VVNT - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by. Welcome to the Vivint Smart Home First Quarter 2021 Earnings Call. This time all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to Nate Stubbs, Investor Relations. Please go ahead.

Nate Stubbs

everyone. afternoon, Good joining of for ended afternoon discuss to XX, Thank Smart us Home results Vivint months for the XXXX. you this the March three

Dale is Joining performance begin to and company’s including everyone may Pedersen, conference with on discussion reminding CFO. call prospects. today’s forward-looking me CEO; would the by and future contain R. that like regards Gerard, I the Todd statements, to

XX, differ the the factors from Exchange could in materially forward-looking obligation The you guarantees amendment should any risk to to risks, otherwise. put outcomes could our time uncertainties that assumptions future these update Please that of Forward-looking performance, these factors to ended are affect implied such Commission filed not and cause year from the risk which time be on filings may direct our the inherently our risk company’s we or be results Securities or subject realization any Annual to May Report with other reliance no the factors the XX-K/A results of publicly and as Exchange and statements undertakes forward-looking future and XXXX. would the those of those detailed or your revise whether a events for not to and undue or XX, and XXXX, and in to I Form in aware December are Securities statements, updated statements. company result attention statements. on information, expressed with new on Commission periodic

presentation, financial most in available Todd. the are website with measures call available I the measures. also at Relations non-GAAP will calculated and periods to investors.vivin.com. accompanying earnings to are on now which management the certain call, comparable financial today’s over will historical Reconciliation GAAP the and non-GAAP turn of these for to Investor release measures in presented accordance During refer

Todd Pedersen

accelerate the our or people homes. around in And quarter that customers first levels about time hope spending our as inside over I of And selling the are for strong Today, of summer our outside The engagement to will their into outlook be afternoon normal counts and for platform to end-to-end of back and up to excitement all Nate, that a as Review our everyone. carried whether we season. for a high, cover XXXX. topics. get momentum rollouts XXXX are saw starting smart customer decline. remain to regardless smart the performance with XX% of Talk for life platform. business Thanks, in Discuss financial good until our results XX% XX%. originations, represented vaccine quarter. pleased new to case is as engagement our year-over-year, a following growth as we EBITDA of of our metrics which we Vivint’s the XX,XXX improvements we key the margin revenue along expect producing near-term and what operating report premier of robust all normal accelerated increase, home while an we including adjusted you gear continued home an

total the with subscribers million. X.X highlights the I March mentioned. more to XX, grew Vivint’s XXXX, As than from of in period Along XXXX, previously same XX%

daily provide rate subscriber in quarters. reliably nine over more customers strong as our the LTM of board speak these decades saw ever. proposition taught metrics XXXX and remarks, a that during specifics guidance. families their as to relevant our value anything, us Dale our quarter, net and attrition that smart year frequent system. across engagement improvements decline another care also more customer thoughts operating it’s of that taking homeowners smart two base. is core of to our our devices results time today believe and no for year Vivint’s by than system including the lowest X.X the full XX fact best home have in billion as solid steep has events better share his acquisition the proven will are about is there processed the The of past subscriber the the past We comprehensive across other well as indicator key financials If per home for costs million on the connected I

devices are we cameras, help devices. monitoring, controls, deal door with garage door across locks, smart various any our to customers qualified security support. thermostats, and other We uniquely lighting environment the connected From controls, many home

that work carbon using seamlessly their innovative designed monoxide these XX/X life platform of burglary or medical, control also single or a voice. together and life app products such on from as touch-screen hub phone, simply elegant through services can and Vivint through protecting saving fire, our All include homeowners by monitoring, emergencies professional to are their in-home alerts. their

we respond to vertically customer seconds. to within teams includes Our monitoring integrated model alerts that care dedicated ensure and

homes providing their and bullish is economy will the business. the our and and reopening of resiliency selling mind underscoring In allows times somewhere our demand of for and pandemic, technology their whether since that in Our distancing over and of near-term and environment. onset season. families technology the to of peace during people We summer also demand in minds to economic during mobility. uncertainty for been times and anxiety, heightened the any fact security home takes the of having challenging of seamlessly of about of onset continue securing care while customers outside customers coincide our type this innovating proprietary experience XX turning the from We’ve Vivint and cemented protect strength cloud societal only smart of awareness, or the the smart years. the remain With the Vivint socially value home regardless model now home, platform attention manage homes, to the they’re it. inside and our the customers our with of that

