ALRM - Earnings call transcript Q1 2024 | Alarm.com Holdings, Inc.

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Operator

Thank you for standing by, and welcome to Alarm.com's First Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Matthew Zartman, Vice President of Strategic Communications and Investor Relations. Please go ahead, sir.

Matthew Zartman

welcome First and Conference XXXX everyone, Call. afternoon, to Quarter Alarm.com's Earnings Good this recorded. is note call Please that being

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

report Form We or are be During this that we be review These them. quarterly their may you and to in that we statements refer current information, on along release. which results statements statements Form making are no the to assumes predictions, on of events. projections, differ based cause respective with dates. our Alarm.com and forward-looking about is today's our our actual XX-Q risk future with estimates will after current and to the X-K, materially these shortly uncertainties statements, call you associated factors update factors, expectations forward-looking call, press are subject and other and which This risks encourage filed expectations. to which SEC, to obligation from as the assumptions to will speak call subject risk discussed

financial our will I'll turn several be non-GAAP Steve? Trundle. non-GAAP the in over can call. release GAAP to measures of website. addition, be the measures the discussed found press to Steve today's A Investor In Relations reconciliation on on the call now

Stephen Trundle

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

expectations. We first results our are report exceeded to pleased that quarter

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

West, I'll share in over Valenzuela. security of North broad for of largest provider The conference you results. a their observations the providers. security West, EBITDA our from a the at American $XX some contributions and market released by I Steve manufacturers update our service for I'll service and on at trade April, before U.S. attracts was our range a partners today's had participation my adjusted Our to employees a our presence set was few technology call, and which ISC conference from international capabilities On XX,XXX to of trade to In our professionals. also the ISC Alarm.com million. strong want providers turning things attended quarter and of thank recently product nearly participants to diverse

this will attention enterprise to Connected growing So had we including April professional-grade management fuel contribute of our category develop Connected during they providers as ramp-up our and recently for expect capabilities. Analytics. Shifting interest my many service deeply cloud-based opportunity the full the to is vehicle the Subscribers capability video capabilities, vehicle the have Fleet to called that vehicles cloud-based There a One Analytics but is and launched video hear location market our among fleet allow management ones business. Familiar analytics integrates unknown platform. particular along with access enterprise solution tag seen management associated believe called the create new solution. from robust a of with our seamlessly and We are solution tracking vehicle of day. the will analytics our clip on alerts, garnered can integrated into engagement the continues I offers range customized deal partners and in also solution management and when We rules to business, the production Over be to touch similar certain evaluate of visibility see. control time, we manage period launched The Connected AI believe it We existing beyond we property reporting a Fleet example in that provide partners to on trusted identified. Connected product commercial or will enabling times their commercial known both extend the to and cross offered ramp be that customers to with commercial alerts create video into began with with go-to-market familiar model businesses effectively thousands engine across our software commercial Vehicle the Vehicle dispersed notification meaningful relationships high-value based in trip video their the steady locations. them fleet system the Fleet's our vehicle of plans. our partners in that vehicle automated growth introducing Connected subscriber indicated personalize dashboard integration, our end monitor will engine reporting. side that our multiple recording then Alarm.com's going Many their recently to sell to offers to fleets can and use business gradual and Familiar our another package. competition conference of service Fleet. our category. walls and operational per with video recognize and point rules a Fleet update monitoring. forward. also They that capability,

ahead, that to property. to and with customers Looking additional their Overall, pleased quarter I'm personalize are with continue results. to market allow to capabilities positioned AI innovate the we AI, bring specific plan in our to associated first we models

market our home deliver residential fleet markets. access video, diverse the that We the continue and to smart management security, to in grow markets, allow products us and increasingly and commercial capabilities control revenues including

We business, XX stages these of range different and margin their energy and over has structures initiatives to build operating around world. with countries international Hub our Each of the XXs. maturity to Energy business reached from also negative in our the continue customers high

hard thank grow areas adjusted I of out work our and review build our to want I'll service our Our Steve and overall financials. in to for Valenzuela XX% on we their basis for consolidated producing our With partners over Steve? their the our goal trust things provider also as hand while is team business. these margins continued EBITDA an investors that, business. to to of each

