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What changed in SmartRent, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SmartRent, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+363 added−347 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in SmartRent, Inc.'s 2025 10-K

363 paragraphs added · 347 removed · 276 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeEnvironmental and Sustainability Benefits We are facilitating a more sustainable future by helping owners, operators, and residents reduce energy consumption, meet de-carbonization goals and achieve sustainability objectives. Our solutions are designed to reduce overall energy consumption by setting limitations on vacant units, controlling ventilation, and providing automated work orders based on temperature and humidity thresholds.
Biggest changeOur solutions are designed to reduce overall energy consumption by setting limitations on vacant units, controlling ventilation, and providing automated work orders based on temperature and humidity thresholds. Our platform drives these benefits through a variety of connected devices, including smart thermostats, leak sensors, smart appliances and smart lighting.
Other regulations that may apply to us depending upon the circumstances include, for example, the General Data Protection Regulation (GDPR) in the European Union, Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), and the Tenant Data Privacy Act (TPDA) in New York. 9 Corporate History We were originally incorporated in Delaware on November 23, 2020 as Fifth Wall Acquisition Corp.
Other regulations that may apply to us depending upon the circumstances include, for example, the General Data Protection Regulation (GDPR) in the European Union, Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), and the Tenant Data Privacy Act (TPDA) in New York. Corporate History We were originally incorporated in Delaware on November 23, 2020 as Fifth Wall Acquisition Corp.
Teams can also choose to export data into third party tools for deeper analysis. The application integrates with major property management systems to provide an up-to-date and personalized experience. 6 • Answer Automation . Answer Automation reduces costs and improves on-site team efficiency through the automation of leasing and resident call handling.
Teams can also choose to export data into third party tools for deeper analysis. The application integrates with major property management systems to provide an up-to-date and personalized experience. • Answer Automation . Answer Automation reduces costs and improves on-site team efficiency through the automation of leasing and resident call handling.
We expect this dynamic will drive demand for smart home technology as additional owners and operators evolve to meet this growing demand for integrated smart home solutions. 3 Fragmented Technology Offerings The residential technology market remains fragmented, with offerings generally consisting of isolated point solutions and closed-architecture devices that do not integrate with one another.
We expect this dynamic will drive demand for smart home technology as additional owners and operators evolve to meet this growing demand for integrated smart home solutions. Fragmented Technology Offerings The residential technology market remains fragmented, with offerings generally consisting of isolated point solutions and closed-architecture devices that do not integrate with one another.
With an intuitive design and customization options, Audit Management replaces outdated, manual processes with a modern, user-friendly platform. • Inspection Management . Inspection Management automates the property inspection process so that teams can quickly access property and unit conditions, plan for capital improvement expenses, and monitor the performance of a portfolio.
With an intuitive design and customization options, Audit Management replaces outdated, manual processes with a modern, user-friendly platform. 6 • Inspection Management . Inspection Management automates the property inspection process so that teams can quickly access property and unit conditions, plan for capital improvement expenses, and monitor the performance of a portfolio.
SmartRent, the SmartRent logo and other trade names, trademarks or service marks of SmartRent appearing in this Report are the property of SmartRent. Trade names, trademarks and service marks of other companies appearing in this Report are the property of their respective holders. Available Information Our website address is www.smartrent.com.
SmartRent, the SmartRent logo and other trade names, trademarks or service marks of SmartRent appearing in this Report are the property of SmartRent. Trade names, trademarks and service marks of other companies appearing in this Report are the property of their respective holders. 9 Available Information Our website address is www.smartrent.com.
Additionally, hardware solutions such as smart locks, hubs, and sensors are manufactured in-house under the Alloy brand. These devices serve as the backbone for our ongoing software innovations, helping accelerate growth and advance initiatives focused on optimizing site team and resident experiences. They also contribute to improved automation and enhanced energy efficiency.
Additionally, hardware solutions such as smart locks, Hub Devices, and sensors are manufactured in-house under the Alloy brand. These devices serve as the backbone for our ongoing software innovations, helping accelerate growth and advance initiatives focused on optimizing site team and resident experiences. They also contribute to improved automation and enhanced energy efficiency.
We protect our intellectual property rights through a combination of trademarks, trade dress, domain name registrations, trade secrets, and a patent, as well as through contractual restrictions and reliance on federal, state, and common law. We enter into confidentiality and proprietary rights agreements with employees, consultants, contractors, and business partners, which include invention assignment provisions for our employees and contractors.
We protect our intellectual property rights through a combination of trademarks, trade dress, domain name registrations, trade secrets, and patents, as well as through contractual restrictions and reliance on federal, state, and common law. We enter into confidentiality and proprietary rights agreements with employees, consultants, contractors, and business partners, which include invention assignment provisions for our employees and contractors.
This represents approximately 15% of the U.S. market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners and management companies, our customers include some of the largest single-family rental homeowners, homebuilders and iBuyers in the United States.
This represents approximately 13% of the U.S. market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners and management companies, our customers include some of the largest single-family rental homeowners, homebuilders and iBuyers in the United States.
When a resident moves out, the automated move-out feature immediately locks the apartment door, resets interior thermostats to the “Vacant Mode” temperature, and revokes resident access to their unit, common areas, Community WiFi, parking, and the SmartRent app — all with the click of a button.
When a resident moves out, the automated move-out feature immediately locks the apartment door, resets interior thermostats to the “Vacant Mode” temperature, and revokes resident access to their unit, common areas, parking, and the SmartRent Resident App — all with the click of a button.
Our Smart Community solutions include software and devices that power (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as asset protection and monitoring, parking management and self-guided tours.
Our Smart Community solutions include software and devices that power (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as asset protection and monitoring and self-guided tours.
We believe that rental owners may be able to increase, or maintain higher, rental rates (depending on the rental market and solutions offered) due to the differentiated resident experience and strong demand for smart communities. Additionally, we believe our solutions can increase resident retention, accelerate leasing and re-leasing activities, and provide ancillary monetization opportunities. • Cost Reduction.
We believe that rental owners may be able to increase, or maintain higher, rental rates due to the differentiated resident experience and strong demand for smart communities. Additionally, we believe our solutions can increase resident retention, accelerate leasing and re-leasing activities, and provide ancillary monetization opportunities. • Cost Reduction.
With various keyless entry options, including deadbolts, interconnected locks, lever locks, and patio locks, these products can be customized to meet each property’s needs. 7 • Smart Thermostats, Sensors, Plugs, Switches, Dimmers, and Readers.
With various keyless entry options, including deadbolts, interconnected locks, lever locks, and patio locks, these products can be customized to meet most property’s needs. • Smart Thermostats, Sensors, Plugs, Switches, Dimmers, and Readers.
Offerings under the Smart Communities Solutions umbrella include Smart Apartments, Access Control, Self-Guided Tours, Community WiFi, Package Management and Parking Management. • Smart Apartment s.
Offerings under the Smart Communities Solutions umbrella include Smart Apartments, Access Control, Self-Guided Tours, and Package Management. • Smart Apartment s.
Smart Apartments is a solution that connects all the smart devices in a community to a single dashboard, enabling property managers to remotely monitor and control unit access, climate settings, and security while providing residents with a seamless, user-friendly experience that enhances convenience and efficiency.
Smart Apartments is a solution that connects all the smart devices in a community to a single dashboard, enabling property managers to remotely provide unit access, set guardrails for climate settings, and monitor and control building access while providing residents with a seamless, user-friendly experience that enhances convenience and efficiency.
Our revenue is generated from: (1) the direct sale to our customers of hosted services from monthly subscription fees collected from customers to provide access to one or more of our software applications (“Hosted Services”) including access controls, asset monitoring, WiFi, and related services; (2) the sale and delivery of smart home devices, which generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches ; and (3) installation and implementation of smart home devices that enable our Hosted Services.
Our revenue is generated from: (1) the direct sale to our customers of hosted services from subscription fees collected from customers to provide access to services including access controls, asset monitoring, WiFi, and related services ("Hosted Services"); (2) the sale and delivery of smart home devices, which generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches; and (3) installation and implementation of smart home devices that enable our Hosted Services.
For more information about our “Units Deployed” and other metrics, refer to the section of this Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of December 31, 2024, our customers own or operate an aggregate of approximately 7.4 million rental units.
For more information about our “Units Deployed” and other metrics, refer to the section of this Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of December 31, 2025, we believe our customers own or operate an aggregate of approximately 6.6 million rental units.
We believe that our customers can recognize cost savings on utilities through the utilization of our solutions, including our connected smart thermostats, smart lights, and leak sensors, as well as through more efficient management of vacant rental units. • Incremental Revenue Generation.
We believe that our customers realize several benefits from implementing our solutions, including: • Operating Efficiency. We believe that our customers can recognize cost savings on utilities through the utilization of our solutions, including our connected smart thermostats, smart lights, and leak sensors, as well as through more efficient management of vacant rental units. • Incremental Revenue Generation.
Self-Guided Tours integrates with many popular property management and customer relationship management systems, and other third-party software products, which enables owners and operators to manage all prospect and other actionable data from one platform. • Community WiFi . Community WiFi delivers secure, wireless, high-speed internet across an entire property.
Self-Guided Tours integrates with many popular property management and customer relationship management systems, and other third-party software products, which enables owners and operators to manage all prospect and other actionable data from one platform. • Package Management .
As of December 31, 2024, we had 809,497 Units Deployed and over 650 customers, including many of the largest multifamily residential owners in the United States (the "U.S.").
As of December 31, 2025, we had 890,870 Units Deployed and approximately 600 customers, including many of the largest multifamily residential owners in the United States (the "U.S.").
We also have a professional services team that provides customers and residents with training, installation, and support services. 2 We have designed our smart home operating platform to enable our customers to more efficiently and effectively manage their properties and interface with their residents.
We also have a professional services team that provides customers with training, installation, and support services. 2 We have designed our smart home operating platform to enable our customers to more efficiently and effectively manage their properties and interface with their residents. Importantly, our enterprise software integrates into most existing property management systems used by residential property owners and operators.
Competitive Market Given the emerging nature of smart home technology in residential real estate, the industry is highly fragmented and there are a number of companies developing solutions that may be similar to parts of our smart home operating system.
With our holistic smart home operating system and in-house installation, training, and support services, we believe we offer a smart home solution that provides a full-service, end-to-end experience. 3 Competitive Market Given the emerging nature of smart home technology in residential real estate, the industry is highly fragmented and there are a number of companies developing solutions that may be similar to parts of our smart home operating system.
We engage with our employees to gather insight, feedback, and data about their workplace experiences, and manager effectiveness. This data informs and supports our action plans, with the goal of enhancing workplace satisfaction and overall employee well-being and effectiveness. We attract and retain talent through market-based compensation, our employer brand initiatives, employee referral programs, and through internal career growth.
This data directly informs our action plans, with the goal of enhancing workplace satisfaction, overall employee well-being, and effectiveness. We attract and retain talent through a comprehensive strategy that includes market-based compensation, targeted employer brand initiatives, employee referral programs, and internal career growth paths.
Smart Package Room offers 2 to 3 times the capacity of lockers all while providing an agnostic solution that can accept any type of package and allows couriers and residents to always access the package room.
Smart Package Room offers 2 to 3 times the capacity of lockers all while providing an agnostic solution that can accept any type of package and allows couriers and residents to always access the package room. Smart Package Room complements SmartRent’s smart home line, expands the Company’s product offerings and solves a long-standing pain point for rental housing operators.
Our digital marketing strategy encompasses several channels, including search engine optimization (SEO), Google Ads campaigns, programmatic display advertising and an active presence across professional social media platforms. We engage our audience through organic content, targeted advertising and a comprehensive content marketing program that includes a recurring newsletter, product updates and educational materials.
Our digital marketing strategy encompasses several channels, including search engine optimization (SEO), Google Ads campaigns, programmatic display advertising and an active presence across professional social media platforms.
Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents. Through a central connected device ("Hub Device"), we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces.
Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents.
Through work order and service request automations, the platform provides a simplified overview of on-site tasks and allows for easy scheduling of team members. In addition, the application offers a mobile interface, allowing owners and operators to accomplish more on the go with access to the application available both online and offline.
In addition, the application offers a mobile interface, allowing owners and operators to accomplish more on the go with access to the application available both online and offline.
We use an open-architecture, brand-agnostic approach that allows owners, operators, and residents to manage their smart home systems through a single connected interface.
Through centrally connected devices ("Hub Devices"), which integrate our enterprise software with third party smart devices, we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces. We use an open-architecture, brand-agnostic approach that allows owners, operators, and residents to manage their smart home systems through a single connected interface.
Parking Management is available to communities as a stand-alone product or as part of our fully integrated smart home operating system. Smart Operations Solutions. Smart Operations Solutions encompasses integrated software solutions focused on centralizing community operations to improve efficiency and collaboration. This software suite is tailored to streamline management processes by consolidating various operational tasks onto a single platform.
Smart Operations Solutions. Smart Operations Solutions encompasses integrated software solutions focused on centralizing community operations to improve efficiency and collaboration. This software suite is tailored to streamline management processes by consolidating various operational tasks onto a single platform. It aims to enhance productivity among site teams by providing tools that facilitate better communication, coordination, and management of community tasks.
Our platform drives these benefits through a variety of connected devices, including smart thermostats, leak sensors, smart appliances and smart lighting. We also reduce waste through predictive maintenance tools and building software integrations. In this way, our solutions are a key tool in reducing water usage and energy consumption across entire portfolios of real estate assets.
We also reduce waste through predictive maintenance tools and building software integrations. In this way, our solutions are a key tool in reducing water usage and energy consumption across entire portfolios of real estate assets. Human Capital Management Our employees are fundamental to our success. As of December 31, 2025, we had 418 total employees worldwide.
It aims to enhance productivity among site teams by providing tools that facilitate better communication, coordination, and management of community tasks. Smart Operations Solutions is designed to modernize and simplify the operational aspects of community management, making it easier for teams to deliver high-quality service and support to residents.
Smart Operations Solutions is designed to modernize and simplify the operational aspects of community management, making it easier for teams to deliver high-quality service and support to residents. Offerings organized under the Smart Operations Solutions umbrella include Work Management, Answer Automation, Audit Management and Inspection Management. • Work Management.
Intellectual Property We regard our intellectual property rights as critical to our success generally, with our trademarks, service marks, and domain names being especially critical to the continued development and awareness of our brands and marketing efforts.
In addition, a significant portion of the hardware devices we sell, including both proprietary and third-party products, are manufactured outside the United States, which subjects our supply chain to additional risks, including geopolitical, regulatory, and logistics-related disruptions. 8 Intellectual Property We regard our intellectual property rights as critical to our success generally, with our trademarks, service marks, and domain names being especially critical to the continued development and awareness of our brands and marketing efforts.
Our total rewards program enables us to retain talent, reward high-performing employees at all levels and incentivize and motivate exceptional performance. In addition to competitive base pay, we have an annual bonus program for employees at all levels, stock-based compensation for certain employees, and a comprehensive variable compensation program specific to our revenue organization.
In addition to competitive base pay, our compensation structure includes an annual bonus program for all employees, stock-based compensation for certain roles, and a comprehensive variable compensation plan for our revenue organization. All bonus and variable compensation plans are directly linked to both individual and company performance.
