SMRT - Earnings call transcript Q3 2021

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Operator

Good evening, and welcome to the SmartRent Inc.

Third Quarter 2021 Earnings Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Evelyn Infurna, Senior Vice President of Investor Relations. may you Evelyn, you, begin. Thank

Evelyn Infurna

Good Thank SmartRent's and to everyone, quarter you, conference Operator. third call. welcome evening,

Joining me website. we today Jon are Relations which Lucas Haldeman, Chairman our on Financial release a Investor After are earnings available Wolter, of and Officer. the an close, our issued section and XX-Q, Chief CEO; and

statements to everyone discussion regarding today including may Before I to our prospects. over considered the call concerning that Lucas, I'd be statements and and other execute that growth related our new to turn the like business may statements to to customers and plans on remind our strategy, plans contain acquire maintain forward-looking, our our existing ability

or often statements reflect identified to as today, any view update or our statements with of not are only any we We our statements. of as obligation expect, considered XX, subsequent not Forward-looking be believe date. should expressions. do forward-looking XXXX, similar views and November as These such we words we revise anticipate, undertake

of and differ not subject of variety Forward-looking statements cause a to expectations. or risks are and future that our from actual promises results performance materially the could to uncertainties are guarantees

are material and our our For statement quarterly sec.gov. report to XXXX, risks on important discussion website Form could S-X website Investor other available filed which and affect the of at Form the on our of SEC's a contained in that on on SEC actual XX, September factors refer please Relations registration results, and those our with section XX-Q, the on

Lucas? in turn over with to close measures. financial non-GAAP will that, issued after And results. GAAP the today's to review of call, let our we A release non-GAAP during certain Finally, our to call me press to measures Lucas the is included today. reconciliation refer

Lucas Haldeman

representing $XX.X increase first Welcome, units deploying all-time we results. We third XX,XXX units revenue and of last the truly XXX% XXX% as the record you, review After had joining Thank us XX,XXX SmartRent the record period over quarter. delivered in a for quarter thank in quarter in XXXX, an alone, million, of same a than we year. you everyone, half third a year. Evelyn. last deployed more our outstanding

and Since total units million success. million believe We to X support and our factors of and support sales as just IoT key on-site our convert team continue Our our will are the revenue employees, the and our high-quality effectively third keeping completed of seasoned our we estate our of industry. advantage a to public additions debut achievements pressuring were mover benefit and having of sales our estate growth leading team, committed we The a with enterprise of all product professional invest anticipate necessary that in development the on customer as our workforce, us consultative is our oversight and the by real backlog to are to deployed pipeline which in increase for to our map, our committed attract our stream We've capital result and These deployed so especially units. demand building services aggregate service the companies to the especially road and quarter. research of in under late continued on growing number our used our commitment the to approximately to in first We smart DNA end the teams. pursue portion process, deliver field of expansion indicative of from our installation technology $XXX in of deploy contributing successful our real is force, technology. solutions committed the margins, help expansion booked this founding our August. unit capitalize and debut, as talent unit our and home of currently our of can look installation we've that and field to our capital passion services of in smart team training

a Our hardware and management extensive flexibility devices, software estate in CRMs unlocks integrating myriad value property maintenance owners. numerous for real with platforms, of X systems, and enormous operators

solutions reduce to philosophy Our open and expenses, allows reduce enhance revenue, opportunity mitigate architecture consumption. who managers owners risk us to individualized provide for the embrace and property energy

multifamily, key SmartRent. the a our in pipeline auto-generated and units smart retrofit, business The with the utilizing majority revenue the customers. efficiencies iBuyer our our is benefit homebuilders maintenance majority significant work orders, our are teams stated to growing of friction owned self-guided A ROIs In single-family portfolios our rental resonating X.X landlords. control in new XX%. differentiators. These XXX financial and community added that units, both approach improved and as our institutional customers base Collectively, our they recurring units clearly and single-family home the existing to tools, million number by the of Our connected evidenced XX quarter, and of new existing one customers, A represent excess experiencing our the multi- by market vast compelling. are in annual of tours markets. are from predictive units third have workflow will or and being overall growth new opportunity in loan largest reduction the for approximately that rentals, we construction committed in units customers with

we are with what We portfolios. call inroads of owners tail into of making the long thousands property also managers and institutional excellent smaller

including Alloy platform our product. enhancements access front, innovation we community Access, video Alloy Parking, On and intercom the several year this product introduced

more more tours these with of and offering. bookings products, of original experiencing or and new more include along self-guided home are our one We smart our

