Matterport Q4 and Full Year 2023 Results: Revenue up 16% YoY but GAAP Net Losses Hit $199M For the Year

Digital twin technology specialist Matterport has caveated that its strategy of rapid expansion offset the company's Q4 and full-year earnings—released yesterday—with profitability an achievable and realistic goal for 2024.

Highlights include:

• Total Revenue for 2023 hit, $158M, up 16% on 2022
• Q4 2023 Revenue dipped slightly to $39.5M, from $41.1M in Q4 2022
• The company continues to make a loss, $199M for the year and $44M for the quarter
• Q4 net loss improved 27% YoY
• Revenue from subscriptions accounts for 60% of total revenue
• Matterport is close to achieving 1M subscribers (currently 938,000)
• Total revenues are expected to grow 19%-22% this year

The good news for Matterport is that it exceeded its expected earnings from subscriptions—an income of $23.7M—by $400k for the quarter.

But the reality is that the company will rely heavily on new subscription revenues to break even and hit profitability. Matterport announced it now has 938,000 subscribers, including construction companies and "1 out of 4 Fortune 100 companies". Guidance for revenue from subscriptions to hit between $24.0-24.2M Q1 2024.

Meanwhile, "Q4 net loss improved 27%" was the public interpretation of Matterport's GAAP net losses for the year—a shade under $200M, of which $43.9M was lost from September to December.

Share prices remain low, at $2.54 today (compared to a high of $27.86 in November 2021).

Nevertheless, Matterport remains a clear market leader for virtual and augmented reality technology for real estate use cases. The NASDAQ-listed company now boasts management of 38 billion square feet of buildings and spaces, having created 11.7 million digital twins. The company said that’s 100 times more than its competitors.

CJ Pittman, CEO at Matterport, said:

"Our digital listings serve as comprehensive marketing tools. Agents are under increased pressure to meet the high expectations of their clients and secure new listings.

"I’m incredibly excited about our 2024 Winter Release where we introduced Property Intelligence - a suite of AI-powered features and automations - along with new capabilities and add-ons that our customers are craving.

"This launch sets the stage for 2024 to be the year of the intelligent digital twin, fueling our AI-driven revenue growth and accelerating us towards our profitability goal."

Q4's results also coincided with a statement that Matterport is expecting a busy 2024, with a suite of new products and services set to launch this year. The firm has released plenty of new technology, including Artificial Intelligence integrations, in the past 12 months.

Matterport continues to be one of the leading real estate technology companies worldwide, and growing subscription numbers are a testament to the usefulness and popularity of the product.

But the reality is that Matterport—which generated 60% of its revenues via subscriptions in 2023—would need to more than double that number ($87M) if the company wanted its customers to cover its $199M losses for the year.

Given Matterport's upper guidance limit for 2024 proposes income from subscriptions to top out at $106M for the year, this is unlikely to happen.

However, Matterport's 2024 full-year guidance suggests total revenues of $183M could be achievable, a far more palatable number should losses remain steady. Nevertheless, Matterport would still have to cut its losses if it is to achieve profitability this year.