Human Capital Management Our employees are critical to our success. As of December 31, 2024, we had 494 total employees worldwide, all of which are full-time employees. We also engage consultants and contractors to supplement our workforce. A majority of our employees are engaged in engineering, software and product development, sales, and related functions.
We also utilize consultants and contractors to supplement our workforce as necessary. The majority of our employees are engaged in engineering, software and product development, sales, and related functions. As of December 31, 2025, we have maintained strong employee relations with no work stoppages.
Offerings organized under the Smart Operations Solutions umbrella include Work Management, Answer Automation, Audit Management and Inspection Management. • Work Management. Work Management enables on-site teams to manage tasks, respond quickly to inquiries, and engage in preventative maintenance all from a mobile device.
Work Management enables on-site teams to manage tasks, respond quickly to inquiries, and engage in preventative maintenance all from a mobile device. Through work order and service request automations, the platform provides a simplified overview of on-site tasks and allows for easy scheduling of team members.
Supply Chain Generally, our hardware device suppliers maintain a stock of devices and key components to cover any minor supply chain disruptions. Where possible we utilize multiple sourcing methods to mitigate the risk of disruption from a single supplier. However, we also rely on a number of single source and limited source suppliers for components of our solutions.
Where practicable, we utilize multiple sourcing strategies to reduce the risk of disruption associated with reliance on a single supplier. However, we continue to depend on a limited number of single-source and limited-source suppliers for certain components used in our solutions.
As of December 31, 2024, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing. None of our domestic or international employees are subject to a collective bargaining agreement or represented by a labor union.
None of our domestic or international employees are represented by a labor union or subject to a collective bargaining agreement. We strive to cultivate a welcoming and inclusive work environment where employees are empowered to be authentic and contribute to meaningful work that positively impacts our customers and communities.
We primarily sell our solutions through our internal sales organization to diverse customers, including single-family rental homeowners, homebuilders and iBuyers, across our operating markets. Our sales team engages prospects through telephone and email communication, while our visibility is further enhanced through publications in recognized industry magazines and online media outlets.
We engage our audience through organic content, targeted advertising and content marketing efforts that include product updates and educational materials. 7 We primarily sell our solutions through our internal sales organization to diverse customers, predominately in multifamily but also including single-family rental homeowners, homebuilders and iBuyers, across our operating markets.
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Importantly, our enterprise software integrates into most existing property management systems used by residential property owners and operators. We believe that our customers realize several benefits from implementing our solutions, including: • Operating Efficiency.
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Our sales team engages prospects through telephone and email communication, while our visibility is further enhanced through publications in recognized industry magazines and online media outlets. Environmental and Sustainability Benefits We are facilitating a more sustainable future by helping owners, operators, and residents reduce energy consumption, meet de-carbonization goals and achieve sustainability objectives.
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During the year ended December 31, 2024, to further focus and align our efforts, we defined four strategic pillars: Sustainable Annual Recurring Revenue ("ARR") Growth, Platform Superiority, Operational Excellence and Collaborative Innovation.
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Our culture is supportive, engaging, and fast-paced, fostering strong partnerships among coworkers with diverse backgrounds and experiences. We promote employee involvement through resource groups and community give-back opportunities. We gather regular insights, feedback, and data about workplace experiences and manager effectiveness through our annual employee engagement survey.
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With a solid strategy in place and a clear focus on enhancing our competitive strengths, we believe SmartRent is positioned to capitalize on significant market opportunities, deliver high return on investment to our customers and create sustainable long-term value for our shareholders.
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Our commitment to employee development is supported by real-time, informal feedback, a formal annual performance review process, career path transparency, and ongoing, role-specific training. Our total rewards program is designed to retain talent, reward high performance, and incentivize exceptional results across all levels.
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With our holistic smart home operating system and in-house installation, training, and support services, we believe we offer a smart home solution that provides a full-service, end-to-end experience.
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Our highly competitive benefits program provides a 100% employer-paid medical option for employees and dependents, as well as dental, vision, life insurance, flexible time off, paid parental leave, an employee stock purchase plan, and a 401(k) plan with a company match.
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A network of strategically placed access points ensures seamless coverage, reliable connectivity and a device-dedicated WiFi network to power Hubs and other in-home smart devices. While Hubs have built-in cellular connectivity, in markets where cell coverage is not available or poor, communities can add Community WiFi to help maintain a consistent connection.
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Research and Development Our research and development efforts are focused on advancing our platform and enhancing the capabilities of our Smart Communities and Smart Operations solutions. We prioritize investments that support platform integration, expanded functionality across leasing and maintenance workflows, strengthened home and building IoT connectivity and improvements to operational tools and data visibility for owners and operators.
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With a Community WiFi system, owners, operators, and residents will have access to a dedicated and secure network. Residents can set up Community WiFi in seconds through their Resident App, without the need for a technician. Upon move-out, access is automatically deactivated.
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Our development strategy emphasizes interoperability across hardware and software components, scalability across large portfolios, continued refinement of automation and reporting capabilities, and the responsible use of artificial intelligence to enhance our solutions and improve internal development efficiency. Supply Chain Our hardware device suppliers generally maintain inventories of finished goods and key components intended to mitigate minor supply chain disruptions.
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Community WiFi can be installed in any property type, including new construction or retrofitting existing structures, and perform site surveys to customize the equipment best suited to each property and provide full technical support 24 hours a day, 365 days a year. • Package Management .
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The loss of, or disruption at, any such supplier could require significant time and expense to identify, qualify, and transition to alternative sources, and may result in delays or increased costs.
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Smart Package Room complements SmartRent’s smart home line, expands the Company’s product offerings and solves a long-standing pain point for rental housing operators. • Parking Management . Parking Management alleviates resident and guest parking issues faced by multifamily residential properties.
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This solution provides an integrated software system and single-source database that allows owners and operators to automatically assign and re-assign parking spaces, review interactive maps for live parking space availability (based on parking sensors for real-time occupancy), implement a proactive enforcement process, monitor parking management with resident parking decals, and install custom parking signs to monetize guest parking.
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Through a Parking Management portal, residents can add or remove vehicles, edit vehicle details, review assigned parking decals, and provide guests with parking access. Parking Management integrates with many popular property management systems, which enables owners and operators to manage all parking-related actions from one platform.
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We seek to foster a welcoming, inclusive work environment where employees can be themselves and do meaningful work that positively impacts our customers and communities. Our culture is supportive, engaging, and fast paced and facilitates partnerships among coworkers with diverse backgrounds and experiences. Our employees have opportunities to get involved in resource groups and give back to the community.
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Employee growth and development comes from receiving real-time, informal feedback, a formal performance review, career path transparency, and ongoing role-specific training. The structure of our compensation programs endeavors to give employees peace of mind when it comes to health and financial benefits so that they can focus on doing their best work.
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Both the bonus and variable compensation plans are tied directly to individual and company performance. Our competitive benefits program includes a 100% employer paid medical option for employees and dependents.
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Additionally, we provide dental, and vision for employees and their dependents, life insurance, flexible time off, paid parental leave, employee stock purchase plan and a 401(k) plan with a company match. 8 Research and Development Our near-term product roadmap includes new leasing solutions (including an online application for the leasing process and other applications for lease signing and customer relationship management), resident experience solutions (including applications for marketplaces, amenity reservations, rent payments, and work orders), home IoT solutions (including hubless systems, smart appliances, and video and security systems), building IoT solutions (including energy, water, and air metering), and property operations solutions (including centralized maintenance management, IoT-triggered predictive maintenance alerts for HVAC and plumbing, asset portfolio planning, vendor performance tracking, and energy reporting with Environmental, Social, and Governance ("ESG") dashboards and predictive analytics).
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Replacing any single source or limited source suppliers could require the expenditure of significant resources and time to source these products. The majority of our hardware devices sold, both proprietary and third-party, are manufactured overseas.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

115 edited+46 added−29 removed270 unchanged
Biggest changeYou may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “- Risks Related to Our Business and Industry” and the following: • our operating and financial performance and prospects; • our quarterly or annual earnings or those of other companies in our industry compared to market expectations; • conditions that impact demand for our products and/or services; • future announcements concerning our business, our customers’ businesses or our competitors’ businesses; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the JOBS Act; • the size of our public float; 32 • coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; • market and industry perception of our success, or lack thereof, in pursuing our business strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in laws or regulations which adversely affect our industry or us; • privacy and data protection laws, privacy or data breaches or incidents, or the loss or other unavailability of data; • the impact of pandemics or epidemics, such as the COVID-19 pandemic, on our financial condition and the results of operations; • changes by the Financial Accounting Standards Board or other accounting regulatory bodies to generally accepted accounting principles, standards, guidance, interpretations or policies; • changes in senior management or key personnel; • issuances, exchanges, sales or purchases, or expected issuances, exchanges, sales or purchases of our capital stock; • changes in our dividend policy; • adverse resolution of new or pending litigation against us; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.
Biggest changeThe trading price of our Class A Common Stock may fluctuate widely and you may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Related to Our Business and Industry” and the following: • our operating and financial performance and prospects and those of other participants in our markets, including our customers and competitors; • conditions that impact demand for our products and/or services; • public announcements concerning our business, our customers’ businesses or our competitors’ businesses; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the JOBS Act; • the size of our public float; • coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; • market and industry perception of our success, or lack thereof, in pursuing our business strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in laws or regulations which adversely affect our industry or us; • privacy and data protection laws, privacy or data breaches or incidents, or the loss or other unavailability of data; • changes by the Financial Accounting Standards Board or other accounting regulatory bodies to generally accepted accounting principles, standards, guidance, interpretations or policies; • changes in our senior management or key personnel; • issuances, exchanges, sales or purchases, or expected issuances, exchanges, sales or purchases of our capital stock; • changes in our dividend policy; • adverse resolution of new or pending litigation against us; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, pandemics, epidemics, terrorist attacks, acts of war and responses to such events. 33 Further, broad market and industry factors may materially reduce the market price of our Class A Common Stock, regardless of our operating performance.
Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and quality problems, and other unknown factors that may result in losses in future periods. If these losses exceed our expectations or our revenue growth expectations are not met in future periods, our business will be harmed and our stock price could decline.
Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, quality problems, and other unknown factors that may result in losses in future periods. If our revenue growth expectations are not met or these losses exceed our expectations in future periods, our business will be harmed and our stock price could decline.
For example, in 2020 and 2021 we identified a deficiency with batteries contained in certain hardware sold which we acquired from a supplier. As of December 31, 2023 we accrued $864,000 in hardware cost of goods sold on the Consolidated Statements of Operations related to the battery deficiencies.
For example, in 2020 and 2021 we identified a deficiency with batteries contained in certain hardware sold which we acquired from a supplier. As of December 31, 2023 we accrued $864,000 in hardware cost of goods sold on the Consolidated Statements of Operations related to the battery deficiencies.
In addition, we will face risks in doing business internationally that could materially and adversely affect our business, including: • our ability to comply with differing and evolving technical and environmental standards, telecommunications regulations, building and fire codes, and certification requirements outside the U.S.; • difficulties and costs associated with staffing and managing foreign operations; • our ability to effectively price our products and solutions in competitive international markets; • potentially greater difficulty collecting accounts receivable and longer payment cycles; • the need to adapt and localize our products and subscriptions for specific countries; • the need to offer customer care in various native languages; • reliance on third parties over which we have limited control; • availability of reliable network connectivity in targeted areas for expansion; • difficulties in understanding and complying with local laws, regulations, and customs in foreign jurisdictions; • restrictions on travel to or from countries in which we operate or inability to access certain areas; • changes in diplomatic and trade relationships, including tariffs and other non-tariff barriers, such as quotas and local content rules; • U.S. government trade restrictions, including those which may impose restrictions such as prohibitions, on the exportation, re-exportation, sale, shipment or other transfer of programming, technology, components, and/or services to foreign persons; • our ability to comply with different and evolving laws, rules, and regulations, including the European Union General Data Protection Regulation and other data privacy and data protection laws, rules and regulations; • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and U.K.
In addition, we will face risks in doing business internationally that could materially and adversely affect our business, including: • our ability to comply with differing and evolving technical and environmental standards, telecommunications regulations, building and fire codes, and certification requirements outside the U.S.; • difficulties and costs associated with staffing and managing foreign operations; 31 • our ability to effectively price our products and solutions in competitive international markets; • potentially greater difficulty collecting accounts receivable and longer payment cycles; • the need to adapt and localize our products and subscriptions for specific countries; • the need to offer customer care in various native languages; • reliance on third parties over which we have limited control; • availability of reliable network connectivity in targeted areas for expansion; • difficulties in understanding and complying with local laws, regulations, and customs in foreign jurisdictions; • restrictions on travel to or from countries in which we operate or inability to access certain areas; • changes in diplomatic and trade relationships, including tariffs and other non-tariff barriers, such as quotas and local content rules; • U.S. government trade restrictions, including those which may impose restrictions such as prohibitions, on the exportation, re-exportation, sale, shipment or other transfer of programming, technology, components, and/or services to foreign persons; • our ability to comply with different and evolving laws, rules, and regulations, including the European Union General Data Protection Regulation and other data privacy and data protection laws, rules and regulations; • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and U.K.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expiration or non-utilization of net operating loss carryforwards; • tax effects of share-based compensation; • expansion into new jurisdictions; • potential challenges to and costs related to implementation and ongoing operation of our intercompany arrangements; • increases in state or federal statutory tax rates on corporate income; 23 • changes in tax laws and regulations and accounting principles, or interpretations or applications thereof; and • certain non-deductible expenses as a result of acquisitions.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expiration or non-utilization of net operating loss carryforwards; • tax effects of share-based compensation; • expansion into new jurisdictions; • potential challenges to and costs related to implementation and ongoing operation of our intercompany arrangements; • increases in state or federal statutory tax rates on corporate income; • changes in tax laws and regulations and accounting principles, or interpretations or applications thereof; and • certain non-deductible expenses as a result of acquisitions.
For example, if the outputs that our AI technology assists in producing are or are alleged to be deficient, inaccurate, or biased, or if such outputs or their development or deployment, including the collection, use, or other processing of data used to train or develop such AI technology, are held or alleged to infringe upon or to have misappropriated third-party intellectual property rights or to violate applicable laws, regulations, or other actual or asserted legal obligations to which we are or may become subject, our business, operating results, financial condition, and growth prospects could be adversely affected.
For example, if the outputs that our AI technology assists in producing are or are alleged to be deficient, inaccurate, or biased, or if such outputs or their development or deployment, including the collection, use, or other processing of data used to train or develop such AI technology, are held or alleged to infringe upon or to have misappropriated third-party intellectual property rights or to violate applicable laws, regulations, or other actual or asserted legal obligations, including privacy rights, to which we are or may become subject, our business, operating results, financial condition, and growth prospects could be adversely affected.
During the year ended December 31, 2024, we determined the battery replacements were complete and released the remaining warranty accrual of $864,000 related to the battery deficiency. 28 The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain senior management and qualified Board members.
During the year ended December 31, 2024, we determined the battery replacements were complete and released the remaining warranty accrual of $864,000 related to the battery deficiency. The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain senior management and qualified Board members.
Although we have implemented policies and procedures designed to ensure compliance with anti-corruption laws, there can be no assurance that all of our employees, representatives, contractors, partners, and agents will comply with these laws and policies. 30 Our operations require us to import from Asia and Europe, which geographically stretches our compliance obligations.
