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On a quarterly earnings call Tuesday, Matterport told shareholders, analysts and media attendees that total revenue for the first quarter of 2023 (Q1) was $38 million, a 33 percent increase from quarter one last year.
Despite predicting last quarter that subscription numbers would be flat to start the year, total subscribers actually increased to 771,000, up 37 percent year-over-year. That jump boosted first-quarter subscription revenue to $19.8 million, up 16 percent from this time last year.
While residential real estate makes up 50 percent of Matterport’s subscription revenue, according to the company, Q1’s numbers saw a boost thanks to expansion into facilities management, retail, construction, travel and insurance, Matterport Chief Financial Officer JD Fay said on the call.
Of its total subscriber count, 704,000 are free accounts and 67,000 are paid, according to Fay. Free accounts increased in Q1 by 11 percent since quarter three (Q3) of 2022 and paid grew by 5 percent.
Matterport’s number of spaces under management, or spaces that have been scanned and filed on the Matterport platform, also increased through Q1, jumping 36 percent year-over-year to 9.9 million — and crossing 10 million last month.
“We are off to a great start in 2023, with first-quarter revenue $2 million above the high end of our guidance range, along with strong outperformance on the bottom line with a Non-GAAP net loss per share of $0.07, as we accelerate our path to profitability,” RJ Pittman, Matterport’s chairman and CEO of Matterport, said in an announcement published minutes before the call.
On the call, Pittman touted the number of spaces on Matterport’s platform, saying it’s more than double the number the company had at the start of 2021.
Another highlight is a 119 percent increase in services revenue year over year, totaling $8.7 million for the quarter, according to the report.
Included in services is Matterport’s Digital Pro, released in February 2023. The program offers residential real estate agents an end-to-end digital twin marketing solution. It includes its most well-known home-tour product with dollhouse view, 25 or more high-end still photos, a static 2D floor plan and a 10-15-second preview reel, all delivered within two business days, the company said.
The company also shared Tuesday that later this year it will release a product called Property Intelligence, a byproduct of owning the world’s largest 3D spatial data library.
Now being beta-tested, the service will help customers manage built environments from afar. In short, it turns a digital twin — Mattterport’s term for a virtual space made from its technology — into a proactive business asset, beyond its typical use in short-term marketing endeavors.
On the investor call, Pittman called Property Intelligence, “the cornerstone of our future in the built world.”
“This fully automatic software generates powerful property insight from our extensive spatial data library, enabling clients to easily manage their properties online and discover new operational efficiencies,” he said. “It allows them to manage multiple properties from any single remote location.“
The company released its most advanced camera to date in the third quarter of 2022, the Pro3, and its adoption has increased, according to the company. However, supply chain issues created a backup in sales of the previous model, the Pro2. Those issues are largely behind them, and they soon expect to sell what remains of that camera line, the company said on the call.
Still, Pro3 sales drove product revenue to $9.4 million in Q1, up 28 percent year over year.
Matterport is well-known in the real estate industry for software that creates photorealistic, immersive renditions of any sort of property, or in industry parlance, “built environments.”
Its sophisticated cameras and interfaces do more than offer fun ways for agents to market homes. The use of digital twins has expanded quickly into the larger commercial contexts of space planning, architecture, retail layout and merchandising, insurance oversight and facilities management, among other uses.
But the end of last year wasn’t particularly positive for the company, making the first quarter report something of a surprise. It lost $26.5 million in the final three months of 2022 and for the year, $116.6 million. That was more than double the $46.9 million in losses Matterport announced in 2021, Inman reported in February.
Based on Q1 performance, the company expects total revenue in the second quarter of this year to be between $38 and $40 million and subscription revenue to land between $20.7 and $20.9 million.
Matterport said in Tuesday’s report that it has a “strong balance sheet” with $456 million in cash and investments and no debt. Its annualized recurring revenue (ARR) exiting the first quarter was $79.4 million and net loss was $0.18 per share.
The company’s stock price closed Tuesday at $2.67 on volume of 86,419. That was up about 2.7 percent for the day. Matterport shares rose over the last week as the company’s earnings report drew near, but more generally they’ve fallen since hitting an all-time high near $30 in November 2021.
After Matterport published its earnings Tuesday, shares jumped in after-hours trading. The company had a market cap of about $793 million when markets closed Tuesday.