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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 001-39790
____________________________
MATTERPORT, INC.
(Exact name of registrant as specified in its charter)
____________________________
Delaware
85-1695048
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer
Identification No.)
352 East Java Drive
Sunnyvale, California 94089
(Address of Principal Executive Offices, including zip code)
(650) 641-2241
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol
Name of each exchange
on which registered
Class A Common Stock, par value of $0.0001 per shareMTTRThe Nasdaq Global Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o


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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The registrant had 295,867,535 shares of Class A common stock outstanding as of May 2, 2023.


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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements in this Report are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including our ability to grow market share in our existing markets or any new markets we may enter; our ability to respond to general economic conditions; our ability to manage our growth effectively; our success in retaining or recruiting our officers, key employees or directors, or changes required in the retention or recruitment of our officers, key employees or directors; the impact of the regulatory environment and complexities with compliance related to such environment; our ability to maintain an effective system of internal controls over financial reporting; our ability to achieve and maintain profitability in the future; our ability to access sources of capital; our ability to maintain and enhance our products and brand, and to attract customers; our ability to manage, develop and refine our technology platform; the success of our strategic relationships with third parties; our history of losses and whether we will continue to incur continuing losses for the foreseeable future; our ability to protect and enforce our intellectual property rights; our ability to implement business plans, forecasts, and other expectations and identify and realize additional opportunities; our ability to attract and retain new subscribers; the size of the total addressable market for our products and services; the continued adoption of spatial data; any inability to complete acquisitions and integrate acquired businesses; general economic uncertainty and the effect of general economic conditions in our industry; environmental uncertainties and risks related to adverse weather conditions and natural disasters; factors relating to our business, operations and financial performance, including: the impact of the ongoing COVID-19 public health emergency or other infectious diseases, health epidemics and pandemics; the volatility of the market price and liquidity of our Class A common stock, and other securities; the increasingly competitive environment in which we operate; and other factors detailed under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023, and subsequently filed Quarterly Reports on Form 10-Q.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Report will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should read this Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
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Part I- Financial Information
Item 1. Financial statements
MATTERPORT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share data)
March 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$144,315 $117,128 
Short-term investments311,884 355,815 
Accounts receivable, net of allowance of $1,295 and $1,212, as of March 31, 2023 and December 31, 2022, respectively
21,817 20,844 
Inventories
11,002 11,061 
Prepaid expenses and other current assets
10,724 13,084 
Total current assets
499,742 517,932 
Property and equipment, net
31,701 30,559 
Operating lease right-of-use assets2,225 2,515 
Long-term investments 3,959 
Goodwill69,593 69,593 
Intangible assets, net10,447 10,890 
Other assets
5,825 4,947 
Total assets
$619,533 $640,395 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$6,044 $8,331 
Deferred revenue
18,284 16,731 
Accrued expenses and other current liabilities
21,900 23,916 
Total current liabilities
46,228 48,978 
Warrants liability581 803 
Deferred revenue, non-current
1,489 1,201 
Other long-term liabilities
1,155 5,502 
Total liabilities
49,453 56,484 
Commitments and contingencies (Note 8)
Redeemable convertible preferred stock, $0.0001 par value; 30,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; nil shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
  
Stockholders’ equity:
Common stock, $0.0001 par value; 640,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; and 295,700 shares and 290,541 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
30 29 
Additional paid-in capital
1,206,100 1,168,313 
Accumulated other comprehensive loss
(2,811)(5,034)
Accumulated deficit
(633,239)(579,397)
Total stockholders’ equity
570,080 583,911 
Total liabilities and stockholders’ equity
$619,533 $640,395 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended March 31,
20232022
Revenue:
Subscription
$19,847 $17,141 
License
27 23 
Services
8,704 3,973 
Product
9,416 7,373 
Total revenue
37,994 28,510 
Costs of revenue:
Subscription
6,962 5,262 
License
  
