Business Overview and History
Matterport, Inc. (MTTR) is a leading spatial data company that is at the forefront of the digital transformation of the built world. Founded in 2011 and headquartered in Sunnyvale, California, Matterport has established itself as the industry standard for digitizing, accessing, and managing buildings, spaces, and places online.
Matterport's pioneering technology platform utilizes spatial data collected from a variety of digital capture devices to transform physical buildings and spaces into dimensionally accurate, photorealistic digital twins. These digital twins provide Matterport's subscribers access to valuable building information and insights, fundamentally changing the way people interact with the built environment.
In 2018, Matterport brought on R.J. Pittman as Chief Executive Officer. Pittman's extensive experience in senior leadership positions at companies like eBay, Apple, and Google has been instrumental in driving Matterport's growth and expansion into new verticals. Under his leadership, the company has continued to innovate and strengthen its market position.
A significant milestone in Matterport's history came in July 2021 when the company consummated a merger transaction with Gores Holdings VI, Inc., a publicly listed special purpose acquisition company. This transition enabled Matterport to become a publicly traded company, providing capital to fund its growth initiatives. However, the transition also presented challenges, as Matterport had to adapt to the additional compliance requirements and operational complexities associated with being a public company.
Despite these challenges, Matterport has continued to make significant progress. The company has expanded its subscriber base, which included many Fortune 1000 companies as of the end of 2024. Matterport has also continued to invest in research and development to enhance its spatial data platform and unlock new use cases for its technology across various industries, including real estate, facilities management, retail, and more.
As of December 31, 2024, Matterport served over 1.10 million subscribers globally, a 23% increase from the prior year. The company has digitized over 50 billion square feet of physical space, underscoring its leadership in the emerging market for spatial data and digital twin technology.
Financial Performance and Ratios
Matterport's financial performance in recent years has been marked by a focus on efficient growth and improving profitability. In the fiscal year ended December 31, 2024, the company reported total revenue of $169.70 million, an 8% increase from the previous year. This growth was primarily driven by a 14% increase in subscription revenue, which reached $99.60 million and accounted for 59% of total revenue.
The company's gross profit margin improved to 49% in 2024, up from 45% in the prior year, as a result of cost efficiencies and the restructuring plan implemented in the second half of fiscal year 2023. However, Matterport continued to incur significant losses, with a net loss of $256.62 million for the year, compared to a net loss of $199.08 million in 2023.
For the most recent quarter (Q4 2024), Matterport reported revenue of $43.82 million, up 8% year-over-year. The net loss for the quarter was $40.51 million, an improvement of 14% compared to the same period in the previous year.
Liquidity
Matterport's balance sheet remains healthy, with $304.21 million in cash, cash equivalents, and investments as of December 31, 2024. The company's cash and cash equivalents stood at $57.23 million. The current ratio stands at 2.58, indicating strong liquidity, while the quick ratio is 2.54. Matterport's debt-to-equity ratio is 0.0005, suggesting a low level of financial leverage.
In terms of profitability ratios, Matterport's return on assets (ROA) and return on equity (ROE) were -0.47 and -0.59, respectively, in 2024, reflecting the company's continued focus on growth and market expansion rather than near-term profitability. The company's asset turnover ratio of 0.31 suggests that it is not yet utilizing its assets as efficiently as it could.
For the fiscal year 2024, Matterport reported an operating cash flow of -$21.31 million and a free cash flow of -$30.88 million, indicating that the company is still investing heavily in its growth and operations.
Product Segments and Revenue Breakdown
Matterport operates in three main product segments: Subscription, Services, and Product.
Subscription Segment: This is Matterport's core business, generating 59% of total revenue in fiscal year 2024. The segment provides customers access to Matterport's AI-powered spatial data platform, which transforms physical buildings and spaces into digital twins. Subscription revenue grew 14% year-over-year in 2024 to $99.59 million, driven by an increase in paid subscribers and some pricing adjustments.
Services Segment: Accounting for 24% of total revenue, this segment includes Matterport Capture Services and add-on services. Services revenue grew 10% year-over-year in 2024 to $41.26 million, driven by increased adoption of capture services and upsells of add-on features.
Product Segment: Generating 17% of total revenue, this segment consists of sales of Matterport's proprietary 3D capture devices. Product revenue decreased 12% year-over-year in 2024 to $28.84 million, primarily due to lower sales volume of Pro2 and Pro3 cameras as customers increasingly utilize smartphone-based capture options.
Geographic Performance
While Matterport does not break out detailed performance by geographic markets, the company notes that subscribers outside the United States accounted for approximately 43% of its subscription revenue in 2024. This indicates a significant international presence and potential for further global expansion.
