VVNT - Earnings call transcript Q1 2022

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Operator

Good afternoon. Thank you for attending today's Vivint Smart Home First Quarter 2022 Financial Results Conference Call. My name is Nate, and I will be your moderator for today's call. [Operator Instructions] I'd like to pass the conference over to our host, Nate Stubbs with Vivint. Nate, please go ahead.

Nate Stubbs

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

Home's the Dale regard future this Bywater, like Financial including to me are with reminding Chief to may would Smart Executive performance everyone contain by that statements, Joining Officer. I company's Officer; today and Gerard, R. afternoon and begin Vivint's discussion prospects. Chief the Vivint David forward-looking

could to in we Risk subject as time. unreasonable effort, measures. the call or statements release risks comparable in financial revise over in otherwise. GAAP, will outcomes no risks We non-GAAP certain Form a the available available I on now which events our turn calculated available inherently cause update are Relations X, website. will non-GAAP filed The most extent with accompanying section measures in presented to obligation that report materially the indicated Investor actual to refer measures to SEC in to remarks, earnings or and information, In Factors presentation, to forward-looking the results any was financial XX-K, uncertainties those the describe today's future of accordance we are statements any whether differ on these to the Forward-looking without and Reconciliation in of are from time which with of our new result company make and uncertainties the other these or undertakes to XXXX, annual and statements. filings section some from of publicly March and in such David.

David Bywater

Vivint everyone. Nate, in and your good Great. story. appreciate interest We Thank you, afternoon, ongoing the

and execution end, every continue of day your that the strong a record we adjusted and through XX%. grew XX,XXX the nearly work to home to hard public your a total period. am track originated EBITDA continued quarter over pleased report support. smart of revenue record XX% new for our almost We first by as company To is to I XXXX that confidence We first as quarter by which subscribers, earn

attrition XX-month and was by believe improvement among is companies was prior the point XX the versus our low a a national We basis smart XX-quarter year. attrition last margin. Our which a rate rate XX.X%, lowest significant home

as a improving efficiently and result work of portfolio across of credit collaboration lows, customer performance our enhancements operating with QX delighting services. overall and indication service ended products the subscriber is of we customers cost retention strong near per to the We well our years Our quality while net of are all-time business improve as our and that customers. effectively a

model mind we has believe is communicated adjusted environment. sets we first times. revenue in the February. security subscribers, targets in the quarter stage proven total any believe We during And relevant resilient peace and revenue us recurring to EBITDA we challenging our full and Our of for to momentum meet that the year economic the market provide the late for in

rates our specifics interest range the end constraints, lowering Dale end we for in bottom the rising speak guidance unchanged. and by presented supply will top of of remarks. this flow challenges cash the Given to the leaving free the his change chain while range are of

that services our home money every while safer redefining on the customers' focused experience technology, home, create greener, a are saving smarter, with We products and month.

X.X We across is to that per core platform more this us portfolio. subscriber day on events than integrated billion process deliver enabler the Our our allows mission.

nearly for Our and times years. XX with stays home average has interacts customer us day their with XX about and devices X system approximately in per their

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that home we and segment. year And strategy home Energy intelligent we the longer smart customers from will scale, One. $XXX remain we with with advantages they our value our home will home customer indicates additional the value by Smart increases in further will that Moreover, a who each cement We platform. remain than the smart lifetime extend services further customer X-year believe greater Vivint We with bundle bundles our our leverage being of current lifetime integrated us as are the on smart Smart as has customer who a at broader alone. do-it-for-me confident than $XXX believe our smart in a strategy and/or data platform a of Insurance a in Category And leadership platform, average. the as to

our Chief recently in billion a product lifetime our customers. as the of AT&T well building platform. technology segment Business, as technology continuous value Chief leaner and our We excellence, experience Of Rasesh to customers. Officer, innovation forward experience customer the to commitment on Patel, us of requires helping our service our I innovation brings Officer of most Vivint XX-plus with and improving driving $XX operations focus the he making join the businesses, executing mid-May, look to Operating customer-facing of welcome our of annual Platform will in He a homes Rasesh approach to all on and strategy safer new in course, smart of am revenue. Rasesh years product Vivint would experience, pleased and the to enhancing our Product oversee and expanding operational as us smarter, refine to team. to us and

our key to strategic adjacencies. Turning

expect the the smart the of quarter. first one expand by are into As saw momentum Smart companies Due we the majority to Energy, of come remain in first XX we our back would track sold And in seasonality of in double the megawatts to on year. we the we we very XXXX. the to of encouraged sales the to our business, home half

are one Vivint better partners Our of home those are selling who smart seeing rate strategic with strikes wasted that never than solar the and bring we sales on demonstration This a sales a at power bundle of directly solar of costs force sales is a solar that issues a Vivint bundled installed. solution. an who the seamlessly And incredible solar. considerably struggles it with, get system the by upfront system offering only realization industry

