Latch, Inc. (NASDAQ: LTCH) (“Latch” or the “Company”), maker of
LatchOS, the full-building enterprise software-as-a-service (SaaS)
platform, today reported financial results for the three months
ended March 31, 2021.
“Latch had a strong start to the year, highlighted by a sharp
acceleration in Total Bookings and revenue growth as well as a
significant increase in attach rates of non-access LatchOS software
modules to 81%,” said Luke Schoenfelder, Latch co-founder, CEO, and
Chairman of the Board of Directors. “Our strong results demonstrate
the increasing market demand for our industry leading products and
tangible ROI for our customers.”
Schoenfelder added, “Looking ahead to the rest of the year, we
plan to increase our investments in sales and marketing as well as
new, innovative experiences and products to meet the growing demand
in the multifamily market. Additionally, we are pleased to have
recently completed our business combination with TS Innovation
Acquisitions Corp. to become a publicly traded company. We now have
a stronger balance sheet and additional capital as we continue to
execute our long-term growth initiatives, increase our share of our
large and growing market, and drive value for our
shareholders.”
Three Months Ended March 31, 2021 and 2020 Financial
Highlights
$ in thousands
|
|
Three months ended March 31, |
|
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
|
% Change |
|
Revenue |
|
$6,629 |
|
|
$2,726 |
|
|
$3,903 |
|
|
143 |
% |
Cost of revenue (1) |
|
$6,162 |
|
|
$3,262 |
|
|
$2,900 |
|
|
89 |
% |
Operating expenses (1) |
|
$31,714 |
|
|
$15,345 |
|
|
$16,369 |
|
|
107 |
% |
Other expenses (2) |
|
$6,854 |
|
|
$60 |
|
|
$6,794 |
|
|
NM |
|
GAAP net loss |
|
$(38,101 |
) |
|
$(15,941 |
) |
|
$(22,160 |
) |
|
(139 |
%) |
NM: Not meaningful
(1) Stock based compensation expense included in cost of revenue
and operating expenses is as follows.
Cost of revenue |
|
$14 |
|
|
|
$4 |
|
|
Operating expenses |
|
|
14,479 |
|
|
|
352 |
|
|
Stock-based compensation |
|
$14,493 |
|
|
|
$356 |
|
|
Stock-based compensation of $14.5 million includes $13.8 million
in non-recurring stock based compensation and warrant expense
related to one of the Company’s existing equity holders acquiring
approximately three million shares of the Company’s common stock
from certain employees and nonemployee service providers in a
secondary purchase transaction during the three months ended March
31, 2021.
(2) Other expenses for the three months ended March 31, 2021
include a $3.6 million unfavorable change in the fair value of the
derivative liability primarily related to the Company’s convertible
notes and a $3.3 million increase in interest expense primarily
related to the Company’s convertible notes, each as compared to the
three months ended March 31, 2020.
Key Business Metrics
- Booked ARR: Booked
ARR for the three months ended March 31, 2021 was $38.9 million, up
120% compared to $17.6 million for the same period in 2020.
- Total Bookings:
Total Bookings for the three months ended March 31, 2021 were $71.7
million, up 89% compared to $38.0 million for the same period in
2020.
- Cumulative Booked Home
Units: Cumulative Booked Home Units for the three months
ended March 31, 2021 were 368,994, up 109% compared to 176,902 for
the same period in 2020.
- Adjusted EBITDA:
Adjusted EBITDA for the three months ended March 31, 2021 was
$(13.9) million, flat as compared to the same period in 2020.
Please see below for a reconciliation of Adjusted EBITDA to our
closest GAAP metric, net loss, as well as a discussion of why we
view Adjusted EBITDA as an important metric.
Recent Business Highlights
- The Latch C2, the Company’s new
smart access device launched during the first quarter, booked over
20,000 units and was a contributing driver of Total Bookings
performance. The Latch C2 is competitively positioned to address
the retrofit market due to its low cost, long battery life, and
limited infrastructure needs.
- Latch deployed NFC Unlock
functionality on Android across its product portfolio, building on
the Company’s industry-leading variety of unlock options. The
initiative served to amplify the value of Latch’s full technology
stack of hardware, firmware, and software, adding new features that
contribute immediate value to both building owners and residents,
while simultaneously deepening technology integrations with
Google.
