Latch (LTCH)

Kevin Toomey Director, Investor Relations
Luke Schoenfelder CEO and Co-founder
Garth Mitchell CFO
Stephen Sheldon William Blair
Ryan Tomasello KBW
Tom White D.A. Davidson
Ben Sherlund Cantor Fitzgerald
Call transcript
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Good afternoon, and thank you for standing by, welcome to the Latch Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and answer-session. [Operator Instructions]. I'd now like to hand the conference over to the speaker today Kevin Toomey. ahead. go Please

Kevin Toomey

are Good After today operator. session. year thank for up Mitchell, for call you financial and call Executive Thank and the remarks, Co-Founder; review afternoon, we Latch's us Garth today the on to With Financial fiscal question-and-answer Schoenfelder, fourth joining Chief results. Officer Officer. you, Chief me and Luke prepared quarter a XXXX open and will

forward-looking statements this future our are During to we business statements risks These statements may performance of uncertainties. and subject of federal to related under are call, make rather a guarantees laws. variety securities that not but

from statements. Our actual materially reflected in these differ any forward-looking results could expectations

no made revise only Forward-looking today obligation as to publicly speak of update them. expectations or we statements our to take today and

the system our For to please results, risks important SEC filings, the a our and today's risks important available section our factors and well refer affect could other discussed factors results. in and of in on material website, EDGAR discussion as that as actual other the Factors Risk other SEC's

will a measures measures the earnings Investor over be With measure. release to most the portion Chief comparable like the turn on website call. Please this financial call these to refer in to and non-GAAP Additionally, Officer, Relations our GAAP financial of our reconciliation conference Schoenfelder. of the for tables discussed directly Luke to that, I'd Executive

Luke Schoenfelder

discuss be to strategic to great Latch's quarter XXXX. It's here and Kevin. XXXX you, our and fourth Thank outlook for full-year results

market results and sales continues the our are opportunity. growth variants to real XXX% from XXXX. landscape the hardware, anticipate that real growth year-over-year exciting, our quarter. We increasing year. impact we the nearly in increased customers Omicron is estate more that this our even monetization as We've opportunities teams. market delivered those buyer market And delivered for total services see year-over-year and customers and this line drive surge construction than XXX% revenue increased confidence again with and in were The continuing delivered saw our created COVID-XX growth recurring XXX% infield love in enormously timelines, impacts as owners, be expanding. we results and to and we our installation guidance QX demand Our sophistication, from We software, we delivering

Now as opportunities we the opportunity where to I market the well to things went turn we improvement XXXX in that to XXXX, for reflect short forward. take on landscape, in and XXXX going strategic want areas fell

on well back and did across services. lot software last we As year, a we hardware, look

customers or scaling deliver seen significant unit an our for Our the white shipments two made products components modern these with even Despite some teams labor work continue or to to it deployment impact delivering of Redesigning for in efforts shortages proud and chain products we've fly overtime of experience. glove more working to first areas have most Whether our customers. times. team help customers. the on ensure direct short-term to supply despite I'm economics. the in very

partnerships in managers bring them more ways very LatchOS XXXX. discuss our for and will to side. last began second division It new development property the Security partners and NAPCO in were to device to fruition positive residents, software devices. lock these to to allow of product And intended partner Townsville through our lock very and detail hardware collaboration AG. third-party powerful by including these leading growth that in XXXX. hardware help enabling us later. really to even On a see We partner come excited to such embodied in access We types partnerships approach we'll USA of excited guests products manufacturers experiences accelerate The the planning we're was to deliver Dormakaba Marks and reception and early great with announce and see of more

our also serving The primarily product on We focused designed development retrofit retrofit new efforts successfully for customers. customers. deadbolt CX product our

real growth a year-over-year retrofit can category very retrofit deadbolt the need differentiated from the older given year. in for saw results for swap approach and particular development that need cellular without We customers last about to for for us, interest to demonstrating for to Internet strong a excitement retrofit the services hubs this conditions. without account without capabilities the product XXX% apartment products need So product operated be doors the they yield and last

