What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-04 compared with 2025-03-05 · 251 added, 291 removed, 847 unchanged (39% of the section changed)

38 unchanged sentences

Cash and cash equivalents

Restricted cash, current portion

Accounts receivable, net

45 unchanged sentences

Total operating expense

Impairment charge

Loss from operations

Interest income, net

Other income (expense), net

Interest income

Interest expense

Other (expense) income, net

Loss before income taxes

20 unchanged sentences

Stock-based compensation

Tax withholdings related to net share settlement of equity awards

Issuance of common stock upon vesting of equity awards

Common stock warrants issued to customers as consideration

Common stock warrants related to marketing expense

Reverse recapitalization, net of transaction costs

Tax withholdings related to net share settlement of equity awards

Exercise of options

Net settlement related to exercise of options

Exercise of warrants

ESPP purchases

Common stock warrants issued to customers as consideration

Other comprehensive loss

1 unchanged sentence

Stock-based compensation

Issuance of Class A common stock upon vesting of equity awards

Issuance of common stock upon vesting of equity awards

3 unchanged sentences

ESPP purchases

Common stock warrants issued to customers as consideration

Repurchases of Class A common stock

Other comprehensive loss

4 unchanged sentences

Tax withholdings related to net share settlement of equity awards

Exercise of options

Net settlement related to exercise of options

ESPP purchases

10 unchanged sentences

Depreciation and amortization

Asset impairment

Impairment of investment in non-affiliate

Goodwill impairment

Non-employee warrant expense

Provision for warranty expense

(Recovery of) provision for warranty expense

Non-cash lease expense

3 unchanged sentences

Change in fair value of earnout related to acquisition

Deferred tax benefit

Non-cash interest expense

Provision for excess and obsolete inventory

Provision for expected credit losses

(Recovery of) Provision for expected credit losses

Non-cash legal expense (Note 12 "Commitments and Contingencies")

9 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for SightPlan acquisition, net of cash acquired

Payments for investment in non-affiliate

4 unchanged sentences

Payments for repurchases of Class A common stock

Proceeds from warrant exercise

Proceeds from options exercise

1 unchanged sentence

Taxes paid related to net share settlements of stock-based compensation awards

Payments for business combination and private offering transaction costs

Payment of earnout related to acquisition

7 unchanged sentences

Restricted cash, current portion

Restricted cash, included in other long-term assets

Total cash, cash equivalents, and restricted cash

17 unchanged sentences

SmartRent, Inc., and its wholly owned subsidiaries (collectively, the "Company"), is an enterprise real estate technology company that provides comprehensive management software and applications designed for property owners, managers and residents.

Its suite of products and services, which includes both smart building hardware and cloud-based "SaaS" solutions, provides seamless visibility and control over real estate assets.

Its suite of products and services, which includes both smart building hardware and cloud-based software-as-a-service ("SaaS") solutions, provides seamless visibility and control over real estate assets.

The Company’s solutions can help lower operating costs, increase revenue, mitigate operational friction and protect assets for owners and operators, while providing a differentiated, elevated living experience for residents.

The Company is headquartered in Scottsdale, Arizona.

The Company is headquartered in Phoenix, Arizona.

SIGNIFICANT ACCOUNTING POLICIES

21 unchanged sentences

(in thousands, except per share amounts)

In March 2022, the Company purchased all of the outstanding equity interests of SightPlan in an acquisition that meets the definition of a business combination, for which the acquisition method of accounting was used (see Note 14).

The acquisition was recorded on the date that the Company obtained control over the acquired business.

The consideration paid was determined on the acquisition date.

The acquisition-related costs, such as professional fees, were excluded from the consideration transferred and were recorded as expense in the period incurred.

Assets acquired and liabilities assumed by the Company were recorded at their estimated fair values, while goodwill was measured as the excess of the consideration paid over the fair value of the net identifiable assets acquired and liabilities assumed.

Net Loss Per Share Attributable to Common Stockholders

13 unchanged sentences

The Company believes any risks are mitigated through the size and security of the financial institution at which its cash balances are held.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Restricted Cash

The Company considers cash to be restricted when withdrawal or general use is legally restricted.

The Company reports the current portion of restricted cash as a separate item in the Consolidated Balance Sheets and the non-current portion is a component of other long-term assets in the Consolidated Balance Sheets.

The Company determines current or non-current classification based on the expected duration of the restriction.

Accounts Receivable, net

4 unchanged sentences

The provision for expected credit losses totaled $ ( 666 ) , $ 1,436 and $ 819 for the years ended December 31, 2025, 2024 and 2023, respectively.

The negative amount for the year ended December 31, 2025 is primarily attributable to the collections of accounts previously reserved as expected credit losses.

The Company evaluates the collectability of the accounts receivable balances and has determined the allowance for expected credit losses based on a combination of factors, which include th e nature of the relationship and the prior collection experience the Company has with the account and an evaluation for current and projected economic conditions as of the Consolidated Balance Sheets date.

1 unchanged sentence

Actual collections of accounts receivable could differ from management’s estimates.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Significant Customers

13 unchanged sentences

The Company is subject to certain buy-back provisions relating to the transferred inventory.

As of December 31, 2024 and December 31, 2023, the Company recorded $ 537 and $ 851 in connection with the buy-back provision, which is recorded in other current liabilities on the Consolidated Balance Sheets.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

As of December 31, 2024, the Company recorded $ 537 in connection with the buy-back provision, which is recorded in other current liabilities on the Consolidated Balance Sheets.

As of December 31, 2025 , no such provision was recorded.

Goodwill represents the excess of cost over net assets of the Company's completed business combinations.

1 unchanged sentence

The Company will conduct additional tests between annual tests if there are indications of potential goodwill impairment.

During the year ended December 31, 2024, the Company conducted an interim test as of July 31, 2024 following the departure of the Company's former Chief Executive Officer ("CEO") and decline in the Company's stock price.

The Company concluded that goodwill was no t impaired as of July 31, 2024.

No goodwill impairment has been recorded as of December 31, 2024 and December 31, 2023 .

During the three months ended March 31, 2025, the Company experienced a sustained decline in stock price, resulting in a significant decrease in market capitalization.

As a result, the Company conducted an interim impairment test utilizing the qualitative approach and determined that impairment is more likely than not.

As a result, the Company then performed an interim quantitative impairment test which resulted in an indication of impairment.

The fair value of the reporting unit used in this impairment test was determined using the combination of an income approach and market-based approach.

The mix between the two approaches requires significant judgement, however, the Company engaged a third-party valuation specialist to assist with its assessment.

As a result of this test, the Company recorded a goodwill impairment charge of $ 24,929 during the year ended December 31, 2025.

The Company conducted its annual goodwill impairment test as of September 30, 2025.

As part of its annual assessment, the Company performed a market capitalization reconciliation, along with other procedures, which indicated that the fair value of the reporting unit sufficiently exceeded the carrying value.