Services
6,244 2,983 
Product
8,376 8,356 
Total costs of revenue
21,582 16,601 
Gross profit
16,412 11,909 
Operating expenses:
Research and development
18,273 26,002 
Selling, general, and administrative
54,933 70,849 
Total operating expenses
73,206 96,851 
Loss from operations
(56,794)(84,942)
Other income (expense):
Interest income
1,471 1,295 
Change in fair value of warrants liability 222 21,433 
Change in fair value of contingent earn-out liability
 136,043 
Other income (expense), net
1,183 (1,321)
Total other income
2,876 157,450 
Income (loss) before provision for income taxes
(53,918)72,508 
Provision for (benefit from) income taxes
(76)604 
Net income (loss)
$(53,842)$71,904 
Net income (loss) per share attributable to common stockholders:
Basic
$(0.18)$0.26 
Diluted$(0.18)$0.23 
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders:
Basic293,074 275,199 
Diluted293,074 312,432 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands, unaudited)
Three Months Ended March 31,
20232022
Net income (loss)(53,842)71,904 
Other comprehensive income (loss), net of taxes:
Unrealized gain (loss) on available-for-sale securities, net of tax
2,223 $(4,635)
Other comprehensive income (loss)$2,223 $(4,635)
Comprehensive income (loss)
$(51,619)$67,269 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, unaudited)

Common Stock
SharesAmount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
loss
Accumulated
Deficit
Total
Stockholders’
Equity
Balance as of December 31, 2022
290,541 $29 $1,168,313 $(5,034)$(579,397)$583,911 
Net loss
— — — — (53,842)(53,842)
Other comprehensive income
— — — 2,223 — 2,223 
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding4,910 1 356 — — 357 
Issuance of common stock in connection with acquisitions249 — 3,921 — — 3,921 
Stock-based compensation
— — 33,510 — — 33,510 
Balance as of March 31, 2023
295,700 $30 $1,206,100 $(2,811)$(633,239)$570,080 


