VVNT - Earnings call transcript Q2 2022

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Operator

Good afternoon. Thank you for attending today's Vivint Smart Home, Inc.

Second Quarter 2022 Financial Results Conference Call. My name is Bethany, and I will be your moderator for today's call. [Operator Instructions]. to VP conference Vivint of like host, to Smart now Stubbs, Nate Investor would pass over the our Home. I Relations at ahead. go Please

Nathan Stubbs

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

would Officer; Also COO; this me I in regard the reminding of today Rasesh performance Patel, Executive future the Nitin by David Russell, Abraham, Vivint's Finance. and Smart Home's the Bywater, to contain room to Joining Dana Vivint Chief and everyone SVP today are prospects. company's discussion with Chief forward-looking afternoon begin and like Financial Officer. are including statements, that may

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

David Bywater

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

work support. to every will your and earn your main continue areas. We confidence today comments X hard My to day cover

some the financial review our for I'll key operating and highlights of quarter. First, second

cover to place earnings business technology services I'll home greener, continue I'll release. priorities we redefine some smarter, Second, to that our create have with review the home. since our And as and safer experience a last developments strategic third, taken

very finance has quarter a will updated in review building our fits time, share Dana's Before our moment welcome Solar, We're I fourth new Russell. worked has for up for sell best-in-class leading only enter Financial Dana comments. thrilled following history Vivint Vivint joined expertise phase my until Dana, having let been in very next begin, him results impact. he's our that rich me already sister with Dana take company, Personally, of team. financial outlook as organizations Sunrun to us of made a closely our leadership have a profitable with at years a and we at Officer, Though growth. and successful a XXXX. perfectly with he X positive our short the Dana I Chief to

to during of Platform at key that, a and segment in experience Rasesh areas, next period. operational was productivity. Chief Product industry-leading annual and our today, their focused of has AT&T role We technology, operations, new that loyalty the our and with services, also value room of the experience in AT&T experience. he $XX product company Officer, in level growth revenue. and and his excellence Officer prior the as DIRECTV in Operating customer Rasesh products charter improving customer spans executive a us with a who business, of have He the Chief broad billion and has these functionality Patel, and from the driving explosive is Rasesh extensive May. delivering joined Prior on

the by Moving sale home XX% our a adjusted by contributions of public for for of for more normalizing as record track continued I operations. period, We new with to that of through strong am and XXX,XXX second all-time originated XX% an over pleased quarter Canadian the subscribers, on than energy smart company revenue execution the grew our quarter as our over after total the smart to our from second high significant highlights EBITDA quarter. partners. report XXXX we

basis the XX-month with this XX.X%, year. attrition smart among which home We're by lowest prior and extremely our and point low attrition was XX a rate result, we a versus Our was last the XX-quarter is to national companies believe a pleased improvement margin. continue significant

and a is to net the quality of increase of and efficiently space. believe improve per customers. low, delighting customer service developed platform benchmark products in XX interactions our of strong of retention all-time our history, with performance ended the that our cloud-based an than our at are with smart of is our more has refined effectively operating the operating and we customer we've the improving credit a customers, we We the Vivint and that years platform. and improve the cost work years Our second services proprietary result overall while business a quarter subscriber indication of home

we during any of has is provide environment. and peace model and proven economic Our we the mind reoccurring resilient believe challenging security in relevant revenue times,

the cash was operations during Canadian divestiture successful second the our highlight proceeds. key of million Another $XXX for quarter in

in due in a As unsatisfactory in quarter Canada subscriber we our XXXX, first sales economics stopped business. to new of part reminder, of the direct-to-home that doing

growth longer we Our were Canadian operations of cash investing were generating revenues amount no meaningful a since in there. from flow

However, vulnerable these in to customers made our investment more Canada attrition. lack of

and Vivint the safely proactive is putting prudent where risk value by a U.S., growth the focus sell flow secure the cash decision and to opportunities of the are and subscriber to, We growth. from attrition leader allows here revenue source So the in to removing the terms acquisition also on value-accretive these in of of may of efficiencies, the of our we resources plan growth the improving Divesting to limited Successful the and and cash exist sharpen value us in on should customers. business the the transaction exciting potential Canadian that to elevating sheet experience not our more invest subscriber future balance made adjacencies, years top the the generation include, business lifetime and enhancing growth, in customer the structure. durable areas cash that business. execution drive while of these customer higher in but line areas cost operations

on our deliver We on is portfolio. now core across process integrated subscriber home, our mission. home us the and products with services We smarter, that per the than allows this create billion more to events are continuously focused safer and platform experience redefining smart , X.X technology, that day enabler

smart with that's time resilient interacts they day with improved. -- our receive Our by Vivo. our streams interacting average approximately customer revenue customers smart a from taking value We us increased XX demonstrating XXx devices believe per retention more technology more They and as products, home approximately in this their and than stays longer. more system are home customer are with services and has staying systems has value over the years, their with number us and home, their X for

