ALRM - Earnings call transcript Q3 2019 | Alarm.com Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Alarm.com Q3 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions]

I would now like to introduce host of today’s conference call Mr. of President Vice Trone, Investor Relations. David

begin. may You

David Trone

to Thank XXXX Quarter welcome you. afternoon everyone Good Alarm.com’s Earnings Third and Conference Call.

As is a being recorded. call reminder, this

and CFO. Joining and today from are Trundle, us Alarm.com Steve President Valenzuela, Steve CEO,

our in discussion for certain Before we reminder business, business performance the for which call XXXX, impact markets quick XXXX begin, investments for statements, liabilities, forward-looking timing the will platform, forward-looking or demand payments projected and certain enhancements anticipated during and full and listeners. include year to today continued market include growth the markets statements. our new our our to expand our a current of strategies, Management's opportunities of into to other in financial fourth anticipated our of quarter for offerings,

statements. differ in the from subsequent updated Commission and These continue, and based filed and report are on as currently These XX-Q, available and on Commission Risk materially uncertainties, our words in such with to forward-looking expect, to us. contained time, expectations estimate, including statements anticipate, Securities intended time intend, forward-looking similar recent from actual information of file statements. Factors are risks current to such Form forward-looking statements subject containing those most cause our our will, and statements with we results reports Statements are quarterly Exchange that Exchange other the to Securities section and the to believe, identify those beliefs could and on may, that contained

undertakes to subsequent by except the of only this during update events or conference these today's required statements Please speak reflect note that made to statements extent date Alarm.com and obligation these as circumstances, law. to no forward-looking call

the provides and of investors guidance. comparable the presentation understanding non-GAAP GAAP. to use not that measures provide Also considered trends, in or include for with in prepared call, believes financial company's to use the these be measures commentary performance isolation will note non-GAAP Management financial in additional non-GAAP of tool directly an meant that is financial management's measures financial non-GAAP during substitute this and the but accordance for information a as

results archived webcast is our conference This be will and metrics GAAP statement our of Investor also telephone between also we replay website. and have our webcast being non-GAAP on website The on press in available to be reported Relations financial for release, call be Relations earnings and available tables the is this found can posted call website. at of our Investor investors.alarm.com. Reconciliations which a will our

with turn way, So over these call now to I'd formalities to out the Steve of Trundle. like the

begin. You may

Steve Trundle

welcome everyone today. David, to Thanks, our and call joining

that are to up quarter pleased to million, our expectations. the SaaS solid exceeded $XX.X report We in grew revenue third another license year-over-year. XX.X% and quarter

third in Our $XX.X quarter was non-GAAP EBITDA adjusted million. the

goals days had together We've roadmap, home active In of number as team. to long-term course early a progress devices. several an the company introduced entire over our our and better September, smart of and solutions and gathered quarter the fall. we to product a against strategy, We review and connect

in management hosted recently a and provider OpenEye, applications. leading Washington software service of Partner the present our for to Annual acquisition number a of also We commercial priorities. for latest DC of partners our here R&D in Summit And provider announced October, video our products we late

XXXX. planning process we the I'll home for new on and focus OpenEye. products some initial acquisition thoughts launched on smart I'll call, of our by today's providing On close the

capacity. have of designs, presents lighting highly even also provide increased in Starting we lineup. offer with residential quality launched new variable two field increased view outdoor our conditions. pipeline, cameras, sleek compute onboard indoor that video cameras significantly our enhanced and product They and upgrade industrial picture Both substantially

in or their improves other advanced us cameras Wi-Fi we is we A supporting most video dependence IP to performance devices edge capabilities analytic deploying network. can the video their subscriber's deploy on and challenge support overall future. that gives more the plan environment an use computing and the to that common This with

antennas Our a efficient two new more cameras have that and connection. isotropic wireless create uniform