Common Stock
SharesAmount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
loss
Accumulated
Deficit
Total
Stockholders’
Equity
Balance as of December 31, 2021
250,173 $25 $737,735 $(1,539)$(468,058)$268,163 
Net income
— — — — 71,904 71,904 
Other comprehensive loss
— — — (4,635)— (4,635)
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding6,295 1 (14,498)— — (14,497)
Issuance of common stock upon the reverse recapitalization, net of transaction costs— — 76 — — 76 
Issuance of common stock to a customer100 — 559 — — 559 
Issuance of common stock upon exercise of public warrants1,994 — 34,055 — — 34,055 
Issuance of common stock in connection with acquisitions1,215 — 19,118 — — 19,118 
Issuance of earn-out shares upon triggering events, net of tax withholding21,494 2 (17,738)— — (17,736)
Earn-out liability recognized upon the re-allocation— — (896)— — (896)
Reclassification of remaining contingent earn-out liability upon triggering events— — 242,430 — — 242,430 
Stock-based compensation
— — 61,097 — — 61,097 
Balance as of March 31, 2022
281,271 $28 $1,061,938 $(6,174)$(396,154)$659,638 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(In thousands, unaudited)
Three Months Ended March 31,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$(53,842)$71,904 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
4,391 2,463 
Amortization of investment premiums, net of accretion of discounts(681)954 
Stock-based compensation, net of amounts capitalized
31,074 55,277 
Change in fair value of warrants liability(222)(21,433)
Change in fair value of contingent earn-out liability
 (136,043)
Deferred income taxes(184)(227)
Allowance for doubtful accounts
289 191 
Loss of excess inventory and purchase obligation 622  
Other
(381)45 
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable
(1,261)(3,988)
Inventories
(3,258)427 
Prepaid expenses and other assets
1,308 (1,571)
Accounts payable
(2,287)659 
Deferred revenue
1,841 2,610 
Accrued expenses and other liabilities
2,193 3,254 
Net cash used in operating activities
(20,398)(25,478)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(87)(448)
Capitalized software and development costs
(2,567)(3,596)
Purchase of investments(57,577)(30,378)
Maturities of investments108,806 46,200 
Business acquisitions, net of cash acquired (1,676)(30,020)
Net cash provided by (used in) investing activities
46,899 (18,242)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options
686 2,191 
Payments for taxes related to net settlement of equity awards(329)(33,337)
Proceeds from exercise of warrants 27,844 
Other  76 
Net cash provided by (used in) financing activities
357 (3,226)
Net change in cash, cash equivalents, and restricted cash
26,858 (46,946)
Effect of exchange rate changes on cash
329 (45)
Cash, cash equivalents, and restricted cash at beginning of year
117,128 139,987 
Cash, cash equivalents, and restricted cash at end of period
$144,315 $92,996 
Supplemental disclosures of non-cash investing and financing information
Earn-out liability recognized upon the re-allocation $ $896 
Reclassification of remaining contingent Earn-out liability upon triggering events$ $242,430 
Property, equipment and capitalized software and development costs included in accounts payable and accrued expenses and other liabilities 270 
Common stock issued in connection with acquisition $3,921 $19,118 
Unpaid cash consideration in connection with acquisition $2,434 $4,348 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Matterport, Inc., together with its subsidiaries (“Matterport” or the “Company”), is leading the digitization and datafication of the built world. Matterport’s pioneering technology has set the standard for digitizing, accessing and managing buildings, spaces and places online. Matterport’s platform comprising innovative software, spatial data-driven data science, and 3D capture technology has broken down the barriers that have kept the largest asset class in the world, buildings and physical spaces, offline and underutilized for so long. The Company was incorporated in the state of Delaware in 2011. The Company is headquartered at Sunnyvale, California.
On July 22, 2021 (the “Closing Date”), the Company consummated the merger (collectively with the other transactions described in the Merger Agreement, the “Merger”, “Closing”, or “Transactions”) pursuant to an Agreement and Plan of Merger, dated February 7, 2021 (the “Merger Agreement”), by and among the Company (formerly known as Gores Holdings VI, Inc.), the pre-Merger Matterport, Inc. (now known as Matterport Operating, LLC) (“Legacy Matterport”), Maker Merger Sub, Inc. (“First Merger Sub”), a direct, wholly owned subsidiary of the Company, and Maker Merger Sub II, LLC (“Second Merger Sub”), a direct, wholly owned subsidiary of the Company, pursuant to which First Merger Sub merged with and into Legacy Matterport, with Legacy Matterport continuing as the surviving corporation (the “First Merger”), and immediately following the First Merger and as part of the same overall transaction as the First Merger, Legacy Matterport merged with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity as a wholly owned subsidiary of the Company, under the new name “Matterport Operating, LLC”. Upon the closing of the Merger, we changed our name to Matterport, Inc.
Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Merger, “Gores” refers to the Company prior to the Merger and “Legacy Matterport” refers to Matterport, Inc. prior to the Merger.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Note 2 – Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023. There have been no significant changes to these policies during the three months ended March 31, 2023.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC, regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in the Company’s 2022 Form 10-K for the fiscal year ended December 31, 2022, which provides a more complete discussion of the Company’s accounting policies and certain other information.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2023, and its results of operations for the three months ended March 31, 2023 and 2022, and cash flows for the three months ended March 31, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements and accompanying notes. Significant estimates include assumptions related to the fair value of common stock before the Merger and other assumptions used to measure stock-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of identified intangibles, goodwill impairment, valuation of deferred tax assets, the estimate of net realizable value of inventory, allowance for doubtful accounts, the fair value of warrants liability, and loss contingencies, and the determination of stand-alone selling price of various performance obligations. As a result, many of the Company’s estimates and assumptions required increased judgment and these estimates may change materially in future periods.
Management evaluates its estimates and assumptions on an ongoing basis using historical experience and various other factors, including the current economic environment, which management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company adjusts such estimates and assumptions when dictated by facts and circumstances. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the condensed consolidated financial statements in future periods. Actual results may differ materially from those estimates.
Segment Information
The Company has a single operating segment and reportable segment. The Company’s chief operating decision-maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Refer to Note 3 for information regarding the Company’s revenue by geography. Substantially all of the Company’s long-lived assets are located in the United States.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and accounts receivable. The Company maintains its cash balances in accounts held by major banks and financial institutions located in the United States. Such bank deposits from time to time may be exposed to credit risk in excess of the Federal Deposit Insurance Corporation insurance limit, and the Company considers such risk to be minimal.
We invest only in high-quality credit instruments and maintain our cash and cash equivalents and available-for-sale investments in fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits.
The Company’s accounts receivable is derived from customers located both inside and outside the United States. The Company mitigates its credit risks by performing ongoing credit evaluations of the financial condition of its customers and requires advance payment from customers in certain circumstances. The Company generally does not require collateral from its customers.
No customer accounted for more than 10% of the Company’s total accounts receivable at March 31, 2023 and December 31, 2022. No customer accounted for more than 10% of the Company’s total revenue for the three months ended March 31, 2023 and 2022.

