ALRM - Earnings call transcript Q3 2020 | Alarm.com Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Alarm.com Third Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Investor President, Vice Trone, Relations. David sir. Please go ahead,

David M. 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;

prepared available identify and and discussion emerging Before These we are may, reminder file performance possible uncertainty on expectations objectives us. of those in relations Securities Risk on is which our website in use the archived as market earnings and and investor call our the call well including information quick unfold understanding trends in information subject anticipated Commission and our year in GAAP. that comparable for in and non-GAAP contained similar time-to-time may with begin, will for will financial Also Factors the the and any Exchange offerings; that opportunities use telephone This pandemic; risks obligation [Form posted the Risk also occur our project, developments events for this and section currently XX, after intended in the GAAP expect, Exchange metrics (XX:XX:XX) as press statements, that accordance (sic) the we and early a results COVID-XX of trends, update on current market Form the current the website. made our also and These that subsequent not financial shortly intend between replay the ADT; to will continue, and will considered available of The forward-looking respect our by being including required on reports which projected today's reflect law. XXXX Commission on statements. ADT will undertakes with at guidance. Management we as is during on impact no this in extent to additional Annual statements statements and beliefs date and Report of with including and platform Exchange to release, during for substitute offerings; and webcast and XX-K] on such the XXXX website. and our of these found listeners. call is include be and full available forward-looking tool provide trend, forward-looking could business financial an from note Securities our or conference to markets; except measures presentation Statements circumstances, tables today may Securities containing statement speak to be call as forecast, be call, the Report have most are to include are words this XX-Q on statements non-GAAP but we meant and isolation we uncertainties financial in operations management's relations the XXXX updated with to for other such that of to conference Alarm.com began, our investors investor Form measures demand to with regarding section differently reported believe, our forward-looking on expectations forward-looking a global caused dynamics anticipate, file webcast on than by and Commission cause financial from provides those be Management's of Factors to the to based the performance XX-Q call, XXXX; results investors.alarm.com. financial the our a materially subsequent believes of statements. to or our words fourth differ non-GAAP directly the thoughts contained measures our February other in our enhancements or commentary during recent this Quarterly estimate, to growth quarter statements can company's and future as risks that these plans anticipated for for not Please filed forward-looking non-GAAP future economic non-GAAP business statements. strategies, Reconciliations only relationship notes the of continued our actual that include

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

Stephen S. Trundle

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

third We are report pleased to strong very quarter results.

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

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

our quarter, contributions begin expectations launched distant will The the commercial I'll we've third the results. initiatives initiatives. pre-COVID and overall We home the to third growth Flex of we've product overall recovered performance to not our seen segment, sensor ongoing the the recently professionally recovery our began I/O strength review I/O. some particularly exceeded The and US Canada. launched in On called showing the levels, our that Flex innovative their with made our while During Wi-Fi residential Flex designed to of is and partners, It can multi-sensor and integrated business. connection a its existing into sensor call, drove does highlight or or market, positive recently the in and addresses to I/O new provider new via network. security set today's powered to device and the or serviced control needed. or stand in where existing an it enough. the the market also environment. is a quarter. on communication strength devices are that products momentum panel security own CAT-M an cases against may an fully awareness in so strong the with a to I cellular connectivity smart progress we've or service panel capability be extend can The voltage fully deployed any RF be properties. location we other LTE Flex be property a entire hub security integrated where control and applications panel a use can battery not of control an are it a connected require wires anywhere is not We outdoor for and directly on I/O new low sensors very even

or to allows driveway fit properties their market, and our pool monitor subscribers can we device service trigger use diverse automation subscribers providers other video subscription see to mobile will with and the In our breadth bring the recordings. remote The units, residential that professional garages, customers. to such RVs data industrial event they footprint. example, barns facilities I/O items physical and Alarm.com with sends sensor's of to or gates, detached create tractors, storage gates as a lawnmowers. commercial customized data scenes allow boats, extend strong with solutions Flex cloud enables a to incremental or new the fee service and alerts or to an plan can For

shut also announced persistent burst drips. Unlike onboard at Meter Valve CES. our which This works property in companies, to can provide After off the water major also positive all water We devices, detect available two automatically standalone our water whole HVAC solution safety anywhere leaks a provider the now to been flow introduction water its BuildingXX plumbing had Water with a who solution quarter, are Smart when in home is year property's supply earlier even sensors this slow solution pipes, sensors the + the also to primarily service solution service the providers. valve solution. Alarm.com released deployed and partners, and