As a result, the Company concluded there were no indications of impairment and therefore no further impairment charge was recorded during the three months ended December 31, 2025.

There was no such charge recorded during the year ended December 31, 2024.

December 31, 2025

December 31, 2024

Balance at beginning of period

Impairment charge

Balance at end of period

The significant assumptions used in determining the fair value of the reporting unit under the income approach primarily relate to revenue growth rate, forecasted EBITDA and the selected discount rate used in the discounted cash flow model.

The significant assumptions used in the market-based approach primarily relate to the forecasted EBITDA margin, the selected control premium, and selected revenue and EBITDA multiples, which require significant judgement.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

To the extent that inputs and assumptions used in the analysis change, such as an increased discount rate, updated cash flow projections, or decreases to Guideline companies’ multiples, additional impairment charges may be recorded in the future.

In addition, a further decrease in the Company’s common stock share price and market capitalization could be an indicator of a decrease in the fair value of the Company’s equity.

Intangible Assets

44 unchanged sentences

For the years ended December 31, 2025, 2024 and 2023, warranty expense included in cost of hardware revenue was $ 291 , $ 261 and $ 2,142 , respectively.

The lower warranty expense during the year ended December 31, 2024 was primarily attributable to the Company's release of an $ 864 accrual related to the replacement of deficient batteries as disclosed in the paragraph below.

As of December 31, 2025, and December 31, 2024, the Company’s warranty allowance was $ 423 and $ 1,077 , respectively, and is recorded in other current liabilities on the Consolidated Balance Sheets.

During the year ended December 31, 2020, the Company identified a deficiency with batteries contained in certain hardware sold and included an estimate of the expected cost to remove these batteries, which were acquired from one supplier, in its warranty allowance.

During the year ended December 31, 2024, the Company determined the battery replacements were complete and released the remaining warranty accrual of $ 864 related to the battery deficiency.

As of December 31, 2024 , there is no amount in the Company’s warranty allowance related to the remaining cost of replacement for this identified battery deficiency.

As of December 31, 2023, $ 864 is included in the Company’s warranty allowance related to the remaining cost of replacement for this identified battery deficiency.

During the year ended December 31, 2023, the Company identified a deficiency with the firmware and sensor accuracy of certain hardware sold and included an estimate of the expected cost to update the related firmware and hardware in its warranty allowance.

As of December 31, 2023 , $ 410 is included in the Company’s warranty allowance related to the remaining cost to perform the firmware and hardware updates.

The affected hardware and firmware was fully updated during 2024, and therefore, a s of December 31, 2024 , there is no amount in the Company's warranty allowance related to the remaining cost to perform the firmware and hardware updates.

December 31, 2025

2 unchanged sentences

Non-recurring warranty items incurred

Warranty (reversal) accrual for completed projects

Warranty accrual (reversal) for completed projects

Warranty settlements

Warranty reserve ending balance

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Fair Value of Financial Instruments

5 unchanged sentences

Unobservable inputs are used when little or no market data is available.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value.

8 unchanged sentences

smart home hardware devices, professional services, and a subscription for use of the Company's software (“Hosted Services”).

Included in these contracts are centrally connected devices ("Hub Devices"), which integrate the Company’s enterprise software with third party smart devices.

Included in these contracts are Hub Devices, which integrate the Company’s enterprise software with third party smart devices.

Historically, the Company only sold non-distinct Hub Devices.

2 unchanged sentences

When distinct Hub Devices are included in a contract, the Hosted Services performance obligation is comprised of only the Company’s software.

We do not expect to deploy any more non-distinct Hub Devices.

The Company considers delivery for each of the hardware, professional services and Hosted Services to be separate performance obligations.

5 unchanged sentences

Taxes collected from customers and remitted to governmental authorities are not included in reported revenue.

Payments received from customers in advance of revenue recognition are reported as deferred revenue.

Payments re ceived from customers in advance of revenue recognition are reported as deferred revenue.

The Company has elected the following practical expedients following the adoption of ASC 606:

2 unchanged sentences

Amounts billed for shipping and handling fees are recorded as revenue.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

• Sales tax collected from customers:

5 unchanged sentences

the Company elected not to adjust the promised amount of consideration for the effects of a significant financing component when the period between the transfer of promised goods or services and when the customer pays for the goods or services will be one year or less.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Timing of Revenue Recognition is as follows.

9 unchanged sentences

• Hosted Services Revenue

Hosted Services revenue primarily consists of monthly subscription revenue generated from fees that provide customers access to one or more of the Company’s software applications including access controls, asset monitoring and related services, and our Community WiFi solution, which provides communities with a private, device-dedicated WiFi network.

Hosted Services revenue primarily consists of subscription revenue generated from fees that provide customers access to one or more of the Company’s software applications including access controls, asset monitoring and related services, and our Community WiFi solution, which provides communities with a private, device-dedicated WiFi network.

These subscription arrangements have contractual terms ranging from one month to ten years and include recurring fixed plan subscription fees.

8 unchanged sentences

If a contract contains a material right, proceeds are allocated to the material right and recognized over the period of benefit, which is generally four years .

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Cost of Revenue

3 unchanged sentences

Cost of professional services revenue consists primarily of direct costs related to personnel-related expenses for installation and supervision of installation services, general contractor expenses and travel expenses associated with the installation of products and indirect costs that are also primarily personnel-related expenses in connection with training of and ongoing support for customers and residents.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

• Hosted Services

12 unchanged sentences

For all stock options granted, we calculated the expected term using the simplified method for “plain vanilla” stock option awards.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The grant date fair value is also utilized with respect to RSUs which vest based on performance and time based service conditions.

For RSUs with a performance condition which vest based on a liquidity event, as well as a time-based service condition, no compensation expense is recognized until the performance condition has been satisfied.

Subsequent to the liquidity event, compensation expense is recognized to the extent the requisite service period has been completed and compensation expense thereafter is recognized on an accelerated attribution method.

Under the accelerated attribution method, compensation expense is recognized over the remaining requisite service period for each service condition tranche as though each tranche is, in substance, a separate award.

Research and Development

3 unchanged sentences

During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 5,629 , $ 5,270 and $ 3,919 , respectively, of research and development costs in other long-term assets on the Consolidated Balance Sheets.

As of December 31, 2024, the Company had capitalized $ 12,334 of research and development costs in other long-term assets on the Consolidated Balance Sheets, of which $ 9,543 remained to be amortized.

As of December 31, 2023, the Company had capitalized $ 7,064 of research and development costs in other long-term assets on the Consolidated Balance Sheets, of which $ 6,163 remains to be amortized.

As of December 31, 2025, the Company had capitalized $ 17,963 of research and development costs, including $ 16,900 of capitalized software costs, in other long-term assets on the Consolidated Balance Sheets, of which $ 11,529 remains to be amortized.

As of December 31, 2024, the Company had capitalized $ 12,334 of research and development costs, including $ 12,068 of capitalized software costs, in other long-term assets on the Consolidated Balance Sheets, of which $ 9,543 remained to be amortized.