Gateway provides also faster We Gateway, subsequent support easier caused Alarm.com a device by Smart cameras. the launched recently Wi-Fi The and private to likelihood video the of reduces network changes and that and secure a dedicated instillations issues network. service These our Smart deploy associated unmanaged ongoing video our Wi-Fi to to as to of the our possible as examples Wi-Fi services. easy goal with minimize are make provider and it new partners inefficiencies subscribers networks for products to makes

remains also smart category opportunity and management an home important us. Energy for

monitoring technician they BuildingXX a new in proactively and home deploy During the automation new or a HVAC a of a connects Alarm.com quarter, with enabled and When access with HVAC set codes device single can service. system. diagnostic to support link and system remotely remote and parts, launched error an visit. the service business that the their With service by necessary occurs, innovative the a It's can monitoring, service rich directly providers called the troubled home to condition equipment, customers. training capabilities

that acquisition to contractors this relationships. recent Shifting leading business, our commercial unique commercial a focus home video OpenEye, our management BuildingXX company. solution, of want on can I very HVAC new opportunity transform their to With leverage to software offers a technology smart customer

over a that have near OpenEye approximately of at in compliments than through service different XXX,XXX employees network. They go-to-market XXX provider cameras servicing Lake at headquarters sites has licensed Washington partners channel Spokane. more own their our Liberty XX,XXX

about thinking we're how explain this opportunity. me Let

opportunity overall and its our national requirements property commercial and and address national partners expands of large enterprise Alarm.com customer solutions Their retail banks, includes OpenEye customers commercial OpenEye the base platform. the management chains, in for compliments business unique and accounts. universities, market the companies. commercial First,

proven a where a often station require of customer a sales this from user than mobile video in OpenEye guard site rather point capabilities other integration OpenEye is refined unique like set have of focused located segment. unique cameras system setting app. capabilities a market advanced needs on These applications The workstation large addressing they forensic developed software of search is for and and and on or secure mapping. is these video viewed a number on

Second, a days increasingly class enabled cloud that referred VSaaS. as significant transformation. is OpenEye market as to shifting early surveillance the include to very deployments of an Enterprise the solution serves service are video a in or from on-premise architectures video

a provider our can partners. technology we recurring and strong, propositions is new transformation lead creating and model. believe for recurring opportunities where growth We users like durable value emerging OpenEye markets by build We business revenue help that service revenue for generating

leverage an further technologies created opportunity by see some channel. of to OpenEye the in Alarm.com we the Third,

As of over even heavily in done value an of work from advanced couple and and domain example, software much each more video we that in stack analytics will have years OpenEye us deployment. drive we the last to allow the have invested enhance the

see near and Lastly, further term, and will the team to OpenEye scale OpenEye partners. foremost to we prospective focus like on program. of continue an continuing first In customers and opportunity to exceed the their current and expectations our R&D the

the like analytics through I technology a commercial space video new to we OpenEye the differentiation the build integrations to up value see integration assets opportunities we mentioned. and just that build of in number our As team, with accelerate existing

platform the strengthen our We to video Alarm.com platform also offering. to plan the to of OpenEye introduce elements

continue scale the team brings centric and that business the team attitude kind management seasoned the like. experience and of entrepreneurial to operations manner grow Alarm.com. the to we want to to OpenEye disciplined OpenEye’s welcome in customer I entire

share Valenzuela, some Steve Before I'll things strategic plan. current over I to turn on our thoughts

applications and over deliver opportunity solution and the have position next growth expand We build leadership to markets in to continue an and decade. define predominant sets existing positions to new ones the in durable solid our IoT to

current at need core enabled security our of accelerate capacity. opportunities can markets, broader the pursue in look areas. we number we our with we see As I both we believe a level of and than market to property investments more intelligent IoT our

beginning are make plans do We that. to to

OpenEye smart initiatives. further good the growth programs of team our of be are market business but a with platform to services. these opportunities suite organically gives The is teams to portfolio established acquisition of an Similarly, us scaled we capitalization. the and recent of can business expanding and accelerate accelerate better development our across Our

internationally we are opportunities engineering significant see our I resources. year for as continued pipeline next the additional progress year a and of necessitates on tracking. field staff international Our team based