and into an production to data-infused that energy manage combine to is vision AI integrated power consumption more uses long-term consumption platform intelligently. Our

solution a our or energy Our for and U.S. confident is smart believe, go-to-market Pack, the a adopted manage right home next smart lead solar, X partnerships, to solar grow signing Solar, customer partners. home have our solidify home leadership powerful relationships of a the in key a and that as a nationwide growth. and with for We the this phase the customers. energy initiative Vivint this he opportunity footprint is the we we than our grow homes point new retain hundreds worked person in of will prove add across team every Smart day I've I'm significant to our that to addressable is of believe North Even our to Energy show combination to customers joined these Vivint our there back less our lead and business a well provide bundled up years smart game with our at at with several Surveys X% ability portfolio to and year. and existing X.X home as few within award-winning months to who be our as We the subscribers smart differentiated industry nearly believe customers. customers we thousands of to install for for we changer million of America.

can our risk present We our than system that discuss smart was with without briefly customers inadequately of homeowners a a system DIY installed installed. help to events. and of scoped Insurance believe that and mitigate has unmonitored customer lower smart the price the a to or better an Vivint professionally monitored potentially severity continue home Now we actively who data-rich initiative, risk platform that can loss system home believe a Smart poorly

to Officer. Ron this leads In the coverages And General marketing is We a this development Smart Agent, insurance invest created Insurance as us of becoming to a Ron Allstate growing in most for continue insurance Allstate. more as Insurance than as homeowner initiative. brands our and and proven as of our to which to the newly transform develop The build a process March, provide including such we're X and we headroom the recently, we're they're significant universally growth. Progressive, first that XXXX, with recognized at companies Auto, purchased future. has operate closing, and excited pleased provides large, by showcased Safe his In of was role Davies proprietary role, leader well of extremely offerings. and to over Chief business, Managing the in performance career ability about will allow the recently enables which are the Ron decades aspects all markets quarter in a which welcomed in us strategy specific we spanning

we and a provides adjacencies growth to free grow for our the and than home our that, results opportunities. we'll platform in quarter cash believe as to to much turn positive first faster flow like continue in model discuss further smart I way do-it-for-me will rate peers can that generating more. value-accretive over well Energy, call Our Smart a that We the business a Insurance Smart for as our profitable outlook year. so invest while and in do at Dale With

Dale Gerard

vivint.com My comments information Good to was refer everyone. our of our prior Investor section will Thank the Relations you, that at posted this call. David. presentation afternoon, website to earnings to in

a remarks, prepared will open my session. call the Following for we Q&A

continued well metrics in the year-over-year portfolio quarter. and perform showed to improvement subscriber key Our

subscribers quarter X.XX and first million to versus decreasing X.XX growth the period, from prior in we the had During of total million. X.X% XXXX, year of

The quarters. Our trend year-over-year total in and at monthly several incremental AMRRU was average first the in revenue year-over-year smart per of have drove AMRRU, over XX.X% home purchasing total growth driven in customers that products sale, a user, past increase or a subscribers quarter average monthly point recurring the by recurring AMRRU initial X.X% total in or $XX.XX. seen MRR. the we to revenue increased The

million first total MRR $XXX in reported prior the $XXX.X million, For the up from quarter was of year XXXX, period.

as AMRRU revenue attributable was total to growth revenue as million Revenue the solid first of our quarter and Energy XX.X% in mentioned the increase and subscribers to by in increase Smart The on the initiative. grew adjusted previously to well in in $XXX.X EBITDA. Moving double-digit a from contribution XXXX.

are the XX.X% the revenue service in G&A We the first same we quarter were million, a pleased XX.X%. cost. The G&A increase. EBITDA exceed revenue remain decrease quarter's XXXX, primary grew margin XX.X% the on from this guidance was legal revenue, primary meet the of very onetime note at of of with up period of in year-over-year finishing of of with costs driver XXXX, year. year-over-year the full expenses in first a and in I our first would incurred for nicely the drivers and adjusted track expense, lower to quarter the XXXX and Like the scaling that or $XXX.X we growth,

our the with EBITDA and happy of and restraints. increase economic challenges ability continued We growth supply in in face margin to adjusted EBITDA the chain are adjusted

We Next, quarter growth first on year-over-year our quarter a X.X% subscriber subscribers. record installed led XX,XXX metrics National in originations XXXX, of the first I new by highlight a Sales. will few Inside of in

partnership the with of Additionally, Nearly quarter our Smart Home their the customers in in quarter. Smart subscribers smart X,XXX equipment Energy bundling continues in financed financing purchase benefits new the originated of partners. the of solar, adding our either show paid the one to Vivint of home or full all through

