SmartRent Inc (NYSE:SMRT) Posts Mixed Q3 2025 Results with Narrowed Losses and Strong Profitability Progress

SmartRent Inc (NYSE:SMRT) delivered a mixed financial performance for the third quarter of 2025, with revenue declining year-over-year but key profitability metrics showing significant improvement. The company's strategic shift toward recurring revenue streams appears to be gaining traction, though the transition continues to impact overall sales figures.

Financial Performance Versus Estimates

The company's third quarter results presented a nuanced picture when measured against analyst expectations. While total revenue fell short of projections, the company's bottom-line performance exceeded estimates, driving positive market sentiment.

• Revenue: $36.2 million, representing an 11% year-over-year decrease and slightly below analyst estimates of $37.0 million.
• Earnings Per Share: GAAP loss of $0.03 per share, notably better than the anticipated loss of $0.05 per share.

This earnings beat, despite the revenue miss, suggests investors are focusing on the company's improving cost structure and path toward profitability. The stock reacted positively in pre-market trading, rising approximately 9.6%, indicating the market viewed the overall results favorably, particularly the progress on narrowing losses.

Strategic Shift and Operational Metrics

The decline in total revenue was primarily driven by a deliberate strategic move away from low-margin bulk hardware sales. This shift is part of a broader transition toward a more sustainable, software-as-a-service (SaaS) focused business model, which is reflected in several key operating metrics.

• Annual Recurring Revenue (ARR): Increased 7% year-over-year to $56.9 million.
• SaaS Revenue: Grew 7% and now represents 39% of total revenue, up from 33% in the prior year.
• Units Deployed: Reached 870,230, an 11% increase, demonstrating continued expansion of the installed base.
• New Units Deployed: 22,644, a 49% increase from the prior year, indicating stronger customer adoption.

Path to Profitability and Cost Management

A central theme of the quarter was the company's significant progress in reducing losses and managing expenses. The implementation of a cost reduction program yielded substantial results, contributing to a markedly improved financial position.

• Net Loss: Improved to $6.3 million from $9.9 million in the prior year.
• Adjusted EBITDA: Improved to a loss of $2.9 million from a loss of $3.8 million.
• Operating Expenses: Declined 34% to $16.6 million.
• Liquidity: The company maintains a strong position with $100 million in cash and no debt.

Management expressed confidence in achieving Adjusted EBITDA and cash flow neutrality on a run-rate basis by the end of 2025, a key milestone for investors.

Looking Ahead

While the press release did not provide specific quantitative financial guidance for the next quarter or full year, the company's commentary emphasized continuing to expand its installed base and leveraging investments in sales and AI. For context, analysts currently estimate Q4 2025 revenue to be approximately $36.9 million.

For a detailed breakdown of historical earnings, future estimates, and analyst projections, you can review the full data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.