Although we have implemented policies and procedures designed to ensure compliance with anti-corruption laws, there can be no assurance that all of our employees, representatives, contractors, partners, and agents will comply with these laws and policies. Our operations require us to import from Asia and Europe, which geographically stretches our compliance obligations.
Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage additional outside consultants, which will increase our costs and expenses. As a result, management’s attention may be diverted from other business concerns, which could harm our business.
Although we have hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage additional outside consultants, which will increase our costs and expenses. As a result, management’s attention may be diverted from other business concerns, which could harm our business.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or services, make content unavailable, or require us to stop offering certain features, all of which could negatively affect our membership and revenue growth.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or services, make content unavailable, or require us to stop offering certain features, all of which could negatively affect our revenue growth.
Our Charter provides that, unless we consent in writing to the selection of an alternative forum, (i) the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action, suit or proceeding brought on our behalf; (b) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (c) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, our Charter or bylaws; or (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (ii) subject to the foregoing, the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our Charter and bylaws provide that, unless we consent in writing to the selection of an alternative forum, (i) the Court of Chancery of the State of Delaware (or, in the event that the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action, suit or proceeding brought on our behalf; (b) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (c) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, our Charter or bylaws; or (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (ii) subject to the foregoing, the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Due to this shortage in prior periods, we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. The semiconductor supply chain is complex, with capacity constraints occurring throughout.
Due to this shortage in prior periods, in the past we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. The semiconductor supply chain is complex, with capacity constraints occurring throughout.
Expanding our international operations subjects us to a variety of risks and uncertainties, including exposure to foreign currency exchange rate fluctuations, which could adversely affect our business and operating results. We had international operations in Canada and the United Kingdom, and we may grow our international presence in the future.
Expanding our international operations subjects us to a variety of risks and uncertainties, including exposure to foreign currency exchange rate fluctuations, which could adversely affect our business and operating results. We previously had international operations in Canada and the United Kingdom, and we may grow our international presence in the future.
Our bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our Charter and bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Alternatively, if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business.
Alternatively, if a court were to find the choice of forum provision contained in our Charter or bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business.
Bribery Act of 2010; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • fluctuations in currency exchange rates; 31 • exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S.
Bribery Act of 2010; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • fluctuations in currency exchange rates; • exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S.
Finally, in order to benefit from the protection of intellectual property rights, we must monitor and detect infringement, misappropriation or other violations of our intellectual property rights and pursue infringement, misappropriation or other claims in certain circumstances in relevant jurisdictions, all of which are costly and time-consuming.
Finally, to benefit from the protection of intellectual property rights, we must monitor and detect infringement, misappropriation or other violations of our intellectual property rights and pursue infringement, misappropriation or other claims in certain circumstances in relevant jurisdictions, all of which are costly and time-consuming.
If there is price compression in the market after these decisions are made, it could have a negative effect on our business. 17 If we fail to continue to develop our brand or our reputation is harmed, our business may suffer.
If there is price compression in the market after these decisions are made, it could have a negative effect on our business. If we fail to continue to develop our brand or our reputation is harmed, our business may suffer.
If we become the subject of certain forms of shareholder activism, such a concerted short squeeze, threatened or actual proxy contest or a hostile bid, the attention of our management and the Board may be diverted from executing our strategy.
If we become the subject of certain forms of shareholder activism, such as a concerted short squeeze, threatened or actual proxy contest or a hostile bid, the attention of our management and the Board may be diverted from executing our strategy.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Item 1B. Unresolved Staff Comments None.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. 36 Item 1B. Unresolved Staff Comments None.
Changes in effective tax rates, or adverse outcomes resulting from examination of our income or other tax returns, could adversely affect our results of operations and financial condition.
Changes in effective tax rates, or adverse outcomes resulting from examination of our income, sales or other tax returns, could adversely affect our results of operations and financial condition.
We face, and may in the future face, competition from large technology providers, managed service providers and WiFi providers, that may have greater capital and resources than we do.
We face, and may in the future face, competition from large technology providers and managed service providers, that may have greater capital and resources than we do.
In addition, such increased costs could cause us to increase our rates, which could increase our attrition rate. 16 The markets in which we participate could become more competitive as many companies, including large technology companies, managed service providers and internet service, security and WiFi providers, may target the markets in which we do business.
In addition, such increased costs could cause us to increase our rates, which could increase our attrition rate. The markets in which we participate could become more competitive as many companies, including large technology companies, managed service providers and internet service and security providers, may target the markets in which we do business.
For example, Virginia, Colorado, Utah, and Connecticut have adopted such legislation that became effective in 2023, Texas, Montana, Oregon, and Florida have adopted such legislation that became effective in 2024, Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey and Tennessee have adopted such legislation that has or will become effective in 2025, and Indiana, Kentucky, and Rhode Island have adopted such legislation that will become effective in 2026.
For example, Virginia, Colorado, Utah, and Connecticut have adopted such legislation that became effective in 2023, Texas, Montana, Oregon, and Florida have adopted such legislation that became effective in 2024, Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey and Tennessee have adopted such legislation that became effective in 2025, and Indiana, Kentucky, and Rhode Island have adopted such legislation that has become effective in 2026.
Paladin is unsuccessful at leading the management team or is unable to articulate and execute our strategy and vision, we may not be able to achieve our financial and operational goals, which could adversely affect our business and results of operations.
Martell is unsuccessful at leading the management team or is unable to articulate and execute our strategy and vision, we may not be able to achieve our financial and operational goals, which could adversely affect our business and results of operations.
In addition, these suppliers, manufacturers, and partners may experience delay, disruption, or lapse in the quality of their operations, which would subject us to risks, including the following: • inability to satisfy demand for our products; • reduced control over delivery timing and product reliability; • reduced ability to monitor the manufacturing process and components used in our products; • limited ability to develop comprehensive manufacturing specifications that take into account any materials or components shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; • price increases; • failure of a significant supplier, manufacturer, or partner to perform its obligations to us for technical, market, or other reasons; • insolvency, bankruptcy or liquidation of a significant supplier, manufacturer, or partner; 11 • difficulties in establishing additional supplier, manufacturer, or partner relationships if we experience difficulties with our existing suppliers, manufacturers, or partners; • shortages of materials or components; • disagreements with suppliers, manufacturers, or logistics partners as to quality control, leading to a surplus of ineffective products; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; • misappropriation of our intellectual property; • geopolitical uncertainty and instability, such as the ongoing geopolitical tensions related to conflicts in and around Ukraine, Israel and other areas of the world, or potential conflicts in the region surrounding the Taiwan Strait, which may lead to changes in U.S. or foreign trade policies and general economic conditions that impact our business; • foreign subsidiaries may operate in a way which harms our business including the violation of labor, environmental or other laws, or failure to follow ethical business practices; • exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of manufacturing operations in or trade from foreign countries in which our products are manufactured or the components thereof are sourced; • changes in local economic conditions in the jurisdictions where our suppliers, manufacturers, and partners are located; and • insufficient warranties and indemnities on components supplied to our manufacturers or performance by our partners.
Our use of third-party suppliers, manufacturers and partners subject us to risks, including the following: • inability to satisfy demand for our products; • reduced control over delivery timing and product reliability; • reduced ability to monitor the manufacturing process and components used in our products; • limited ability to develop comprehensive manufacturing specifications that take into account any materials or components shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; 12 • price increases; • failure of a significant supplier, manufacturer, or partner to perform its obligations to us for technical, market, or other reasons; • insolvency, bankruptcy or liquidation of a significant supplier, manufacturer, or partner; • difficulties in establishing additional supplier, manufacturer, or partner relationships if we experience difficulties with our existing suppliers, manufacturers, or partners; • shortages of materials or components; • disagreements with suppliers, manufacturers, or logistics partners as to quality control, leading to a surplus of defective products; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; • misappropriation of our intellectual property; • geopolitical uncertainty and instability, such as the ongoing geopolitical tensions related to conflicts in and around Ukraine, Israel and other areas of the world, or potential conflicts in the region surrounding the Taiwan Strait, which may lead to changes in U.S. or foreign trade policies and general economic conditions that impact our business; • foreign subsidiaries may operate in a way which harms our business including the violation of labor, environmental or other laws, or failure to follow ethical business practices; • exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of manufacturing operations in or trade from foreign countries in which our products are manufactured or the components thereof are sourced; • changes in local economic conditions in the jurisdictions where our suppliers, manufacturers, and partners are located; and • insufficient warranties and indemnities on components supplied to our manufacturers or performance by our partners.
As a result of disclosure of information in this Report and in filings required of a public company, our business and financial condition is more visible, which may result in more litigation, including by competitors and other third parties.
As a result of disclosure of information in this Report and in other filings required of a public company, our business and financial condition is publicly visible, which may result in litigation, including by competitors and other third parties.
We rely on assumptions and estimates to calculate certain of our key operating metrics, such as Units Deployed and New Units Deployed, Units Booked, and ARR. Our key operating metrics are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies.
We rely on assumptions and estimates to calculate certain of our key operating metrics, such as Units Deployed and New Units Deployed, Units Booked, and Annual Recurring Revenue ("ARR"). Our key operating metrics are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies.
Revenue growth may slow, revenues may decline or grow at a slower rate relative to increasing costs, or we may incur significant losses in the future for a number of possible reasons, including general macroeconomic conditions, decreasing demand for our products, slow down in construction, increasing competition (including competitive pricing pressures), a decrease in the growth of the markets in which we compete, and our failure to capitalize on growth opportunities.
Revenue growth may slow, revenues may decline or grow at a slower rate relative to increasing costs, or we may incur significant losses in the future for a number of possible reasons, including general macroeconomic conditions, decreased demand for our products, slow down in housing construction, increased competition (including competitive pricing pressures), a decrease in the growth of the markets in which we compete, and our failure to capitalize on growth opportunities.
For example, in August 2022 the United States enacted a 1% excise tax on stock buybacks, which could impact our share repurchase program, and a 15% alternative minimum tax on adjusted financial statement income as part of the Inflation Reduction Act of 2022.
In addition, in August 2022 the United States enacted a 1% excise tax on stock buybacks, which could impact our share repurchase program, and a 15% alternative minimum tax on adjusted financial statement income as part of the Inflation Reduction Act of 2022.
Accordingly, a loss of any of our significant suppliers, manufactures, or logistics partners could have an adverse effect on our business, financial condition, and operating results.
Accordingly, a loss of any of our significant suppliers, manufacturers, or logistics partners could have an adverse effect on our business, financial condition, and operating results.
Our ability to compete depends on a number of factors, including: • our product and solution functionality, performance, ease of use, reliability, availability, and cost effectiveness relative to that of our competitors’ products and solutions; • our success in utilizing new technologies to offer solutions and features previously not available in the marketplace • our success in identifying new markets, applications and technologies such as our Community WiFi solution; • our ability to attract and retain partners; • our name recognition and reputation; • our ability to recruit software engineers and sales and marketing personnel; and • our ability to protect our intellectual property.
Our ability to compete depends on a number of factors, including: • our product and solution functionality, performance, ease of use, reliability, availability, and cost effectiveness relative to that of our competitors’ products and solutions; 16 • our success in utilizing new technologies to offer solutions and features previously not available in the marketplace • our success in identifying new markets, applications and technologies; • our ability to attract and retain partners; • our name recognition and reputation; • our ability to recruit software engineers and sales and marketing personnel; and • our ability to protect our intellectual property.
Among other things, our Charter and/or bylaws include the following provisions: • a staggered board, which means that the Board is classified into three classes of directors, with staggered three-year terms and directors are only able to be removed from office for cause; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • a prohibition on stockholder action by written consent, which means that our stockholders are only able to take action at a meeting of stockholders and are not be able to take action by written consent for any matter; • a forum selection clause, which means certain litigation against us can only be brought in Delaware; • the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders. 35 These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
Among other things, our Charter and/or bylaws include the following provisions: • a staggered board, which means that the Board is classified into three classes of directors, with staggered three-year terms and directors are only able to be removed from office for cause; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • a prohibition on stockholder action by written consent, which means that our stockholders are only able to take action at a meeting of stockholders and are not be able to take action by written consent for any matter; • a forum selection clause, which means certain litigation against us can only be brought in Delaware; • the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Risks Related to Our Business and Industry We have a history of net losses and may not be able to achieve or maintain profitability in the future. We experienced net losses in each year since inception, including a net loss of $34.6 million for 2023 and $33.6 million for 2024.
Risks Related to Our Business and Industry We have a history of net losses and may not be able to achieve or maintain profitability in the future. We experienced net losses in each year since inception, including a net loss of $33.6 million for 2024 and $60.6 million for 2025.
We cannot assure you that we will be able to comply with any such restrictive covenants. In the event that we are unable to comply with these covenants in the future, we would seek an amendment or waiver of the covenants. We cannot assure you that any such waiver or amendment would be granted.
In the event that we are unable to comply with these covenants in the future, we would seek an amendment or waiver of the covenants. We cannot assure you that any such waiver or amendment would be granted.
Fluctuations in our operating results and financial condition may arise due to a number of factors, including: • the proportion of our revenue attributable to SaaS, versus hardware and other revenues; • fluctuations in demand for our platform and solutions; • changes in our business and pricing policies or those of our competitors; • the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient products to meet our demands; • the timing and success of introductions of new solutions, products or upgrades by us or our competitors; • our ability to control costs, including our operating expenses, the costs of the hardware we purchase or manufacture, the cost of the labor required to provide our professional services and the costs required to provide subscriptions for use of the Company's software; 14 • changes in business or macroeconomic conditions, including global supply chain issues, housing affordability, inflation, foreign currency exchange rate fluctuations, changing interest rates, recessionary conditions, political instability, volatility in the credit markets, regulatory requirements or market conditions in our industry; • the ability to accurately forecast revenue; • competition, including entry into the industry by new competitors and new offerings by existing competitors; • our ability to successfully manage any future acquisitions and integrations of businesses; • issues related to introductions of new or improved products, such as shortages of prior generation products or short-term decreased demand for next generation products; • the amount and timing of expenditures, including those related to expanding our operations, increasing research and development, introducing new solutions or paying litigation expenses; • the ability to effectively manage growth within existing and new markets domestically and internationally; • changes in the payment terms for our platform and solutions; • restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data; and • the impact of other events or factors, including those resulting from natural disasters, pandemics, war, including due to the war in Ukraine and Israel-Hamas conflict, acts of terrorism, or responses to these events.