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Recently Adopted Accounting Standards
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contract with Customers, as if it had originated the contracts. The Company adopted this standard effective January 1, 2023, which did not have a material impact on the Company’s condensed consolidated financial statements.
3. REVENUE
Disaggregated RevenueThe following table shows the revenue by geography for the three months ended March 31, 2023 and 2022, respectively (in thousands):
Three Months Ended March 31,
20232022
Revenue:
United States
$24,226 $16,237 
International
13,768 12,273 
Total revenue
$37,994 $28,510 
No country other than the United States accounted for more than 10% of the Company’s revenue for the three months ended March 31, 2023 and 2022, respectively. The geographical revenue information is determined by the ship-to address of the products and the billing address of the customers of the services.
The following table shows over time versus point-in-time revenue for the three months ended March 31, 2023 and 2022, respectively (in thousands):
Three Months Ended March 31,
20232022
Over time revenue
$28,551 $21,114 
Point-in-time revenue
9,443 7,396 
Total
$37,994 $28,510 
Contract Asset and Liability Balances—Contract assets consist of unbilled accounts receivable and are recorded when revenue is recognized in advance of scheduled billings. The timing of revenue recognition differs from the timing of invoicing to customers and this timing difference results in contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheets. The contract balances as of March 31, 2023 and December 31, 2022 were as follows (in thousands):
March 31,
2023
December 31,
2022
Accounts receivable, net
$19,965 $19,037 
Unbilled accounts receivable
$1,852 $1,807 
Deferred revenue
$19,773 $17,932 
During the three months ended March 31, 2023 and 2022, the Company recognized revenue of $5.9 million and $4.4 million that was included in the deferred revenue balance at the beginning of the fiscal year, respectively. Contracted but unsatisfied performance obligations were $49.7 million at the end of March 31, 2023 and consisted of deferred revenue and backlog. The contracted but unsatisfied or partially unsatisfied performance obligations expected to be recognized over the next 12 months at the end of March 31, 2023 were $34.6 million, and the remaining thereafter.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. ACQUISITION

On January 5, 2022 (the “Enview Acquisition Date”), the Company completed the acquisition (the “Enview Acquisition”) of Enview, Inc. (“Enview”), a privately-held company engaged in the development of artificial intelligence algorithms to identify natural and man-made features in geospatial data using various techniques. The total purchase consideration for the Enview Acquisition was $64.3 million, including an insignificant working capital adjustment finalized during the measurement period that reduced the purchase price for Enview. The total purchase consideration consisted of the following (in thousands):

Amount
Cash(1)
$36,897 
Common stock (1.5 million shares)(2)
23,161 
Unpaid Consideration (3)
4,266 
Total $64,324 
(1) The Company paid $1.9 million and $35.0 million in cash consideration during the three months period ended March 31, 2023 and 2022, respectively.
(2) On the Enview Acquisition Date, the Company's closing stock price was $15.73 per share. The Company issued 0.3 million shares and 1.2 million shares during the three months period ended March 31, 2023 and 2022, respectively.
(3) The Company recorded a liability for unpaid cash of $2.4 million and stock consideration of $1.9 million that will be paid due to the passage of time on the second anniversary of the Enview Acquisition Date in accordance with the merger agreement. The liabilities are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet.