lower business, even will home, A they will to Smart households our insurance our world-class points and the possible smart retain Energy smart services. of per believe to continue customer technology made attrition, subscriber We feat, natural us and touch and home platform. expanded in down. net possibly allow are we penetrate complex integrated lifetime Smart continues remarkable more by customer home believe yet, are more value. is to lead service and average and go to install lifetimes extensions our believe, we platforms cost additional We with customer and technology that the longer --

be our strategic progress adjacencies. encouraged We continue the to of by

Energy in our our XX to ramp business, our XX.X partners momentum the Smart of seasonality on back megawatts come in positive business where the expect solar Smart seen of quarter the of the the business, our XX we installed first partners year, second have XXXX. quarter. to Due would to our in and of double that we megawatts in generated Energy the We and we track through the we in half to remain installed through revenue from majority megawatts

our grow Our who uses than And We combining to we who long-term manage into and strategic vision rates we smart continue sales those and solar. and as ability see will considerably towards to combination and go-to-market to up industry make better signing of our Vivint a X Vivint energy for customers. smart realization the solar to a a grow our with believe partnerships, solidify be system changer differentiated consumption or game home sell is for bundle continue day footprint a award-winning only and powerful We power intelligently. that and smart and home solution solar our retain more platform partners our sales production integrated consumption customers. we artificial force progress an intelligence a that of install for prove customer home to a to nationwide believe within

to the insurance smart agent, home to and On policies operate front, new smart insurance as we selling existing an subscribers. continue

to the challenging of to of of world-class of to operations. results our a about managing home employees call been and tireless profits do-it-yourself excludes with segment. our Because now progress backdrop for that, appreciate headroom We growth. We're our especially for believe model the as the will markets truly pleased the extend economic world-class and on for the to our which home Vivint. the as segment. to further since able specific than generating to customers, agent, the meticulous the smart accelerate advantages We of of we intelligent provide to enable our and I'll the in than and recognize turn of optimizing efforts With continue XXXX, the Dana platform and for in I of focus the we is grow strength work the been growth. expand peers the these -- Canadian quarter operate environment we have do leverage to closing, Dana? hard a do-it-for-me to expanding a outlook chain rejoined while it's supply higher will and our achieve that our towards in updated alternatives general a and business group and second quality faster do-it-for-yourself develop divestiture We're employees Vivint further which the against of performance do-it-for-me impressed extremely and home from leadership significant platform, growth. in becoming integrated We the year, the first to experience coverages allow us year results. future I continue for half excited owner we've discuss a our be smart constraints. further continue In the with sincerely what over our our just our segment, people. believe over match we are large, We which

Nathan Stubbs

David. afternoon, everyone. Good Thanks,

in, upside. refer more X Let with and to saying was me comments growth this I that Relations employees. market when really to team. with I The the at of rest I the start business earnings solid pleased to posted of a our a reunite this that by in solid and way people, call. will shareholders that job. has presentation combination prior of development. I'm opportunities fosters driven special encouraged section the our my provides And vivint.com and David a and company accepted how a of leadership even this fundamentals, I website believe tremendous Vivint unique with I Vivint, customers, to join Investor culture and foundation months is talented about am great prospects feel the felt information our remainder the for work

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

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

for versus During reaching the our growth period, XXXX, was divestiture, of nearly year-over-year XX%. in subscribers we X.X% million year the of as had XX. total of June Normalized subscribers $X.XX the growth quarter prior second Canadian total in

user Our average by monthly X% revenue second increased recurring the year-over-year in per $XX.XX. quarter to

average for was quarter. monthly $XX.XX the recurring Canada, user revenue per Excluding

revenue first on well as adjacency. and a the for spin-off from margin divestiture, We're meet were XX.X%. Normalized for XXXX in and $XXX.X previously supply the was our in EBITDA. of revenue, The second adjusted EBITDA Canada of quarter year-over-year. increase quarter by grew for sale, of and total lower same the growth to on the was quarter in million, mentioned the growth Canadian Like operations. nicely attributable challenges the the improved in expenses revenue in constraints. XXXX. the to XX% or the user revenue revenue at revenue continued adjusted Revenue XXXX, of primary period full to finishing Moving through EBITDA XX.X% for our EBITDA from the smart of adjusted of year our the the year, despite very half with growth growth solid remain up chain growth pleased Canada was energy we to and the subscribers average the revenue with contribution grew monthly costs original guidance exceed track economic recurring margin per We're service as XX.X%. in face in at performance. the $XXX.X G&A of second drivers adjusted of XX.X% scaling the The million pleased Normalized and

I'll a the metrics few for Next, highlight subscriber quarter. originations on second

sold. quarter demonstration over was -- X.X% period through X,XXX smart originations the of in driven in partners, year growth smart subscriber and period same the the New of benefits homes prior to we by compared the energy bundled a our was prior

was ended our by the New X again and energy subscriber growth smart driven partners. X.X% June XX through was originations for months

to to the by to we're improve, total our And growth loyalty the encouraged base continue XX%. overall our quality We the the of customer adding by approximately customers as in portfolio. of be of continues evidenced subscribers