Fluctuations in our operating results and financial condition may arise due to a number of factors, including: • the proportion of our revenue attributable to SaaS, versus hardware and other revenues; • fluctuations in demand for our platform and solutions; • changes in our business and pricing policies or those of our competitors; • the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient products to meet our demands; • the timing and success of introductions of new solutions, products or upgrades by us or our competitors; • our ability to control costs, including our operating expenses, the costs of the hardware we purchase or manufacture, the cost of the labor required to provide our professional services and the costs required to provide subscriptions for use of the Company's software; • changes in business or macroeconomic conditions, including global supply chain issues, housing affordability, inflation, foreign currency exchange rate fluctuations, changing interest rates, recessionary conditions, political instability, volatility in the credit markets, regulatory requirements or market conditions in our industry; • the ability to accurately forecast revenue; • competition, including entry into the industry by new competitors and new offerings by existing competitors; • our ability to successfully manage any future acquisitions and integrations of businesses; • issues related to introductions of new or improved products, such as shortages of prior generation products or short-term decreased demand for next generation products; • the amount and timing of expenditures, including those related to expanding our operations, increasing research and development, introducing new solutions or paying litigation expenses; • the ability to effectively manage growth within existing and new markets; • changes in the payment terms for our platform and solutions; • restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data; and • the impact of other events or factors, including those resulting from natural disasters, pandemics, political or military conflict, including due to the war in Ukraine and Israel-Hamas conflict, acts of terrorism, or responses to these events. 15 Due to the foregoing factors, and the other risks discussed in this Report, you should not rely on quarter-over-quarter and year-over-year comparisons of our operating results as an indicator of our future performance.
Adverse macroeconomic conditions, including inflation, slower growth or recession, barriers to trade, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, currency fluctuations, regulatory requirements and other events beyond our control, such as economic sanctions, natural disasters, pandemics, including the COVID-19 pandemic, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war and Israel-Hamas war, can materially adversely affect demand for our products and solutions.
Adverse macroeconomic conditions, including inflation, slower growth or recession, barriers to trade, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, currency fluctuations, regulatory requirements and other events beyond our control, such as economic sanctions, tariffs, natural disasters, pandemics, epidemics, political instability, including in regions such as Venezuela, armed conflicts and wars, including the Russia-Ukraine war and Israel-Hamas conflict, can materially adversely affect demand for our products and solutions.
Any changes in our effective tax rate could adversely affect our results of operations. Our business is subject to the risk of earthquakes, fires, power outages, floods, pandemics and other health events and other catastrophic events, and to interruption by manmade problems such as terrorism.
Any changes in our effective tax rate could adversely affect our results of operations. 24 Our business is subject to the risk of earthquakes, fires, power outages, floods, pandemics and other health events and other catastrophic events, and to interruption by manmade problems such as political or military actions and acts of terrorism.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, and similar events. The third-party systems and operations and manufacturers we rely on are subject to similar risks.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, political or military conflicts, human errors, break-ins, and similar events. The third-party systems and operations and manufacturers we rely on are subject to similar risks.
New rules and regulations applicable to public companies may also make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
Rules and regulations applicable to public companies may also make it expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantial costs to obtain coverage.
As of December 31, 2024, we had approximately $222.9 million of gross federal net operating loss carryforwards available to reduce future taxable income.
As of December 31, 2025, we had approximately $252.9 million of gross federal net operating loss carryforwards available to reduce future taxable income.
As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. 29 Effective internal controls are necessary to provide reliable financial reports and to assist in the effective prevention of fraud.
As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.
However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we have the ability to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, exemption from the requirement to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding stockholder advisory votes on executive compensation.
Our failure to comply with these laws, regulations and standards could materially and adversely affect our business and results of operations. 29 However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we have the ability to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, exemption from the requirement to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding stockholder advisory votes on executive compensation.
There are a number of factors that could lead to a decline in customer levels or that could prevent us from increasing our customer levels, including: • our failure to introduce new features, software, products, or solutions that customers find engaging or our introduction of new products or solutions, or changes to existing products and solutions that are not favorably received; • harm to our brand and reputation; • pricing and perceived value of our offerings; • our inability to deliver quality products and solutions in a timely manner; • our customers engaging with competitive software, services, products, and solutions; • technical or other problems preventing customers or their residents from using our products and solutions in a rapid and reliable manner or otherwise affecting the customer experience; • deterioration of the apartment or real estate industry, including declining levels of multifamily and single-family rental buildings and reduced spending in the apartment industry; • unsatisfactory experiences with the delivery, installation, or products or solutions; and • deteriorating general economic conditions or a change in customer or consumer spending preferences or buying trends.
There are a number of factors that could lead to a decline in customer levels or that could prevent us from increasing our customer levels, including: • our failure to introduce new features, software, products, or solutions that customers find engaging or our introduction of new products or solutions, or changes to existing products and solutions that are not favorably received; • harm to our brand and reputation; • pricing and perceived value of our offerings; • our inability to deliver quality products and solutions in a timely manner; • our customers engaging with competitive software, services, products, and solutions; • technical or other problems preventing customers or their residents from using our products and solutions in a rapid and reliable manner or otherwise affecting the customer experience; • deterioration of the apartment or real estate industry, including declining growth in rental rates and levels of new multifamily and single-family rental building development, and reduced spending in the apartment industry; • our inability to attract and retain professional sales executives and develop a sales organization to economically sell to the small and medium segment of the rental market; • unsatisfactory experiences with the delivery, installation, or products or solutions; and 11 • deteriorating general economic conditions or a change in customer or consumer spending preferences or buying trends.
We own four issued U.S. patents, have five pending U.S. patent applications, and two pending international patent applications that relate to smart home, security and wireless Internet technologies utilized in our business. We may file additional patent applications in the future in the U.S. and internationally.
We own seven issued U.S. patents, have four pending U.S. patent applications, three foreign patent applications, and one international patent application that relate to smart home, security and wireless Internet technologies utilized in our business. We may file additional patent applications in the future in the U.S. and internationally.
The expansion of our systems and infrastructure will require us to commit substantial financial, operational, and technical resources in advance of an increase in the volume of business, with no assurance that the volume of business will increase. Any such capital investments will increase our cost base.
The expansion of our systems and infrastructure will require us to commit substantial financial, operational, and technical resources in advance of an increase in the volume of business, with no assurance that the volume of business will increase.
Risk Factor Summary Our business operations are subject to numerous risks and uncertainties, including those outside of our control, that could cause our business to be harmed, including risks regarding the following: Risks Related to Our Business and Industry • We have a history of net losses and may not be able to achieve or maintain profitability in the future. • Any delay, disruption or quality control problems experienced by our third-party suppliers, manufacturers, and partners, could cause us to lose market share and our results of operations may suffer. • We rely on a limited number of third-party suppliers and manufacturers for our products, and a loss of any one of them could negatively affect our business. 10 • We may not successfully manage the transition of leadership to our new Chief Executive Officer, which could have an adverse impact on us.
Risk Factor Summary Our business operations are subject to numerous risks and uncertainties, including those outside of our control, that could cause our business to be harmed, including risks regarding the following: Risks Related to Our Business and Industry • We have a history of net losses and may not be able to achieve or maintain profitability in the future. • Our ability to attract and retain new customers, retain and expand sales with existing customers may be impacted by macroeconomic and other factors as described in this Report which could have an adverse effect on our results of operations. • Any delay, disruption or quality control problems experienced by our third-party suppliers, manufacturers, and partners, could cause us to lose market share and our results of operations may suffer. • We rely on a limited number of third-party suppliers and manufacturers for our products, and a loss of any one of them could negatively affect our business. • We may not successfully manage the transition of leadership to our new President and Chief Executive Officer, which could have an adverse impact on us.
In addition, the restrictive covenants in credit facilities we may secure in the future may restrict us from being able to conduct our operations in a manner required for our business and may restrict our growth, which could have an adverse effect on our business, financial condition, or results of operations.
In addition, the restrictive covenants in credit facilities we may secure in the future may restrict us from being able to conduct our operations in a manner required for our business and may restrict our growth, which could have an adverse effect on our business, financial condition, or results of operations. 20 We cannot assure you that we will be able to comply with any such restrictive covenants.
We could also be prohibited from using or selling certain subscriptions, prohibited from using certain processes, or required to redesign certain products, each of which could have a material adverse effect on our business and results of operations. 21 These and other outcomes may: • result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers; • cause us to pay license fees for intellectual property we are deemed to have infringed; • cause us to incur costs and devote valuable technical resources to redesigning our products or solutions; • cause our cost of revenues to increase; • cause us to accelerate expenditures to preserve existing revenues; • materially and adversely affect our brand in the marketplace and cause a substantial loss of goodwill; • cause us to change our business methods; and • require us to cease certain business operations or offering certain products or features.
These and other outcomes may: • result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers; • cause us to pay license fees for intellectual property we are deemed to have infringed; • cause us to incur costs and devote valuable technical resources to redesigning our products or solutions; • cause our cost of revenues to increase; • cause us to accelerate expenditures to preserve existing revenues; • materially and adversely affect our brand in the marketplace and cause a substantial loss of goodwill; • cause us to change our business methods; and • require us to cease certain business operations or offering certain products or features.
If the smart home technology industry does not grow as we expect, or if we cannot expand our products and solutions to meet the demands of this market, our revenue may decline, fail to grow or fail to grow at an accelerated rate, and we may incur operating losses.
Any delay or failure in the introduction of new or enhanced products or solutions could harm our business. 14 If the smart home technology industry does not grow as we expect, or if we cannot expand our products and solutions to meet the demands of this market, our revenue may decline, fail to grow or fail to grow at an accelerated rate, and we may incur operating losses.
Similarly, if any of our potential competitors implement new technologies before we are able to implement ours, those competitors may be able to provide more effective products or solutions, possibly at lower prices. Any delay or failure in the introduction of new or enhanced products or solutions could harm our business.
Similarly, if any of our potential competitors implement new technologies before we are able to implement ours, those competitors may be able to provide more effective products or solutions, possibly at lower prices.
Some residents, owners, or operators may be reluctant or unwilling to use our solutions for a number of reasons, including satisfaction with traditional solutions, concerns about additional costs, concerns about data privacy, and lack of awareness of the benefits of our solutions.
Some residents, owners, or operators may be reluctant or unwilling to use our solutions for a number of reasons, including satisfaction with traditional solutions, concerns about additional costs, concerns about data privacy, and lack of awareness of the benefits of our solutions. In addition, macroeconomic conditions may cause delays or reductions in the capital expenditures by our customers.
If our assumptions regarding these uncertainties are incorrect or change in reaction to changes in our markets, or if we do not manage or address these risks successfully, our results of operations could differ materially from our expectations, and our business could suffer.
If our assumptions regarding these uncertainties are incorrect or change in reaction to changes in our markets, or if we do not manage or address these risks successfully, our results of operations could differ materially from our expectations, and our business could suffer. We plan to extend our offerings to current customers by introducing new software, services and products.
This volatility often has been unrelated or disproportionate to the operating performance of particular companies.
The stock market has historically experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies.
Risks Related to Legal and Regulatory Matters • We are subject to legal obligations and laws and regulations related to privacy and cybersecurity, and any actual or perceived failure to meet those obligations could harm our business. • If there is any breach of security controls; unauthorized or inadvertent access to customer, residential, or other data; or unauthorized control or view of systems, our products and solutions may be perceived as insecure, our business may be harmed, and we may incur significant liabilities. • Design and manufacturing defects in our products and services could subject us to personal injury, property damage, product liability, warranty, and other claims, which could adversely affect our business and result in harm to our business.
Risks Related to Legal and Regulatory Matters • We are subject to legal obligations and laws and regulations related to privacy and cybersecurity, and any actual or perceived failure to meet those obligations could harm our business. • If there is any breach of security controls; unauthorized or inadvertent access to customer, residential, or other data; or unauthorized control or view of systems, our products and solutions may be perceived as insecure, our business may be harmed, and we may incur significant liabilities. • Design and manufacturing defects in our products and services could subject us to personal injury, property damage, product liability, warranty, and other claims, which could adversely affect our business and result in harm to our business. 10 Risks Related to Ownership of Our Class A Common Stock • If securities analysts issue unfavorable commentary about us or our industry or downgrade our Class A Common Stock, the price of our Class A Common Stock could decline. • Our management has limited experience operating a public company.
These and other economic factors can materially adversely affect our business, results of operations, financial condition and stock price. 22 During weak or uncertain economic times, the available pool of potential customers and the amount of capital expenditures that our existing customers deploy may decline as the prospects for residential building renovation projects and new multifamily apartment and single-family rental construction diminish, which may have a corresponding impact on our growth prospects.
During weak or uncertain economic times, the available pool of potential customers and the amount of capital expenditures that our existing customers deploy may decline as the prospects for residential building renovation projects and new multifamily apartment and single-family rental construction diminish, which may have a corresponding impact on our growth prospects.
Certain of our products are currently subject to tariffs, changes in trade policies or labor shortages, which could make delivery of supplies more expensive. For example, the new U.S. presidential administration has imposed additional tariffs on imports into the United States from Canada, China and Mexico, which could lead to increased expenses and delays in shipments.
Certain of our products are currently subject to tariffs, changes in trade policies or labor shortages, which could make delivery of supplies more expensive. For example, recent changes have resulted in fluctuating tariffs on imports into the United States from certain European countries, Canada, China and Mexico, which could lead to increased expenses and delays in shipments.
We do not intend to pay dividends on our Class A Common Stock for the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business.
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A Common Stock in the foreseeable future.
If we fail to promote and maintain our brand, our business could be materially and adversely affected. Interruptions to, or other problems with, our website and interactive user interface, information technology systems, manufacturing processes or other operations could damage our reputation and brand and substantially harm our business.
Interruptions to, or other problems with, our website and interactive user interface, information technology systems, manufacturing processes or other operations could damage our reputation and brand and substantially harm our business.
In the future, if we are not able to meet the continued listing requirements of the NYSE, our Class A Common Stock may be delisted.
We have in the past been notified that we may be delisted for failing to meet the continued listing requirements of the NYSE and may be unable to meet the continued listing requirements in the future. If we are not able to meet the continued listing requirements of the NYSE, our Class A Common Stock may be delisted.
Our products and solutions may be affected from time to time by design and manufacturing defects that could subject us to personal injury, property damage, product liability, warranty, and other claims, which could adversely affect our business and result in harm to our reputation.
The use of AI technology also presents emerging ethical issues that could harm our reputation and business if our use of AI technology becomes controversial. 28 Our products and solutions may be affected from time to time by design and manufacturing defects that could subject us to personal injury, property damage, product liability, warranty, and other claims, which could adversely affect our business and result in harm to our reputation.
In addition, if any of our products or components in our products are, or are alleged to be, defective, we may be required to participate in a recall of that product or component if the defect or alleged defect relates to safety.
In addition, if any of our products or components in our products are, or are alleged to be, defective, we may be required to participate in a recall of that product or component if the defect or alleged defect relates to safety. Any such recall and other claims could be costly to us and require substantial management attention.
Any inability to provide reliable financial reports or prevent fraud could harm our business. Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A Common Stock.
In addition, delisting from the NYSE could have an adverse effect on our business, reputation, financial condition, and operating results. 35 Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A Common Stock.
Failure to do so could result in widespread technical and performance issues affecting our products and solutions and could lead to claims against us. We maintain general liability insurance; however, design and manufacturing defects, and claims related thereto, may subject us to judgments or settlements that result in damages materially in excess of the limits of our insurance coverage.
We maintain general liability insurance; however, design and manufacturing defects, and claims related thereto, may subject us to judgments or settlements that result in damages materially in excess of the limits of our insurance coverage.
Risks Related to Ownership of Our Class A Common Stock Our Class A Common Stock price may be volatile or may decline regardless of our operating performance. The trading price of our Class A Common Stock may be volatile. The stock market has historically experienced extreme volatility.
Risks Related to Ownership of Our Class A Common Stock Our Class A Common Stock price may be volatile or may decline regardless of our operating performance. The trading price of our Class A Common Stock has experienced substantial price volatility in the past and may continue to do so in the future.
