Matterport (MTTR) Q2 2024 earnings summary

Executive summary

• Revenue grew 7% year-over-year to $42.2 million for Q2 2024, driven by subscription and services growth, partially offset by lower product sales.

• Annualized recurring revenue reached $96.6 million, up 16% year-over-year.

• Total subscribers grew 28% year-over-year to 1.06 million; square feet under management rose 33%.

• Net loss widened to $141.6 million for Q2 2024, primarily due to a $95 million litigation expense related to a court ruling.

• The company entered into a merger agreement with CoStar Group, valued at $2.1 billion, expected to close in Q4 2024 pending regulatory approvals.

Financial highlights

• Q2 2024 revenue: $42.2 million (up 7% year-over-year); six-month revenue: $82.1 million (up 6%).

• Subscription revenue rose 16% to $24.2 million, now over 57% of total revenue.

• Gross margin improved to 46% from 40% in Q2 2023, reflecting cost efficiencies and subscription growth.

• Operating expenses surged to $164.5 million, mainly due to the $95 million litigation charge.

• Free cash flow for the first half of 2024 was negative $16.3 million, an improvement from negative $38.2 million in the prior year.

Outlook and guidance

• The CoStar Group merger is expected to close in Q4 2024, subject to regulatory and other customary closing conditions.

• Financial guidance for the full fiscal year 2024 and the upcoming quarter has been suspended due to the pending acquisition.

• Management expects continued investment in growth, with operating losses anticipated for at least the next 12 months.