PointCentral Our channel-oriented multi-family more its markets expanding to model. business dwelling include business developing is is units a and

the EnergyHub of has model proven and is its up. business scaling in process

analytics the segments. and to market Our being in development, investments continued paid leader our an solutions well of across opportunity we video a off. video have in number intelligent have be With received the products market by are

well. American security service existing the Our North channel performing providers are in

deliver that more planning can platform We produced R&D And most in program invest in our to continue our half expanding year. we're manner commercialize so efficient customers second they exciting possible. some to more new of the technologies next in lastly, services has to the

and been into of are move our longer set back continue quarter wide we on likely growth opportunities. business we term I our our you that for can that fourth our right whether amount updating look pursue to see XXXX. we all have forward cultivate to strategies we I to I've sufficiently fully when we more to opportunities after of expand our present investments the that should plan so the more business business. our investing the the considering increase back concluded into

To and pleased work team third continued results. in service conclude, I hard our for investors I'm business. for partners their with quarter want our to our our our their provider thank and trust

with Steve? And over Valenzuela. Steve me things that, let turn to

Steve Valenzuela

with of quarter full review the provide fourth and and Steve. our for XXXX. a Thanks year begin financial outlook of third the then for raised will guidance results I quarter our XXXX

revenue questions, year for $XX.X includes grew quarter, QX million from XXXX. Connect in $XX.X Before third opening quarter the compared for the to to third license quarter approximately XX.X% software same for of last call and license the $XX.X revenue million. million SaaS the This

rate $XX over Hardware up to quarter of renewal XXXX. The hardware SaaS video and other the revenue an XX.X% increase license due high primarily XX% revenue revenue quarter was XX% cameras. sales was the range XX%. historical in to Our our at over QX third increase of in the was end in and million, in third

up for to the approximately quarter XX.X%, same SaaS in operations to improved the up achieve last revenue was have due and third efficiencies for the able quarter mainly XX.X% over points $XXX.X million, third we margin prior quarter XX Total network from our license basis quarter, been was centers. gross the year.

XX.X% gross better XX.X%. product margin XX.X% Total same due for was primarily XX.X% the compared mix. margin gross to Hardware year, third the quarter, slightly to gross quarter of third than XXXX for last for quarter, for was QX margin the

expenses expenses, the XXXX. R&D $XX.X million third the were to quarter operating compared quarter to third million, Turning in $XX.X in of

opportunities the XXX from markets. support see to R&D year. the employees third R&D, quarter in in in ended investments the quarter our same planned in we employees with our continued we As We last up XXX

to increased XX.X% of million in employees and to quarter in total Sales headcount to of same X,XXX million were last end of XX.X% XXXX. XXX or the at QX the Total year. employees $XX.X compared $XX.X marketing quarter revenue third compared expenses revenue the or

million for settlement. the litigation expense a Our in were third the G&A G&A G&A charge in last $XX.X same settlement. TCPA million, in quarter million $XX included million compared for course XXXX, expense $XX includes third million the quarter $XX.X compared which to QX the million, the of year's expenses of TCPA $XX.X non-ordinary included Last for quarter expense to a $X provision year.

$X.X litigation our adjusted performance. expense in non-GAAP are expenses the in course measurement part from excluded of are acquisition-related our and G&A financial includes also our acquisition measures quarter expenses. third and of million Non-ordinary

to for net compared third million. income was net in Non-GAAP million $XX.X of the of quarter, the quarter Non-GAAP adjusted to third the $XX.X loss increased was in in million million, $X.X quarter, to quarter third compared GAAP the million In $XX.X XXXX. adjusted EBITDA income XXXX. a third QX $XX.X

$X million million the and Turning and of with TCPA initial payment to we for ended QX our $XX cash settlement quarter, quarter XXXX. we In million sheet, in balance of $XXX.X payment final third made the with equivalents. the our third of cash the

