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Latch (LTCH)

Participants
Kevin Toomey Director, IR
Luke Schoenfelder Chief Executive Officer and Co-Founder
Garth Mitchell Transitioning Chief Financial Officer
Barry Schaeffer Interim Chief Financial Officer
Peter Benedict Baird
Patrick Sheerer William Blair
Max Gamperl Goldman Sachs.
Ben Sherlund Cantor Fitzgerald
John Bank of America
Tom White DA Davidson
Brian Ruttenbur Imperial Capital
Call transcript
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Operator

Good day, and thank you for standing by, welcome to the Latch’s First Quarter 2022 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 your host today, Kevin Toomey, Latch’s Director of Investor Relations.

begin. may You

Kevin Toomey

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

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

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

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

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

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

Luke Schoenfelder

made experiencing the software in timelines to between update great sales we’re this strong Latch results quarter growth the software on It’s delivered growth which priorities. trajectory progress here first we’ve our and continued XXXX our strategic of you, hardware discuss agreements. provide range, to to guidance be exceeded on its Kevin. end an Latch’s quarter. of revenue We as initiation X the high and Thank of shortened year-over-year million XX% QX,

year full at implies the midpoint. for guidance revenue the growth XXX% total Our year-over-year

basis to we revenue guiding now providing ARR in annual reporting to forward, going basis. reporting and an and quarterly Now are software annual on quarter addition and guidance on a each

defined other term value as it active our promotional any and is and the is ARR net discounts. Our of software annualized contract

of at ARR was year-over-year quarter end the representing the X.X first Our growth. million, XXX%

up now or contracts quantity We spaces, new in also the We’re an reporting that metric, XXX% now apartments, The is ARR year-over-year customers. which the indicator represent commercial to XXX,XXX as XX% or a at a metric and as the it both and of owner generate quarter, in and to in where brings revenue our that active is potential spaces spaces with strategy building building. the Latch spaces dwelling defined have resident is end units units software leading buildings Latch sequentially. our other first it the units factor engagement important the concept of almost

We’re remarks. software demonstrated excited year about his full metrics speak Barry’s about these in guidance our the to growth going Latch and business prepared more by in

total million a over alone, project its from see our and recent despite operations. accounting to in across contributed of activation serve deployment continue to lifecycle of quarter introduction, We needs first of quarter. XX% opportunities activities ongoing customers’ the in $X.X better for Direct the these the our revenue revenue

created the our market and customers and opportunity. love, demand to a opportunities market exciting incredibly services and our square we see the offerings continue our We’ve and hardware, service more Our monetization remains real is owners, drive a foundation more now that products deeper support, off of up with business, better forward. The set investments competence here increased increasing installation us helped estate from buyer and offered services recurring increased expanding. software, sophistication, in that and infield competitors market level win going previously for to for

Now initiatives strategic outlined like quarter. last to progress to our I’d of some on speak

in Latch’s American visit. places growth live, to more high as to our core a spaces, the North expansion of initiatives We and multifamily to XXXX of make work, market see better continue year opportunities with for lots

focused product on opportunity I’d start to supply required first continue on supply delays made We’re initiatives chain, these sales market with we to partnerships the executing to and this successful. changes, changes we’ve a number make and In of organizational February, to chain. speak quickly the progress. to strategic massive I’ll like compensation, will and and continue construction wanted be and all

customers, backdrop. recognize with continue our in extended geopolitical our margins fewer uncertainty, As we due to not in look to we’re construction despite but shutdowns teams supply macroeconomic purchases quarter, and more as back customers’ significant conflicts continued efficiency first on our quarter, products We result. made spot a challenging deliver own constraints seen own improvements timeline adding due hardware our the in quarter. teams in the internationally ongoing to to improved deliver We’ve to have COVID our for chain a their first the changes gross the short-term electronics and with able first market, in

environment to pleased margin least term, at the XXXX. these the pressure positive see and, results the over trends remainder we on be spot in hardware in the will long volume of were we expect put positive, for current margins Although

expertise changes with was three to organizational than changes, and Latch’s more key opportunities the the Mitchell team. Garth we’re the of Finance, announced Officer, business. in President years, After Senior as leadership Chief Interim Vice of to to QX company the Turning Schaeffer, other Barry appointed to and pursue transitioned in Financial we his continue out excited