remote we software and something new market believe customers from cases. for residents, of labor recognizing classes labor shortages with continued infrastructure, began net augmentation providers in enable managers our and The set heard operations. set save last customers our every way looking hours also the the top open and infrastructure. Last they integration, management in We and of act deployments Latch's and It's enable Property year. ask this adding be to costs our well. we're our many And Yarde API's more. for States. like leverage staff integrating use offerings asset management more to page, tools real partners delivering can follows that saw of offerings year, with Entrata software on in property four pages United largest markets. growing capabilities and now forward. of and their TourXX three And like new ongoing staff, to wanted of the going even expanding operating overall cases to they're their with on see specifically costs platform console growth and use really more we revenue to AvalonBay serving customers that reduced leasing, XXX to as both of Turning company's saw API's technology and software excited for and leasing rising We recurring benefits integration their with enabling infrastructure powerful excited building LatchOS ways for shortages, across customers based the Latch With This delivered yielding API's of integrations. We're an resulting over and Latch we average to income expanded previous differentiated sharing new the remote the to successfully LatchOS. our software for a offset can living ePMS integrations. partnerships with capabilities with projects efficiencies. Pynwheel and of ePMS on flexible home also citing for market unintended brand Migo to compelling and partners trying have and of customers latch savings also to our on real time further

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is to revenue is change. see be a American market our our But to places and focus year our on for Looking core near-term execution better with Latch's not making in ahead, we lots growth multi-family North high vertical on going going spaces work, leading as XXXX to opportunities our visit live, core future in priority. focus of expansion.

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lower in a delays some XXXX. we during opportunities transitory resulted the Delays revenues recurring software present of saw scaled in are year. quickly won't and software these did on also of long-term activating XXXX XXXX, But recognized largest our hardware headwinds. per new devices ratio revenues believe revenue we in offerings dollar the we throughout While that that we not of deliver

As specific assess guidance now mentioned more revenue people before, for are to area. the our we performance software full-year providing this accurately in help

of software shipping half in generating the second it wasn't revenue activation what new Beyond year, the delays, or should have velocity of been.

these reorganized for result, solve a development teams XXXX product we to As have our challenges.

organization groundwork we to work stakeholders. the of and allow we've previous customers our we're prioritize from We previously discussed stakeholder to shift serve needs match rent this payment, our specific Specifically, our around year, think And product of lay new category. customers experiences. wide believe mapped development excited and the specifically us ship a resident each organization will this product customer which of better communications recurring and to set products revenue our order, all growth for replacing

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we remain focus European We in or in growth significant from remain European to accounting XXXX. enable working setting partners We significant long-term expanding on expansion. the want beyond as at nuances don't other balance strategic we that need visibility want we that. excited focus efforts and expand our operators, about sure still a in make in LatchOS long-term expansion expansion strategy. long-term around activities markets. software local for on in American for investments with will multi-family revenue operations and markets don't second ourselves meaningful these Latch's up expansion our our European As And North international we product But value the XXXX. methodically existing these don't our short-term. for platform to partners opportunities our providing make expansion We multi-family strategic opportunity. software, device regulation, We to growth committed perceive perceive revenue with this investments in growth third-party we from look to see on and in to growth We meaningful

see continuing to we as existing buy they office, on Latch channel small our immaterial partners products to LatchOS years small customization, basis. activate small serve without education. an we for commercial offices, office incidentally expect with have opportunities customers to office investments continue Turning these at Because customers to and for informal product

customers. explore office to continue we While commercial bringing LatchOS largest the to

the We commercial offices. validated in to small to small expect We've segment meaningful we Meanwhile, excitement have environments. office to to of commercial mix revenues needs too from commercial from anticipate LatchOS office have XXXX. in most large for previously also partners about satisfy segment together the break XXXX. the in commercial complex need from not and large not the the deriving that highlighted right our the segment, of expected come pilots do revenue office And a be independently large office revenue office the

of to take the have providing However, the about strategies with opportunity We software software to the commercial to broader expansion they verticals new by set is look material these well-positioned we role excitement around our we for a And in our believe as future. updates have forward become a partners. play unique in advantage experiences of office market. select working this

