Financial Analysis

ACQUISITIONS During 2024, the Company completed several acquisitions to expand its service offerings and operational capabilities, including the acquisition of substantially all of the assets of the property management divisions of The Broadway Company and Boston Realty Advisors (collectively, the Property Management Acquisitions) and the merger with HelloTech, Inc. (HelloTech and, such merger, the HelloTech Merger). These transactions were accounted for as business combinations under Accounting Standards Codification (ASC) 805, Business Combinations . The results of operations of the acquired businesses have been included in the Companys consolidated financial statements from their respective acquisition dates. The following unaudited supplemental pro forma financial information presents the Companys consolidated results of operations for the three and six months ended June 30, 2024, as if the Property Management Acquisitions and the HelloTech Merger had been consummated on January 1, 2024. Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 Total revenue $ 18,285 $ 36,187 Net loss $ (18,186) $ (33,331) The supplemental pro forma financial information presented above is not necessarily indicative of the results of operations that would have been achieved had the acquisitions occurred on January 1, 2024, nor is it indicative of future operating results. The supplemental pro forma financial information does not reflect potential cost savings, operating synergies or …

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COMMITMENTS AND CONTINGENCIES Registration Rights Agreements In connection with the 2021 business combination (the 2021 Business Combination) with TS Innovation Acquisitions Corp. (TSIA), the Company and certain stockholders of Legacy Latch and TSIA entered into an amended and restated registration rights agreement (the 2021 Registration Rights Agreement). Pursuant to the 2021 Registration Rights Agreement, in June 2021, the Company filed a registration statement on Form S-1 with respect to the registrable securities under the 2021 Registration Rights Agreement. Certain Legacy Latch stockholders and TSIA stockholders may each request to sell all or any portion of their registrable securities in an underwritten offering up to two times in any 12-month period, so long as the total offering price is reasonably expected to exceed $75.0 million. The Company also agreed to provide certain demand and piggyback registration rights. The 2021 Registration Rights Agreement also provides that the Company pays certain expenses relating to such registrations and indemnifies the stockholders against certain liabilities. The Company bears the expenses incurred in connection with the filing of any such registration statements. The 2021 Registration Rights Agreement does not provide for any penalties connected with delays in registering the Companys common stock. In connection with the consummation of the 2023 acquisition of Honest Days Work, Inc. (HDW), the Company and certain of HDWs stockho …

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DEBT A summary of the Companys debt is as follows: June 30, 2025 December 31, 2024 Term loan $ 5,292 $ 5,829 Total debt 5,292 5,829 Less: Current portion of long-term debt (1,314) (1,314) Total long-term debt $ 3,978 $ 4,515 On July 15, 2024, the Company entered into an Amended and Restated Loan and Security Agreement (the Loan Agreement) with Customers Bank. Pursuant to the Loan Agreement, Customers Bank issued a term loan in the principal amount of $6.0 million (the Loan). Interest is payable on the Loan at a rate equal to the greater of (a) the prime rate published in The Wall Street Journal or (b) 6.0%, and the maturity date is July 15, 2029 (the Maturity Date). Concurrent with the Companys entry in the Loan Agreement, the Company issued a warrant to Customers Bank to purchase 1,000,000 shares of the Companys common stock (the Bank Warrant). The Bank Warrant has an exercise price of $1.25 per share, exercisable upon issuance and expiring on July 15, 2030. The Bank Warrant is classified as a liability under ASC 815, Derivatives and Hedging (ASC 815) and is remeasured at fair value each reporting period, with changes recognized in other income, net. At issuance, the Bank Warrant was recorded at its fair value of $0.2 million and reflected as a debt discount, which is being amortized to interest expense over the term of the Loan. The fair value of the Loan was $5.3 million and $5.8 million as of June 30, 2025 and December 31, 2024, respectively. Payments under the Loan were …

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The following table provides information about disaggregated revenue from customers into the nature of the products and services provided and the related timing of revenue recognition: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Point-in-time revenue: Hardware $ 5,916 $ 5,583 $ 9,953 $ 10,226 Total point-in-time revenue 5,916 5,583 9,953 10,226 Period-of-time revenue: . Software 5,244 5,022 10,403 10,059 Hardware installation and activation services 3,015 1,829 4,843 4,018 HelloTech in-home services 3,921 7,557 Property management services 957 501 2,068 664 Other 2 3 5 6 Total period-of-time revenue 13,139 7,355 24,876 14,747 Total revenue $ 19,055 $ 12,938 $ 34,829 $ 24,973 …