We agreement. now satisfied have the settlement

XXXX. flow and were flows was third our cash In to million from million quarter, the flow of operations of for payment cash compared by for the the cash quarter $XX.X final settlement. million, free $XX TCPA Including $X payment, our third reduced this

Our negative free same million year. $X compared $XX.X the for cash last quarter million, to was flow

Alarm.com $X.X will segment. plus XXXX quarter, subject In OpenEye OpenEye in $XX our acquired on in the fourth million cash, additional $XX.X with of their conditions XX% performance. potential of be included for we payment an in up to holdbacks, in to financial XXXX, million post-closing based million

turn to for and year let's Now of guidance the the for full XXXX. quarter fourth

$XX.X fourth for to $XX.X SaaS million of the We million quarter. revenue expect and license

the million SaaS $XXX.X to license $XXX.X from between million revenue to up $XXX.X and be full to year, of million, prior expect For we guidance our $XXX.X million.

our We million. from for guidance $XXX.X to $XXX.X million. $XXX.X for our for XXXX guidance of includes guidance are million prior and million revenue to This to of hardware million, raising $XXX other million revenue increased to our total $XXX.X $XXX up

adjusted And to $XXX million share. be million. per non-GAAP for between $X.XX net million or $XXX.X to expect EBITDA $X.XX We to income to XXXX $XX diluted non-GAAP million $XX.X to be

at We is weighted expect based estimate for XX% average our EPS diluted remain on shares of outstanding. non-GAAP $XX.X tax rate XXXX. to an million

million. compensation year full expect We to XXXX $XX stock-based of $XX million expense

process. thoughts of to approximately million in time, At revenue revenue provide Finally, from other early million $XX acquisition some hardware of we our than our million, be $XXX included current anticipating I consensus. total revenue in Mainly higher currently higher are expected on as planning to to attributable are we P&L. OpenEye $XXX our and this XXXX, will in

plan in currently our on line believe include on-premises will solution as that mostly today and We OpenEye’s software item material. P&L, hardware. their revenue revenue the other OpenEye’s and hardware our XXXX SaaS to be We not of in majority is revenue

that in a solution of will more increase we their future as However, contribution years their be will as SaaS delivered offering. expect SaaS

guidance we results fourth We XXXX will our provide report and XXXX February for initial next our year. plan in quarter when

to And working expand to welcome the we conclusion, commercial space. growth team forward together we Alarm.com. the In look to in excited our opportunities OpenEye to are

strong We growth XXXX in number a on are out mentioned on of and focused a that to build Steve closing the investing opportunities for future.

us call please on call with for that, you And operator, our the for joining today. Thank open Q&A.

Operator

first from Our Tindle Instructions] Adam Raymond comes James. with [Operator question

Madison Suhr

for been to in taking Adam Hey, on you've and question. thanks I adding SaaS such expanding for my Chile presence also markets. is your Madison good as and afternoon. This know internationally areas and Brazil existing

and has As relative talk you I share progressed us. hoping has recently, early that Thanks. could learnings any this expectations how your was expanded this can about you with to

Steve Trundle

line point. the this would that and been few here Steve Madison, say bumps and had I speaking. Trundle a in with internationally we've few but has this expectations is a made progress Sure. positives We've our generally at I there, the the the about at way any XX it's the a to excited next months faster rate up it's more at probably business. shaping for – growing, the growing rest XX we're than it's think in past than of period

we're closing We're – the really on market. set get to scale small, to right the – I gap at on think on the all the international gap things have deploy closing little in the you of that

pleased like we're feel expected So in where begin year. we general, tracking the and about to it its

Madison Suhr

a on then looks just a some revenue, helpful? it the conservatism hardware know guidance? thanks. I Okay, of the helpful. And just seen of basis. would we've implies on of That's but there's Thanks. Can meaningful drivers what like pretty decline talk typical hardware guidance outside it's there, little sequential a there seasonality of revenue just Anything to kind be you above obviously historically. bit on