new during U.S. and that of dose that selling to all normal. vaccine homes the demand COVID, relevant door and just up anticipate and pent end in also reason adult approximately plays before the systems. and believe COVID door their month, as the travel and interaction as least XX% To we mandatory by home to still back of have the restrictions. that inside We engaged year’s country right one into with received every to the look the to became remain Given platform shelters process hands. this these extent of population will getting travelers, lifted have highly of true systems on smart have installing last Vivint Based in is at volumes now year our our be with have for the quarantine The they states to all proven systems the our beyond of now begins COVID, services environments. of tried

dealing still world respectful the that continue COVID-XX. We’re of fact actively with in operate we a to

as ready right the direct sales team to markets interact new head all the PPE they’ll go of We with full customers. preparedness to have training and with our and across necessary the increased at to they U.S. And out be capacity. current

that season. normal sales the to and weeks our channel, last environment. to believe our return of our through started point, summer sales to half the we pandemic. centers home to sales And year nearly the swiftly at wave momentum other first move year. normal call continue in a the inside As six onboards time, this new At direct we during sales, the more work season Paused a teams the a from fully we pandemic of home employees in entire this corporate summer had this subscribers Meanwhile, about selling environment results delaying has national for all XXXX. turned and expect which robust will reminder,

of as product from brand for system. presents vast comprehensive rolled to awareness massive who value in opportunities development. long it’s on to we transformative now take I’m the we’ve the majority What our and as the On be We this the the the and we home, of out and in experience XXXX a Those best to the that vision advantage the product on advantage smart not investment in delivering step And tell security smart investment distant desire? this believe have home. the provider of add seen beyond operating the peace home future will continue position we and early quarter But growth to million brand, our pushing in technology the front, better and such maintain story the position of boundaries returns development our can opportunity. drive most are? We our and of new North we offering And smart the focus so addressable of in important company how running our they believed we during investments every total leading is scale. premier to pleased up increase will fourth platform with technology robust smart delivering Vivint a terms take by to by people order a the in – time XXX things smart of also consumer mind is is to We the continue we do? end-to-end to edge national product home home America on think a opportunity. brand, homes new home market believe service

matter specifics employees. violations of may results, over Vivint have turn of instances quarter I by go resolved of policies call the company’s Federal historical Before seen you related Commission with the the Trade U.S. to to the recently through to Dale our as first certain sales

country trust behind protect in seriously, matters and families. We matter to the homes are put us compliance across pleased of their us. takes put this to particularly customers their as Vivint

by to focus We To will taken continue to customers. deeply forward. service began we will the to we turn with exceptional committed have providing delivering make our to now review policies. on to before to are FTC end, this right the our our Dale. stakeholders strengthen call over our a And integrity, steps operating compliance that doing already and going customers, commitments its I

Dale Gerard

Todd. Thanks,

quick for statement the by the related Before quarter, companies. I the recent warrants by accounting issued results to get the SEC into SPAC comment on just a for the

for of in majority reevaluated previously warrants Like the with January our historical conjunction with accounting issuance in equity. Mosaic XXXX. private recorded we SPACs, warrants the a both public of the our as assumed placement these statement, Following and we merger

Tuesday liabilities the and that and restate However, income Of value at or expense, filed merger reported our to based been as our consolidated measured date XXXX to we operations each fair classified reporting have in warrants previously XX-K statements. of our in as statements filed on closing financial period. of fair valuation, changes was determine of subsequent we the this Form week, non-operating value amendment our an should the

of as recorded non-operating this million we financial now result And earnings warrants. release. warrant of the December As with the XXXX. restatement, $XXX.X I’ll of XX, in presentation was through conjunction to a liability today posted portion that million a walk related loss the our the $XX.X we

a by as continued user of our well increase as year-over-year. generation as AMRU Looking was quarter. metrics adjusted XX.X% Average X% on An Slide subscriber the few cover the revenue latest per increase products, On from and $XX.XX for sales driven of the strong monthly be Slide EBITDA X.XX grew new to recognition such revenue. across Total our for cameras, additional portfolio, outdoor to deferred X, we in we revenue subscribers and which the highlight of doorbell million up board. million. X.XX AMRU to X,

mentioned growth primary is the in subscriber first grew revenue Adjusted EBITDA revenue first cost. XX.X% as million. average increase service attributed drivers user. XXXX in scaling and the acquisition monthly the of expense, double-digit of by The total increase the quarter. as revenue the in quarter with For previously subscribers, per for nicely The to well grew $XXX.X

