SmartRent's 2025 Q2 Earnings Call: Navigating Contradictions in Cost Savings, AI Strategy, and SaaS Transition

Cost savings implementation and timing, AI product enhancements and integration, expansion strategy and AI integration, transition to SaaS revenue model are the key contradictions discussed in SmartRent's latest 2025Q2 earnings call.



Revenue Mix and Transition:
- SmartRent's total revenue was $38.3 million for Q2 2025, down 7% sequentially and 21% year-over-year.
- This decline was primarily due to the conscious decision to move away from onetime bulk hardware deals, which lack alignment with customer implementation timelines.

Cost Reduction and Financial Discipline:
- SmartRent implemented additional cost reduction actions totaling $20 million, bringing the cumulative total to $30 million.
- These reductions are aimed at achieving adjusted EBITDA and cash flow neutrality on a run-rate basis by exiting 2025.

SaaS Revenue Growth:
- SaaS revenue reached $14.2 million in Q2 2025, making up 37% of the company's total revenue.
- Growth in SaaS revenue is attributed to disciplined pricing, enhanced value delivery, and an increase in the number of units booked, averaging $8.21 ARPU.

Installed Base and Customer Retention:
- SmartRent's installed base increased to 850,000 units, up 3% sequentially and 10% year-over-year.
- High customer retention is evidenced by a net customer revenue retention rate of 108%, indicating customer satisfaction with the platform's value.