- Latch deepened its status as a
trusted technology partner with AvalonBay by developing a
self-service touring experience that allows prospective residents
to visit Kanso Twinbrook, its newest development concept, in a
safe, contactless manner. This partnership illustrates how Latch
unifies software, hardware, and services in one single seamless
experience for customers.
- In May, Latch announced the
expansion of its full-building enterprise SaaS platform into the
commercial office space with the launch of LatchOS for Commercial
Office and Latch Visitor Express, two product offerings
specifically tailored to commercial office buildings, which should
greatly expand the Company’s addressable market.
Financial Outlook
Latch is providing guidance for second quarter
and full year 2021 as follows:
- Second
Quarter 2021 Guidance: We expect revenue to be in the
range of $9 million to $10 million, Total Bookings to be in the
range of $82 million to $87 million, and Adjusted EBITDA to be in
the range of ($17) million to ($20) million.
- Full
Year 2021 Guidance: We expect revenue to be in the range
of $47 million to $51 million, Total Bookings to be in the range of
$290 million to $325 million, and Adjusted EBITDA to be in the
range of ($75) million to ($95) million.
Quarterly Conference Call
Latch will host a conference call today at 5:00 p.m. Eastern
Time to review the Company’s financial results for the quarter
ended March 31, 2021. To access this call, dial (833) 562-0132 for
the U.S. or Canada, or (661) 567-1107 for callers outside the U.S.
or Canada, with Conference ID: 7510438. A live webcast of the
conference call will be accessible from the Investor Relations
section of Latch’s website at https://www.latch.com/investors, and
a recording will be archived and accessible at
https://www.latch.com/investors.
Additional Information
For additional information regarding Latch’s first quarter 2021
financial results that management believes to be useful for
investors, please refer to the presentation posted on the Investor
Relations section of Latch’s website at
https://www.latch.com/investors.
About Latch, Inc.
Latch makes spaces better places to live, work, and visit
through a system of software, devices, and services. More than one
in ten new apartments in the U.S. are currently being built with
Latch products, serving customers in more than 35 states through
its flagship full-building operating system, LatchOS. For more
information, please visit https://www.latch.com.
Key Business Metrics
Latch reviews Key Business Metrics, including those detailed
above, to measure its performance, identify trends affecting its
business, formulate business plans, and make strategic decisions
that will impact the future operational results of the Company.
Increases or decreases in the Company’s Key Business Metrics may
not correspond with increases or decreases in its revenue.
The limitations these Key Business Metrics have as an analytical
tool are: (1) they might not accurately predict the Company’s
future financial results, (2) the Company might not realize all or
any part of the anticipated value reflected in its Total Bookings
and (3) other companies, including companies in Latch’s industry,
may calculate Key Business Metrics or similarly titled measures
differently, which reduces their usefulness as comparative
measures.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance
with GAAP and to provide investors with additional information
regarding our financial results, we have presented in this press
release Adjusted EBITDA, a non-GAAP financial measure. Adjusted
EBITDA is not based on any standardized methodology prescribed by
GAAP and is not necessarily comparable to similarly titled measures
presented by other companies.
We define Adjusted EBITDA as our net loss, excluding the impact
of stock-based compensation expense, depreciation and amortization
expense, interest income, interest expense, provision for income
taxes, restructuring, one-time litigation expenses, loss on
extinguishment of debt, gain or loss on change in fair value of
derivative instruments, and our transaction related expenses. The
most directly comparable GAAP measure is net loss. We monitor, and
have presented in this press release, Adjusted EBITDA because it is
a key measure used by our management and Board of Directors to
understand and evaluate our operating performance, to establish
budgets, and to develop operational goals for managing our
business. In particular, we believe excluding the impact of these
expenses in calculating Adjusted EBITDA can provide a useful
measure for period-to-period comparisons of our core operating
performance. We believe Adjusted EBITDA helps identify underlying
trends in our business that could otherwise be masked by the effect
of the expenses that we include in net loss. Accordingly, we
believe Adjusted EBITDA provides useful information to investors,
analysts, and others in understanding and evaluating our operating
results, enhancing the overall understanding of our past
performance.