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STOCK-BASED COMPENSATION The components of stock-based compensation expense were as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Stock options $ 101 $ 49 $ 238 $ 107 Restricted common stock (1) (147) 1,386 (51) 2,772 Restricted stock units 544 14 1,219 Capitalized costs (2) (4) (61) (110) Total stock-based compensation expense $ (50) $ 1,918 $ 201 $ 3,988 (1) See the section entitled Jamie Siminoff Restricted Common Stock below. (2) Included in internally-developed software, net on the accompanying Condensed Consolidated Balance Sheets. Stock-based compensation expense is included in cost of revenue, research and development, sales and marketing and general and administrative on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of revenue $ 1 $ $ 2 $ 3 Research and development 3 201 46 535 Sales and marketing 19 4 39 3 General and administrative (73) 1,713 114 3,447 Total stock-based compensation expense $ (50) $ 1,918 $ 201 $ 3,988 Stock Incentive Plans In January 2016, Legacy Latch adopted the Latch, Inc. 2016 Stock Plan (the 2016 Plan and, together with the Latchable, Inc. 2014 Stock Incentive Plan, the Prior Plans). Under the 2016 Plan, Legacy Latchs board of directors was authorized (i) to grant either incentive stock options (ISOs) or non-qualified stock options (NSOs) to purchase shares of the Companys co …

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FAIR VALUE MEASUREMENTS AND CONCENTRATIONS OF CREDIT RISK Fair Value Measurements The Companys financial assets that are measured at fair value on a recurring basis are summarized as follows: As of June 30, 2025 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash $ 4,076 $ $ $ 4,076 Money market funds and other cash equivalents 42,651 42,651 Total cash and cash equivalents 4,076 42,651 46,727 Available-for-sale securities 877 2,773 3,650 Investment in private company 954 954 Total assets $ 4,953 $ 45,424 $ 954 $ 51,331 Liabilities Warrant liability $ $ 99 $ $ 99 Total liabilities $ $ 99 $ $ 99 As of December 31, 2024 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Cash $ 4,087 $ $ $ 4,087 Money market funds and other cash equivalents 66,116 66,116 Total cash and cash equivalents 4,087 66,116 70,203 Available-for-sale securities 544 4,643 5,187 Investment in private company 954 954 Total assets $ 4,631 $ 70,759 $ 954 $ 76,344 Liabilities Warrant liability $ $ 30 $ $ 30 Total liabilities $ $ 30 $ $ 30 The Companys investments in cash, money market funds and other cash equivalents that are highly liquid and low-risk have been classified as Level 1 as they are valued utilizing quoted prices (unadjusted) in active markets for identical assets. Investments in other cash equivalents that are not active are classified as Level 2. Investments in asset-backed securities, commercial paper, corporate bonds and U.S. Government debt securities that are valued using …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND INTANGIBLE ASSETS, NET Goodwill During the three and six months ended June 30, 2025 and 2024, management determined there were no triggering events or changes in circumstances that would indicate the carrying value of the Companys goodwill is not recoverable. As such, no quantitative assessment for impairment was required. No goodwill impairment charges were recorded during each of the three and six months ended June 30, 2025 and 2024. Intangible Assets, Net Intangible assets, net consisted of the following: June 30, 2025 December 31, 2024 Domain names $ 2,034 $ 2,034 Developed technology 600 600 Customer relationships 595 595 Patents 37 37 Non-compete 10 10 Licenses 4 4 Intangible assets $ 3,280 $ 3,280 Less: accumulated amortization (814) (696) Total intangible assets, net $ 2,466 $ 2,584 Total amortization expense related to intangible assets was $0.1 million and $0.1 million for the three and six months ended June 30, 2025, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30, 2024, respectively. The estimated useful life of the intangible assets is as follows: Useful life in years Developed technology 6 - 10 Domain names 3 - 13 Customer relationships 15 - 20 Patents 12 Non-compete 3 Licenses 5 There was no intangible impairment expense recorded in the three and six months ended June 30, 2025 and 2024. …

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INCOME TAXES The income tax provision for the three and six months ended June 30, 2025 was zero and zero, respectively. The income tax provision for the three and six months ended June 30, 2024 was zero and $0.002 million, respectively. For the three and six months ended June 30, 2025 and 2024, the Companys effective tax rate was different from the U.S. federal statutory rate. This difference is primarily attributable to the effect of foreign, state and local income taxes and permanent differences between expenses deductible for financial reporting purposes offset by the valuation allowances placed on the Companys deferred tax assets. As of June 30, 2025, no liability for unrecognized tax benefits was required to be recorded by the Company. Management does not expect any significant changes in its unrecognized tax benefits in the next 12 months. To date, the Company has incurred cumulative net losses and maintains a full valuation allowance on its net deferred tax assets as the Company has determined that it is more likely than not that these assets will not be fully realized. …

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Recently Adopted Pronouncements No new accounting standards that were material to the Company were adopted in the three months ended June 30, 2025. Accounting Pronouncements Not Yet Adopted In October 2023, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) 2023-06, Disclosure Improvements: Codification Amendments in Response to the SECs Disclosure Update and Simplification Initiative (ASU 2023-06). ASU 2023-06 was intended to align the requirements of the ASC with overlapping SEC requirements. The guidance in ASU 2023-06 is required to be applied prospectively, and the ASC amendments will be effective only upon the removal of the overlapping SEC disclosure requirements. If, however, the SEC does not act to remove the relevant overlapping requirements by June 30, 2027, the FASB amendments will not be effective. The Company does not anticipate that the adoption of ASU 2023-06 will have a material impact on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which intends to increase the transparency of income tax disclosures, particularly the rate reconciliation table and disclosures about income taxes paid. For public business entities, it is effective for annual periods beginning after December 15, 2024, and interim periods beginning after December 15, 2025, with early adoption permitted. The Company has not early-adopted this standar …

