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    SMRT
    Earnings call· Jun 2026(Q2 FY26)

    SmartRent Q2 FY26 earnings call SMRT

    Aug 5, 2026 Source

    Executive summary

    SmartRent Q2 FY26 — Strong Revenue Growth and Profitability Progress

    SmartRent delivered strong Q2 FY26 results, driven by accelerating core revenue growth and significant margin expansion, reflecting progress on its Vision 2028 strategic plan. The company achieved its third consecutive quarter of positive adjusted EBITDA and expanded its share repurchase authorization, underscoring its financial flexibility and commitment to shareholder value. Strategic partnerships and investments in data and analytics are expected to further enhance its market position and drive future growth.

    Highlights

    6

    • Core revenues grew 14%, marking the highest quarterly growth rate in over two years.

    • SaaS revenues grew 13% and now represent more than 40% of total revenue.

    • ARR increased year-over-year from $57 million to $65 million.

    • Installed IoT footprint expanded 10% to nearly 930,000 units.

    • Gross margins improved by 760 basis points to 41% in the second quarter.

    • Adjusted EBITDA was $700,000, marking the third consecutive quarter of positive adjusted EBITDA.

    Guidance & targets

    2
    CategoryTargetConfidence
    Installed IoT Units
    exceed 1 million units
    high materiality
    High
    Revenue, Profitability, and Cash Flow
    stronger than the first half
    high materiality
    High

    Operational metrics

    12
    Core revenue
    $38Mup 14%
    Q2 FY26

    Excludes non-cash hub amortization; considered more representative of underlying volume.

    SaaS revenue
    $16Mup 13%
    Q2 FY26

    Represents more than 40% of total revenue.

    Hardware revenue
    $14Mdown 10%
    Q2 FY26

    Reflects changes in mix.

    Professional services revenue
    $9Mup 100%
    Q2 FY26

    Reflecting increased hardware refresh installations and higher access control volume.

    Adjusted EBITDA
    $700,000
    Q2 FY26

    Third consecutive quarter of positive adjusted EBITDA.

    Net loss
    $6Mimproved $5M, or 48%
    Q2 FY26

    Improvement compared to Q2 FY25.

    Operating expenses
    $23Mdown 7%
    Q2 FY26

    Reflecting continued benefit of productivity initiatives.

    Cash and investments balance
    $93M
    Q2 FY26

    Ended the quarter with no debt.

    Undrawn credit facility
    $75M
    Q2 FY26

    Available capacity.

    Shares repurchased
    3M shares1.5% of outstanding
    Q2 FY26

    Aggregate cost during the quarter.

    Share repurchase authorization
    $25Mexpanded
    Post Q2 FY26

    Board expanded the plan subsequent to quarter end.

    Renewal pricing benefit
    5 cents per unit per month
    FY26

    Expected benefit by the end of the year from completed negotiations for renewals. This benefit is expected to grow in following years due to more units moving to new rates and escalation clauses.

    Industry KPIs

    4
    MetricValueDetails
    Orders book to billover 48,000 units (Q2); over 112,000 units (TTM)units
    Order visibility backlog policy—
    Recurring software services mix$16M SaaS revenue; $65M ARRUSD
    Operating margin incremental leverage41% total gross margin; 75% SaaS gross margin; 21% professional services gross margin; 13% hardware gross margin%

    Orderbook & backlog

    4
    Annual Recurring Revenue (ARR)$65MQ2 FY26

    up from $57M YoY

    Reflecting continued expansion of IoT footprint and increased demand for access control and self-guided tour offerings.

    Installed IoT footprint930,000 unitsQ2 FY26

    up 10%

    Expected to exceed 1 million units in H1 next year.

    Units bookedover 48,000 unitsQ2 FY26

    Bookings for individual quarters can be non-linear due to long sales cycles and timing of customer decisions.

    Trailing 12-month units bookedover 112,000 unitsQ2 FY26

    up 40% from 80,000 units in Q2 FY25

    Provides a more meaningful view of underlying customer demand and progress in go-to-market strategy.

