SmartRent Q2 2026: 40% Booking Surge Says Turnaround Is Real

Units Booked Are Telling Investors the Turnaround Is Real

This quarter shifts the SmartRent discussion from whether the company is turning to how quickly reported results will reflect stronger demand. The clearest signal is in bookings: Units Booked in the second quarter totaled 48,254, up 98%, and Units Booked for the trailing twelve months increased by 40% to 112,560. That is a meaningful acceleration, not a quiet uptick.

Why bookings matter more than the headline revenue number

Bears can fairly point out that Total Revenue grew only 4% to $39.8 million, while Core Revenue was $38.4 million, up 14%. That gap supports the view that hardware timing can still mute the top-line headline even when demand is improving.

But bookings are the leading indicator here. The downstream effect is already showing up in other metrics: SmartRent's Annual Recurring Revenue increased by 13% to $64.5 million, now 40% of Total Revenue, and Total Units Deployed as of June 30, 2026, totaled 929,487, up 10%. In other words, more units are being booked, the installed base is still expanding, and recurring revenue is becoming a larger part of the mix.

If that momentum carries into the next few quarters, revenue should continue to close the gap.

The SaaS Mix Is Starting to Improve the Margin Profile

The bookings surge is the most visible signal, but the more important valuation point is the improving margin bridge.

The business mix had already started shifting

The market has often treated SmartRent as a weakened hardware-heavy software company. Yet the mix has been moving the other way for some time: in 2024, Total Revenue decreased 26% while SaaS Revenue increased 26%. That helps explain why reported revenue could look soft while the underlying recurring engine was still growing.

That pattern persisted into 2025. In Q2 2025, revenue was still 21% lower than the prior year, primarily due to lower hardware revenues, while Adjusted EBITDA was -$7.3 million. From that vantage point, investors could reasonably argue that SmartRent was still paying for its transformation. But the key point was that the pressure was concentrated in hardware, not in the recurring business.

Q2 2026 shows the model improving

In Q2 2026, the financial model started to look healthier. SmartRent delivered gross margin of 40.7%, up 760 basis points, marking the third consecutive quarter of gross margin expansion. Adjusted EBITDA totaled $0.7 million, an $8.0 million improvement from the prior-year loss.

That improvement likely reflects two forces working together: a better product mix as SaaS becomes a larger part of revenue, and the company's ongoing cost-reduction efforts. In Q2 2025, SmartRent had already expanded its cost reduction program to a $30 million annualized savings target and said it was targeting cash flow neutrality exiting 2025.

What the market needs to keep re-rating the stock

The bullish case is straightforward: if SmartRent keeps lifting the SaaS mix and expanding margins, the stock can start trading less like a distressed hardware proxy and more like a software-enabled platform. The main risk to that view is simple too: if hardware weakens again and margin gains stall before bookings convert into stronger recurring revenue, the re-rating story loses momentum.

For now, the evidence suggests the turnaround is becoming earnings-power positive, not just demand-positive.

What Has to Happen Next for the Bull Case to Hold

The bull case has real support, but it still needs confirmation. SmartRent already has the distribution win - it serves 15 of the top 20 multifamily owners and operators. That matters because a large installed base can help turn bookings into durable revenue over time.

The next print has to show better conversion

The key bear argument is no longer whether demand exists. It is whether demand converts into reported results quickly enough. The company just reported that total revenue was up 4%, while the broader story remains focused on a higher-quality growth mix. The 2025 backdrop helps explain why investors should care: revenues were 21% lower than the prior year, primarily due to lower hardware revenues.

That leaves one clear test for the next update: reported revenue needs to catch up with the improvement in bookings, ARR, and margins. If that happens, the turnaround story becomes harder to dismiss. If not, the stock may remain trapped between improving fundamentals and noisy reported results.