over 2 years ago • 3 mins
I work in advertising technology and have a passion for all things tech, clean energy, cyber security, and artificial intelligence.
A long-term, large cap growth investment in Matterport (Ticker: MTTR).
In the first quarter, Matterport reported $26.9 million in sales, up 108% year over year, and it hit annual recurring revenue (ARR) of $55.2 million for its subscription business. It is not yet profitable on a GAAP basis, but gross margin was 62%, indicating the business has the potential to become quite profitable once it scales. Matterport was in 4.9 million spaces at the end of the first quarter, growing 88% from the previous year.
Matterport management identifies a lot of growth opportunities, but the main one is to expand its presence globally. There are an estimated four billion buildings and 20 billion spaces (an internal Matterport metric, it is unclear how they define it) worldwide, leaving a huge market for Matterport to grow its digital twin solution.
Customers of Matterport include Redfin, Compass, AT&T, and Verizon.
Matterport was founded in 2011 and joined the stock market this year after a deal with a special purpose acquisition company (SPAC). The company's goal is to allow users to create a digital twin of any physical space, be it a commercial building, factory, or residential home. A digital twin is a virtual representation of an object or space that can be updated in real-time. This service lets people or companies virtually monitor and show their assets without having to physically travel to them, saving time and money in the process. Users scan a 3D space with cameras (Matterport also offers special equipment for high-quality scans), and Matterport's technology processes the data and creates a 3D representation of it.
The company can establish itself as the global leader in physical-to-digital property transformation positioning themselves to become the digital platform for the built world.
Matterport is expecting to generate $123 million in revenue this year, which puts its forward price-to-sales ratio at about 27. This is very expensive compared to other stocks in the market. Matterport currently faces competition from a number of companies and expects to face significant competition in the future as the market for spatial data develops. Its future growth and success is dependent upon the continuing rapid adoption of spatial data.
This insight was submitted by a community member for information and educational purposes. It doesn't represent the views of the Finimize team and shouldn't be taken as financial advice.
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