stations. focus central program R&D area intelligent our strategic integration for with Another is monitoring

to Year to our by they years, station partner the aggressively the allows industry moved our This and partners longtime when of verify update central released, a capability results monitoring closely Product positive efficiency, service it products or dispatches to alarm is events Signal, dispatched Security cancel with introduce service Over working Response a on Rapid the and reported awards the to false enabling easily by mobile reduced CES. subscribers Response of which was from Alarm.com. introduced we providers. we've ours I of wanted monitoring services a XX% called their In of station at false we've you alarms introduced. Smart to monitoring app. us eliminate XXXX, Smart to capability has or systems one received Smart Alarm.com powered to the Signal differentiate last by recently dealer been improve Signal the several by alarms and reduce XX%. capability including Rapid provided for few

key we're Next, about progress against I to initiatives. making talk growth want some of our the

growth commercial security IoT on XX.X% in international the fully prior investing then see. on As capitalize in These and and been with and video I'm video to pleased SaaS growth the we calls, initiatives made. quarter application we opportunities year-over-year. I have accounted analytics, the grew we've overall discussed third in adjacent for of markets revenue XX% opportunities order have the vertical, our progress

to strong residential continued see video. We growth in

and our subscribers lots the our hard to contribution service. their result investment is from opted services aspect During the of video new work third quarter, of advance video XX% video with of systems. of growing include to every The

and We and to video capabilities. have advance in engineering product differentiate our strong continue to team place a

even tailoring XX% an provider progress As account plan. of diversity about with wider service we're the and the property customer making and commercial have a partners service an good market continues our created our requirements platform service to opportunities. of commercial commercial months, service XX recover, last expanding In Alarm.com provider to new our types, base

beginning Mackenzie, flexible portfolio They video any partners energy Alarm.com inverters, vehicle opportunities. and now EnergyHub provider platform the solar XX number industrial electric the chargers, announced thermostats, According that Meanwhile, a a bring continue include utilities batteries, a to to customer-owned aggregators. energy this manage sales of are utility system to service for addition, report its solution load recent sites grade States. of Wood OpenEye's energy use largest distributed and Mercury research growing network over grow of to firm, programs to that commercial United resource In EnergyHub manages quarter. providers recently and heaters distributed enterprise of resource in from the global water management monitoring

demand response in Angeles Power, largest the managed country. their requirements peaking municipal recent One Water program summer offset seven and during Los platform waves additions to California. and demand Mercury thermostat-driven of EnergyHub's the in utility response the summer, This initiated past of events heat Department utility the EnergyHub's

constitutes I promise. well. license of just initiatives investments said, XX.X% of each are I continuing we very are combination these now SaaS and believe R&D shows areas I serving the our the that these areas in of that As and making company covered, the the revenue,

matured highly investment million to things the into Valenzuela, $XXX over will discussions highlight agreement, we well on ADT. agreement, as I they to Under would early by to XXXX. concert of Control in After professionally in the want accounts in their we our in into that ADT extended the this install These partnership. update Control recently a indicated begin successful extend and of on terms business renewal also hand August, an our to agreement which ADT XXXX. security extended support professionally their all Google ends, installed continue residential offering been ADT. of new that promote they I announcement with provide ADT our discussions Before installed Steve of have and have in software nearly as Under to in intend will expectations. products the I until Since like a Command some certain activating are a the early Google. specified will has and the extended integration platform smart Google with platform of to developing terms, period XXXX, with Command the subscribers

over ADT license. extending to by important support full the no it's to plan. agreement subscribers We in XXXX expect provide support the to Overall, decade. that continue also of Alarm.com subscriber this agreement have are the for or with royalty-bearing in both next service XXXX service by IP with agreed XXXX Alarm.com subscribers our to continue to We our our note accounts. a and platforms and on will existing material we changes serviced ADT who with this until excited ADT millions resolve this under all software we're initiative business our platforms ADT uncertainty to see that software of the anticipates of And ADT to life

face of many product strong that We done and Alarm.com the over years pleased a the side ADT relationship commercial business. on work fronts. partners our I'm their and trust for In in of let their thank for the business service And with and have positive our in quarter our both Valenzuela. expect many work partners, provider a Steve team and pandemic. the side continue the and with for to that, ecosystem have this investors quarter working hard summary, I to me to things on financial want third and results with our Steve? turn we our and