Steve Valenzuela

QX Valenzuela. the Steve is quarter hardware. weakest This seasonably for Typically Sure. is

is If other at you lowest quarter in and the for of past to things. look a typically the on contribution tied focus that's the holiday number people typically hardware year. season the And QX

quarter hardware. of the weaker typically a And so just it's seasonably year for

Operator

you. Thank

America. comes Our with Nikolay next question Bank from Beliov of

Nikolay Beliov

at And for helpful with my for next business And for business, you is up, us next XX to key the the start the know months. months, dealers incremental contributors at there the XXXX. the doing be by look still a taking thanks signed international, plan maybe think. Hi, commercial, way for questions. you're subscription you rank size you the referring incremental go I dealers, That revenue guys to the drivers. new expansion revenues existing over major XX I'm the to for your just I down will When look

Steve Valenzuela

an breakdown you if the think first of some how some know of domains, each those I but you don't I got can you Sure. can And absolutely give it. parts I about give thoughts on by discreet right. we

we the certain business So core North at that's growing have clip. American a

the package percentage still of us in is America North this the big that bit in there helping. drivers the piece off a residential the and success year growth has then to couple of – faster been increasingly a growing really is The also in with had offering. North America, is really recent of drivers a And commercial play than for piece especially internationally. the growing becoming base One relevant. little are but terms the But there we've small addition analytics of video even

I it So what's growing moving next international than that domain and increasing continue about in bit even into nice have the of feel is And with to a our will our space. acquisition moving steady food up be of of probably I at focus focus business clip year of a the we grow enterprise at year. driver And accelerate more I chain and obviously, of the PointCentral year think then state, The will is like a we're sort to year the the team a there. are That couple will OpenEye, where moment. would called lot think segments. next be further and in a a – new past. a growth itself next as sort any driver things the ready

they relevant is larger unit the The network. guess, they EnergyHub device relevant scale, makers. more segment are that are utilities the the where EnergyHub and I the The they – become, on become, other biggest more the to multi-dwelling all the driver one I more forgot from the being benefits

growth also So is us. driver a that for

And the bottom we segments picture kind we the at. are of that that of are we do really modeling the and focused some up a on of and lot components do key top-down analysis those then look segments those the So on. we're

Nikolay Beliov

is margins talked EBITDA clear sense? XXXX EBITDA we in Steve, margins about, for model EBITDA you margins, investments. second we should us light my question flat year directional And down. about model margins next or you give I some mean, of the should Can

Steve Trundle

Yes, directionally.

year. about Nikolay I the investments plan this where flow that definitely to so come the incremental – think about solid contribution generate thinking level about and as contribution. we I cover about Good happy I businesses solid will basically today. the about some And And start I'm EBITDA next I would growth, today. contribution accelerating that thinking think thinking from growth with to incremental is it, at are by next I that plowing that the into it. we sort we're If I'm thinking way some wanted is incremental we think our of I'm I'm So cash quarter of do back year start about I basically think way grow the and

Nikolay Beliov

you. Thank

Operator

question comes Suisse. next Our Kevin with Credit from McVeigh

Kevin McVeigh

how sense Steve, then OpenEye ultimately Great. the Hey, any of impacted the and XXXX? rest much of quarter

Steve Trundle

– This because… reported here. on impact may the correct we is Steve just this Had results Steve, is me Trundle. you no QX on So

Steve Valenzuela

Yes, it toward we This closed the end Steve Valenzuela. October. is of

impact we've sort of a how QX, there it couple at we I QX terms only think So been of in didn't of weeks. in then And all. at looked for

on on other much. very the – in million look but sprinkled our model we as were side at QX hardware maybe and modest dollars a impact not couple modest So of very,

we of our much the line picture model look. about kind then some the OpenEye for as into not we said, meaningful hardware Steve XXXX think did from on I really initial initial XXXX, there. So when other in and And revenue think

Kevin McVeigh

would that XXXX? And think in as impact, of reinvested would Got then would growth be there, well kind obviously you kind or EBITDA the that of be it. of

