Alarm.com Holdings, Inc.

Good day and thank you for standing by. Welcome to the alarm.com first quarter 2021 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you would need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, to Mr. David Trone, Vice President of Investor Relations. Thank you. Please go ahead, sir.

Thank you. Good afternoon, everyone, and welcome to Alarm.com's first quarter 2021 earnings conference call. As a reminder, this call is being recorded. Joining us today from Alarm.com are Steve Trundle, President and CEO, and Steve Valenzuela, CFO. Before we begin, a quick reminder to our listeners. Management's discussion during the call today will include forward-looking statements, which include projected financial performance for the second quarter and full year 2021, the impact of emerging market dynamics and trends on our business, and on anticipated market demand for our offerings this The impact of the COVID pandemic on our global supply chain and the global economy, our business strategies, plans and objectives for future operations and integration of recent acquisitions, continued enhancements to our platform and offerings, opportunities for growth in our current markets and our plans to expand into new markets, and other forward-looking statements. These forward-looking statements are based on current expectations and beliefs and on information currently available to us. Statements containing words such as began, believe, continue, estimate, expect, forecast, may, project, trend, will, and other similar words are intended to identify such forward-looking statements. These statements are subject to risks and uncertainties, including those contained in the risk factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission on February 25th, 2021, and in subsequent reports that we filed with the Securities and Exchange Commission from time to time, including our quarterly report on Form 10-Q that we intend to file with the Securities and Exchange Commission shortly after this call. That could cause actual results to differ materially from those contained in the forward-looking statements. Please note that the forward-looking statements made during this conference call speak only as of today's date, and alarm.com undertakes no obligation to update these statements to reflect subsequent events or circumstances except to the extent required by law. Also during this call, management's commentary will include non-GAAP financial measures and provide non-GAAP guidance. Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in understanding the company's Performance and Trends, but notes that the presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in the financial statement tables of our earnings press release, which we have posted to our investor relations website at investors.alarm.com. This conference call is being webcast and is also available on our investor relations website. The webcast of this call will be archived and a telephone replay will also be available on our website. With these formalities out of the way, I'd now like to turn the call over to Steve Trundle. You may begin. Thank you, David.

Good afternoon and welcome to everyone. We are pleased to report solid Q1 results to begin the year. Our SAS and license revenue in the first quarter was $107.4 million and up 16.8% over last year. Our adjusted EBITDA in the first quarter was $35.6 million. I want to thank our service provider partners and the Alarm.com team for their contributions to our results and for their ongoing performance during these challenging times. The favorable conditions that we saw in the US and Canadian residential markets in late 2020 carried into the first quarter of 2021. This momentum was driven by new account creation and the growing adoption of advanced services such as video and video analytics. Commercial sales opportunities in the large-scale enterprise segment also improved but remained somewhat below pre-pandemic levels. Our international business remains more impacted by the pandemic than our U.S. and Canadian business. As we monitor conditions in our international markets, Our team continues to add new service providers to better position for the growth we expect once more robust recoveries are underway in these markets. During the quarter, we continue to build on our growth initiatives and invest in new product development programs. I want to update you on some of the technology we released and other key developments over the period. I'll begin with our residential services. I discussed the launch of the Alarm.com touchless video doorbell last quarter, and we saw encouraging adoption during its initial rollout. In the first quarter, nearly 1,200 service providers installed the new product. This shows the level of confidence that our service providers have in our ability to deploy innovative, market-leading products that also meet the dependability and performance expectations associated with life safety solutions. To expand our success We continue to offer our traditional doorbell products, and we saw strong sales across the value spectrum of our lineup in the U.S. and Canadian residential markets. Shifting to our commercial solutions, we recently launched smarter business temperature monitoring for restaurants, grocery stores, pharmacies, and other commercial verticals with temperature-sensitive inventory or areas. The solution uses temperature sensors which are integrated with our supported security control panels. It provides comprehensive monitoring, real-time alerts, historical reporting and multi-location awareness to ensure health safety and inspection compliance. Customized alerts can inform the subscriber if the temperature in a refrigerator or freezer is outside predefined thresholds or if a door is left open for a predetermined length of time. The alarm.com reporting engine provides an audit of out-of-range temperature incidents that includes the incident's total time. We also launched a new enterprise dashboard to provide a single interface for monitoring storage temperatures and trouble conditions across multiple business locations and refrigeration units. We integrated this new temperature monitoring solution into our higher value Commercial Plus service plan. This is part of our ongoing effort to develop unique capabilities that are available only through our Commercial Plus offering, where ARPU is more favorable. As a result, the portion of new commercial subscribers taking a Commercial Plus plan has increased by 35% since 2018. With a strong ROI-based value proposition, we expect temperature monitoring to contribute further to these results and generate additional RMR for our service providers. We also enhanced the enterprise dashboards that we designed to make it easier for multi-location businesses to monitor and manage their properties. For businesses with multiple cameras installed across multiple sites, monitoring the high volume of activity and ensuring that all the cameras are performing reliably with the traditional video solution is cumbersome at best. We believe our enterprise video dashboard offers a smarter and more efficient solution. The new enhancements include a single screen for viewing video clips of important activity captured by any camera from any location. We also automated the process of monitoring the operational status of video cameras. On-demand video health reports summarize the status and trouble conditions discovered on all video cameras that the business has deployed. New trouble condition filters can also pinpoint specific issues at specific sites. We also strengthened the enterprise dashboard to enable multi-site security administrators to manage enterprise credentials across locations more easily. For example, administrators can assign a single user code to provide employees with customized access to any business location or region. Streamlining these workflows and permissions simplifies the process for administrators and employees while enhancing security and control at every location. Before I hand things over to Steve Valenzuela, I want to update you on new developments with Energy Hub. Energy Hub orchestrates and manages distributed energy resources, including thermostats, batteries, commercial and industrial resources, solar inverters, and Electric Vehicle Chargers. Energy Hub's steady expansion of its industry-leading ecosystem and associated services has opened new opportunities and growth areas. A critical strategic challenge that Energy Hub's utility customers are actively planning for is how to manage the substantial increase in demand on the grid that electric vehicle charging will create. Energy Hub is investing in comprehensive solutions to help address this. This past quarter, Energy Hub added another EV charging program to its platform through a partnership with Potomac Edison. Potomac Edison will use Energy Hub's platform to administer a dynamic pricing program for electric vehicle charging. By managing data from electric vehicle chargers, the Energy Hub platform will encourage charging during off-peak hours and support customer adoption of connected charging infrastructure. Energy Hub also announced the launch of Mercury Edge Connect. This is a standardized framework for integrating distributed energy resources such as connected EV chargers and batteries with Energy Hub's platform. We believe streamlining the integration process for providers of these devices will strengthen Energy Hub's position as the single platform for utilities to manage a broad range of customer-owned distributed energy resources. To conclude, I'm pleased with our Q1 results and the progress we made to expand our platform during the quarter. I want to thank our service provider partners and our team for their hard work and our investors for their continued trust in our business. And with that, let me turn things over to Steve Valenzuela. Steve?