Turning in presenting revenue our training customers And direct great real to services to our activities activation. serve growth better XXXX. in activation opportunities in support monetize monetized all success, revenue, deployment, under opportunities this we and historically for customer is we see see services we've and and segment,

buildings. apartment going transition last the adopted to rules major Internet Since just about by the competition of Services. of formally intending change for One for and the additional presidential Internet FCC year and formally administration, building and Services was Internet we a management is month additional with market promote spoke Internet Services through last week, that proposed the apartment last services new at

these to experts bit for will category the of between that the watching ways in this entirety with the could play underlying operators, XXXX market to believe out this investments we leading in very and this evolving market and will opportunity continue We're play the been to are external additional developments time fully field partners us nexus take for that emerge reserving working well specific and While known, path residents until excited be to and clear. role building at unique closely this of the a position Latch's in more the landscape. perhaps We've the in clarity position a shift.

broader As building we've reorganization, resident our product a on asset development by focus the residents. high part that also established product of will specific on our experience team utilization exclusively

of unique as reselling our market monetize that through are multifamily of effectively at our increased part customers or the is often they One attributes their of experience, least products which remarketing Latch apartment rents. total

drive new give customers core ability to been value resell has Our our multifamily revenue they and think greater that. value, and experience the experience remarket multifamily to end provides customers model, the tools always are need This to for resident opportunities their there to building better residents. serve ability we to numerous the our driving that customers,

to a serve specific on overall better by the customers assets. tied experience to resident in a of building just stakeholder them us an the particular opportunities helps or their wider portfolio focus building independent Our not multifamily as improve giving serving at

LatchID, additional for revenue last building for Latch financial envision as in this customers groundwork preferences to them and activate of preferentially multifamily result. spaces, residents and residents a accruing through world our lifestyle preferences service with where they bringing platform and laid We identity cross a their and help traveled spaces. Latch the us keep between services live choose Latch account enabled with year, announcement first for them as our the to resident Our their year,

to in and it's stakeholder deliver for to deliver that multifamily we about a had excited very activation this going. work get good I'm of had execution the more priorities you how QX, for longer Mitchell, more growth users plan will see CFO, predictably excited software the to lease terms never over we closing, across alongside evolving core to to forward Thank and Garth? XXXX as for revenue the and get XXXX. such hardware, this time, we your our our a vector teammates While to And company throughout of I'm In a for believe for a future. experience Latch's customers I've a are continued opportunity And higher set result over early, Latch Latch. services. resident grateful and for into revenues level to clear highest We Those really support. in me our differentiated And call sharing turn and been look continue customers, dedicated with let lead shareholders. Garth that, to the year. and

Garth Mitchell

non-GAAP in Revenues the today. the of included end revenues the of guidance XXXX quarter fourth I'd Luke. shortages of reconciliation delivered another million quarter the XXXX through QX XX% impact year-over-year. to results provided I'm to our were to of I'll and fiscal company. our labor going Thanks, quarter was providing of year range been discussing non-GAAP point that in building to earlier The material some in share for the our metrics the up issued forward. QX we financial addition growth statement QX tables be GAAP measures $XX.X in the despite guidance. earnings high company near like and financial quickly going has out A release quarter.

our up $XX.X revenues XXXX, fiscal from million, XXX% For total were fiscal XXXX.

to turning Now bookings.

$XX.X bookings million, first XXX% and of up our were midpoint the year-over-year prior For at quarter, the guidance.

the that generated year-over-year. the total XXX% to QX LOI. XXX% in as prior-year. apartment software Latch dwellings full-year similar of up defined are units total units Growth also $XX.X installed to number from subscriptions accelerated ARR million home cumulatively of represent booked is XX% committed fiscal million ARR in a up value units cumulative booked installed annual cumulative to For bookings the units $XXX XXX,XXX in recurring or Booked well be in with revenue as of grew up XXXX, home Latch as year-over-year, Booked the we under from assigned products. a

as a metric of bookings business. our provide investors our prior space, the direction As provided into Because cycles process we've reflected activation. a picture been our that to have earlier, is to Bookings Luke our financial that sales has in long forward happened process our GAAP in into our demand always the fuller metrics. in a we and given into mentioned of for believe adoption realized visibility this in of market steps insight sales look products many sales

for bookings even bookings Today, of cumulative and XXX% million years forward gives drive lot XX% our confidence pipeline demonstrate which of a next that's target Now, next the how revenue than in we've dates our that cumulative has bookings a us net robust bookings expected annual all the months, demand revenues. cancellations, of promotional two million LOI give roughly roughly accounting of of greater in to $XXX been delivery $XXX pipeline outlook. discounting, our reported after XX have us coverage