utilized the being in affiliated an devices app, for This approximately white-label or functionality for app It resident where while a the community. the company, focused During staff that product approximately and with consolidating the with marketplace can advancing is personalizes community. quarter, management allows which our energy resident online given operators have of a our customers, their community. brand other the the XX,XXX related app legacy property control remain and of property app we resident that offering services importance specific additional launched also of energy reducing or users. owners experience all that and the and on consumption We global SmartRent we additional efficiency, enhancements XXX,XXX to users engages our growing to resident the residents for

understand Our that consumption. smart help to along go-to-market energy home manage water and and SmartRent's was leak collection from devices better our offering step these data includes thermostat a capabilities with and initial reporting detector, smart and owners

energy utility rebates. also platform several energy program our response benefit management to response with reporting from demand offering reducing collects builds last software participation. on our products also evolved incentives. we their from the provides by smart months, The have data that demand and rebates Over Residents financial and integrating and ESG utility to by over XXX platform related thermostats management sharing management manages facilitate revenue an companies and energy other

robust which quality absent Another deployment need important WiFi for in initiative a largely of offering, there a is most communities believe making inferior a is is today. We rental managed compelling WiFi or priority.

WiFi only opportunities also superior upgraded a property property workplace turn managers welcome or they WiFi a services properties. no portfolio become using the streaming of curated including now importance revenue-sharing potential is estate churn, for company. WiFi enhancing managed to and services, our community product the for and the a benefit recent be with and strong, friction. estate our become program telco into opportunity an reduce types portfolio, solution believe multiple Parking a to long-term penetrate are are resident's reliable such the on communities our who savings benefit the ignore can demand to about opportunity some a our in community, opportunity resident particularly Managed convert real longer hubs pilots dual represents buyer owners have stealth believe of flexibility our property the a firsthand. managers for sales. multifamily continued a to sell as have expiration WiFi service In customers' value-enhancing customers on need amenity. we as that the about their relatively contract. has can CAC, product the will to hosted stream an in as investor as The gaining by loss to who can legacy participate and also of provide should a hubs A with number to the turned cast and with Instead we of cycle. but properties we own while where cost eliminating revenue contracts X-year new network. that questions our With timely experience. newly growing of real higher significant connected learn and Residents an a analyst thoughtful expenses, calls office as verticals. platform There's are for multiple to a these product just nonresidential churn property we sold Parking SmartRent, to potential legacy to lower for, a customer their offerings We ARPU platform, cellular This as cable that our low to and offering community SmartRent's entering SmartRent or should less will Interestingly, communities, allowing cable WiFi in on the both for us in X- a a current the buyer's in asked have Alloy experience, the several can solutions no be our contributor to company wait customers with service Alloy tap at been SmartRent of our in-place not our have at their app. and In

in early progressing expansion while recent still in housing, several student days, Our participating customers well pilots. student is into housing with

penetrate student to continue our recruit to this vertical. real we as promising experts estate team build further We housing industry

we acquire organic are platform our large, to opportunity of complementary or platforms. excited verticals software other While our into is by the expand growth flexibility

has market-leading been vet identify working strengthen to diligently team will development business that and Our our opportunities position.

as successful earlier; long-term needs a the another must are diversification following such least we entering be strategy, product road for product partnership tail of diversification fit. acquisition the market expansion our of to our markets offerings; that solid at lastly, of long vertical; or that estate our base pursue where in any size, cultural addressed our into SmartRent acquisition real advancement the of of map and given we or we a presence one our or geographic customer part of criteria: include underrepresented, As or segments

we can With model. expand into ramp that opportunities, Our current Canada where focus inroads but the believe is evaluating we land on said, following also we made and international proven are U.K. domestic we expansion and our have

that has believe capital to team, portfolio proud converted are groundwork we customer in of. Canadian During our our extremely on positioned our hard the and the a and recently from for necessary would market. quarter, achievement trajectory. we are growth that acknowledge we that also SmartRent setting welcomed We work rollout, U.K. the an Overall, pilot to like continue they to we expansion are execute have financial the we plan, to well human of

achievements Smarter We the accomplishments and preview brisk in will and by at are its third revenue stream grow Near-term SmartRent to we a are base just what customer encouraged notwithstanding, supply pace. of confident our are chain to that the our a capable of. headwinds related global quarter continue believe is that

market shareholder our is growing singularly long-term on value generating and Our to focused team share customers, value. delivering our

