ALRM - Earnings call transcript Q2 2020 | Alarm.com Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Alarm.com Q2 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to introduce today's conference call to 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 second 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;

pandemic discussion by Before we reminder performance emerging which our call of quick and XXXX, begin, for statements, global the the will forward-looking uncertainty projected and the our during full anticipated anticipated and listeners. include year offerings. dynamics to today include trends the and our business a COVID-XX market Management's caused financial third for economic demand market quarter impact on on

believes date, to Relations website telephone conference as and guidance. to undertakes on to only Relations during as or provide a This measures call measures investor being website. include statements in non-GAAP speak words could Reconciliations Our business may, and results to not differ in information press file such contained in forward-looking annual a we the will by obligation The available expect, to the substitute to call our including Commission with looking for and an made circumstances, meant trends, currently will, to note Factors on after forward-looking considered presentation Securities and these statements opportunities enhancement available offerings, have and Securities the and us. statements. Exchange GAAP the our Management Alarm.com commentaries continue, February for we XX-K forward-looking are and on of contained those continued release, non-GAAP company's directly for use report Exchange time, and recent and statements to uncertainties, isolation GAAP. report that section financial financial filed of investors of at non-GAAP metrics on in or no of comparable the strategies, required the Securities information our believe, financial shortly additional performance most growth our management's will of beliefs conference actual Commission in of our prepared Commission that provides file Statements risks we subsequent updated financial our Form to call, in that XX, with similar Form call, section are notes extent on webcast in that and based will statements. estimate, Please with these results be can Risk in quarterly be between XX-Q investors.alarm.com. operation the of Also These time from be archived intended is this financial on during on from markets law. with the began, subject reported to reports the risk but Investor be the which plans is current containing XXXX, factors website. forward that objectives and today's and such tables intend including Exchange non-GAAP for our posted and future webcast our trend, expectations available our project, also that this statements. other the statements as and our understanding earnings materially use of non-GAAP this tool this and cause reflect to These platform are those to the current found subsequent replay measures also except events indicates, words the and to statements is and accordance other forward-looking identify update

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

begin. may You

Stephen Trundle

David. you, to afternoon, Good welcome everyone. and Thank

are solid quarter We results. to please report second

SaaS year. million, $XX.X period up license over XX.X% quarter the revenue last same was second Our and the in

in for we their these $XX.X and strong want was partners the continued performance Our service team adjusted times. second navigate million. EBITDA quarter challenging I to as alarm.com our the thank provider

driven by decent in were in quarter U.S. March half installation caused back in up account the nicely April. picked results COVID-XX of shutdowns Our momentum in new and the a slowdown after the the which by

for I'll believe reputations less transformation note have acquired discuss call then we adjusted the cases, solutions. service our mid were than property. project XX/X large several XX included to of announcement businesses COVID the opportunity manage investment. them comfortable with and XX close OWS OpenEye installations. services, providing additional commercial enterprise innovative restaurant effective the of program institutions, that leader its to providers without some in efficient per get recent to We recent They disruption traditional commercial I'll consumers pure other business. temporary. up our the using to evolving Bargain the provides the system by component access feature to customers. SaaS on expand rolling video XX% they multiple OpenEye Lite, with our the retail OpenEye Our conditions. launching want market in recording accessible access and a this and service of to of control services the years paused, environment who to and chains, of deployment should alarm.com conduct and OpenEye reassure begin month. by and our to Bargain billion of COVID development increase from that help from internal and to we growing is partners has have full the focused operate After their to to in on was Alarm.com budgets been started that they Since serve. flexible the procedures Alarm.com's condition. and set. to based experienced video versions service Hunt is inside example offers the seemed platform. more tier number engage $X.X enterprise as American mid today's by service. platforms Hunt. installation. on supports our our allow They some accounts One for subscriber and with service enterprise the their their customer their Americas a secure their XXXX have and remember, provider their of recent option market market. large for channels These to safety with financial of this year site schools, team's OpenEye providers the North commercial OpenEye tend started of offering capabilities I in total component or OpenEye we robust commenting multi to smarter They market introduced It to a the this address security region a ADT XXXX. the for allowing probably markets upfront on launched capital to last locations. locations. residential out to we the provide view our that suite X% We On to the initially expanded been streamlined forecasted and Earlier the designed it return uncertain of cloud In sizable national sites Alarm.com been in on highly technology XX/X optimized new for trusted continue successfully offering will focus with is service to as market the OpenEye been that management company implemented mostly a cost locations with our goals also customers. Meanwhile, OWS in console, disruption The this tier locations. recently year, Lite, details have R&D integration and executing integration attracted have an you OpenEye these very toolbox while for partners We have companies to effect OpenEye, the initiative adapt Beginning subscription product