Importantly, netting out in dated pandemic signed to for challenges Whereas that us recent $XXX on can based indication for previously. bookings, accelerating the installation historic goals, our cancellations which pipeline delays with achieve led number gives than gives our we had technology issues bookings the and million bookings pipeline. these Latch activation our conversion been penning last conversion this cumulative market bookings relatively roughly months, to direct also due us and in found bookings specific is clear have sight that and of confidence we've even six our after timing fresh realize indirect the the metrics chain supply to confidence us that down to product gives adoption have revenue and ongoing of and of products. customer We've rolling adjustments purchase

want sales strong process. order and tools to customers compensation the to commitments give and away our better sales customers process reps to make earlier in sales our our bookings shifting get to from we're So in our

our full-year change for better quarterly no installation and our suspend Accordingly, this total the to we and more for activations. change intend to with Going performance. in we guidance compensation, focusing bookings XXXX our reflect begin our internal in-year align forward, have, for incentivizing to on to priorities closely the of for and disclosure the process. first have and today, metrics on we're backlog same bookings quarterly Beginning reporting sales in previously, guidance Because provided with disclosures. and and is already did intended performance external activation change the sales revenue financial and the structural delivering we've incentivizing will align to process team This decided guidance we revenue. quarterly and longer we're way to that quarter software closer

and intend the cash starting tie to scale our we net our term collected provide the Additional which customers of of our active from new The platform our discounts platform, active sales spaces in are metrics on to provide to will the closely care recurring XXXX services. about. investors and ARR more QX to results and that include process

experience proud during by XX%, company to continue spot improvements. hardware margins, for environment, ability XX% differentiated contributed that from negative and basis We XXX quarter. impacted shipping much of the gross not and confidence to physical this of discounting. products. a this basis Turning margin the a did market in XX% dynamic costs Altogether, decline margin X%, this the almost which meeting XXXX XXXX, estimate by challenge our to long-term $X.X now have buying fourth throughout mostly X,XXX the our was impact impede hardware temporary we We every XQ previously needs, shortages, margins explained these been largely negative be margins our fourth not Gross point on a which elevated larger on improvement, from electronics supply as that and negative our pressure have to remains if in supply unprecedented disruptions priority year-over-year quarter-over-quarter in due Though mentioned had sequential quarter, hampered shipping our distributes will costs chain a higher to in million negative and earlier. would revenue should team hardware quarter growth macro improvement headwinds chain they margin deliver year. performance margin have customer simultaneously to XXXX, points global and hardware driven of Luke that in roughly

long-term supply to the our We to As Luke We're the single been benefit customers adjust products committed as hardware to. believe deliver price volatility without pricing. from gives pricing chain meaningfully on of priority. We have to which our won running to it a instances our and exceeds customers experiments that profitability we building us value pricing need current remain decent and in expect customers relationships economic of institutional mitigate the bottom if supply impact we keep our order said, There against hardware with in corporate chain demand. realities the that vehicle software of zero as delivery In deepening margin our of view we products our the margins in gross our digit we to we environment high do are compromising and commitment a adoption, our our customers maximize adjustments services. software That balancing flexibility primary range, on charge actively expect numerous our percentage the to and accessibility because discussed, for to not our the intended low and of stability the to deep to in contribute line. them, pricing. the XXXX, our to which of stability our

our with fourth Turning now our third business modular software, the stack, strength functionality expansion. software quarter, ago. margin our a we to our revenues revenue a the the continue of We integrating XX% to as year time, percentage devices. margins software Latch's of highlight and third-party for of scalable and and driver all software is which long-term Over to LatchOS the was consistent and hardware margin a believe model gross demonstrate increase mix, software in quarter enables first, including which key expect second