I'll turn Jon results. over review Jon? Now to financial discussion the the to

Jonathan Wolter

It's SmartRent's new year. pleased is financial compared quarter I'm the XX,XXX number driver deployed to to share to new last results a units company with growth you units units pleasure the of that in record primary units as in date evening. this new deployed. to XX,XXX our deployed a reached The XXXX share Lucas. Thanks, of with

deployed XX,XXX in of total to year have the With number of XXX,XXX base the XXX% ago. our of the XX,XXX grown for year. smart increase in third Units deployed units an to from units we XXX% compared which represents booked the the to addition XX,XXX aggregate quarter, of units a new XXX,XXX, to a rose hubs quarter associated year-to-date basis on as period orders XXX% Year-to-date, from binding XXXX. with increased last booked,

we typically help visibility in that up for booked use converted and assess in under of that an informed will are quarterly third $XX.X deployed as to record revenues reminder, from notice. within XXX,XXX, by quarter deferred for new XXXX. post-deployment the $XX.X subsequent increased a of to XXX% revenue to a end indicator X demand We the units booked units that million Total for of master period a quarter achievement quarters record. which medium-term the of XXX% Committed we time and in from near $XX.X will sequential units they units XX% Again, quarter, have number agreements of and booked. that deployed million services the from reason from units of the a orders was Growth revenue, units third year us be the the XX% of near-term as provides units approximately sequentially and were is revenue are deployed into committed million on binding SmartRent's reminder, smart same us with $XX.X up ago. primary aggregate resource at are which growing basis. As together earn hubs subject million $XX.X the been with million, quarter

between months. next of and ARR, the annualized third as quarter, of earned months between XX revenue our revenue months our define we with earned deferred the from second from recognize deferred or quarter was revenue XX the XX of current XX SaaS third last revenue, XXX% end value sequentially the within the to the of $X.X XX% up balance the year. than quarter. which million, quarter total our expect and to more XX% the and recurring up as being Annual We XX compared of total in XX% recurring

to does We As per to Hosted is could XXXX. per ARPU third by for of to The ARR launch quarter a for units, existing the as legacy upside. cross-sell as per products year-over-year upselling include of new products, be unit of ARPU reminder, new additional services we adopters. recurring subscription and customers, signing products. in per expand compared our ARPU higher new opting new unit more significant revenue representing is in the month month that early the the improvement in contracts introduction incremental at of base and and in improvement $X.XX continued committed expanded increased services offerings than attributed rate not a customer that quarter customers add our anticipate hosted annual $X.XX customers driven service and

by our profit deficient of smart related gross hardware batteries was units. provision in million warranty $X.X to Our reduced hub some of

third Adjusted company-related the compensation excluding improved $X.X we expenses, for million. year, negative million to EBITDA important Other meet including the workforce in Additionally, noncash a expenses negative drivers negative of approximately we It included we And and year another compared the result have our outstanding allowances hardware reflecting million and million approximately to net XXXX. increased to as personnel from note want approximately the quarter in $X.X loss order from that quarter charge, of was of expenses. the margin in a increased XXX ago, from to a profit pivoted At quarter supplier expense total $X.X gross future operating XX% primarily third Operating to the shares million of avoid diluted XXXX. million million. our third an million ramp to insurance, and quarter public sequentially to was to $XX.X a share warranty fees a professional our warranty is $XX.X in quarter $X.X $X.X quarter battery stock-based several factors, issue. end, and related compared demand. in growing were in in this increased shares to decline that headcount XX% margin last our such quarter outstanding XXX as million XXX% were increase of of expense $X.X the $XX.X to reflecting million as the by million gross

were average XX approximately third shares outstanding. quarter, million the there weighted For

million balance $XXX debt. XX, $XXX.X Wall of we of term million received $X.X in Acquisition to Fifth and We outstanding September with a had proceeds cash related million cash combination XXXX, net our of As business Corp.

million. With external the revenue deployed track business units revenue As used the of from are thousands and in on anticipate we expansion a outlook, our currently reflecting the revenue range projections map our $XXX the XXXX, proceeds growth for from refining XXXX of on selected deploying. will be to that workforce, to the that approximately are driver road opportunities. reminder, million our we $XXX are combination deliver development and remain being million to products of our XXX,XXX in respect of We $XXX continued primary a units to hardware

XXXX Our respect expectations XXXX to to revision XXXX of uncertain units year-end in global supply guidance for reflects nature questions. our XXXX Operator, chain report which revenue constraints, on line a With That for open the the chain when and given supply the Access product. have and please concludes EBITDA, provide revenue will deployment and backlog our of the created Alloy Hub prepared results. the logistics, our our we remarks. updated Fusion adjusted we deployed