Steve Valenzuela

year XX.X% Thanks, for as third quarter, conclude results in our the Connect last the revenue year approximately of quarter. million down as year Steve. million. of our same software a questions. to license quarter initial I'll third for well SaaS start XXXX quarter revenue $XXX.X our with license for This from expected of the in full $X.X from provide the XXXX. third the with guidance and $XX.X call and quarter on before ago grew the XXXX review then as fourth includes million the outlook I'll quarter for raised thoughts opening financial

high metrics very LTV XX.X% revenue XXXX. in end remains renewal of a of of pandemic. positive in SaaS historical was $XX.X license and retention with with the quarter, lifetime customer prior to to high to value. with This QX our high Our to approximately our favorable third long up XX% and rate the Hardware million, ratio due a COVID consistent at our CAC revenue levels quarter revenue the X.X range rate and contributes other of third visibility XX% the over SaaS to XX%,

quarter $XXX.X a quarter million primarily see quarter the hardware up XX third Total XX.X% last large gross quarter mainly same for XX.X% sales XX.X% license video QX third year. mix. primarily XXXX. last margin We of XX.X% gross XX.X% Total grew basis was our accounted quarter sales. same from the quarter gross for hardware to third the XX.X%, higher continue for revenue strong product due cameras, due to year margin to for Hardware was to quarter compared for SaaS same and in third for the points to margin increase the of year, revenue. for the from compared last which approximately was the

expenses. in the to $XX.X third in XXXX. head We the were and R&D of with the quarter employees, X,XXX to XXX total compared $XX.X operating of up third employees third count Turning million million expenses ended R&D quarter in from of and compared quarter or million $XX.X marketing in in in the year R&D of XX.X% quarter. in and total quarter of count the quarter revenue, ago million to the revenue total third X,XXX head expenses were Sales last $XX.X or XX.X% same year. XXX

the was million million from to third Our adjusted QX income $XX.X up to entity excluded financial the this XX.X% result a for of unrelated the we third however, income net year in investment. $XX.X where other is net The million income third to $XX.X GAAP from million, of investment was of expense QX, $X.X third as compared results GAAP quarter not the as for $XX.X up $XX.X gain gain our an third the million non-ordinary in These for net operating million ago payment to we course $XX.X $XX.X income In QX our an in expense acquired from our $X G&A million $XX.X our we as down when in measures. reflected this a quarter, measurement third also that Non-GAAP the litigation G&A we booked million refer XXXX. income; our $XX.X includes operating EBITDA XXXX. from quarter, XX.X% performance, from an expenses In million non-GAAP received third-party of performance. exclude to million, of Non-GAAP P&L gain expenses XXXX. quarter. we of non-GAAP in quarter adjusted the had GAAP the quarter financial include quarter is were QX adjusted in as in in million from increased compared it's related XXXX. which

cash Turning to We quarter equivalents. third our sheet. balance cash $XXX.X and of million the ended with

XX QX were from and year compared when are flat DSOs days our days, were Our XX DSOs days. QX ago also a which in to improved XX XXXX in

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

million, the and quarter flow million $XX was significantly free negative was the months quarter through Our for same cash flow to our period for $XX.X up same last $X year. free $XX.X cash a a XXXX. nine third the year-to-date million from was basis, compared first million of XXXX, On flow cash in the operating

quarter outlook Next, I review full XXXX. year our and the fourth will for

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

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

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

million are our net XXXX up $XXX estimated diluted to We $XXX $X.XX our prior to be non-GAAP or adjusted to to prior for million for up of to $X.XX a million. million, $XX.X $X.XX guidance per for share. from from to million of income per $XX.X $X.XX or $XXX $XXX diluted $XX guidance EBITDA million, raising million, guidance million is $XX.X to XXXX share, Non-GAAP our to

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

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

that XXXX revenue our upheaval our the With million. supply service economic EBITDA with $XXX our or to of is million on around $XXX early million, million. around believe are $XXX providers and on cannot impact will shutdowns other revenue in million among said, were to for including $XXX will or factors. some if the chain, adjusted forecast XXXX be for with additional this caveat we currently license the I be currently to Finally, impact while SaaS between thoughts that million. $XXX we At and stages, expected COVID other about $XXX to provide occur, initial hardware non-GAAP a Total other estimated revenue time, XXXX is and we planning

we for performing February fourth teams pleased results our our are provide In quarter and this year. our summary, are environment. we partners next guidance report how well provider when will XXXX in XXXX service in initial We Alarm.com our

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

Operator

Thank you.