The Company has accounted for the Enview Acquisition as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on the fair values at the Enview Acquisition Date. The purchase price allocation includes adjustments for additional information that existed as of the Acquisition Date but at that time was unknown and became known during the measurement period of 12 months from the Acquisition Date. As of March 31, 2023, the Company has completed the purchase price allocation of the Enview Acquisition. The following table summarizes the allocation of purchase consideration on the Enview Acquisition Date, inclusive of measurement period adjustments (in thousands):

Amount
Goodwill $53,990 
Identified intangible assets5,400 
Net assets acquired 4,934 
Total $64,324 

Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Enview technology with Matterport’s products and services. The goodwill is not deductible for income tax purposes.

The following table summarizes the estimated fair values and estimated useful lives of the components of identifiable intangible assets acquired as of the Enview Acquisition Date (in thousands, except years):

Fair Value Estimated Useful Life
Developed technology $5,400 5 years

Developed technology relates to existing Enview technology of its artificial intelligence algorithms to identify natural and man-made features in geospatial data. The economic useful life was determined based on the technology cycle related to the developed technology of existing services, as well as the cash flows anticipated over the forecasted periods.

The fair value of developed technology was estimated using the multi-period excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. Significant assumptions used in the discounted cash flow analysis for the developed technology were the revenue growth rates, EBITDA margins, obsolescence technology factor, and discount rate.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Pro forma results of operations have not been presented because the effects of the Enview Acquisition were not material to the Company’s condensed consolidated statements of operations.
Acquisition-related transaction costs are expensed as incurred and are recorded in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations. The Company incurred $0.5 million of acquisition-related costs for the three months ended March 31, 2022. There were no acquisition-related costs incurred for the three months ended March 31, 2023.

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
5. GOODWILL AND INTANGIBLE ASSETS
Goodwill—As of December 31, 2022 and March 31, 2023, goodwill was $69.6 million. The Company did not recognize any impairment losses on goodwill during the three months ended March 31, 2023 and 2022, respectively.
Purchased Intangible AssetsThe following table presents details of the Company’s purchased intangible assets as of March 31, 2023 and December 31, 2022 (in thousands).

March 31, 2023December 31, 2022
Gross Carrying AmountAccumulated Amortization Net Carrying Amount Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Intangible assets subject to amortization:
Developed technology $5,400 $(1,335)$4,065 $5,400 $(1,065)$4,335 
Customer relationships 6,900 (518)6,382 6,900 (345)6,555 
Total $12,300 $(1,853)$10,447 $12,300 $(1,410)$10,890 
The Company recognized amortization expense of $0.4 million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively. The Company did not recognize any impairment losses on intangible assets or other long-lived assets during the three months ended March 31, 2023 and 2022, respectively.
The following table summarizes estimated future amortization expense for the Company’s intangible assets as of March 31, 2023 (in thousands):

Amount
Remaining 2023
$1,327 
20241,770 
20251,770 
20261,770 
2027705 
2028 and thereafter
3,105 
Total future amortization expense$10,447 


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6. BALANCE SHEET COMPONENTS
Allowance for Doubtful AccountsAllowance for doubtful accounts as of March 31, 2023 and 2022 and the rollforward for three months ended March 31, 2023 and 2022 were as follows (in thousands):
Three Months Ended March 31,
20232022
Balance—beginning of period
$(1,212)$(291)
Increase in reserves
(289)(191)
Write-offs
206  
Balance—end of period
$(1,295)$(482)
Inventories—Inventories as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Finished goods
$731 $2,112 
Work in process
4,628 3,477 
Purchased parts and raw materials
5,643 5,472 
Total inventories
$11,002 $11,061 
Property and Equipment, NetProperty and equipment as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Machinery and equipment
$4,035 $3,948 
Furniture and fixtures
355 355 
Leasehold improvements
734 734 
Capitalized software and development costs
60,665 55,662 
Total property and equipment
65,789 60,699 
Accumulated depreciation and amortization
(34,088)(30,140)
Total property and equipment, net
$31,701 $30,559 
Depreciation and amortization expenses of property and equipment were $3.9 million and $2.2 million for the three months ended March 31, 2023 and 2022, respectively.
Additions to capitalized software and development costs, inclusive of stock-based compensation in the three months ended March 31, 2023 and 2022, was $5.0 million and $9.4 million, respectively. These are recorded as part of property and equipment, net on the condensed consolidated balance sheets.