    Product announcements

    2
    ProductTypeDetails
    Smart Rent Innovation Centerlaunch
    Dedicated Data and Analytics Practicelaunch

    Deals & partnerships

    2
    HexawareStrategic collaboration

    Hexaware is an AI-forward BPO player, helping to build operating leverage and ingest AI into process margins.

    DatabricksStrategic collaboration

    Databricks is a core component of SmartRent's technology layer for its data and analytics practice, helping to jumpstart the required infrastructure.

    What to watch in Q3 FY26

    5

    Installed IoT Units

    H1 FY27
    Currentnearly 930,000 units
    Targetexceed 1 million units

    Why it matters

    Reaching 1 million installed units is expected to be a significant inflection point for growth and profitability, driving more software revenue.

    Given the significant acceleration of units booked over the last 12 months, I believe we're in a strong position to exceed 1 million units installed during the first half of next year.

    Q&A highlights

    3

    What specific factors contributed to strong bookings in the quarter, including any large deals or seasonal factors? What guardrails can be provided for H2 unit deployments and the flow-through from bookings?

    Frank noted that Q2 bookings included a couple of large orders that had been in progress, contributing to the uptick. He also attributed strength to investments in the sales team and go-to-market motion. Daryl clarified that while individual quarters can be non-linear, the trailing 12-month units booked (over 112,000) provides a better view of underlying demand. He suggested that the TTM number, normalized monthly, could be a proxy for future deployments, but cautioned against expecting a full swing to 30,000 units deployed in Q3.

    “This happened to be in there's a couple of orders we've been working on for some period of time, and they happened to fall into the second quarter. So we saw an uptick in the velocity, but it's more of a timing issue.”

    asked by Ryan Tomasello · answered by Unknown Speaker

    2 min read5 chapters

    Detailed Narrative

    01

    Vision 2028 Strategic Plan Progress

    SmartRent is executing its Vision 2028 strategic plan, focusing on two priorities: accelerating growth by expanding its competitive moat and increasing profitability through a leverageable operating model. This plan is anchored by five pillars, including growing the installed base at a double-digit compound rate, scaling a world-class go-to-market organization, infusing the platform with data/analytics/AI, simplifying hardware architecture, and strengthening internal operating rigor. The Q2 results demonstrate significant progress against these strategic objectives.

    02

    Data & Analytics Initiative and Partnerships

    The company is investing in data and analytics solutions, leveraging its network of millions of connected devices. This includes the planned launch of the Smart Rent Innovation Center and strategic collaborations with Hexaware and Databricks. Hexaware will assist with operating leverage and AI deployment in processes, while Databricks will be a core component of the technology layer for a new dedicated data and analytics practice. This initiative aims to translate real-time data into actionable insights for customers, expanding the total addressable market, driving ARPU growth, and deepening the competitive moat.

    03

    Installed Base Growth and Financial Inflection Point

    SmartRent expanded its installed IoT footprint by 10% to nearly 930,000 units in Q2 FY26. The company is on track to exceed 1 million units installed in the first half of next year, which is viewed as an important milestone. This scaling is expected to create a new inflection point for the business, driving both growth and profitability due to increased software spins and the annuity stream from hardware refreshes.

    04

    Operational Improvements and Margin Expansion

    Total gross margin expanded by 760 basis points to 41% in Q2 FY26, reflecting revenue acceleration and structural cost reduction programs. SaaS gross margin improved to 75% from 70% a year ago, and professional services gross margin dramatically improved to 21% from negative 44%. The partnership with Hexaware is anticipated to contribute to additional margin expansion and accelerate the deployment of AI tools in operating processes.

    05

    Capital Allocation and Financial Strength

    SmartRent maintains a strong balance sheet with $93 million in cash and no debt, complemented by an undrawn $75 million credit facility. During Q2, the company repurchased approximately 3 million shares, or 1.5% of outstanding shares, for $3 million. Subsequent to quarter-end, the board expanded the share repurchase authorization to $25 million, demonstrating a commitment to building long-term shareholder value through financial flexibility.

    AI-generated summary of the company’s earnings call. Not investment advice.