Steve Valenzuela

upfront. and Yes. been that because Good run cash. fast run some a of on has selling question. software it's to drives opposed you sort is – business to a conserve that get focus as selling And licenses your in Currently cash well ways

at of moment. So break-even nice a it's the business sort

an accelerate probably under shift growth the we little better. way cost of way capitalize and end for the the to we more Try think to of works. and SaaS by prefer model a upfront model business is that the to say I that's drives about would to we a it's the down try reflective the into think providers accelerate economic and/or capitalized the shifting the some customer it would software service costs Alarm.com

EBITDA, is, healthy impact be business of I some things the but So we're to no accelerate about, into we're be investment profits likely that and would of talked would the the one be plowing. areas where expect a headwind while kind into not good it’s where would the of to the incremental not way it looking would at type to be business, business one I when only back massive could be a

Kevin McVeigh

And side? the this scaling Got how the within to out, that how just and on partnership the of it. about context we in then has the earlier STANLEY it year finish should commercial been think

Steve Valenzuela

Yes, know don't initiatives two question. that matched I yet. those good just we've sort of

think there's of are there, OpenEye that in XXX And integrators partners. I system their who about are the overlap group. providers existing little there case very in and service

thing great or whether in partnerships. very but business is overlap honestly model remember I the to one actual us, can't the So little And is not. STANLEY established similar

is the all those of a on we relevant to and what is feel they're where like end providers, high of inclusive stack be a particularly our to We some of hundred we about would our But this one site. product install the cameras given feel the them. couple I think And needing we're identified adding space. of like say will as service with to you've cases customer OpenEye on that in

may but just where relevant fit be and there that's So I a connected there, we've it's don't think yet. that particularly

Kevin McVeigh

so Great. Thanks much.

Steve Valenzuela

Thanks.

Operator

Analysis. First comes Gearhart Our David next question from with

David Gearhart

for maybe to the directionally the other back questions. to margin Thank hardware mix a on briefly, I year? in taking OpenEye lift go we Should as we a side, and afternoon. between and good hardware come wanted license. QX gross next expect into just you Hi, my and forward

Steve Trundle

want you question. to that take one? good Steve, Yes, do

Steve Valenzuela

than for margins. margins hardware the typical gross think OpenEye I higher for gross our are Yes,

a contributing bit Alarm.com. gross be little OpenEye to to XX% lift So of see typical I what's margin there be basically for pretty is revenue hardware what revenue. a going in on we relative software, overall or the of high what But is margins think it's there around we're would which from taking

the contribution margins other hardware their of item would us meaningful of the So on bit gross and such line it on provide software. tailwind because a actually a a component is

Steve Trundle

right. That's

David Gearhart

I Got maintaining it. then you're Okay. to on And outlook? tariff Steve in of quarters, on more And issue front couple positive you talked or ask, that's V, about the of front. you're your last would what are the directionally you wanted the been and guidance terms your seeing on current that in expectations tariff say

Steve Valenzuela

certainly we've certainly we We absorbing as of costs some some have to incurring past, in pass related been We've to We've on. able talked been about that those. been tariffs. of have, the

But it still have we just a we're careful. out, don’t would tariff, come cautious tariffs. we we I tweet view so know be And when – take say, to next cautious comes on we're going when to so to the being is

Steve Trundle

I may incremental willing be expected would materially right to out of of absorb but add probably sort amount have without we be, providers it demand. to and we not costs. sort these because think incurring what that's figured that the the are and some should customer absorb does service a the the event maybe affected altering of we been quite hasn't right amount little there of And costs that our color demand. which We're it is, I could those material costs, that seem additional big though,

still were we ago. the forward they're relevant them three, hasn't big potentially it think six going while fearful look months of So, to been I event really maybe and that we away,

David Gearhart

the litigation Can litigation next you. just us XXXX? should Thank me, year on quarter last roughly dollars model sense for for That's then And you Okay. give sequentially. million, absolute the from we expense, it for any should expect, we what flat down of $X in me. for

