Latch Posts $14.1M Revenue, $13.6M Goodwill Writedown

Latch, Inc., which trades as DOOR on OTC Markets under the symbol LTCH, reported third quarter 2026 results on November 12, 2026, disclosing total revenue of $14.1 million, down 18.9% year over year, and a net loss of $20.5 million that included a $13.6 million non-cash goodwill impairment charge. Software revenue rose 18.1% to $6.3 million and gross margin expanded to 55.2% from 44.3%. The company said its restructuring plan targets $10 million to $12 million in annualized operating cost savings and a goal of positive cash flow in the second half of 2027.

Context — why DOOR's Q3 2026 results matter now

The quarter marks the first full reporting period in which DOOR's revenue mix tilted decisively toward software. Software contributed $6.3 million of the $14.1 million total, while hardware revenue was $3.1 million and professional services revenue was $4.7 million. That split matters because the two hardware-adjacent lines carried the decline: the company attributed the $3.3 million year-over-year revenue drop primarily to lower hardware shipments and reduced professional services installation activity.

The report supplies its own sequential comparable. Total revenue fell 9.4% from $15.6 million in the second quarter of 2026, meaning the contraction accelerated within the year rather than stabilizing. On the profit line the direction reversed: gross profit of $7.8 million was $0.1 million higher than the prior-year quarter despite the revenue decline, a direct consequence of the software-heavy mix.

DOOR's catalyst chain is a restructuring announced in August 2026. The company began a reduction in force that quarter, expects to complete it in the fourth quarter of 2026, and on October 30, 2026 closed the sale of certain assets of its DOOR Property Management business as part of a planned exit from property management operations. Management framed the moves as concentrating resources on the core Building Intelligence platform.

A second catalyst is the launch of OpenDOOR, the company's SDK and developer platform, in September 2026. EliseAI was named the first public partner, integrating DOOR access into its AI-Guided Tours and Maintenance App, and the company said OpenDOOR also supports integrations with Della and Cybersuite X.

A third is legal. DOOR settled a previously disclosed SEC investigation, without admitting the findings, through a cease-and-desist order entered October 1, 2026. The settlement includes a $1.0 million civil monetary penalty payable in four quarterly installments.

Data — what the numbers show

The headline figures compare against the prior-year quarter, which the report provides in full.

Metric	Q3 2026	Q3 2025	Change
Software revenue	$6,344K	$5,370K	+18.1%
Total revenue	$14,140K	$17,426K	-18.9%
Net loss	$(20,484)K	$(6,582)K	+211.2%
Adjusted EBITDA	$(3,792)K	$(4,605)K	-17.7%
Gross margin	55.2%	44.3%	+10.9 pts

Operating expenses were $28.0 million, including the $13.6 million goodwill impairment and $1.2 million of restructuring costs. Excluding both, non-GAAP operating expenses were $13.2 million, down 6.0% year over year from $14.0 million.

The impairment removed the entire remaining balance of DOOR's goodwill. The company said the charge reflects the market-participant assumptions used in the required fair value assessment, which differ from the assumptions in its internal operating plan — a disclosure that separates the write-down from management's own forecast.

Hardware gross margin was 19.7%, down from 23.7% a year earlier, so the margin expansion came entirely from software and professional services rather than the hardware line.

Liquidity: as of September 30, 2026, DOOR held $22.9 million of cash, cash equivalents and restricted cash, comprising $17.6 million unrestricted and $5.3 million restricted. Cash, equivalents, restricted cash and available-for-sale securities decreased $3.2 million in the quarter, versus $2.4 million in the second quarter. Nine-month operating cash use fell 58.2% to $11.8 million from $28.1 million.

The company reported underlying cash utilization — excluding non-ordinary course legal payments, restructuring costs and proceeds from a private-company investment sale — improving from $5.8 million in Q1 to $4.3 million in Q2 to $2.2 million in Q3.

Analysis — what it means for markets and sectors

DOOR sits in the building-intelligence and proptech niche, where the reported peer set is fragmented and the company did not name direct comparables in the release. The relevant read-across is structural rather than ticker-specific: a vendor shrinking hardware shipments while growing subscription revenue is trading near-term top-line for margin, and the 10.9-point gross margin gain is the evidence that trade is working.

The counter-argument is balance-sheet velocity. A $3.2 million quarterly cash draw against $22.9 million of total cash and restricted cash implies a runway measured in quarters, not years, and the restricted portion is not fully available. The company's own path to positive cash flow runs to the second half of 2027 — roughly six to eight quarters away on its stated timeline — which leaves little tolerance for slippage in the restructuring savings.

The goodwill impairment carries a second-order signal. Writing off the entire remaining balance against market-participant assumptions, rather than internal-plan assumptions, indicates the required valuation exercise produced a materially lower view of the business than management's own operating plan. That does not change cash, but it does reset the asset base against which future returns are measured.

Positioning is constrained by venue. Shares trade on OTC Markets under LTCH rather than a national exchange, which limits institutional mandate eligibility for many funds and typically widens spreads. Flow into the name is therefore likely to be event-driven around the restructuring completion and the OpenDOOR partner announcements the company said it expects through year-end.

The company said it has received significant interest from potential integration partners since the OpenDOOR launch, but did not disclose the number of partners, pipeline value, or commercial terms.

Outlook — what to watch next

Three dated items anchor the near term. The reduction in force is expected to complete in the fourth quarter of 2026. The SEC penalty is payable in four quarterly installments beginning from the October 1, 2026 order. The company's stated goal of positive cash flow sits in the second half of 2027.

Undated but company-flagged: additional OpenDOOR releases expected through year-end 2026, and further improvement in cash utilization in the fourth quarter of 2026, which management said should accelerate through 2027 as restructuring benefits land. The company noted the first quarter typically carries elevated cash requirements because of the timing of annual payments.

The Form 10-Q for the period ended September 30, 2026 will carry the financial statements and footnotes, and the company said it will be posted on its investor relations site when filed with the SEC. Investors tracking the restructuring math should watch whether realized savings land inside the $10 million to $12 million annualized band and whether software revenue growth holds above the hardware decline.

Frequently Asked Questions

Why did DOOR's net loss widen to $20.5 million in Q3 2026?

The increase was driven almost entirely by a $13.6 million non-cash goodwill impairment charge recorded in the quarter, which represented the entire remaining goodwill balance. Adjusted EBITDA, which excludes the impairment, restructuring costs and other items, actually improved 17.7% year over year to a $3.8 million loss. The gap between the two figures is the difference between a write-down of accounting value and the company's cash-generating performance.

What does the OpenDOOR platform launch mean for DOOR's revenue?

OpenDOOR is an SDK and developer platform that lets property technology partners integrate DOOR's access management, IoT and building data. EliseAI was the first public partner. The company said it has received significant interest from potential integration partners but did not disclose pipeline size, pricing or expected revenue contribution, so the platform's financial effect cannot yet be quantified from the release.