There can be no assurance that our effective tax rates, tax payments or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
These and other developments or changes in U.S. federal, state or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. There can be no assurance that our effective tax rates, tax payments or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
We may not successfully manage the transition of leadership to our new Chief Executive Officer, which could have an adverse impact on us. On February 24, 2025, Michael Shane Paladin became our new Chief Executive Officer. Our new Chief Executive Officer will be critical to executing on our evolving business strategy.
We may not successfully manage the transition of leadership to our new President and Chief Executive Officer, which could have an adverse impact on us. On June 16, 2025, Frank Martell became our new President and Chief Executive Officer. Our new President and Chief Executive Officer is critical to executing on our evolving business strategy.
Additionally, interpretations of federal and state consumer protection laws relating to online collection, use, dissemination, security, and other processing of personal information adopted by the FTC, state attorneys general, private plaintiffs, and courts have evolved, and may continue to evolve, over time.
These and other new and evolving laws and regulations relating to privacy in the U.S. could increase our potential liability and adversely affect our business. 25 Additionally, interpretations of federal and state consumer protection laws relating to online collection, use, dissemination, security, and other processing of personal information adopted by the FTC, state attorneys general, private plaintiffs, and courts have evolved, and may continue to evolve, over time.
These and other developments may require us to make significant changes to our use of AI technology, including by limiting or restricting our use of AI technology, and which may require us to make significant changes to our policies and practices, which may necessitate expenditure of significant time, expense, and other resources, the use of AI technology also presents emerging ethical issues that could harm our reputation and business if our use of AI technology becomes controversial.
These and other developments may require us to make significant changes to our use of AI technology, including by limiting or restricting our use of AI technology, and which may require us to make significant changes to our policies and practices, which may necessitate expenditure of significant time, expense, and other resources.
We expect to continue to devote significant resources to our future growth, including making meaningful investments in our customer acquisition teams, building out our technological capabilities, including internal business systems and tools, and exploring strategic acquisition opportunities. We may continue to incur losses and will have to generate and sustain increased revenues to achieve future profitability.
We believe we will continue to incur operating losses in the near-term as we continue to invest significantly in our business. We expect to continue to devote significant resources to our future growth, including making meaningful investments in our customer acquisition teams, building out our technological capabilities, including internal business systems and tools, and exploring strategic acquisition opportunities.
We expect to rely on AI to help drive future growth in our business, but there can be no assurance that we will realize the desired or anticipated benefits from AI technology or at all. We may also fail to properly implement AI technology or to effectively promote our use of it.
We expect to rely on AI to help drive future growth in our business, but there can be no assurance that we will realize the desired or anticipated benefits from AI technology or at all. The use of AI and AI-related technologies involves complexities and requires specialized expertise.
The terms of many open-source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services.
The terms of many open-source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. 22 Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that we developed using such software, which could include our source code, or otherwise seeking to enforce the terms of the applicable open-source license.
Thus, our business could be adversely affected if one or more of our suppliers is impacted by a natural disaster, geopolitical instability, such as the ongoing geopolitical tensions related to conflicts in and around Ukraine, Israel and other areas of the world, or other interruptions at a particular location.
Thus, our business could be adversely affected if one or more of our suppliers is impacted by a natural disaster, geopolitical instability, such as the ongoing geopolitical tensions related to conflicts in and around Ukraine, Israel and other areas of the world, or other interruptions at a particular location. 13 In particular, we rely on an exclusive manufacturer of Z-wave chips, which facilitate the Z-wave communication protocol used for communication between our Hub Devices and all other smart devices.
A change in the central processing unit would necessitate an extensive printed circuit board redesign, also resulting in production and deployment delays. 12 If we experience a significant increase in demand for our products, or if we need to replace an existing supplier or partner, we may be unable to supplement or replace them on terms that are acceptable to us, which may undermine our ability to deliver our products to customers in a timely manner.
If we experience a significant increase in demand for our products, or if we need to replace an existing supplier or partner, we may be unable to supplement or replace them on terms that are acceptable to us, which may undermine our ability to deliver our products to customers in a timely manner.
The loss of protection for our intellectual property rights could reduce the market value of our brands and our products and solutions, reduce new customer originations or upgrade sales to existing customers, lower our profits, and could have a material adverse effect on our business, financial condition, cash flows, or results of operations. 20 Our policy is to require our employees that were hired and contractors that were engaged to develop material intellectual property included in our products to execute written agreements in which they assign to us their rights in potential inventions and other intellectual property created within the scope of their employment (or, with respect to consultants and service providers, their engagement to develop such intellectual property), but we cannot assure you that we have adequately protected our rights in every such agreement or that we have executed an agreement with every such party.
Our policy is to require our employees that were hired and contractors that were engaged to develop material intellectual property included in our products to execute written agreements in which they assign to us their rights in potential inventions and other intellectual property created within the scope of their employment (or, with respect to consultants and service providers, their engagement to develop such intellectual property), but we cannot assure you that we have adequately protected our rights in every such agreement or that we have executed an agreement with every such party.
Repurchasing our Class A common stock reduces the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or business opportunities, and other general corporate purposes, and we may fail to realize the anticipated long-term stockholder value of any stock repurchase program.
Repurchasing our Class A common stock reduces the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or business opportunities, and other general corporate purposes, and we may fail to realize the anticipated long-term stockholder value of any stock repurchase program. 34 Our issuance of additional shares of Class A Common Stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price.
On March 21, 2022, we purchased all of the outstanding equity interests of SightPlan Holdings, Inc. ("SightPlan"). We cannot assure you that we will successfully identify suitable acquisition candidates, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company.
We cannot assure you that we will successfully identify suitable acquisition candidates, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company. Any such acquisition or investment could materially and adversely affect our results of operations.
In addition, the sale of a large number of shares by our stockholders could cause the prevailing market price of our Class A Common Stock to decline.
In addition, the sale of a large number of shares by our stockholders could cause the prevailing market price of our Class A Common Stock to decline. Our management has limited experience in operating a public company. Our executive officers have limited experience in the management of a publicly traded company.
In addition, if we expand the geography of our service offerings, the laws of some foreign countries where we may do business in the future may not protect intellectual property rights and technology to the same extent as the laws of the U.S., and these countries may not enforce these laws as diligently as government agencies and private parties in the U.S.
In addition, if we expand the geography of our service offerings, the laws of some foreign countries where we may do business in the future may not protect intellectual property rights and technology to the same extent as the laws of the U.S., and these countries may not enforce these laws as diligently as government agencies and private parties in the U.S. 21 From time to time, legal action by us may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others, or to defend against claims of infringement, misappropriation, or invalidity.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement’s Role in Assessing and Managing our Material Risks from Cybersecurity Threats We maintain an Incident Response Plan (the “Plan”) that involves a Security Incident Management Team (“SIMT”), comprised of members of our executive management, who work collaboratively across the Company to assess and respond to any cybersecurity incidents in accordance with the Plan.
Biggest changeManagement’s Role in Assessing and Managing our Material Risks from Cybersecurity Threats We maintain an Incident Response Plan (the “Plan”) that involves a Security Incident Management Team (“SIMT”), comprised of members of our executive management, who work collaboratively across the Company to assess and respond to any cybersecurity incidents in accordance with the Plan. 37 The SIMT includes our Chief Information Officer (“CIO”) and Vice President of Information Security, among other senior members of management, as well as their designees and experts as deemed necessary.
We did not identify any cybersecurity threats that have materially affected our business, including our business strategy, results of operations or financial condition in the calendar year ended December 31, 2024. However, despite our best efforts, we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced undetected cybersecurity events .
We did not identify any cybersecurity threats that have materially affected our business, including our business strategy, results of operations or financial condition in the calendar year ended December 31, 2025. However, despite our best efforts, we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced undetected cybersecurity events.
Through ongoing communications with the Information Security and Technology teams, the SIMT monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents, and is informed of potential cybersecurity incidents by the Security Incident Response Team when potential threats are discovered through various channels.
Through ongoing communications with the Information Security and Technology teams, the SIMT monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents, and is informed of potential cybersecurity incidents by the Security Incident Response Team when potential threats are discovered.
For additional information regarding these risks, please refer to Item 1A, “Risk Factors,” in this Report. Governance Board of Directors’ Oversight of Risks from Cybersecurity Threats The Audit Committee oversees our ERM process, including the management of risks arising from cybersecurity threats.
For additional information regarding these risks, please refer to Item 1A, “Risk Factors,” in this Report. Governance Board of Directors’ Oversight of Risks from Cybersecurity Threats The Audit Committee oversees our ERM process, including the management of risks arising from cybersecurity threats but the Board holds ultimate accountability for the effectiveness of our ERM policy .
On an annual basis, the Audit Committee reviews our approach to cybersecurity risk management with the members of our executive management team, including the Chief Financial Officer ("CFO"), Chief Legal Officer, Senior Vice President of Finance and Controller.
On an annual basis, the Audit Committee reviews our approach to cybersecurity risk management with the members of our executive management team, including the Chief Financial Officer ("CFO"), Chief Legal Officer, Senior Vice President of Finance and Controller - and the Board reviews key enterprise risks and mitigation plans and approves risk tolerance and ERM Policy updates, if any.
We have established and maintain an incident response and recovery plan that addresses the Company’s response to cybersecurity incidents, and such plans are tested and evaluated on a periodic basis. 36 We maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
We maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. We have established and maintain an incident response and recovery plan that addresses our response to cybersecurity incidents, and such plans are tested and evaluated on a periodic basis.
Item 1C. Cybersecurity Risk Management and Strategy Our Board recognizes the critical importance of maintaining the trust and confidence of our customers, business partners, and employees. The Board is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our integrated approach to enterprise risk management (“ERM”).
Item 1C. Cybersecurity Risk Management and Strategy Our Board recognizes the critical importance of maintaining the trust and confidence of our customers, business partners, and employees.
The SIMT includes our Chief Technology Officer (“CTO”) and Vice President of Information Security, among other senior members of management, as well as their designees and experts as deemed necessary. The CTO and Vice President of Information Security each have significant experience managing risks or advising on cybersecurity issues.
The CIO and Vice President of Information Security each have significant experience managing risks or advising on cybersecurity issues.
Added
We have adopted an enterprise risk management (“ERM”) policy that is intended to cover all types of risks, including but not limited to strategic risks, financial and commercial risks, third-party risks, operational risks, technology risks, cybersecurity and data privacy risks, legal and regulatory risks, reputational risks and talent risks.
Added
The Board is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our integrated approach to ERM.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease 60,820 square feet of warehouse space in Avondale, Arizona. In addition to our facilities located in the U.S., we lease 4,101 square feet of office space and 2,110 square feet of warehouse space in Zagreb, Croatia.
Biggest changeItem 2. Properties Our corporate headquarters are located in Phoenix, Arizona, where we lease 38,820 square feet of office space. We also lease 60,820 square feet of warehouse space in Avondale, Arizona. In addition to our facilities located in the U.S., we lease 4,101 square feet of office space and 2,110 square feet of warehouse space in Zagreb, Croatia.
Removed
Item 2. Properties Our corporate headquarters are located in Scottsdale, Arizona, where we lease 40,893 square feet of office space. In August 2024, we entered into a new lease agreement for 38,820 square feet of office space in Phoenix, Arizona that will be our new corporate headquarters starting March 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile it is not feasible to predict the outcome of these matters with certainty, we do not believe that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or prospects. 37 For a discussion of legal and other proceedings in which we are involved, see Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report.
Biggest changeWhile it is not feasible to predict the outcome of these matters with certainty, we do not believe that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or prospects.
Removed
Item 4. Mine Safety Disclosures Not applicable. PART II
Added
For a discussion of legal and other proceedings in which we are involved, see Note 12 - Commitments and Contingencies in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report. Item 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe information under “Stock Performance Graphs and Cumulative Total Return” is not deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act and is not to be incorporated by reference in any filing of the Company under the Securities Act, or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language in those filings.
Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A Common Stock. 38 The information under “Stock Performance Graphs and Cumulative Total Return” is not deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act and is not to be incorporated by reference in any filing of the Company under the Securities Act, or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language in those filings.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed on the NYSE under the ticker symbol “SMRT.” Holders of Record As of December 31, 2024, there were 13 stockholders of record of our Class A Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed on the NYSE under the ticker symbol “SMRT.” Holders of Record As of December 31, 2025, there were 11 stockholders of record of our Class A Common Stock.
The chart assumes $100 was invested on February 9, 2021 (the date our Class A Common Stock commenced trading on NYSE), in the Class A Common Stock of SmartRent, Inc., the S&P 500 Index, and the Russell 2000 Index, and assumes the reinvestment of any dividends. 38 The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A Common Stock.
The chart assumes $100 was invested on February 9, 2021 (the date our Class A Common Stock commenced trading on NYSE), in the Class A Common Stock of SmartRent, Inc., the S&P 500 Index, and the Russell 2000 Index, and assumes the reinvestment of any dividends.
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Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities The following table summarizes the share repurchase activity for the three months ended December 31, 2024.
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Unregistered Sales of Equity Securities None. Item 6. [Reserved] 39
Removed
Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in thousands, except per share amounts) October 1 - October 31, 2024 2,300 $ 1.72 2,300 $ 22,728 November 1 - November 30, 2024 723 $ 1.59 723 $ 21,587 December 1 - December 31, 2024 - $ - - $ 21,587 Total 3,023 3,023 (1) In March 2024, our board of directors authorized the repurchase of up to $50,000,000 of our Class A common stock.
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Repurchases under the program can be made through open market transactions, privately negotiated transactions and other means in compliance with applicable federal securities laws, including through Rule 10b5-1 plans. We have discretion in determining the conditions under which shares may be repurchased from time to time.
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The repurchase program does not have an expiration date and may be suspended at any time at our discretion. Refer to Note 7 — Convertible Preferred Stock and Equity in Part I, Item 8, of this Report for additional information related to share repurchases. (2) Average price paid per share includes costs associated with the repurchases. Item 6. [Reserved] 39

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Selected Financial Data 39 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8. Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 94
Biggest changeItem 6. Selected Financial Data 39 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 93

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Revenue Hardware $ 82,844 $ 137,201 $ 87,372 $ (54,357 ) (40 )% $ 49,829 57 % Professional services 18,803 35,473 32,301 (16,670 ) (47 )% 3,172 10 % Hosted services 73,238 64,164 48,148 9,074 14 % 16,016 33 % Total revenue 174,885 236,838 167,821 (61,953 ) (26 )% 69,017 41 % Cost of revenue Hardware 58,833 108,780 83,289 (49,947 ) (46 )% 25,491 31 % Professional services 31,160 55,495 59,547 (24,335 ) (44 )% (4,052 ) (7 )% Hosted services 24,554 23,034 23,637 1,520 7 % (603 ) (3 )% Total cost of revenue 114,547 187,309 166,473 (72,762 ) (39 )% 20,836 13 % Operating expense Research and development 29,369 28,805 29,422 564 2 % (617 ) (2 )% Sales and marketing 18,446 19,209 20,872 (763 ) (4 )% (1,663 ) (8 )% General and administrative 54,295 44,674 55,305 9,621 22 % (10,631 ) (19 )% Total operating expenses 102,110 92,688 105,599 9,422 10 % (12,911 ) (12 )% Loss from operations (41,772 ) (43,159 ) (104,251 ) 1,387 3 % 61,092 (59 )% Other income (expense) Interest income, net 8,242 8,580 1,946 (338 ) (4 )% 6,634 (341 )% Other income (expense), net 154 (116 ) 595 270 233 % (711 ) (119 )% Loss before income taxes (33,376 ) (34,695 ) (101,710 ) 1,319 4 % 67,015 66 % Income tax expense (benefit) 267 (108 ) (5,388 ) 375 (347 )% 5,280 (98 )% Net Loss $ (33,643 ) $ (34,587 ) $ (96,322 ) $ 944 3 % $ 61,735 64 % 48 Comparison of the years ended December 31, 2024 and 2023 Revenue Years ended December 31, Change Change 2024 2023 $ % (dollars in thousands) Revenue Hardware $ 82,844 $ 137,201 $ (54,357 ) (40 )% Professional services 18,803 35,473 (16,670 ) (47 )% Hosted services 73,238 64,164 9,074 14 % Total revenue $ 174,885 $ 236,838 $ (61,953 ) (26 )% Total revenue decreased by approximately $61.9 million, or 26%, to $174.9 million for the year ended December 31, 2024, from $236.8 million for the year ended December 31, 2023.