XXX% driving million our up marketing with XX% full-year organization XX%. focused generally sales expenses with consistent sales building investment fourth quarter the marketing Operating in higher team year, last our including margin infrastructure, the results ramping in XXXX $XX.X cover is and significant growth joining leads capacity. was training, XXXX year-over-year. sales leadership also sales expenses to growing on sales were fourth Software in and for out operations the We're our of Since scratch. marketing, from quarter and

to XXX% from $XXX.X to accelerating expenses Adjusted customer was $XXX.X EBITDA fourth XXXX. up in loss lower the in was loss loss excited change. fiscal and and in compared end to XXXX, as EBITDA market sales expect driving the going we investments compared public were of the functions we quarter invest to growth as to our growth million our our of place. for of our foundation for acceleration $XX.X year are customers to Though the higher grew the lower a in which the continued this, we support of we in a demand. of million product XXXX as of in products. went Adjusted owing we Operating have to focus, OpEx year continue showed in We customer was deliver to a Because go of to fourth in and million, a the forward operating areas sequential necessary build XXXX towards for margins gross a range loss to development million million of pillars of fiscal significantly core in the our scale. believe $XX.X quarter guidance XXXX and market, at anticipate $XX.X mark adoption that growth we slower go core our foundational and XXXX.

in XXXX. should our many become to XXXX investors expect leverage in that half to OpEx Although XXXX will leverage this into the to of pronounced lines, see more led beginning growth of second

third margins drivers skyrocketed spot improvements key XXXX. This impact market. on XXXX, unit three logistics hardware supply profitability, dramatic Latch's revenues. logistics, chain and purchasing chain distributor hardware of the costs software due to unprecedented gross economics situations in percentage hardware of first in our bill and our materials are In costs electronics there revenue underlying total supply reminder, revenue cuts products the second and of the of a As impact on released of offset

consider this environment. our to drivers software unit more economics our hardware than extreme, of expected had and Though XX% will year-over-year to devices. XX% For first become decreased value the sustained which a quarter quarter But our disruption cyclical floor generation all year-over-year, due the significant that on has C has of and delivering improved incremental that a Once confidence of fourth is shrink to see We focus of customers more the give channel a via XX% hardware margin into should two sustained Series in environment to continued more through was of lost generation in be second relief, steady the improved improvements incentive partner there much Those been agreements clear. hardware improvement C distributor us margins XXXX. lower and investors year. the example, than bomb despite our impact plus represent fourth phenomenon, QX massive Series roughly hardware cuts our incremental revenue, revenue. macro this in improvement chain growth but we supply

now our Turning balance to sheet.

as cash equivalents XX, $XXX.X and of As had to compared of XXXX. million $XX.X December million we XX cash December of

had due cash from increase December investments with XXXX. XX up of was in also The and and We the $XXX.X marketable closing equivalents the million investments in proceeds marketable marketable in combination zero of business in received as connection Innovation. to primarily cash with securities TS

me of year-over-year million, XX% to revenue turn to $XX increase. software we're let In $XX to Now, guidance a providing million XX% full-year guidance. XXXX,

million, $X.X For million first a of guidance, a to increase. to range we're $X.X quarter projecting software revenue XX% year-over-year XX%

year-over-year a For to to an projecting XX% XXX% our million of $XXX guidance, million, range revenue $XX we're increase. total full-year

million guidance current range global we're the to a XX% first XXX% and EBITDA meaningful quarter adjusted in This guidance, assumes million no environment. our XXXX For $XXX We're projecting to total year-over-year million. to of and guidance for increase. chain improvement of supply $XX.X revenue macro million losses $XXX providing fiscal $XX.X

our and remains our year. we In materials strong our in first deceleration $XX contemplated loss Though XXX% XXXX it For million. EBITDA growth. adjusted marketing high, this is million guidance, total a slight from at XXXX what's to SPAC expect quarter, we an the presented grow revenue year-over-year our growth of $XX growth expecting last slower revenues midpoint to are XXXX, of

As than us about slower than to more rapidly ramp the volatility, on led had macro XXXX evolving SPAC confident market continued of revenue a mentioned, marketing measured we're expected our due delays exposure a as to have investments take our opportunity. construction But marketing in our acceleration sales and expectations, ever we to Luke as unique materials. view customer and our

ways We've many guidance finding sustained Our the upside offerings These made guidance see these in the be our partnership win-win previously, growing ever We customers would for expect for the efficiency. a introduce per get cash Should unit ranges exact to for Latch factors third-party in wide while customers. devices ranges. devices. deliver Latch persist revenue enormous factors, announced for includes of buy our to progress get the the our also our it needing the create XXXX. very these improving number our Latch's of and partners, that with hardware number many same for that without ways to of an entirety assume revenues ranges. will benefits mentioned we Latch second offering Luke ability through hardware from year. increase software first-party can the could LatchOS These so of and to products benefit experience device of while but relief from and customers do the more we to customers LatchOS and software partnerships This

