ALRM - Earnings call transcript Q1 2022 | Alarm.com Holdings, Inc.

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Operator

00:04 Good day and thank you for standing by. Welcome to Alarm.com First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. like Matt the Investor Zartman, now your over Relations. would today speaker Vice I to conference turn to XX:XX President of Please go ahead.

Matt Zartman

first that this Good welcome is being call. you. everyone call want quarter Alarm.com's I you Thank conference XXXX remind XX:XX to recorded. earnings afternoon, to and

include and forward-looking during Before and other us a we market among global Joining President quick from statements, today's Valenzuela, supply the Steve reminder. emerging chain the demand, challenging are Alarm.com pandemic and today discussion COVID call on the begin, include will our which Trundle, Management's performance, and of financial Steve CEO; CFO. market projected of anticipated XX:XX dynamics. impact impact trends dynamics,

understanding required notes to webcast between can be investors.alarm.com. at website. our Investor have for statements our acquisitions, and to and we growth the to statements that XX:XX made and SEC of to these opportunities report Form in note include Also additional The no actual current Reconciliations and and of XXXX speak XX-Q our on on presentation GAAP. we performance reflect non-GAAP information XX:XX forward-looking subsequent release during file the XXXX on this on we Our measures earnings SEC financial also events Relations and reported and This archived webcast filed is these offerings, trends, also section or is in press filed our which obligation expectations quarter available considered call that for to expansion cause or an information platform tool the quarterly today's the our the March Let's posted Factors call as currently undertakes after with date annual subject to forward-looking conference metrics reports meant differ comparable XX, contained non-GAAP in statements These shortly XX:XX extent use our to non-GAAP continued a financial earnings non-GAAP Risk only management's a the this conference this guidance. call, the and the is based beliefs, from XX, investors for in XX:XX February our in results materially update Management will the turn will that telephone enhancements with to today’s circumstances and during business contained release, being and results forward-looking of time company's Investor as Relations and for over that available subsequent uncertainties, including Please to These call, the strategies, use those on Alarm.com Trundle. financial that plans and new to SEC GAAP to this the financial for our our statements. time, with from in available tables with replay financial website. call press and measures could provides be substitute our statement intend ended the now most to objectives in current and in are markets. non-GAAP statements provide are those to Steve recent found in on but of including on risks measures XX-K by will Form call of law. of report us. website not isolation directly in prepared the recent and integration the accordance that believes of except commentary be be

begin. may You

Stephen Trundle

Good to Matt. you, everyone. and welcome Thank XX:XX afternoon

results pleased QX year. the begin solid are to We to report

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

first we was and the absorbed sales remained we in expected, the quarter margins. a saw increased pressured steady but and products million. stronger EBITDA services than quarter, also $XX.X cost In for adjusted gross hardware first component Alarm.com demand Our freight our that and

we a second price on select result, a the are facing of currently products. increase year in As

us product via the management the customers video has March. We from XXXX. expect as that commercial R&D that On of was will and XX:XX collaboration ongoing West, progresses, our a customers, Alarm.com and capabilities at that hardware support typically Series had historical Series activity also between teams. subscribers property an you which our view OpenEye enterprise I the on video OpenEye anywhere accessible includes to by from available timeline This call, with functionality some Starting events. recorder strengthen security searches We recording effort sensor-based to and several teams. ISC and introduce view Alarm.com time the stream OpenEye examples Importantly, designed other The to XX new new in feeds commercial with OpenEye and systems, security update I important all medium-sized unified and commercial single displays today's QX SVR introduced to of late share timeline collaboration XX:XX and margins SVR through overlay our grade control interface It's for small from Pro mid-tier up year, Pro to a to large-scale analytics, developed are an not video levels levels allowed recently to set cameras video only good productive intelligent is of initiatives detected of to The The also was product the the that takeaways commercial year or reach during but XX:XX serves. monitor held in products. on video a are provides my the interface for their installations between of want streamlines device. largest show the SVR. commercial industry a trade quarter. activity. the a property. for forensic access