Steve Valenzuela

if exclude a hard to really litigation QX compared $X you as for was it's down million expense the said $X TCPA to XXXX settlement. QX you million it Yes, predict

level when So at around the per concur. it does $X kind of around to $X upon quarter million a million events bump depending

litigation would including of TCPA $XX So it's million I settlement. say hard if higher the look come predict the to always you litigation case. around expense when level to at XXXX, But not in matters was the

In XXXX, it was million. million. $XX $X it was then around And XXXX, in

So with, cases million $XX million, I caveat be around going incurred. range it's the the costs historical to forward, to the that's but will modeling very what predict It's to hard a forward. will you're around come when think again, predict if $XX hard

David Gearhart

Got it. Thank you.

Steve Trundle

Sure.

Operator

with comes next Darren Roth Our question Capital. from Aftahi

Darren Aftahi

Hey guys, I for my couple questions. may. A if thanks taking

I for Steve Trundle. First, guess

right strategically investments, why you of You talk kind kind mentioned? in to is business about of reinvest the of now the time areas of all these

Steve Trundle

tipped in of a Yes, water I the think number our it's, because in domains. we have toes

I think, one commercial, I international. segment. HVAC same being one being the can say thing about the

we point but delicately with being I have, few worthy additional it's of fully feel efforts I filled. kind think drive hub that allocation we playing and that show And have committing, for the will been you that do for a worthy these a and a are and energy think wait of of matter, in basically so an to some cases results business So, that positive you confident that more now you of where at we number capital scale. we're not

So that's one thing.

many The feel to cash our us organic gotten like with healthy say of sort that Corp initiatives Dev with activities at that to of allows leaning I production would of don't to Dev be so we've is, level a I have second we're we capital I want are great that the allocation. Corp point growth entirely driving when worthy to forward and also go

in to to operate a of really is of now We of this for And the is next felt terms we're production months to way. and the of year mix of tomorrow time we're point think get think thought I at we'll have I to, years next business us a I cash three, saying four number go terms therefore, about like not So, But couple think efforts. good out good a the... details in points of by then how time nice going of these in I begin to a with year. the positive through still we're into of now planning

Steve Valenzuela

we've would good very built balance I that, to And add a sheet.

about million, We about XXXX, I you have year, And strong guide – of cash generate look over very a probably is EBITDA the amount – at year, TCPA Steve amount strong good million to if is last which the about cash as million This generation. good think of the you for we're if flows. talked of is I $XX $XXX $XXX had again, around is a payments, flow, EBITDA. cash exclude going over which

we've we're where think being the cash really the of and with growth is to with commercial, generation good all there for investment ready that yield video business all I the coming sheet, are good and with flow so international, those PointCentral So, of with got the balance analytics, the the for think we will given EnergyHub future. at opportunities point opportunity forefront

Darren Aftahi

helpful. if That's Great. A couple I may. more

provider your do How going be together, but commercial do well talked the [indiscernible] I about with think service a thousand past it's of OpenEye, Just integration about how I over XXXX, when base? your we two be in think you've the type your provider think like we it'd into about you service a base platforms integrate think vis-à-vis strategy? commercial, on lot. core these and

Steve Trundle

Yes.

solution offering easy of to that that OpenEye the OpenEye for will service become in them. versa. the to platform relevant integrations various vice back a by We'll think providers. of that become service OpenEye efficiently parts markets be to and year a some with set providing of We'll as do next are enable folks and who we will our path into make providers I OpenEye those as for So, service possible certified early part

So begin a we'll couple things.

that is terms in fairly the initially after the some can integrations work of low not But simple on we hanging we'll are fruit and right the nice There get there's video on integrations then more now. thing ton overlap go to a sophisticated piece. like things analytics of so probably

of we thinking about that it. business sort we I talked good that's to I the think where business there model. we down OpenEye on how trajectory change maybe second to same ago the a to of would interested that driving cause own assuming will they're the upfront solution the see bit think the than set. adding And with costs and enable other be what quarter or some of SaaS in and its interfering about The we're we avoid some quarter, of I by moment is time things is doing shifting kind to on value the want offering a it providers where it more discussed that by first their a service

Darren Aftahi

other the in And Thank SaaS then helpful. revenue just That's quarter? the what was you. lastly,

Steve Valenzuela

was XX% It other segment. about the million $X for for SaaS, year-over-year up other

Darren Aftahi

guys. you Thank Great.

