Latch, Inc. (DOOR) Reports Second Quarter 2026 Financial Results
Rhea-AI Summary
Latch (OTC: LTCH), operating as DOOR, reported Q2 2026 total revenue of $15.6 million, down 18.1% year-over-year, as lower hardware and installation activity offset 16.8% software revenue growth to $6.1 million. Gross margin rose to 49.0% from 43.0%.
Operating expenses fell 5.7% to $14.9 million, narrowing net loss 12.1% to $(6.9) million. Adjusted EBITDA loss improved 37.5% to $(3.6) million. Cash, restricted cash, and available-for-sale securities totaled $26.1 million, with quarterly net cash use improving to $2.4 million from $6.1 million in Q1 2026.
DOOR outlined a restructuring plan expected to cut annualized operating costs by $10–$12 million and reached a settlement in principle with SEC Staff involving a proposed $1.0 million civil monetary penalty. The company also highlighted AI-driven initiatives, including the launch of DOOR Scout and the OpenDOOR developer platform.
Positive
- Software revenue +16.8% YoY to $6.1 million in Q2 2026
- Gross margin expanded to 49.0% from 43.0% year-over-year
- Net loss improved 12.1% YoY to $(6.9) million
- Adjusted EBITDA loss reduced 37.5% YoY to $(3.6) million
- Quarterly cash usage fell to $2.4 million from $6.1 million in Q1 2026
- Restructuring plan targeting $10–$12 million in annualized operating cost reductions
Negative
- Total revenue declined 18.1% YoY to $15.6 million, driven by lower hardware and services
- Hardware gross margin impacted by $0.9 million inventory impairment, reducing hardware margin to about 3%
- Continuing net loss of $(6.9) million in Q2 2026
- Cash and cash equivalents decreased to $19.1 million from $34.6 million at December 31, 2025
- Proposed $1.0 million SEC civil penalty to be paid in installments
AI-generated analysis. How Rhea-AI works. Not financial advice.
Software Revenue Grows
Second Quarter 2026 Highlights (Three Months Ended June 30, 2026)
- Software revenue increased by
16.8% year-over-year to$6.1 million - Total revenue was
$15.6 million 18.1% year-over-year, primarily reflecting a lower volume of hardware shipments and professional services installation activity against an elevated prior-year second quarter. - Operating expenses decreased by
5.7% year-over-year to$14.9 million - Net loss narrowed by
12.1% year-over-year to$(6.9) million - Adjusted EBITDA loss (non-GAAP) narrowed by
37.5% year-over-year to$(3.6) million
"We are running a fundamentally different company than we were a year ago, and this quarter reflects meaningful progress in that transformation," said David Lillis, Chief Executive Officer of DOOR. "Software revenue grew
"AI is central to how we expect to achieve these improvements," Lillis continued. "By embedding AI across software development, customer support, and our internal operations, we have built a leaner, more efficient organization that is expected to continue delivering innovative products for our customers. The launch of DOOR Scout marks the first of several AI-enabled products planned for our Building Intelligence platform, and we expect several additional releases in the months ahead. We also reached a settlement in principle with the SEC Staff, representing an important milestone toward resolving legacy matters. This allows us to focus on executing our Building Intelligence strategy, continue innovating, expanding customer adoption, and creating long-term value for our stockholders."
Business Highlights
SEC Investigation Settlement – The Company reached a settlement in principle with the Securities and Exchange Commission (the "SEC") Staff related to the previously disclosed investigation. Subject to Commission approval, the proposed settlement includes a
Restructuring Plan – Subsequent to quarter end, the Company announced a restructuring plan designed to accelerate profitability and strengthen its focus on Building Intelligence. The plan is expected to reduce annualized operating costs by approximately
AI Innovation – Continued integration of AI across software development, customer support, and internal operations to improve productivity, accelerate innovation, and support a more efficient and scalable operating model. The Company also continued expanding AI-enabled capabilities within its Building Intelligence platform, representing an important step in executing its strategy to deliver intelligent, connected solutions that modernize multifamily operations.
Building Intelligence – DOOR's strategy is to transform building operations through AI, automation, and an open platform that reduces the day-to-day burden on onsite teams, enabling management by exception and positioning DOOR as the operational layer for connected multifamily buildings.
DOOR Scout – Launched a connected edge AI device that combines remote lock management with environmental sensing in one device, replacing a stack of multiple single-purpose hardware devices while enabling proactive building intelligence.
OpenDOOR – Introduced a developer platform that provides partners, property technology vendors, and customers with access to DOOR's access management, IoT, and building data, expanding the building technology ecosystem and enabling future AI-driven automation.