Tindle question first Adam James. comes from Our of Raymond

Your line is now open.

Adam Tindle

Good ADT. Steve, I acknowledge first Thanks. Okay. largely the be afraid to the on is going want afternoon. focus results. strong I'm to

So, couple ask wanted around I that. to a

you It commentary think I – there. thanks helpful. was

You to the life expecting? the all I subscriber. lot a for service Alarm.com truck you platforms the what of dollars, to the full anticipate with they're this sense may after What you going both provide will roll. is not service service know on customers life make of full said of are marketing subscriber, existing but

(XX:XX:XX) cadence subscriber. life I'm trying understand the of the to the to trying service case and just of So, runoff that

Stephen S. Trundle

customer – can factors. activated and sort XX% that We're the be on normally steady is – would if depending see rate. when what and Command then on so, to from if XX% lower a in probably a activate that we or industry get we X,XXX what have of to that or XX% attrition the Yeah. of years And Control we think XX% had on will is platform and would couple to attrit Adam. typically anywhere you customers, when of normal as XX% the Sure, attrition a you a Alarm.com say XX% therefore number or first than But rate so a expect a platform I subscriber subscriber subscriber. service life, you that's

middle quarter well this that, of So, part started is is was I in depends that, life normal around in next to It the as years, and lot would contract extended that service of years, what the And as eight, life. average – a eight I nine with customer thing think terminating the a ahead think normal provider customer on uncertainty tends and be something like how contract. the as for doing. year case, solved exciting of we that a

XXXX, full be then what's what's So, in we we subscribers their run for know occurring there'll life. in XXXX, coming they'll occurring and on and know

Adam Tindle

Okay. helpful. That's

change I for or license think ends, IP occurs via as speaking? to it generally that a kind agreement. transition that – still you maybe way Is royalty that occurs, think a economics, after in also you'll mentioned there us just support about a of

Stephen S. Trundle

And of our and there. – really obviously it's But the agreement of recurring I I go the lot reasonable terms it can't exactly is I exact for customer really of Well, our think will different royalty a communicate what it's unfortunately, less. includes in can't I into agreement performance areas. say types different by a incentives

it some the on it I no. there, variability going are can't – incentives depending So, number dollar but you and has those really how in give

Adam Tindle

X,XXX pretty Okay, additional partnering then chess trying dealers. value strategic just instead. cons and a It's to think you're bigger alternatives, relative scaled, on an bigger pros understand chess – the maybe I'll the think of your this you like to try entity, strategic with picture Each to bigger one last moves about of investing just, I one over a is enterprise optionality already creates, given the I'm million. pursuit you $XXX maybe kind there top your have how picture, $XXX and moves. company expensive then million

Stephen S. Trundle

Yeah.

Google I chose ADT with that. the and Control their a first support of to and we set to make was So, products the Command think certain decision to in – offering, do

sense. that market for as to enables our existing customer think of that customers couple new make next the years well that as of customers as to may set upgrade I products

a customer We've the my was, during primarily looked that's that. talked that of if where roughly set of a of would already our a down, have represent trending revenue, that's guess growing XX%. the our we sort now what because of is XX% we're initiatives – of And I our slightly we remarks. revenue I longer of got in and I and of say growth have at terms XX% how term, probably that's So, XX%, prepared during things we about some that dynamic

a already will number. at look create had natural where that durable I in and diversified can areas that and little of we we'll a bit decline to nice revenue here healthy a focus we think long-term So, think that stream. got continue We we runway

that's probably relieved more At look at sort for So, plan a couple clear of than of how have happy here I same the it. time, a years. that we and I'm and runway clear

Adam Tindle

Understood. congrats again Thanks, and on the results.

Stephen S. Trundle

Thank you.

Operator

Thank you. And our next Beliov of America. question comes of from Bank Nikolay

Your line is now open.

