Matterport Reports 8% Revenue Growth, Net Losses Continue Amid Litigation Expenses and Restructuring Efforts

Matterport, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a revenue increase but continued net losses. Total revenue for Q3 2024 was $43.8 million, an 8% increase from $40.6 million in Q3 2023. For the nine months ended September 30, 2024, total revenue reached $125.9 million, up 6% from $118.2 million in the same period last year. Subscription revenue, which accounted for approximately 58% of total revenue, rose to $25.4 million in Q3 2024 from $22.9 million in Q3 2023, driven by new subscribers and expanded usage.

Despite the revenue growth, Matterport reported a net loss of $38.4 million for Q3 2024, an improvement from a net loss of $44.8 million in Q3 2023. However, the net loss for the nine months ended September 30, 2024, was $216.1 million, compared to $155.1 million for the same period in 2023. The increase in net loss for the nine months was attributed to significant litigation expenses totaling $95 million related to a court ruling in favor of a former employee.

The company’s gross profit for Q3 2024 was $21.7 million, with a gross margin of 50%, up from 49% in the prior year. Operating expenses decreased to $65.7 million from $69.3 million in Q3 2023, reflecting cost-cutting measures implemented as part of a restructuring plan initiated in July 2023, which included a workforce reduction of approximately 30%.

Matterport's cash and cash equivalents decreased to $63.4 million as of September 30, 2024, down from $82.9 million at the end of 2023. Total current assets also declined to $397 million from $422.8 million. The company’s total liabilities increased significantly, with current liabilities rising to $143 million from $44.2 million at the end of 2023, largely due to the litigation expenses.

Strategically, Matterport is in the process of merging with CoStar Group, with the merger expected to be completed in Q4 2024 or Q1 2025, pending regulatory approvals. The merger agreement includes a cash consideration of $2.75 per share and shares of CoStar Group common stock. The company incurred approximately $12.2 million in expenses related to the merger for the nine months ended September 30, 2024.

Overall, while Matterport has shown revenue growth, it continues to face challenges with profitability and significant legal expenses impacting its financial performance.