Key Business Metrics
The Company's key business metrics are as follows for the periods presented (unaudited, in thousands):
Three Months Ended June 30, | ||||||||||||||||
2026 | 2025 | $ Change | % Change | |||||||||||||
GAAP(1) Measures: | ||||||||||||||||
Software revenue | $ | 6,124 | $ | 5,244 | $ | 880 | 16.8 | % | ||||||||
Total revenue | $ | 15,615 | $ | 19,055 | $ | (3,440) | (18.1) | % | ||||||||
Net loss | $ | (6,900) | $ | (7,849) | $ | 949 | (12.1) | % | ||||||||
Non-GAAP Measure: | ||||||||||||||||
Adjusted EBITDA(2) | $ | (3,558) | $ | (5,689) | $ | 2,131 | (37.5) | % | ||||||||
(1) | Generally accepted accounting principles in | |||||||
(2) | Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below for the definition, limitations, and reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure. | |||||||
Second Quarter 2026 Results Summary
DOOR's second quarter of 2026 delivered total revenue of
The Company continued to improve operating efficiency during the quarter. Gross profit was
Second Quarter 2026 Cash and Liquidity Update
As of June 30, 2026, the Company had
Additional Information Available on Our Website
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2026, which will be posted on the "Financials and SEC Filings" section of the Company's investor relations website at DOOR.com, when it is filed with the SEC. Information contained on, or accessible through, the Company's website is not incorporated by reference into this press release.
Information Regarding Key Business Metrics
DOOR reviews the key business metrics and other measures presented in this release to measure its performance, identify trends affecting its business, formulate business plans, and make strategic decisions that may impact the future operating results of the Company. For definitions and discussions of key business metrics, see the Company's most recent Annual Report on Form 10-K.
Increases or decreases in the Company's key business metrics and other measures may not correspond with increases or decreases in its revenue. The limitations these measures have as analytical tools include: (1) they are not necessarily indicative of the Company's future financial results and (2) other companies, including companies in DOOR's industry, may calculate key business metrics or similarly titled measures differently, which reduces their usefulness as comparative measures.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we have presented in this press release Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.
We define Adjusted EBITDA as our net loss, excluding the impact of the following items, if applicable: (i) depreciation and amortization expense, (ii) net interest income or expense, (iii) provision for income taxes, (iv) change in fair value of warrant liability, trading securities, or derivative instruments, (v) restructuring costs, (vi) transaction-related costs, (vii) impairment of assets, (viii) non-ordinary course legal fees and settlement reserves, (ix) stock-based compensation expense and (x) gain or loss on extinguishment of debt. The most directly comparable GAAP measure is net loss. We believe excluding the impact of these items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance. We monitor, and have presented in this press release, Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets, and to develop operational goals for managing our business. We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we include in net loss. Accordingly, we believe Adjusted EBITDA provides useful information to investors, analysts, and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance.
Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net loss, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. In addition, the expenses and other items that we exclude in our calculations of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results.
In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. The following table reconciles Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||
Net loss | $ | (6,900) | $ | (7,849) | $ | (12,838) | $ | (19,099) | |||||
Depreciation and amortization | 1,021 | 1,320 | 2,028 | 2,842 | |||||||||
Interest expense, net(1) | 306 | 281 | 629 | 534 | |||||||||
Loss on extinguishment of debt | 120 | — | 120 | — | |||||||||
Change in fair value of warrant liability | (14) | 32 | 23 | 69 | |||||||||
Restructuring costs | — | (30) | — | (88) | |||||||||
Loss on derecognition of intangible assets | 251 | — | 251 | — | |||||||||
Non-ordinary course legal fees and | 1,141 | 607 | 1,614 | 2,586 | |||||||||
Stock-based compensation expense | 517 | (50) | 671 | 201 | |||||||||
Adjusted EBITDA | $ | (3,558) | $ | (5,689) | $ | (7,502) | $ | (12,955) | |||||
