Matterport (NASDAQ:MTTR) Beats Q4 Sales Targets But Full Year Guidance Underwhelms

Petr Huřťák /
2023/02/22 4:10 pm EST
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Real estate focused virtual reality platform Matterport (NASDAQ:MTTR) reported Q4 FY2022 results that beat analyst expectations, with revenue up 51.9% year on year to $41.1 million. However, guidance for the next quarter was less impressive, coming in at $35 million at the midpoint, being 11.8% below analyst estimates. Matterport made a GAAP loss of $60.4 million, improving on its loss of $161 million, in the same quarter last year.

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Matterport (MTTR) Q4 FY2022 Highlights:

  • Revenue: $41.1 million vs analyst estimates of $39.7 million (3.64% beat)
  • EPS (non-GAAP): -$0.09 vs analyst estimates of -$0.10
  • Revenue guidance for Q1 2023 is $35 million at the midpoint, below analyst estimates of $39.7 million
  • Management's revenue guidance for upcoming financial year 2023 is $161 million at the midpoint, missing analyst estimates by 7.61% and predicting 18.3% growth (vs 22.9% in FY2022)
  • Free cash flow was negative $22.2 million, compared to negative free cash flow of $41.6 million in previous quarter
  • Customers: 701,000, up from 657,000 in previous quarter
  • Gross Margin (GAAP): 28.8%, down from 41.5% same quarter last year

“We delivered record revenue again in the fourth quarter, as our subscriber base continued to grow and our spaces under management exceeded 9 million,” said RJ Pittman, Chairman and Chief Executive Officer of Matterport.

Founded in 2011 before any mass market VR headset was released, Matterport (NASDAQ:MTTR) provides the hardware and software necessary to turn real world spaces into 3D visualization.

The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.

Sales Growth

As you can see below, Matterport's revenue growth has been strong over the last two years, growing from quarterly revenue of $23.6 million in Q4 FY2020, to $41.1 million.

Matterport Total Revenue

This was a standout quarter for Matterport with quarterly revenue up an absolutely stunning 51.9% year on year which is above the two year trend for the company. But the growth did slow down compared to last quarter, as the revenue increased by just $3.15 million in Q4, compared to $9.51 million in Q3 2022. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates Matterport is expecting revenue to grow 22.8% year on year to $35 million, improving on the 5.87% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $161 million at the midpoint, growing 18.3% compared to 22.4% increase in FY2022.

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Customer Growth

You can see below that Matterport reported 701,000 customers at the end of the quarter, an increase of 44,000 on last quarter. That's in line with the customer growth we have seen last quarter but a bit below what we have typically seen over the last year, suggesting that sales momentum may be slowing a little.

Matterport Customers

Key Takeaways from Matterport's Q4 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Matterport’s balance sheet, but we note that with a market capitalization of $977.3 million and more than $472.9 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the exceptional revenue growth Matterport delivered this quarter. On the other hand, it was unfortunate to see that Matterport's revenue guidance for the full year missed analysts' expectations and that cash burn is still high. Overall, this quarter's results were not the best we've seen from Matterport. The company is up 2.71% on the results and currently trades at $3.6 per share.

Matterport may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.