Matterport (MTTR 0.87%) is slated to report its first-quarter 2022 results after the market close on Tuesday, May 10. An analyst conference call is scheduled for 4:30 p.m. ET on the same day.
Investors will probably be feeling cautious heading into the spatial-data company's report. Following the release of last quarter's report, shares plunged 17.4%. The quarter's earnings fell slightly short of Wall Street's consensus estimate, but the main catalyst for the sell-off was likely management's outlook. First-quarter and full-year 2022 guidance was much lighter than analysts had been expecting on both the top and bottom lines.
In 2022, shares of Matterport (which went public last July via a special purpose acquisition company, or SPAC) are down 70.1% through April 25. The S&P 500 and Nasdaq (including dividends for both indexes) have declined 9.5% and 16.7%, respectively, over this period.
Matterport stock's poor performance is largely attributable to investor dissatisfaction with quarterly results and annual guidance along with market dynamics. While the broader market has been struggling since late last year, growth tech stocks have been hit particularly hard in this environment of rising interest rates.
Here's what to watch in Matterport's upcoming first-quarter report.
Image source: Getty Images.
Matterport's key 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.
| Metric | Q4 2021 Result | Wall Street's Q1 2022 Consensus Estimate | Wall Street's Projected Sequential Change |
|---|---|---|---|
| Revenue | $27.1 million | $24.5 million | (9.6%) |
| Adjusted earnings per share (loss) | ($0.10) | ($0.13) | Loss expected to widen 30%. |
Data sources: Matterport and Yahoo! Finance.
Wall Street expects Matterport's revenue to decline nearly 10% sequentially. In and of itself, such a decline isn't a cause for concern. Many companies have some seasonality in their results, with the fourth quarter typically stronger than other quarters.
For the first quarter, management guided for total revenue ranging from $25.5 million to $27.5 million and subscription revenue of $17.1 million to $17.4 million. Included in the guidance was the statement that the subscription revenue range represents growth of 24% to 26% year over year. In addition, management expects a first-quarter adjusted loss of $0.13 to $0.15 per share.
For context, in the fourth quarter of 2021, total revenue grew 15% year over year to $27.1 million, driven by a 32% jump in subscription revenue. This result topped the Wall Street consensus estimate of $25.1 million. The adjusted loss widened 900% year over year to $0.10 per share. This loss was driven by the ramping up of operations and costs incurred due to global supply chain issues. That result slightly missed the loss of $0.09 per share that analysts had expected.
Subscription revenue growth
Matterport has been transitioning to a largely subscription-based business, which generates recurring revenue. Investors should continue to monitor its success in growing its subscription revenue.
Last quarter, subscription revenue increased 32% year over year to $16.5 million, accounting for 61% of total revenue. Total subscribers soared 98% year over year to 503,000, of which 55,000 are paid subscribers.
Investors should also focus on another key metric: the net dollar expansion rate. Last quarter, this metric was 110%, so existing subscribers expanded their spending with Matterport by an average of 10% from the year-ago period. While down from 114% in the third quarter, this result was in line with the company's historic rate, chief financial officer JD Fay said on last quarter's earnings call.
Guidance
Second-quarter guidance that varies much from Wall Street's estimates will likely move the stock. The stock would also probably move if management significantly revises its full-year 2022 guidance, which isn't likely this early in the year.
For the second quarter, Wall Street is modeling for an adjusted loss of $0.12 per share on revenue of $30.9 million.
For full-year 2022, management guided for revenue of $125 million to $135 million, representing annual growth of 12% to 21%. It also expects subscription revenue of $80 million to $82 million, or growth of 31% to 34%. And it also guided for an adjusted loss of $0.47 to $0.52, which represents a widening of 104% to 126% year over year.