(1) | As a result of significant discounts provided to our customers on certain long-term software contracts paid in advance, we determined that there is a significant financing component related to the time value of money and have therefore broken out the interest component and recorded it as a discount in interest expense, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. Interest (income) expense, net includes interest expense associated with the significant financing component of | |||||||
(2) | The amounts primarily represent legal fees related to stockholder lawsuits and the SEC's ongoing investigation into issues related to our key performance indicators and revenue recognition practices (the "SEC Investigation"). While we are involved in various litigation and legal disputes in the ordinary course of our business, we believe the non-ordinary course legal fees and settlement reserves included in our calculation of Adjusted EBITDA do not represent normal operating expenses. These costs are included within general and administrative on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. | |||||||
About DOOR
DOOR is a Building Intelligence company redefining how buildings operate. By combining hardware, intuitive software, and automated services into one streamlined system, DOOR helps properties think ahead, reduce overhead, and quietly improve life inside. Headquartered in
Visit www.door.com for more information.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "would," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Forward-looking information includes, but is not limited to, statements regarding: the Company's cash expenditures, cash flows, revenues, and other financial or operational results, the Company's business plans, the Company's name and branding, the Company's application for its securities to trade on any particular market or national securities exchange or under any particular stock ticker, the results of our ongoing business transformation, the impacts on our business of our recent restructuring and workforce reduction actions, the use of artificial intelligence by the Company and its anticipated benefits, our ability to continue launching new products and consumer demand for those products, and regulatory disputes and investigations, including any potential settlement with the Securities and Exchange Commission. Many factors could cause actual future events to differ materially from the forward-looking statements in this release, including: the Company's ability to implement its business plans and achieve revenue forecasts; changes in the Company's plans; unexpected delays, difficulties, or expenditures; and other factors outside of the Company's control. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K, and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law, including the securities laws of
Latch, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands, except share amounts) | |||||||
June 30, 2026 | December 31, 2025 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 19,056 | $ | 34,620 | |||
Available-for-sale securities | 1,794 | — | |||||
Accounts receivable, net | 7,778 | 7,960 | |||||
Inventories, net current | 12,099 | 15,258 | |||||
Prepaid expenses and other current assets | 7,096 | 7,098 | |||||
Total current assets | 47,823 | 64,936 | |||||
Property and equipment, net | 775 | 835 | |||||
Internally-developed software, net | 8,121 | 8,382 | |||||
Inventories, net non-current | 11,623 | 12,080 | |||||
Goodwill | 13,605 | 13,605 | |||||
Intangible assets, net | 1,875 | 2,297 | |||||
Other non-current assets | 9,625 | 4,667 | |||||
Total assets | $ | 93,447 | $ | 106,802 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 5,659 | $ | 4,447 | |||
Current portion of long-term debt | — | 1,314 | |||||
Accrued expenses | 10,621 | 10,458 | |||||
Deferred revenue, current | 11,275 | 11,237 | |||||
Other current liabilities | 851 | 790 | |||||
Total current liabilities | 28,406 | 28,246 | |||||
Deferred revenue, non-current | 12,898 | 15,138 | |||||
Long-term debt | 4,361 | 3,330 | |||||
Other non-current liabilities | 2,012 | 2,077 | |||||
Total liabilities | 47,677 | 48,791 | |||||
Commitments and contingencies (see Note 14) | |||||||
Stockholders' equity | |||||||
Common stock - | 19 | 19 | |||||
Treasury stock | (1) | (1) | |||||
Additional paid-in capital | 770,980 | 770,423 | |||||
Accumulated other comprehensive income | 79 | 39 | |||||
Accumulated deficit | (725,307) | (712,469) | |||||
Total stockholders' equity | 45,770 | 58,011 | |||||
Total liabilities and stockholders' equity | $ | 93,447 | $ | 106,802 | |||
(1) | On June 4, 2026, the 738,000 shares subject to vesting requirements held by TS Innovation Acquisitions Sponsor, L.L.C. (the "Sponsor") related to the 2021 business combination (the "Sponsor Shares") were forfeited and cancelled pursuant to the Sponsor Agreement dated January 24, 2021. Accordingly, such shares are no longer outstanding as of June 30, 2026. Shares issued and outstanding as of December 31, 2025 exclude the unvested Sponsor Shares held by the Sponsor. | |||||||
Latch, Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (in thousands, except share and per share amounts) | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||