Advertising costs are expensed as incurred and recorded as a component of sales and marketing expense.

The Company incurred $ 743 , $ 650 and $ 423 of advertising expenses for the years ended December 31, 2025, 2024 and 2023, respectively.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The Company has one operating segment and one reportable segment.

Its chief operating decision maker ("CODM") was the Company's Chief Executive Officer until the Chief Executive Officer’s resignation on July 29, 2024.

On that date, a management committee comprised of certain of the Company’s then executives became the CODM until February 24, 2025 (the “Start Date”) and effective the Start Date, the Company appointed a new President and Chief Executive Officer who currently acts as the CODM .

Its chief operating decision maker ("CODM") is the Company’s President and Chief Executive Officer , with the exception of the period from July 29, 2024 to February 24, 2025 when a management committee comprised of certain of the Company’s executives acted as the CODM while the Company was in a transition period between Chief Executive Officers.

The CODM reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

1 unchanged sentence

Refer to Note 13 - Segment Reporting for more information on the Company's operating and reportable segments.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Recent Accounting Guidance

Recent Accounting Guidance Not Yet Adopted

In November 2024, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date, which clarified the effective date of ASU 2024-03.

ASU 2024-03 requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effect that the updated standard will have on the consolidated financial statement disclosures.

In July 2025, the FASB issued ASU No.

2025-05 (“ASU 2025-05”), Financial Instruments–Credit Losses.

The guidance provides an optional practical expedient when applying the guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets resulting from transactions arising from contracts with customers.

The amendments in ASU 2025-05 are effective for fiscal years beginning after December 15, 2025, and interim reporting periods, with early adoption permitted.

We are evaluating the impact of the standard on the consolidated financial statements.

In November 2024, the FASB issued ASU No.

3 unchanged sentences

The Company is currently evaluating the effect that the updated standard will have on the consolidated financial statement disclosures.

In September 2025, the FASB issued ASU No.

2025-06 (“ASU 2025-06”), Intangibles–Goodwill and Other–Internal-Use Software.

The guidance modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods, with early adoption permitted.

We are evaluating the impact of the standard on the consolidated financial statement disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12").

The guidance addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S.

The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply.

ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years.

Entities are required to apply the amendments to ASC 260 retrospectively.

All other amendments may be applied prospectively or retrospectively.

Early adoption is permitted.

The Company is currently evaluating the effect that the updated standard will have on the consolidated financial statement disclosures.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements ("ASU 2025-11").

The guidance is intended to improve the navigability of guidance in ASC 270, Interim Reporting, and clarify when it applies.

The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption.

The Company is currently evaluating the effect that the updated standard will have on the consolidated financial statement disclosures.

Recently Adopted Accounting Guidance

In December 2023, the FASB issued ASU No.

3 unchanged sentences

ASU 2023-09 is effective for annual periods after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company is currently evaluating the effect that the updated standard will have on the consolidated financial statement disclosures.

Recently Adopted Accounting Guidance

In November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) No.

2023-07 - Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU updates the annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

Early adoption is also permitted.

The Company adopted this ASU during the year ended December 31, 2024.

The adoption of this guidance modified the Company's segment disclosures but had no impact on results of operations, cash flows or financial condition.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)” which modifies the measurement of expected credit losses of certain financial instruments.

This update is effective for fiscal years beginning after December 15, 2022 and must be applied using a modified-retrospective approach, with early adoption permitted.

The requirement to disclose credit quality indicators by year or origination is not applicable to trade receivables due in one year or less that result from revenue transactions within the scope of ASC 606.

The Company adopted ASU 2016-13 effective January 1, 2023 using the modified-retrospective approach.

The adoption of this guidance did no t have a material impact on the Company's consolidated financial statements.

The Company has completed its assessment of ASU 2023-09 and has adopted the standard prospectively, which has resulted in an expanded income tax disclosures with no impact on the Company’s consolidated financial statements.

FAIR VALUE MEASUREMENTS AND FAIR VALUE OF INSTRUMENTS

6 unchanged sentences

Cash and cash equivalents

Restricted cash

4 unchanged sentences

Total liabilities

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In December 2021, the Company purchased all of the outstanding equity interests of iQuue, LLC ("iQuue").

8 unchanged sentences

Balance at end of period

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The fair value of the earnout payment is measured on a recurring basis at each reporting date.

The following inputs and assumptions were used in the Monte Carlo simulation model to estimate the fair value of the earnout payment as of December 31, 2024 and December 31, 2023.

During the year ended December 31, 2025, the Company recorded a $ 294 decrease in the fair value of the earnout.

The final earnout payment of $ 1,466 was made in July 2025.

During the year ended December 31, 2024, the Company determined there was a $ 960 decrease in the fair value of the earnout, primarily due to a decrease in the forecasted units expected to be deployed during the earnout period.

During the year ended December 31, 2023, there was a $ 412 increase in the fair value of the earnout, primarily due to a decreased payment term as the Company approached the payment date .

The Company recorded these adjustments in general and administrative expense on the Consolidated Statement of Operations and Comprehensive Loss.

The following table sets forth the weighted-average assumptions used to estimate the fair value of the earnout payment as of December 31, 2024 and December 31, 2023.

December 31, 2024

The Company recorded these adjustments in general and administrative expense on the Condensed Consolidated Statement of Operations and Comprehensive Loss.

The following table sets forth the weighted-average assumptions used to estimate the fair value of the earnout payment as of December 31, 2024.

No such estimate was made as of December 31, 2025 as the earnout amount was finalized as of June 30, 2025 and was paid in July 2025.

December 31, 2024

13 unchanged sentences

Total revenue

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

For the years ended December 31,

12 unchanged sentences

Total Revenue

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Remaining Performance Obligations

11 unchanged sentences

Deferred revenue balance as of December 31

As of December 31, 2024 , the Company expects to recognize 40 % of its total deferred revenue within the next 12 months , 19 % of its total deferred revenue between 13 and 36 months , 34 % between 37 and 60 months , and the remainder is expected to be recognized beyond five years .

As of December 31, 2025, the Company expects to rec ognize 61 % of its total deferred revenue within the next 12 months , 19 % of its total deferred revenue between 13 and 36 months , 17 % between 37 and 60 months , and the remainder is expected to be recognized beyond five years .

Contracts may contain termination for convenience provisions that allow the Company, customer, or both parties the ability to terminate for convenience, either at any time or upon providing a specified notice period, without a substantive termination penalty.

9 unchanged sentences

Total inventory

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The Company writes-down inventory for any excess or obsolete inventories or when the Company believes the net realizable value of inventories is less than the carrying value.

During the years ended December 31, 2025, 2024 and 2023, the Company recorded write-downs of $ 4,165 , $ 2,900 and $ 2,837 respectively.

As of December 31, 2025 and 2024, the Company's inventory reserve balance was $ 4,307 and $ 5,949 , respectively .