recently alerts analytics reduces enterprise recorded This team an video AI detection will analytic video engine analytics more opportunity demand the Alarm.com's is of of our worked activity customers camera incident. for Another retrofitting It they of simultaneously can advance new events environments activity benefit detection quickly associated neural caused relatively customers. More third-party into by new and motion During offering. a is, precise received storage is recordings optimized image important video accurate could commercial allow video and be including cameras. volumes enterprise too Today, deploy by XX:XX noise. find nuisance, that a high the video this that and for with movement and important to generated reduce to of demonstrated only XX:XX most also of human existing that create introduced waste false valuable actionable is was activity, other the presence OpenEye’s that hundreds commercial and OpenEye’s OpenEye West, their background architecture detected. analyze the many One dynamically architecture benefit enterprise or cost. related space. to customers false ISC when with solution of deployments supports network data subscribers SaaS video open vehicle that recording new into large highly alerts OpenEye a of camera is can alerts functional needs and trigger now ecosystem. new

West, step contributor important in the team and to When a build a a saw great across our revenue and facing of the and at business durable Let discuss doing to saw recently and vision it's capability, presence. in a storage me ISC work that quarter advanced of XX% strong a efficiency. OpenEye. in We I in The XX:XX acquired part reporting this the this security increased especially positive we model business. highlighted expertise XXXX, video XX:XX OpenEye capabilities that subscriber false strong capabilities testing a reduction improvement efficiency new led an OpenEye operational strategy fourth alerts and had video and new in video was recurring where residential to OpenEye During domain next XX% drive our become Alarm.com great to turn of we Developing OpenEye. is key opportunity leverage OpenEye satisfaction. to partner to deploying and and analytics products, technology channel our Alarm.com

also We commercial our showcased set of services. expanding

and things with XX% installed positive competitors issues, related expand installed To pressures service we developing, These our platform work for market partners QX and deploying with video in made in that intelligent for and video. included our In particularly pleased continued driving conference, see Home our our thank residential service of opportunity video all systems our business. And on Alarm.com always our labor feedback. trust to see this leading security over Overall, supply activities the partner providers half XX:XX inflationary we Smart events. Steve and providers progress channel to Steve? During broad continue most constraints pulse the the conclude, was services. rather engaged direct security as concerns of for Parks investors focused XX:XX a security section to and their Our take platform Smart industry, estimated Consumers that sense service recently provider provider increasingly hosted accounts. of training results about X:XX attached valuable of our to let meetings, are our systems to or than Associates provider service nearly I'm trend to I to the year their a service turn for the Home. me multi-device of and direct in Industry-wide in were hard security XXXX, our with environment the new view want a market my create and team during demand partners and that, XXXX, sessions our their and partners quarter. Valenzuela. product challenges, positive professionally cross hear a solutions. gaps. our an

Steve Valenzuela

the a first license before our in the from expected includes revenue approximately first million. XXXX. at questions. financial revenue quarter. of visibility which SaaS renewal first for I $XXX.X the provide XX:XX year in the first revenue with XX% last million in the then other was XX% in software our from of revenue quarter review quarter, quarter high million, Hardware updated the our quarter same for QX license $X.X XX.X% end Our call first range Thanks, a is ago with high, guidance revenue $XX.X year This Connect up results XX.X% SaaS and quarter will XX%. the as rate Steve. grew the to of $X.X historical and begin to and license million remains of quarter, for XXXX XX:XX opening and down of

