Matterport, Inc.

Thank you for standing by, and welcome to the Matterport Inc. Fiscal 2021 Q3 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touchtone telephone. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Mr. Suwon Kim, Vice President of Investor Relations. Please go ahead.

Thank you. Before we begin, I'd like to remind you that today's call contains forward-looking statements within the meaning of federal securities laws, including but not limited to statements regarding Matterport's future financial results and management's expectations and plans for the business. These forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those discussed in today's call. Additional information regarding the risks and uncertainties that could cause actual results to differ from forward-looking statements can be found in our filings with the SEC. Any forward-looking statements made on this call speak only as of today and Matterport assumes no obligation to update or revise them whether as a result of new developments or otherwise, except as required by law. In addition, today's call may include discussion of non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in today's earnings deck, which is available on the company's website. Hosting today's call are R.J. Pittman, Chairman and Chief Executive Officer of Matterport, and J.D. Fay, Chief Financial Officer. Now I would like to turn it over to RJ to begin.

Thanks, Suwan. Good afternoon, everyone, and thank you for joining us today. I'm excited to share our third quarter financial results with you. This is the second earnings call as a public company, and we had another strong quarter delivering on our products, strategy, and results. Our subscriber base more than doubled last to over 439,000 subscribers, and we delivered over $15 million in subscription revenue, up 36% from one year ago, further increasing its percentage of the revenue mix with total revenue for the quarter of $27.7 million. This includes an all-time monthly shipment record for our Pro2 camera for the month of September. I would like to talk about four key initiatives that we have recently brought to market. Matterport for Android, our entry into the public sector, BIM file for the AEC category, and an update on our partnership with Facebook, now Meta, before handing over the call to JD to discuss our financial results for the quarter in more detail. Let's start with Android and our capture ubiquity strategy. We've had tremendous success with our breakthrough Pro2 camera, selling over $100 million of hardware in the first 10 years of our history. We also knew that Pro2 would be just one of the many ways in which we would capture the built world digitally. Over the past three years, we've opened up our capture ecosystem to a number of third-party cameras, including the high-precision Leica BLK LiDAR camera, followed by support for low-cost, highly portable 360 cameras. It was at this point that Matterport unveiled scalable, true 3D capture from standard digital photography. This breakthrough was powered by Cortex, our artificial intelligence engine that can accurately predict 3D geometry of any space because it was trained on the accurate 3D data captured over the years with Pro2. In 2020, we took Cortex even further, training the AI to accurately predict 3D building geometry from flat photos taken from an iPhone. The early beta product was well-received, attracting more subscribers to our platform in three days than in the first eight years of the company. To say that Matterport for iPhone has been an important part of our SaaS subscriber growth strategy would be an understatement. As we approach a half a million Matterport subscribers today, it is almost hard to imagine we had just over 13,000 subscribers on the platform at the start of 2019. Making the first Matterport space free for our new customers is very important to our business. This compelling offer removes any friction from getting started and becoming successful with their first digital twin of any space, a home, office, or hotel. all from just the smartphone in their pocket. Just download and go. Later in 2020, Matterport exited beta with another groundbreaking announcement. Full support for iPhones and iPads with Apple's new LiDAR sensor added to the device's camera system. Matterport's partnership with Apple has continued to flourish, including our technical input on LiDAR software controls, ensuring Matterport's seamless integration on these new devices. while also creating solutions for Apple's global enterprise customer base. The result, a Matterport plus high-precision, enterprise-ready LiDAR capture solution that fits in your pocket. It is simply game-changing. Now, during that same period, Matterport recognized that our big ambitions for smartphone capture would only be partially fulfilled without Android. which represents nearly 75% of active smartphones in the world today. And with companies like Samsung, Xiaomi, and Google shipping more than 1 billion new Android phones every year, the potential is massive. I'm happy to confirm that we have delivered on that commitment with the full release of Matterport for Android in the Google Play Store on October 28th for 175 countries around the world. enabling both existing and new customers to experience Matterport using just the Android phone in their pocket. Together, Matterport for Android and Matterport for iPhone provide a 3D capture solution for the vast majority of the world's digital citizens, and we call it Matterport for Mobile. And as always, your first full-featured Matterport for Mobile digital twin is free. From here forward, we will be rolling Matterport for mobile across all of our key vertical markets and geographies, starting with travel and hospitality, insurance, residential real estate, and the enterprise. This highly portable, all-in-one solution makes 3D capture more convenient than ever for homeowners, hospitality hosts, facilities managers alike. Here is a quick take of Matterport for mobile's powerful value proposition in each of these global markets. For travel and hospitality, property owners want to maintain, promote, and feel confident managing multiple properties online with ease. For insurance, building owners can quickly document a home, assets, warranties, upgrades, personal property, and even keep active records of how the property, its contents, and condition have changed over the years. They can also easily capture a Matterport model on a lost to quickly document things such as subrogation, insurance fraud, sub bids, approval questions, and resolution disputes. For residential real estate, property owners and agents can easily and freely start capturing properties with no special camera required, allowing them to quickly add 3D tours to improve their online engagement and visitor conversions. For enterprise, large companies and facilities managers gain the ability to enlist teams of people to head out and accurately capture many buildings and spaces at the same time, each using the smartphone in their pocket. This