The Company evaluates inventory levels for excess and obsolete products based on its assessment of future demand and market conditions.

Prepaid expenses and other current assets consisted of the following.

4 unchanged sentences

Total prepaid expenses and other current assets

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

During the year ended December 31, 2024, the Company recorded $ 3,534 in other current assets related to a lease for its new headquarters in Phoenix, AZ.

3 unchanged sentences

December 31, 2024

Computer hardware

Leasehold improvements

Computer hardware

Warehouse and other equipment

12 unchanged sentences

Total intangible assets, net

Amortization expense on all intangible assets was $ 3,874 , $ 3,874 and $ 3,367 for the years ended December 31, 2024 , 2023 and 2022, respectively.

Amortization expense on all intangible assets was $ 3,874 for the years ended December 31, 2025 , 2024 and 2023.

Total future amortization for finite-lived intangible assets is estimated as follows.

Amortization Expense

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Other long-term assets consisted of the following.

3 unchanged sentences

Operating lease - ROU asset, net

Investment in non-affiliate

Other long-term assets

3 unchanged sentences

"Commitments and Contingencies" - Lease Commitments.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In December 2023, the Company invested $ 2,250 in a non-affiliated, privately held entity, under a Simple Agreement for Future Equity ("SAFE") agreement.

1 unchanged sentence

The Company’s investment in the SAFE is recorded using the cost method of accounting and is included under other long-term assets on the Consolidated Balance Sheets, as it is not readily convertible into cash.

During the year ended December 31, 2024, the Company identified factors indicative of impairment and recorded an impairment charge of $ 2,250 in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss.

During the year ended December 31, 2023, the Company did not identify any factors indicative of impairment.

During the year ended December 31, 2024, the Company identified factors indicative of impairment and recorded an impairment charge of $ 2,250 , the full value of the asset, in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss.

Accrued expenses and other current liabilities consisted of the following.

3 unchanged sentences

Accrued compensation costs

Accrued acquisition consideration

Warranty allowance

Accrued acquisition consideration

Total accrued expenses and other current liabilities

32 unchanged sentences

If the minimum cash balance is not maintained, the Company is required to maintain a minimum liquidity ratio.

As of December 31, 2025, the Company did not maintain the minimum cash balance, but exceeded the minimum liquidity ratio.

If an event of default occurs, the lender is entitled to take various actions, including the acceleration of amounts due under the Senior Revolving Facility and all actions permitted to be taken by a secured creditor.

12 unchanged sentences

The fair value of the vested warrants was recorded as additional paid-in capital and contra-revenue on the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive Loss, respectively.

Based on the count of installed units as of February 2024, the number of warrants to vest is zero and as of December 31, 2023, the Company removed $ 193 from additional paid-in-capital and contra-revenue on the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive Loss.

Based on the count of installed units as of February 2024, the number of warrants to vest is zero .

There was no contra-revenue recorded related to these warrants during the years ended December 31, 2025, 2024 and 2023.

4 unchanged sentences

The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

During the year ended December 31, 2024, the Company repurchased and subsequently retired 15,150 shares of our Class A common stock under the stock repurchase program at an average price of $ 1.89 per share for a total of $ 28,566 , including $ 151 of broker fees.

During the year ended December 31, 2025, the Company repurchased and subsequently retired 5,084 shares of our Class A common stock under the stock repurchase program at an average price of $ 0.96 per share for a total of $ 4,886 .

The Company has elected to record the amount paid to repurchase the shares in excess of the par value entirely to accumulated deficit.

As of December 31, 2025, approximately $ 16,751 remained available for stock repurchases pursuant to our stock repurchase program.

The Company has elected to record the amount paid to repurchase the shares in excess of the par value entirely to accumulated deficit.

As of December 31, 2024, approximately $ 21,587 remained available for stock repurchases pursuant to our stock repurchase program.

STOCK-BASED COMPENSATION

2018 Stock Plan

Legacy SmartRent’s board of directors adopted, and its stockholders approved, the SmartRent.com, Inc.

The Company's board of directors adopted, and its stockholders approved, the SmartRent.com, Inc.

2018 Stock Plan (the “2018 Stock Plan”), effective March 2018.

The purpose of the 2018 Stock Plan was to advance the interests of Legacy SmartRent and its stockholders by providing an incentive to attract, retain and reward persons performing services for Legacy SmartRent and by motivating such persons to contribute to the growth and profitability of Legacy SmartRent.

The purpose of the 2018 Stock Plan was to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company.

The 2018 Stock Plan sought to achieve this purpose by providing awards in the form of stock options and restricted stock purchase rights.

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Amendment to the 2018 Stock Plan

In April 2021, the board of directors of Legacy SmartRent executed a unanimous written consent to provide an additional incentive to certain employees of Legacy SmartRent by amending the 2018 Stock Plan to allow for the issuance of RSUs and granted a total of 1,533 RSUs to certain employees which vest over four years .

In April 2021, the board of directors executed a unanimous written consent to provide an additional incentive to certain employees of the Company by amending the 2018 Stock Plan to allow for the issuance of RSUs and granted a total of 1,533 RSUs to certain employees which vest over four years .

The estimated fair value for each RSU issue d was approximately $ 21.55 per share and the total stock-based compensation expense to be amortized over the vesting period is $ 33,033 .

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Shares available as of December 31, 2023

Stock options issued, net

RSUs issued, net

Shares available as of December 31, 2023

Additions to the plan

Stock options forfeited, net

RSUs issued, net

Stock options forfeited

Stock options issued

RSUs forfeited

RSUs settled for taxes

Shares available as of December 31, 2024

Stock options forfeited

RSUs forfeited

RSUs settled for taxes

Shares available as of December 31, 2025

The table below summarizes the activity related to stock options, pursuant to the 2018 Stock Plan and 2021 Plan, for the years ended December 31, 2025 and 2024.

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Compensation expense associated with the unvested RSUs is recognized on a straight-line basis over the vesting period.

In June 2025, the Company granted RSU awards under the 2021 Plan to Frank Martell, the Company's President and Chief Executive Officer.

Martell’s grant consisted of time-based RSUs covering 1,800 shares of the Company's Class A common stock.

The RSUs will vest in four substantially equal quarterly installments, such that 100 % of the RSUs subject to the grant will be vested as of June 30, 2026 , subject to the terms of Mr.

Martell’s award agreement.

During the years ended December 31, 2025, 2024 and 2023, stock-based compensation expense of $ 8,179 , $ 10,154 and $ 11,273 , respectively, was recognized in connection with the vesting of all RSUs.

As of December 31, 2025, there is $ 10,902 of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 2.3 years.

2025 Inducement Equity Incentive Plan

In January 2025, the Board adopted the SmartRent, Inc.

