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 and six
months ended June 30, 2021.
“Latch continues to see powerful demand for our products that
drove a sharp acceleration in Total Bookings and revenue growth in
the first half of the year,” said Luke Schoenfelder, Latch
Co-Founder, CEO, and Chairman of the Board of Directors. “These
results underscore the increasing needs within the market for our
industry leading software, product ecosystem, and the tangible
value they create for our customers. We are especially proud of our
team’s ability to deliver these results given the global supply
chain and construction market challenges that we began to see at
the end of the quarter.”
Three Months Ended June 30, 2021 and 2020 Financial
Highlights
$ in thousands (unaudited)
|
|
Three months endedJune 30, |
|
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
Revenue |
|
$ |
9,012 |
|
|
$ |
2,752 |
|
|
$ |
6,260 |
|
|
227 |
% |
Cost of revenue |
|
$ |
8,242 |
|
|
$ |
3,239 |
|
|
$ |
5,003 |
|
|
154 |
% |
Operating expenses |
|
$ |
22,726 |
|
|
$ |
14,082 |
|
|
$ |
8,644 |
|
|
61 |
% |
Other expenses (1) |
|
$ |
18,105 |
|
|
$ |
417 |
|
|
$ |
17,688 |
|
|
NM |
GAAP net loss |
|
$ |
(40,071 |
) |
|
$ |
(14,986 |
) |
|
$ |
(25,085 |
) |
|
(167 |
%) |
|
NM: Not meaningful |
|
|
(1) |
Other expenses for the three months ended June 30, 2021 include:
(a) $9.0 million unfavorable change in the fair value of the
derivative liabilities related to our convertible notes and
warrants related to our term loan; (b) $4.8 million unfavorable
change in the fair value of our private placement warrants; (c)
$1.5 million loss on extinguishment of debt related to the
convertible notes and warrants related to our term loan; and (d)
$2.9 million interest expense primarily related to our convertible
notes. |
|
|
Six months endedJune 30, |
|
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
$ Change |
|
% Change |
Revenue |
|
$ |
15,641 |
|
|
$ |
5,478 |
|
|
$ |
10,163 |
|
|
186 |
% |
Cost of revenue |
|
$ |
14,404 |
|
|
$ |
6,501 |
|
|
$ |
7,903 |
|
|
122 |
% |
Operating expenses |
|
$ |
54,440 |
|
|
$ |
29,427 |
|
|
$ |
25,013 |
|
|
85 |
% |
Other expenses (2) |
|
$ |
24,959 |
|
|
$ |
477 |
|
|
$ |
24,482 |
|
|
NM |
GAAP net loss |
|
$ |
(78,172 |
) |
|
$ |
(30,927 |
) |
|
$ |
(47,245 |
) |
|
(153 |
%) |
|
|
|
|
|
|
|
|
|
Cash flow used in operations |
|
$ |
(32,835 |
) |
|
$ |
(30,091 |
) |
|
$ |
(2,744 |
) |
|
(9 |
%) |
Net cash balance |
|
$ |
471,999 |
|
|
$ |
31,174 |
|
|
|
|
|
(2) |
Other expenses for the six months ended June 30, 2021 include: (a)
$12.6 million unfavorable change in the fair value of the
derivative liabilities related to our convertible notes and
warrants related to our term loan; (b) $4.8 million unfavorable
change in the fair value of our private placement warrants; (c)
$1.5 million loss on extinguishment of debt related to the
convertible notes and warrants related to our term loan; and (d)
$6.2 million interest expense primarily related to our convertible
notes. |
Key Business Metrics
- Total Bookings:
Total Bookings for the three months ended June 30, 2021 were $95.8
million, up 102% compared to $47.5 million for the same period in
2020.
- Booked ARR: Booked
ARR for the three months ended June 30, 2021 was $48.8 million, up
122% compared to $22.0 million for the same period in 2020.
- Cumulative Booked Home
Units: Cumulative Booked Home Units for the three months
ended June 30, 2021 were 451,333, up 108% compared to 217,424 for
the same period in 2020.