We’re CFO process growth. in to for search an continued midst new Latch’s ongoing support of the

Latch’s worked phase Executive this role across Nakamura Officer Garth new and Operating as These down focus Accounting and roles. of efforts while in of organizational projects on next extremely him have assumed as Junji Officer, important Chief a Chief initiatives this Ali this I enabling stepped evolution, with special Officer part Operating Hussain Principal an growth, point. Ali Officer also company As our and his of their the and strategic am are to inflection at important to grateful changes part an

a our sales are shareholders reported what structure, guidance. move continuing and XXXX. We for delivering compensation year made and believe year our in and and, recurring and customers the our year towards compensating we our revenue the teams full software our to software exceeding services a in growth, revenue we our of out increase for ARR Turning to today matters software we on most introducing sales revenue full outlook range guidance end result, high as early raising

provide products around around our them ways motion find progress market to to our to We improvements continue a our to but also updates efficient for deliver customers, new well. the as continuing throughout existing making sales products continuing to deliver to more go forward our year. great We’re experience look to to

of than announced associated XXXX this more and of later the we to more to through partnerships set partnerships, made progress finding announce service expect year. of and of includes second an had software. QX software, end Turning we’ve partnerships. enormous expanded to at get party than benefits In we our the many This for revenue million LatchOS and devices the from and customers hardware, ways of $X

product in third our party strategy near-term life us to the drive a and are contribute the differentiated a high Latch brought market, spaces party flexibly first, of will This through second recurring software our through to for delays. services. Building is software pursue Latch for subject This second, with of experience, results, is quality in products and positive into having to without trusted, partner party that space first to of devices, impact ecosystem to and spaces. development helpful third ability us are high set a scale party of the Lens excited the begin matter the on We’re support Latch-enabled the wider on of to of retrofit retrofit spaces to and of to The incur as device activation projects of strategy continue rapidly each retrofit Latch construction active particularly addition this allow it allows having more first open combined the the less push market program to see costs quarter. as further products. the broader effect our standard provides

We this partners to build for LatchOS. expect the ecosystem throughout the grow and strategy of year on to continue

We’ve the next first of LatchOS worldwide. spoke solving full companies, earnings features organization new around and first back we release, year to in pending update world’s our many further of and products some a our a all at core, in selling expansion for version entire building residents sensor of products value features upsell retrofit spaces, release set amazing XXXX, To are XXX and have our us services, to experience. over spaces, product capabilities and retrofit two time. complement From product new Two customer LatchOS get needs operate bridge and consistent more spaces lifetime granted all smart of last which operators, industry more returned apartments new be releases new system their home patents our and we quarter, and real of needs in delivering of in will and living the experiences, the of beyond. help building and our the XX of we’re collaboration, specifically third been a basic our LatchOS ago, an September software, years market, we These will integrations this spoke expand of spaces. Latch we on later our about management, of with to our announced operating range small spaces, serving already will to They and products the open largest we’ve existing this wait powers this services, residents engineering work problems US. the needs or year. once and Latch again be partnership foundation to functionality masturbates to between of XXX,XXX to on products products partners a and products and through payments ecosystem million over reorganized to interface call, later our recent their standard with first, than to officially will the us specific forward to with the building, piloting Through to and to a At hundreds experiences unique the products land with this will now company second begun and also in the through shipping, of these over and increasing product these major our user releasing excited and LatchOS, the our distribute tailored retrofit about conversational customers. relative close provide feature and rent deliver in of and services enhanced the can’t Built poised leading real the market. the estate As more party platform of to new that unmatched push of estate LatchOS, reorganization, ship of last to year. legacy to unified able this customers an and which of always our will and and we to multifamily offer to deliveries other announce product, differentiated and players products and Through software delivering has suite the to stakeholders resulting our our retrofit way multifamily our and skyscrapers basics devices.

