Smart home company SmartRent (NYSE: SMRT) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 4% year on year to $39.84 million. Its GAAP loss of $0.03 per share was in line with analysts’ consensus estimates.

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Company Overview

Founded by an employee at a real estate rental company, SmartRent (NYSE: SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, SmartRent grew its sales at an incredible 16.3% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. SmartRent’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 16.6% over the last two years.

SmartRent also reports its annual recurring revenue (ARR), or the predictable, normalized yearly income from subscriptions and contracts. SmartRent’s ARR reached $64.5 million in the latest quarter and averaged 13.9% year-on-year growth over the last two years. Because this number is better than its normal revenue growth, we can see the company’s proportion of recurring revenue from long-term contracts and subscriptions has increased. This implies more stability in its business model and revenue streams.

This quarter, SmartRent reported modest year-on-year revenue growth of 4% but beat Wall Street’s estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to grow 21.3% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will catalyze better top-line performance.

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Operating Margin

SmartRent’s high expenses have contributed to an average operating margin of negative 36% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, SmartRent’s operating margin rose by 57.1 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

In Q2, SmartRent generated a negative 16.2% operating margin.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although SmartRent’s full-year earnings are still negative, it reduced its losses and improved its EPS by 58% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For SmartRent, its two-year annual EPS growth of 5.1% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q2, SmartRent reported EPS of negative $0.03, up from negative $0.06 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects SmartRent to improve its earnings losses. Analysts forecast its full-year EPS will improve from negative $0.10 to negative $0.08.

Key Takeaways from SmartRent’s Q2 Results

It was good to see SmartRent narrowly top analysts’ ARR expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EBITDA missed and its EPS was in line with Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 1.4% to $1.07 immediately following the results.

So do we think SmartRent is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).