Amortization expense was $3.8 million and $2.1 million for three months ended March 31, 2023 and 2022, respectively, of which $3.5 million and $1.8 million was recorded to costs of revenue related to subscription and $0.3 million and $0.3 million to selling, general and administrative in the condensed consolidated statements of operations, respectively.

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities as of March 31, 2023 and December 31, 2022, consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Accrued compensation
$6,421 $5,609 
Tax payable
1,412 1,669 
ESPP contribution1,122 341 
Current unpaid acquisition consideration4,266 6,109 
Short-term operating lease liabilities1,287 1,267 
Accrued loss on firm inventory purchase commitments1,296 3,991 
Other current liabilities
6,096 4,930 
Total accrued expenses and other current liabilities
$21,900 $23,916 
7. FAIR VALUE MEASUREMENTS
We categorize assets and liabilities recorded or disclosed at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:
Level 1—Inputs are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The inputs require significant management judgment or estimation.
The Company’s financial assets and liabilities that were measured at fair value on a recurring basis were as follows (in thousands):

March 31, 2023
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$71,343 $ $ $71,343 
Total cash equivalents$71,343 $ $ $71,343 
Short-term investments:
U.S. government and agency securities$153,490 $ $ $153,490 
Non-U.S. government and agency securities 19,208  19,208 
Corporate debt securities 95,927  95,927 
Commercial paper 43,259  43,259 
Total short-term investments$153,490 $158,394 $ $311,884 
Total assets measured at fair value$224,833 $158,394 $ $383,227 
Financial Liabilities:
Private warrants liability$ $ $581 $581 
Total liabilities measured at fair value$ $ $581 $581 

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2022
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$51,557 $ $ $51,557 
Total cash equivalents$51,557 $ $ $51,557 
Short-term investments:
U.S. government and agency securities$181,714 $ $ $181,714 
Non-U.S. government and agency securities 24,946  24,946 
Corporate debt securities 114,113  114,113 
Commercial paper 35,042  35,042 
Total short-term investments$181,714 $174,101 $ $355,815 
Long-term investments:
Corporate debt securities$ $3,959 $ $3,959 
Total long-term investments$ $3,959 $ $3,959 
Total assets measured at fair value$233,271 $178,060 $ $411,331 
Financial Liabilities:
Private warrants liability$ $ $803 $803 
Total liabilities measured at fair value$ $ $803 $803 

Available-for-sale Debt Securities
The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023
Amortized CostUnrealized GainsUnrealized LossesFair Value
Investments:
U.S. government and agency securities$155,185 $ $(1,695)$153,490 
Non-U.S. government and agency securities19,311  (103)19,208 
Corporate debt securities96,863  (936)95,927 
Commercial paper43,284  (25)43,259 
Total available-for-sale investments$314,643 $ $(2,759)$311,884 
December 31, 2022
Amortized CostUnrealized GainsUnrealized LossesFair Value
Investments:
U.S. government and agency securities$185,371 $ $(3,657)$181,714 
Non-U.S. government and agency securities24,989  (44)24,945 
Corporate debt securities119,396  (1,324)118,072 
Commercial paper35,052  (9)35,043 
Total available-for-sale investments$364,808 $ $(5,034)$359,774 
As of March 31, 2023, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $0.4 million, which were related to $112.5 million of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were $2.4 million, which were related to $199.4 million of available-for-sale debt securities. As of December 31, 2022, the gross unrealized losses
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
that have been in a continuous unrealized loss position for less than 12 months were $0.2 million, which were related to $49.4 million of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were $4.8 million, which were related to $291.0 million of available-for-sale debt securities.
Unrealized losses related to these securities are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. We did not recognize any credit losses related to our available-for-sale debt securities during the three months ended March 31, 2023 and 2022.
The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of March 31, 2023, by contractual years-to-maturity (in thousands):
March 31, 2023
 Amortized CostFair Value
Due within one year
$314,643 $311,884 
Total
$314,643 $311,884 
8. COMMITMENTS AND CONTINGENCIES

Purchase Obligation—The Company has purchase obligations, which include agreements and issued purchase orders containing non-cancelable payment terms to purchase goods and services.