The stock market was having a rather negative day, with all three major indexes firmly in negative territory throughout Thursday. But spatial-data company Matterport (MTTR -2.71%), once one of the hottest IPOs of 2021, was plunging Thursday after reporting earnings after market close on Wednesday. As of 3:15 p.m. ET, Matterport was down by 21% for the day to a fresh all-time low.
In some ways, Matterport's results were quite solid. Subscriber growth nearly doubled year over year, and subscription revenue grew by 47% in 2021. But there are some big concerns when it comes to growth.
For one thing, Matterport generated $27.1 million in revenue in the fourth quarter, which was just 15% more than a year ago (before the company received hundreds of millions in capital from the SPAC merger). Worse yet, the company is guiding for a decline in revenue in the first quarter, calling for $26.5 million at the midpoint of its range.
Also, while 98% growth in the subscriber base is impressive, it isn't even close to the 500% year-over-year growth rate it experienced in 2020.
To be fair, Matterport's subscription revenue (the most important part) is projected to be about $17.25 million in the first quarter, which would represent 25% year-over-year growth. But this isn't enough to get investors excited about a company trading for 14 times sales and posting operating losses greater than its revenue.
Like most SPAC IPOs, Matterport (and its SPAC sponsor Gores Holdings VI) gave some pretty ambitious growth projections. The initial presentation projected $2.4 billion in annual recurring-revenue potential from a 1% market-penetration rate. It also specifically had called for $131 million in subscription revenue in 2022, while the company's recent guidance only calls for about $81 million.
The bottom line is that the growth story Matterport investors were told doesn't quite seem to be a reality -- not yet anyway.