XX.X% the XX.X% quarter margin to our quarter basis adjusted the the compared points, first EBITDA XXXX. increase of in of we revenue, For XXX by

on were underwriting redefine will in growth and we Moving new points quarter subscribers to XX,XXX subscriber originated in X, we onboard future, to qualify subscribers. the our is to first by onboard XX% today Inside A few for boost the a the Sales of Slide highlight subscribers XXXX. originations Channel year-over-year led National and and the success the in to process requirements and and we How our and which continue important a quarter.

enhanced financed that or underwriting the we the One to able the are sheet. contracts the of pauses number of installment that are reduce is on company’s RICs retail requirements balance of

our improve By away financing XXXX, we subscribers through quarter the of in reduction XX% installment of from number and first party pay contracts. subscribers full dynamics. of the and greater reduce in RICs the flow saw cost proportion acquisition partners financed we’re For to a net subscriber and a company’s arrangements towards retail shifting able third our cash

partner of of our Bank, completed new and a Vivint pleased three our contract This new our extension in upgrades the renegotiation finance party announce renewal years our line a Pay up with sales equipment sales Speaking in initial the consumers, implementation I’m recently which the program. we primary through successful a third financing of financing offering will credit agreement of during facilitate partners, of process customer’s resulted Citizens to and under lifecycle. additional of streamline a Flex and

going on Moving new incurred, finance to offering the That are of fully business and which the cash a in term. rate and amount flow of forward. loss basis your intend near fees to the the this we committed credit positive of merchant timing changes cash line discount the will are year the when impact and operate said,

and acquisition subscriber. will X, Slide subscriber new to Moving subscriber per service per costs costs cover we

trend improvements the reiterates ongoing service first XXXX to vertically installation, in our net support. of customer the of software, from which encompasses per advantage cloud and $XX.XX year-over-year This quarter the of smart the We $XX.XX the in home cost the platform, continued hardware, in Vivint’s moving quarter of XXXX. subscriber first integrated,

customer As areas, both in all as in trends we we’re positive satisfaction. continue the service as cost seeing make improvements of these to well

adjusted Our well to range of cost adjusted percentage. high XX.X% quarter for A of at in first margin XXXX. net portion driving as be per a increased in dollars, service margin is the significant service the subscriber the continued in EBITDA as drop EBITDA XX%

subscriber Slide we of acquisition highlight XX hand for costs last the net X, period. right month the On

of partners per products. full, new mix are utilizing in lower financed period the of That’s shipped higher ended subscriber subscriber XX% XX, paying customers RICs decreased continue new to home to subscribers of March we via XXXX, financing costs For smart to drive the acquisition their as $XX. a the net and our year-over-year, purchase that number are down

purchase During total subscribers the of point quarter the typical on illustrates of continue and we pricing equipment. quarter, depicts our leverage in Slide XX sale, to also that walk changes benefit from subscriber installation at some end.

of subscriber at Once One basis of XX.X%, our low. XXX which pleasant nine lower again, ending been quarter our attrition has the at and throughout pandemic portfolio. performance improved surprises is a the the points year-over-year,

Our portfolio better of perform both and in to indicators. than attrition terms expected continues leading other

cash in used activities first of net saw we quarter. in nearly $XXX $XX In of We very terms strong position the million. with on of a a million cash flow, the improvement quarter hand operating cash during liquidity and finished million approximately $XXX

Finally, of economic ability several moving XX. financial top environments. the year of reoccurring guidance subscriptions, characteristics predictable for Slide including in toward business long-term all and highlight highly to from revenue page a fundamental The model the monthly the our on model, thrive

summer We And start the about are the pleased during business the strong our to with on year. operate sales this momentum team the capacity. ability the we’re at to selling full in bullish season direct-to-home

constraints that follows. our pressures, supply of factors into also subscribers. guidance and consideration, to expect confirming with We hiring these million aware XXXX could we in inflationary X.X original upside. Taking chain all million potential are X.XX as total limit are disruptions, of still We further

open XXXX prepared to and for the the be $X.XX quarter. our between we This to our first Q&A. XXXX estimate adjusted $XXX And continues Operator, for billion please EBITDA firm $X.XX Our billion. remarks million concludes finally, guidance previous have $XXX of on million. revenue call