All equipment one through of full of in partners. our either or in paid originated quarter the of finance purchase the the their financing customers

payment collected the net period cover last ended $X,XXX subscriber quarter. next net or subscriber was June of the point cost, cost XX, I'll service at the acquisition average sale per and the for financing new proceeds our fees. For subscriber after XX-month of

in platform of of second our quarter The trend from subscriber the XX.X% Equipment service XX% Vivint's platform. to services, low net from demonstrate $XX.XX dropping all-time XXXX. service the to the satisfaction. improvement advantage particularly increased drop. and of integrated loop We feedback continue our in our second the cost of service cost continuously an customer quarter $X.XX to year-over-year net in continues Correspondingly, quarter continued fewer of rates, recent to leading subscriber our per from These net and in us while quarter. higher second the margin of customer in attach to XXXX integrated enables per XXXX proprietary fully cost to cameras, and issues improve results products increase, most

XX, of new in paid of including reporting As those point the partners upfront in fees, Vivint earnings our of the includes net calls, financing for at paid to the acquisition Whether the term discussed now sale, net fees financing fees subscribers. over in or subscriber fees the prior are was expenses costs loan XX the subscriber acquisition last cost per as new well $XXX, The year-over-year was to increases. subscriber up for period. MDR prior higher $XXX marginally June driven months year recent interest from ended 'XX due rate equipment-related increase by as higher

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

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

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

second quarter change primarily million flow, the of quarter free by the timing our was in fees XXXX. during second to financing terms The of of paid driven $XX.X $XX.X million from financing In XXXX, a lead partner. decrease cash generated of the we down

from optionality drive June our strength financial reflected of our invest would $XXX homes home and provide. to solutions we're that million our very will with the areas years, challenging of momentum $XXX to over divestiture cash XX believe half significantly approximately position key XX, we stakeholders. approximately exhibiting of operations more our smart forward, the is will value we resiliency We're $XXX economic and our sheet XX and a we're cash the smart we our for the of million. we years, and generated Canadian cash liquidity back provides confident securing year. of have The across creating of million XXXX, believe on business over As going fundamentals these subscribers with and a hand In remain and the for of value through of which pleased that The has was security history execution in consistent strong, strong and it metrics. pleased next into our Vivint we times. incremental have operating than conclusion, balance been and customers continue

total second account subscribers end million of to end the million. to range In the $X.XX the remarks and billion operating market connection related and opportunity, we concludes believe the with end, and Vivint take $XXX decrease flow environment, and We advantage in the guidance, free have smart with a our cash provider of range announced best addressable the million. of the tremendous home believed that Total prepared that current economic challenges $X.X for the To subscribers open cash our within year to for million opportunity. for the in first on summary, long in by range This our million subscribers presents to adjusted QX Q&A. by for broader XX,XXX positioned is sold. and we're reaffirming of sold. for million $XX X.X adjusted $XXX Despite our which Operator, revenue the $XX adjusting were the number of million guidance cash February and on and sale the of call EBITDA X.XX the range our quarter. flow within or bottom top of and $XX account revenue $XX please EBITDA. Canadian for Canadian for subscribers that expect million, the range We're we're roughly in total operations, billion, we for guidance within within also range total the call adjusting the were our earnings original

Operator

Instructions]. [Operator

Our of with line Rod comes the from Hall Sachs. first question Goldman

Maxime Gamperl

Rod. on Max is This for

cash this, rates. rates ways then incremental to touched how do is would flow impacted walk think and interest represents? that I the flows And could have and you that wider flow the is what you on I a us rising think Vivint through question main possibly First by interest cash on follow-up. free And is present? but what headwinds Or the guidance cash quantify you

Dana Russell

Max, component debt So variable you as our to of know, it. has a probably lot a

impacted by so to the variable And financing a there. And we're also provide have change with them. the we interest associated component rates rising then that customer options

pretty can of things significantly. us So both impact those

million for expense the If rates here, creates me of that little as give outstanding increase That's X%, the let about just bit in X% to interest you a and the interest benchmark by provided quantify in rate increase you with. of if current a rise the $XX company we a the that, debt combination at as structure. the debt, current the run well consumers with products for we financing buy about

on so annualized And an a what an basis rates -- in that interest that's benchmark of roughly do. increase

So increases company. here which the fairly seems months, have impacted some few interest significant rate last the it over

And pretty expect cash interest guided kind robust be from what is and far those so back there full seeing we original is as The to be to about rate figures and year, in ranges, those excluding increases originally to. the free Canada we're we've February. been able the also continue flow operating that operate impact the to And financial our provided to pretty for what of here as guidance we to of operate provide close we very to which good talked were thing in expenses. in close able to statements and

we of and we we're are still good in, not and very flow many that faced terms position about year. free environment of either. that we're well So significant companies we're earlier operating expense feel cash increase terms originally in to like to with, in generating certainly in the along this pretty feel But the the that interest not optimal guided immune

