and Net Loss

  • Operating expenses: $20.2 million (down 32% from $29.9 million in Q1 2025), mainly due to cost alignment initiatives.
  • Net loss: $4.4 million (improved by $35.8 million from $40.2 million in Q1 2025).
  • Adjusted EBITDA: $0.4 million (improved by 106% from a loss of $6.4 million).
  • Cash used: $5.7 million during the quarter; cash balance at quarter end: $99 million; no debt.

Key Operating Metrics (Q1 2026 vs. Q1 2025)

  • Hardware Units Shipped: 33,466 (down 23% from 43,418)
  • Hardware ARPU: $460 (up 6% from $434)
  • New Units Deployed: 20,662 (up 14% from 18,114)
  • Professional Services ARPU: $378 (down 12% from $427)
  • Units Deployed: 911,244 (up 10% from 827,611)
  • Average aggregate units deployed: 901,057 (up 10% from 818,554)
  • SaaS ARPU: $5.63 (down 1% from $5.69)
  • Units Booked: 16,592 (down 9% from 18,210)
  • Bookings: $18.5 million (down 32% from $27.2 million)
  • Units Booked SaaS ARPU: $9.52 (down 7% from $10.28)

About SmartRent

Founded in 2017, SmartRent, Inc. (NYSE: SMRT) provides smart communities and operations solutions for the rental housing industry. Its ecosystem automates operations, protects assets, reduces energy consumption, and more. The company serves 15 of the top 20 multifamily operators and millions of users daily.

Use of Non-GAAP Financial Measures

SmartRent reports certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, and Core Revenue. These are not recognized under GAAP and should not be considered in isolation. Definitions:

  • EBITDA: Net income (loss) before interest income, net, income tax expense (benefit), and depreciation and amortization.
  • Adjusted EBITDA: EBITDA before expenses related to non-recurring legal matters, stock-based compensation, impairment of investment in non-affiliate, goodwill impairment, non-recurring warranty provisions, acquisition expenses, and other non-recurring or unusual events.
  • Core Revenue: Total revenue excluding hub amortization.

Financial and Operating Metrics Defined

  • Units Deployed: Number of Hub Devices installed and with an active subscription as of a measurement date.
  • New Units Deployed: Number of Hub Devices installed and resulting in a new active subscription during a period.
  • Units Shipped: Number of Hub Devices shipped to customers during a period.
  • Units Booked: Number of Hub Device units subject to binding orders executed during a period, expected to result in a New Unit Deployed.
  • Bookings: Contract value of hardware, professional services, and first year of ARR for binding orders executed during a period.
  • Annual Recurring Revenue (ARR): Annualized value of SaaS Revenue earned in the current quarter (quarterly SaaS Revenue x 4).
  • SaaS Revenue: Subscription revenue from customer fees for access to SmartRent's software applications and related services.
  • Average Revenue per Unit (ARPU): Used to assess business growth and health. Calculated for each revenue stream as revenue divided by relevant units.
  • Property Net Revenue Retention: SaaS Revenue at period end for properties with SaaS Revenue at the end of the same period in the prior year, divided by prior year SaaS Revenue for those properties.
  • Customer Net Revenue Retention: SaaS Revenue at period end for customers with SaaS Revenue at the end of the same period in the prior year, divided by prior year SaaS Revenue for those customers.
  • Customer Churn: Cancelled deployed units during the period divided by Units Deployed at the beginning of the period.

Financial Statements (Condensed)

Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts)

  • Revenue (Q1 2026 / Q1 2025):
    • Hardware: $15,381 / $18,830
    • Professional services: $6,033 / $3,893
    • Hosted services: $17,269 / $18,621
    • Total revenue: $38,683 / $41,344
  • Cost of revenue:
    • Hardware: $12,576 / $13,960
    • Professional services: $5,898 / $7,293
    • Hosted services: $5,088 / $6,529
    • Total cost of revenue: $23,562 / $27,782
  • Operating expense:
    • Research and development: $6,146 / $8,258
    • Sales and marketing: $4,446 / $4,770
    • General and administrative: $9,623 / $16,894
    • Total operating expense: $20,215 / $29,922
  • Impairment charge: $0 / $24,929
  • Loss from operations: $(5,094) / $(41,289)
  • Interest income: $860 / $1,303
  • Interest expense: $(99) / $(103)
  • Other (expense) income, net: $(75) / $13
  • Loss before income taxes: $(4,408) / $(40,076)
  • Income tax expense: $40 / $108
  • Net loss: $(4,448) / $(40,184)
  • Other comprehensive loss: $(467) / $88
  • Comprehensive loss: $(4,915) / $(40,096)
  • Net loss per common share (basic and diluted): $(0.02) / $(0.21)
  • Weighted-average shares: 191,654 / 192,419

Condensed Consolidated Balance Sheets (in thousands)

  • Total assets (March 31, 2026 / Dec 31, 2025): $300,236 / $320,925
  • Cash and cash equivalents: $98,821 / $104,550
  • Accounts receivable, net: $36,753 / $47,401
  • Inventory: $24,397 / $26,670
  • Total current assets: $168,574 / $187,878
  • Total liabilities: $69,562 / $88,786
  • Total stockholders' equity: $230,674 / $232,139

Condensed Consolidated Statements of Cash Flows (in thousands)

  • Net cash used in operating activities (Q1 2026 / Q1 2025): $(4,543) / $(12,169)
  • Net cash used in investing activities: $(1,088) / $(3,469)
  • Net cash provided by (used in) financing activities: $393 / $(1,505)
  • Net decrease in cash and cash equivalents: $(5,729) / $(16,882)
  • Cash and cash equivalents at end of period: $98,821 / $125,600

Reconciliation of Non-GAAP Measures (in thousands)

  • Net loss: $(4,448) / $(40,184)
  • Interest income, net: $(761) / $(1,200)
  • Income tax expense: $40 / $108
  • Depreciation and amortization: $2,223 / $1,943
  • EBITDA: $(2,946) / $(39,333)
  • Legal matters: $37 / $5,105
  • Stock-based compensation: $3,057 / $2,836

Note: Some tables and detailed reconciliations are truncated in this extract.