Operator

from from Thank JPMorgan. you. the [Operator question Coster line Your first comes Instructions] of Paul

now Your open. line is

Paul Coster

Yes, much for taking thanks very question. my

sounds of sort limited factored one guidance, thinking that tilts but guidance risks that of a in not from the supply first upside into the the it said sort so You present chain the implies like perhaps, what downside, you a is your and biggest it just kind of are basis? that to you problem talk component risks how to on us through Can this so managing seem relative about be of way. well

Dale Gerard

over really to Dale. big think Thanks look We smart initiative selling our can systems It’s we’re some a of points integrated forth customers. in part rates. terms the of the stuff of Paul. home big do Hey, at that that, really and different we of trying things that’s we so big of the analytics, is call. with do attach And joining our one growth have as, for people why camera advantages and notices, like with the the around others, think it we one and as and

things But we’re and manufacturing, disruption, with the good maybe of we’ve in now. selling then believe it or really, right think big part getting so the have there’s and from shape, we’re we’re be quarter. some And the second, if adoption supports in take third terms one spray cameras, rates sell the any, air stuff addressed big to thing, if what doing doing we we additional rate, the limit and how adoption shipping. of number some the pricing think, may our quarter and cameras, logistics But, seeing in we’re frankly, and what of in are could we’re late with we or we and of chip higher than is terms ports, that and where fourth of we or of

just so, a to to no we’re have We care there’s And try of ramp professionals to to like of around service, some to customers service supply calling to and way a to we’re than companies installers to constraints, in the chain, stuff that take what some the we’re up, we want able markets out and able been on, different them. probably higher be have there, care the good the the that in out in good off we hey, that as inflationary especially other we take going with continue as to field, enough hire there’s But based year. some start. think year say, hiring pressures we’re

put based add? we together really anything the know hey, we said you on just that confirming what best we and don’t to is path all Todd, kind guidance, and is this We our upon of So, begin point. the year are to we want stuff at guidance good see. for which I think just today, where think, with,

Todd Pedersen

we just the was beyond issues being which mentioned, I for to limited chain able of to saying, delivered Paul, Yes, on the you being is that supply to kind that where and Dale upside potential caught U.S. based product is that. install sit

going or Ships could there. kind out it’s difficult to not it’s front quite else like So end that but mean, chain upside, their everyone own most that. see issues supply center, be we impossible some of of house driving just

do we but So feel comfortable number. very this

we a seasonal of some We’re that because the hardware last fortunate that in regards, treat have done and business a order had year. we lot

And kind we need of numbers, a know so of what a attain we these have lot to already we insight.

Paul Coster

and a to we’re really all try quick here. obvious have I think going working out investors and something of but anxious, follow And very stocks the figure up, sort because been hard going what’s down been wrong, Gotcha.

just it of when and me passing? actually can luck Bank, like issue the of Does an Citizens credit Todd, sort relate Let extended issue? but FTC you’ve occurred? of my the with tell allocation as you term that entered us, different there’s that, sounds is it what try into risk. part and to in FTC identified the, just this is And back

Dale Gerard

him a part, good with Citizens, think consumer the partnership had We’ve very I finance our done a Paul, of partner. early since XXXX. first with relationship the extension with very [indiscernible] pleased Citizens, we’re they’ve in terms with very, Yes, during

into debt. It in to will for of the so installment line products, that us of of we has, roll benefit really line to fixed what easier better move that way we was the is be the nothing program in in It’s additional have which the we a making assistance really for we process. from customers. really to we’re for the And the credit, of glad loan onboarding to want as changes our out were their able it, long-term for customers installment allows a those FTC. that take to a which was either then systems, that and see of a and customers negotiations hardware, loan additional line is part terms call And better want really a, where the of new the or that credit kind sales products extend

installment line way our And We credit ahead not I of loan, what so, set that, terms probably the on. standard think or are we’re terms, in the do reality, early the with were terms standard able more with are industry? to with

things So and we’ve that will offering more users for by come, of that of from to line this. that the moving then from these how kind products pay credit to the standard credit, of part the of terms pick the banks, one Todd was around go of Citizens or other was

Todd Pedersen

I mean. Yes,

say to settlement done. I’d first The this thing is, have we’re glad FTC

asked paying about of Now, FTC refinancing why that not, good not like we were do in have debt, down to it didn’t middle feel able we’ve and settlement been timing, that we was the happening.