Biggest changeYears ended December 31, 2025 vs 2024 Change 2024 vs 2023 Change 2025 2024 2023 $ % $ % (dollars in thousands) Revenue Hardware $ 57,973 $ 82,844 $ 137,201 $ (24,871 ) (30 )% $ (54,357 ) (40 )% Professional services 21,133 18,803 35,473 2,330 12 % (16,670 ) (47 )% Hosted services 73,220 73,238 64,164 (18 ) (0 )% 9,074 14 % Total revenue 152,326 174,885 236,838 (22,559 ) (13 )% (61,953 ) (26 )% Cost of revenue Hardware 52,829 58,833 108,780 (6,004 ) (10 )% (49,947 ) (46 )% Professional services 26,167 31,160 55,495 (4,993 ) (16 )% (24,335 ) (44 )% Hosted services 23,461 24,554 23,034 (1,093 ) (4 )% 1,520 7 % Total cost of revenue 102,457 114,547 187,309 (12,090 ) (11 )% (72,762 ) (39 )% Operating expense Research and development 26,224 29,369 28,805 (3,145 ) (11 )% 564 2 % Sales and marketing 19,451 18,446 19,209 1,005 5 % (763 ) (4 )% General and administrative 43,241 54,295 44,674 (11,054 ) (20 )% 9,621 22 % Total operating expenses 88,916 102,110 92,688 (13,194 ) (13 )% 9,422 10 % Impairment charge 24,929 - - 24,929 100 % - 0 % Loss from operations (63,976 ) (41,772 ) (43,159 ) (22,204 ) (53 )% 1,387 3 % Other income (expense) Interest income 4,299 8,642 8,977 (4,343 ) (50 )% (335 ) (4 )% Interest expense (378 ) (400 ) (397 ) 22 6 % (3 ) (1 )% Other (expense) income, net (462 ) 154 (116 ) (616 ) (400 )% 270 233 % Loss before income taxes (60,517 ) (33,376 ) (34,695 ) (27,141 ) (81 )% 1,319 4 % Income tax expense (benefit) 41 267 (108 ) 226 85 % (375 ) (347 )% Net Loss $ (60,558 ) $ (33,643 ) $ (34,587 ) $ (26,915 ) (80 )% $ 944 3 % 48 Comparison of the years ended December 31, 2025 and 2024 Revenue Years ended December 31, Change Change 2025 2024 $ % (dollars in thousands) Revenue Hardware $ 57,973 $ 82,844 $ (24,871 ) (30 )% Professional services 21,133 18,803 2,330 12 % Hosted services 73,220 73,238 (18 ) (0 )% Total revenue $ 152,326 $ 174,885 $ (22,559 ) (13 )% Total revenue decreased by $22.6 million, or 13%, to $152.3 million for the year ended December 31, 2025, from $174.9 million for the year ended December 31, 2024.
Annual Recurring Revenue We define ARR as the annualized value of our SaaS Revenue earned in the current quarter, which we calculate by taking the total amount of SaaS Revenue in the current quarter and multiplying that amount by four.
Annual Recurring Revenue We define Annual Recurring Revenue ("ARR") as the annualized value of our SaaS Revenue earned in the current quarter, which we calculate by taking the total amount of SaaS Revenue in the current quarter and multiplying that amount by four.
Investing Activities For the year ended December 31, 2024, we used $7.6 million of cash for investing activities, resulting primarily from cash paid of $5.8 million for capitalized internal-use software development costs and $1.8 million for the purchase of property and equipment.
For the year ended December 31, 2024, we used $7.6 million of cash for investing activities, resulting primarily from cash paid of $5.8 million for capitalized internal-use software development costs and $1.8 million for the purchase of property and equipment.
Financing Activities For the year ended December 31, 2024, our financing activities used $33.0 million of cash, resulting primarily from $28.6 million used for repurchases of Class A common stock, $2.0 million used for taxes paid related to net share settlements of stock-based compensation awards and $1.5 million used for earnout payments related to the iQuue LLC acquisition (the "iQuue acquisition").
For the year ended December 31, 2024, our financing activities used $33.0 million of cash, resulting primarily from $28.6 million used for repurchases of Class A common stock, $2.0 million used for taxes paid related to net share settlements of stock-based compensation awards and $1.5 million used for earnout payments related to the iQuue LLC acquisition (the "iQuue acquisition").
Our operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our ability to grow our customer base in a cost-effective manner, expand our hardware and hosted service offerings to generate increased revenue per Unit Deployed (as defined below), and provide high quality hardware products and hosted service applications to maximize revenue and improve the leverage of our business model.
Our operating results and cash flows are dependent upon a number of opportunities, challenges and other factors, including our ability to grow our customer and installed base in a cost-effective manner, expand our hardware and hosted service offerings to generate increased revenue per Unit Deployed (as defined below), and provide high quality hardware products and hosted service applications to maximize revenue and improve the leverage of our business model.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs associated with our general and administrative organization, professional fees for legal, accounting and other consulting services, office facility, insurance, information technology costs, and expenses incurred as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and stock exchange listing requirements, additional insurance expense, investor relations activities and other administrative and professional services.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs associated with our general and administrative organization, professional fees for legal, accounting and other consulting services, office facility, insurance, information technology costs, legal settlements, and expenses incurred as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and stock exchange listing requirements, additional insurance expense, investor relations activities and other administrative and professional services.
We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. Units Deployed and New Units Deployed We define Units Deployed as the aggregate number of Hub Devices that have been installed (including customer self-installations) and have an active subscription as of a stated measurement date.
We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. 41 Units Deployed and New Units Deployed We define Units Deployed as the aggregate number of Hub Devices that have been installed (including customer self-installations) and have an active subscription as of a stated measurement date.
All historic non-GAAP financial measures have been reconciled with the most directly comparable GAAP financial measures - these non-GAAP financial measures are not intended to supersede or replace our GAAP results. We define EBITDA as net income (loss) computed in accordance with GAAP before interest income, net, income tax expense (benefit) and depreciation and amortization.
All historic non-GAAP financial measures have been reconciled with the most directly comparable GAAP financial measures - these non-GAAP financial measures are not intended to supersede or replace our GAAP results. 51 We define EBITDA as net income (loss) computed in accordance with GAAP before interest income, net, income tax expense (benefit) and depreciation and amortization.
Due to this shortage in prior periods, we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. We also experienced shortages and shipment delays related to components for Access Control and made-to-order specialty locks.
Due to this shortage in prior periods, we experienced Hub Device production delays, which affected our ability to meet scheduled installations and facilitate customer upgrades to our higher-margin Hub Devices. We also experienced shortages and shipment delays related to components for access control systems and made-to-order specialty locks.
A change in our estimates could have a significant impact on the value of our inventory and our results of operations. 55 Stock-Based Compensation Our stock-based compensation relates to stock options and restricted stock units ("RSUs") granted to our employees and directors. Stock-based awards are measured based on the grant date fair value.
A change in our estimates could have a significant impact on the value of our inventory and our results of operations. Stock-Based Compensation Our stock-based compensation relates to stock options and restricted stock units ("RSUs") granted to our employees and directors. Stock-based awards are measured based on the grant date fair value.
While these areas represent opportunities for us, they also represent challenges and risks that we must successfully address in order to operate our business. 40 Active Supply Chain Management We continue to experience improvements in the challenges related to the global supply chain.
While these areas represent opportunities for us, they also represent challenges and risks that we must successfully address in order to operate our business. Active Supply Chain Management We continue to experience improvements in the challenges related to the global supply chain.
We believe our sales and marketing expenses will increase in future periods as we continue to invest in building a scalable sales team, which began with hiring our new Chief Revenue Officer in September 2024.
We believe our sales and marketing expenses will increase in future periods as we continue to invest in building a scalable sales team, which began with hiring our Chief Revenue Officer in September 2024.
Our revenue is generated from: (1) the direct sale to our customers of hosted services from monthly subscription fees collected from customers to provide access Hosted Services including access controls, asset monitoring, WiFi, and related services; (2) the sale and delivery of smart home devices, which generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches ; and (3) installation and implementation of smart home devices that enable our Hosted Services.
Our revenue is generated from: (1) the direct sale to our customers of hosted services from subscription fees collected from customers to provide Hosted Services including access controls, asset monitoring, and related services; (2) the sale and delivery of smart home devices, which generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches; and (3) installation and implementation of smart home devices that enable our Hosted Services.
For ABR Loans, the interest rate is based upon the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.50%, or (iii) 3.25%, plus an applicable margin. As of December 31, 2024, the applicable margins for SOFR Loans and ABR Loans under the Senior Revolving Facility were 1.75% and (0.50%), respectively.
For ABR Loans, the interest rate is based upon the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.50%, or (iii) 3.25%, plus an applicable margin. As of December 31, 2025, the applicable margins for SOFR Loans and ABR Loans under the Senior Revolving Facility were 1.75% and (0.50%), respectively.
For comparison of the fiscal years ended December 31, 2023 and 2022, refer to Part II, Item 7 "Management's discussion and analysis of financial condition and results of operations" on Form 10-K for our fiscal year ended December 31, 2023 filed with the SEC on March 5, 2024, under the subheading "Comparison of the years ended December 31, 2023 and 2022".
For comparison of the fiscal years ended December 31, 2024 and 2023, refer to Part II, Item 7 "Management's discussion and analysis of financial condition and results of operations" on Form 10-K for our fiscal year ended December 31, 2024 filed with the SEC on March 5, 2025, under the subheading "Comparison of the years ended December 31, 2024 and 2023".
Our Smart Community solutions include software and devices that power (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as asset protection and monitoring, parking management and self-guided tours.
Our Smart Community solutions include software and devices that power (i) smart apartments and homes, (ii) access control for buildings, common areas, and rental units, (iii) community and resident WiFi, and other solutions such as asset protection and monitoring and self-guided tours.
Cost of Revenue Cost of revenue consists primarily of direct costs of products and services together with the indirect cost of estimated warranty expense and customer care and support over the life of the service arrangement. We expect the cost of revenue to increase in absolute dollars in future periods.
Cost of Revenue Cost of revenue consists primarily of direct costs of products and services together with the indirect cost of estimated warranty expense and customer care and support over the life of the service arrangement. We expect the cost of revenue to increase in absolute dollars in future periods commensurate with increases in revenue.
In August 2021, the Company completed the merger with FWAA, which met the liquidity event vesting condition and triggered the recognition of compensation expense for awards of RSUs, or applicable portions of such awards, for which the time-based vesting condition had been satisfied.
In August 2021, we completed the merger with FWAA, which met the liquidity event vesting condition and triggered the recognition of compensation expense for awards of RSUs, or applicable portions of such awards, for which the time-based vesting condition had been satisfied.
Customer Churn We define Customer Churn as cancelled deployed units during the measurement period divided by Units Deployed as of the beginning of the measurement period. Cancelled deployed units are the previously deployed units that have been cancelled during the same measurement period in which a customer cancels all product subscriptions.
Customer Churn We define Customer Churn as cancelled deployed units during the measurement period divided by Units Deployed as of the beginning of the measurement period. Cancelled deployed units are the previous Units Deployed that have been cancelled during the same measurement period in which a customer cancels all product subscriptions.
Subscription arrangements have contractual terms ranging from one month to ten years and the weighted average length of our recurring revenue contracts is 4.4 years. Key Factors Affecting Our Performance We believe that our success is dependent on many factors, including those further discussed below.
Subscription arrangements have contractual terms ranging from one month to ten years and the weighted average length of our recurring revenue contracts is 3.9 years. Key Factors Affecting Our Performance We believe that our success is dependent on many factors, including those further discussed below.
Our sales and marketing expenses may increase over time as we hire additional sales and marketing personnel, increase our marketing activities, grow our operations, and continue to build brand awareness.
Our sales and marketing expenses may increase over time as we hire additional sales and marketing personnel, increase our lead generation activities, grow our operations, and continue to build brand awareness.
Under the previous definition, Professional Services ARPU was $209, $206 and $156 for the years ended December 31, 2024, 2023 and 2022, respectively. We define SaaS ARPU as total SaaS Revenue during a given period divided by the average aggregate Units Deployed in the same period divided by the number of months in the period.
Under the previous definition, Professional Services ARPU was $256, $209 and $206 for the years ended December 31, 2025, 2024 and 2023, respectively. We define SaaS ARPU as total SaaS Revenue during a given period divided by the average aggregate Units Deployed in the same period divided by the number of months in the period.
We believe that SaaS Revenue growth demonstrates our ability to acquire new customers and to maintain and expand our relationships with existing customers. More specifically, we monitor our SaaS Revenue to assess the general health and trajectory of our Hosted Services business.
We believe that ARR growth demonstrates our ability to acquire new customers and to maintain and expand our relationships with existing customers. More specifically, we monitor our ARR to assess the general health and trajectory of our Hosted Services business.
We define Adjusted EBITDA as EBITDA before expenses related to non-recurring legal matters, stock-based compensation, impairment of investment in a non-affiliate, non-employee warrant expense, non-recurring warranty provisions, asset impairment, compensation expense in connection with acquisitions, other acquisition expenses, and other expenses caused by non-recurring, or unusual, events that are not indicative of our ongoing business.
We define Adjusted EBITDA as EBITDA before expenses related to non-recurring legal matters, stock-based compensation, impairment of investment in a non-affiliate, goodwill impairment, inventory write-off, non-employee warrant expense, non-recurring warranty provisions, compensation expense in connection with acquisitions, other acquisition expenses, and other expenses caused by non-recurring, or unusual, events that are not indicative of our ongoing business.
During the year ended December 31, 2024, we updated the denominator of the calculation to exclude self-installations as self-installations don't materially contribute to professional services revenue. For the years ended December 31, 2024, 2023 and 2022, Professional Services ARPU was $344, $255 and $182, respectively, per the new definition of Professional Services ARPU.
During the year ended December 31, 2024, we updated the denominator of the calculation to exclude self-installations as self-installations don't materially contribute to professional services revenue. For the years ended December 31, 2025, 2024 and 2023, Professional Services ARPU was $413, $344 and $255, respectively, per the new definition of Professional Services ARPU.