- Adjusted EBITDA:
Adjusted EBITDA for the three months ended June 30, 2021 was
$(17.4) million, down as compared to $(13.4) million during 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
- Latch expanded its property
management software (ePMS) integrations, adding both Yardi and
Entrata to LatchOS. This follows the Company's previous integration
of RealPage, resulting in LatchOS now integrating with the three
largest ePMS providers in the United States. With LatchOS' growing
roster of ePMS integrations, property managers can save, on
average, over four hours of their time for every 100 residents,
yielding ongoing net operating income savings for the Company's
customers across asset classes and markets.
- Latch officially launched its
strategic Direct Sales and Deployment efforts, which allow the
Company to provide a unified experience and a single point of
contact for customers across fulfillment, installation, support,
and third-party vendors. These services allow customers to
implement nationwide deployments with Latch as the single
counterparty, allowing for a simplified customer journey and
improved installation quality control.
- Latch hired Justina Omokhua as its
Chief Marketing Officer, furthering its investment in the expansion
of its enterprise customer base and the ways the Company serves
individual users on its platform. Omokhua's marketing career has
included experience at some of the world's most powerful brands,
and her recent roles include Senior Vice President of Brand
Marketing at Endeavor and Global Head of Content and Lifestyle
Strategy at Apple.
Financial Outlook
Latch is providing guidance for third quarter
and full year 2021 as follows:
- Third
Quarter 2021 Guidance: We expect Total Bookings to be in
the range of $85 million to $90 million, a 149% to 164% YoY
increase. We expect revenue to be in the range of $10 million to
$11 million, a 96% to 116% YoY increase. We expect Adjusted EBITDA
to be in the range of ($32) million to ($28) million.
- Full
Year 2021 Guidance: We have updated our Total Bookings
guidance to be in the range of $325 million to $340 million, a 97%
to 105% YoY increase. We have updated our revenue guidance to be in
the range of $38 million to $42 million, a 110% to 133% YoY
increase. We have updated our Adjusted EBITDA guidance to be in the
range of ($115) million to ($90) 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 June 30, 2021. To access this call, dial (833) 562-0132 for
the United States or Canada, or (661) 567-1107 for callers outside
the United States or Canada, with Conference ID: 7130858. 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 second 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 39 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 warrant liabilities, 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 June 30, |
|
For the six months endedJune 30, |
(In thousands) |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net loss |
|
$ |
(40,071 |
) |
|
$ |
(14,986 |
) |
|
$ |
(78,172 |
) |
|
$ |
(30,927 |
) |
Depreciation and amortization |
|
|
689 |
|
|
|
313 |
|
|
|
1,342 |
|
|
|
586 |
|
Interest (income)/expense, net |
|
|
2,873 |
|
|
|
291 |
|
|
|
6,191 |
|
|
|
351 |
|
Income taxes |
|
|
10 |
|
|
|
- |
|
|
|
10 |
|
|
|
- |
|
Loss on extinguishment of debt |
|
|
1,469 |
|
|
|
- |
|
|
|
1,469 |
|
|
|
- |
|
Change in fair value of derivative liability |
|
|
8,991 |
|
|
|
- |
|
|
|
12,588 |
|
|
|
- |
|
Change in fair value of warrant liability |
|
|
4,795 |
|
|
|
- |
|
|
|
4,795 |
|
|
|
- |
|
Restructuring costs (1) |
|
|
- |
|
|
|
576 |
|
|
|
- |
|
|
|
886 |
|
Transaction-related costs (2) |
|
|
3,420 |
|
|
|
- |
|
|
|
5,568 |
|
|
|
- |
|
Litigation costs (3) |
|
|
- |
|
|
|
11 |
|
|
|
- |
|
|
|
1,046 |
|
Stock-based compensation and warrant expense (4) |
|
|
424 |
|
|
|
351 |
|
|
|
14,916 |
|
|
|
707 |
|
Adjusted EBITDA |
|
$ |
(17,400 |
) |
|
$ |
(13,444 |
) |
|
$ |
(31,293 |
) |
|
$ |
(27,351 |
) |
(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. These
costs are primarily included within research and development, sales
and marketing, and general and administrative based on the
department to which the expense relates.
(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 six months ended June 30,
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 with TSIA
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 our Registration
Statement on Form S-1 filed with the Securities and Exchange
Commission (the “SEC”) on June 25, 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