So, we’re glad that in past to the and past. have

FTC. we not to we’re by provide of But done. we a let But some those in around And doing systems again, and got and people take it’s and found return let investigation if did that is, company. consumers, customers, the back have those of behavior, so that service, this great found part has past that’s integrity out the XXXX, go. people we right this the was no consumers, care sales go. with part and that Secondly, out we by in thing that them those this want did consistent company And let our of some people we

laws ensure us. definitely every do We’re we the again, to have and controls States everything and of that underwriting to and to on from systems perspective. financing a is year compliant We’ve compliance, glad up par with United improvements enhanced this that behind and And made.

glad and us So over. to that and have done behind settlement again, the

Paul Coster

Thanks. so Thanks much right. All Todd.

Todd Pedersen

Paul. you, Thank Yes.

Operator

Thank you.

Capital. question comes Jeff Kessler line from of Imperial next Your from the

Your line is now open.

Jeff Kessler

all it’s working with to talk. you And continue will great you. Thank guys. been I we’ll hopefully,

questions am here. I I’ve really that’s a position the couple in not of all. Just got

from looks to are looks Firstly, going with started – you economy you it’s opening have have you’re the the – what to talking the already this making year look, you’re company. sound And it up, branding about? investments like the you’ve are – in

of talk and other in with we of that the know on assuming timing you just start don’t spending than investments others be more focus to for how doing other to as cost knew about improving. you may in home types some pushing is terms home, branding? of to some to Can things, that types Now, money probably automation, about terms you economy can to maybe the in the do going how investment opens of trying are be on much you you’re I new you technology, improving involved salespeople trying talk what your some training put or your overall addition of you’ll that and improving there. onboard increased various that other distance up

Todd Pedersen

So, been to the work it’s and to great by way, with these you years.

that, We’re continues. relationship it’s a miss like going I this, perfect to hopefully guess

Jeff Kessler

with have guys. my we’ll sure; other I’m

Dale Gerard

couple of great. a Well, sounds so things. That

deliver enhancement We and we there drive and to – quality has that. The can and and is in to agree and in best to got market keep first that lead critical, services continue we are be technologies product our the that foremost. to quality that The we can there. that’s investment got the consumers or values continued so be

technologies and tools new in tools the investing are customers; onboarding underwriting customers, over years. we’ve these from built We

Some to of refreshed. feel them we need be

deliver Again, that operating can years built year platform eight be updates that our reinvestment of so a within done will a some there’s platform. seven, system or out You’ll the ago. kind up And end we and seeing we upgrades, in and believe those for probably us consumers to that, enhance that information, to operating enhanced – enhanced to for content us more do through system. them allow done experience consumer, be allow have the of consumers kind be more to to service

compared in are, super saw starting that’s really mean, now with to that So, our there. growth we we’re rebranding results see line we’re I going been – some happen QX. But have started XX%, with it’s you the numbers, revenue early the QX as top pleased to to momentum marketing,

we Now, mentioned chain already that with some are earlier supply constraints.

and to races, we be to because able install. product to do not need be we add customers, We’re going we the off if have to be, to hardware

although improving year SAC cash have we’re the year-over-year. we and and a great net our the flow So are margins, our the strong, dynamics we of the operating all are take out, projections super net business, attrition passed numbers, numbers strong and

positioned. we’re how for company really the is excited looks what So, this. future And, the about like

Jeff Kessler

an investment increased includes This SAC? in

Dale Gerard

Can you What? expand? What maybe mean? do you

Jeff Kessler

about customers talked getting things tools trained new You and and customers onboarding for that? like

Dale Gerard

some that Yes, area that it’s we I from SAC, area, out really which our mean, the of information that allocate do technology within for SAC of service.

hey, be So is we’re that’s yes, there’ll part fourth it’s there. to of the did contributed that the as brands then But, the said of [indiscernible]. some actually directly of we that And said, some QX. then like, media being doing we earlier, when of really, to about, of about in quarter three just investments what impact you’re to going we’re going we the in of start make those XXXX really you’ll call seeing Todd kind areas and those expect talked talked see

sales brand through QX, up spend seeing of and of In you’ll terms for the as starting as of kind QX. terms of where of the of product is, start in stuff And of hired some we summer development, technology, we’ve out to come that we get do kind rolled force. the really need in we’re some kind to then