We for video XX Total approximately revenue the and which by margin freight gross costs. for of our cameras, for was increased due solutions up margin quarter-over-quarter see of in our during residential by Hardware due the products shipping XX:XX year-over-year. last for sales quarter and subscribers. capabilities industry-leading video part quarter ship our more for driven grew XX:XX gross margins quarter, prices. mix. video same basis both was continue XX% increasing expected were million XX.X% cost the quarter-over-quarter, and analytics strong gross XX.X% costs commercial the to due demand increases mainly shipping adoption increased $XXX.X points We first meet product fuel license than and down of first components continue to was from quarter year. to and higher air lower SaaS XX.X% and additional first to Hardware to to flat

or from XX.X% we effect pricing result XX:XX for changes we gross revenue due any or XX.X% supply of XX% to The disruptions, economic XXX the to in this was the first R&D $XX.X higher quarter, in the were increase in first first first hardware same of the in employees, measures year. this first $XX.X $X.X were of up price in first year mix in from up the of the in announced impacts non-ordinary last in expense the XXXX. our ago. mainly compared million compared the the of hardware G&A will marketing quarter expense some $X.X Total of XXXX. first to in Turning quarter the XXXX. QX revenue million share first cash revenue of compared expenses our in from due a hardware million first of for expenses million quarter to employees $XX XXXX. net to headcount the per quarter In Non-GAAP X,XXX Total quarter net of improve $XX.X XX:XX a the $XX.X quarter was the $X.XX to balance QX quarter, quarter. first R&D, Sales take same last on XXX total $XXX.X compared includes course and in increased a million Our cash additional excluded these million mainly or for adjusted XX:XX operating employees sheet. year. quarter adjusted expenses. Non-GAAP our XXXX, income was expenses quarter quarter We each employees X,XXX our expect million or with gross litigation hardware to from and quarter costs, quarter. to the quarter $XX.X part margin to year. million chain year for quarter GAAP the margins. expenses million margins per million, financial for We the the $XX.X second quarter down same mostly GAAP are Barring in of XX.X% levels additional million, $XX.X products. last litigation were G&A second was from income later net last As EBITDA in $XX.X ended QX lower quarter $X.XX QX compared down first first XX:XX ended $X.X to and in million equivalents. income of year. quarter adjusted Turning are Non-ordinary compared performance. to diluted from course quarter non-GAAP measurement or the our $XX million share $XX.X the with million the first of to million

used the financial repurchase of During we stock. our million XXX,XXX quarter, to our first Turning cash XX:XX to our outlook. shares $XX.X of

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

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

and We other prior $XXX to $XXX million are to $XXX revenue our $XXX for million maintaining projecting among of unusual factors. are given adjusted to guidance $XXX $XXX.X for million million and XXXX for very revenue We which supply dynamics XXXX hardware the XX:XX EBITDA $XXX challenging total from geopolitical of million global concerns to $XXX.X million. the includes guidance of non-GAAP our million, at increase chain other million estimated

EBITDA our EPS $XXX.X with adjusted represent $XXX in prior be annual consistent for estimated expect to guidance. of to $X.XX per net to to adjusted projected million We income Our guidance. Non-GAAP $X.XX XXXX to our QX million, is is approximately XX% be XX:XX tax estimate rules. We XX% under to of weighted diluted guidance our project XXXX our share rate remain an compared on $X.XX for share. prior currently of $XX.X based to to is $X.XX at shares average non-GAAP million tax outstanding. EPS per current diluted

XX:XX stock-based how We expense, $XX expect compensation summary, In pleased internal during up full time. service million. $XX year perform XXXX to challenging continue our these are to teams and well we million providers

call operator, investing to continue focused the deliver business We growth. and strategy profitable please open our are And executing our in on opportunities while that, with XX:XX for growth Q&A.