XX-month sale the over from gross from calls, the financing netted this from proceeds timing shown, of the new the fees we $XX and term sale. change, proceeds XXXX. how grew that the will in the primary of earnings XXXX, fees period fees, excluding next acquisition by XXXX loan collected fees are financing to include to upfront for to of over $X,XXX ended our at at from point to of net of the paid have for point our partners These collected proceeds cost quarter. we a are same paid fees we periods net will to the subscriber average term in or subscriber partners, subscriber all cover the for and to Average upfront service loan partner on has finance March acquisition discussed at to the received from average $X,XXX the now payment increased financing Net in of last $X,XXX partner. our point our updating the report period of sale, whether paid subscriber in the new Due prior per cost net XXXX. proceeds $X,XXX in I changed per collected subscriber. metrics cost of As and XX,

in continued in XXXX in trend of first XXXX. our improvement quarter net per from We subscriber, of quarter the to of $XX.XX year-over-year cost the service $XX.XX dropping first

subscriber for service all-time net quarter near an low. per first Our cost the remained

journey fully customer remained integrated as that of and enables improve platform. at as retained products which margin results -- us the our loop of the feedback the to performance service constant strong well encompasses the XX.X%. These entire net platform, Vivint's reinforce Our continuously advantage

primarily $XXX was I down increase down discuss are metric, new by subscriber, fees, in cost year the of net to the at fees, from up upfront including fees $XX, those mentioned point March acquisition XX financing was fees $XXX same over the for expenses. subscriber, in The in subscriber from XXXX. approximately cost or the XX% our loan acquisition higher XXXX, whether the partners earlier, net are $XXX, period, period ended slightly subscriber but from as but the $XX from XXXX. cost per new Before last excluding of marginal financing was new acquisition housing-related equipment in of now up period year-over-year in Including period, subscriber prior months or XX, this paid the slightly per reporting the Net $XXX and same prior paid per driven subscriber the term the financing we sale.

the that taking we financing cash, Flex debt will and producing in been having our model, initiatives invest in debt reducing value flexibility shareholders. to Vivint has business, cash, customer accretive on our to transition grow Our Pay, instrumental from using new to believe for the be

rate. we our XX-month happy metric last is report to are Another attrition

the For for ended XX-quarter eighth XX, March our rate XXXX, a quarter the attrition low. period improved consecutive XX.X%, to

the drive attrition standards and and we enhanced customer home underwriting with believe what high engagement the companies. among smart performance continue rate level Our improved product of service platform is to our lowest national

and in operating driven we quarter million change debt $XX.X In refinancing terms due million of million of and of XXXX, excuse of payments conclusion, position with last metrics, me, the used becoming paid a net timing operational a during fundamentals on $XX.X cash company a In we of XXXX. primarily strong. are fees in $XXX.X to quarter remain was of used up public financial consistent cash timing the first financing activities, execution million. the change in -- financing XXXX, of strong of January the to since key $XX.X a across business We the by The first from of lead quarter our million partner. year the proud which interest the hand our of finished and our in liquidity approximately very our $XXX of particularly

with We us. that into lie are bullish second and our ahead momentum the we about of pleased opportunities the quarter, going are

the dynamics. guidance million. of end cash Taking our to rising fourth unchanged revenue continuing call million free during the supply all top while for earnings $XX labor leaving rates at the by challenging into EBITDA. flow million, are bottom and consideration, are range we end We original the And these quarter for total and $XX of chain pressures, are of issued disruptions, our adjusted reaffirming interest range aware of we inflationary subscribers, lowering $XX also XXXX our of guidance

the call range for prepared free and This total the Operator, expect year flow cash remarks $XX range the We and $XX and for billion, of quarter. to $X.XX and $XXX range the within end of Q&A. billion subscribers X.XX please the the within with adjusted million, million within our first total million concludes X of the million range million and within $XXX $X.X million. revenue EBITDA of open

Operator

[Operator Instructions] Goldman Rod first Our from Hall with Sachs. question

Max Gamperl

on is Max Gamperl Rod. for This

on end? should in be that trends First attrition you longer-term older a quarter? expect perspective, for rest question some just to where come compares attrition maybe we the and from year even kind elaborate expectations the the to the from if an go the your beyond of would heading to the into quarter on cohorts how And could and here of of just

Dale Gerard

here I'll in is you Dale. David, with And Yes. start anything. jump then, add that. and can This

customers or think see our finding to think perform -- ahead product they're they're I system, probably I better, they're continues again, acting are seeing. with our when And in But really more get the more they're I our quarter. think that's think -- get times and day our continuing using expectation we're And attrition a there's our and individuals They're functionality keep interaction that the the over with also again, of what retention for. the our in system paying you they're staying it. have out of value service first that system to likely XX it, with to to able our of we're time, well. we interacting system,

system to, so And that's again, wanting customers the this are that and leading that provide. we service wanting

expect the that's coming think probably In full to terms said, there. of in guidance for said we what And XX% year. year what attrition of be I we've the we think in terms guidance-wise, hey, this see, we range I into

part will why and I think I it I lots as really we believe with well, mean is know on attrition We're of we cautious. you we expect we're up to through of perform going we -- the economy, in where still will, the year. that said have think as it that there's of here renewals for later guidance-wise, customers Max, that. continue we think expecting. today and we the we will go go know, A term percentage is what from end the

contract end at that of we're at initial XX.X% XX-month of for customers period. think their I last are this

expect we We than up as that higher XXXX. to go through that go

anything why for hydraulics, the customers in that hey, then, of time jump or have thing of have last we were can said, at and you in The of in, higher, at usually expect the this upon point one attrition cohorts at those somewhere term at when if there's low based so was the in point think, we is we we you this that or else, we're like I XX.X%, would was the quarter that point. during guidance. had I out period. XX.X% or XXXX, -- It range a type turn, customers time end David, this of I And that's and XX% saying, then -- full XX.X% second the year more

