Latch, Inc. Reports $11.15 Million Revenue in Q1 2023, Down 17.7%

Latch, Inc. reported a total revenue of $11.15 million for the first quarter of 2023, a decrease of 17.7% compared to $13.56 million in the same period last year. The decline was primarily driven by a significant drop in hardware sales, which fell by 42.5% to $5.35 million from $9.29 million. However, software revenue increased by 46.8% to $3.97 million, reflecting growth in subscription services, while installation services revenue rose by 17.4% to $1.83 million. The company recorded a net loss of $32.92 million, an improvement from a loss of $46.83 million in the prior year, indicating a 29.7% reduction in losses.

In terms of operational changes, Latch underwent a significant restructuring in 2022, which included two rounds of layoffs affecting approximately 245 employees, or 51% of its workforce. This restructuring aimed to align staffing levels with sales volumes and improve operational efficiency. The company also appointed new interim leadership in January 2023, which included a new Chief Executive Officer and Chief Financial Officer, following the resignation of the previous management team. These changes were part of a broader strategy to enhance the company's performance and address ongoing challenges.

The company’s total assets decreased to $287.65 million as of March 31, 2023, down from $316.66 million at the end of 2022. This decline was attributed to a reduction in cash and cash equivalents, which increased to $116.69 million from $109.83 million, while available-for-sale securities decreased significantly. Latch's total liabilities also saw a slight decrease, totaling $74.46 million, compared to $75.91 million at the end of the previous fiscal year. The company’s stockholders' equity fell to $213.19 million from $240.76 million, primarily due to the accumulated deficit increasing to $526.51 million.

Looking ahead, Latch is focused on evolving its go-to-market strategy and investing in research and development to enhance customer experience and product offerings. The company anticipates that its current cash reserves and available-for-sale securities will be sufficient to fund operational needs for at least the next 12 months. However, Latch continues to face challenges, including ongoing legal issues and the need to improve its internal controls following a recent investigation into its financial reporting practices. The company is committed to addressing these issues and enhancing its operational efficiency to drive future growth.