Operational Highlights and Strategic Initiatives
Matterport has made significant strides in expanding its platform capabilities and driving innovation in the digital twin and spatial data market. In 2023, the company launched its Digital Pro solution, an all-in-one marketing package that combines Matterport's 3D digital twin technology with integrated marketing and content production services. This offering has been well-received by real estate professionals, helping them manage more listings and sell homes faster.
In 2024, Matterport unveiled its "Insights Meets Imagination" Fall Release, which introduced a suite of new tools powered by generative AI. These tools enable users to easily reimagine the potential of any space, transforming digital twins into dynamic canvases for creativity. Features such as automatic defurnishing and property description generation have helped real estate agents, contractors, and designers save time and elevate their marketing efforts.
Additionally, Matterport has continued to expand its partnerships and integrations, allowing the company to better serve its growing customer base. In 2023, the company announced integrations with Autodesk Construction Cloud and AWS IoT TwinMaker, making it easier for project teams and enterprise customers to leverage Matterport's digital twin technology within their existing workflows.
Matterport has also made strides in its environmental, social, and governance (ESG) initiatives. In 2024, the company released its third annual ESG report, which set new targets for reducing carbon emissions and transitioning to renewable packaging. Matterport's digital twin platform has been instrumental in helping its customers reduce their own carbon footprints by enabling remote collaboration and reducing the need for in-person site visits.
Industry Trends and Market Opportunity
Matterport estimates its total addressable market to be more than 4 billion buildings and 20 billion spaces globally, yielding a market opportunity of more than $240 billion. The company believes this opportunity could expand beyond $1 trillion as its spatial data platform continues to grow. This substantial market potential underscores the growing importance of digital twin technology and spatial data across various industries.
Risks and Challenges
Despite Matterport's impressive growth and technological advancements, the company faces several risks and challenges that investors should be aware of:
1. Intense competition: Matterport operates in a relatively new and rapidly evolving market, with competition from both established players and emerging startups. The company's ability to maintain its market-leading position will depend on its ability to continuously innovate and meet the changing needs of its customers.
2. Reliance on third-party suppliers: Matterport's business is dependent on a limited number of suppliers for its hardware components, including its 3D capture devices. Disruptions in the supply chain or the inability to secure reliable suppliers could have a significant impact on the company's operations.
3. Regulatory and compliance risks: As Matterport expands globally, the company must navigate an increasingly complex regulatory landscape, including data privacy and security requirements, which could increase compliance costs and expose the company to potential liabilities.
4. Macroeconomic and geopolitical uncertainties: Matterport's business could be affected by broader economic and political factors, such as inflation, interest rate changes, and global trade tensions, which could impact customer spending and the company's supply chain.
5. Successful integration of acquisitions: Matterport has made strategic acquisitions, such as the VHT acquisition in 2022, to expand its capabilities and market reach. The company's ability to successfully integrate and realize the benefits of these acquisitions will be crucial for its long-term growth and profitability.
6. Path to profitability: While Matterport has shown strong revenue growth, the company continues to incur significant losses. The ability to achieve and maintain profitability in the future remains a key challenge.
Outlook and Conclusion
Matterport's pioneering technology and market-leading position in the digital twin and spatial data space make it well-positioned to continue driving the digital transformation of the built world. The company's focus on innovation, strategic partnerships, and sustainability initiatives have positioned it as a trusted partner for customers across a variety of industries.
While Matterport continues to prioritize growth and market expansion, the company's path to profitability remains a challenge, as evidenced by its significant net losses in recent years. However, the company's strong balance sheet and efficient approach to growth provide a solid foundation for its long-term success.
Investors should closely monitor Matterport's ability to execute on its strategic initiatives, maintain its competitive edge, and navigate the evolving regulatory and macroeconomic environment. The company's success in delivering innovative solutions and driving the adoption of digital twin technology will be key to its future performance and shareholder value creation.
As Matterport continues to expand its global presence, with 43% of subscription revenue coming from outside the United States, the company's ability to capitalize on international markets will be crucial for sustained growth. Additionally, the shift towards smartphone-based capture options presents both challenges and opportunities for Matterport's product segment, requiring continued innovation in software and AI capabilities to maintain its competitive advantage.
In conclusion, Matterport's position at the forefront of the digital transformation of the built world, combined with its substantial market opportunity and innovative technology platform, make it a compelling company to watch in the coming years. However, investors should remain mindful of the risks and challenges facing the company as it strives to achieve profitability and solidify its leadership in the spatial data and digital twin market.