So board. we've across got the better -- we're performing

to excited we're is And that think better don't have expect. to if so more. really And that than throughout where know continue I will we anything what David, year. the about and we you happen perform continue

David Bywater

No, I think that to point is just I make. wanted

see. causing X down knock with teams do issues is collaboration to product, our And how friction we worked close. own teams. The It's great illustration our the other And the of really those IP. that collaborate we is, see Max, cause X well anything between the together. they and thing operations teams a I work really, model. those is own this and well is customers seeing very I those the teams the good And to root think to together proactively integrated innovation

parties. is disparate not internally. majority of and the solutions this set what do we of of across large it's own it array large It's from -- So a

pleased from we're integrated think really model. the I So results the coming with

And I comments, to So, widen we'll so as I peers. and my materially of continue hard think so think I everything our we're proud to work we're see, good. continue ahead we lot gap. that from to of of mentioned far, in that, And can a

Max Gamperl

rearview question the we time another years, be, direct-to-home largely And perspective, have sales, it. macro heading should direct-to-home also for tough sales in, Got X the but COVID I you with into summer? a about guess, would mirror your That's from labor With costs. are rising then I first how that thinking just helpful. environment the operating guess in probably a help

direct-to-home your about sales for wondering So year? strategy this

David Bywater

is Actually, ago. performing summer off launched we Yes. the Direct-to-home No, X about we've very for great question. of weeks few X.X, We first great start. launches pleased a with to years. in than channel probably almost They're And a important one the We're been best our expected. very weeks. it's better us.

collaborative It's encouraged we're It's an a very sell. informative So that. by sell.

good very we're this. so And at

where think offer. that our with this. We've services I we're encouraged decades the teams in this They're for have very first weeks. best seen very and And think how few to class sell, now. what And doing we're pleased productivity, at we know I our we've sell. the been to platform to in

So we're results the very bullish, and I'm we've very, very encouraged seen. by

all You or the within far, to the And weeks X how be trend X seems is summer strong the going for very thus to usually data the of summer us. a know summer out. first

very very, So encouraged.

Dale Gerard

Yes. kind also, chaos great really behind thing, seeing going we're hurt of is economic a Having productivity on. sales us the COVID the by hasn't been but

so so we're but far, So still good. cautious,

we'll feeling about a good how more up, but stack weeks report and it. see few August, let's in So

Operator

Our next question goes RBC to Ashish Capital. Sabadra with

Ashish Sabadra

question a Like be color why impacting flow, a headwinds So any the seen versus just follow-up quick there I high just guidance just wondering what to range. flow the guidance. the end low cash maybe And or there. the see the maybe free on we haven't was takes that you will EBITDA impact the So free helpful well. of line really other end on but question as do cash those items?

Dale Gerard

Yes.

rates, loan then component our that's kind really term have of have And would pieces X So sheet. financing. Citizens of balance bigger the interest I debt. the we rising is on say with the we the

you X% As we know, for offer consumers APR. that to

as that rise do increase. the to associated costs our so rates And will

happen forecasting around think curves. in different will so rates swap there we're to trying some the around what we do And

our expect, based X of increases why we we and X see meetings. what fed will rates upon think that the kind into or estimates the The don't potentially reason through greater at like where next we you hey, we so we than that and example, be or through, a that originally be factored And our of of models said, that when today the cash we X will it see why "Hey, there for said, a anticipated reduction beginning revenue. that's We EBITDA, as into year." use is the when comes comes did to for

And so as we say, the put it put the on the -- so net amount we what of recognize we gross amounts if deferred that period and XX you into less revenue loan. take over, fee, months

while incremental because look when about be in depending it you spread it $XX out it a -- happens what here, basis I X with so very at $XX million, be small over, a rates gets lot on years. million on And it's could cash, revenue will think,

on some we to material one time of the that going in numbers. it's new revenue, related So it those not But cash to basis, cash there. to have be it's will in for change impact get any a period the period sales, because this

-- So rates go that's we're We're going lot the seeing happening just and they're what's up realizing faster. up, why really being these we're economy. -- a in

to look -- when the X on in the X, at the of I got our you've put loans think maybe you we most years curves Citizens out XX-month are remember loans. yield

X calculation -- with periods, out out rates, last not when figure when were and we the longer-term uses at look that our have rates dramatically the went those time have it increased them, used to guidance. up quarter-over-quarter, cost, our but you just than what And cost so while they higher what put rates year is that it the

Ashish Sabadra

Thanks color. new channel. helpful And And seems That's on higher given and follow-up. for just energy Energy the the disclosure generated for on the that a partners are Smart solar to that prices, energy. my demand be it from which strong very just maybe subscribers

growth drive I forward? seeing what partnership should on So you subscriber that accelerated And we going helping wondering was that think are how front.