2025 Inducement Equity Incentive Plan (the “Inducement Plan”), pursuant to which the Company may grant equity awards that are intended to qualify as employment inducement awards under the New York Stock Exchange Listed Company Manual Rule 303A.08 and any applicable interpretive material and other guidance issued under such rule (together, the “Inducement Listing Rule”), from time to time as determined by the Committee (as defined in the Inducement Plan), the Board’s Compensation Committee, or a majority of the Company’s “Independent Directors” (as defined under the applicable rules of the New York Stock Exchange).

Upon adoption of the Inducement Plan, and subject to the adjustment provisions therein, the Company reserved 6,500 shares of Common Stock for issuance pursuant to equity awards granted under the Inducement Plan.

The Inducement Plan provides for the grant of equity-based awards, including options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards.

Such equity-based awards may be granted under the Inducement Plan only to employees of the Company, so long as the following requirements are met:

(i) the employee was not previously an employee or director, or the employee is to become employed by the Participating Company Group (as defined in the Inducement Plan) following a bona fide period of non-employment (within the meaning of the Inducement Listing Rule), and (ii) the grant of the award or awards is an inducement material to the employee’s entering into employment with the Participating Company Group in accordance with the Inducement Listing Rule.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In March 2025, the Company granted inducement awards under the Inducement Plan to Michael Shane Paladin, the Company's then President and Chief Executive Officer, as inducement awards in connection with the Start Date.

Paladin’s grant consisted of time-based RSUs covering 1,791 shares of the Company's Class A common stock and performance stock units ("PSUs") covering a target of 2,320 shares of the Company's Class A common stock.

The RSUs vest at a rate of one-third of the RSUs annually on each anniversary of the Start Date, subject in each case to Mr.

Paladin’s continued employment through the applicable vesting date.

In April 2025, the Company announced the departure of Mr.

Paladin effective as of the End Date.

As of the End Date, no shares had vested and all inducement awards granted were forfeited and returned to the Inducement Plan.

The table below summarizes the activity pursuant to the Inducement Plan, for the year ended December 31, 2025 and the shares available for future issuances as of December 31, 2025.

Shares Available for Future Issuance

Shares available as of December 31, 2024

Additions to the plan

RSUs issued (1)

RSUs forfeited

Shares available as of December 31, 2025

(1) RSUs issued exceeds the total plan size as forfeited shares were re-issued during the year ended December 31, 2025.

Employee Stock Purchase Plan

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During the years ended December 31, 2024 and 2023, there were options granted covering 2,527 and 3,299 shares, respectively.

During the year ended December 31, 2025 there were no options granted.

The fair value of stock option grants is estimated by the Company on the date of grant using the Black Scholes option pricing model with the following weighted-average assumptions for the years ended December 31, 2025, 2024 and 2023.

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Expected life (years)

(1) 2025 assumptions are not applicable as no options were granted during the year ended December 31, 2025.

The Company recorded stock-based compensation expense as follows.

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General and administrative

During the year ended December 31, 2023 $ 109 was recognized for 844 shares granted in connection with the Company's February 2020 acquisition of a foreign supplier and are recorded as a component of general and administrative expense.

There was no such stock-based compensation expense recorded in connection with this acquisition during the years ended December 31, 2025 and 2024.

SMARTRENT, INC.

1 unchanged sentence

(in thousands, except per share amounts)

In July 2024, the Company announced the departure of Lucas Haldeman, the Company’s Chief Executive Officer and Chairman of the Company’s Board effective July 29, 2024.

The Company and Mr.

Haldeman entered into a Separation Agreement and Release (the “Separation Agreement”).

The Separation Agreement provides that, in exchange for Mr.

Haldeman executing a release of claims in favor of the Company and its affiliates, complying with restrictive covenants (including a non-compete), resigning from the Board and agreeing to other terms of the Separation Agreement, Mr.

Haldeman received accelerated vesting of any unvested equity awards (excluding performance based awards) that would have vested had Mr.

Haldeman remained employed during the eighteen-month period immediately following the separation date.

Pursuant to the Separation Agreement, 1,359 stock options and 342 shares of restricted stock units were accelerated to vest on July 29, 2024.

The Company accounted for the modification of existing awards as a Type III modification under ASC 718, Compensation—Stock Compensation and during the year ended December 31, 2024 , the Company recognized $ 820 and $ 449 related to the acceleration of Mr.

Haldeman's RSU and stock option awards, respectively.

During the years ended December 31, 2023 and 2022, stock-based compensation expense of $ 109 and $ 811 , respectively, was recognized for 844 shares granted in connection with the Company's February 2020 acquisition of a foreign supplier and are recorded as a component of general and administrative expense.

There was no such stock-based compensation expense recording during the year ended December 31, 2024 .

The Company's components of income tax (benefit) expense consisted of the following.

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Income tax (benefit) expense

The following table presents a reconciliation of the Company’s effective tax rates for the periods indicated.

Years Ended December 31,

The following tables present a reconciliation of the Company’s effective tax rates for the periods indicated.

Year Ended December 31,

Rate reconciliation

statutory rate

State and local income taxes, net of federal income tax effect (1 )

Foreign rate effect

Other foreign jurisdictions

Effect of changes in tax laws or rates enacted in the current period

Effect of cross-border Laws

Change in valuation allowance

Nontaxable or nondeductible items

Stock compensation

Other permanent adjustments

Other adjustments

Effective tax rate

(1) State taxes in California and Arizona made up the majority (greater than 50 percent) of the tax effect in this category.

For the Years Ended December 31,

Rate reconciliation

statutory rate

State rate net of fed benefit

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(in thousands, except per share amounts)

The components of the income tax payments (net of refunds received) as of December 31 follow.

Year Ended December 31,

North Carolina

South Carolina

Total income tax payments (net of refunds received)

Tax effects of temporary differences can give rise to significant portions of deferred tax assets and deferred tax liabilities.

The components of deferred income tax assets and liabilities are as follows.

Tax Effects of Temporary Differences

As of December 31,

Tax effects of temporary differences

Deferred tax asset

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The net valuation allowance increased by $ 15,226 from $ 80,612 to $ 95,793 in 2025.

As of December 31, 2024, the Company has gross net operating losses of $ 222,864 and $ 215,389 for federal and state income tax return purposes, respectively.

Federal net operating losses can be carried forward indefinitely, while State NOLs will expire between 2032 and 2044 .

As of December 31, 2025, the Company has gross NOLs of $ 252,280 and $ 245,468 for federal and state income tax return purposes, respectively.

Federal NOLs can be carried forward indefinitely, while State NOLs will expire between 2032 and 2045 .

The Company also has $ 145 of R&D credits available that expire in 2039 .

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The Tax Reform Act of 1986 (the "Act") provides for a limitation of the annual use of the net operating loss carryforwards following certain ownership changes (as defined by the Act and codified under IRC 382) that could limit the company's ability to utilize these carryforwards.

The Company has conducted an analysis under Section 382 of the Code to determine whether there would be any limitation on our ability to utilize our tax attributes.

We have not experienced any limitations on the ability to use these tax attributes as the result of our analysis.

We continue to analyze any shifts in ownership which may limit our ability to use these tax attributes in the future.

