What happened
Shares of SmartRent (SMRT 2.15%) were tumbling today after the property tech company missed expectations in its second-quarter earnings report and cut its guidance for the full year.
As a result, the stock was down 32.6% as of 10:59 a.m. ET.
So what
SmartRent, which sells a hardware-agnostic smart hub that pairs with smart home devices like thermostats, doorbells, and cameras to help landlord owners, business owners, and others monitor their properties, posted strong revenue growth in the second quarter, but it missed its own guidance and expectations.
The top line grew 96% to $42.4 million, but that fell well short of estimates at $51.5 million and the company's own guidance of $47 million to $55 million. Supply chain constraints appeared to be the culprit, causing delays in deployments.
New units deployed rose 153% to about 60,000, and total units deployed jumped 113% to just over 451,000, showing its monetizable business rapidly expanding. Annual recurring revenue from the software-as-a-service (SaaS) business, which the company expects to eventually become a high-margin profit center, soared 337% to $30.6 million.
On the bottom line, its adjusted EBITDA loss widened from $9.3 million to $19.8 million, and it posted a GAAP loss per share of $0.13 against the consensus at $0.11.
CEO Lucas Haldeman said: "While unprecedented supply chain constraints are leading us to modify our 2022 outlook, customers remain loyal, as evidenced by our record backlog. We are on a clear path to profitability and expect to be adjusted EBITDA positive on an intra-quarter basis in 2023."
Now what
SmartRent continues to see strong demand for its product and has contractual agreements for deployments, but supply chain constraints are delaying those deployments. This means it's cutting back its guidance for the year.
It now sees revenue of $155 million to $180 million, representing growth of 51% at the midpoint, compared to a previous range of $220 million to $250 million. It also slashed its adjusted EBITDA forecast from a loss of $35 million to $50 million to a loss of $70 million to $75 million. For the third quarter, it expects revenue of $43 million to $47 million, or just 29% growth at the midpoint.
Based on those numbers, it's easy to see why the real estate stock is down sharply today. If supply chain issues are the only reason for the slowdown, the stock should bounce back. Keep an eye on the EBITDA profit target for next year.