into growth years to of We’re XXXX. anticipating continued a our set in made our our consistently customers results grateful come. through of opportunity delivering never value products, for services we operational in I’ve improvements, and shareholders strong growth for by the laying In software QX, closing, and significant had are strong the users, turn foundation that, to me and serve future, CFO. company to dedicated for your Mitchell, a alongside Transitioning such the to CFO; Garth? over our Latch’s been Schaeffer, more this partners And to and Thank excited the set you with continue teammates Barry call Garth support. customers, lead shareholders. working and for of to all interim deliver let

Garth Mitchell

a and Today, private base the real four owner Luke. a company world’s hundreds employees, finance, with about of we exceptional we’re in over of early Latch XXXX, I best in global XXX the were and a Thanks, joined operators employees, on estate lot some with company people platform. a XXX,XXX thousands of public spaces, of enthusiasm. products, When the

and part the decided differentiated of and remains. opportunity pursue for to have I’ve to have and a the become leave grateful products the leaving companies opportunity role market to clearer, high opportunities, I’m that, Although company confidence other only Thank collaborative enthusiasm Latch extremely customers, more finance team in to and for same the to this world to I’ll experience teammates I’m hardware I decades style shareholders, the I’ll company’s at that finance built Barry to class and the than next. With of company growing Latch’s I’m public and wait opportunity for can’t for me your to serve who’s hands. of our gives Schaeffer very a that continued support and team capable technology cheering and hand CFO, to be over company success, software years. ready turn Interim and what’s continued organization, CFO have the the leadership the the to Barry. prepared over fast growth. it three and company reins proud to see you been

Barry Schaeffer

Assistant, our metrics point our statement that measures the quarter year and strong we scale tables new the recurring and GAAP non out the active first our quarter forward. net reflect I’ll the results release term discounts, and company GAAP The Garth, another on to you, included provided KPIs, in promotional other most collected These and and issued be any thank providing spaces reported in The the also reported XXXX and and cash and the update addition we customers are to earlier was platform. been non-GAAP a to spaces, lab ARR, software live of lifetime the XXX,XXX. has quarterly to value, services. of in on QX Luke. Today, XXXX in share provided have from Home some quickly full our XXX,XXX ARR attach we’ve XXX% I growth revenue gives cause for also customers of that metrics in in In Smart guidance year-over-year, I’d up total of ARR products reconciliation A as addition in and Thanks, potential and going in XXXX two us to opportunity seen we generating new XXX% QX spaces software and revenues, which today. our primarily of ARR $XX.X launch business, customer a of discussing to strong intercom, closely these metrics. in believe of more provide was platform the up quarter financial fiscal company. $X.X strong am result Delivery million, and almost case earnings we units. of the financial and going like our guidance. to have an potential going XXX,XXX in of year-over-year. growth services. $XX.X to confidence We ARR of rates million macro Latch our construction the for we seen best headwinds although range million, introducing spaces to today, Beginning for guidance spaces may growth represents to variability the leading delays our turn ARR in grow year

to now Turning first our results. quarter

up XX% quarter grew of the first million $X of revenue revenue year-over-year Software million and $XX.X was in total year-over-year. XXX%

and hardware, There of and between total recognize spaces revenue was in closely by guidance XX% when contracts our software timing first by with number growth ARR software that growth deals, our net of discounts, in for proven midpoint are revenue of Software revenue our which items of ARR our reflect is exceeded the revenue, growth. midpoint and including and quarter the high of revenue, line growth, guidance of of revenue and range. guidance a our includes quarter, more differences ARR the timing the of such large acceleration end beat these term Adjusting would discounts. software software while includes we

hardware to revenue. now Moving

macro challenges, chain relatively hardware changes revenue It predict due deliver you which can recognition to hardware of timing and to we given construction supply that we meaningful to be any can in low ongoing quarter, revenue, any third revenue Also, second lead book base told sold towards our in the of revenue. amount mix hardware delays. pipeline. of impact shipped of our may products hardware software given the a the quarter, in As hardware last or have difficult party

services quarter. this the We breaking are out revenue also time first for

and growth real last presenting of second we continuing all over and under the historically quarter, direct we revenue support, total activation, represent XXXX. magnitude training for customer has Services our opportunities quarter, the XX% success, deployment, mentioned in and As in we and anticipate into now monetized services have quarter. we and that see revenue activation,

margins. Turning now to

first on positive overall our First impact consistent XXXX. hardware XX% from our the our fairly both Latch’s and margin, and was margin software margin for gross first the of scalability software quarter demonstrates quarter, software the margin with We software. believe agnostic on fourth high