Revenue | |||||||||||||
Hardware | $ | 3,444 | $ | 5,916 | $ | 7,801 | $ | 9,953 | |||||
Software | 6,124 | 5,244 | 12,267 | 10,403 | |||||||||
Professional services | 6,047 | 7,895 | 11,249 | 14,473 | |||||||||
Total revenue | 15,615 | 19,055 | 31,317 | 34,829 | |||||||||
Cost of revenue⁽¹⁾ | |||||||||||||
Hardware | 3,340 | 4,150 | 6,558 | 7,453 | |||||||||
Software | 600 | 503 | 1,131 | 1,054 | |||||||||
Professional services | 4,016 | 6,206 | 7,750 | 10,647 | |||||||||
Total cost of revenue | 7,956 | 10,859 | 15,439 | 19,154 | |||||||||
Operating expenses | |||||||||||||
Research and development | 4,057 | 4,454 | 7,850 | 10,087 | |||||||||
Sales and marketing | 3,806 | 4,150 | 8,078 | 7,727 | |||||||||
General and administrative | 5,989 | 5,856 | 10,680 | 13,627 | |||||||||
Depreciation and amortization | 1,021 | 1,320 | 2,028 | 2,842 | |||||||||
Total operating expenses | 14,873 | 15,780 | 28,636 | 34,283 | |||||||||
Loss from operations | (7,214) | (7,584) | (12,758) | (18,608) | |||||||||
Other expense, net | |||||||||||||
Loss on extinguishment of debt | (120) | — | (120) | — | |||||||||
Interest expense, net | (306) | (281) | (629) | (534) | |||||||||
Realized gain on equity investment | 765 | — | 765 | — | |||||||||
Change in fair value of warrant liability | 14 | (32) | (23) | (69) | |||||||||
Other (expense) income, net | (39) | 48 | (73) | 112 | |||||||||
Total other income (expense), net | 314 | (265) | (80) | (491) | |||||||||
Loss before income taxes | (6,900) | (7,849) | (12,838) | (19,099) | |||||||||
Provision for income taxes | — | — | — | — | |||||||||
Net loss | $ | (6,900) | $ | (7,849) | $ | (12,838) | $ | (19,099) | |||||
Other comprehensive income (loss) | |||||||||||||
Unrealized loss on available-for-sale | (1) | (2) | (4) | (16) | |||||||||
Foreign currency translation adjustment | 11 | (15) | 44 | (11) | |||||||||
Comprehensive loss | $ | (6,890) | $ | (7,866) | $ | (12,798) | $ | (19,126) | |||||
Net loss per common share: | |||||||||||||
Basic and diluted net loss per common | $ | (0.04) | $ | (0.05) | $ | (0.08) | $ | (0.12) | |||||
Weighted average shares outstanding: | |||||||||||||
Basic and diluted | 161,191,157 | 160,416,365 | 160,949,018 | 160,344,652 | |||||||||
(1) | Exclusive of depreciation and amortization shown in operating expenses. | |||||||
Latch, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) | ||||||
Six Months Ended June 30, | ||||||
2026 | 2025 | |||||
Operating activities | ||||||
Net loss | $ | (12,838) | $ | (19,099) | ||
Adjustments to reconcile net loss to net cash used by operating activities | ||||||
Depreciation and amortization | 2,028 | 2,842 | ||||
Non-cash interest income | (1) | (118) | ||||
Extinguishment of debt | 120 | — | ||||
Change in fair value of warrant liability | 23 | 69 | ||||
Realized gain on equity investment | (765) | — | ||||
Unrealized income on marketable securities | (4) | (12) | ||||
Loss on derecognition of intangible assets | 251 | — | ||||
Provision for expected credit losses, net of recoveries | 110 | 56 | ||||
Provision for expected credit losses on contract assets | (9) | (8) | ||||
Stock-based compensation expense | 671 | 201 | ||||
Changes in assets and liabilities | ||||||
Accounts receivable | 72 | (1,760) | ||||
Inventories, net | 3,616 | (1,351) | ||||
Prepaid expenses and other current assets | (934) | 17,248 | ||||
Other non-current assets | 111 | 700 | ||||
Accounts payable | 1,207 | 490 | ||||
Accrued expenses | 175 | (18,085) | ||||
Deferred revenue | (2,202) | (3,899) | ||||
Other current liabilities | 61 | (463) | ||||
Other non-current liabilities | (88) | (55) | ||||
Net cash used in operating activities | (8,396) | (23,244) | ||||
Investing activities | ||||||
Purchase of available-for-sale securities | (2,357) | (6,656) | ||||
Proceeds from sales and maturities of available-for-sale securities | 577 | 8,307 | ||||
Proceeds from sale of investment in private company | 1,719 | — | ||||
Purchase of property and equipment | (6) | (77) | ||||
Capitalized internally-developed software | (1,528) | (1,098) | ||||
Net cash (used in) provided by investing activities | (1,595) | 476 | ||||
Financing activities | ||||||
Repayment of term loan | (4,777) | (556) | ||||
Proceeds from revolving credit facility | 4,361 | — | ||||
Tax withholdings on settlement of equity awards | (116) | — | ||||
Net cash used in financing activities | (532) | (556) | ||||
Effect of exchange rate on cash | 227 | (152) | ||||
Net change in cash, cash equivalents and restricted cash | (10,296) | (23,476) | ||||
Cash, cash equivalents and restricted cash | ||||||
Beginning of period | 34,620 | 70,203 | ||||
End of period | $ | 24,324 | $ | 46,727 | ||
Supplemental disclosure of non-cash investing and financing activities | ||||||
Capitalization of stock-based compensation to internally developed software | $ | 2 | $ | — | ||
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SOURCE Latch, Inc.