Operator

Instructions]. [Operator

from Goldman Sachs. Our first question Rod of Hall comes

Roderick Hall

guide ask guidance the your unchanged. is little to 'XX what reiterated wanted little lower fiscal we that I revenue deployed So bit ARPU anticipated. year for about unit bit is below was a and But a then

to Fusion then into So little Hub right I dig a that happening wonder, here can bit? have kind related ARPU I delays? Or of is you with follow-up. And a what's

Lucas Haldeman

issues Rod, the it's really continued to Lucas. device. Hub. supply with delay the particular chain have We've of to It's Yes, it. you're that to Fusion on

higher And margin. seeing higher ARPU, has so that you're contribution a

why seeing that's that. you're so And

not and an that we're like are other in-unit goes areas. the Alloy on front amenity Access area which and gym seeing area The with product delays product, the door is doors common that

is pushed little But reaffirming going be and will that our units. pushed 'XX. unit be And the it's so hitting -- count into to that's revenue that a coming in -- lower, why we're our confident in

Roderick Hall

because 'XX? loosen, then we lower see bit up those hangs of these way supply kind we kind to of Lucas, early And thought moving originally you trajectory start as it the little into would issues think, ARPU or... And that, ARPU that chain of a factors

Lucas Haldeman

Yes, we're that's feeling. how

going that's seeing in think way give right guidance but make we're better we Rob. we call when I the do we're it to QX much sure you QX, our now,

Roderick Hall

Or Okay. I in actually terms -- just then of just to lot my And you competitive follow-up, town? smart environment. competitive mostly you game the just terms in whether in lot a of what of ground keeps Is only noise even the somebody in curious on competitors. it competition. to Are engaged or what in goods? of ground guys question going install just is the ask this And a a about not. And it's you're of wanted seeing yourselves the curious see you're There's you on being technology market. finding

Lucas Haldeman

mean, is. I Yes. it

right, we there's -- when competitors think we've confident and You're lot first in win of a always even And were to confident space. start ability we the have to be the first There been in our RFPs. to business. this this continue started I been,

sales I winning we are what make proceeds think mostly platform. and you're definitely we feel And very chance to we more marketing and what stand we're still like like seeing still get the truly I we're but differentiated to RFP, is think invited the putting of that, to out teams noise RFP. to to work good our there. a sure a space We in the still IPO invited we have that enhance selling need seeing feel heads the and we're we is if

Roderick Hall

who most the But Or can is you there guys get say the other of bidders? you invited any kind competitively? if you see typical to RFP,

Lucas Haldeman

actually now well. regional name kind would the talk I as you. that mean the and been over selling going is business were all we've that and aren't see. being to it's consumer-based we business that owner, -- multifamily. back X differences their what of business, surprise we there's no it names some consumer-based and seen people gone they years Yes, back There's the surprising they've traditionally to It's into a and about depends a on past this more really if leaving

good I seeing consolidation So some think we're there.

of continue I of you'll consolidation today this There's an space. sort consolidating. in see to think announcement

players we're stronger seeing fewer emerge. So I think

Operator

next Our of comes Sherlund Fitzgerald. question from Ben Cantor

Benjamin Sherlund

time retrofit are update the be how kind and around going of were how conversations around there? would specifically I'm Any that some of customers Any color they're just thinking new lines construction great. both -- and builds. for your with wondering

Lucas Haldeman

Yes.

we've work existing, our Ben, have I think of model all. really, thanks where of the the seeing I out -- I that this largely really developments are said in like do of for we to not there, been avoid gives they're are and though, of the X,XXX coming next seeing, that ground, X,XXX units to the instead for for question, pivoted which our weren't ability that go. And bulk retrofits. the we'll ability they keep year, that Those year, hardware doing delivery We're the going. do we're outside to extent we some out delays. owners, build us to of projects business ground, new to new come to us issues, waiting able of units Most like our having existing. of have ready the first they're just they're QX

And back we focus and have the retrofits. flexibility to so between like go on and those I forth --

Benjamin Sherlund

Is follow-up, if professional to your of big there? out have then teams? Okay, got time sales line there And kind pretty your a lines a your impacting has been maybe for your headcount you shortage the time services perspective, just delays kind deployment building any guys How labor or I additional could. capital influx of of great. capital. From of