Now first negative volatile environment fluctuations hardware any XX%. may in on hardware current quarter. negative margin temporary supply to in solid improvement particular a quarter, from in we side, the cause The hardware margins quarter-over-quarter saw XX% in chain the

the to QX down XXXX a the of $XX.X for first as Although XX% in to hardware software quarter, margin revenue EBITDA expect put million we for we time, margin, of along will over believe guided loss was the for expenses be in pressure result hardware primarily a driving versus QX. one-time with least due improving we $XX.X the spotlight of This current better XXXX. adjusted our our items a at hardware quarter a first time, remainder margins margin expect driver the sequential Operating to Adjusted were million of much $XX.X of compared will of margin in EBITDA environment loss on component quarter gross improve long-term mix, expansion. our in the percentage to than higher loss improvement. fourth XXXX. increase with range, as hardware key million gross which was Over revenue

and in cash compared with $XX marketable balance XXXX, total and equivalents $XX.X cash as marketable of equivalents business million was as in our million cash Innovation. total and XXXX. plus securities, The of the marketable marketable cash closing in with we TS XX, XXXX including increase had received million, March of in $XXX zero to XX, to now proceeds and with securities million the March June cash due primarily plus $XXX which cash combination of of Turning securities securities sheet, of connection

to me let Now, turn guidance.

representing $XX.X full to to representing guidance XXXX introducing XXX,XXX $XX.X to year year-over-year and million, XX% year-over-year ARR growth. XX% growth XXX,XXX, are million XX% of We guidance XX% of spaces to

recurring increase. raising million, our year-over-year XX% to to guidance full year are $XX.X range a $XX.X million We revenue a to XX% of software

to to $X.X XX% $X.X For our a guidance, projecting range second quarter revenue are software and year-over-year we million increase. million of XX%

our $XX million, an range we unchanged are XXX% For is to $XXX XX% revenue increase. guidance of million guidance, our year maintaining in to from total a February. full year-over-year This provided

second total revenue projecting guidance, our For XX% to year-over-year million are a increase. million, to we quarter $XX.X of range $XX.X XXX%

adjusted our year $XXX to to our updating EBITDA million, improvement for previous are represents XXXX We a million guidance loss over full $XXX which of a guidance. million $X

an quarter, loss For our adjusted second expect $XX of we $XX to million. EBITDA million

continue are improve. and to there We efficiencies evaluating are operating continuously to opportunities believe

to growth. You will with can expect while we implement move efficiency quickly balancing improvements

challenges reflect continues in Our change optimistic at launches. XXXX cautiously guidance to and ramp the to meaningful a software in reflects start and investments, market no supply of go seen chain

full in up questions. a We adjusted to second and market. as summary, we downward guidance will third range this call In EBITDA delivering hardware, remain guidance revenue for the In party sustainable have With expanding long delivered wider we ramp that, quarter, the we and are up our hardware massive outcomes introduced our addition, Accordingly, term and revenue. spaces revenue in software for committed growth open year. on provided a the Operator? we strong in ranges. of maintaining our growth first hardware and and could anticipate on implied raised impact the that now we for ARR guidance,

Operator

you. Thank

CFO, And Joe answer We session Schoenfelder Schaeffer. from will Luke the and first with Latch’s with call [Operator Interim Barry Baird. for Instructions]. our Vruwink comes open CEO, and question now question

line now Your is open.

Peter Benedict

you for Hello a tonight. early about know think This everyone. - the about My but be would think Great. pretty been month, on, just Joe is it’s of alignments when of quarter new we planning any desired compensation question first Peter this sales, has proof communication and on to it’s you early about? I of us the of points this and the talked of the having first rollout last gone, all, the for that effect how

Luke Schoenfelder

so much thanks question. Peter, Hey, for the

As high obviously saw we quarter, our exceeded the for range our of guidance year. reported end in software software and raised we the actually we the

focused offer the margin our compensate high that that to we’re really that see making recurring the to develop continue on excited we software We’re throughout about year. sales sure to on we services and teams continuing deliver