Nikolay Beliov

Hi. durable Thanks to about last you secular a three last for the spoke confirm Steve, quarter questions. taking potentially data you any months more COVID the my that? points or disprove Do maybe shift on over positive residential to the being have business side.

Stephen S. Trundle

Good question, Yeah. Nikolay.

ready we're induced, surprised say take our what that but last think to providers hearing over performance from can't I they that bottom, I customers almost because not home, their invest been we've it's – want to And in we service our home they're have I the of they're all traveling. not providers are think from months. surprised COVID four meetings, top service by we're are or XXX% and been the three to

the them obviously and they sort monitoring so. income and and which for discretionary automation we homes need of all (XX:XX:XX) some more second were adding do thing a So, they bit of things have that

a been ongoing quite And as this suburbanization that just benefits indicated, essentially levels. of now I can period our closer long be some lifestyle enough it think business to it the customer to that to the than keep real of stronger – pre-COVID remain of they you several that that short-term thing sort but here? really you So, you your hope appeared not or much life the is hope as but value expected. a I or with one add customer what long-term provider across and has strong time. Commercial question do sort and we you with service for nature an gotten a add may Is you of trend? convenience and where appears at for life are looking That's has is properties, is, their it's we great.

at of that anticipated have seeing So, COVID, and to that an in and providers may be may now. our additional + I induced we're some more to our subscribers (XX:XX:XX) Meter something than the will or what subscriber think be like probably more we Water kind ground give benefits And service Smart create by but the Flex we're of will grabbing will else It business something more grabbing right forever. going on, perpetual us beginning that we're long-term it because convenience like hopefully bring of expectation in year. Valve think last I products eyes the the for the the and optionality I/O turf

think So, it's positive. I

Nikolay Beliov

What far of price case has is few you I/O? customers what quite the one interesting, it the I years. find Flex in been proof think concept, gravitate towards and from Flex will in opinion, last I/O do personally most my marketplace? beta uplift a product customer and the so the the from deploying probably of reception customer your important use what's Is over innovations

Stephen S. Trundle

Yeah.

– new using we and as cellular it has time. We're speak month, is beta the there. this really in it been going this now, for right into market long So, technology just a

different sure the that of at in connectivity. sort have testing we grade we so of safety So, of and management wanted reliability with It's in sure make to we're environments. powered, industrial power make climate of (XX:XX:XX), you in want have so times lot safety life that we a to battery types that caliber reliability – life

So, folks it's way, of bad purposes. a we for a I I use game but say feedback long a changer is a myriad we've been a for to think the really mean, will – it variable, that And excited are set not with time variable testing of whole providers. marquee and it service have just in some

They sort have if area they some particularly a X, and detached coop, may you're example, property. think open they are have on types have, and weird make the things. lots equipment sure to some of leave installing I their where thing that. this capital people maintain on chicken equipment that I of may in suburb heard to We've where of more it's , people the out door on for they spread garages mean, acre even X use an they didn't living X,

have value a anything monitor. add much to, now pretty us I/O So, to Flex to as some you it allows hobby, us may allows

a into a coming gate that If very case a you or cabin, a gate second a gate home, or into into farm. coming use and a a heavy their their have been either barn, home have has property people second –

got a wide cases. broad will the how super us predict So, be. difficult use just distribution set for It's of it's of sort to

of that leverage the we has us that engines to been will distribution enable us, on do feedback some think But how product. create maximally very be strong. many I different to

the to Massey of terms the then have in Ferguson someone if is price you're providers, obviously with that that tractor there other you thinking favorite system, us with rates, what our than And to there I/O service is. wholesale are rates, consumer Flex barn, just know we about the We're a are end costs to provider, you goes subscriber. wholesale a (XX:XX:XX) that so subscription incremental charge – the that's between you into provider barn customer. start have suppose $X nothing else the think service and you service may have In want the storing and and want your what if I'll barn

itself. device, that want them. that much and fee Alarm.com if the on existing if $X I hypothetically, And of sort the additional the to to make RF obviously will pool dealer sort hardware if then charge pool If sale said addition money (XX:XX:XX) someone as the To swimming and cheaper a to I'm that existing by the with I'm it's whatever, paying swimming subscription It's pool to swimming I goes child or I adding gate, control my supported too then to just have to a fee dealer your margin make it and type some opens the is consumer, on so already that's Alarm.com system, $X.X, dealer. Our into incremental there. on and know before, I Alarm.com the in will already system. far panel a from connectivity home think we of want my a my monitor dealer the of will add and

Nikolay Beliov

Thanks it. so Got much.