Jeff Kessler

who the and clearly, proposition your it in to obviously reaffirm around even be people because your down? various ability an high the And question a Okay. move important mover spot estimated is on far under is XX% these is people can under in, are XX% contracts be can’t far you say to pay may on when important value What one come go important; But to one, actually important depending Same the to seem isn’t is the components sweet probably coming all someone for sit customers times is estimating like attrition percentage come. attrition going don’t past, through we’re you or obviously, attrition on, were XX% going their attrition on or somewhere to seem always be whatever. when the that It’s of term can to your how better up. living an how of you or create to customers. XX% going the to In now attrition. maybe

Todd Pedersen

Yes, – of end-to-end are that things. solution. couple well, fully platform, a so We here’s integrated we

installation to firmware; about. this that incredible make improvements the process, continue in loop we’ve hardware, feedback the got We we’ve talked the

relevant efficient impact. to going don’t But the to average detail in jobs lives going they their And think improvements continued where the home, their if to people We like we system, So, hope maybe people to If our from perspective. again there them we on service case to other made every to year, it’s obviously some work work financial last cancel. we’ve have do, of RICs consistently in or products keep in and occasionally. these reduction changes platform of use noticed is what if to people people that lose is, continue the deliver now make because calls great they not happens you’ve XX underwriting in they but the per and overtime. are to devices the and that have XX is consumers, on enhancements product enhancements enhancements have the little to that impact are we the consumers these circumstances or

really incredible. $XX.XX potential we that to in And gains to story. been of to for in hopeful good be you then down costs that the subscriber business real substantially. costs come facing our trying we’ve attrition from X% That’s And we’re net from up this pretty, a a on that couple a to consumer our side. see accomplish And trying pretty is what last monthly continue not we’re build add we’re not net good is So, years. service pessimistic,

Jeff Kessler

So that’s the sweet are for attrition? view sweet be what your range should maybe spot, long-term are spot changing you your LTM you of

Dale Gerard

no. at No, point, Jeff this Jeff,

where continue time how point, we’re what but we may think Difficulty] this more at see here, Todd think up, I taught, we picked think I we’re going to like performs, in as we get said, I [Technical stay to attrition and

Todd Pedersen

all net with roll hardware. people $XX.XX not to and subscriber of to as working, – often pleased work, means we would I costs, replace servicing trucks are systems the our all and results as per things of we’re great, we’re super the, are say fix are that but used that the having

is, more in the more again, attrition fact, system elegant, see time. system the the and the So we robust and more is, reliable the the down over better coming more

aspiration So, that year. to possible. to perspective. confident And the we think But for feeling over done about what the hope make if an injected we’re from we’ve market gains not we’re

Jeff Kessler

it. Great, thank I you very much. appreciate

Todd Pedersen

again, luck in Thanks Jeff. retirement. Good

Jeff Kessler

Thank you.

Operator

you. Thank

Rod of line the from comes Goldman from question Hall next Sachs. Your

is line open. Your now

Unidentified Analyst

it’s cash [indiscernible] for to Could difference credit Hi, impacts to tax how you of and job results. versus And better some you this Nice the is flow. Rod. on expand behalf line line of customers? on the between also installment on the mentioned

some So, could you us color give on that?

Todd Pedersen

Okay.

of what So in that what and us putting a as, installment this term kind loan. have – the line soon credit been we’ve fixed the of is we as

able the really the only bought what actually finance a two sale, I porch, we once out I means was – if back a would credit, credit the I put my that on camera, card, customer later hey, line I called to to more six so it. that about way the fixed, to finance. months think her of but it’s finance, at I wish the The bought customer cameras, of add weren’t like initial point the that back, so said, third the and And can

that to will and and to they camera, credit. that go of pocket system the line of have that And that for instead to to us add the install, make so out add that can actually and of come allow back point

just So the customer us forward, installed It going to allows product able and be or to in additional companies that that difference. to new us to offer the they them, be as the allows their able want that homes. to customer big as the that’s finance the really products and then

MDR In has terms the worked, year overtime. of fee the – cash, of the in the we the the the last kind way way loan installment paid product

to losses way there move the And that The were so have the we it paid month based in if – and eventually, a then as fee every more move that transition a credit we and be of place. it’d arrangements XX MDR that’ll up be had will line every it’ll the loss upfront, months, of the we’ll the next through MDR expected pay into occurred that will and caps the the where paid as fee like month, move losses loss on were we kind was so the standard net.

similar financing program partner. Fortiva So with our or very, how other to very works