Peter Benedict

with a Okay, like the But quarter? the positive, just you’re more seeing maybe, those are for got stronger you one sounds spoke forward great. in just you’re guide, versus to throughout incrementally what little kind same. expecting anything more still one And get better looking to the versus markets those there then And expectations? worst new, outperform on kind macro, of clearly then to retrofits of it And year, of factors. it the retrofit mostly and last the you you being

Luke Schoenfelder

did to future we be positive movement, would sort Yeah, on we think, thanks, environment in buying fewer planning quo. expect I and guidance activities that of see as the provided of not the great see supply change within we’re status first stays of Peter. to real no quarter. annual environment meaning but about that case. sort construction for spot -- do opportunity the the guidance, if implies, It an so chain We Yeah, be over our a those sort our

for As excited be growth at party also we to continue of we and ability spaces. products, growth, third the of about more second our retrofit the growth retrofit our but look sort existing and to our serve for products in

piloting already have customers, on exciting us retrofit from for be hear more retrofit the that some more year expect able tailored with later are in this side. about the to we’ll that that also market new detail We to speak so specifically products are

about excited very We’re opportunity. that market

Peter Benedict

you. Thank Awesome.

Operator

comes Stephen Blair. question And William you. Sheldon our thank from from And next

Your line now open. is

Patrick Sheerer

on on This actually pat quarter. Congrats guys. Hey is Steven today. a nice for

just software property a Entrata, few the ones providers, those fragmented and can you’ve to Yarde -- major I to connections of Just time. incremental from announced if progressed, a mentioned those couple I like quarters over deepen and what this one, ago, ask of other sales plans at traction some first management, those stacks, and believe some point, guys my questions any the integrations have given tech wanted so seen how with be here, of capabilities. you somewhat

Luke Schoenfelder

last real we can of Entrata, Yeah, page and to thanks, with ways quarters Hey, ways over Yarde, that announced we’re looking partners. the so work series always the for Pat. we expand

We’re deeply committed ecosystem to partner open approach. an

of And think, we building, think about folks for problems who of to we’re to a live we people you is that best that amounts manage opportunities we’ve who with haven’t yet and in in want before, trying Latch experiences so seen spaces. spaces the integrating solve the some improve for I more about And as that create spoken we’ve we possible by a and experience product mentioned, company, and announced. best and class numerous partners, the to large the whom

through excited the And to we’re And very and announcements about over from continue partnerships. ecosystem our throughout increase so see continuing to expand time us you’ll year. partner functionality

Patrick Sheerer

then, a some follow And Thanks. the retrofit pilots new this quarter it. up, products. Got as for you mentioned

the about pilots have a opportunity to about thinking progressed side, you talk how on office if think, generally little you’re ask you space, to running last how were you talked that there. quarter, just wanted in I the related about commercial those bit commercial can some

Luke Schoenfelder

the office Absolutely, we excited remain market. about commercial

continue we American have a We North on of anything our market. the in space. that multifamily don’t focus large We but to in that continue as today view pilots top announce new opportunity to have to

and so in the and right you’ll market, will And the to American with expansion but the office pilot look, deeply multifamily North we European commercial -- opportunistically, for customers. partners right continue focus opportunities

Patrick Sheerer

the Thanks that’s time. for Understood, helpful.

Operator

from our Goldman And Rod next question Thank comes Hall you. from Sachs.

now line Your open. is

Max Gamperl

is guys. for with also, my initiatives on next you. $XXX $XX wanted Garth, touch the To some And you’ve on $XXX. that with wanted hi, But you on Latch between Max This you goes versus color Thank party and to providers. you get of mentioned with endeavor, party with and second it’s to start questions. working luck your call. generally, -- very for my this goes did along questions, is to second been Latch nice which in taking Rod. I for previously Yeah, your flagship the third of And locks, hardware around Lens, used one the locks, best product on

So come revenue, what I percentage going locks. and And we it’s deployed substantial, what then should more gross space or of is in party implications And that third that hardware I estimate that forward to at pretty trade are revenue percentage from off your up. margin maybe impact on the a an importantly, expected wondering of second and was then and, follow the have expect?

