SmartRent — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached $41.6 million, a 15% increase year-over-year from $36.2 million in Q3 2025.
• Core revenue totaled $40.7 million, up 24% year-over-year from $32.8 million.
• Annual Recurring Revenue (ARR) increased 11% to $62.9 million.
• Gross margin expanded 1,470 basis points to 41% (41.2% per detailed text), marking the fourth consecutive quarter of expansion, compared to 26.4% in the prior year.
• Total gross profit increased 79% to $17.1 million from $9.6 million in the prior year.
• Adjusted EBITDA was $1.1 million, a $4.0 million improvement from a $2.9 million loss in the prior year period, representing the fourth consecutive quarter of positive Adjusted EBITDA.
• Net loss narrowed 38% year-over-year to $3.9 million from $6.3 million.
• Operating cash flow was positive at $2.9 million for the quarter.
• Year-to-date net cash used in operating activities improved by $25.9 million to $3.4 million, compared to $29.2 million in the prior year period.
• Cash on hand ended the quarter at $89.2 million.
• The company maintains an undrawn $75 million credit facility.
• Deferred revenue (current and non-current) totaled $38.1 million ($17.6 million current, $20.5 million non-current) as of September 30, 2026, down from $55.9 million at December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 total revenue growth is guided to be 15% to 20% year-over-year.
• Q4 2026 core revenue growth is guided to be 20% to 25% year-over-year.
• Q4 2026 Adjusted EBITDA growth is guided to be 450% to 650% year-over-year.
• The company aims to surpass one million installed units during the first half of 2027.
• Management expects to enter 2027 with considerable momentum and accelerating growth.

Business Segments and Product Lines:

• Hardware revenue increased 61% to $18.5 million from $11.5 million in the prior year.
• Hosted services revenue totaled $16.6 million, comprising $15.7 million in SaaS revenue and $0.9 million in hub amortization.
• SaaS revenue grew 11% year-over-year.
• SaaS gross margin expanded to 74.6%.
• Access Control revenue surged 171% to $4.7 million, with Access Control hardware revenue growing 242% to $2.5 million.
• Hardware and installation revenue for upgrades and refreshes increased 6.3% to $2.4 million.
• Professional services revenue decreased 8% to $6.5 million from $7.0 million.
• Units Deployed reached 941,977, an 8% increase from the prior year.
• Units Booked for the trailing twelve months increased 44% to 122,510.
• Hardware Upgrade Units increased 27% to 51,569 for the trailing twelve months.

Market and Competitive Landscape:

• SmartRent positions itself as the only comprehensive provider uniting purpose-built hardware and software under a unified ecosystem in the rental housing industry.
• The company reports accelerating adoption of Access Control and Self-Guided Tour (SGT) solutions.
• Management notes strong demand for equipment upgrades and refreshes as the installed base scales.
• The company is trusted by top names in real estate.

Risks and Challenges:

• Forward-looking statements highlight risks including the ability to accelerate product adoption, manage third-party supplier risks, and navigate adverse macroeconomic conditions such as inflation, recession, and higher interest rates.
• Risks include challenges in attracting and retaining key employees, developing differentiated products, and resolving pending litigation.
• Potential impacts from changes in fiscal/monetary policy, trade barriers, and currency fluctuations are noted.

Management Commentary and Tone:

• Frank Martell, President and CEO, described Q3 2026 as the company's strongest quarterly financial and operational results in over two years, citing four successive quarters of accelerating growth and margin trends under the Vision 2028 Strategic Plan.
• Management highlighted operating leverage, noting that margin improvements are occurring alongside significant investments in platform, data, infrastructure, and AI capabilities.
• CFO Daryl Stemm emphasized tangible benefits from cost efficiencies, leading to positive operating cash flow and improved Adjusted EBITDA.
• The tone is confident, with management viewing the company as approaching an inflection point in scale and consistent profitability growth.

Other Key Points:

• The company repurchased 2.5 million common shares (1% of shares outstanding) during the quarter at an aggregate cost of $3.4 million.
• Year-to-date stock repurchases totaled $6.8 million.
• The company executed its Vision 2028 strategic framework, expanding its sales organization and investing in technology and AI-related capabilities.
• A $2.5 million non-recurring accrual reversal benefited the prior year's operating expenses.
• The company has no convertible preferred stock issued or outstanding as of September 30, 2026.
• A conference call was held on November 4, 2026, to discuss results.