David Bywater

team to incredible to your job. add an I point, just I'd mean done the Yes. that, has Dana,

Our net improved. servicing margins

servicing You saw net . our cost

think well the I thought responded those market performed inflationary I really the really So team and in well and the given challenges quarter. has challenges. they interest in

that been those that make and -- is things our we about all-time in the go been self-help to technology, roll we've the how translate our lower talk experience reducing the costs, And So an per rolling out efficiency cost we've the of how net subscriber seen do optimization, a route just technology optimization the with call low. being there's about continue I we to tighten better customers, and down demands. tools costs, servicing I think, all to that think

little really and not So interest with the continue were as bodes in we has rates how forward environment to in, with well operated, the pleased move once for a stabilized. would more rates -- I'm team that interest they're us but are

continues time encouraged that have the to think to over performance me, continue company even sleeves their they up make impress core the do still to I by I'm and what of better. to

So a good question, Max.

Maxime Gamperl

do any Or And ever away wondering helpful. X% very continue financing, change financing? we're you you're from if That's follow-up, this to APR the that expect popularity of you in to this? citizens plan you seeing financing. then a do as offer given to offer move And X%

Dana Russell

successful been a that's the Well, has my thing been financing from here in I've pretty X% entered CFO, of role attractive. this view as

we very a with options Now that there's an some that rate there. we impacted Vivint. being not by themselves of our whether ever But couple ability and we're other been to a engage that, as happy to consumers or in And their commitment pretty more with It's bodes there's for things at some contractual go certainly good increase well today, certainly product relationship. away years. other interest not and That terms we'd get extends look relationship, Obviously, I forward. from could that move do for think relationship.

to us be we a that's near something being able anytime upfront it's successful So been and allow company don't to in cash see here, very from strong cash terms generate and in that future away going in position. the the been of

Operator

Paul of with line the JPMorgan. from Chung comes question next Our

Paul Chung

here. Nice execution

consecutive out And of profitable some year help be are can GAAP by the you here? here with to a positive the new GAAP OpEx follow-up. we And seeing Canada. opportunities have seasonal of kind So half, second kind where of then uptick And operating on kind full sparse 'XX. second Are should profit. for a your expect the And maybe we on I this us is quarter and related cost in we base? trend

David Bywater

question. half to want second the your Do part? handle you I'll of the first

Dana Russell

sale GAAP operations. of earnings, Canadian somewhat the benefited from Paul,

when at sale the the profitability the about gain had a So we of look Canadian the million we associated $XX with overall company, for operation.

The event. We'll continues onetime especially a terms are in in we're the overall overall operations, that's to talked -- company direction. its profitability, of moving good in improve that we So that performance. a terms service in gaining efficiency component. David its about of

see a see So that we GAAP the exactly continue profits, feel to of put continue we're direction. expect expect certainly improvement but to positive and upcoming trend move direction good in over to time a in the terms we that I wouldn't to want frame to about we on quarters. heading, that

David Bywater

I'm we're entire Yes. kind just there's comes through us. a hopefully future, far his off. to chain. a cash area received Paul, us, and of the being competency definitely cost actually stuff right that about focus There's now you things, us reductions actually maturity, multitude I when bunch next very, and strong that's that of certain here that a costs day quite be that There's bunch profitable that continue after, very they're working of to well into this team, in bullish around that nice. of not would threshold and that on reduce will we're our pretty right, regards coming the working the I crosses through think products supply produce With will a for a I'm it an There's that that by too now, in generation nice of competency. And definitely Rasesh a of for we're with scale for think -- that going as waiting for business our area, market, strong that increase that solar mean, our the to and and performing I is are starts be significant. think profit quite well. the And about, things

think and possibly with considerable tremendous some having customer normalize And about spent customers, everything versus we things a real put had the year stuff. there. amount visits, air We costs us product. that with just this bunch calls to our to money of think real, relationships it stabilize on and well there's as real we go year and on You a our of there's innovative vendors, opportunity then and commits as every that and escalation drives but the boat other back self-fueling with around opportunity self-help we're gives advantages once care a our doing service again the

that be I really be excited to exploring what well. We're channels lower additional about. And accretive go to I'm channels mean, also So pushing just to that in, customers. and to blends market, then that's go really, that market. we And as market as should a cost -- acquire will

sharing by definitely cash by the our today and down. think me this road we on we very to details and costs details. feel it I makes will continue to up more it the quarters doing we're future, get you'll coming comfortable map, generation considerably over and So our encouraged as move that our pilots from I'm But work where encouraged drive all the

to very that. by more but definitely encouraged So come,

Paul Chung

agent there And slides just is of in transition? your you're of one specific in, targeting? any you're this for growth smart insurance of on becoming of timing your general platform TAM smart kind biggest uplift transition. And the on a managing is of the the your of follow-up there view? a opportunities then given on kind then Or this comments and insurance you once And and Great. a the is kind uplift TAM largest participating the