Luke Schoenfelder

Hey, thanks for much so the Max. question,

for want as right their mix with of do that number spaces make really what we So to spaces. our experience, of to to the we our think and of products continuing sure customers about we grow, sort with the serve continue products we for is deliver

we to entire required lots of are typical products going building, that And so to apartment about different experience. the the think be if there’s complete

cases, party Lens. the that’ll some product, in include hardware. And it’ll product. product that product cases, Latch cases, be any is so first a doesn’t built some be with In a party be In second some a Latch that’ll a which

the a dollars hardware implied derived not has of customers product we work out million from associated given in over our so that revenue prepared second say breaking and quarter. in want remarks with and to needs a it’s third the full And we we’re in our still that bit in party rollout our hardware products revenue specific and range software did LatchOS, that early but there on first party more the in year we second side be relatively and of meeting guidance that given flexible the third

that do to continue to excited we’re So time. over

expand As maintaining software. efforts, our we high on those focused high focus to we’re continue margin, to value always

as amount And area the focus so, from those to an on the of look derive and at spaces. number continue software of to we spaces revenue that is

Max Gamperl

in that then it. Got point. And spaces question, data a And that you. helpful and little ended increase, thank very XX% expect spaces, noted it. XXX,XXX about think, guidance, and midpoint with to bit of another then you the for the at which Got XXX,XXX Thank I that, deeper then diving you think you guidance, you additional QX disclosure, your on is disclosure that’s units have your units. year-over-year total about about I the

XX,XXX units So or the the about and units be thinking about I’m of quarter. guess, I XX,XXX additional believe new If you points guess XX,XXX an -- I year, deployed course the then roughly of over towards remainder that correctly, quarter. that the the deployed would I that for or spaces imply, in to a

roughly even a actually or below QX. your deployments that’s slightly bit line in in little So

that’s would wondering expecting going in units. guidance Thank kind be conservative you. So of slowdown if you’re if helpful. forward, that Yeah, deployed some

Barry Schaeffer

hi, Yeah, Max.

Sorry. just your we right, guidance still the and want impact so the will what year rest that the to to just be the know on we’re construction see see we Yeah, Barry. Max, the wasn’t is for spaces this of it I to macro want about cautious how I is delays [Indiscernible], giving be. name headwinds

feel guess. with So our This that this is best that’s the so reflects most and confident guidance. the guidance we

Max Gamperl

it. you. Got Thank

Operator

KBW. our Thank from next question you. And comes Tomasello from Ryan

Your now open. line is

Unidentified Analyst

with acquisition? you the appetite Can so is Thank tonight. for number could everyone. much This you. actually think volatility? benefit an you Hi, the an question. M&A? Ryan update from have the seen opportunities you Kayla increase provide of What an Thank for most And in on of you your do on taking for areas business recent

Luke Schoenfelder

and company our customers’ Latch at for a that Thanks product solve we Kayla. we problems. always question. look ways can Hey, is the

build, the We’ve our the with years And and think over our companies to as this think companies that the customer and problems seen every to opportunities opportunity about partner we some the in we opportunity. toolkit of there’ll last we really nine approach tools forward. lens amazing partnerships is buy, so space. customers. opportunistically technology be And We’ve leading also for and product to build great built products going acquire solve

continuing have strong side, feel and inbound see those. M&A on We continued opportunity to the to we’re

persist, tech category, companies couple last prop have years. will earlier opportunities is those a folks particularly, you think raised of stage the as I in new money lot a that technology relatively see of

a to complete don’t to smaller moment, change, for problems. As market have specifically integrate full will we there acquire and our more solution the opportunities customer announce. dynamics anything the at think to But, we providers be

Unidentified Analyst

cash as Got ARR can the framework level Maybe you profitability? breakeven? the that you to And cost right sizing drive at any provide initiatives expect Thank a do any to it. follow maybe accelerate is explored have up, of to there And bridge timeline? you. path flow, to what you

Luke Schoenfelder

with effectively. Hey, we operating plan. Kayla. as efficiently possible remain funded to that’s we on to committed continue move to as massive the market, required fully efficiency flow, And Yeah, really to we’re growth have and focused to free balance a getting in cash a the continuing breakeven, forward business massive, operating

really about market we’re We’re what excited seeing the growth. in

that We’re responding to we about really sure make plan internally, are we’re serve our excited And funded excited to and a products. how forever. customers about we’re to seeing we’re here what really have fully spaces

So very Kayla. move forward appreciate excited continue to question, to and the

Unidentified Analyst

much. Awesome, so thank you

Operator

thank And comes next our from Cantor And Ben from question you. Sherlund Fitzgerald.

on mute. Ben, line line now your is may Your be open.