The Company has not completed a formal Section 382 study;

however, given its cumulative losses and valuation allowance position, management does not expect any potential limitation to have a material impact on the Company’s income tax provision.

A formal analysis would be performed when taxable income is generated in future periods and the utilization of these attribute become probable.

The income tax expense on the Consolidated Statement of Operations and Comprehensive Loss is primarily related to state minimum and franchise taxes.

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federal and state income tax examinations by authorities for all tax years beginning in 2018, due to the accumulated net operating losses that are carried forward.

Similarly, SightPlan is subject to U.S.

Similarly, SightPlan Holdings, Inc.

is subject to U.S.

federal and state income tax examination by authorities for all tax years beginning in 2012.

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The Company is subject to Indian income tax examinations for all tax years beginning in 2023.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The Company evaluates uncertain tax positions which requires significant judgments.

The Company believes that it has established an adequate allowance for its uncertain tax positions, although it can provide no assurance that the final outcome of these matters will not be materially different.

We believe that we have established an adequate allowance for our uncertain tax positions, although we can provide no assurance that the final outcome of these matters will not be materially different.

To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.

A summary of changes in the Company's gross unrecognized tax benefits for the years ended December 31, 2024 and 2023 is as follows (in thousands):

A summary of changes in the Company's gross unrecognized tax benefits for the years ended December 31, 2025 and 2024 is as follows.

As of December 31,

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Common stock warrants

Shares subject to repurchase

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

RELATED-PARTY TRANSACTIONS

A member of the Board served on the board of directors of a SmartRent customer until June 2024.

For the six months ended June 30, 2024, the Company earned revenue from this customer of $ 1,298 .

There was no related party relationship beyond June 30, 2024.

For the years ended December 31, 2024 and 2023, the Company earned revenue from this customer of $ 1,298 and $ 3,738 , respectively.

As of December 31, 2023 , the Company had receivables due from this customer of $ 1,352 .

There was no related party relationship as of December 31, 2024.

All business dealings with the customer were entered into in the ordinary course of business and the arrangements are on terms no more favorable than terms that would be available to unaffiliated third parties under the same or similar circumstances.

During the year ended December 31, 2022, the Company incurred marketing expenses of $ 217 in connection with the vesting of warrants held by a former investor (see Note 7).

During the year ended December 31, 2022, the Company incurred consulting expense of $ 20 related to services provided by companies in which one of the Company's former executives had control or significant influence.

In March 2022, the Company purchased all of the outstanding equity interests of SightPlan (see Note 14).

One of the Company's directors, through a personal investment vehicle, held an unsecured convertible promissory note in SightPlan (the “SightPlan Convertible Note”).

As consideration for the conversion and cancellation of the SightPlan Convertible Note, the director received $ 458 at the closing of the SightPlan acquisition.

The director did not participate in any negotiations, recused himself from all Board discussions related to the SightPlan acquisition, and did not vote on the matter.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

Entities affiliated with RETV Management, LLC ("RET"), which at the time of the SightPlan acquisition held more than 5 % of the outstanding shares of the Company's Common Stock, held more than 17 % of the fully diluted shares outstanding of SightPlan (the “RET SightPlan Holdings”).

As consideration for the RET SightPlan Holdings, entities affiliated with RET received $ 22,271 at the closing of the SightPlan acquisition.

None of the Company's executive officers or directors hold any economic interest in RET and RET does not have a designee on the Board.

Further, RET did not assist the Company with any negotiations or participate in the Board discussions related to the SightPlan acquisition.

As of December 31, 2024 and 2023, RET does no t hold any outstanding shares of the Company's Common Stock.

All business dea lings with the customer were entered into in the ordinary course of business and the arrangements are on terms no more favorable than terms that would be available to unaffiliated third parties under the same or similar circumstances.

COMMITMENTS AND CONTINGENCIES

Purchase Commitments

The Company sometimes enters into long-term purchase commitments for certain goods and services.

In October 2025 the Company entered into an agreement with a supplier to purchase minimum volumes of certain goods and services through December 2030.

Future minimum annual payments in connection with the purchase commitment as of December 31, 2025 are as follows.

Annual Minimum Payments

Total purchase commitment

In the event of certain deteriorating business conditions during fiscal year 2028, and upon providing sixty days written notice to the supplier prior to January 1, 2029, the Company shall have the option to request for a reduction of its minimum payments for the fiscal years of 2029 and 2030 respectively, including an extension of the commitment term by one additional fiscal year , 2031.

Lease Commitments

From time to time, the Company enters into lease agreements with third parties for purposes of obtaining office and warehouse space.

These leases are accounted for as operating leases and have remaining lease terms of 2 months to 7.75 years .

These leases are accounted for as operating leases and have remaining lease terms of 1.33 years to 6.75 years .

If an optional renewal is reasonably certain to be exercised at lease commencement, the lease term will include the optional period for purposes of measuring the initial ROU asset and lease liability.

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During the year ended December 31, 2024, the Company obtained $ 2,701 of ROU assets in exchange for lease obligations in connection with its operating leases.

No new leases were entered into during the year ended December 31, 2023.

During the year ended December 31, 2022, the Company obtained $ 2,776 of ROU assets in exchange for lease obligations in connection with its operating leases.

Lease agreements entered into by the Company do not specify an implicit borrowing rate, however we utilize an incremental borrowing rate based on the lease term on a collateralized basis.

No new leases were entered into during the years ended December 31, 2025 or 2023.

Lease agreements entered into by the Company do not specify an implicit borrowing rate, however the Company utilizes an incremental borrowing rate based on the lease term on a collateralized basis.

ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date.

2 unchanged sentences

During the years ended December 31, 2025 , 2024 and 2023, the Company had no finance leases.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

During the years ended December 31, 2025, 2024 and 2023 the Company incurred rent and other related occupancy expenses of $ 1,672 , $ 2,159 and $ 1,374 , respectively.

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Lease liability, noncurrent

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The Company had $ 3,058 and $ 3,808 of ROU assets, net of related amortization , related to its lease liabilities at December 31, 2025 and December 31, 2024, respectively, and are included in other long-term assets on the Consolidated Balance Sheets.

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The Company does not believe that the outcome of these proceedings or matters will have a material effect on the consolidated financial statements.

In April 2020, the Company entered into an agreement with a supplier, as further amended in March 2021 (the "Supplier Agreement"), to purchase minimum volumes of certain products through August 2022.

Due to significant failure rates and other defects, the Company ceased ordering product from this supplier as of December 2020.

Despite the Company’s requests, the supplier indicated they are not willing to refund the Company for the malfunctioning products previously purchased, and therefore, the Company filed a complaint against the supplier on March 22, 2022 in the Superior Court for the State of California, County of Santa Clara (the "Court").

During the year ended December 31, 2024, the Company recorded a legal expense of $ 5,300 within general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss.

The final settlement agreement was signed in June 2024.