pandemic providers they to their providers, a Next, share of environment. year can I operations we're our service Academy we on services program COVID we the advantage during expanded second optimize the increase leverage in our participation to service our new the in including training for The services capabilities seen help engage to continue tools the Every digital quarter. significantly a Alarm and take We've costs providers we has to Recently, with for person platform service and the launched training our for new an provide support for of online repair. is training programs, and We to want utility in our initially throughout and typically times. year, com and The designed these in current normal providers extensive new of entirely strong so learning. session remote COVID-XX to reduce evolving opportunities that testing, conduct the extensive offer. configuration, capabilities, number training how our catalogue develop help differentiated troubleshooting, service value. our operating significant system given these capabilities we

videos, a webinars replace workshops, interactive of instructional smart series and launched small to tip sessions. scenarios, group also person live We troubleshooting new in

that these have providers versed were and offer. making that capabilities are our All on latest of well during added been the we service and quarter helpful services in the sure second

me for investors is that that on Next, this strategic their longer for two objectives initiative their as to are to Google. Alarm.com. I'm this further I of a a and regarding develop plans. one ADT the both comment partnership with to has We day it term ADT continues days what our indicated ago working are the that they ADT announcement Alarm.com view means to made and want initial partner. view sure wondering believe

and undertaking, growing Our their Home has the many Services by The of the Smart control commercial software a measures. command provides platform significant and for been customers. powers a and large launch that offering of control and command success and the in was technology a and XXXX residential is percentage ADT

offering work to continue the for the and this future. ADT of support expect expand foreseeable We to with deployment

As secure our we served the delivering believe our partners our our done, continue approach. we We us their well have has of and innovation our on technology and we platform innovative, reliable customers, committed providers on on and end focus to to available. service will to remain serving focus mission always and most

to environment. the quarter, as past despite as continued innovation, awards for win have grow challenging partner the our base we well Over our

partners provider service than We XXXX globally. have more

of advantages segments. a the spectrum commercial ability platform partners ecosystem enables single we services address breadth service Often Alarm.com full one smart the full Our help residential a provider small business DIY, with property to hardware our large multifamily of capabilities all a of that market these of that to that see services provide service that and span brings partners verticals. and is application IoT the

pandemic COVID to our our sense on the want I the Lastly, market update effects and conditions overall on you business. about of

quarters installations As I sales across last but shelter-in-place new business orders in our all, and as implemented. improved from energy market and account U.S. pandemic mentioned slowdown. of on impacted call, The were residential has April, security March lines the considerably this hub

international new couple of account an from commercial our pre and dynamics market our seeing that levels. Our security tend business and installations continue to of second remain through business, more COVID and sales We're favor COVID. the systems. ongoing also solid quarter, especially impact momentum retention build at a of Overall new are to seeing

expensive of will increasingly years Home purchase future. exact adults as homes, for want also of I XX you migrate predict. single influence consumers fit and likely involve we smaller tend a suburbanization away more of high emerging safety to growing The our percentage continue family of This economic During we installed And about metro outcomes where strong number single dense, more under for adults pandemic suburbs to security to households the a more serviced an that historically environments, course to where younger Smart difficult protection a age, are to and now seeing important. professionally cities from remind challenging see of economic worry remain family accessible. and areas and trend to foreseeable are a homes asset are major seeking conditions Solutions. become cohort appears the the to

remain we hard thank that let as continue to strategy this partners, Alarm.com period. our over focus summary, our ecosystem quarter will can investors we about or the seen, in our business. look their that, future are As things advance trust to their provider our and for our our on want service confident me markets. and with navigate seeing to primarily In continue cautious may already Valenzuela. partners, pleased I currently turn We like and I'm such, remain uncertain Steve And second team Steve? work projecting in we results. we with will conditions for what what to our we've

Steve Valenzuela

XXXX provide XXXX Steve. the a financial license guidance software year you, license second XX.X% from and the in results of million second ago quarter quarter quarter SaaS for revenue Connect approximately then raised third the This the questions. our quarter for last our Thank the second includes for million $X.X before outlook begin and to and full opening of quarter. review for with from will year I the $XX.X quarter, the revenue down year grew in same million. $XX call of