For the years ended December 31, 2024, 2023 and 2022, we had 169,476, 226,722 and 200,169 Units Shipped, respectively. Units Booked We define Units Booked as the aggregate number of Hub Device units subject to binding orders executed during a stated measurement period that will result in a New Unit Deployed.
For the years ended December 31, 2025, 2024 and 2023 we had 110,011, 169,476 and 226,722 Units Shipped, respectively. Units Booked We define Units Booked as the aggregate number of Hub Device units subject to binding orders executed during a stated measurement period that will result in a New Unit Deployed.
The Senior Revolving Facility is secured by substantially all of the Company’s assets and guaranteed by each of the Company’s material domestic subsidiaries.
The Senior Revolving Facility is secured by substantially all of our assets and guaranteed by each of our material domestic subsidiaries.
Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents. Through a Hub Device, we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces.
Our platform can lower operating costs, increase revenues, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents. Through Hub Devices, which integrate our enterprise software with third party smart devices, we enable the integration of our platform with third-party smart devices, our own hardware devices and other technology interfaces.
For the year ended December 31, 2024, ARR (as defined below) related to Units Booked was $8,410. Bookings We define Bookings as the contract value of hardware, professional services, and the first year of ARR for binding orders executed during a stated measurement period, including renewals and upgrades.
For the years ended December 31, 2025 and 2024, ARR (as defined below) related to Units Booked was $9,102 and 8,410, respectively. Bookings We define Bookings as the contract value of hardware, professional services, and the first year of ARR for binding orders executed during a stated measurement period, including renewals and upgrades.
Units Booked SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions for orders executed during the period. For the years ended December 31, 2024, 2023 and 2022, Units Booked SaaS ARPU wa s $6.44, $8.32 and $4.60 , respectively.
Units Booked SaaS ARPU is used to evaluate the effectiveness of our SaaS pricing and assess our ability to market and sell our various software solutions for orders executed during the period. For the years ended December 31, 2025, 2024 and 2023, Units Booked SaaS ARPU wa s $8.40, $6.44 and $8.32 , respectively.
Certain Hub Devices do not function independently without the subscription, and therefore, the revenue is recognized in Hosted Services revenue. We generally provide a one-year warranty period on hardware devices that are delivered and installed. We record the cost of the warranty as a component of cost of hardware revenue.
Certain previous versions of our Hub Devices do not function independently without the subscription, and therefore, the revenue for those Hub Devices is recognized in Hosted Services revenue. We generally provide a one-year warranty period on hardware devices that are delivered and installed. We record the cost of the warranty as a component of cost of hardware revenue.
We utilize the concept of Units Booked to measure estimated near-term resource demand and the resulting approximate range of post-delivery revenue that we will earn and record. Units Booked represent binding orders only. For the years ended December 31, 2024, 2023 and 2022 there were 121,670, 173,195 and 282,512 Units Booked, respectively.
We utilize the concept of Units Booked to measure estimated near-term resource demand and the resulting approximate range of post-delivery revenue that we will earn and record. Units Booked represent binding orders only. For the years ended December 31, 2025, 2024 and 2023 there were 90,243, 121,670 and 173,195 Units Booked, respectively.
Hardware ARPU is used to evaluate the effectiveness of our hardware pricing and assess our ability to market and sell our hardware offerings. For the years ended December 31, 2024, 2023 and 2022, Hardware ARPU was $489, $605 and $436 , respectively.
Hardware ARPU is used to evaluate the effectiveness of our hardware pricing and assess our ability to market and sell our hardware offerings. For the years ended December 31, 2025, 2024 and 2023, Hardware ARPU was $527, $489 and $605 , respectively.
For the years ended December 31, 2024, 2023 and 2022, we had 89,806, 172,495 and 207,711 New Units Deployed, respectively. Units Shipped We define Units Shipped as the aggregate number of Hub Devices that have been shipped to customers during a stated measurement period.
For the years ended December 31, 2025, 2024 and 2023 we had 82,626, 89,806 and 172,495 New Units Deployed, respectively. Units Shipped We define Units Shipped as the aggregate number of Hub Devices that have been shipped to customers during a stated measurement period.
Although the correlation has decreased, New Units Deployed is still an indicator of our ability to acquire new customers and expand our relationships with our current customers. As of December 31, 2024, 2023 and 2022, we had an aggregate of 809,497, 719,691 and 547,196 Units Deployed, respectively.
Although the correlation has decreased, New Units Deployed is still an indicator of our ability to acquire new customers and expand our relationships with our current customers. As of December 31, 2025, 2024 and 2023, we had an aggregate of 890,870, 809,497 and 719,691 Units Deployed, respectively.
For the years ended December 31, 2024, 2023 and 2022, SaaS ARPU was $5.63, $5.40 and $5.32 , respectively.
For the years ended December 31, 2025, 2024 and 2023, SaaS ARPU was $5.67, $5.63 and $5.40 , respectively.
When a Hub Device without independent functionality is included in a contract that does not require a long-term service commitment, the customer obtains a material right to renew the service because purchasing a new device is not required upon renewal.
The estimated average in-service life of those devices is four years. When a Hub Device without independent functionality is included in a contract that does not require a long-term service commitment, the customer obtains a material right to renew the service because purchasing a new device is not required upon renewal.
As of December 31, 2024, we had $222.9 million of U.S. federal and $215.4 million of state gross net operating loss carryforwards available to reduce future taxable income, which will be carried forward indefinitely for U.S. federal tax purposes and will expire between 2032 and 2044 for state tax purposes.
As of December 31, 2025, we had $252.9 million of U.S. federal and $246.0 million of state gross net operating loss carryforwards available to reduce future taxable income, which will be carried forward indefinitely for U.S. federal tax purposes and will expire between 2032 and 2045 for state tax purposes.
We offer an open-API architecture that enables a myriad of third-party partner integrations, resulting in a multi-functional platform that enhances property management workflow efficiencies, empowers teams to get more done, elevates resident interactions, and improves resident living experiences.
We offer an open-API architecture that enables third-party partner integrations, resulting in a multi-functional platform that enhances property management workflow efficiencies, empowers team productivity, elevates resident interactions, and improves resident living experiences.
Changes in our operating assets and liabilities primarily resulted from a $42.8 million increase in inventory, $15.9 million increase in accounts receivable, and $9.9 million increase in deferred cost of revenue, partially offset by a $43.7 million increase in deferred revenue, a $12.4 million increase in accounts payable, and a $3.2 million increase in accrued expenses and other liabilities.
Changes in our operating assets and liabilities primarily resulted from a $31.7 million decrease in deferred revenue and an $11.3 million decrease in accrued expenses and other liabilities, partially offset by a $12.9 million decrease in accounts receivable, $8.6 million decrease in deferred cost of revenue, a $6.6 million decrease in prepaid expenses and other assets, a $4.5 million decrease in inventory and a $4.2 million increase in accounts payable.
Property Net Revenue Retention includes additions to revenue from price increases on existing products, additions of new products at existing properties and transfers of ownership, offset by any reductions in revenue caused by cancellations or downgrades. Property Net Revenue Retention was 101% as of December 31, 2024 compared to 105% as of December 31, 2023.
Property Net Revenue Retention includes additions to revenue from price increases on existing products, additions of new products at existing properties and transfers of ownership, offset by any reductions in revenue caused by cancellations or downgrades.
During the year ended December 31, 2024, we repurchased 15.2 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $1.89 per share for a total of $28.6 million, including $0.2 million of broker fees.
During the year ended December 31, 2024, we repurchased 15.2 million shares of our Class A common stock under the stock repurchase program at an average price of approximately $1.89 per share for a total of $28.6 million. As of December 31, 2024, approximately $21.6 million remained available for stock repurchases pursuant to our stock repurchase program.
We expect an increase in cost of hardware revenue in absolute dollars in future periods. In 2019, the U.S. administration imposed significant changes to U.S. trade policy with respect to China. Tariffs have subjected certain SmartRent products manufactured overseas to additional import duties.
We expect an increase in cost of hardware revenue in absolute dollars in future periods commensurate with increases in revenue. Tariffs imposed by the U.S. government since 2019, especially with respect to China, have subjected certain SmartRent products manufactured overseas to additional import duties.
To date, our principal sources of liquidity have been the net proceeds received as a result of the Business Combination, and payments collected from sales to our customers.
Our cash equivalents are comprised primarily of money market funds. To date, our principal sources of liquidity have been the net proceeds received as a result of the Business Combination, and payments collected from sales to our customers.
We consider marketability and product life cycle stage, product development plans, demand forecasts, historical revenue, and assumptions about future demand and market conditions in establishing our estimates.
Significant judgment is used in establishing our forecasts of future demand and obsolete material exposures. We consider marketability and product life cycle stage, product development plans, demand forecasts, historical revenue, and assumptions about future demand and market conditions in establishing our estimates.
These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield, the expected stock price volatility over the expected term and forfeitures, which are recognized as they occur.
These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield, the expected stock price volatility over the expected term and forfeitures, which are recognized as they occur. The grant date fair value is also utilized with respect to RSUs with service conditions to vest.
For the year ended December 31, 2023, our financing activities used $1.9 million of cash, resulting primarily from $1.7 million used for earnout payments related to the iQuue acquisition. For the year ended December 31, 2022, our financing activities used $2.8 million of cash primarily for taxes paid related to net share settlements of stock-based compensation awards.
Financing Activities For the year ended December 31, 2025, our financing activities used $7.4 million of cash, resulting primarily from $4.9 million used for repurchases of Class A common stock, $1.5 million used for earnout payments related to the iQuue LLC acquisition (the "iQuue acquisition") and $1.4 million used for taxes paid related to net share settlements of stock-based compensation awards.
This represents approximately 15% of the United States market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners, our customers include some of the leading single-family rental homeowners, homebuilders, and iBuyers in the United States.
As of December 31, 2025, we believe our customers owned an aggregate of approximately 6.6 million rental units. This represents approximately 13% of the United States market for institutionally owned multifamily rental units and single-family rental homes. In addition to multifamily residential owners, our customers include some of the leading single-family rental homeowners, homebuilders, and iBuyers in the United States.
Years ended December 31, 2024 2023 2022 (dollars in thousands) Net cash (used in) provided by Operating activities $ (32,913 ) $ 5,981 $ (77,833 ) Investing activities (7,599 ) (6,023 ) (133,993 ) Financing activities (32,962 ) (1,905 ) (2,801 ) 53 Operating Activities For the year ended December 31, 2024, our operating activities used $32.9 million in cash resulting primarily from our net loss of $33.6 million and $28.4 million used in changes in our operating assets and liabilities, partially offset by approximately $29.1 million provided by non-cash expenses.
Years ended December 31, 2025 2024 2023 (dollars in thousands) Net cash (used in) provided by Operating activities $ (21,575 ) $ (32,913 ) $ 5,981 Investing activities (8,625 ) (7,599 ) (6,023 ) Financing activities (7,444 ) (32,962 ) (1,905 ) 53 Operating Activities For the year ended December 31, 2025, our operating activities used $21.6 million in cash resulting primarily from our net loss of $60.6 million and $6.8 million used in changes in our operating assets and liabilities, partially offset by approximately $45.8 million provided by non-cash expenses.
The following table summarizes our historical consolidated results of operations data for the periods presented. The period-to-period comparison of operating results is not necessarily indicative of results for future periods. All dollars are in thousands unless otherwise stated.
The period-to-period comparison of operating results is not necessarily indicative of results for future periods. All dollars are in thousands unless otherwise stated.
We have also introduced Community WiFi, which provides communities with a private, device-dedicated WiFi network to power Hub Devices and other in-home smart devices, and Smart Package Room, which is a smart package management solution that transforms package visibility, reduces labor demands, optimizes storage space and enhances resident satisfaction.
We have also introduced other in-home smart devices, and Smart Package Room, which is a smart package management solution that transforms package visibility, reduces labor demands, optimizes storage space and enhances resident satisfaction.
Hosted Services cost of revenue increased by approximately $1.6 million, or 7%, to $24.6 million for the year ended December 31, 2024, from $23.0 million for the year ended December 31, 2023.
Hosted Services cost of revenue decreased by $1.1 million, or 4%, to $23.5 million for the year ended December 31, 2025, from $24.6 million for the year ended December 31, 2024.
We will remain an “emerging growth company” under the JOBS Act until the earliest of (a) the first fiscal year following the fifth anniversary of the initial public offering by FWAA, which closed on February 9, 2021, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the last date of our fiscal year in which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non- convertible debt securities during the previous three years.
The extended transition period exemptions afforded by our emerging growth company status may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of this exemption because of the potential differences in accounting standards used. 56 We will remain an “emerging growth company” under the JOBS Act until the earliest of (a) the first fiscal year following the fifth anniversary of the initial public offering by FWAA, which closed on February 9, 2021 (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the last date of our fiscal year in which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non- convertible debt securities during the previous three years.
We may also increase the size of our general and administrative staff in order to support the growth of our business but at a rate that is lower than the corresponding increase in total revenue.
We may also increase the size of our general and administrative staff in order to support the growth of our business but at a rate that is lower than the corresponding increase in total revenue. Impairment Charge Impairment charge consists of goodwill impairment. See Note 2 - Significant Accounting Policies for more information.
Professional services cost of revenue decreased by $24.3 million, or 44%, to $31.2 million for the year ended December 31, 2024, from $55.5 million for the year ended December 31, 2023.
Professional services cost of revenue decreased by $5.0 million, or 16%, to $26.2 million for the year ended December 31, 2025, from $31.2 million for the year ended December 31, 2024.
The income tax expense is related to the federal, state, and international taxes payable offset by a change in the valuation allowance.
The income tax expense is related to the federal, state, and international taxes payable offset by a change in the valuation allowance. On July 4, 2025, the OBBBA was enacted in the U.S.
For the year ended December 31, 2022, our operating activities used $77.8 million in cash resulting primarily from our net loss of $96.3 million and $4.9 million used in changes in our operating assets and liabilities, partially offset by $23.4 million provided by non-cash expenses.
For the year ended December 31, 2024, our operating activities used $32.9 million in cash resulting primarily from our net loss of $33.6 million and $28.4 million used in changes in our operating assets and liabilities, partially offset by approximately $29.1 million provided by non-cash expenses.
For the years ended December 31, 2024 2023 2022 (dollars in thousands) Net loss $ (33,643 ) $ (34,587 ) $ (96,322 ) Interest income, net (8,242 ) (8,580 ) (1,946 ) Income tax expense (benefit) 267 (108 ) (5,388 ) Depreciation and amortization 6,495 5,533 4,262 EBITDA (35,123 ) (37,742 ) (99,394 ) Legal matter (1) 8,325 - Stock-based compensation 10,766 13,271 13,716 Impairment of investment in non-affiliate 2,250 - - Non-employee warrant expense - (193 ) 289 Non-recurring warranty provision 291 1,746 - Asset impairment - - 4,441 Compensation expense in connection with acquisitions - 2,010 5,042 Other acquisition expenses (725 ) 651 1,197 Other non-operating expenses (2) 4,334 1,070 - Adjusted EBITDA $ (9,882 ) $ (19,187 ) $ (74,709 ) (1) Refer to Note 12 "Commitments and Contingencies".
