Matterport (MTTR -1.82%) is slated to report its fourth-quarter and full-year 2021 results after the market close on Wednesday, Feb. 16. An analyst conference call is scheduled for 5 p.m. ET on the same day.
The spacial-data company went public in July 2021 via a special purpose acquisition company (SPAC). Its technology enables users to create 3D-digital replicas -- or "digital twins" -- of physical spaces. Many investors are optimistic about the company's potential to profit from the burgeoning metaverse.
Since going public, Matterport stock is down 41% through Feb. 10. The S&P 500 index returned nearly 4%, and the Nasdaq Composite index lost just over 3% over this period.
The stock has been volatile. After going public, it soared 128% through Nov. 29, 2021, when it hit its all-time closing high. Since then, it's plummeted 72%, as of Feb. 10.
Arguably, investors bid up shares too high, too fast. So some fall back down to Earth wasn't surprising. The magnitude of the decline increased due, in large part, to market dynamics. Over the last few months, highly valued tech-growth stocks have been hit hard. Some investors have rotated out of these interest-rate sensitive stocks because the Federal Reserve is poised to begin raising rates soon.
Investors focused on the long term shouldn't pay much attention to market dynamics.
Here's what to watch in Matterport's Q4 report.
Matterport's key quarterly numbers
Matterport wasn't a publicly traded company in the year-ago period, so that period's numbers can't be presented in this table, as is customary. So last-quarter's numbers are used.
Q3 2021 Result
|Wall Street's Q4 2021 Consensus Estimate||Wall Street's Projected Sequential Change|
Adjusted earnings per share (EPS)
|($0.06)||($0.09)||N/A. Adjusted loss per share expected to widen by 50%.|
Wall Street expects Matterport's fourth-quarter revenue to decline somewhat from the third quarter. Such a decline wouldn't necessarily be worrisome. It's common for many companies -- even non-retailers -- to have some seasonality in their results, with the fourth quarter often stronger than the third.
For some context, in the third quarter, the company's revenue grew 10% to $27.7 million. This result missed the $29.1 million analyst-consensus estimate. However, the only reason for this miss was that pandemic-driven supply constraints -- which are plaguing most companies -- prevented Matterport from fully meeting demand.
Adjusted for one-time items, the third-quarter's loss per share was $0.06, compared with earnings per share of $0.01 in the year-ago period. This result was slightly better than the loss per share of $0.07 that Wall Street had been expecting.
Focus on subscription-revenue growth
Investors should be more concerned with growth in subscription revenue than total revenue. Matterport has been transitioning its business model to one focused on subscriptions. This transitioning is a positive for investors because subscription-based businesses generate recurring revenue and have high-profit-margin potential.
In the third quarter, subscription revenue grew 36% year over year to $15.7 million, accounting for 57% of Matterport's total revenue. Total subscribers soared 116% year over year to 439,000, and paid subscribers jumped 35% to 53,000.
Investors will also want to keep an eye on Matterport's net dollar expansion rate, which is a measure of customer satisfaction. Last quarter, this metric was 114%, which means that existing subscribers expanded their spending with the company by an average of 14% from the year-ago period.
It remains to be seen if management will provide guidance for the first-quarter 2022, the full-year 2022, or both. Given the company is new to the public markets, it doesn't have much of a history with respect to guidance. Since going public, management has been providing an annual outlook for both revenue and adjusted EPS.
That said, investors should know what Wall Street is expecting for the first-quarter and full-year 2022. The stock is likely to move on an outlook that's notably different from what analysts are projecting.
For Q1 2022, Wall Street is modeling for an adjusted loss of $0.07 per share on revenue of $31.9 million. And for 2022, analysts expect an adjusted loss of $0.23 per share on revenue of $160.4 million.