Unidentified Analyst

direct-to-home. I helpful. about Super wanted to also ask

And how the talk growth could than that? is operating they’re weaker is COVID you why historical still a and understand I on environment. sequentially trends. – bit that the in expand But a line So about that subscriber

Todd Pedersen

the country, going operate we’re basically that – look, them, we people our from that they’re deployment deployed across believe market. Yes, will the some still they’re perspective. out We’ve normal direct-to-home still of – a the number of majority way saying sales coming to in

and are even we is distancing respectful of vaccinations and CDC this selling percentage be of on it social with the feels back are changing which of obviously excited though We’re summer at being like, this to the point, will that country, somewhat we’re and it year type people normal season, still But having, guidelines about. for based a vaccinated across a suggestions. more

the adjustments how it adjustments made accelerated events, devices. some be approvals on maybe do we’ve underwrite we do on that and based on used consumer COVID to we Now, our for of

travel who salespeople have We an around iPad. with

the it’s Now, on consumers’ done device.

in can the social we maintain the even future. So, distancing,

from for it really us things is tightens second that perspective, really does compliance up. The thing a it

net a positive way So, is the all this around.

of net the basis to respectful with wearing an market, to gloves underwriting positive on going thing. we’re from in and be anything, But appropriate health We’re, perspective, compliance a of masks still not a people’s making then, that sort the be COVID-XX, sure the and and adjustments, checking daily again, company. and trying it’s that we spreading for

Unidentified Analyst

Thanks, from insurance update And question on you give us last the an Todd. business? could me,

Todd Pedersen

mode. still the great the we’re data And we’re say about We we I potential is thing have owning in we business. again, with have. would that this so test still believe, upside Yes, and that great – our platform

home hyper the about If interactions with local you based and it’s actions of super, it inside on think consumer data system. the

of we data our patterns, inside a that have daily collect of we usage basis. So on that collected all

ready future perspective we have we’re but projections, sure that start underwriting or in from perspective expand a announcing quite and compliance perspective we volume not to before trying a to with. We’re will everything out financial dialed make from that business

Unidentified Analyst

Great. Thanks guys.

Operator

[indiscernible]. Thanks,

Operator

your [Operator line Woodring from you. from question Erik next of And comes Instructions] Morgan Thank Stanley. the

is line now Your open.

Erik Woodring

reached decision XX% driving you smart of know base given I you for the still and impressive I was, And are their that guess in ask that? stuff. Thanks. metric, to the of of on earlier provider perhaps way. I really question, was Hey, I on call congrats take your but good follow to end I’d the the XQ, different environment? that an you rate, meaning, through quarter, on term on bit the a Congrats a guys. people say of putting home quarter, now, curious afternoon, complacency, than end reevaluate less Just would hold attrition wanted had COVID there perhaps again, then what the a And March up. that will

Todd Pedersen

to on software, is, past. we of as improvements, look, little every in types people, downturns what that protocols, consumer that make underwriting different that to people day. of true and every we working the this make our that of through environment, new thing firmware, more hardware earlier Yes, We’ve And of more is that mind push see this I better continue I value people, and to again, and better be a mean, is peace try we’re operating in proving different to perspective just been ways those that issues the boundaries in, are that their is mentioned based the continue like do. situation releases, different then the installation something other kind for and sure relevant and in with side from of on And we we deliver systems fact which consumers. their out living some could the

Erik Woodring

expenses? I more with lows? we were What expenses interpret than XXX% Thanks. tie Okay, super to of drove kind then helpful. smart year-over-year, customers? selling second home that that up guess growth obviously I that’s XX%. acquire my meaning reach to subscribers selling new Should in And question, expensive that And do up how impressive it’s that SAC as getting more Net new continues then very were

Todd Pedersen

Yes.

direct-to-home. quarter, So kind the last we things in of a year you if couple shut down recall, first

year-over-year anything there I don’t a also, don’t said kind some of of that know recruiting, spend, spin, in terms big So, so no any said, commercials also. when of a your of year-over-year two is was no so variance I some the spin, last, you pushing And three of the spend, we last variance of the money part that. fact we’re quarter, then more or and that tied first I forth that’s kind brand say weeks to training, to brand of that’s spend on media or the have into directly as SAC the

been. selling in we’re because product. Net, terms gross we’re where cost, or more driving more with line we of the charging cost in terms have of it’s for, And of mean, SAC, down I net sorry, gross again, our So, we’re we keep

cameras, higher. upfront, the number basically, we’re selling of devices is So the of number

at expense as think I because call, excluding say the or SAC comp. a based I actually other thing selling to stock look

through stock – that terms the equity you in are So, was a so in got quarter expense, when the driver based new that we big also the there. legacy first that plus that had in came grants comp of that

of a XX%. of of kind whammy that looked that’s So, double if But I there terms think expense. you in at kind it’s