Ben Sherlund

you [Phonetic]. indication looking you would taking that added units, chains, then for like guys booked to give supply home much looks disclosures. be of guys. going it booked you one on have a that, Could what we backlog kind of of backlog of disclosures question cumulate like? And the to quarter, if last that easing Using of Thanks for leasing there so signals and the be what supply I us about from pretty appreciate like that of fulfillment pressure are sorry kind look maybe big chain were should the Hey, units. any

Luke Schoenfelder

so thanks for much Ben, Hey, question. the

construction, So, XX the months market, as look with our future [Indiscernible]. customers at historically, bookings as focused looked new of based on us growth to and sort the into project allowed our on were we we

seen, for to challenges we’ve to of chain on focus that supply coming backlog in source of our we historic and to continue important software that revenue, teams as sales really driving our us an deliver use over are bookings the excited to With year the years. deploy we pipeline

and but go guidance full and pipeline what when given experiencing, delays. we to of that chain supply coverage predict things our We backlog just our those deliver continue remain forward with in will of confident we rates, are growth. to are changes It’s to any for material have not for seen have land out sort us to hard extensive year construction exactly and excited obviously, conversion

Ben Sherlund

And in units and you newer that color a to there? looking started the you. maybe seeing ARPU -- there for Was anything I’m that product of you’re looks a like Okay, see in provide ARR thank quarter, signing we’re that Any it starting success? reacceleration of XQ, follow can up at the there new the you Is some causing units. is that?

Luke Schoenfelder

revenue to the lighter think number of be making two times are focused we you solutions. that just to things, see more platform when I higher tax Hey, weight spaces on always drive ARPU. There going and we’re broadly spaces higher going rates Ben. recurring with There’s speaking increase across sure platform. the also lead on of we software perceived modules times be to when add particular Yeah,

we between but spoke as we continue looking indicators, retrofit last higher. looking a attach than was is leading the create the and modules, spaces really at think, to both for continue of continue to also those. important positive add and of highest something quarter more And So, ARR, unit kind to about as accelerate software at skew lowest between trying ratio is our that us, more growth, of to rate some attach be and unit rate initiatives, going we the to the two

total that valuable recurring kind of then of at the we items. calculation so and for And total as think the called upsell we is as previously don’t number revenue as opportunity line of has that what the ARPU two spaces amount of distinct looking sort necessarily

Ben Sherlund

much, so guys. thanks Okay,

Operator

America. from our Mohan Wamsi And question of from you. comes Bank next Thank

Your line open. now is

John

some And right of XXXX? us question. Thank sense contracts? what of of on units taking spaces software John active you. just the will is behalf you exiting this multiplier Thanks be Wamsi. you Hi, between and with multiplier that Can give my number think for do

Barry Schaeffer

is this Barry. John, Hey,

active of So number is software the units is the spaces with contracts. of actually definition

you it. way capture if want So a that to doesn’t question maybe the different ask

or on one little question be bit based one your for it’d exact So you might a be different. something asking

John

And affecting like could guide out? just talk you and Okay, some about uncertainties that got see it. then the maybe macro how playing that’s you

Barry Schaeffer

and biggest on just the global situation been impact be spot Yeah, so, global the the we’ve macro the chain of on would construction uncertainties is two supply would talking probably other side about, economic on margin be one delays, that -- the or there’s two one the buys.

where So despite upside the overall fact spot that and are situations of we margin FYXX both we improvement cases QX we just supply when hardware QX, and construction favorable delays saw is sustainable no assuming in in were There and that’s and all [Multiple stop improvement. we kind buy buying chain got our entered on from into situation, those revenue baked guidance. some Speakers]

