425: Matterport Announces Record Full Year Subscription Revenue and Acquisition by CoStar Group Expected in Q1 2025

Matterport reports strong 2024 financial results, including record subscription revenue and growth in subscribers and square footage under management, while awaiting acquisition by CoStar Group.

Summary

• Matterport announced its Q4 and full year 2024 financial results, showcasing growth in several key areas.
• Full year subscription revenue reached a record $99.6 million, a 14% increase year-over-year.
• Total revenue for the year was $169.7 million, up 8% from the prior year.
• The company's annualized recurring revenue (ARR) grew to $104.2 million in Q4.
• Matterport's subscriber base grew to 1.2 million, a 23% increase year-over-year.
• Square feet under management reached 50.7 billion, a 33% increase year-over-year.
• The net loss per share improved significantly, with a 50% improvement in Q4 non-GAAP net loss per share to $0.02 and a 73% improvement for the full year non-GAAP net loss per share to $0.06.
• Matterport launched its 2025 Winter Release, featuring new capabilities and the Matterport Marketing Cloud.
• The acquisition of Matterport by CoStar Group is expected to close in the first quarter of 2025.
• Due to the pending acquisition, Matterport has suspended financial guidance and will not hold a conference call to discuss the results.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the strong growth in key metrics and the pending acquisition, but tempered by the ongoing net losses and suspension of financial guidance.

Positives

• Record full year subscription revenue of $99.6 million, up 14% year-over-year, indicates strong growth in the core subscription business.
• Annualized recurring revenue (ARR) grew to $104.2 million, demonstrating the increasing predictability of revenue.
• Total subscribers increased to 1.2 million, up 23% year-over-year, showing strong customer acquisition.
• Square feet under management reached 50.7 billion, up 33% year-over-year, reflecting increased platform usage.
• Significant improvement in non-GAAP net loss per share, both in Q4 and for the full year, suggests progress towards profitability.
• The upcoming acquisition by CoStar Group could provide financial stability and strategic advantages.

Negatives

• The company is still reporting a net loss, although it has improved year-over-year.
• The pending acquisition by CoStar Group has led to the suspension of financial guidance, creating uncertainty for investors.
• Litigation expense of $95 million during the year ended December 31, 2024 significantly impacted the net loss.

Risks

• The acquisition by CoStar Group may not be completed if closing conditions are not met or waived.
• The acquisition could disrupt Matterport's current plans and operations.
• The acquisition could negatively impact Matterport's ability to retain key personnel and maintain relationships with customers and suppliers.
• Failure to grow market share in existing or new markets could hinder future growth.
• Inability to manage growth effectively could lead to operational inefficiencies.
• Failure to maintain an effective system of internal controls over financial reporting could lead to financial misstatements.
• The increasingly competitive environment could put pressure on pricing and market share.

Future Outlook

The company has suspended financial guidance due to the pending acquisition by CoStar Group, which is expected to close in the first quarter of 2025.

Management Comments

• RJ Pittman, Chairman and CEO of Matterport, stated that total square feet digitized and managed reached a significant company milestone of 50.7 billion, up 33% year-over-year, with annual recurring revenue continuing to grow to a record $104.2 million.
• JD Fay, Chief Financial Officer of Matterport, noted the record $99.6 million in total subscription revenue, representing a 14% increase from the prior year, and the significant improvement in non-GAAP net loss per share.

Industry Context

Matterport is operating in the growing spatial data and digital twin market, which is seeing increased adoption across various industries including real estate, construction, and manufacturing. The acquisition by CoStar Group, a leading provider of online real estate marketplaces, could significantly enhance Matterport's market reach and competitive position.

Comparison to Industry Standards

• Comparing Matterport to similar companies in the digital twin and spatial data space is challenging due to the unique nature of its platform and business model.
• However, companies like Autodesk and Bentley Systems also offer solutions for the built environment, but with a different focus on design and engineering.
• Matterport's subscription-based model and focus on ease of use differentiate it from some competitors.
• The growth in square footage under management and subscriber base suggests strong adoption compared to industry benchmarks.
• CoStar's acquisition of Matterport is similar to Zillow's acquisition of ShowingTime, where a large real estate platform acquires a technology company to enhance its offerings.

Stakeholder Impact

• Shareholders: The acquisition by CoStar Group could provide a positive return on investment.
• Employees: The acquisition could create new opportunities for career growth and development.
• Customers: The acquisition could lead to enhanced products and services.
• Suppliers: The acquisition could strengthen Matterport's financial position and ability to meet its obligations.
• Creditors: The acquisition could reduce the risk of default and improve the company's creditworthiness.

Next Steps

• Complete the acquisition by CoStar Group in the first quarter of 2025.
• Integrate Matterport's technology and platform with CoStar Group's existing offerings.
• Continue to innovate and develop new features for the Matterport platform.
• Focus on driving further growth in subscription revenue and subscriber base.

Key Dates