Matterport Earnings: What to Watch on August 10 | Colorful fool
Matterport (MTTR 1.19%) is scheduled to report its Q2 2022 results after the market closes on Wednesday, August 10th. A conference call with analysts is scheduled for 4:30 PM ET on the same day.
Investors will probably approach the space data company’s management with caution rather than optimism. On the plus side, last quarter the company beat Wall Street consensus estimates as well as its own guidance for both revenue and earnings. However, management once again issued guidance that fell short of analysts’ expectations for the upper and lower bounds.
Additionally, the US residential real estate market has been cooling for several years. Some investors are likely to be concerned – rightly so, in my view – that a significant slowdown in the global real estate market could slow the industry’s adoption of Matterport’s subscription-based platform and digital twin cameras. While the company focuses on several industries, the majority of its customers are in the real estate industry.
Here’s what to watch for in Matterport’s upcoming Q2 report.
Some investors are excited about the company’s potential to profit from the metaverse, but any significant potential benefit is likely years away. Image source: Getty Images.
Matterport key figures
Below are year-ago quarterly results and Wall Street guidance to use as benchmarks.
| Metric | Result for Q2 2021 | Matterport’s Q2 2022 Guide | Wall Street Consensus Estimate for Q2 2022 | Expected change on Wall Street YOY |
|---|---|---|---|---|
| Revenues | 29.5 million dollars | $28.5 million to $30.5 million* | 29.6 million dollars | Flat |
| Adjusted earnings per share (EPS) | ($0.62) | ($0.15) to ($0.13) | ($0.14) | 77% loss reduction expected |
Data sources: Matterport and Yahoo! Finance. *Matterport also provided guidance for subscription revenue: $18 million to $18.3 million, which would equate to year-over-year growth of 18% to 20%. YOY = year-on-year.
The context is critical given the company’s earnings direction and Wall Street’s earnings expectations. Matterport is transitioning from a license-based business model to a software-as-a-subscription (SaaS) business model. The company’s subscription business is growing at a solid (though not rapid) clip, though that fact is masked when just looking at total revenue.
In the first quarter, total revenue rose 6% year-over-year to $28.5 million, driven by a 24% increase in subscription revenue to $17.1 million. Total revenue beat the Wall Street consensus estimate of $27.5 million.
Last quarter’s adjusted loss widened 900% year-over-year to $0.10 per share. This loss was due to scaling up operations and additional costs resulting from bottlenecks in the global supply chain. The result beat Wall Street expectations by $0.04 and also beat the company’s guidance of an adjusted loss of between $0.15 per share and $0.13 per share.
Net dollar expansion rate
Investors should watch the company’s net dollar expansion rate, a metric that reflects customer satisfaction.
Last quarter, this metric was 107%, meaning that existing subscribers increased their spend at the company by an average of 7% year-over-year. This result was down from 110% in the previous quarter, which is also about the company’s historical rate.
Guidance
Matterport’s stock is likely to move if third-quarter guidance diverges significantly from what Wall Street expects, or if management significantly revises its full-year 2022 guidance.
For Q3, analysts are expecting an adjusted loss of $0.13 per share on revenue of $32.9 million.
For 2022, management guided for revenue of $125 million to $135 million, or annual growth of 12% to 21%. It also expects subscription revenue of $80 million to $82 million, or growth of 31% to 34%. And it also projects an adjusted loss of $0.47 to $0.52, or a year-over-year expansion of 104% to 126%.
Beth McKenna has no position in any of the shares mentioned. The Motley Fool has positions and recommends Matterport, Inc. The Motley Fool has a disclosure policy.