In July 2024, the inventory was returned to the supplier and the Court granted the parties' Request for Dismissal of the action with prejudice.

In February 2024, a putative class action complaint was filed against Fifth Wall Acquisition Sponsor, LLC, Fifth Wall Asset Management, LLC (the “FWAA Defendants”), and the individual directors of Fifth Wall Acquisition Corp.

1 unchanged sentence

(the "2024 Class Action”).

The complaint asserts claims for (i) breach of fiduciary duty against the Director Defendants;

(ii) aiding and abetting breach of fiduciary duty claims against Fifth Wall Asset Management LLC;

and (iii) unjust enrichment claims against all Defendants, for purported actions relating to FWAA’s August 24, 2021 merger with legacy SmartRent.com, Inc.

The parties are engaged in discovery and document production to date, and the Company and the defendants believe the allegations and claims made in the complaint are without merit.

As the surviving entity following the business combination, the Company presently has certain advancement obligations to the Director Defendants in connection with the 2024 Class Action which includes the costs of their defense of such litigation.

While the Director Defendants are the beneficiaries of coverage for such costs up to $ 10,000 by directors’ and officers’ insurance (“D&O insurance”), the D&O insurance is subject to a retention of $ 5,000 .

The Company has notified the relevant D&O insurance carriers of the 2024 Class Action and is litigating coverage and allocation issues in a separate action filed in the Delaware Superior Court in December 2024.

The complaint asserted claims for purported actions relating to FWAA’s August 24, 2021 merger with legacy SmartRent.com, Inc.

Beginning in February 2025, the parties participated in a mediation, which ultimately led to all the parties’ agreement to settle the 2024 Class Action for $ 11,375 .

In August 2025, the parties executed a Stipulation and Agreement of Settlement, Compromise and Release, which the Court approved in November 2025.

Legal expenses and settlement costs incurred by the Company during the years ended December 31, 2025 and 2024 were $ 4,905 and $ 2,230 , respectively, in connection with the 2024 Class Action.

These legal expenses were recorded within general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss and accrued expenses and other current liabilities on the Consolidated Balance Sheets.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In May 2021, the Company entered into a licensing agreement with a service provider, as further amended in July 2021 (the "Service Provider Agreement"), to license the provider’s software and participate in the provider’s energy demand response program to generate revenue for the Company.

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and related equitable claims.

The parties engaged in substantial written discovery and depositions.

In January 2025, the Company moved for summary judgment on the Agreement’s limitation of liability provision, asserting that the service provider could not recover damages under the contract.

In February 2025, the service provider filed a motion for summary judgment on its breach of contract claim.

Pending the cross motion hearing in April 2025, the parties participated in a mediation in February 2025, which ultimately led to the parties agreement to settle the matter.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

In February 2025, the parties participated in a mediation, which ultimately led to the parties' agreement to settle the matter.

The final settlement agreement was signed in March 2025, and the case was dismissed with prejudice.

In April 2023, a collective action was filed against the Company in Federal Court in Georgia (the "Federal Court") by two former employees alleging failure to pay overtime wages in violation of the Fair Labor Standards Act (“FLSA”).

The plaintiffs claim they were improperly classified as exempt employees under the FLSA and thus should have been entitled to overtime pay.

Limited discovery was conducted in 2023, and Plaintiffs moved for conditional certification of a collective class in July 2023, which was granted on March 31, 2024.

Notice was issued to potential class members, who had until July 15, 2024, to opt into the lawsuit.

In October 2024, the parties engaged in a private mediation and agreed to settle the matter for a total amount of $ 1,500 , inclusive of all Plaintiffs’ attorneys’ fees and costs and related releases, subject to a written agreement and the Federal Court’s approval.

As of December 31, 2024, the Company recorded a legal accrual of $ 1,500 related to this matter within general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Loss and accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The Court approved the settlement and dismissed the case on December 31, 2024.

As of December 31, 2024, the Company recorded a legal accrual of $ 1,500 related to this matter within general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Loss and accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.

The settlement amount was paid in full in January 2025.

In December 2025, the San Francisco Tenants Union and three residents filed claims against the Company and several multifamily property owners in the Superior Court of the State of California in the County of San Francisco for alleged violations of Article 1 Section 1 of the California Constitution for alleged violation of tenant privacy rights, for common law intrusion upon seclusion and for violation of the San Francisco Rent Ordinance for purportedly interfering with tenants privacy rights arising out of the use of the Company’s SmartHome products and services (the "Complaint").

The Complaint seeks declaratory relief that the conduct described in the Complaint constitutes an invasion of the right to privacy and injunctive relief prohibiting the Company and owners from violating tenants’ privacy rights.

The Complaint also seeks unspecified damages.

The Company disputes the plaintiffs’ claims and intends to vigorously defend against those claims.

The Company regularly reviews outstanding legal claims, actions and enforcement matters, if any exist, to determine if accruals for expected negative outcomes of such matters are probable and can be reasonably estimated.

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The amount of such adjustment could significantly exceed the accruals the Company has recorded.

As of December 31, 2024 , an accrual of $ 1,500 was included within accrued expenses and other current liabilities related to the legal matters discussed above.

The Company had no such accruals as of December 31, 2023.

SEGMENT REPORTING

The Company operates as a single operating segment, which is also its only reportable segment as its CODM, which is currently the Company's CEO , reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The Company operates as a single operating segment, which is also its only reportable segment as its CODM, which is currently the Company's President and Chief Executive Officer , reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The Company’s principal operations are in the United States and the Company’s long-lived assets are located primarily within the United States.

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Total operating expenses

Impairment charge

Loss from operations

4 unchanged sentences

The Company considers these categories significant based on their materiality to the segment’s results and their importance in the CODM’s evaluation of segment performance and resource allocation decisions.

BUSINESS ACQUISITIONS

SightPlan Acquisition

In March 2022, the Company purchased all of the outstanding equity interests of SightPlan for approximately $ 135,000 .

SightPlan was founded in 2013 and is headquartered in Orlando, Florida.

SightPlan is a SaaS company that provides a real estate operating platform offering automated answering, resident engagement, field service and maintenance management, inspections management, and due diligence and audit management services to real estate owners and managers.

The Company accounted for the SightPlan acquisition as a business combination.

The preliminary purchase price consisted of $ 131,781 of cash and restricted cash and a post-closing downward adjustment of $ 127 reflecting the difference between estimated and actual net working capital of SightPlan on the acquisition date.

On the acquisition

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

date, the Company paid cash consideration of $ 130,931 and placed $ 850 in escrow accounts legally owned by the Company.

During the year ended December 31, 2022, consideration held in escrow of $ 850 was distributed.

As part of the distribution, the net working capital adjustment of $ 127 was returned to the Company.

As part of the business combination, the Company agreed to pay up to approximately $ 5,760 to the former employees of SightPlan on the one-year anniversary of the acquisition date, subject to continued employment at the Company.

As this payment was contingent upon the continuous service of the employees, it was accounted for as post-combination expense and was recognized ratably over the service period of one year .

