Matterport (NASDAQ:MTTR) Reports Bullish Q1, Provides Optimistic Full Year Guidance

Radek Strnad /
2023/05/09 4:11 pm EDT

Real estate focused virtual reality platform Matterport (NASDAQ:MTTR) reported results ahead of analyst expectations in the Q1 FY2023 quarter, with revenue up 33.3% year on year to $38 million. Guidance for next quarter's revenue was $39 million at the midpoint, which is 1.3% above the analyst consensus. Matterport made a GAAP loss of $53.8 million, down on its profit of $71.9 million, in the same quarter last year.

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Matterport (MTTR) Q1 FY2023 Highlights:

  • Revenue: $38 million vs analyst estimates of $35.1 million (8.13% beat)
  • EPS (non-GAAP): -$0.07 vs analyst estimates of -$0.10
  • Revenue guidance for Q2 2023 is $39 million at the midpoint, above analyst estimates of $38.5 million
  • The company reconfirmed revenue guidance for the full year, at $162 million at the midpoint
  • Free cash flow was negative $23.1 million, compared to negative free cash flow of $19.5 million in previous quarter
  • Customers: 771,000, up from 701,000 in previous quarter
  • Gross Margin (GAAP): 43.2%, up from 41.8% same quarter last year

“We are off to a great start in 2023, with first quarter revenue of $38 million; $2 million above the high end of our guidance range, along with strong outperformance on the bottom line with a Non-GAAP net loss per share of $0.07, as we accelerate our path to profitability,” 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 $26.9 million in Q1 FY2021, to $38 million.

Matterport Total Revenue

This was a standout quarter for Matterport, with the quarterly revenue up 33.3% year on year, which is above the trend for the company. But the revenue actually decreased by $3.15 million in Q1, compared to $3.15 million increase in Q4 2022. We'd like to see revenue increase each quarter, but a one-off fluctuation is usually not concerning and the management is guiding for growth to rebound in the next quarter.

Guidance for the next quarter indicates Matterport is expecting revenue to grow 36.9% year on year to $39 million, improving on the 3.46% year-over-year decline 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 14.1% 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 771,000 customers at the end of the quarter, an increase of 70,000 on last quarter. That is a fair bit better customer growth than last quarter and quite a bit above the typical customer growth we have seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

Matterport Customers

Key Takeaways from Matterport's Q1 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 $772.1 million and more than $456.2 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by how strongly Matterport outperformed analysts’ revenue expectations this quarter. And we were also glad that the revenue guidance for the rest of the year exceeded expectations. Overall, we think this was a strong quarter, that should leave shareholders feeling very positive. The company is up 4.08% on the results and currently trades at $2.8 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.