$XX.X up Hardware at Our licensed high XXXX. revenue XX%. of our other rate million, high pandemic. levels in XX% and the end And over SaaS in revenue second prior renewal consistent visibility to of remains with the second was QX, historical and a XX.X% quarter, revenue with XX% of COVID range the the quarter to

strong same due the a for for to see which quarter sales margin Total been favorable to second of due efficiencies of was mix. quarter QX, XX.X% the margin gross $XXX.X due hardware to XXXX improved mainly the has primarily in margin product higher compared operations. to from OpenEye increase the license inclusion points QX sales. basis slightly for cameras, video margin from for quarter, second accounted and XX.X% over to grew was product gross year, up which second for approximately XXXX. gross mix a XX.X%, large second to able was SaaS primarily of quarter we've year, the Hardware and million achieve last for for XXX continue revenue XX.X% We quarter in hardware gross to Total last XX.X% margin. compared the XX.X% quarter our same XX.X%,

XXXX quarter the $XX.X million, compared headcount to total $XX.X employees from of in ended ago second the and R&D, We in headcount Turning second XXX the XXX in the operating of second to in up with expenses quarter. R&D, XXXX in employees, quarter of R&D XXXX. expenses. were total year employees quarter and million

have were have continued build of second the our focus quarter past. with $XX.X that or been on revenue team XX.X% last success for marketing hard to the particular of year. fill revenue same in hiring quarter had in Sales $XX.X XX.X% and million, to total expenses the million staff, We and the during pandemic, some compared positions to had engineering in or

G&A net quarter we $XX.X year that of the second to million, expenses the second exclude compared our $XX.X expense TCV, quarter expense as QX adjusted to financial expenses in the for the of measures. $X.X our These to completed in in measurement expenses from also refer course we includes of XXXX. by G&A $X.X was the the EBITDA second $XX.X million lower million, quarter in $XX.X income net related $X.X QX Non-GAAP In GAAP million for the to increased million GAAP due adjusted to earn-out. second QX OpenEye million from $XX compared of million, achieving second quarter, their XXXX. $XX.X liability adjusted for of to earn-out income acquisition adjust income the was compared OpenEye quarter probability to XXXX. on a million, Our were million non-GAAP ago quarter. compared of include expenses non-ordinary which $XX.X course and net second QX performance, $XXX,XXX non-ordinary for reduction of quarter secondary to Non-GAAP the includes our for measures million offering of litigation adjusted $XX.X XXXX. to million up to

$XXX.X of very our we balance to million quarter quarter quarter. increase sheet, of cash cash ended million equivalents. over $XX.X second the with and strong A of Turning cash

slightly XX Our from DSOs days. days XX a our when constant and ago at DSOs in QX year up were remain

cash $XX.X million flow $XX.X and quarter, we In strong positive a have a second flow the We second million operations, from sheet business from model. approximately in of up cash flow quarter generated cash the balance XXXX.

XXXX. the Our second in cash $X.X was In compared QX capital million for purchases free same quarter the flow to million, year. quarter, $X.X second quarter for compared million, $XX.X the our to $XX.X last million equipment were

will third as XXXX. regard there unknowns I to a be challenging time continues Next, to quarter our for review pandemic. the the in to forecast are many This outlook with

providers that on results the other factors. economic among operating conditions and fairly affected show service fully chain, general how or our supply be our overall, well we pandemic are by quarter cannot impact future While results might anticipate our second its

expect and For of the revenue million million. quarter $XX.X $XX.X third to XXXX, SaaS license we of

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

$XXX.X hardware estimated million million. to our EBITDA adjusted to million of to prior $XXX up for million prior diluted prior from guidance million, XXXX $X our for $XXX We're for our per non-GAAP or is for share, to XXXX to or revenue $XXX guidance for includes million, which to net raising $XX a up $X.XX million are diluted guidance million to $XX.X XXX of our from of million, and estimated $XXX.X $XXX $XXX We guidance to total to of to million Non-GAAP other million, raising $XXX share. XX revenue XXXX $XX.X million million income per be XX.X $XXX to from up $X guidance million. $X.XX to XX

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

We and million environment. to summary, based are million. In pleased our of our how provider year well stock this Alarm.com expense expect compensation are full partners $XX teams we performing $XX XXXX service in

to provider Q&A. open support times. We will service And partners to for that call continue challenging the with customers operator, these their please and hard our work during

