Smart home company SmartRent (NYSE:SMRT) reported Q3 2026 results exceeding the market’s revenue expectations, with sales up 14.8% year on year to $41.57 million. Its non-GAAP loss of $0.02 per share was $0.01 below analysts’ consensus estimates.
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SmartRent (SMRT) Q3 2026 highlights:
- Revenue $41.57 million vs S&P analysts’ estimates of $40.05 million (14.8% year-on-year growth, 3.8% beat)
- Adjusted EPS -$0.02 vs S&P analysts’ estimates of -$0.01 ($0.01 miss)
- Adjusted EBITDA $1.06 million vs analyst estimates of $678,670 (2.5% margin, relatively in line)
- Operating margin -11.6%, up from -19.4% in the same quarter last year
- Annual recurring revenue $62.9 million (10.5% year-on-year growth)
- Market capitalization $310.4 million
StockStory’s take
SmartRent delivered revenue above Wall Street expectations in the latest quarter, with the market responding positively to the company’s operational progress and margin improvement. Management attributed this performance to accelerated growth in hardware shipments—particularly in Access Control and Self-Guided Tours—and to a larger installed base approaching 1 million units. CEO Frank Martell noted that SmartRent’s focus on integrating hardware with its software platform has improved customer retention and created opportunities for equipment upgrades and refreshes. The shift towards higher-margin solutions and disciplined cost management also contributed to narrowing losses and improved cash generation.
Looking ahead, SmartRent’s leadership expects continued momentum as the company targets surpassing 1 million installed units in the coming year. Management emphasized that ongoing investments in sales, technology integration, and operational capabilities are designed to increase deployment velocity and recurring revenue. CFO Daryl Stemm highlighted that the consolidation of maintenance solutions into the core platform and the scaling of Access Control are central to future growth. Martell added, “We are on the verge of realizing our march to 1 million installed units, and we are exiting 2026 with strong operational and financial momentum.”
Key insights from management’s remarks
Management linked the quarter’s revenue outperformance to robust demand for Access Control, Self-Guided Tours, and recurring upgrade activity, supported by a more scalable operating platform.
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Access Control and Self-Guided Tours: Uptake of Access Control solutions, which enable automated entry management, and Self-Guided Tours, allowing prospective tenants to view properties independently, grew significantly from a low base. CFO Daryl Stemm noted that Access Control revenue rose 242% year-over-year, with further growth expected as adoption broadens across the customer base.
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Hardware upgrades and refreshes: The company saw a marked increase in hardware-related revenue, driven by both new installations and the replacement of aging equipment in existing units. Management sees these upgrade cycles as a recurring source of future revenue, particularly as SmartRent’s installed base matures.
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Margin expansion through operating leverage: Gross margin improved by 1,500 basis points compared to last year, reaching 41%. This was attributed to a combination of higher-margin software revenue, cost controls, and greater scale in hardware deployments, demonstrating progress toward the company’s long-term profitability goals.
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Integration of maintenance solutions: Management acknowledged ongoing attrition within Smart Operations, its maintenance solution, but pointed to efforts to integrate and enhance these tools within the core platform. Stemm expects this integration to improve customer experience and retention, helping to offset current headwinds in SaaS ARPU (average revenue per unit).
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Stronger bookings pipeline: Bookings for new installations and upgrades rose sharply, with units booked up 44% over the trailing twelve months. Martell believes this pipeline supports continued growth, as hardware shipments in Q3 are expected to convert into higher deployment activity in the next several quarters.
Drivers of future performance
Management’s outlook centers on scaling deployments, broadening product adoption, and capturing recurring revenue as the installed base expands.
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Deployment velocity to 1 million units: SmartRent expects to surpass 1 million installed units next year, which management believes will solidify its market position and unlock additional recurring SaaS and hardware refresh revenue. CEO Frank Martell emphasized that increased deployment efficiency is key to achieving this milestone.
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Expansion of integrated platform offerings: The company is prioritizing integration of its maintenance solution and enhancing data analytics capabilities. Martell stated that a unified platform will enable automation of routine workflows and improve property-level economics, potentially driving higher customer retention and incremental sales.
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Headwinds from solution attrition and CapEx trends: Management acknowledged churn in the Smart Operations product and noted that multifamily operators remain cautious on capital expenditures. However, Martell expressed confidence that SmartRent’s solutions continue to demonstrate strong return on investment, even in a challenging macroeconomic backdrop.
Catalysts in upcoming quarters
Our analyst team will be monitoring (1) the pace at which SmartRent approaches and surpasses the 1 million installed unit milestone, (2) the success of integrating maintenance solutions into the core platform and the impact on customer retention, and (3) ongoing adoption rates for Access Control and Self-Guided Tours. Execution on expanding data analytics capabilities and the conversion of bookings into deployments will also be critical markers in assessing future performance.
SmartRent currently trades at $1.64, up from $1.37 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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