Latch, Inc. Reports $107.5 Million Net Loss and $44.96 Million Revenue for 2023

Latch, Inc., a technology company serving the multifamily rental market, reported a net loss of $107.5 million for the year ended December 31, 2023, compared to a net loss of $162.3 million in 2022. Total revenue for 2023 was $44.96 million, a 4.7% increase from $42.95 million in 2022. This increase was driven by a 36.5% rise in software revenue to $17.775 million and a 37.9% increase in installation services revenue to $7.447 million, partially offset by a 19.5% decrease in hardware revenue to $19.739 million. The decrease in hardware revenue stemmed from lower net delivered units, partially offset by higher average selling prices.

Significant changes compared to the previous fiscal year include a substantial reduction in operating expenses. Research and development expenses decreased by $21.1 million, and sales and marketing expenses fell by $30.2 million, primarily due to reductions in force implemented in 2022 and 2023. Conversely, general and administrative expenses increased by $10.9 million, largely due to increased legal fees and professional fees related to an internal investigation and the restatement of prior financial statements. The company also repaid $23.9 million in principal and accrued interest on promissory notes issued in connection with the Honest Day’s Work acquisition in 2023.

Strategic developments during the year included the acquisition of Honest Day’s Work, Inc. in July 2023 for a total consideration of approximately $37.65 million, including cash, common stock, and promissory notes. This acquisition added approximately 35 employees to Latch's workforce. The company also completed the HelloTech merger in July 2024, assuming HelloTech's outstanding debt and paying $250,000 in merger-related expenses. In March 2024, Latch launched Door Property Management, LLC, following the acquisition of a property management business. Further executive transitions occurred in November 2024, with the departure of the Chief Strategy Officer and Chief Product Officer. New leadership appointments were made in February 2025.

As of December 31, 2024, Latch employed approximately 120 full-time employees in the United States and 100 in the Philippines. The company also utilizes consultants and contractors internationally. Latch's software revenue represented a significant portion of its total revenue, indicating a shift towards a recurring revenue model. The company's securities were delisted from Nasdaq in April 2024 and are currently traded on the OTC Expert Market. The company's unrestricted cash and cash equivalents and available-for-sale securities totaled approximately $75.5 million as of December 31, 2024.

The company acknowledged material weaknesses in its internal control over financial reporting as of December 31, 2023, related to control environment, risk assessment, control activities, information and communication, and monitoring activities. Latch stated that it is implementing a remediation plan to address these weaknesses. The company also highlighted various risk factors, including liquidity concerns, competition in the smart building industry, reliance on third-party suppliers and partners, and the potential for future legal proceedings and regulatory investigations. The company expects to continue to incur losses for the foreseeable future.