Operator

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

Adam Tindle

would afternoon. maybe thought with general of update. a I I Trundle, Okay. strategic Steve start Thanks. kind Good just

has different performance quite your very -- been in pretty backdrop Your competitors. probably but from the is industry environments volatile, stable,

you bit on get to sheet, a You afford a maybe more healthy some business, offense. optionality stable, balance got predictable little

using thinking about in stability metrics advantage. thinking for something as business how doing talk key you're about this larger? Is you're time just looking maybe to start investments? then now or characteristics the And a the competitive about So,

Stephen Trundle

Adam, Sure. a position. I fortunate think, we're yes, in

our service of by providers businesses amount more stability. doing think driven generally good recurring that well. I a revenues, makes And The are are very provides pretty them predictable. so

as forward, our I going mean, we we're strategy. dramatically I to think not look change

their continuously see can so R&D to into is I make that we attempt you do available service footprint think back us the and expand providers, our to expand what reinvest of the offering markets. steadily they

the years video, So intensive over our sort to and investment. cover important providers control, able you've services. us of from access that pretty to cetera. we'd takes of That's for et service commercial, IoT seen to Likewise, moved to residential spectrum residential the that expanding application we've globally been full be

So operation. of our OpenEye that function. focus lot corporate an corporate a more. spoke of that are development things We is One bit said, about that's just active continue probably ago. a a result moment to there couple we on development the And

So may aggressive vet then to look And can over continue sort think that value. we and we'll places the shift of marketing posture next add a opportunities to slightly more I year. for where we

but that direction, continue are a of key be directions. challenging positions to taking a sort creates time a the think doing bet we're at big like time lot generally to to an new we're to open of of recruiting you grow in in think this and advantage that to the engine -- well. I run It's So COVID bullish, that. fill look there'll But with want our moment that generally, steps some get especially uncertainty hot, dynamic on overhang I so different

Adam Tindle

quarter, Maybe think helpful. accelerated I as revenue more growth. sequential That's a near SaaS growth X% obviously term, over this Understood. up follow just

that dealer just ARPU, in you some also quarter you're the the could of update picked seeing pick early the of as you August? I up continue end end at retention. in up kind Could give you Thank an what linearly, ads, early key sit Did the guys. here us on that here August? And you the of at think quarter. subscriptions you If of drivers mentioned between touch

Stephen Trundle

Yes. Good question.

that have And have number quarter a that, is in the extremely internationally. well. international market, than the the saw the of picked And of at that which partners running as commercially markets surprised this a quickly we quite pretty covered the up little and are residential well. the us really, thing So more particularly not some of doing kind come probably point, That we weakness quite quickly. U.S., U.S. back of as that was expected. The we strength

lot a U.S. outperformance driven of and the by So growth residential. was

Now there also in subs. the performance was strong some

if look not. the it's status for XX% energy that's of subsidiary If a good the at or growth bit some of the to driven in more bringing SaaS their But out a you'll really businesses business. you the that's and XX-Q, relationships. on in year-over-year don't utility see on nice mature know hub yet tailwind And line by I moving electric

analytics video over able use more, the then we And So driven. well. on consumer nice our some as and ARPU make said, on continuing customers to customers that really improvement the is been moment, instead up. on rate of on the value table not at to a ARPU necessarily, the as get time really trickle But the use is offering, it capabilities steadily of providers we're get we're everything better deliver ARPU of more That as the render, the it a to experience. pick has to focus service providing to posture that is trying we're sure but

Adam Tindle

Thanks, Steve.

Stephen Trundle

Yes. Thanks.

Operator

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

Nikolay Beliov

internet guys. a a security from and for questions. have Thanks does of like, chess development? And question strategic the for Steve, Hey, this it I Part game CEO for the clearly home your mean how in this how you about transaction -- high around two-part does between this a just And I the taking at this view? as complicated do What think around is with home point against business? Steve the you week. mean, about mean long term? convergence one, chess sound viewers. now Trundle. smart the What game do has began more think the this it level

Stephen Trundle

was the service cracked at internet to I we've question. it part. understood if question, it think first correctly, start provisioning That's I'll mean, first your up with tad. Convergence underway. world So, I times been a security, that's a I of two-part entirely in for integration party video for one from we're internet connectivity, consumers almost additional more third more technology of where and gone where services, wireless leveraging at we the devices. putting were particularly

that to world you We in sure online very we communication leverage pipe, games here. have don't make our not as reliable So, very doing provide it's security trying our reliable. We're we're with teenagers service. to a --

service providers to service in to our don't is sort administer it's feeding inside of noise their help allows self reliability purpose a video more the make for migrating and more about connected of did dealer have offering services, efficient, smart that an specifically So -- we providers customers been improve of of become the that of bit something easy But make attempting connectivity their I it home or other that ship. the we the we've internet we sort for remotely. internet into becoming remotely piece Alarm.com cameras the ship it consumer gateway, But and and to it. that additional the of the -- lot to business made offering. service them are think it's it devices. called a the And

think I that So will continue.

