Matterport (MTTR 0.86%) is slated to report its second-quarter 2022 results after the market close on Wednesday, Aug. 10. An analyst conference call is scheduled for 4:30 p.m. ET on the same day.
Investors will probably be approaching the spacial-data company's report with more caution than optimism. On the positive side, last quarter, the company beat Wall Street's consensus estimates, as well as its own guidance, for both revenue and earnings. However, once again, management issued guidance that fell short of analysts' expectations on the top and bottom lines.
Moreover, the U.S. residential real estate market has been cooling off after being sizzling hot for a couple of years. Some investors are likely concerned -- rightfully so, in my opinion -- that a significant slowdown in the global real estate market could slow the industry's adoption of Matterport's subscription-based platform and cameras for creating digital twins. While the company targets a handful of industries, the bulk of its customers are in the real estate industry.
Here's what to watch in Matterport's upcoming second-quarter report.
Some investors are enthused about the company's potential to benefit from the metaverse, but any significant potential benefit is likely years away. Image source: Getty Images.
Matterport's key numbers
Below are the year-ago quarter's results and Wall Street's guidance to use as benchmarks.
| Metric | Q2 2021 Result | Matterport's Q2 2022 Guidance | Wall Street's Q2 2022 Consensus Estimate | Wall Street's Projected Change YOY |
|---|---|---|---|---|
| Revenue | $29.5 million | $28.5 million to $30.5 million* | $29.6 million | Flat |
| Adjusted earnings per share (EPS) | ($0.62) | ($0.15) to ($0.13) | ($0.14) | Loss expected to narrow 77% |
Data sources: Matterport and Yahoo! Finance. *Matterport also provided guidance for subscription revenue: $18 million to $18.3 million, which would equate to growth of 18% to 20% year over year. YOY = year over year.
Context is critical with respect to the company's revenue guidance and Wall Street's revenue expectation. Matterport has been transitioning its core business from a license-based to software-as-a-subscription (SaaS) business model. The company's subscription business has been growing at a solid (though not fast) clip, though this fact is masked if one only considers total revenue.
For context, in the first quarter, total revenue grew 6% year over year to $28.5 million, driven by a 24% jump in subscription revenue to $17.1 million. Total revenue topped the Wall Street consensus estimate of $27.5 million.
Last quarter's adjusted loss widened 900% year over year to $0.10 per share. This loss was driven by the scaling up of operations and additional costs stemming from global supply chain bottlenecks. That result beat Wall Street's expectation by $0.04, and was also better than the company's guidance of an adjusted loss between $0.15 per share and $0.13 per share.
Net-dollar expansion rate
Investors should watch the company's net-dollar expansion rate, which is a metric that reflects customer satisfaction.
Last quarter, this metric was 107%, which means that existing subscribers increased their spending with the company by an average of 7% year over year. That result was down from the prior quarter's 110%, which is also about the company's historic rate.
Guidance
Matterport stock will likely move if third-quarter guidance comes in notably different from what Wall Street is expecting or if management significantly revises its full-year 2022 guidance.
For Q3, analysts are modeling for an adjusted loss of $0.13 per share on revenue of $32.9 million.
For 2022, management guided for revenue of $125 million to $135 million, or 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 projects an adjusted loss of $0.47 to $0.52, or a widening of 104% to 126% year over year.