For the years ended December 31, 2025 2024 2023 (dollars in thousands) Net loss $ (60,558 ) $ (33,643 ) $ (34,587 ) Interest income, net (3,921 ) (8,242 ) (8,580 ) Income tax expense (benefit) 41 267 (108 ) Depreciation and amortization 8,430 6,495 5,533 EBITDA (56,008 ) (35,123 ) (37,742 ) Legal matters (1) 1,892 8,325 - Stock-based compensation 8,779 10,766 13,271 Impairment of investment in non-affiliate - 2,250 - Goodwill impairment (2) 24,929 - - Inventory write-off (3) 1,794 - - Non-employee warrant expense - - (193 ) Non-recurring warranty provision (500 ) 291 1,746 Compensation expense in connection with acquisitions - - 2,010 Other acquisition expenses (231 ) (725 ) 651 Other non-operating expenses (4) 2,912 4,334 1,070 Adjusted EBITDA $ (16,433 ) $ (9,882 ) $ (19,187 ) (1) Refer to Note 12 "Commitments and Contingencies".
For the years ended December 31, 2024 2023 2022 (dollars in thousands) SmartRent Solutions Hardware Professional Services Hosted Services (1) Total 2024 Hardware Professional Services Hosted Services (1) Total 2023 Hardware Professional Services Hosted Services (1) Total 2022 Smart Communities Solutions Smart Apartments $ 74,754 $ 13,095 $ 57,335 $ 145,184 $ 130,894 $ 30,546 $ 49,696 $ 211,135 $ 82,799 $ 30,419 $ 37,605 $ 150,823 Access Control 3,791 2,378 1,722 7,891 3,607 3,527 912 8,047 3,440 1,799 316 5,555 Community WiFi 287 1,041 701 2,029 395 996 688 2,078 179 44 257 480 Other 4,012 2,289 2,100 8,401 2,305 404 1,534 4,243 954 39 1,537 2,529 Smart Operations Solutions - - 11,380 11,380 - - 11,334 11,334 - - 8,433 8,433 Total Revenue $ 82,844 $ 18,803 $ 73,238 $ 174,885 $ 137,201 $ 35,473 $ 64,164 $ 236,838 $ 87,372 $ 32,301 $ 48,148 $ 167,821 (1) For the years ended December 31, 2024, 2023, and 2022, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $21,600, $23,097, and $20,360, respectively. 45 Hardware Revenue We generate revenue from the direct sale to our customers of hardware smart home devices, which devices generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches.
For the years ended December 31, 2025 2024 2023 (dollars in thousands) SmartRent Solutions Hardware Professional Services Hosted Services (1) Total 2025 Hardware Professional Services Hosted Services (1) Total 2024 Hardware Professional Services Hosted Services (1) Total 2023 Smart Communities Solutions Smart Apartments $ 52,833 $ 18,207 $ 56,473 $ 127,513 $ 74,754 $ 13,095 $ 57,335 $ 145,184 $ 130,894 $ 30,546 $ 49,696 $ 211,135 Access Control 3,485 1,685 2,267 7,437 3,791 2,378 1,722 7,891 3,607 3,527 912 8,047 Community WiFi 71 451 770 1,292 287 1,041 701 2,029 395 996 688 2,078 Other 1,584 790 3,051 5,425 4,012 2,289 2,100 8,401 2,305 404 1,534 4,243 Smart Operations Solutions - - 10,659 10,659 - - 11,380 11,380 - - 11,334 11,334 Total Revenue $ 57,973 $ 21,133 $ 73,220 $ 152,326 $ 82,844 $ 18,803 $ 73,238 $ 174,885 $ 137,201 $ 35,473 $ 64,164 $ 236,838 (1) For the years ended December 31, 2025, 2024, and 2023, Hosted services revenue for our Smart Apartments solution included hub amortization revenue of $15,396, $21,600, and $23,096, respectively. 45 Hardware Revenue We generate revenue from the direct sale to our customers of hardware smart home devices, which devices generally consist of a Hub Device, door-locks, thermostats, sensors, and light switches.
(2) During the year ended December 31, 2024, other non-operating expenses includes $3,183 of severance expense and $1,065 of CEO transition expenses. During the year ended December 31, 2023, other non-operating expenses includes $1,070 of severance expense.
During the year ended December 31, 2023, other non-operating expenses includes $1,070 of severance expense.
Income Taxes Years ended December 31, Change Change 2024 2023 $ % (dollars in thousands) Loss before income taxes $ (33,376 ) $ (34,695 ) $ 1,319 4 % Income tax expense (benefit) 267 (108 ) 375 347 % We provided a full valuation allowance on our net U.S. federal and state deferred tax assets as of December 31, 2024, and December 31, 2023.
Income Taxes Years ended December 31, Change Change 2025 2024 $ % (dollars in thousands) Loss before income taxes $ (60,517 ) $ (33,376 ) $ (27,141 ) (81 )% Income tax expense (benefit) 41 267 (226 ) (85 )% We provided a full valuation allowance on our net U.S. federal and state deferred tax assets as of December 31, 2025, and December 31, 2024.
We don’t expect to deploy any more non-distinct Hub Devices, thus, the revenue contribution from hub amortization should continue to decrease in future periods until the non-distinct Hub Devices are fully amortized.
We don’t expect to deploy any more non-distinct Hub Devices, thus, the revenue contribution from hub amortization should continue to decrease in future periods until the non-distinct Hub Devices are fully amortized. As noted above, revenue from hub amortization decreased by $6.2 million from the year ended December 31, 2024 to the year ended December 31, 2025.
Professional Services Cost of professional services revenue consists primarily of direct costs related to personnel-related expenses for installation and supervision of installation services, general contractor expenses and travel expenses associated with installation of our products, and indirect costs that are also primarily personnel-related expenses in connection with training of and ongoing support for customers and residents. 46 Hosted Services Cost of Hosted Services revenue consists primarily of the amortization of the direct costs of certain Hub Devices consistent with the revenue recognition period noted above in “Hosted Services Revenue” and infrastructure costs associated with providing our software applications together with the indirect cost of customer care and support over the life of the service arrangement.
Hosted Services Cost of Hosted Services revenue consists primarily of the amortization of the direct costs of certain Hub Devices consistent with the revenue recognition period noted above in “Hosted Services Revenue” and infrastructure costs associated with providing our software applications together with the indirect cost of customer care and support over the life of the service arrangement.
Of the $73.2 million revenue in 2024, $51.6 million is related to SaaS Revenue and $21.6 million is related to hub amortization. Revenue from SaaS increased by $10.5 million and revenue from hub amortization decreased by $1.5 million from the year ended December 31, 2023 to the year ended December 31, 2024.
Of the $73.2 million revenue in 2025, $57.8 million is related to SaaS Revenue and $15.4 million is related to hub amortization. Revenue from SaaS increased by $6.2 million, or 12%, and revenue from hub amortization decreased by $6.2 million from the year ended December 31, 2024 to the year ended December 31, 2025.
The amount of the import tariff has changed numerous times based on action by the U.S. administration and new presidential administration recently announced additional tariffs on imports from Canada, Mexico and China. Such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future. We continue to monitor the change in tariffs.
The amount of the import tariff has changed numerous times based on actions by the U.S. government. The U.S. government has implemented and threatened further increases to tariffs in 2025 on imports from countries such as Canada, Mexico and China. Such actions may increase our cost of hardware revenue and reduce our hardware revenue margins in the future.
The decrease in professional services cost of revenue is primarily attributable to a decrease of approximately $18.6 million in third-party direct labor costs due to a 48% decrease in New Units Deployed, and a decrease of $4.4 million in personnel-related costs including travel.
The decrease in professional services cost of revenue is primarily attributable to a decrease of $3.3 million in personnel-related costs and travel and a $1.6 million decrease in third-party contractors driven by an 8% decrease in New Units Deployed.
Hardware cost of revenue decreased by $50.0 million, or 46%, to $58.8 million for the year ended December 31, 2024, from $108.8 million for the year ended December 31, 2023.
Hardware revenue decreased by approximately $24.8 million, or 30%, to $58.0 million for the year ended December 31, 2025, from $82.8 million for the year ended December 31, 2024.
We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized. We believe that we have established an adequate allowance for our uncertain tax positions, although we can provide no assurance that the final outcome of these matters will not be materially different.
We believe that we have established an adequate allowance for our uncertain tax positions, although we can provide no assurance that the final outcome of these matters will not be materially different.
Inventory Valuation Inventories are stated at the lower of cost or estimated net realizable value. Cost is computed under the first-in, first-out method. We adjust the inventory balance based on anticipated obsolescence, usage, and historical write-offs. Significant judgment is used in establishing our forecasts of future demand and obsolete material exposures.
Our goodwill balance was $92.3 million and $117.3 million as of December 31, 2025 and December 31, 2024, respectively. Inventory Valuation Inventories are stated at the lower of cost or estimated net realizable value. Cost is computed under the first-in, first-out method. We adjust the inventory balance based on anticipated obsolescence, usage, and historical write-offs.
Key Metrics We regularly monitor a number of operating metrics in order to evaluate our operating performance, identify trends affecting our business, formulate business plans, measure our progress and make strategic decisions.
Basis of Presentation The consolidated financial statements and accompanying notes included elsewhere in this Report are prepared in accordance with GAAP. Key Metrics We regularly monitor a number of operating metrics in order to evaluate our operating performance, identify trends affecting our business, formulate business plans, measure our progress and make strategic decisions.
The decrease in net interest income is primarily attributable to a lower cash balance on which we’re earning interest, and a decrease in interest rates throughout the year.
The decrease in net interest income is primarily attributable to a lower cash balance on which we’re earning interest, and a decrease in interest rates throughout the year. Interest expense was flat at $0.4 million for the years ended December 31, 2025 and 2024.
Foreign currency transaction gains and losses relate to the impact of transactions denominated in a foreign currency other than the U.S. dollar. If we continue to expand our international operations, our exposure to fluctuations in foreign currencies has increased, which we expect to continue.
Foreign currency transaction gains and losses relate to the impact of transactions denominated in a foreign currency other than the U.S. dollar.
Sales and marketing expenses decreased by $0.8 million, or 4%, to $18.4 million for the year ended December 31, 2024 from $19.2 million for the year ended December 31, 2023, resulting primarily from a decrease of approximately $1.2 million in personnel-related expenses, partially offset by an increase of $0.3 million in business applications and software.
Sales and marketing expenses increased by $1.0 million, or 5%, to approximately $19.4 million for the year ended December 31, 2025 from $18.4 million for the year ended December 31, 2024, resulting primarily from an increase of $1.0 million in third party consultants.
Hardware Average Revenue per Unit ("ARPU"), Professional Services ARPU, SaaS ARPU, and Units Booked SaaS ARPU We define Hardware ARPU as total hardware revenue during a given period divided by the total Units Shipped during the same period.
As of December 31, 2025, 2024 and 2023, ARR was approximately $61.6 million, $54.4 million and $46.2 million, respectively. 42 Hardware Average Revenue per Unit ("ARPU"), Professional Services ARPU, SaaS ARPU, and Units Booked SaaS ARPU We define Hardware ARPU as total hardware revenue during a given period divided by the total Units Shipped during the same period.
Interest rates for draws upon the Senior Revolving Facility are determined by whether the Company elects a secured overnight financing rate loan (“SOFR Loan”) or alternate base rate loan (”ABR Loan”).
Debt Issuances In December 2021, we entered into a $75.0 million senior secured revolving credit facility with a five-year term (the "Senior Revolving Facility" ) . Interest rates for draws upon the Senior Revolving Facility are determined by whether we elect a secured overnight financing rate loan (“SOFR Loan”) or alternate base rate loan (”ABR Loan”).
We consider those devices and hosting services subscription as a single performance obligation, and therefore we defer the recognition of revenue for those devices that are sold with application subscriptions. The estimated average in-service life of those devices is four years.
We sold certain Hub Devices, which only function with the subscription to our software applications and related hosting services ("non-distinct Hub Devices"). We consider those devices and hosting services subscription as a single performance obligation, and therefore we defer the recognition of revenue for those devices that are sold with application subscriptions.
The weighted average length of our recurring revenue contracts is 4.4 years. Our arrangements do not provide the customer with the right to take possession of our software at any time. Customers are granted continuous access to the services over the contractual period.
More specifically, we monitor our SaaS Revenue to assess the general health and trajectory of our Hosted Services business. Arrangements with customers do not provide the customer with the right to take possession of SmartRent's software at any time. Customers are granted continuous access to the services over the contractual period.
Other Income Years ended December 31, Change Change 2024 2023 $ % (dollars in thousands) Interest income, net $ 8,242 $ 8,580 $ (338 ) (4 )% Other income (expense), net 154 (116 ) 270 233 % Interest income, net decreased by approximately $0.4 million to $8.2 million for the year ended December 31, 2024, from $8.6 million for the year ended December 31, 2023.
Other Income Years ended December 31, Change Change 2025 2024 $ % (dollars in thousands) Interest income $ 4,299 $ 8,642 $ (4,343 ) (50 )% Interest expense (378 ) (400 ) 22 6 % Other (expense) income, net (462 ) 154 (616 ) (400 )% Interest income decreased by $4.3 million to $4.3 million for the year ended December 31, 2025, from $8.6 million for the year ended December 31, 2024.
Our Customer Churn for our Smart Communities Solutions is 0.07% for the year ended December 31, 2024 compared to 0.02% and 0.01% for the years ended December 31, 2023 and 2022, respectively. 43 Property Net Revenue Retention We define Property Net Revenue Retention as SaaS Revenue at the end of the current period related to properties which had SaaS Revenue at the end of the same period in the prior year, divided by SaaS Revenue at the end of the same period in the prior year for those same properties.
Property Net Revenue Retention We define Property Net Revenue Retention as SaaS Revenue at the end of the current period related to properties which had SaaS Revenue at the end of the same period in the prior year, divided by SaaS Revenue at the end of the same period in the prior year for those same properties.
As of December 31, 2024, approximately $21.6 million remained available for stock repurchases pursuant to our stock repurchase program. Cash Flow Summary - Years Ended December 31, 2024, 2023 and 2022 The following table summarizes our cash flows for the periods presented.
Cash Flow Summary - Years Ended December 31, 2025, 2024 and 2023 The following table summarizes our cash flows for the periods presented.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur inability or failure to do so could harm our business, results of operations or financial condition. 56 Interest Rate Fluctuation Risk As of December 31, 2024, we had cash, cash equivalents, and restricted cash of approximately $142.5 million, which consisted primarily of institutional money market funds, which carries a degree of interest rate risk.
Biggest changeInterest Rate Fluctuation Risk As of December 31, 2025, we had cash, cash equivalents, and restricted cash of approximately $104.6 million, which consisted primarily of institutional money market funds, which carries a degree of interest rate risk.
A hypothetical 10% change in interest rates would increase our annual interest income by $14.3 million, or decrease our annual interest income by $8.2 million, based on our cash position as of December 31, 2024. Foreign Currency Exchange Rate Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
A hypothetical 10% change in interest rates would increase our annual interest income by $10.5 million, or decrease our annual interest income by $4.3 million, based on our cash position as of December 31, 2025. Foreign Currency Exchange Rate Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations or financial condition.

Other SMRT 10-K year-over-year comparisons