probably announcement complicated? place of on is channel think a service the intensely We've the and been really we very are I think be of company I sort that's and to has that it's of benefit a over Of And offering. market. years. some in we MSO there, time saying has is segments, smart as home good this one for also multiple at and is I does us been service sort gotten demonstrate that professional the customers. And market course, look more -- the more bundled there period most the and provider world that hasn't of that that provider. professional focus the the But have attractive for some landscape,

the So, to decade think adopted an at in tell. too announcement additional this over a of see a that And we particular, strategy way a endorsement I that same little time, just early it's ago. you with in

I We've we a forward. ADT be been valued got got together. a collaboration think in of million over look customers solid lot that partner. will I we're with We've we've capability competence servicing as and think X that

necessarily forward we'll integrated. go. don't roadmap some be looking we're -- planning out. it see of exactly additional to and to see So things session washes not-too-distant that But in and the earlier whatnot that little it's set we think devices a discussions -- tell I early where may and a future I how a

Nikolay Beliov

mean, a but end system makes at in dealers DIY having take to to services same might a And was I some threat clarification ADT dual-brand okay. with how have at Google, for Google wants work it okay, Google can that strategy, I But sounds your And Brinks, technology. from, see professional comparable didn't that that just that out next back maybe like the question, it level. the well, current and I strength the guess is time. to that point to you it that's

and versus you. Thank compare your maybe that regard in if So today capabilities system? Google us you contrast can has the of help what

Stephen Trundle

Yes.

think customer XXXX, provider on to have they professional building allows pedigree while we've software I is contrast based manage the and end service been themselves focused for on out a when large provider, so lot being back of and and first multiple that oftentimes since that dealers. service application that a deployment a the foremost, quite professional the very

getting probably of what if produces and not the that whatnot that them you a get there's routines required of have when application have done very directly is permissioning we in front we Certainly, login well, few that's and consumer. rich as years. We -- we where to lot of into wouldn't last the get So started we hierarchies half into were do. commercial applications just

is think Google contrast, that strong some shifting. cases, been very I think very functionality, with I on designed in in has I elegantly consumer that the that, have device side to were market where if been devices are rich

been the think platform software provider. And the about focus a around think those you service to rendering on I devices the thermostat. rendering a focus really on then really Not If for the on side a consumer. Nest an experience has

So the we sort basic well right place the may But we're are of differences. -- yet. basic not starting of can in and a very those collaboration, of amount be different sure that on it the both some with sides. I'm accelerate

I segments what a think also we're of a lot look if you we covering market platform. do, different single at with

you're going DIY whether small or residential that you've your business component health or a dealer in So servicing or business. you're got

it whatever provider. control, work access the from, is, on, that And place is the really in a moment, where devices strong that's kind a consumer had service offering installing they've to be home. may You the pretty users at we focus for Google the coming the different the where tailored than of

Nikolay Beliov

you. Thank Perfect.

Operator

next David Blair. Robinson from William Our with comes question

David Robinson

Hey, had SaaS on guys. offering. OpenEye the a I question just

elaborate said how was compares OpenEye. I to know put of you And you how maybe selling just additional behind legacy the that So can offering? I in you -- curious, the to resources kind sales on the past, process some intended

the still that change? legacy well? What will target offering as look like of the kind Is So compared customer And the that will to case?

Stephen Trundle

when Now Salesforce good question. Really we about it's on two think fronts enhancement.

the in a and we're And we've partner enhancing -- long is the of offering the one sales do. sales their hand, introduce can the team OpenEye the the had outreach the place the amount of the number of team on that time. through team for -- scale On of they sort to side, Alarm.com other then beginning number

very that which and to not a it the product a channel, reselling. low akin Now of to moment our But as to that providers tailor of of is sense upfront SaaS a what more are an made sort continue use using, described as is introduce true use of segment. has OpenEye and platform I OWS with Alarm.com the the that Lite, service cost product. ago as is through version a more much we OpenEye take components to enterprise and what less enterprise sales begin We'll to in

knock, to and of who to of running So large, set customers there running a like universities, software, that very going enterprise who pursue racks own servers want a places are institutions, always OpenEye deployment are with the be that, typically pursue classical more their to package. want

upfront with can Now of on to layer, the lately out remotely is I by But guess is offering all which The short model to of sort and be enterprise that the of more manage long lightweight a very to subscriber. nice keep more doing attractive backed our software SaaS our that of applicable with less you infrastructure the the the using view, build enterprise fast broader slightly think segment and to applicable the on going have in side. durable will so a a administer, way has enterprise. economic deployment will traditional slightly market been smaller the cost remotely for term that kind answer more we model up locations,

David Robinson

Great.