Adjusted EBITDA is not prepared in accordance with GAAP and
should not be considered in isolation of, or as an alternative to,
measures prepared in accordance with GAAP. There are a number of
limitations related to the use of Adjusted EBITDA rather than net
loss, which is the most directly comparable financial measure
calculated and presented in accordance with GAAP. In addition, the
expenses and other items that we exclude in our calculations of
Adjusted EBITDA may differ from the expenses and other items, if
any, that other companies may exclude from Adjusted EBITDA when
they report their operating results.
In addition, other companies may use other measures to evaluate
their performance, all of which could reduce the usefulness of
Adjusted EBITDA as a tool for comparison.
Latch has not reconciled its Adjusted EBITDA
guidance metrics to GAAP net earnings or loss because certain of
the reconciling items cannot be reasonably calculated or predicted
at this time. Accordingly, a reconciliation is not available
without unreasonable effort.
The following table reconciles Adjusted EBITDA to net loss, the
most directly comparable financial measure calculated and presented
in accordance with GAAP.
|
|
For the three months ended March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
(In
thousands) |
|
|
|
|
|
|
Net loss |
|
$ |
(38,101 |
) |
|
$ |
(15,941 |
) |
Depreciation and
amortization |
|
|
653 |
|
|
|
273 |
|
Interest (income)/expense,
net |
|
|
3,318 |
|
|
|
60 |
|
Change in fair value of
derivative liability |
|
|
3,597 |
|
|
|
- |
|
Restructuring costs (1) |
|
|
0 |
|
|
|
310 |
|
Transaction-related costs
(2) |
|
|
2,148 |
|
|
|
- |
|
Litigation costs (3) |
|
|
- |
|
|
|
1,035 |
|
Stock-based compensation and
warrant expense (4) |
|
|
14,493 |
|
|
|
356 |
|
Adjusted
EBITDA |
|
$ |
(13,892 |
) |
|
$ |
(13,907 |
) |
(1) The Company initiated a restructuring plan in the first
quarter of 2020 as part of its efforts to reduce operating expenses
and preserve liquidity due to the uncertainty and challenges
stemming from the COVID-19 pandemic. The restructuring included a
reduction in force involving an approximate 25% reduction in
headcount, which resulted in severance and benefit costs for
affected employees and other miscellaneous direct costs.
(2) Transaction costs related to the business combination of TS
Innovation Acquisitions Corp. (“TSIA”) and Latch, Inc. These costs
are included within operating expenses.
(3) Legal and settlement fees incurred in connection with
non-ordinary course litigation and other disputes. These costs are
included within operating expenses.
(4) Stock-based compensation and warrant expense associated with
equity compensation plans including $13.8 million related to the
secondary purchase transaction during the three months ended March
31, 2021.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements within
the meaning of the federal securities laws, including statements
regarding expected benefits of the business combination to Latch
and adoption of Latch’s technology and products. These
forward-looking statements generally are identified by the words
"believe," "project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should,"
"would," "will continue," "will likely result," and similar
expressions. Forward-looking statements are predictions,
projections, and other statements about future events that are
based on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Forward-looking information
includes, but is not limited to, statements regarding: the expected
benefits of, and use of proceeds received in connection with, the
business combination with TSIA; the Company’s future products,
performance, and operations, and the related benefits to
shareholders, customers, and residents; and the Company’s strategy.
Many factors could cause actual future events to differ materially
from the forward-looking statements in this document, including
Latch’s ability to implement business plans and changes and
developments in the industry in which Latch competes. The foregoing
list of factors is not exhaustive. You should carefully consider
the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of TSIA’s definitive proxy
statement/prospectus filed with the Securities and Exchange
Commission (the “SEC”) on May 12, 2021 and other documents filed by
Latch from time to time with the SEC. These filings identify and
address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained
in the forward-looking statements. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and the Company
assumes no obligation to update or revise these forward-looking
statements, whether as a result of new information, future events,
or otherwise, except as required by law, including the securities
laws of the United States and the rules and regulations of the SEC.
The Company does not give any assurance that it will achieve its
expectations.
CONTACTS:
Investors:investors@latch.com
Media:Daniel Tewelespress@latch.com
Latch (NASDAQ:LTCH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Latch (NASDAQ:LTCH)
Historical Stock Chart
From Jul 2023 to Jul 2024