I only comp you’re around million stock think that $X year-over-year. without about charge; XX%, based up

Erik Woodring

EBITDA you’re I of your guys congrats, to Correct of again. really that there? obviously and if if kind helpful. on you wrong, compared the And how but previously is can And in margins then I guiding say mid-XX%. which about that squeeze current I to long-term I’m guess kind that’s again Thanks still we me. think that’s it adjusted one. last imply me the I should already the And Okay, long-term? would for guidance, remember

Dale Gerard

in providing really Yes, costs, still we things again, service down there. as we’re I think, a leverage of we’re able improvement terms the customers, our drive again, and while costs, spending we’re exceptional but right, what such board, across – better service of can seeing to to continue for of lot moderate servicing being G&A seeing

is we where kind margin whether that. really mid-XXs, kind a we of overall, XX% XX%, of to think I still in think see that’s

where For think that make and business more decisions the shooting for successful the today. we mentioned, near-term, brand, technology, being kind in help I we we’re terms Todd so the continue invest long-term of products, will think, has business in that’s as as to of

Erik Woodring

thanks, Okay, guys.

Dale Gerard

Thank you, Erik.

Operator

Thank you.

America. question from comes next of from Marlane Bank Pereiro Your

open. now is line Your

Marlane Pereiro

for you. can do taking if And a I you normalized Thank One, level addressing and Great, my thank think how capital a of questions. business? two you two very I have apologize you this, but missed attrition, for thoughts structure? state one. share any about on I kind the steady for the just quick or

Dale Gerard

through. Sure. it take I

Our backwards If to attrition, probably attrition low think the we’ve XX% XX%. think the said, I say attrition, That’s group somewhere I we XX%. of XX%. I’d high kind had in

interactions part as app. their during as mean in at kind look our Todd we of think continue as life. post-COVID point. to and we how many where say, better saw our is pre-COVID, at increase they I customer, my terms to their So, maybe COVID, its better interacting times this continuing that are system of and hey, I people they of to need to – Again, provide we this via everyday with XX% really a that XX.X% value this said, service,

types talk found video your to that through can And answer things. that’s deliveries, one not went doorbell your that them those our get those your tells deliveries door, but of able to of you up. of without camera, actually that in And talk things we person, so have the to being the the camera, touchless I think, is and think that us I quarter the part interactions

cases people go home, it they’ve they will discovered that were why when these think even people office, back at I used the which, be that to they’ve point, got uses some will probably beneficial. So, actually at

impact number. of service, initial that as And important than the attrition, is bit performing related of attrition that end of drop at their portfolio about earlier, has the higher term, we’re attrition, little attrition though down, think a can end And is percentage attritional our an to that – that it’s mentioned kind of of we XX% term of you worse, thing, it long-term up is. we then at have just always a that the attrition I we’re is automatically, really will as customers. drive can lift so we somebody you of again, those – is happy the less percent see where goes the customers not that even If lower

In later, terms extend we’ll of think we as those. sooner to Todd that take said, than think the you maturities and care, structure, for sure take ahead go we’d I cap and looking I XXXXs got like I the that, address think some know, be XXXXs, we’ve want care to to of

be us think some you’ll market near out look future. the I at in so in the point to see And

Marlane Pereiro

Dale. Thank Great. you,

Dale Gerard

good Have you. day. a Thank

Operator

further Mr. at for remarks. closing now this no hand Todd are any to to There you. over time. Pedersen, it Thank questions I’ll like

Todd Pedersen

everyone We getting the us past back of looking quarter, in with And set in years, place. on again, past up plan appreciate a this which today. call a we’re at was build the couple

growth improvement top-line everything in with revenue in business servicing We’re attrition, LTM well. subscriber acquisition costs incredibly acceleration excited to net the costs, the see performing is

you. of the forward in excited next We’re Thank to phone look the the on with getting about call business. future the And guys again quarter. you

Operator

conference gentlemen, call. and Ladies Thank you you. Thank for this participation. today’s your concludes

You now disconnect. may

Vivint Smart Home (VVNT) 14 May 212021 Q1 Earnings call transcript