Steve Valenzuela

opening our provide of a the quarter for XXXX first call then and questions. results before begin review updated I'll Thanks, guidance financial with Steve. our

SaaS grew First $XXX.X of million same the revenue quarter and year. quarter last XX% from license

in was SaaS down expected and a higher revenue Our first revenue Total $XX.X and of and range. at from million, quarter first up XX.X% license quarter, up about QX in high of the Hardware from year rate SaaS the quarter of Hardware Total door of $XX.X ago basis first our ago the a XX% SaaS for points XX.X% year margin controllers mix quarter the the XXXX $XXX.X renewal million X.X% remains from of higher XXXX, revenue was the and XX.X% thermostats. for due sales due down license in the million to to quarter from the fewer in quarter, other gross visibility with mainly end in QX first gross for revenue year-over-year. slightly mix. to revenue. XX.X%, XX.X% was margin for grew XX was quarter, XX.X% mainly margin for increased due the first product and quarter. SaaS gross first margins

to related in million X,XXX year the quarter. employees in headcount the were increased of to XXXX. $XX.X ended first in in down mainly to million program quarter the X,XXX in or expenses. compensation compared X,XXX R&D, quarter first Total in and due the first of million million first $XX.X operating revenue to mainly the quarter or the last marketing the expenses. from headcount Sales QX revenue, employees employees compared increased spending. X,XXX employees XX.X% ago for were up of year, to XX.X% in first expenses Turning expenses quarter less with to from $XX and We total quarter R&D XXXX, same $XX.X quarter due

compared million for from adjusted EBITDA $XX or QX per GAAP $XX.X up in million G&A defaulted the legal service year income quarter were the first was first partially to $XX on due XXXX. expenses was $X.XX senior $XX.X the who from million million by to net XX% share ago $XX.X In was Non-GAAP a in bad diluted XX.X% $XX.X income adjusted XXXX. a to receivable quarter $XX.X loans, $XX.X debt net QX note for first quarter offset mainly quarter, Our for in up of the income net from a Non-GAAP or quarter, $X.XX the reserve GAAP XXXX. million, the million up million $X first provider in quarter share lower per expenses. for first million, million, of

quarter at December tax their R&D million XXXX for companies balance internal X the Turning ended million $XXX.X R&D to over year, We due April million purposes. XX, equivalents, for of $XXX XX our to costs first our of we tax the revenue with capitalize XXX years XXXX. this $XX.X in cash code Section tax the to sheet. to from In and up cash paid requiring change

to financial our Turning outlook.

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

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

our of total between to projecting revenue $XXX our of guidance million for $XXX revenue XXXX from EBITDA We million million and increased broader from $XXX million, $XXX are million, estimated $XXX other prior million of million. that million. be of which $XXX.X to million $XXX.X We $XXX includes to up guidance estimate XXXX adjusted will for $XXX to to hardware $XXX.X million

share. XXXX is diluted to million our current million approximately of on $X.XX $X.XX for guide. We represent income shares based remain or to an be up million to for from for $XXX estimate of currently per average to of Non-GAAP to outstanding. $XXX.X second million our at million XX% diluted expect the net quarter of share, We $XXX.X $X.XX to tax XX% to prior annual projected rules. EBITDA is per to adjusted rate $X.XX project under XXXX EPS XX% guidance XXXX our $XXX.X non-GAAP tax weighted or diluted $XX.X

stock-based summary, while XXXX operator, focused of we open Q&A. to business the for year are strategy full In long-term $XX in call strategic that, executing our expect expense growth. million. our profitable to on please And plan with We and investing $XX on deliver compensation continuing million

Operator

Certainly. [Operator first Roth. the of Instructions]. line And from Aftahi comes our from Darren question