Stephen S. Trundle

X or And add really like the it of cases. you use on X them, may depends

So.

Nikolay Beliov

Got it. Thank you.

Operator

Capital. comes Kessler question next of from the And Imperial Jeff you. Thank

line is open. Your now

Jeffrey Ted Kessler

Yeah.

seems have of this? I to about quite area questions growth your business. that America. talk XX% other bit now quite the period all I couple you've in the is It are revenue really a a been and X% – sudden a So, bit of of what higher. areas of time driving it was that been you've it are of you probably South little – in driving know really strong about a Can are for –

period in new a range points of fairly very the that we're know such giving these why give But – company us short could you're strong time? areas of of wide data been talking color probably around about. become has You've bigger EnergyHub. in you just a it's part I this us if a some

Stephen S. Trundle

to the looking quarter, a around out Yeah. Jeff, of we return excited at there measure making. the were data we're did point I investment and we last question someone analysis. was this it's some good us What on we a – R&D how do asked investments quarter when of (XX:XX:XX) sort toss

excluded is So, where denominator international, our we video gear those really the all numerator kicking the and a commercial, those And were put and subsidiary domains all. in kicking categories right growth we're XX% at those of from we at around in the R&D And that. looked businesses. said, the license coming with how now. around from it's domains in I but much denominator the and we ADT is as revenue from left is categories in we year-over-year And and XX%. SaaS as and We and into looked the lot everything anything and revenue, numerator, ADT

pretty we a the quickly has it's conference through I'd part So, one Each but different one can calls. points drivers, go different them them one, at and business. of by and different growing cover

out same in service and being the position a but new larger additional them of getting of the really been ease XX teaching some sort instead demand studied share. a platform more mature well to (XX:XX:XX) cases, where countries. it's salespeople and how platform, our just and, different to platform maturity, manage all pilots therefore, of control and customers. And being expanding reaching the solely sort the to investments where market. in edge slog, wallet and day utility to very a including well providers the is go to it's make and and commercial level sort bringing running where we're we're went Commercial, more it's software EnergyHub of that response convenience and sort a of of of access with and a already we've slog from of to after resources we're our people continuing International now. game a platform shift is important a think their and a cases, doing I tests, getting that but point In Alarm.com every selling more getting allows other to batteries, affords – to there there some a they're

maturity these of is nice of and been for reaching of a we've years things three maturity are sort them lot relevant the a showing confirmatory investments or that So, makes that last return. two and the making more

Jeffrey Ted Kessler

All right.

potential fix for you Second problem and my is the is, alarms interest know verification. long-term in false question the

front And what but place of of about (XX:XX:XX) and of and with been while. I response that cutting just I'm also other with universe really is been – potential this mean, is, stuff wondering out type providers many decide demonstrate you and obviously you Rapid of You can that – There that Rapid Rapid companies obviously if Response works, at you some the Response. that there. get something monitoring independent like it out can But were in great them. you Is one Response doing business aren't it what the (XX:XX:XX) your not talking was (XX:XX:XX) decreasing users with times? doing to well? on are down a there start for are you relationship fines doing just alarms false clearly as now you increasing it's what the are

Stephen S. Trundle

question. Right. No, great

you're yeah, about Response. correct So, Rapid

false few and probably things and at know looking doing. And what the we on that They're was its and does bad talked central were for months rate. the It on, is bad dispatch different quality dispatched false very ago False that first and had station, was we had better those I think the And monitoring our we call, alarm means partner you a and impact conversations, it for they operators. – an you we that been or I in obviously the dispatch what all everyone, Signal there Russ. both for industry did. high up responders, subscriber. bad about I watch Smart and

So, on at looked technology Signal was on and bring provider we and this all bear education their service the there's of the lot of And the our Smart obviously side impact they together of work to to make a impact very there's there with meaningful. very, work us.

false cutting in that dispatches you're the huge a app, huge that embedded we've capability If XX% down with downstream, like mobile consumer's by savings savings.

the with generating. to we AI will offering, analytics our all sure to and excited – So, the in I much interest all we of video interpret continue the user control. that great lot a And continuing experience elements in in do think more we convenient events the partners, downstream to terms I sophisticated of in domain, way costs interest about to from everyone more will were this in to working reduce across different everything it's coming has consumer the more a of that. make we're industry's our – entire think be that every We're and

think follow see here. And so, you'll people I

Jeffrey Ted Kessler

Is guys team your of objects, dream involved video this? in

Stephen S. Trundle

yes. definitely are initiative, involved in They the

Jeffrey Ted Kessler

Yeah.