Operator

[Operator you. Adam Raymond Thank question first from XX:XX Instructions] James. comes Our Tindle with

open. Your line is

Adam Tindle

consumer major et subscription challenges right afternoon. to of lot whether observation an Netflix, Steve a I kind are cetera. Good companies it's with Okay. now, Thanks. XX:XX wanted of Trundle that just start seeing

your consumer a there are subscription metrics know is impact, think and you're seems subscription Wondering the consumer of there? be models of on solid you growth. that metric business mid-teens sort of because but this why you BXB to view than some those to still lag not give is, expecting your durable why you're BXBXC any some Your more customer. or other can end ultimate effect is kind lot us support out this I

Stephen Trundle

Good Yeah. Adam. Hey, XX:XX question.

not safety new a fundamental that entertainment, selling other whether lot not security are and or competing a otherwise. entertainment we're variety sources needs. is consumer sort TikTok service -- be of market with and we the of think it'd it our serve of I of and We're

consumer which is So thing, And -- believe our is growing, renders So long part basic that, we're providers to more perhaps we that a and the I Smart market address the going that I and and to very the best a long, think a see to We but security probably security locality. XX:XX up think the we're service going periods. what recessionary moving in is during that the delivering be a fortunately, technology normally there they consumer that is need BXBXC concerned not a after experience. of knowing less and than heightened market sort shield, have of case, the is well. are it's history with even little holds want bit to us the and our each away security People usually protection. it's property fundamental how gives Home of needs of safety don't generally about

going probably it's that's think I not a trend away. So

I think time. we'll hold a

Adam Tindle

That makes it. Got XX:XX sense.

Just a but a V, really well executing Steve EBITDA margin, obviously challenging on you're QX. for follow-up environment, in

but think guidance. look Just I quarter, year full the this if under, XX% I at

XX%, I year the of think you're to for to key as EBITDA lift sort Thank of in if margin those maybe normalize? so you. Wondering it's progresses. climb assumption and unpack timing margins the this closer considering of could up you kind that the factors that to some

Steve Valenzuela

XX:XX price hardware improve to the increases. with Yeah. good Adam, margins, Certainly, expect we the point.

margin QX So, XX%. hardware

We around expect QX QX to and could XX%, probably to be XX%. closer XX% then

is factor. that's revenue. big So keep quarter, that have of typically contributing seasonality strongest mind, certainly wise especially incremental a our amount QX energy with seasonally in Also

for the are main those improvement margins. I point factors So the really in would you EBITDA

Adam Tindle

of uncertain see sequential different since for on year think we've to something for I'm hardware hate to how and not sure a if got be about would missing but just kind a Okay. QX? of summer type really hardware just XX:XX QX, revenue typically in you mean environment, uptick, months, such we're got And I an a a just quickly supply we clarify,

Stephen Trundle

certain is that sequential uptick think, an year, odd see of in we're it's going think, we to bit be yeah, T a Adam, I Steve QX. speaking, can absolutely so little that I this XX:XX

as cost his We mentioned also, put we prepared second or V on increase hardware. the through increase a on forth Steve remarks, in price the put

dampen that There So expect much. yet, played don't it while demand comes X. out to we hasn't into effect really May

So second crazy I hardware. go quarter with the wouldn't

anticipate flat of I'd hardware sort a think number. I quarter-over-quarter

Adam Tindle

Thank you. Very XX:XX helpful.

Stephen Trundle

Thanks. XX:XX

Operator

you. Thank XX:XX

question comes from next Bank Our with America. Michael of Funk

Your line is open.

Michael Funk

all XX:XX it. appreciate questions, Yeah. Thank really taking for the really, you

know the additions, quantitative kind past the rating remember last us commentary XX,XXX think if So I shifted you're quarter correctly. you've the first run of quarter given around side. on quarterly about I in I commercial a some

any this I'll you there, seeing and hoping you're So I if after update of could. if follow-up kind then acceleration

Stephen Trundle

This Steve. Michael. Hey, is XX:XX

make right. it got Just sure I've to

You're referencing, the the per of which XXK referencing, on quarter business? you're part

Michael Funk

commercial, XX:XX I I if was it believe last you XXK, remember was correctly. said quarter

Stephen Trundle

Yeah. XX:XX

than So revenue. to XXX,XXX SaaS and and continue percentage -- that over commercial SaaS we component I numbers becoming that momentum continue good, a to a active larger I quarter, to grow growing at that's an is account larger faster be it's believe base our growth. last subscriptions our was overall of increasingly level at indicated commercial level