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RELATED-PARTY TRANSACTIONS The Company has customers who are also stockholders and directors, or affiliates thereof, in the Company. The Company charges market rates for products and services that are offered to such customers. As of June 30, 2025 and December 31, 2024, the Company had $0.1 million and $0.05 million, respectively, of receivables due from these customers, which is included within accounts receivable on the accompanying Condensed Consolidated Balance Sheets. For the three and six months ended June 30, 2025, the Company had $0.002 million and $0.003 million, respectively, of hardware revenue, $0.05 million and $0.1 million, respectively, of software revenue, and $0.2 million and $0.5 million, respectively, of services revenue from these customers, which was included on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. For the three and six months ended June 30, 2024, the Company had $0.001 million and $0.003 million, respectively, of hardware revenue and $0.04 million and $0.1 million, respectively, of software revenue from these customers, which is included on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

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REVENUE The Company currently generates its revenue from three primary sources: (1) sales of hardware devices, (2) licenses of software products and (3) professional services. Hardware The Company generates hardware revenue primarily from the sale of its portfolio of devices. The Company sells hardware to customers, which include real estate developers, builders, building owners and property managers, directly or through its channel partners, who act as intermediaries, installers or wholesalers. The Company recognizes hardware revenue when there is evidence a contract exists and control of the hardware has been transferred to the customer. The Company has determined that control transfers to a customer when hardware is shipped, as the Companys standard delivery terms are Free on Board (FOB) Shipping Point. Certain customers may request FOB Destination, in which case control transfers to the customer upon delivery to the requested destination. The Company generally provides warranties that its hardware will be substantially free from defects in materials and workmanship for a period of one or two years for electronic components, depending on the hardware product, and five years for mechanical components. The Company determines in its sole discretion whether to replace or refund warrantable devices. The Company determined these warranties are not separate performance obligations as they cannot be purchased separately and do not provide a service in addition to an assurance the …

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SEGMENT REPORTING As of June 30, 2025, the Company had one operating and reportable segment, as it reports financial information on an aggregate and consolidated basis. The Companys chief operating decision maker (CODM) as of such date was the Chief Executive Officer. The CODM reviews results to assess performance, make decisions and allocate the Companys operating and capital resources as a whole, on a consolidated basis. All of the Companys revenue is attributable to one operating segment. The CODM does not distinguish among the Companys principal business activities for the purpose of internal reporting and uses net loss to allocate resources in the annual budgeting and forecasting process, along with using that measure as a basis for evaluating financial performance quarterly. The measure of segment assets is reported on the consolidated balance sheets as total assets. The accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025 and 2024 reflect the one reportable segment. Geographic Information The Companys revenues are primarily generated in the United States. Revenues outside of the United States were approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively, and zero and $0.4 million for the three and six months ended June 30, 2024, respectively. The Company does not have any long-lived assets located outside the United States. …

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the Companys accounting policies since December 31, 2024, as described in Note 2. Summary of Significant Accounting Policies , in Part II, Item 8. Financial Statements in the 2024 Annual Report. …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

EQUITY The Companys second amended and restated certificate of incorporation designates and authorizes the Company to issue 1.1 billion shares, consisting of (i) 1.0 billion shares of common stock, par value $0.0001 per share, and (ii) 100.0 million shares of preferred stock, par value $0.0001 per share. Common Stock Reserved for Future Issuance The Companys reserved shares for future issuance included the following: June 30, 2025 December 31, 2024 Stock options issued and outstanding 24,381,384 26,436,951 Restricted stock units issued and outstanding 375,640 375,640 Public warrants outstanding 9,999,967 9,999,967 Private placement warrants outstanding 5,333,334 5,333,334 Bank warrant 1,000,000 1,000,000 2021 Incentive Award Plan available shares 36,166,709 25,869,878 Total 77,257,034 69,015,770 Public Warrants As part of the closing of the 2021 Business Combination, 10.0 million public warrants sold during TSIAs initial public offering converted into 10.0 million public warrants to purchase up to 10.0 million shares of common stock of the Company, which are exercisable at $11.50 per share. The Company accounts for warrants as required under ASC 815 and has concluded that equity classification would be met for the public warrants as the Company has a single class of equity, and thus all holders vote 100% on all matters submitted to the Companys stockholders and receive the same form of consideration in the event of a change of control (thus qualifying for the exception to the …

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SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of these financial statements and determined that there have been no events that have occurred that would require adjustments to its disclosures in the condensed consolidated financial statements.

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