Operator

Kessler Imperial Jeff from Capital. comes with question next Our

Jeff Kessler

them be potentially got large just going to Johnson out you Johnson with a base talk it into Are you're like continent? the quarter about business on very with of because and seems with consumer aside it in of in going a Europe to Congratulations or will good but time? tough start systems the pushed targeting help to be European your was But old strategy announcement And Or moving you Hi. consumer? in -- beginning that ways, up Controls? the types you going a and now to brand on Europe are small to that even covering Controls business entire I'm you've of to be also Can into you enterprise with interested the rose gotten over you by securitize, Verisure. International. many out some and you're in ramp. there with environment. considered cases That's ADT kind actually

Steve Valenzuela

Yes.

-- Now up announcement. insightful picked it's you that that's

not ADT I successful still large about a of U.S. very of people business but Europe, had it's it's And parts forgotten and U.S. the outside International, think many really just Asia. in it's

ADT think business parts bringing of Latin powered set richer I in of a residential countries, there side set kind is attrition initially of of of and to that also launching on And couple to Alarm.com that richer parts upgrading the services, freshening we're services. the of consumer. America. And a of customers International up of the the a presentation the lot Asia, focus existing XX Europe, primarily brings what but managing customer

the going well. the six, that's eight well pretty --they've of year, going months remarkably first executed and So in that's

to international every for In terms overall much make think of the ambition. the leverage investment is American I ambition as market market. our as possible for our Yes, we North

never this or as elsewhere going cetera. other make small So the North on different when feature to we here analytics, providers the access parts feature. based service here well, and we And market, et therefore, relevant commercial control we say, in enterprise, video of sit we investments We see and America, be U.S. service only much is in partners of or sort is Intel the a the the asked business, in to whether other different world. ourselves, have segments

of work But can partners these because fragmentation experience lot we'll hopefully, time markets. to of it do lots that over there's all. sort expect overall different of Some consumer with the a smart upgrade a property and other in continue

Jeff Kessler

this How be be -- going this is apart key overlap? in And some Will cost? and with this them? you separate to Is from going this? are your Is to be there work going secure with to conjunction

Stephen Trundle

-- it's providers R&D, how we similar already of work service And lot much providers. lot service It's have do as a a then a different we across we a role. can No. little we Switzerland then of take we XXXX with to bit which as amortize where, Jeff,

company. But So -- we intend is with Securitas. different just not good We have International a a relationship is this support fully to ADT them.

affiliation type not an it's deal. So of

Jeff Kessler

Right. Understood.

energy on quickly Just hub.

some growth right your on so part helped words What had numbers that's -- that's the for SaaS bit? during a is growth, hub, now kind as since little on in them of that quarter. your going you it this successful in of to seems Could nice quarter? You expand energy particularly

Stephen Trundle

little time tactics Yes. have -- I notable strategy. then we've large and On large think and from of I'll to been some tactics, fairly time utilities. energy talk a have whom partners, hub bit new announced

deal confidential partners to deployment their keep not and We some information because every confidential. want of to keep able have they've information those been signed, that announce

in So, phase we've running announced startup those deployment. some and things that came some, the the we on the opportunities fact haven't you're announced in those think and saw from relationships them of place. second where of growth now that all. side accelerated trials Last quarter year, I pilots, most sort getting of then, are the you're of And -- of business were we the in reaching full were maturing a a the lot

Now, that concept let property. me a back up talk primarily is to a that exist energy in is little residential any which connect components you about consuming strategy in a may the there,

way we tethered lot their be ours, business. be on energy device at level making what's manage side also the people it better of times control the manufacturer, water manufacturer, electric competitors, the so and partner we heater can may not through a that hands that grids they to a with of on might at influence data can we happening production. of aggregate that the a with that that partner a certain power that or time typically a the would us traditionally manufacturer be already that their HVAC into be. then line Alarm.com the whoever load And -- we to may is pool edge even thermostat So they folks or hub But a of manufacturer do lot you utility, someone even a put control whether of pump, of describe a as anyone and all an and it partner and amount expect of

It a good business time. scale. to in. becoming, it's just that's takes long a So It takes be

other some few a get carries traction into few over with that a and relationships. You then

that's of grid these of guys edge course, of and sort the easier. for is So, the not -- getting

batteries. got You've

the You more inverters, you that need got more need consumer understand. to manage, got side track, you to you've there solar on you to need and

a place good prosper. generating to data, provider additional those all components of software So which makes for that

Jeff Kessler

very Okay. much. you Thank

Stephen Trundle

Thanks.

