Latch Inc Q3 revenue falls as hardware sales drop
LTCH•Latch's third-quarter revenue fell 19% year over year to $14.14 million as hardware and services activity declined, while software revenue rose 18% to $6.34 million. Gross margin expanded to 55% from 44%, and the company aims to achieve positive cash flow in the second half of 2027.
1. Revenue and margins
Latch reported third-quarter revenue of $14.14 million, down 19% year over year on lower hardware and services activity. Software revenue increased 18% to $6.34 million, driven by continued subscription growth on its DOOR platform. Gross margin expanded to 55% from 44%, reflecting a greater contribution from higher-margin software and improved professional services margins.
2. Losses and restructuring
Net loss widened to $20.48 million, driven by a goodwill impairment, while the adjusted EBITDA loss improved 18% year over year to $3.79 million. Latch began a restructuring plan focused on its Building Intelligence platform and AI-enabled software, which it expects to reduce annualized operating costs by $10 million to $12 million.
3. Cash flow outlook
The company expects further improvement in cash utilization in the fourth quarter of 2026 and throughout 2027. It aims to achieve positive cash flow by the second half of 2027.