David Bywater

actually year. It's a state been Yes. X still Great this towards I'm the being MGA we're question. thoughtful. or by insurance. encouraged still the by moving on end in very model. plan We of

insurance the down in lift years to out It's a that mentioned regards I road. to piece customers portfolio nicely an immediate. like be pay for significant. large our next view what getting We're right and to about is be energy. the of their over that really profit us revenue it'd material. I making large, over demonstrate a very I us significant As our will off sure. interesting to And that earlier in as It's MGA the for the nice to few we're that It's this to feather looking Insurance is and X will benefit. I the years, growth few now What's of smart insurance parts. think right I'm of investment or addition calls, for do. quite not there's their play, growth. with data giving now a to next we value

think we're doing great the value benefits So I already will over which and time, has we're retention add seeing. already what got that just to

approach So from as is the to some build that also interested insurance the and a customer they to I'm But large looking another in with solutions. partner what customer-centric I And have to innovative really are for opportunity to a channel get and we companies bring base used market. like that them. value

having look well. as forward I so And to time play that out over

is I strategic our value us. insurance very I'm for term. the shareholders. the for reliant am not and for customers in short upon So it for long-term our add

it nicely. benefits by will it encouraged bring I'm us. think And multiple off think I very pay I will for

years. large be it but the a and to excited few over TAM, is we're next will it So that, tap into

Paul Chung

your kind expectations the projections of energy lastly, then evolving? the And how plus new bill for have Great. Senate, smart passing

Dana Russell

the Dana. knew the legislative my I we it of solar through in in and mean, work interest comments, been that we'll goes they have seeing done We amazing They're just in in it the as with almost amount solution install We as I with But that nothing mean as of I the them -- bundle it's that but of well, had have. mentioned heat Yes. they bundled ratio finalize of our feel to higher previously I good. considerably wanted sell This market concept smart was top together. it. consumption, hand. force seeing hand do the all production, we're it sales home. smart their go a means value customers And sell to process. which

legislation going now a the So work right I positive think thing. is through that's the

and us. safer a home, Our smarter, goal to means greener as greener, lot a

it hopeful around that And long-term going stability so we'll some I'm and that through, actually that pass see forward. will

very that. So by encouraged

David Bywater

on that I don't got any Rasesh, know, thoughts piece? you

Rasesh Patel

energy. the said, customers, very our smart to be sale passing the that the with -- small this Senate to nailed there product solution. the third-party activation. it, And driving you smart will that's weekend, demand product make think strong bill And as very home I from smart for smart mean I partners from energy demand we're No, optimistic David. you home the bundle sticky our about

And so the to look solar acceleration demand forward energy we with energy our and to the forward we partners. driven look in bill, by bundling

Operator

comes the Woodring of question next with Morgan Our Eric from Stanley. line

Erik Woodring

quarter. get strong would really to a the love revenue on Congrats I just guide. to

the the of by just outperformed but amount, And as you're takes X of would to months XX,XXX revenue there I up Just million-plus second of the call guide at think it, operations, because and puts from $XX of means least kind some fair obviously, back a half we get it XQ like unless think That's your that's losing picking revenue that. slack. envelope about which roughly you that obviously, math. that be is helpful subscribers unchanged, Canadian something

just that's side, you full puts would think have guys on what keep And the whether some that I you love from? So pricing where are of from your help guide might a and takes the year coming follow-up. be that and hear I to then you

David Bywater

Yes.

we're strong. there, solar from Eric, two that the quite major think one drivers is I is is benefiting

second we've the revenue brought. with incredible. is attrition pleased So in growth been has the thing been the that's solar And the

well. maintaining positive ongoing really there. So outperformed we've that The quite revenue been stream for us has -- as

the reaffirm, QX in for has of a sure. that done we balance helpful, revenue reaffirm our to EBITDA. and guidance adjusted So us Like there's lot February, that here of and But gave there's companies they that helped reaffirm performance other that back of things the of have said, probably was around kind that, the us. there you guidance all in allowed not

So -- and the the team obviously cost managed quite has nicely.

they I'm has continue we on of platform, of retain the perform thought been a our customers cohorts the better than see and the ecosystem So the would of they strength value to pleased to real both platform, new better diversification those EBIT. than thought,

So add major anything want and to of puts those to some takes. you are else the that? Dana,

Dana Russell

a increase of meaning that I think more. here rates you're with other usage. seeing value the customer, our each seeing we're think I per customer an in the significant And attach uptick the thing

all same generate buy revenue scores, positive. I their of been as the the several have I their of last we quality, and And ability kind to credit at lower think customer, it here are more made that continue over value find product I mentioned, improvements the customers, David more So come these things into per attrition. those time, the the interesting as the in company to quarters see

happiness that with So getting quality and they're having they obviously that they're engage the the them. as that

point our confident brighter I ahead, things I map think quite we a and about feel so all think streams. to revenue And those road