grows. software medium our in potentially term which short our much base Importantly, support forecasting, regardless and reflected in base. revenues. more in unit, our serve software options profitability the accuracy our tighter pricing initiatives hardware diversify first-party business of as and accelerated confident software us only recurring software revenue stability The volatile model of our hardware in only our and go of software away guidance to be from a devices Despite allows of to up hardware range Latch is revenue growth for the per revenue predictability to much software

we adjustment revenue time accelerate believe faster Although short the this and an software term to expectations, for Latch. adoption profitability LatchOS that to performance growth, requires will lead accelerate to of

of by implied for is slower macroeconomic good exposure This than software range investments ramp go our guidance our impacted and guidance outcomes the to launches. customers normal and our ranges. to in is and macro good our the provided been reflects expected more business. reflected market than heavily revenue wider of hardware this Again, deterioration no Given in improvement in environment, in has construction, reflects the a new which for volatility, the

While it use to volatility of unit, increase the allow should hardware revenue could and Latch. in more customers introduce our per LatchOS it profitability short-term

rates and macro high growth supply macro upside the strong we our to delivering guidance fourth Importantly, In relief volatile these delivered continue expect remain if in we remain for growth committed the team's ranges sustained ability deliver the such We proud in despite summary, chain long-term. environment. see we growth and to to a of sustainable XXXX. in the quarter to environments

value chain growth we're positioning in driver Latch's growing supply marginally the issues While for positioned our have our seeing up of our growth. questions. this for adoption for customer now will of technology, With the accelerating value long-term deliver we to With and believe shareholders we call our results, delivering by Operator? market, short-term is are we that foundational affected customers. open which in said, massive


Instructions]. [Operator

first The William the is from Blair. question from Steve of Sheldon line

Your line is now open.

Stephen Sheldon

for my Thanks guys. taking questions. Hey,

the So software a lots quarter. are what it there revenue timeline revenue the XXXX guidance book like software of but moving translating the for getting the between on pieces is this just know seems metrics extended. reporting done, I you're changing

think recent would just these the there the in the at on guess delays could about but I the be weighed software was bookings speed guidance you XXXX of way actually construction our stood I some And units live, of how for XXXX. live? go to close thinking which there book revenue are going

Garth Mitchell

question, for Thanks Stephen. the

years. That remain and of talked the XXXX the timing to and quarter The conversion cumulative we think we in of we we challenging bookings I in having in experienced more that conversion the about said, a challenges volatility really we seems the -- the volatility a changes value volatility entirety confident that the metrics. we those likely to provide, been the this experienced also The bookings of it about lot quarter how fourth in fourth in macro we experience next of led past, with And to continue to guidance they're we the from thought about revenues. it timing. that makes -- XXXX revenues makes the macro into for XXXX. macro two versus into now the persists

upside any guidance see would relief, So that revenue. software to we we our ranges, the sustained including extent to expect

Stephen Sheldon

Got it.

missed are whether good this, to when pushing smart integrating are I what provider. are smart these Lens, locks, they're you evolution can just these if Latch their it, I've you it's actually I I'm latter, important access, if I similar pulling announcements. their to be they are going that on partners this like guess, to then in then things Latch if curious over, they're to are guess provide whole guess partners partners that? partnership partners and And channel customers multiple in those go-to-market? in And if or Okay. with to important how demand where the see your capabilities some apologies towards how these partners of

Luke Schoenfelder

for Thanks so the question, much Stephen.

that very large then Latch think that we're is also to I our haven't So that form formats module approach really that we a targeting software be a that We're proprietary firmware, them special. unique -- previously and may and includes differentiated factors the a to and partners that really existed. giving link new hardware offer in to

hasn't can looking their a can technology that channel made on products to And their And so embed lock which second-party partners. we capabilities. we bring and channels relationships previously, at because have products with distribution now we're exciting, that both by all Most distribution meet also ones made through Latch bear. But think then we these meeting customer the the their sell the and access to demand unique also that of very as for believe their we're almost piggyback a that formats traditional is into manufacturers, Latch demand the manufacturers on we and supportive first-party that opportunity basis unmet partners.