Okay.

Okay. Thank you very much.

Operator

comes of William you. Thank from our David question Robinson And Blair. next

open. now is line Your

David Robinson

Hey, just Flex question on a I/O quick guys, product.

selling video in pitching I customers? expectations, guess terms wondering progressing providers kind does really just been this the on to and this of to take take released. long and and for then you're of category? just has from it relative up get So, success it service product is kind of guess in how thinking, how I kind analytics to residential growth what of I the there was realize kind of product curious you've kind the into days ramped of was I But And (XX:XX:XX) seen then, you're the rates I

Stephen S. Trundle

Okay. Yeah, good question.

the and on if It's a has uptake, in provider cellular. put very let a actually works. it deal So, for the eliminated you and power a connect supply. case it to the power modest. service have It's We've the sort meaning need register it's complexity don't battery that that with, this and supply, it of

have traditionally sensor of use terms that the monitoring be a a activity that something that's and called and opens, have you most have like you is would contact simple feel what in looks look opens its a case sensor almost you a where for So, – installability chain into case we've a you simple a sensor or like where know use and door had that chain bicycle tether bicycle you loop loop chain there. that when you things

And the then, sales service And overall that of very probably are a particularly little. system to on how that types Technical very teams now add education backend simple educational quickly. familiar they can and them solutions teams of already are Alarm.com pretty sales present their really render be of be any with the are those impedance since providers getting these aware lift cases, installs. sales use how of the our will can to So, market. certain those impedance, of the subscriber. There's find always third-party teams the to of to to amount heavy

becomes be we're as seeing think steady of seeing look we're think where first So, (XX:XX:XX) then will selling in a that kind analytics the it education, and and progress experience a and really arsenal analytics, progress not terms in sort going a maybe people we'll providers a in dollar of putting and begins you see part adoption, contribute. service – it once dynamic nine trained, six, enough you've And months, moving kicks then, enough I half our moving X,XXX it well. so quite that together, get or P&L. But year quick it not is of similar as got installing daily to very enough of out, but something I of

David Robinson

that. Awesome. for Thanks

Stephen S. Trundle

Sure.

Operator

question Aftahi Capital from Partners ROTH (XX:XX:XX). our And you. of Thank next Darren comes

open. now line is Your

Darren Aftahi

Curious that. can you percentage curious you're questions, just please? I'm Steve, home, first, and people on were Thanks. the my what the talked you the of And subs taking congrats buying those quarter. was for of little existing a what Thanks guys. Meaning, from then, – the to give subs? on revenue subs, in quarter, Hi, new in Hope of percentage well. second other about kind the quarter,

Stephen S. Trundle

offering subscriber. I second heavy don't question. that could XX and bet there start great good So, that's have pretty subs, for we and who our growth top The on I that in to answer to mobile the rate actually acknowledge are the we to of two and And – a together in oftentimes, know XX check should because it I'm have unfortunately those the one our multiple know you multiple stores have I or question, taking (XX:XX:XX) Steve homes, just my a percentage of will the hard is properties I the the with our percentage us though. don't user of service it's stack. have second totally different it's of But other charge new for situation and app but if it's I are check. tying five let (XX:XX:XX). stores, know don't number, it the expenses you (XX:XX:XX). your you in your enterprise providers going the commercial

Steve Valenzuela

Yeah. EnergyHub, was Meter year-over-year. XX% Smart quarter. announced we + $X.X million Water up came PointCentral, the That and revenue was that this Darren, out where the so QX it BuildingXX other in segment Valve includes we with

it's the sales it's but just released. not Of course, yet, in numbers been

Darren Aftahi

just more in. one I if So, could sneak

business? $XXX about think – the relative the we as terms revenue. of Like, segment So, should XXXX other you. how growth maybe overall said think million I to Thank we about profile in think you for your that SaaS

Stephen S. Trundle

growing within the from reason don't other XX% XX% anywhere in Depending year-over-year. to quarter XXXX. generally, upon other has timing some growing. but We been EnergyHub change been there that see and is seasonality and The would segment why segment the has any differences, Operator?