Operator

comes McVeigh Our next Suisse. with Kevin from Credit question

Kevin McVeigh

Hey, strength U.S. in quarter. Steve, us understand you unexpected mentioned you. related help drove what in to Maybe just the Thank expectations? that residential just Great.

Stephen Trundle

Yes.

about when. the new a we planned. creation been think the more that thought little weren't as last So what we of And gave cautious to for ramp, would account us We to I that rest sure quarter, of XX% we at be generally -- but we an caused had bit outlook talked be year. around

ramp what maybe I inside think it quarter is surprised company happened allow what a quite how a us is the consumer a the with is reputation. And trusted willing I of bit to think a bit.

can to of So at safety branded a our of let [Indiscernible] whether they're anyone one proper if entity done. sort well consumers the and it you're they into taking service perceive are have that you've if of got reputations. the willing customers providers, lots if get would lot precautions. home, great a time, -- them, At that And of same be someone you're stuff trusted their Brinks, ADT, home they are

about more available the their a So available, been kind been for getting more available think they've system to to upgrade extent smart its of More want I -- they've ours. that thinking visits, see more home system, we And didn't for or sales available. installations.

rest of be at the wouldn't more there intense We've Florida, the COVID resilient. pandemic consumer of to look a you that situation. relative in U.S. elsewhere, the where Texas and the in expect perceive the very we If pandemic world, size necessarily markets, you but being seen even

Kevin McVeigh

you just know, Google. And a ADT, a Google question. triggers just obviously, landscape ADT you then again, the or kind what distributors. similar other of you competitive extent the the I think market To But there just going thoughts think do change? do react? of perspective hard back through fundamental it From on How any relationships any lot of if I think you mean, have is a work that's type industry to to other reset. have distributors

Stephen Trundle

Okay.

coming posture. predict And service I it market -- it's the early drives in will has for I'll thing laying say, know exactly for not announcement provider because is good a on where out. position providers, other I'm from. there, first our though, how innovation. would noise don't this been in to to maintain that getting for relationship the it's exactly place therefore, service it market. for both but be the say, how And we're competitive a And a long We little technology very service I'm general, the for and that our I where competition recent need will really -- generally, investments and it the a tell. a means little I'm But to with me we're not shake background What side providers difficult sure think the think that's us a can I react. time, innovative in side.

things to out current partner right I if you shake X stay good will, the want I how we think for Tier will the you that So for and Alarm.com. environment a and regardless be that that experience, of it hope consumer are and technology deliver competitive

Kevin McVeigh

you. Thank

Operator

last Vander comes with Group. Jack question from Our Maxim Aarde

Jack Vander Aarde

Thanks quarter. questions. Excellent my guys. Hi taking for Okay.

Okay.

services sounds Trundle. exciting. new able In AirDog, quite board talked Do else explore example question a not my any topics talk or expansion the you pipeline while maker potential premium material go on might be But to kind current One what market then anything the may overlooked. or about also recent the for talk one that unmanned favorite offerings unique the Steve of to my aircrafts? drawing the solution, could as of front first for you be about and to plan much. being is or So, a the services during in of unmanned of driver. in acquisition aircrafts. about? the maybe is ARPU vision And That the mind Could pipeline

Stephen Trundle

fruition that not sort of out yet. little the that we're been watching so a we not the quarter is I gotten of being the consumer announced have attention. capabilities in always we the you've things. that car have think been through providers. XXXX. attempting deployment. are yet, that that below fully airplay. That connected times our And of but provide there. expand much too footprint There things But Yes, value a radar, fourth maybe In service can One to of the at paying You're bit few

management absolutely where not need what to more been AirDog, position there it in that's we've I see time we're a a lot the event. go months of for of need place working very they past It's hope and water consumer. to the meaningful I possible some that dynamic XX the investments. attractive able to the next being making becoming where have we've cameras a a to to track With talked as a see we'll for to broadly and in they making see, importance water or on offering water within deployed. fixed think to about monitoring opposed And go,

are So, kind like our updates, service there, And continue we we'll of that, R&D several immediate that one things that's but ongoing our and keep providers to but that initiative. fundamental ahead. there to invest don't an have is any goal --

looking be value, on more but months by or upon, will out at So fliers the sort times over taking And be some that things have to things that time on we the way we than do. months. just while of that six XX next to take generate differentiated use think to a