Steve Trundle

Sure.

Operator

Our you Maxim next comes question from Nehal with Group. Chokshi

Nehal Chokshi

Yes, thanks.

this So I pretty OpenEye is exciting, think. acquisition a

was more competitive this on And so a this a first, process? lot questions

Steve Trundle

I'm sorry, what?

Steve Valenzuela

a competitive Was it process?

Steve Trundle

had A competitive that a retained what a that is say they had they process? banking Yes, few options. relationship retained, I would was exploring

in think I sort were the, the were consider that situation. invited terms of one only a of we the was to strategic, we

so. yes, a It wasn't, big sourced. yes, but it action So was

Nehal Chokshi

biggest That's And consider OpenEye’s who Understood. competitor helpful. today? would then you

Steve Trundle

players There I naming are cameras allow monitor included. to single lot of software and of a MDR any deliver hundreds apparatus cloud onsite that you really of and folks set of fairly a who but without one to established MDRs traditional set normally want a sit avoid

cloud allow through OpenEye the you oriented is differentiation So manage deployment entire cloud. the and the of to piece already provider is that's a really big they

resources, to you want through that you If cloud. the share do

as So implemented it's already hybrid cloud/on a model. premise

benefit players like of four OpenEye. drives premise that startups then space. flow company more that's an traditional traditional a are the self pricing cash of primarily three And to a handful in But gravitated of are there that They've through because large are there funded. or scheme on the

a is on traction the leader entirely OpenEye driving the than and list are probably have of others that cloud couple there would are think But probably them. say destructor of architectures. more they'd any I driven I

Nehal Chokshi

go place Are established have players of guys recently and those that Chinese restricted put been and take can disruption Right. the advantage some of? any be creating vendors that a list on you maybe

Steve Trundle

associated over means think have around to XX what's you years they I that partner you open, cameras to support eight with four – that on offer, have with that want run that's or number XX They a additional any they type oriented, large is installed be And that three to or of XX, driven them. so liabilities the OpenEye proprietary in that Well, software. want when who may there. to location some site, are support opportunity not fairly the told a they've while those dynamic work you the can the replace that cameras, you wide different including of last partners commercial is which OpenEye creates cameras to any – also they of that of to don't range a be all company the and of need they open having, go who probably list

was another element opportunity. attractive that this So, of

Nehal Chokshi

lack then been the VMS of the or VSaaS the commercial of And the it. adoption an Alarm’s finally other for issue driving Got has offerings?

Steve Trundle

focused because the after I on. that we that would have not not say entirely, segments gone they're

So with solution. to cameras. within two is is mobile be anywhere video TAM the is we've iPhone an typical side the or or other installation And an OpenEye conceivable consumed from XX slightly small, the what a normally smaller probably, on device. way working we're case, And than a iPad commercial is our through the in some will

hundreds to with typical of could or station, In it in software XX through sitting alternating a cameras need XX by managed that proprietary in stack. or the a that's through their guard be majority installation user a cameras person the a similar be case, consumed be And a different of will single all interface.

that opportunity that's Bed we market we've Beyond And & the we therefore, through of now our University today. of Bath serve, have Garden, commercial a sort of say wouldn't distributed with segment of or an large more customers offering really targeted to part they like been haven't that segment. hindered, these players, that target I So, that but Gonzaga some Olive OpenEye

Nehal Chokshi

you. Thank Okay.

Steve Trundle

you. Thank

Operator

this Ladies today's presentation. and concludes gentlemen,

now wonderful a disconnect and may day. have You

Alarm.com (ALRM) 5 Nov 192019 Q3 Earnings call transcript