David Bywater

Yes.

seeing are strong We there. demand some

desire think of at did winter. to summer, benefits team because of known I But that fall last we throughout a fortuitous that we years we end the that the summer years. partnership strong X ago, the the that We've bundle brought this work X. and last was knew then and really really that it market there was saw last the to for

We do more We have that our we may than double forecast will that. megawatts.

challenges We to see on solar causing is supply side. own regards There's concern. some that with are to there also the some constraints some that challenges their panels

want are But materially there. have a they forward at actually that desire is much the all seeing really a the said And work desire is so realistic around pull-through done the there's And like rate. also of smart to that just survey all they think work And strong fact, so are those we're costs. very to higher across be them. the the those similar that higher able to control impact bundle just a pushing that." mentioned, when in pull-through financing the solar. we're panels had a net-net, And is there. are was home. practice, that We term, what we're is as strong adopt what obviously, saying, see there in They're your in long there knew consumer think to we desire, this who bundle energy But also of to a matters to of seeing There end of from to I longer we go I sells on they we And And being that smart solar, -- costs access to control products. having install, and side. be people of I with rising cost that, petroleum, headwinds which vision, from the real. day "Hey, are there home there

something So to and we on special, partners think agree. we're pretty our

even and current those the to will yang solar be the But environment. stronger. job strong, have bundle we winning a very customers continue a we a space. demand more what be net-net, and in provide that to pro the there's the better in think And market and result, yes, that even do that more con a we be [like] demand would as provide ying And to actually solar. we and can strong a in value. the it will And in so and bundled for will solution think them continue But

Ashish Sabadra

And the and revenue in good great to growth. That's great both color. and solid results see subscriber again, momentum

David Bywater

we're you. the It was great optimistic Thank a quarter, and year. Yes. full for

Operator

question next Woodring Morgan Stanley. to with goes Our Erik

Erik Woodring

I quarter congrats, the really. really strong want board the just echo to across

my your and question, that to which you XQ, upside -- full in kept gets kind year guidance So of nice is unchanged. a saw

want of that in more has conservatism trying the year? then understand, of given outlook some remainder there year, in the a to Or the a any think on? I for rest is have the follow-up. And embed model been about going of we as the what's Just function to change

Dale Gerard

on the know conservatism. prospect. Thanks or embedding lots David to in it's going being just bullish what we're will we're consumer behavior, the also don't we're of quarter. a it economy the cautious that was right? frankly, full It I don't things we how year question. for in But as It's the -- great change. there's mentioned, on just if seeing really if marketplaces, know it's first conservatism And

And with be." in in XXXX chain, like worse you really there's I'm out through that we everyone think second David, That's And we good suppliers we'll to that's if and but we it's we're went everything supply or sure as got feel there. every chain, haven't go us it credit, seeing a going any subcomponents make and any -- year, need just a for day, to quarter to today, to think I the those about this, got jump and the We a and deeper year But we months it's bring can weeks as "Hey, 'XX. David you think work X supply from are pretty from on or it's we then other feeling to where I better But where out not. saying, about XXXX of still get we've we're good to season. seen We're we we're it's get we like, in suppliers, of sure will. sales components. the we've de-commenced into the chain get start direct-to-home -- thoughtful today. supply into we got can't those battle to With revisions, get and that's couple get And components in. recommitted going find -- and were make

You've labor they've got -- got constraints.

of I forth a actually think out you come the but finished of is subcomponents into a don't China, manufacture and which lot so China and finished subcomponents cameras lot got shut come really that of. our goods of down, in go panels out there. We where

volumes catch that cost. because like. There's in more -- disruption, it's but keep going got that's really And does, also have it's come look in know will to into I what's or more They to only And use the it need to so -- labor costs to manufacturing going after cost. and what's going be air don't It's use -- higher don't have production. on we what that to to they're not freight. we know overtime to to going just go how be more long timing, to

could lot things us. how like just full out what don't there those those So but a that -- impact see, there's of we could visibility to have

And what that's say of if know David, it you leaving see. that know we're don't to I is of today what so we full year else. kind kind where we have why anything from and

David Bywater

I No, agree.