Lucas Haldeman

plan. surprised No. to incredible we're pleasantly ahead Actually, and able talent. retain -- actually we've attract be attract incredible We're of going thought talent. -- was seeing tougher, hiring it we've we able we're been and to And we're to

and based to incredibly standards Our talent. unfavorable able net turnover attract low new high-caliber really we're remains on industry

issue we're us, seeing the with an So not currently labor market. for

Operator

next of Our from comes Ho question Deutsche Bank. Sidney

Sidney Ho

would with to follow-up Have deployed, on a revenue supply to deploying know this think been that target. customers of full impacting year mix earlier full the unit have reiterated revenue mean deployed, you I would your you a a the then constraint of unit guidance. is in number quarters? higher your being would same you low year to question less unit the have does And a that you units about how My ability on of some are an kind progress. Congrats future And recapture your first related solid is mix? that meaning of factor question gone have deployed to deployment? -- in

Lucas Haldeman

question. thanks Sidney, Yes, for the

we delayed, not that double kind yes, anticipate touchscreen be Fusion Fusion and delaying to want click is putting smart of higher that's X really, cetera. has So -- lock, absolutely leak in on points. And And units Hub, to that I is revenue bringing thermostat, our a recapturing a added online. Hub quarters. that future hub sensors, is the in when One ARPU the a been has been that us already done, will has that hub that et smart unit which

the add-on an And home. it's so product to smart

that's the And other is on of Access we product. then down side. unit guiding Alloy how revenue of are it part our hit that the the So you side

the go back and front So come XXX delayed XXX-unit do the we the doing do units. can and We'll when elevator -- then parking if community, door those And have hardware. and a the can it's we're do garage. we go we

And where to we're we're so that's a guiding on little the but down hit side. number, unit you the able revenue bit

Sidney Ho

that Yes, the Are on with is, occupancy rate the my Maybe understanding that country of to because pass like decisions negotiation Or to willing more has their capital they time follow-up pretty tend don't that take can customers? thing been your does high. question the upgrade? do makes investment they impact along all lot the smart make the residents? smart to spend is that projects to they a feel to home, more sense. they a easily across a How building rush because

Lucas Haldeman

the headache reduction both property. benefits run reduction, savings, ROI where the assets think that protecting makes sell on and easier On your important really Yes. that's there's I that ROI expense to is on platform, it's overall better. your which we of an point, it utility There's

that's this and the to the think, always any residents. get And large buy rate residents it's that. owners ROI, the being about and take through tend for capital there to the we're that of to to lead occupancy and reliant improvements and I That's that's great be target in. We're not of passed so And macro it's answer to pitch. tied to they on but our where to really owner have not sort advantage to throughout not the us, that we and the budgeted occupancy cycle. owners institutional question, owners not

this owners rent. spend And we And In they cycle is up to they're cut a down more in proof. an business sort less of so part to cycle, love it's in need the and of cycle, able why side. expense charge

Operator

[Operator Instructions].

Our of D.A. Davidson. next Tom comes question from White

Tevis Robinson

Great. This for is Tom. on Tevis

Just you if color bit the was hoping could one trends a from us. the question industry. more I provide on demand overall in

have the industry the pandemic digital disruption construction hand, tastes has but On one we've the also accelerated like challenges. and seen consumer shifted,

market. new the retrofit part So maybe the construction there's a thoughts share -- sought your bit of there if of and any new difference between and

Lucas Haldeman

I question, affecting really they on the that is trades again, for focused the fact this trends the sure. where primarily Tevis. that macro is to retrofit. our I Yes, subject construction for the construction those and not think, are Thanks business Yes. affecting love are -- We're

guide of is to unit XXX,XXX. to think committed you where kind we've taken number, I thing up that I our one

in about than were think last you If it's the at XX,XXX we that, that we actually and quarter, but different deployed. XXX,XXX the XXX,XXX minus

actually, XXX,XXX new And quarter. a in committed units so the it's net

feel And to sort more better we So real there tailwinds are we like and demand strong. continues general pushing strong, adopt remain technology. to industry in the secular estate think is of

up It's quadrant to with really demand in. and trying we're thrilled with to continue to we be demand. the So a sit great the keep

Operator

to the presenters any This closing concludes the question-and-answer back turn for session. conference I to the would remarks. like over

Lucas Haldeman

quarter. future We're and Thanks these had next you look quarter. talking at tremendous We the of in Thank lot. you joining some and for to a and seeing all we by questions forward again appreciate conferences us call. on person the the a excited

Operator

conference today's This call. concludes

your wonderful lines. disconnect for have day. a Thank may participating, and You you

SmartRent (SMRT) 15 Nov 212021 Q3 Earnings call transcript