And I an as there So, means cameras first remarks space. commercial example, into video in drive in fair OpenEye about team in deeper the to new quarter, alone I XX,XXX analytic believe the spent opportunities my done our points, I talking the in new a time connection space. of prepared integrations basically enterprise the business think, recent amount we've also over which activated OpenEye the

is think I going well recession. and we'll any barring sort of So, major business

good I commercial think momentum. to we'll solid continue see

Michael Funk

in pressure I might got pricing you are current passing to the commented ability to the of to the it, subscription other to could convenient environment? how seeing of thinking subscription store I cost second one then not kind push but of offset this on you're to broad-based of we would all your walk with increase increases it that that's struck on prices understood side but we're you expect seeing? you increase side pricing, point, that else on on price higher at seeing shoulders everything we're increasing some that is if in about equipment and somewhat level kind the pretty And some today, own your trying everyone about obviously, customer more help kind my It thought and in increase earlier, How the price XX:XX it pricing doing market out to pricing of, like condition you're your pressure, it. the increase

Stephen Trundle

margin service And historically that spend each really question. business on pricing certain offer we their on of great we we creation around stable cost a and debt account. are it service assumptions That's the on funding planning the our one, providers. a oftentimes account want cost be making certain services about of amount time through Yeah. to providers Everyone's subscription on XX:XX of using each subscription have our levels

have not too quick, a experiencing we drive made said, I the of And requires at terms up increased would to what cost. you to environment day-to-day where create sort have you stable you service will That the subscription. ready say of be the So to cost in just in a subscription. reflections dynamic providers cost point some increase our of simply the be of also that the the subscription are

that not we're saying So never absolutely cost. subscription we will increase

of think to what our a the necessary tampering a part direction. it of that at but becomes not going I we don't If we're see in inflationary of some be move current I would probably on kind quick pressures, that is, last to We're model. say. point business down some

Michael Funk

AT&T [indiscernible]? price deflationary, wanted should their for wireless prices been data start the cyclone to been increased have want on increases, just price to Nobody a the that be company that just in the wireless has XX I raise XX:XX point connected years. last last,

Stephen Trundle

even I years expected hardware, mean Anyway, XX:XX we a couple of hardware, ago.

now. would be, I view down right hardware just costs happening driving and those was think be always our always cost not we

different So a world is little yeah, now. right the

we'll the I we live better, think I to the old like way but world react in.

Michael Funk

back participant. floor the the yield I'll time. the to appreciate really I Understood. XX:XX next

Stephen Trundle

Thanks, Mike. XX:XX

Operator

you. Thank XX:XX

question William with Pfau Matt Blair. from Our next comes

Your open. line is

Matt Pfau

higher you're the prices the terms getting to extent, of pricing homeowner new probably on which environment customer, hardware passed increased guys. for Thanks questions. and most and has I prices be some perspective discussion Hey, labor also installers would Wanted to for demand think the robust. And back but inflation. be the assume a impact XX:XX cost I remained a follow bigger in up from likely around to would

initial really install? that doesn't the increases in and initial how have of sort install the it impacting you could if around sensitive to set consumers are of price and up So seem comment sort demand. on like Maybe changes been price historically that just

Stephen Trundle

would in XX:XX in seen -- say, think haven't a far, a drop thus and demand really we I demand. I that drop don't anticipate we

I still security of a sort sort account in amount is depending for and might the our services. and terms have most service any think is, in the relative of fundamental think folks. be thing of be expense. that, when on cost security, But we're if basis, Home looking a what And experience a offering, for are a budget Smart On to target might for of of the and safety biggest most provider potentially we're month I on I case, expensive it's video talking people ton the security. mean and $XX service of not safety $XX the of sort it's of plans creations. there's new not $XX, sort people of need reduce It services. don't XX:XX type

