Matterport (NASDAQ:MTTR) Delivers Strong Q3 Numbers, Stock Soars

Radek Strnad /
2022/11/10 4:11 pm EST

Real estate focused virtual reality platform Matterport (NASDAQ:MTTR) reported results ahead of analyst expectations in the Q3 FY2022 quarter, with revenue up 37.3% year on year to $37.9 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $40 million at the midpoint, 3.16% above what analysts were expecting. Matterport made a GAAP loss of $58.2 million, improving on its loss of $167.9 million, in the same quarter last year.

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Matterport (MTTR) Q3 FY2022 Highlights:

  • Revenue: $37.9 million vs analyst estimates of $35.9 million (5.69% beat)
  • EPS (non-GAAP): -$0.09 vs analyst estimates of -$0.14
  • Revenue guidance for Q4 2022 is $40 million at the midpoint, above analyst estimates of $38.7 million
  • Free cash flow was negative $44.4 million, compared to negative free cash flow of $33.2 million in previous quarter
  • Customers: 657,000, up from 616,000 in previous quarter
  • Gross Margin (GAAP): 43.1%, down from 51.2% same quarter last year

“We delivered outstanding third quarter results, with record total revenue, demonstrating that our strategy is working,” 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 $25 million in Q3 FY2020, to $37.9 million.

Matterport Total Revenue

This was a standout quarter for Matterport, with the quarterly revenue up 37.3% year on year, which is above the trend for the company. On top of that, revenue increased $9.51 million quarter on quarter, a strong improvement on the $29 thousand decrease in Q2 2022, and a sign of acceleration of growth, which is very nice to see indeed.

Guidance for the next quarter indicates Matterport is expecting revenue to grow 47.6% year on year to $40 million, improving on the 14.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 35.4% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Matterport reported 657,000 customers at the end of the quarter, an increase of 41,000 on last quarter. That is a fair bit slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing a little bit.

Matterport Customers

Key Takeaways from Matterport's Q3 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 $744.9 million and more than $487.4 million in cash, the company has the capacity to continue to prioritise growth over profitability for some time.

We enjoyed seeing Matterport’s impressive revenue growth this quarter. And we were also excited to see that guidance outperformed Wall St’s expectations. Zooming out, we think this was a great quarter and shareholders will likely feel excited about the results. The company is up 9.09% on the results and currently trades at $3.3 per share.

Matterport may have had a good quarter, so should you 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.