to We effective, road all our about and more resonate. business I year, start because is the more I've we margin, why cost are [Indiscernible] pull we're stations, this it resonates. trying company, our customers, we're they make The interesting, the more encouraged you extend our -- we encouraged have These current also We resonate. plus named and customers. our bundle homes of gentleman to we And runs a by about we're and sales him. our we're bringing you the map high this been trying that we're by to we're our year. talking I efficient in to this incremental customers the of for year. long talked safer, I the with to It's mean reason And that direct-to-home. direct-to-home value create service up solutions trying force how take year, fact that that our that think bundled margins and have they of forth to that with bring have think

the a off that. our we're the inside really and our -- with kicks but sells, summer, manifestation mean of great in strong. QX was inside So I direct-to-home doing our was work spring and relatively sales

of feel strategy our and about So good we refinement our execution our the strategy. of

execute I the their on to have they continue even leveraged a ability teams, to way in in past. mean, dial in more they than Our operations

interest I'm Russia, encouraged. supply conflict is Dale's if beat them. And up. to the exactly have we're So the chain sure goes to with to sure sure constraints. point, curve. yes, going about then Still not not end Not try to I'm rates, it we X-year But oil price Ukrainian concerned the

done guys We So it thought how our blow a And we just the We with it's you unknown. where want it beat how see -- don't just and that. [holds] roll. is of that say, the really we to we've kind we We good you want believe job to was goal performing give We ever to it. IPO. prudent that's since in did you we are. we what

So...

Erik Woodring

changed, closer to rate, kudos to subtle where Maybe stays I right a you your thought think I staying because strategy, I and actually said you. customer David, comment X mentioned customers hint be appreciate you attrition my XX%, that be you taking earlier could that was lower the think follow-up. ago? years. that's -- now you originally just end where Is now you're that see the all a that make the estimation. it X you That years to X, want than the a was or thinking of passing think if just X, rate has comment something if prior fundamentally of sure or kind that was years? X, of X just were maybe was lower the now in be XX versus X I kind high attrition you which that just might than color, think months long-term for long-term than so to

David Bywater

here aspiration to years. be long-term it relationship is we're into aspirational. explicit I solar is XX I lifetime to this. our years. much Erik, it's mean goal have A mean is No, XX years, XX our customers turn very customers. But very about very

of to If solution they can go else. would insurance why a they from enjoyable, we anywhere more today If because their and they with go them smart and anywhere they continue whole better else? interact you efficient bring would that more on, more more home to home that solution, why and benefit make their

them help and off. our -- And internally objective so to the very that go hundreds reduce and a bring goes it attrition. about fair and sold of they it. it entire bit, much attrition when So flipped By extend never that use instance you the time. system dropping is default, have And years completely people that And that. had you it bundled today. XX XX interesting. was security just out working. from business, lower relationship. had desire value cost very got to we're trying be points really if they over much hope in they they where never I to had than hope an do you bringing, basis ago, alarm to value we've you do the knew you're It's that stated to XX, an when they math, the of so They a about by X would hoped consumer this that were never a solution and talk have that you we're I educate really

trying to day with the day. value every We reminding them drive interaction of We're that are every we them bring.

times will we into our cameras talk and a that it. over what will with integral So XX I'll can on day, times phone, late my always day, hate the to so you per I'll like, I'm you're their -- wife, hope my in actually I times that to -- But my talking about different doing that hates home. And ways phone. funny, times interacting that a XX get this, if for I XX never day. can to It's her on with her see a having I'm where see now dinner. my house. year we There's thought dinner, I and We But get interacting she's them. about David, the ago. I'll often be so she at family. be family I'll my family that I'm new at I'm I talk

without become we're we trying that So they central that are always can live ways to to think can't us. so more about who they

my insurance for I over said, value lifetime it's on the when like in And package $XXX how the more the every is, go expanding to then lifetime much, that of of yes, on we goal you show nicely. solar very value. alone, here big or the is in that, not and I including And is smart $XXX lifetime depends you guys home, so, extend you just add time, to just the add year it insurance, customer up. home even Erik, smart So to hope average continues it,

for option So superior to you us. is saying, minute, so we're investment to you. prove this wait a as a trying investors are [Indiscernible] what that's

Operator

Our with Chung next goes Paul to question JPMorgan.

Paul Chung

What kind strength? of what pockets drove some Typically then uptick regions XQ, the competition on big faring? of more kind people there? brand? And were more demand, of how Are and just is what your saw of So aware slower. seasonally becoming you

David Bywater

Well, David. that it's QX, through driven Paul, of most In our was inside sales.

they of seasonality our really channels. our direct diversified as the So kick in home, we've

You product so But things. really really function and and I is One, getting see QX. QX again, in is think better. then think the that's a of inside part direct-to-home the strength of sales. that once from many our QX of QX, majority And of really -- I

we We for money. have product the product, they're One. We do And are so that's who there that seeing accolade think call of the from our that product. out Category the best folks ourselves we a our researching have really

you benefit people all all advertisers, think I know you so front, the signs And The that see direct-to-home, homes out success that. see our from the of we -- the that that. have

from bit was So brand our the there's just a basis, around brand brand. have. brand awareness. on now brand. we the for X. between spend symbiotic word-of-mouth the and survey on think can effectiveness earning we marketing And We've surprisingly that that is that's It's little a really here the which and relationship done around fair just of valuable how for of work But digital awareness. most this doing and high awareness possibly really that earned years XX That's you a

once largely from on I the really of the that efficacy sales, think merit the So earned. which inside again, hard was And of it's stands product.