I think the is continuously some just better. technology happening getting there what's is

rich and of we driver pretty So camera. is and now services offsetting in a on that the is of are grade value increase that cost provide video the a pretty developed residential some analytics the big

last still balance that's consumer the three of a finance cost dynamic to customer is the is financing on the think a being that's used seen type financing we've do over through and actual providers talked I being underway cost towards incurred to the originate the movement years the some a new consumers' mechanism in a bit whereby So more side, creation been lot we've of two, financed a instead of then quite credit where service sheet. value itself

eases the take otherwise. So both markets -- a spread like the other helping. off that the it and on out this service five-year consumer, in can you you burden provider some cost But seeing when over the consumer also think incremental and period companies when you're with a firm the pressure that's I and of

Matt Pfau

the just And commercial functionality released. Got video XX:XX it. have on one you analytics that more

improvements. had the of well? video customers assume terms the would so attach with a while of you You've would your as analytics in also to then out commercial obviously commercial customers relative for I to to some video expectations making be there expect of percentage What are be residential. higher higher, analytics

Stephen Trundle

XX:XX would on attach being very say with residential residential analytic we of Well, are on yes, side. seen the who are point side, of absolutely the analytics cameras high At have activated activated that, except I customers with analytics. this capable the very, XX%

rate, have is that sort not a the it's that's is the adopted XX the I we're sort commercial Does we're consumer. not which but perhaps great. side with of a as the attach will of -- as numbers but and we means makes attach high higher, and we much most pretty and rendering can level through that side. functionality we starting bit if analytics on of would that least at higher, time see on So That sense. kind go offering a becomes most value commercial of the that the expect well by service providers

Matt Pfau

does. XX:XX Yeah, it

So the Got past can't it. hundred go you so.

Operator

you. Thank XX:XX

Our Brian comes Imperial Capital. next from question Ruttenbur with

is line Your open.

Brian Ruttenbur

much. very you Thank Yes. XX:XX

a that all, of go and lot want let's margins First out, downturn? a guys is there I bolts play you and then economy? question, what anticipate your the what is this downturn the if Can talk about there that cash your in plans XX bit you but a doesn't to to that just let's if recessionary of little hope have a been things, have doing all, happen, but nuts about and business a environment, asked you for happening, And if been macro are years. changes the at

Stephen Trundle

a XX:XX that. All spend right. moment on I Yeah. can

that of I know think revenue retention be that we depends probably people but some. we our would our moving downturn, that less, see, see expectation on see obviously would when attrition. We not generally the the dealers are increase severity less

tends a to be that So positive.

the safety to during the particularly from of people also through they're and sort their know prior begin layoffs, are about security period of middle day if are neighborhoods more wondering property. a that the that recessionary about folks They of they the experience during wonder concerned We thing. and concerned, that more

security So, heightened desire a in drive positives. time, see new you positives there those for activity. think XX:XX typically the home a will same slowdown is even sales of I that On and new construction. some customer again retention. At the sales, same safety the probably Those supports are

sales Now the about being now initiated, a probably a homes XX% new right of that new you trade coming home have from and bit creates builder our so of headwind home. are the fewer U.S.

there. So little bit less I have a

And little by perhaps bit offset new greater so a account origination headwind, a of on retention. some

what of in terms way it In of our we position. think about Yeah. cash terms means,

I you're the point for when regional takes opportunities expectations think your recessionary more to period cash time with softens in on can and find efficiently more a deploy cash value, that you returns. in that

active So effectively. I in our (ph) period, a position would see little recessionary think some cash Corp leverage ways, if us to we most the how more you on maybe bit saw a thinking Dev about front

Brian Ruttenbur

Thank much. very you Great. XX:XX

Stephen Trundle

Thanks. XX:XX Sure.

Operator

have Aftahi a Darren We with question XX:XX Capital. ROTH from

Your line is open.