John

you. Thank it. got Okay,

Operator

thank you. comes And Davidson. our next from question from DA Tom White And

is open. line Your

Tom White

my question. afternoon, Good guys. for taking Thanks

modules? of the quick upsell As your kind the increase more kind for to by that of up. additional that guys how to you and you that guys relationships hardware, would supportive those products can follow assess presume be you and a either might be XP access And be through might or way able of kind going I on guys and had partners lock whether a develop channel effective and about the an then build product of of of talk XP manufacturers, kind used you the

Luke Schoenfelder

of to observation. XP of XP a of an Tom, XP software it’s a and having think and relationships spoken use great distribute relationships the basis. I we to question. our haven’t an think really distribution sort wider in strategy there’s unique their Hey, being channel kind specifically We on but and sort opportunity with about big also XP Yeah, those strategy astute

comment larger that are also further creating about In selling base anything upsells then would with see have can that like. opportunity specifically our same we software addition a that time. to we But look to financially, what spaces over direct monetize efforts, we don’t on and excited of

Tom White

And just a up. follow great. that’s Okay,

in one the it’s of four XP? mix, like, XP the if questions of hardware years about around on out, of kind had terms when XP. of out ball you, still versus do of of what front you in early mix and look crystal kind looks XP think strokes we I the just you that a Luke, terms of up broad XP, three, two, kind in Following earlier strategy realized revamp But,

Luke Schoenfelder

say a The answer are certain is about think will variety lot spaces. third party spaces of crystal ball. see the you’re over unsatisfying, to with trend time sense to mix products, in that going as wide to be of I But, make the more don’t first there’s I of we to and spaces a think and second going party then somewhat that a where would spaces, types going going serving I be of you’re a two. see have

that’s that products. have experience to trend is consistent a with planning for sort of set going go software we that of first the ad we that’s a declining are internally we’re forward, all As building be party the stakeholders will what serves that of

Tom White

Got it. the Thanks for color.

Operator

question Instructions] Ruttenbur Brian comes our [Operator And from Capital. next from Imperial

now line open. is Your

Brian Ruttenbur

talk slowdown, prices, but little potential your recession, on current historically, a very thank companies about pull spending if plan out much. is know, you you the seeing well. you’re And I a on what there? a Yes, Can back there have you or security-related mentioned the plan? environments this recessionary very is with bit weathered your Maybe rising and plans to continue

Luke Schoenfelder

business right to products of types the to type our our with will Yeah, echo and to with which market and need the the and the to of said, even the the much so level American looking territory, products right course, if our growth to in shortage towards efficiency. and outfit for to with eye of more customers was question. perhaps units, to live, will we’re, for operate an I we’re these trends, what’s what recessionary you do the market buildings continue advantage, continued work Thanks Brian. what of even level instances. to macro housing, multifamily need, for managing to the enter well, think, make some historically, Hey, continuing a better the increase And environments for dramatic new them have places persist that need and cautiously efficient, best that more the of of needs are in a optimistic and recession North so

responsive about that and reason our massive no do have growth what to make front plan time we our in can anything we forward. that’s in balance But So but that we of going be to course, opportunity point efficiency operational us. to will, to line fully this sure at need of we funded, with the remains the optimistic top

Brian Ruttenbur

near thank of And a as to cash when stock you came public -- then there -- I what on where much. don’t restrictions very any may given restrictions is buy you given up, you Okay. under, follow at stock? Then and know how are there kind restrictions can you any or back buying you, back you trading aggressively? be are

Luke Schoenfelder

back used our about but from come opportunities understand and more like shareholders and have It’s at growth not operating some position, restrictions It’s be But any We this stock, our this their anything don’t benefit large and we large don’t particular announce have excited a cash in fortunate question, to something have have we moments own Brian. to that specific we have point are market, a to to have anything buy great in years very to around. excited in time. companies we’re that a today. announce in the are to

Brian Ruttenbur

Thank you.

Operator

I further to remarks. would Luke questions. I the turn call showing you and no Schoenfelder back to closing over am like for now Thank

Luke Schoenfelder

the days rest you you today. speaking much support to look for your a week. of have great Latch and Thank thanks to of again joining everyone today. you the on so the come. Hope for We forward of to Appreciate time many

Operator

call. you conference today’s concludes This Thank for participating.

disconnect. may You now