So channels of being direct new a through the long the with exciting we necessarily then touch think differentiated pushed offering as we market we particularly is may providing to tail that well, our that not as we're technology see at efforts. we which selling customers look

see here. opportunity collaborative for deep we so unique really and partnerships a And


you. Thank

Your please a remind interest of just in question to one at time, time. limit again, the next question to -- and question your

from from next Hall Goldman Your Sachs. the line of Rod comes question

Your line is now open.

Unidentified Analyst

Rod. is Anmol on Hi, for guys, this

And are check the any strong new traction any and provide there? Just us that through about products. I retrofits wanted the on mean on to color penetration seeing can you you if construction progress more towards bit the of conversion towards shift bookings would to delays, you. that shifts revenues and think from you retrofits mix retrofit, do shorten the impacting timeframe? sort a that the Thank

Luke Schoenfelder

year-over-year take the in the Thanks our growth much feel question. XXX% Garth, deadbolt pass for and follow-up. so We product line. over to first free saw I'll

was really incredible CX of the which in released that, designed saw adoption the for market. And sort retrofit So March. of primarily we is

the growth seeing percentage in are basis we on retrofit market So in particular. a

that also designed interconnect second-party an We product in retrofits, for announced the in have really that the there's market. is products we've particularly California

does retrofit bigger So Garth, which to we faster to exposure the we're anything the our having as business, is increase new have positive. exposure very add that retrofit of in What and if availability, have it as reduce obviously think does know excited time to towards we we about shift allow have that revenue, mix. construction you I that. is on very creating effect generally don't a

Garth Mitchell

expect that we the that see but I don't that in improvements the year. just for -- out the I add necessarily that of the entirety think thing you Actually is mix. the pan captured, assumes only we the guidance our would is retrofit

represent progress retrofit persist that. our the seen So upside in that provided to range the for guidance we is expand to and in XXXX, continue we've if Again, they product.


you. Thank

Baird. next Vruwink Your line the question from of Joe from

is line Your open.

Unidentified Analyst

Everyone, this questions. taking on is our Peter Vruwink. actually Thanks for Joe for

more going metric. On But shift the kind encouraging Have is new side a why the demand diluting one metric? third-party that XXXX of against metric, you XXXX the do on net this from anything change of as hardware things in Thank and seen to the most bookings you this understand second into just bookings and was reporting well expectations. or more seeing coming I away you. in

Luke Schoenfelder

the allows Thanks, investments fact, and in something really market that focus confidence to we've Peter. of this of market to And that's demand our incentives anything? the shift and to of we're in it's The revenue because And to year sales at the exists excited converting right add about. the you that in is I accelerating set if Garth, changed demand metric towards most we're to don't all that to know going right as is on the immediately. looking teams the forward. We demand important. our metrics that provide priorities set like the us seeing want feel internal in have

Garth Mitchell

going Latch volatility understand to are And of think sales reflected they what The first to process in is we're providing sales we of metrics. do, that in be we're the customers prepared Latch investors our as thing get much is we to ARR steps quarter, that, that of going KPIs to quicker. is that replacing business remarks, into them active to want discounts increase we and Peter, I activated process changing incentives. processes. the in on their only sure just include And when bookings, actually were That get information net the spaces want that's buildings the the which which mentioned the mentioned, our to providing underlying our we start the just as term platform. and with change sales actual Because make


you. Thank

of the Ryan Tomasello comes Your line KBW. from from next question

open. Your line is

Ryan Tomasello

progressing. on to XXXX. gotten a thanks. so update provide if how you've on the of is Office calls, prepared Thanks Apologies to initial pilot in juggling start what there's of for guess And the everyone. but hoping far missed in sign product I evening, questions. Good I taking for an we're you the feedback launch, the few can this remarks, LatchOS customers kind there additional And expecting that you're if

Luke Schoenfelder

prepared sort thanks, bifurcate Ryan. Hey, of remarks, we continue market sort two Office for yes, the to and into LatchOS segments. of No our in worries,

valuable to education, data and pilots and with think distribute opportunity unique market, space like see the of partner Trade we also or we Rockefeller a resultant offering, with Center, complete World of folks you provide continued partners the product to the office segment install of role a to market, the to the investments to modest the that lot to or Latch to market. to a that about solution. it. of the there's around office excitement really in components come our we real solution. needs think commercial Latch allow In constellation continue in year, product different small that are types to it's Center, complete small going But go environment. the that commercial LatchOS last Brookfield require large support we've but the where allow together which a going commercial really Place, into products partners a We around we our majority is had to building And folks a those encouraging announced really office in play. to So has channel smaller into When of provide

the have complete participate excited to about we But are in excited that partners Commercial come remain market to We as on Office for board well. large more to our segment. that solution ability


Thank you.