is just a sampling of the enormous opportunity that Matterport for mobile will bring to our capture ubiquity strategy in the years to come. Next, I would like to explain our entry into the public sector. extending Matterport into this important and meaningful part of the built world. The market opportunity for digitizing the public sector is substantial, spanning federal, state, and local government agencies. The segments include education, law enforcement, military, infrastructure, and healthcare. Building assets, infrastructure, and other physical spaces within the U.S. federal government alone exceeds $260 billion in value, according to a study done by the Obama administration in 2017, representing hundreds of thousands of buildings and spaces and infrastructure budgets that are measured in the trillions of dollars in the U.S. alone. The appeal of this enormous market opportunity stems from our established offerings across the property lifecycle, including construction, facilities management, insurance, and remote access training and inspection of facilities from anywhere in the world. Matterport's decade of experience is a distinct advantage to the sector that will provide government agencies and departments a jumpstart that would otherwise take years to develop and deploy with more expensive and complex solutions. We are going to market with two strong partners. we recently announced a strategic partnership with In-Q-Tel, or IQT. For more than 20 years, the intelligence and national security communities have relied on IQT to anticipate its technology questions, needs, and achieve solutions. We are thrilled that IQT is advocating for and representing Matterport to secure federal agencies in a way that will help these government organizations stay ahead of the technology curve and ensure the national security of the U.S. and its allies. Second, our longstanding partnership with Amazon's AWS division expands with the launch of AWS GovCloud. This will be the platform where we deploy and manage our first FedRAMP-compliant offering as we work together with AWS as a new member of the AWS public sector partner program. Upon formally entering the public sector in Q3, the demand was immediate. We have signed a number of customers with compelling use cases, including a large public school district in the United States, to capture an initial footprint of 60 schools for first responder coordination, situational awareness, and space planning and facilities management longer term. In the event of an incident or crisis, the police departments, fire departments, will now have detailed knowledge of the building layout, ingress, egress, and where the critical infrastructure is located from a remote location and long before entering the building. Now moving on to the category of Architecture, Engineering, and Construction, or AEC. I'd like to introduce our next big product for this industry, the Matterport BIM file. Building Information Modeling, or BIM, It's a process for creating and managing information on a construction or design project across the project lifecycle. BIM brings together all of the information about every component of a building into one place. Creating a digital BIM enables those who interact with the building to optimize their actions, resulting in a greater whole life value for the asset. Using software such as Autodesk Revit, professionals can create models for conceptual design, visualization, analysis, and construction. Building information models are not limited to just the dimensions and geometry aspects of the building. Project stakeholders can include information about behavior, performance, material types, costs, and more within the BIM model. BIM objects contain whatever information designers input in the system. Until now, it has required a considerable amount of measurements and CAD translation labor to put all the data into the system to realize the full benefits of BIM. The process can take several weeks or longer, depending on the size and complexity of the project. Today, we are speeding this process up dramatically with the launch of the Matterport BIM File Add-on Service, available to every Matterport digital twin on the platform today. Our customers can quickly transform a Matterport digital twin into a ready-to-use Autodesk BIM file at the click of a button, receiving the final output in days versus weeks or months, and most importantly, delivered at a fraction of the cost. Architects, designers, and building engineers can now accurately reflect the current state of any building and its contents in tabs faster, easier, and more cost-effectively than ever before. As with all of our new vertical market applications, we don't beta test in small corners of the industry. We have been working with Autodesk on the technology, and the early deployments are with some of the biggest and most recognized firms in the industry, including the legendary firm Arup and A. Chase Angus. Together, We are delivering the fastest and most convenient path from Matterport RealityCapture to BIM in just days from the click of a button. BIM is at the center of the global construction industry today. It is equivalent to the PDF document standard for any design build project in the modern age. Matterport's BIM file add-on offers breakthrough scan to BIM performance for any building project large or small. enabling Matterport to accelerate the creation of the built world in both physical and digital forms simultaneously. Our spatial data platform continues to unlock enormous opportunities for the company. At the end of Q2, we announced a collaboration with Facebook AI Research, now Meta, through which we made the largest ever data set of 3D indoor spaces available for academic research across the fields of robotics and autonomy to train AI systems to function in both the physical and virtual worlds. The program is off to a fast start, exceeding all expectations, with hundreds of high-quality institutions and research groups qualifying for the program and beginning their work. including Cornell University and Carnegie Mellon to name just two. Matterport and Meta recognized years ago that our digital twins of the built world and powerful spatial data hold a unique potential to transform the ways in which we work, live and play. This was foundational to the partnership and looking ahead, potentially very relevant to the development of the Metaverse. Matterport for mobile, BIM file, the spatial data partnership with Meta and our public sector initiative are four significant examples of how Matterport is delivering on our platform first strategy to accelerate the digitization of the built world across industries. Q3 was another proof point with clear signals of industry buy-in, key customer wins and breakthrough product launches. We have more exciting launches coming and I look forward to sharing them with all of our investors in the coming quarters. I will now turn it over to JD, who will discuss our financial performance for the third quarter and the continued strength of our business model.