Austin Vetterick

taking This XX:XX Austin my on questions. is Darren. Hi. for (ph) you. Thank Thanks for

if two, Just I had may.

theme home as But seen what the side, I'll the well asked. to interest see and The with curious bit little have homebuyers? anticipate just changes regard it's the one, new rates. with builder rephrase rising to think of on been of to as on differently. program inflation it first a I'm try would I residential you kind second or again

Stephen Trundle

question. Good XX:XX Yeah.

seen not of feeling seem -- home the quarter. a residential think that new I recollection, side, to there for home the we drop data the but memory purchases, I what's we've national buyers remember mean watch over in is my new sales happening with this XX%, perfect, sort XX% new I home prior to so get a On

little there. bit a So tapering the time, have place. super and of like same while we're builders a in At not penetrated majority of we some the the partnership heavily

expansion attachment all for We new we terms we've have some a constructed. greater opportunities of builder room got homes therefore, that see in and being the to the completely penetrated of of number

even as declined homes hope would that I new So potentially.

say homes do. construction to don't price the rates. come that further. home XX:XX of declined second don't any But I that's sort XX% what But point sales think speaking, that's on is, regard our higher I sure generally buy remember, a hopefully that in the now. got We are perspective, not be slightly and there you attempting what I sales. a We maybe actually it's general going folks what's coming data With towards. see think I second I'm in home with most willing of home sales point, with home compression further market trend some new kind declined. can are First, from would of of might penetrate to would even interest have. we more to we And different sales if some. not, to see been new home favorable is town right What that's as avalanche sort on

driving we're next. allows PointCentral you guest to and business good the manager So people places towards we homes, that to is rental a when are that's our seeing rental the quickly and to renting increasing that technology for home, and turn going from the one second have and property there a

necessarily habit, City, for trending or lake want good York then far you just continues, a continue new that continues, to the travel we're ton people appears the right international if United and to or So of sort trend to as us, favor a better the trend a emergence that's to New that direction. of that of in do of over if be vacations so beach seeing the sort the go instead if of States

Austin Vetterick

XX:XX IO appreciate me, Flex just just one Great. going? from how last then initiative you're I that. curious is And

Stephen Trundle

color A Sure. on that. XX:XX little

home, got the the common use whether would remote gates itself still driving gates So probably right be that change that to situations, be four now that toll most Flex We've are fairly our in some at deploy driveway any is the gates of beginning various underway. swing sort from in that are or dealers not numbers. material is by early where Flex days. It's point we're is

feature [indiscernible] few it's service have moving, the a are we but it's request working providers out a had, not at dial-mover that moment. So so

Austin Vetterick

Appreciate right. it again. All it. congrats Got XX:XX and

Stephen Trundle

Thank XX:XX you.

Operator

you. Thank XX:XX

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

line Your is open.

Jack Vander Aarde

Hi, on gotten increases. questions. enough price you start the case a XX:XX for with my I question, Steve, Great. I'll Thanks haven't the appreciate in update. taking just [indiscernible].

round price Just for say hardware rolled did clarity, or of increases new these already that new you works? products out you in are

Stephen Trundle

goes out, do to on a a beginning really of the did announced one, we full didn't want Jack, May early we Yeah. February, first effect we that X. went have really but heels the to effect so second March. late XX:XX a in into that second rolled that then we one increase in on And

deployed half begin the been up show second sort already it's this of in announced So and we'll to quarter. of and

Jack Vander Aarde

XX:XX Got it.

front. And separate just premium then the topic, Okay. services on

kind So the be idea of in an what those to patents might coming down it's fun hear line.

we few seems came car recently, stuff I to years. fun or those you filed big last anything ARPU about? big, looking it but patents drone are as imagine can you I connected drivers, driver talk that's So and big anything throw well close the unique innovative but over have ARPU like something the I that just out of think can that

Stephen Trundle

increases, thing than to inflation Fun that nice. yes about, Yes. other price XX:XX would and talk