During the year ended December 31, 2023, the Company distributed $ 5,976 in connection with this contingent consideration, including $ 216 for payroll taxes and retirement benefits.

The total purchase consideration and the fair values of the acquired assets and liabilities at the acquisition date were as follows.

Consideration

Cash paid at acquisition

Cash consideration held in escrow

Net working capital adjustment

Fair value of total consideration transferred

Recognized amounts of identifiable assets acquired and liabilities assumed

Accounts receivable, net

Intangible assets

Total identifiable net assets acquired

Accounts payable

Deferred revenue

Accrued expenses and other liabilities

Deferred tax liability ( Note 9 )

Other long-term liabilities

Total liabilities assumed

Total identifiable assets

Changes resulting from facts and circumstances that existed as of the acquisition date resulted in measurement period adjustments to the estimated fair values of accounts receivable, net, intangible assets, other assets, deferred tax liability, and goodwill during the year ended December 31, 2022.

Specifically, the refinement of inputs used to estimate the fair value of intangible assets resulted in an increase in customer relationships of $ 4,400 , a decrease in goodwill of $ 3,839 , and an increase in the deferred tax liability of $ 557 .

The increase to the deferred tax liability caused an increase to the release of the valuation allowance, generating a $ 1,227 income tax benefit on the Consolidated Statement of Operations.

Changes to accounts receivable, net and other assets were immaterial.

Cash paid at acquisition

Cash acquired

Cash consideration released from escrow

Net working capital adjustment

Payment of acquisition consideration, net of cash acquired

The Company recognized approximately $ 1,480 and $ 4,495 of compensation expense related to contingent consideration in connection with the SightPlan acquisition during the years ended December 31, 2023 and 2022, respectively.

The Company recognized $ 196 and $ 771 of other non-recurring acquisition related costs that were expensed during the years ended December 31, 2023 and 2022, respectively.

Compensation and other non-recurring acquisition related costs are included in general and administrative expenses on the Consolidated Statement of Operations and Comprehensive Loss.

SMARTRENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

The fair value of the assets acquired includes accounts receivable of $ 1,255 .

The gross amount due under contracts for accounts receivable was $ 1,284 as of March 22, 2022.

The Company did not acquire any other class of receivable as a result of the acquisition of SightPlan.

The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based on the fair market value of such assets and liabilities at the date of acquisition.

Intangible assets associated with the acquisition totaled $ 30,900 and were primarily related to customer relationships and developed technology.

The excess purchase price over the fair value of net assets acquired was recognized as goodwill and totaled $ 104,601 .

The goodwill is attributable primarily to the workforce of the acquired business and expected synergies with the Company’s existing operations and is not deductible for income tax purposes.

The Company recorded intangible assets at their fair value, which consisted of the following.

Estimated useful life (in years)

March 31, 2022

Customer relationships

Developed technology

Total intangible assets

The valuation of intangible assets was determined using an income approach methodology.

The fair value of the customer relationship intangible assets was determined using the multi-period excess earnings method based on discounted projected net cash flows associated with the net earnings attributable to the acquired customer relationships.

The fair value of the trade name and the acquired developed technology was determined using the relief from royalty method, which measures the value by estimating the cost savings associated with owning the asset rather than licensing it.

The income approach methodology involves estimating cash flows over the remaining economic life of the intangible assets, which are considered from a market participant perspective.

Key assumptions used in estimating future cash flows included projected revenue growth rates and customer attrition rates.

The projected future cash flows were discounted to present value using an appropriate discount rate.

As such, all aforementioned intangible assets were valued using Level 3 inputs.

During the years ended December 31, 2024, 2023 and 2022, the Company recorded amortization expense of $ 3,621 , $ 3,622 and $ 2,806 , respectively, related to intangible assets.

These intangible assets are deductible over 15 years for income tax purposes.

Pro Forma Operating Results

The Company’s Consolidated Balance Sheet as of December 31, 2024 and December 2023, and other financial statements presented herein for the years ended December 31, 2024, 2023 and 2022 include the results of operations of SightPlan since the acquisition date.

The following unaudited pro forma information presents consolidated financial information as if the SightPlan acquisition had occurred on January 1, 2022.

Pro forma disclosures for net loss have not been provided as the acquisition did not have, and is not expected to have, a material impact on the consolidated results through the year of acquisition.

Pro forma operating results were prepared for comparative purposes only and are not indicative of what would have occurred had the acquisition been made as of January 1, 2022 or of the results that may occur in the future.

For the years ended December 31,

SUBSEQUENT EVENTS

In connection with the preparation of the accompanying consolidated financial statements, the Company has evaluated events and transactions occurring after December 31, 2025 and through March 4, 2026, the date these financial statements were issued, for potential recognition or disclosure and has determined that there are no additional items to disclose except as disclosed below.

In January 2025, the Company announced the appointment of Michael Shane Paladin as President and Chief Executive Officer and member of the Board.

Paladin’s employment commenced on February 24, 2025 (the “Start Date”).

Paladin will replaces Daryl Stemm who had been serving as Interim Principal Executive Officer since July 29, 2024.

Stemm will continue to serve as the Company’s Chief Financial Officer.

The Management Committee of SmartRent and the Operating Committee of the Board, both formed to guide the Company through its Chief Executive Officer transition, dissolved effective as of the Start Date.

In January 2026, issuable shares of the Company’s Class A Common Stock under the ESPP increased by 1,892 shares.

SMARTRENT, INC.

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(in thousands, except per share amounts)

In January 2025, the Board adopted the SmartRent, Inc.

In January 2025, the Board, upon the recommendation of the Board’s Nominating and Corporate Governance Committee (the “Nominating Committee”), appointed Ana Pinczuk to the Board as a Class III director to serve until the Company’s 2027 annual meeting of stockholders.

The Board also appointed Ms.

Pinczuk to serve as a member of the Board’s Compensation Committee and the Nominating and Corporate Governance Committee.

In January 2025, issuable shares of the Company’s Class A Common Stock under the ESPP increased by 1,920 shares.

In January 2025, the Board of Directors approved 5,887 RSUs to certain employees under the 2021 Incentive Stock Plan.

In January and February 2025, 652 shares of the Company's Class A Common Stock were issued to certain employees related to vested RSUs and ESPP purchases.

In January 2026, the Board of Directors or an authorized committee thereof approved the issuance of 6,024 RSUs to certain employees under the 2021 Incentive Stock Plan.

In January 2026, the Board of Directors or an authorized committee thereof approved the issuance of 1,119 PSUs at target to certain employees under the 2021 Incentive Stock Plan.

In January 2026, the Board of Directors approved the issuance of 465 RSUs to certain employees under the Inducement Plan.

In January and February 2026, 2,572 shares of the Company's Class A Common Stock were issued to certain employees related to vested RSUs, exercised options and ESPP purchases.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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What changed 10-K

Item 8. Financial Statements and Supplementary Data