Solar, the with we the rates that real is attach of that, smart mentioned David power home. that get

partners And in so of to out there value we that home, partners, channels. on that's and those we're seeing in cusp there, developing just channel that, the channel feel we're where potential there's sort engaging going just of David real that thing we're alluded that. there like a also especially as smart the

encouraged and our go not to but only than generate historically. cost quite generate have lower about do it we're that So revenue, opportunities forward, we as at we here potentially

time, over can cost will both think our and see the So best structure. we efficiency I in worlds grow some of

Erik Woodring

then subscriber you captured really smart any isn't quick to kind that way numbers, about can follow-up Awesome. of size just the the us get from but as kind that a ongoing Is of there revenue the outside That's in to year that. help that? for helpful. necessarily of how that everything think energy Maybe you

David Bywater

Yes.

$XXX for watt closer So per $X do million about you XX $XX it's we million. to to that XXX So megawatts, right? to there, say then

there correlation simple So pretty math. and strong pretty very

Erik Woodring

helpful. cut the Okay. is kind had my didn't your free same about cash talk then you And all but just takes bucket puts follow-up, just of and EBITDA maybe in to flow, That's maybe about you really cut forecast. the adjusted

of it and of onetime of So cash help operations headwinds these have the me. free as a flow, a that? there's some then that's then kind why of about and like obviously, been us number kind think factors? of you Canadian relates in of bridge what Can year selling financing And compares. And was terms normalized would temporary it without to free for some this flow cash

Dana Russell

questions Good there. Yes.

the Canadian that of amount investments cash operations disproportional we think about because in generating was heavy I a talked weren't we operation. making

got So presentations those on there, when on in a that not you or think we've -- net new investor presentation $XXX in about customer, of Canada. investment that, which we were investing

not of lot in a the but generating new So in U.S., Canada. customers

a our that of from decrease we're of to And or cash we really servicing. previously free of those solely acquired as so Canada quite that about standpoint out in guidance there's a cash flow cash customers The a related bit operation. coming result talked was that

Weren't extremely headwinds going the addition that in just that out, an Now seeing thought with want associated decision. we there. growth area of It an wasn't that to reiterate -- the we prudent to was for investing us.

We forward very worth ways that good equated thought we've the that believe and up really We We've cash thing in invest do. Canada. on opportunities were XX there. pulled forward our we And have that secured that of pulled the to to would prolific to We years' right have opinion, operations the was more that, U.S. over in cash. in grow it. than It's we sheet. much in balance

use decision where in better places forward really, in we good So to our have mind opportunity get bring that to business and returns. cash to that really an

David Bywater

of I Canada, to would think that XXX a have in done to I I just if about bit, was times. the XXX just thing It was company, When Yes. elaborate of that, the this do. out sole shareholder smart deal

a services, new is wait been. Canada, for like, we're when customers they had there, new solutions. good growth we TELUS think a always company, minute, us. not getting up a And bundled we and partner And stopped We're getting weren't growing growing? XXX employees those have I in weren't

a growth we're company. prudent financially a company customer-centric a we're So company, and we're

sure those And customers. they you growth trajectory take of care make of a which their with think that now owners that you portfolio, current I have sense. So makes

a the employees do, map at this road just to it for is that derisk And completely. and there. have thing I like, we're looked Our then us, right

to I'd I do, great prudent I do. thing acquirer, that think XXX great times. for out us. XXX was now. And that for to it was the is it cash do the said, Definitely secured And thing like right of

Dana Russell

Yes.

in of impact, The obviously, by numbers. from cash guidance terms those of that's interest, EBITDA, EBITDA second isn't that excluded impacted half the question, Eric, versus so

adjusted we've fairly on but And out it's and in those our the EBITDA seen significant so impact interest number. cash that's a increases, flow rate as operations, from

there's we increases of our we've think or an position know And and well. feel X like solid the free cash not a through don't flow on difference some if good an although result means number. impact about But I follow-up having rates. -- in cash, interest rate in other if on also we're we're you impact So in not have we question impact associated It the feel those EBITDA. that those interest an having there, between in on with as EBITDA a our efficiency a answered is is very as EBITDA that I of operations. your but impact fully really mitigated the

Rasesh Patel

have opportunity way that affect kind think number flow this mean as changes year. some inflation, year onetime onetime forward-looking program to well financing the items I we us might rates cash of of generation. as I I Rasesh. interest last that add, were free the hits for a just the of made in to

So if and more onetime generation the optimistic years. this get over next that to and you the potential be you services, X with business about those costs am to product and pressures, customer of we into some combine in 'XX X development acquisition overcome efficient cash of I engineering you have adjacent the potential value and very

the see opportunities joining that the And so company. think I one I that's in exciting of most

David Bywater

Yes.