So the traction commercial providers residential the our and car seeing connected sort of we're from lot used really we're some and offering the service seeing on is demand of car the on [indiscernible] -- SNB space. the gaining side, a

to So we're to support typical that that adding incremental the some arena, capabilities is installation. better

that can So to at see for if to pick some it we ARPU then point begins up continue push some us.

what at but an to early And -- detail for experience drone point around want of it's about not when to both for residential able driver, bit side, point in the are we be close from XX:XX -- there. a yeah, you the once have R&D would to activity sort the of offer you R&D we don't you've sort but work you've monetize and great that some market. and you exact a into program. go product with some for and ready how R&D it projects to then enhancement of commercial would the discover seen would do various solution we don't continue patenting the seen results that we On initiative at market, We we what backing timeframe we're meaningful don't domain to little see an away purposes to we're point do that ARPU believe become video being and have it going I some us to. sort is of the -- you're to for to and And where

have have the of still So that don't progress a new firm excited sort current it, initiative, being as year about made. we're we so forecast for our anything in but don't we

Jack Vander Aarde

just in opportunity? growth one you're on Okay. It’s plan, still Can update on international there XX:XX untapped [indiscernible] the driver. provide you maybe anything as just opportunity TAM And business. a then you changed more do? Do long term Great. at that relatively where today? overall an or still viewing Is untapped and your clearly

Stephen Trundle

on nothing changed, has No, XX:XX it's relative a basis.

great. end $X.X we about I think at that International at last international close we we I that time, is subscribers around milestone, talked of year, to customers overall were blew through quarter number the the during million getting which and million. of said X.X

every and installations talking when about milestones real over and it's million crossing X.X outside So we're business, almost quarter. new you're U.S. a Canada of

we a be we of domestically. to see is a and still time world So third globally have place of would the over point, that believe some large the fairly number that of what the subscribers at we half rest

when So entry in different is, say to really the what you the of cost will really sort material that hardware does the need question types is, playing just and or curve of market. the globally components are begin different to that I cost and to of environments the pick for up each support sort

enthusiasm those making. and continuing we're and to issues, don't we're about that think that on continue globe. to TAM we at drive out of they service So But the the progress I of we've the changed all. product through that sort -- all but work of will large still have

Jack Vander Aarde

Great. time. Well, hop I'll the Okay. in the XX:XX back queue. I appreciate

Stephen Trundle

XX:XX Okay. Thank you.

Operator

Thank XX:XX you.

with We have from Northland Mike question a Latimore Capital.

open. Your line is

Unidentified Participant

is contribute XX:XX of (ph) me largest Adithya you percentage how Mike customer revenue? behalf much on Hi. a Could your did tell This of Latimore. as

Stephen Trundle

they XX% no customer over is of So, XX:XX of there revenue. that's bit little and revenue largest other XX% greater our customer our is are and than ADT

Unidentified Participant

how margins, the about XX:XX and on rest think the gross All color right. for the could some gross we give of in And should margins you the year? XQ

Stephen Trundle

XX:XX Yes.

QX taking SaaS It's obviously, for price as XX% or margins, been points. XX.X%, you've stable in But been XX% was hardware of basis the effect. gross probably XX for that's where SaaS. XX very of are has So XX%, margin, increases seen. the course hardware terms

probably that's probably expectation. probably hardware XX% no QX other for and of say around we so upon see up dependent XX%, going what closer hardware. and XX% but that's occurring caveat today have we QX and that, to know QX And course XX% to then and to margins our margin so to let's in we a current changes gross

Unidentified Participant

XX:XX Thank you. All right.

Stephen Trundle

Thank Sure. you. XX:XX

Operator

conference have Thank And you for This XX:XX Thank the today's you. that's we call. concludes all time participating. questions. for

disconnect. may have Everyone great now You a day.

Alarm.com (ALRM) 5 May 222022 Q1 Earnings call transcript