White D.A. next Tom Davidson. line comes Your from from question the of

is now open. line Your

Tom White

Thanks questions. my guys. for Great, taking

on changes to the salespeople. the Just incentives for

be you anticipating are kind attrition could Just two high on hitting disruption of curious end either you to low churn anything maybe or EBITDA EBITDA the of guys XXXX, biggest if kind related any the what about just that little that to you range? and guys OpEx the or the talk maybe generally the the bit or end elevated a of guidance one of might levers underpinning Garth, assumptions kind or for

Luke Schoenfelder

I could start there.

feel kind on assume we the the chain that tried on market side of and to no the at compensation those real of last improvement sales are supply a we've add over if we the that right for and from But we say conditions then sales this bit think to like and can have OpEx we little our don't is a standpoint, And potential really ranges, you the there. the to for it internal accounted of anything? within going to want guidance thing changes from saw I hand we're if that's no So buy size And look want within I these I know be year. changes you activity. spot around drivers one also Garth, business process impact speak make and I the the going year to will market think, larger to that to Garth, the planning teams our and Garth, to

Garth Mitchell

that we the operating we'll to the the to gross in serve expect of and show And that margins only felt Luke. to XXXX in accelerating on building be customer meaningfully thing OpEx say perfectly, on is in now. XXXX, start No, in was start believe captured XXXX. you foundation lines to our expectations necessary and The to sharply OpEx I'll demand. that We the comp leverage invested meaningfully foundation place starting we second half evolving customer into


Thank Fitzgerald. you, the comes Sherlund question Ben from from Your line next of Cantor

Your line is now open.

Ben Sherlund

of taking pass that great? can if units? through for around my not, consumer costs of Hey appreciate give or impacts higher you. a $X.X the margin labor wondering be there, And entirely Thank of the chain to was the if provide what to color a kind color color little bit you the the headwind just of Is installation million. that'd bit of an headwind supply issues is guys, of little on the thanks question. on from the I I the could you

Luke Schoenfelder

are Hey, Yes Latch customer, not borne of directly the in are by instances, majority something the and the that takes costs labor on. Ben.

fluctuations in the provides and deployment we instances, kept of preserve today, quote window, procuring our service labor for the are But we our any of any or provide final services a sort product, of and ongoing, that the customer However, that have our the such themselves. efforts customers to price provision just to disruptions to we of direct the also our in tight, majority very margin firm installation price we've direct instances quote minimize Latch services in a the customer. have able on the hand vast those and actually contracts again, side from the are deployment the

don't directly labor customer higher borne our are and so pricing. the costs by impact And

Ben Sherlund

Okay, great.

Garth Mitchell

actually show they've have in of timelines to the installations just some to the that the to itself add do labor because And so that, does it actually had demand, getting wanted. our trouble customers on

prior in more calls. some it's of this and consideration a That less and stuff revenue is margin talked of on that the consideration. about reflected a timing So we call of


you. of question of line Bank [indiscernible] Thank Your next from America. the from Instructions] comes [Operator

Your open. line is

Unidentified Analyst

taking question. Hi, my for thanks

out unit think us So gross also for and around how economics. I'm should then prices, about if the hardware some thinking we for 'XX. And electronics you I give know called that? spot improving color about sequential could margins you've progression

Luke Schoenfelder

you to that do Garth, want question? take

Garth Mitchell

Yes, happy to.

mentioned, in environment. lot hardware like that improvement think chain some being that's improvement and I XXXX. steady some experienced supply drivers and Luke in last XXXX of a that the mentioned driven supply disruption question, and we of assume reflected do that electronic have sourcing by largely the in we the deployment persists that to But to small response into margin Luke our we some gradual direct chain that's

again, sequential material sustained remainder year. the see to small that we've any should But improvement improvement them. to to you the upside So guidance for will ranges of provided lead the


There are further at Presenters? you. continue Thank no presenters. time, may this you questions