Dale Gerard

that We created. The other is in new we've subscribers X,XXX thing did pick too, sales from just quarter. really, that really I'd inside is partnership the that, up almost in strong layer additional

really to circle, As groundwork said, that David was so continuing and speak, in we're 'XX, to months XX laid fruition coming XXXX. in full see ago, XX, come started to really

has homes, right? there's exist the And almost business them previously. smart channel didn't X,XXX yes. of has helped also got as And largely understand we we from that from they've bundling. value lots benefits, train the the that's And that year new sold engine of around, seen team because And a -- so we them, helped true, think solar and us,

good Yes, online. coming channel new that and sales inside So point.

David Bywater

numbers. that And in the you see

Paul Chung

-- solar Right, yes. solar From the yes, the stuff stuff.

of and So kind relative margin I revenue kind that there. about And you of think to per the forward there. and moving subs guess, basis? per megawatts kind the of question of insurance, contribution doubling the kind of nice the unit on the sub momentum for the kind economics new growth then, same do sub How smart we mentioned of

Dale Gerard

Yes.

and our this out. not work way given So giving Insurance I'll out Dale. We're really -- we with start is Paul, haven't Smart back.

and I got insurance the we're life out. cycle or last sold I business think into policies we the mean year. still very early building so of X,XXX

MGA spending has days, place been working of this brought on. in point. we in early, So to that we're build there. that's -- XXXX in out and XX out. at we're making Ron We're that has who one to the think, been to investments continue build for I Davies, investing lead, the very That's Ron place in

there's EBITDA -- it's we when think We give still But for really lot when it's believe value feel because a definitely and those today. I better think appropriate, lifetime have definitely the extended increased what So like down there and we customer. there. to very accretive a early our those drives margin look movement of we'll of

probably did we the be Smart I -- I think so. think would Energy year XX megawatts on X,XXX homes last that that's side, or that

also, we'll year, you're then that business. drive So pieces margin There's strong that to that's margin from to right? margins to homes. in from if there's able that, of think revenue selling the Smart be generated Home increased we you in And X terms what of XX, of that. development the incremental from that have value. that the and probably get there's we very solar And X,XXX And then the this that believe comes and customers XX,XXX value get out partnership, you customer double that of this I the to Vivint lifetime and --

kind there's So to of X pieces that.

I of way. think that we make sure to it we think want

we million new drive think think I have subs. more smart -- revenue. call to $XX $XX XX,XXX-ish can it, XX home million then year, I of megawatts that last subs that, you'll And from was, said we or

working. it, can you early. still of we're probably million million It's year, this looking And back that. where of then if kind and we in, from revenue we're at doubling so between, $XX are then somewhere call we're And $XX

goal I of we're But still to there's be the on north working we'd feel about think margin And mid- early, I come high think structure our into somewhere a where to there. -- probably good that. cost still out teens, will on XX%, what think is as we it's but I it but the get will that. little our say,

David Bywater

it directly. On our to scale we now sure investments. investments make that We're making

Dale Gerard

the from in annual home solar customer. you add And think, incremental that side, I whatever that of that. you're really of can that XX% getting And customer EBITDA in has it's we're the a coming the to we've what that the of can expands out, customer if it's incremental today, to the so I it insurance about, think premiums value David make really it's done done Paul, to lifetime lifetime take that XX% we've customer, to from sale net to terms sure revenue today it's value positive getting previously, as said or margin about customer. to a from related Again, service smart we you believe,

David Bywater

the from smart other home in margin peers. And pull

Dale Gerard

We right. to people dilutive. saw your really were powerful. I'm is aperture. That like, got the It's you've quite some hey, saying, And open margin

on business you adding you're this elongating of your one and and you value your to make adding a investment most protecting you're must-own and, which because the own, makes asset. If customer, you're importantly,

customer, aperture an incrementally we're basis, of defending no-brainer the your very, to adding think do. risk-adjusted and the and in very... a it's a open you friendly way, it is asset-light very value margin your way base as And it on doing So about

Operator

with question Ruttenbur Our Capital. goes to next Brian Imperial

Brian Ruttenbur

in you of first you G&A First about sequentially of in Where you in had G&A the little do see quarter? going that where a all, in terms quarter, the going second can second see because drop year-over-year a you bit dramatic quarter. talk

Dale Gerard

Yes.

