GICS Sector : Technology
SmartRent, Inc., an enterprise software company, provides an integrated smart home operating system to residential property owners and operators, homebuilders, institutional home buyers, developers, and residents in the United States.Its solution is designed to provide communities with visibility and control their assets while delivering cost savings and additional revenue opportunities through all-in-one home control offerings for residents.The company's products and solutions include smart apartments and homes, access control for buildings, common areas, rental units, asset protection and monitoring, parking management, self-guided tours, and community and resident Wi-Fi. It also offers professional services to customers, which include training, installation, and support services.
SmartRent's Q3 2025 earnings report showcased significant progress towards achieving profitability, with total revenue reaching $36.2 million, a decline of 11% year-over-year due to a strategic shift away from bulk hardware sales. SaaS revenue, however, grew 7% year-over-year to $14.2 million, now accounting for 39% of total revenue. The company's gross margin stood at 26%, and operating expenses decreased by 34% year-over-year to $16.6 million. The net loss improved 36% year-over-year to a loss of $6.3 million, with adjusted EBITDA loss narrowing 23% to $2.9 million. Earnings per share (EPS) came in at -$0.03, beating estimates of -$0.06.
Publication Date: Nov -24
The installed base expanded to 870,000 units, up 11% from the prior year, driven by a steady increase in SaaS revenue. As Daryl Stemm noted, hardware revenue has been muted due to shipment delays, but is expected to increase as the company ships hardware for current period installations. The revenue mix is shifting towards SaaS, which should contribute to more stable and predictable revenue streams.
SmartRent is on track to achieve run-rate non-GAAP profitability exiting 2025 and is positioned for durable, profitable growth in 2026. The cost reduction program is complete, having unlocked $30 million of annualized expense reductions. The company's net revenue retention rate is well above 100%, indicating strong customer loyalty and potential for continued growth.
SmartRent ended the quarter with $100 million in cash, no debt, and $75 million in undrawn credit. The company aims to exit 2025 with run-rate cash flow neutrality and will maintain financial discipline, having reduced cash burn and evaluating how to use its cash reserves. Analysts estimate revenue growth of 4.1% for next year, indicating a stable outlook.
With a P/S Ratio of 1.76 and EV/EBITDA of -3.8, the market seems to be pricing in a challenging path to profitability, but also reflects the potential for growth. The ROE of -26.71% and ROIC of -28.94% indicate that the company still has a way to go in terms of generating returns on equity and invested capital. However, the progress made so far is encouraging, and the expected improvement in cash flow neutrality should support the stock in the long term.
SmartRent Names Sangeeth Ponathil Chief Information Officer
Nov -17
SmartRent Launches Product Advisory Council to Shape the Next Generation of Property Technology Solutions
Nov -12
SmartRent, Inc. (SMRT) Q3 2025 Earnings Call Transcript
Nov -05
SmartRent Reports Third Quarter 2025 Financial Results
Nov -05
SmartRent to Report Third Quarter 2025 Financial Results on November 5, 2025
Oct -15
Pankaj Bansi Joins SmartRent as Chief Transformation Officer
Oct -09
Renters Expect Property Managers to Provide Energy-Efficient, Cost-Saving Solutions as Utility Costs Continue to Rise
Sep -24
SmartRent: Mixed Q2 Results But Massive De-Risking
Aug -07
SmartRent's 11.67% growth in Hardware is driven by increasing adoption of smart home technology, rising demand for IoT-enabled devices, and growing need for property managers to streamline operations. Additionally, the company's focus on providing a seamless user experience, expanding its partner network, and investing in R&D are contributing to its rapid growth.
SmartRent's Hosted Services growth is driven by increasing adoption of smart home technology, rising demand for property automation, and growing need for efficient property management. Additionally, the company's scalable platform, strategic partnerships, and expanding customer base contribute to its 10.5% growth rate.
SmartRent's Professional Services segment growth of 10.27% is driven by increasing adoption of smart home technology, rising demand for property management solutions, and expansion into new markets. Additionally, the company's focus on customer acquisition and retention, strategic partnerships, and investments in technology and innovation are contributing to its growth momentum.
A smart home automation hub that integrates with various devices and sensors to provide a seamless living experience.
A keyless door lock that provides secure and convenient access control for residents and property staff.
A smart thermostat that learns and adapts to residents' temperature preferences to optimize energy efficiency and comfort.
A rent guarantee and protection program that provides financial protection for property owners and managers.
A suite of sensors that detect water leaks, motion, and temperature anomalies to prevent damage and ensure resident safety.
A mobile app that provides residents with a convenient and personalized living experience.
A comprehensive property management platform that streamlines operations and improves resident engagement.
SmartRent's proprietary technology and partnerships with major property management companies create high barriers to entry for substitutes.
While customers have some bargaining power due to the competitive nature of the property management industry, SmartRent's value proposition and strong customer relationships mitigate this power.
SmartRent's diversified supplier base and lack of dependence on a single supplier reduce the bargaining power of suppliers.
The growing demand for smart home technology and the relatively low barriers to entry in the industry create a high threat of new entrants.
While there is some rivalry in the smart home technology industry, SmartRent's strong market position and differentiated product offerings reduce the intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 5.64% |
| Debt Cost | 13.93% |
| Equity Weight | 94.36% |
| Equity Cost | 13.93% |
| WACC | 13.93% |
| Leverage | 5.98% |
Value: 10.0
Growth: 4.4
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