Operator

Thank you. our... And

Darren Aftahi

Thanks.

Operator

...next Aarde. from Vander question Jack comes

Your line open. is now

Stephen S. Trundle

Jack. Hi,

Jack Vander Aarde

T. Great. Hi, quarter. V. Steve Excellent Hi, Steve Hi. Thanks.

Stephen S. Trundle

you. Thank

Jack Vander Aarde

is revisit life, or though maintain the for of I A nine this property some entire of the lot the as earlier that customer topic. for average consistent maybe initially stuff – analysts guess, let me Maybe you you life have to and Thanks on to responded wanted for But an properties. of touched hope taking move my customer customer or I to years already questions. they ask. single eight life question Steve T,

actually that can So, moving Steve Valenzuela, metrics gone or would they're metrics properties maybe because points points either or you do on on that T number you and the have total or Any you properties? share then Steve have deactivated data to subscribers have any have provide reactivate evidence data of that? Alarm's of

Stephen S. Trundle

have I attrition. will we it's high been Well, main retention that consistent of the a – end we on one reasons the XX%. say, of pretty is probably past moves rate at But for revenue do based our experience,

though. and much you generally have in They've adding out apartment. They've with homes, where have not adding generally apartments the been expanding people moving second been moving cities of where other been have your an typically you alarm as and adding – properties. Now, system obviously people the don't homes second

the benefiting of we've reasons think from trend certainly I but, attrition. So, is one you have movies think yeah, – why and I overall that been

Steve Valenzuela

service them as in. always report providers And larger There the the have have are folks. it now. right they report talking to provider, the people I But do that. in probably providers could find more just of moved may some market examples service don't service re-sign advantages We a can new a move you you by because anecdotal when think we the net don't that is public they look in industry report know of if others re-sign. and a because there's, and report to don't are re-sign a metric, Jack, re-signs We But we at. it call, want oftentimes keep you it their we you may have attrition (XX:XX:XX). what that

Jack Vander Aarde

announced on the of with lot then, Okay. update me and specifically – regions That's some countries talk international, or you hoping And an going on helpful. developments you're Global your after partnership I'm Controls progress explicitly quarter the with That's maybe and Interactive shift on and Services? latest partnership a get last gears. helpful. to let the talk There's with Johnson

Stephen S. Trundle

Sure. Yeah.

that think is going well. partnership I

great done a a time very had case they've hard several it would to markets. upgrade say I lot obviously them we objective existing think it just servicing executed they job. well. and We of different bound that with I a a on project in were internationally that. they on in was And that subscribers worked

sales the have say got So, the a year are But that nine we quite there. conditioned, parties I first teams fruits and – labor. nice conditioned, throughout both installers a would of enjoy the the now of we months now the upgraded few also customers

nice well and in in that and producing Australia. Argentina day UK is as We American and have subscribers a engine many Chile as every Latin markets

working of that. the of COVID this little but indicated We're market I come that terms doesn't green But daily countries of segment So, pre-COVID hit, come have growth so, into to some it. that's was out we're the reverse of market dive I bit we're back we're But XX the We're hope now more whole and – whole set different than in litany We point think to into up to Difficulty] back But quarter, are well. by I at a in get more again internationally. installations. with the just service at And (XX:XX:XX) slower upgrade overall, through various beginning stages was getting a of and still we're and US happy with going with about now to or providers getting continuing that. – a the a it think platform. [Technical it kinks in market it's mature. and sort back took international technology, are levels last and area

Jack Vander Aarde

Again, That's Fantastic. quarter... me, for great guys. it Okay.

Stephen S. Trundle

Thank you.

Jack Vander Aarde

solid guidance. a ...and

Steve Valenzuela

Thanks, Jack.

Stephen S. Trundle

Thank you very much.

Operator

And Thank Thank today's participating ladies question-and-answer for you this on session. you. conclude our does conference and call. gentlemen,

disconnect. may You now

Alarm.com (ALRM) 6 Nov 202020 Q3 Earnings call transcript