with Rashesh. demand costs that's meet think certain that freight of certainly that in as had some today. we're business impacted has seeing we've have other we've be to that. different and Nitin the those but of we're anticipate And had that of wasn't And knowing to is been associated standpoint from things impact additional around supply to a with We've and worked that's that fairly us had new, We've sitting great issues, chain me, have significant. too, and here we a here so that point, I business products work are pointed to kind things going through. the some resulted tried we it's behind a out in the some impacts things. that lot the it that there, headwind think of

things going even better there, all say And feel we've our about about ability considered, other top solid headwinds things and of to on forward. those a all, manage those I'd some very good results of the of extremely and an in performance little couple so had

Operator

Our comes Ruttenbur from next Brian question the with Capital. line of Imperial

Brian Ruttenbur

Yes.

year? for a Can adjusted or quarter with revenue, and real and attrition summary and quick. the this you versus last last without quarter Just for provide get Canada EBITDA to

Dana Russell

can with, that Nitin, provide the have something, my Brian, did could throw have numbers in anything that on I and don't Nitin or we that deck. a slide help in can that. Nate up us head, there. out terms be we we of of maybe off put certainly That may top after but or

David Bywater

a higher. in be [indiscernible] it product growing new attrition which being that function I U.S., growing or to had same in know the it's gotten there, X ago, the seen we have and was of what a then one. to is U.S., able the almost year services and And and you would I XX% said then do bring expect not that that to was higher. not there and earlier, we Canada

a that the our rate was it business, at was which... direction as core definitely So wrong in growing going

Dana Russell

on Yes. presentation, that of can broken those Nate's that presentation. see components And you -- out. our that investor some

you So individual components the see Canada. of can

see also individual the the be. we exclude I as those once you of were for Canada elsewhere. Canada can break result out impact But and need Canada numbers, to having that a rates growing think not of in can if growth we You were our larger most out of metrics growth there better in

Brian Ruttenbur

point new costs? roughly, for rate you million. One then believe, it cash along a just is I and of in $XX And quick follow-up. percentage that Okay. free by, to XXX you move passing basis higher make interest customers? the flow that, certain How along environment, you impacts every as the a your that are customers these negatively Are passing point

Dana Russell

we haven't. No, really

economics things, impact of I resulted price changes result think done, there's other rate increases. a the those option but to most have do that some through that of have that which as has interest impacted been we not and in of

for Now other the where is the that the really is way more company. certainly, of we've efficient in done was activities cost bellwether growth. being kind invest good careful we've but mark and other exceptional, done a to say service a done. job that to we're and structures, point within We've investing been been continue can And well that we our we about a cost

reductions. we we potential we're continue making have So a that believe to pulling to back or reins It's think I grow. not like

We announced there. the there to to be continue acquisition kind continue haven't investments thereby in talked customer optimistic our that, of any and reductions, David invest, portrayed but presentation overall we and to as

Operator

of RBC Markets. next with John line Capital comes Our from the question Mazzoni

Unidentified Analyst

on strong quick. it I'll keep results. Congratulations

attrition, better about back And should how think could you it's think going than give the year? half also, much we why we into color of the about attrition trending as expected? been us Just some on

David Bywater

there's I attrition, I Yes, I'll about take that key one. When John, think drivers. think X

So quite them bit, not we a two about talked the third. of

ones. two obvious the about me let So

strong criteria our tighter we that -- underwriting employees and I our history our with have credit think is I the with time. mean, over customers

modeled. think well we So against out I actually that's just what proving

gotten think that I our underwriting So has quite strong.

much XXXX. I back technology, for like, I the and personally, of in Vivint just is gotten the reinstalled this tighter. wow, of the alerts I I Personally, was old has -- was was for and I system all me think know X and that last was just service performance remember the years, I I system delighted. year. the was the XXXX, I gone had I quite when system. the Dana family he use got is in when cases actually is called, all and trying prevent was and a and doing he goes, for installed family remember technology actually incredible. to me I up phenomenal. was showed professional install something the my wrong asking The a this friends I we incredible, his system, just It's finding I'm with the system. remarkable.

We That that can rubbing it customers own or find to delighting and that second get We thing. technology. that what's on better. the was them. and So how either we the can eradicate fix We I just think own loop that's feedback wrong continues reinforce. we

So I getting that's just think better.

around and the their and And still what I that finish half, bring going several in you we paying when got we're value. off is you And this that them, great ago, think finding in home, to financing with think paying holy home, your I'm drops playing that before. When I about around is of we're went over those enough that's and like, financing. bill consumer half. the services drops is so [indiscernible] getting contract additional hypothesis essentially, was to think was of new well other this we things years I productivity worth to they're around finding these years think efficiency third equipment, in attrition do essentially my X-year I And the half end thing the just in value everything my home. I'm when think about the I consumer at have in on, you to bundling them all And cow, what value, my we they're paying consumers when X saying now value think bringing your build out.

