SmartRent (NYSE:SMRT) executives told investors that the back half of 2025 represented an “inflection point” for the company, pointing to a return to year-over-year revenue growth in the fourth quarter, improved margins, and a materially reduced quarterly net loss. Management also outlined a longer-term strategic plan dubbed “Vision 2028,” centered on accelerating installed-base growth and driving profitability through a more scalable operating model.
Management says 2025 progress sets up “Vision 2028”
President and CEO Frank Martell said 2025 was a critical year operationally and financially, highlighting organizational development work, workflow improvements, and leadership changes that included internal promotions and the addition of outside domain expertise. Martell said the company expanded go-to-market capabilities and invested in hardware and software offerings with a focus on customer ROI and internal operating leverage.
From a financial perspective, Martell said the company executed against commitments to return to “profitable revenue growth” with positive run rates for cash flow and Adjusted EBITDA. He cited fourth-quarter results that included positive total revenue growth for the first time in seven quarters, 13% SaaS revenue growth, and ARR reaching just under $62 million, which he said represents about 40% of total revenue.
Fourth-quarter results: revenue growth returns, margins improve
CFO Daryl Stemm reported fourth-quarter total revenue of $36.5 million, up about 3% from $35.4 million in the prior-year quarter, marking the first quarter of year-over-year revenue growth in seven quarters.
Hosted services revenue totaled $18.1 million, including $15.4 million of SaaS revenue and $2.7 million of non-cash hub amortization revenue. Hardware revenue was $12.5 million, up 20% year-over-year, and professional services revenue was $5.9 million.
Stemm also discussed “core revenue,” which the company defines as total revenue less hub amortization. Core revenue was approximately $33.8 million in the fourth quarter, compared with $30.2 million a year earlier, a gain of about 12%.
On profitability, Stemm said total gross margin expanded about 990 basis points year-over-year to 38.6%. Hosted services gross margin rose to 75.7%, which he attributed to SaaS ARPU growth and operating leverage in the recurring model. Professional services gross margin improved to approximately break-even, which Stemm said marked the second consecutive quarter of profitable professional services operations.
Operating expenses in the quarter were $18.0 million, down 22% year-over-year, reflecting structural cost actions implemented in the second half of the year. Net loss narrowed to $3.2 million from $11.4 million in the prior-year quarter. Adjusted EBITDA improved to a profit of about $200,000, compared with an Adjusted EBITDA loss of $7.4 million a year earlier.
Full-year 2025: SaaS grows, hardware mix shift weighs on total revenue
For the full year, Stemm reported total revenue of $152.3 million, down 13% from the prior year. He said the decline reflected SmartRent’s continued transition away from bulk hardware transactions that were not aligned with customer implementation timelines.
SaaS revenue for the full year was $57.8 million, up 12% year-over-year. Stemm reiterated that ARR now represents roughly 40% of total revenue, which he said reflects an expanding installed base.
Hub amortization revenue, a non-cash component related to “non-distinct hubs sold in prior periods,” was $15.4 million for the year, compared with $21.6 million in 2024. Core revenue for the full year was approximately $136.9 million, down from $153.3 million in fiscal 2024, which Stemm again tied to the shift away from bulk hardware transactions. He said hub amortization revenue is expected to decline further to less than $5 million in 2026.
Full-year operating expenses were $88.9 million, down 13% year-over-year. However, the company’s full-year net loss was $60.6 million, compared with $33.6 million in 2024, primarily due to a $24.9 million goodwill impairment charge recorded in the first quarter of 2025. Full-year Adjusted EBITDA was a loss of $16.4 million, compared with a loss of $9.9 million in 2024.
Liquidity, cash flow, and unit economics
SmartRent ended the year with approximately $105 million in cash and no debt under its $75 million credit facility, Stemm said. In the fourth quarter, the company grew its cash balance by $4.5 million and achieved its goal of cash flow neutrality “on a run rate basis” exiting the year, while also noting cash flow seasonality. Stemm said the company expects to be cash flow positive on an annual basis.
Working capital improved year-over-year, with accounts receivable and inventory declining due to improved collection cycles and better forecasting, according to Stemm.
SaaS ARPU in the fourth quarter was $5.83, up from $5.68 in the prior-year quarter, a roughly 3% increase. On a full-year basis, SaaS ARPU increased about 1%. Units booked SaaS ARPU was $7.64 in the fourth quarter, down from $8.49 in the prior-year quarter; for the full year, units booked SaaS ARPU was $8.40 compared with $6.44 in 2024, which Stemm said reflected changes in customer and product mix within new bookings.
Vision 2028: installed base growth, go-to-market expansion, and operating leverage
Martell said Vision 2028 is built around two priorities: accelerating growth by reinforcing and expanding SmartRent’s “competitive moat,” and increasing profitability through a more scalable operating model. He said the plan is organized around five strategic pillars:
- Growing the installed base at a double-digit pace
- Scaling a “world-class” go-to-market organization to increase revenue velocity
- Deepening platform integration with greater use of data, analytics, and AI
- Simplifying hardware architecture while investing in next-generation capabilities
- Strengthening internal operating rigor to drive sustainable operating leverage and free cash flow
Martell said SmartRent’s IoT technology is operational in more than 890,000 rental units in the U.S., while its maintenance and leasing operations solutions support more than 1.2 million units. He added that IoT units are connected to more than 3 million devices across roughly 3,500 properties. He said the company expects to reach 1 million installed units over the next four to five quarters and is targeting a double-digit compound annual growth rate in installed units through 2028, which management believes could result in more than 1.2 million units exiting 2028, assuming historically low churn rates.
In the Q&A, Martell said the company is “roughly doubling the size of the sales organization” and is evaluating partnerships for local reach, which he said he expects to materialize toward the end of the year. Management said SmartRent has about 600 customers and sees growth opportunity both from existing accounts and an increased focus on small and medium customers. Stemm said that historically, most short-term growth in unit deployments has come from existing customers, and he expects that trend to continue under the Vision 2028 horizon.
On outlook, executives did not provide specific numeric guidance for 2026. Martell and Stemm characterized the company’s commentary as “soft guidance,” reiterating expectations for total revenue growth supported by double-digit ARR growth, progress toward 1 million installed units within four to five quarters, and goals to be Adjusted EBITDA profitable and free-cash-flow positive on a full-year basis. Stemm said customer engagement and booking activity have improved, but management remains measured due to deployment timing variability and macro uncertainty.
About SmartRent (NYSE:SMRT)
SmartRent Inc is a technology company that develops smart home and smart building automation solutions for the residential rental housing industry. Its integrated hardware and software platform enables property managers and owners to remotely monitor, manage and control access, energy use and overall resident experience. The company’s product portfolio includes smart locks, thermostats, leak and flood sensors, door and window sensors, security cameras, and a centralized management dashboard that interfaces with leading property management systems.
SmartRent’s platform is designed to streamline operations for multifamily communities and single-family rental portfolios by automating routine tasks such as digital resident self-showings, remote lease turnovers, package management and preventative maintenance alerts.