Darren Aftahi

big Yes. picture question. Steve, a maybe

talked business Olive go? learning all home specifically, Branches this in Alarm to beyond at the which product industry terms industry are it's where a appreciate sounds and the you we as space, and more new of about those in the ecosystem, commercial like in and fleet you where look you can expands. management, Given think branches the security, I just the relative But that and guys machine when you about are

Stephen Trundle

going of a substantially Darren. find the purpose is I collect of that or AI talking the big now. picture than to higher it each Yes. is Interesting because device value the question, simply about continue now before ago devices data everyone from new say lot that that X years would X Well, was we're derived activity for to data

or than X people you years business. the cameras, they X in line valuable tie valuable So an if what or you there more a it they're themselves done, we've your tell example, when standing you or if member line to unknown to can longer stand them if back an in ago, like but are at would it's as family were car infinitely

result is device analysis a have be a get from take just we So out Connected that from as there X,XXX getting the service provider example, now customer to of for And value of a partner on the that vehicles, higher. intelligence that we when is data, the substantially higher. the the data could that Fleet, with available puts derived and

drive us is, our software room with positioned to as then I and and discover places as intelligence we be backgrounds well where And we'll continue look think can positioned means well all generate at it them. they we're AI, increasingly device the makes branches to those for for in IoT to it. from development, market and in information what harvest So and ideally,

Operator

our next Saket Barclays. And question Kalia the of Instructions]. [Operator line from from comes

Saket Kalia

Maybe SaaS about of first about quickly. Did or on from it's growing have revenue Valenzuela. what am products of for business I sort rough the very you, was of we that? percentage Did emerging you came think talk range Steve updated an XX%

Steve Valenzuela

It's still the grew about and year-over-year. about growth the XX% from last of it same as XX% was segments, SaaS about coming quarter. about It what we talked

rate. same So running it's still the about

Saket Kalia

Trundle, Steve you. great. maybe That's for Great.

updates that's on business? happening the if And Just of on impact any another AT&T question. Any what process? the

Stephen Trundle

Yes, from what Sure. our queue communicating. probably they're we publicly take primary there

I they have progress rollouts. think made some their in

specifically year. throughout to and time their that looks It it's the continue benchmarking on a process will we're frames. comments like that unfold So their

to We continue meaningful the eye things to change our keep have on seen there. we not in date, dynamic

Operator

Instructions]. [Operator

Maxim from Our of next line Group. from Aarde comes question Vander the Jack

Jack Vander Aarde

a or Great just guys. Steve that been on there's update an the know just number properties a just for Maybe Nice there. question bit it's results. are rate, you since I Great if of I any think is outlook. growth international On the for reach what Valenzuela. -- how able business, growing? sort little like don't a business to touch of

Steve Valenzuela

Jack. Sure, Yes.

of is international So total now revenue, X%. up from X% that's

seeing are XX% growth there. we about So year-over-year. It increased decent

Jack Vander Aarde

Excellent.

of relative to do follow-up maybe we residential can versus And a security really you just business inning we're Okay. domestic, international what there, for international on market, touch the in domestic. that terms expect And when to in home grow?

Stephen Trundle

take a probably say, game while different scoreboard. playing And you're quite I would at the been a now, everyone's one, a dealing I'll the many, a Jack. it's many longer than in with Yes. for in game the game domestic markets. slightly that playing different whack that collection of while we've

out in the at countries we're XX So moment, about globally.

not homogenous. cycle to educational take the longer cycle because is the again bit a really Sometimes market and seems sales the

the we announced I'd say, we're there early at say we're second, inning moment. the of X partners third So talked probably, I or days. years about that some ago, Even have with may still would still

Operator

Instructions]. [Operator

line Cory next question Carpenter from Our come from of JPMorgan.

Stephen Trundle

to I'm We're question, the struggling afraid. hear

Operator

conference This gentlemen, for well question-and-answer gentlemen, session. you, Instructions]. participation. conclude this for the participation. [Operator your ladies and the as does as And as session Q&A your you, conclude the program. today's ladies and Thank Thank does well as

disconnect. day. may You now Good

Alarm.com (ALRM) 9 May 242024 Q1 Earnings call transcript