Anything big add that? to the for are want you those that think I X So me. to

Dana Russell

-- you does question X do say going this how forward. I your how would thing, look about John,

the period. this David the as mentioned, end correlated, of Some contract is to of

where curve much the be that have those contracts of rate as at here there at we would times we're and variation educated been But expected just of there. coming contracts from year's on through attrition. bending by because it the I've results So with standpoint X timing those the prior seems some an as results you're looked increase like that higher a attrition those numbers and here mature, to on is some contracts, better fishing getting life and for team bit, lately,

the seeing we're Now still attrition be lower.

associated to overall -- at be but uptick the believe do a specific end on we positive a the So that better we a be a we've of that, life, believe time there's certainly situation quarter see with to downward a these of attrition going being and may that we're that stay slight to in is over that, and contracts not direction and we're going a going to a seen. reversal trend There in that a frame. of trends to significant reversal continues longer where continue see improve

Rasesh Patel

low platform add that of months, And that, at To years. approaching a just X put our loyalty to I the brand just power demonstrates XX.X% into has. average at would customer the the XX-quarter the being now is and context, Vivint XXX life

bodes many aren't that our more to running the brand a involuntary the And and color plan. voluntary of attrition that for the of where that favorability And than is little that right type confidence go-forward and we're attrition. well are interest. originated on there platforms good got seeing cohort the contract had bit a expected, is into you on trends, us And give originally But has off loyalty. stickiness platform gives efficient so really that our higher much now that that customers sort on -- expectations are coming we around of

Operator

Our line with Evercore. of next from comes the question

Unidentified Analyst

unable to is This be Amit, in who's of dialing behalf here on today.

user wanted expand your can term, to see quite some could whether KPI And And subscriber base this trend to grew from kind installed efforts of your great growth this profile what versus ask term? do monthly recurring it's it? revenue talk average about per your I of to growth new think nicely you continue growth? do in contribution to see quarter. So you your longer you long to how And

David Bywater

and and appreciate of take I'll add I this, of half that. end the back Dana question. let Yes. first to the Rasesh the

next things occurs see not you once customer done happens of view then years. key that in upselling the what has actually X upfront of and as One that good. throughout and is the gotten those quite we it's amount X a years The

include nice seeing that's improve in sell little at the then does been solar other section. all is that a to play thing there. is So you're It that continue not we in bit. to see And

meet new attach ideas, services, So it's being go customers share and able new products, rate. once again, but us with really the to new

the we the attached. discovering are cameras, expand The demand cases. continue for we understand as those continues use And for cameras cases and using customers new system grow to grow. use be just to that the strongly to frequency interaction. and the our Like So grow example, just for and continues of then share and

I shows [indiscernible] They're always system. about think our that demand that seeing always our they're interaction, there's system. a using

you don't add of we your And service somebody have on and additional charge. They're part it," "Hey, back love "Hey, do so house." call RMR when camera that's a says, that I'd like, a

think has I use it's add, of doing that driving really you know and don't Dana, I we're Rashesh, monthly. So of want average scope what kind or? been to if

Rasesh Patel

year-on-year. I'd that bet. you just up Yes, our add XX% revenue service is

customers. customer Vivint categories. to And more opportunity we as product the on engagement more service exciting that will earlier, the the drive drive 'XX into there with that so of new ability engagement be announcements have some product good further we even feel are going base we about to up platform those referenced David into as have to coming interactions open And

think the the I realize fully every about to very controlling days mean, of I if of through the so in home this of platform. think platform, the we're of home early you and able type smart connected aspect And power your being

capabilities on well during interactions those service drive we platforms, in-home really organizational open to And as business. up continue engagement that side refining we're service customer the both as to opportunity, as through our so the service

David Bywater

per the this down customers times most XX to about X quarters the thing think, most that I company excited X have. it's -- ago whole thing, mean quarter engagement just, was It's I or the the engagement. XX When a ago. about is it talk I'm day, [indiscernible] we

And go So other working up come along, if it continues to growth you've favor, up. got up, engagement your positive up usage, and things and the [indiscernible]. grow in

Operator

the this conference Bywater, back additional closing no waiting to at David time. CEO, questions I to like are any remarks. would There for pass

David Bywater

Bethany. appreciate Thank you. I that,

did business. employees, the once in I our job our great Just the job the phenomenal was focused of you again, did team the headline a responding, much headwinds. company. appreciate delight And and we in There better I guys' news closing, interest on definitely felt so customers, around I of we they're on QX. they they're think appreciate of all the a them how focused but fundamentals them, in

we've forward. going got map a I think great road

I'm and excited about our me, For map road for encourage to us execute.

we've want what said the I the do. company to that we and done we've a continue think case we've to been we executed X going I expect forward. public consistently since done thing is

So through. and to continue our employees, our come on I message them Hopefully, to deliver guys execute you that see promises.

So interest, after -- take so appreciate Thanks you one-on-one. we'll and guys. guys' afterwards much, calls

Operator

Inc. the Smart That concludes Vivint Home,

XXXX Results enjoy Conference all rest Financial I your Quarter Second the Call. day. of hope you

You may now disconnect your lines.

Vivint Smart Home (VVNT) 9 Aug 222022 Q2 Earnings call transcript