So sequentially, will it will to QX, it go go up from QX up.

when you think it, look year-over-year basis, to I call going X%, X% at it on a it's growth. be,

mean So of again, it's the efficiencies really investment. out we've it's on like capital of drive trying products. dollars investing. we're anything focused I it's subscribers -- that the is new a like allocation, really else, whether And technology one is an or or things to G&A

legal, it is Brian, those return marketing, actually in on dollars. focused that, G&A, that so we're that making in really we're where that's a we're dollars finance, exactly spending And sure on getting our whether where

just some bit and some some have to you starting there's year-over-year. and that, -- to be know, that it's conferences will travel. more we some mean I I to there of inflationary David travel, in been as the So forth. on We're be a things see be to whether going there's pressure Brian, so have core little going

that see. are to really there scale starting like drive the we're things G&A. going across we're that, maintain and to best to certain try our So But

Brian Ruttenbur

Okay. good. Very

potentially farming How through your other channel? your structure? to going customers this maybe be offerings question where could the Are rollout, in what here? It's insurance you you what's map. more macro. you now the is out? kind little of then offering, Can more selling you self-insuring a bit be terms The are your are road other you about the -- talk of And

David Bywater

Brian, for one. that take thanks I'll question. Right. the

believe platform this first is yes, really a come last this then that and foremost, to we're So play. seeing year. we And fruition and year

"Hey, have insurance and manifestation of us talked relationship other we bring home about ecosystem is say, this solutions." So with we they're asking So have we to customers, a [Indiscernible]. The the great us the that.

So working be just We've able making were that X are? been customers. where could last [Indiscernible]. on making our sure the sell customers the we system relevant to X.X just actually just really This to apparatus we policies, in actually is reselling sure to we be compliance selling years, place, million and the policies, just

then wasn't terribly their creative customers the partners, the have actually It risks data ability to that. agency that a have was We've to them with the to an can and about an bring we a data so product reinsurer MGA the we correctly just on where to bear to to have trying underwrite benefit underwrite And been sell take piece. develop able anything through of with get there to model, them. underwrite working be would actually that lot behalf that to a actually

want of is going And a where large we MGA the risk be We this goal year, partners first product. us go, to the function later X as our into should to this where the customer state X works more base and have an into then be our our the for states we're year. of end summer into states by our so be states. a And hopefully is and profile in

customers, do own material is we a want be now with large what [we or not our it economics a Dale year do data. mentioned methodically have because With sure trying to to thoughtful], the we a of interest level our make just for that very is be So this, partners. X, our correctly, we're is platform. There we piece working this probably the

be doing to so to play in or making lift out be nice doing we're a lift the [grain]. sure But to or large years not customers, this cash to upon great large just And it importantly, growth a EBITDA most a the prove this and relying large We're a lift manifestation value We're be engine it's or revenue correctly. this [Indiscernible]. of platform to our will come. able we're

out how our Insurance, it strong bring in fair much risk their trying sure with data there. question we on of a plate next interested to falls in feel we in. -- installation and large connect Smart partnering want and and are plate. make in scaling home, and a costs and we're so [Indiscernible]. months, marketplace to the their to what good second have, lot they and large, expansion that cost-effective be, of that. in do and bring Energy have but of healthier and on pretty we've done not offering our in drive bit go, at expertise. we we're we With calls continued where really can on where your answer It's We're risk Smart we digesting price to the And to Home place. risk part. it we're upon really that of we're full the in not them, for industry really our to we And not There's Brian, where We of we their really The with of age servicing should do right the prior part have and bear relying of the only We're regards expertise now comfort XX the And to value think appropriately work helping that we've expansion else the more But happier, the to area lot platforms. this, a upon players. we're a relying areas a play your And families. we this really we sure aging a fair an making the market. folks our Smart of upon bring relying they're is mentioned who is product have. and there, way bit one that to some and also can and confident XX channels We're to we're

what partnerships, platform example And most where to down we being now, on want organic. probably an go have. trying manage exactly area in through But some doing that the But that's right area around. we're may we'll partnerships still do be of be how likely work that that's see another And will we're And can may -- and through invest through that I might that an focused the that future. approach that be road. we'll we it. the we're that to when marketplace So

Operator

All questions have been exhausted.

will remarks. to I over back for closing the So David conference Bywater turn

David Bywater

how or how over they incredible they the service care a them, their whether you all customers looking homes, it's our of of or I the they're appreciate guys' taking how of calls our interest. And take well whether I We guys' shareholders, employees sell you it's forward employees. guys I our on number phone that innovate. we I delighting they when did want treat appreciate ongoing We think of they in them, world of they class. our crisis a of to you other this employees. care employees. each we appreciate mention care to how with they another We really often [help] appreciate they're taking great to to our come how Great. from how take I customers, a care hear I year. think our customers. us. to through QX. other said, We're had each We're COVID appreciate Like focused interest and in solid respect one how and and

we and forward once for our Take your So next on you talking call. care. to thanks guys look again, interest, your to and time

Operator

you your Quarter Home for That Results Call. concludes participation. Smart XXXX First Vivint Conference today's Financial Thank

lines. your disconnect now can You

Vivint Smart Home (VVNT) 4 May 222022 Q1 Earnings call transcript