Why Did SmartRent Plunge 22.48%? Revenue Miss, Hardware Shift

On August 8, 2025, SmartRent's stock price plummeted by 22.48% in pre-market trading, marking a significant decline for the smart home technology company.

SmartRent reported a 21% year-on-year decline in revenue for the second quarter of 2025, falling short of analysts' expectations. The company's revenue for the quarter was $38.31 million, missing the estimated $38.86 million. This decline was attributed to a shift away from hardware sales, which has been a significant revenue driver for the company.

In addition to the revenue miss, SmartRent's GAAP loss per share was $0.06, in line with analysts' consensus estimates. However, the company's adjusted EBITDA of -$7.35 million also missed estimates, indicating continued financial challenges. The operating margin worsened to -30.5%, down from -14.3% in the same quarter last year, reflecting the company's struggles to maintain profitability.

Despite the financial setbacks, SmartRent's annual recurring revenue (ARR) showed a positive trend, reaching $56.9 million at the end of the quarter, up 11.1% year on year. This suggests that the company is generating more revenue from its existing customer base, which is a positive sign for long-term sustainability.

SmartRent's CEO, Frank Martell, highlighted the company's opportunities for growth and market leadership, emphasizing its purpose-built platform and growing SaaS footprint. However, the recent financial performance indicates that the company faces significant challenges in achieving its growth targets.