Jack Vander Aarde

which than provide rentals. or did back status imagine residential larger if likely more disruptive Doorport acquire it. also, a it's property vacation a PointCentral, giving helpful. update And Steve been impacted in then But you could Trundle, your they and early Got on That's maybe business, maybe I business? May, to But a any last Alarm to informally you color already the as scale you I see -- provide announced speaking, which into PointCentral? might a is can too. quarter might contributor them just whole on And you additional when think when

Stephen Trundle

exactly. Yes,

of were Their vacation some the companies. they COVID So by rental are segments. a probably and bit than impacted other being more are the customers

staying now. their right are again, most than Now those doing companies -- driving, more vacation. how vacation well that's doing homes summer much in people are People are

to is everything's rate. entity whether tying the available and platform property booked. owns into hopefully there's when that They though value with of the will unit making side on to a segment winter XXX that install The also a space property be with several VRBO a we add company to rise a but themselves. back the that full lot that's with opportunity that multifamily multifamily an this buildings, because And both we -- PointCentral or rise faster we via manager owner, the point time and solution. together not rental you're using to is Doorport the solution summer fully good, was wanted get property the the be tenant set higher intercom new access stuff both germane of to for do of benefits a So the the particularly a in thousands provides whether that able smart homes, the tenant market that smart And multifamily install operating business high you're partnerships. vision want residential, at of more

that internet also fairly folks not So with in we're a are building's but connection. the partnering with dependent the solution intercom on several retrofit is that affordable business,

retrofit and PointCentral our fold a was that innovator position into and So strengthen thought an nicely in the domain there. solution technology Doorport cellular will multifamily we that offering and

Jack Vander Aarde

here. And helpful Got one as well. last then it. That that's and I'll queue then lastly, take

Valenzuela, it to XXXX But of so the robust revenue for know, lot questioned was guidance or that's had SaaS I a and does already have questions Steve this. kind raised. imply For of license analysts about growth. And great see.

general? growth. break maybe there much in though that the there they're international Would subscribers grow? commercial it embedded underlying in terms expansion down factors are And the can say, split Does international you terms it's drivers. grow, embed subscribers maybe then how you this subscriber of hoping towards ARPU Just in what of

Steve Valenzuela

for thanks the got. question. This actually question I Jack, the here. Yes, I'm is first

So it's question. good to get a

new you've driver. as residential North in really talked really ads, the SaaS being the subscriber yes, pro major So about, forma, is American

as But American and think main international. helping progress you that's uptake offset V good talked And if we're shaped again, really the in see that from some inch analytics. North residential, really recovery ARPU and We driver, a a about good faster being video continue bit. I up benefiting will does to slowdown a Steve with

of We has Basically pandemic. slow course, level new solid, at has strong driver bit. a given been of new impacted are number have proceeding same subscriber residential. North at a ads ramp that rock compared. commercial, main even, in I just been pandemic. But rates COVID prior been a is the the American And retention then internationally have the think the The to dealers

retention rate inching boost up. same and of And a anticipated, with ads, we ARPU so, faster subscriber than level and we're new at getting from a a

Jack Vander Aarde

And ahead. I'm maybe -- sorry, helpful. That's go

Steve Valenzuela

really growth. driving That's SaaS the

Jack Vander Aarde

rates. there? any you the Does small difference renewal there attrition international strong And is does or true reference that for Or rates North just as hold in it because America?

Steve Valenzuela

International new. is relatively still

difference we don't really two. don't the significant break between really that So out. any think I it there's

doing the is North very relatively American many, The residential, Of beginning. from for still been many course, we've International many, years new.

so typically international differences we I base retention But say you major don't it out. of any that not don't in that break have of would residential. between American And I'm and subscribers. aware North

Stephen Trundle

Again, right. pretty don't differently. it's in pretty point our work Yes, that's so far, model to look similar, similar it we the

Steve Valenzuela

Yes.

Jack Vander Aarde

guys. right, appreciate great Again, time. results All and the solid I Thanks. Fantastic. quarter,

Steve Valenzuela

Thanks, jack.

Operator

presentation. gentlemen, today's and this does Ladies concludes

disconnect wonderful a You have may now day. and

Alarm.com (ALRM) 5 Aug 202020 Q2 Earnings call transcript