Alarm.com Holdings, Inc.

Good day, and welcome to the Alarm.com Q3 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star then 1 on your touchtone telephone. If anyone should require assistance during the conference, please press star then 0 to reach an operator. I would now like to turn the call over to David Trone, Vice President, Investor Relations.

Thank you. Good afternoon, everyone, and welcome to Alarm.com's third 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 fourth quarter 2021 and full year 2021 and 2022, the impact of emerging market dynamics and trends on our business and on anticipated market demand for our offerings, including new product offerings, 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 our current expectations and beliefs and on information currently available to us. Statements containing words such as anticipate, began, believe, continue, could, estimate, expect, forecast, may, plan, 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 quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 2021, and its subsequent reports that we file with the Securities and Exchange Commission from time to time, including our quarterly report on Form 10-Q for the quarter ended September 30, 2021, 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. Reconciliation 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.

Steve Trundle, Thank you, David. Good afternoon and welcome to everyone. We are pleased to report another quarter of strong results. Our SAS and license revenue in the third quarter was $118.1 million, up 17.9 percent over the same period last year. Our adjusted EBITDA in the third quarter was $37.6 million. I want to thank our service provider partners and the Alarm.com team for their continued strong performance. I'll start by updating you on several new products that we recently introduced and discuss how they support our long-term goals. During the third quarter, we introduced a new outdoor camera that we call the 724 and a new capability powered by our video analytics engine that we call Perimeter Guards. The new 724 camera offers premium image quality and field of view. It also includes the addition of an onboard microphone and a powerful speaker and LED light. We married these new hardware capabilities with our advanced video analytics software to enable a new set of customer experiences. PerimeterGuard identifies people anywhere around the perimeter of a property and triggers the 724 camera to respond with both audible alerts and a flashing red LED light. This capability immediately puts any potential intruder on notice that they are being actively watched. Subscribers can easily configure the conditions that trigger perimeter guard. For example, it can be instructed to respond based on a person's direction of travel or only when they loiter in a specific location for a specific period. It can also be set to respond based on various parameters and rules. For example, it can be configured to trigger both while the system is armed and the subscriber is home for the night, or when they are out during the day. The uptake and engagement with Premier Guard among existing subscribers is running above our expectations. Tens of thousands of perimeter guard rules were customized and activated within the first few weeks of its introduction. Our goal is to continue to develop our video offering to address high-value use cases that will drive higher video attachment rates in the residential segment. Shifting to the commercial market, we launched a new lineup of commercial-grade video cameras as well as a package of video analytics software capabilities that we call business activity analytics. The Pro Series commercial grade camera lineup is designed for the mid-market commercial segment. These customers tend to have more nuanced and diverse video surveillance requirements than small businesses. The Pro Series cameras were designed for our service providers to flexibly address these customer needs. For example, the Pro Series line includes a range of form factors with four megapixel image sensors and varifocal lenses that greatly expand the forensic image quality of recorded video. These capabilities allow technicians to utilize more location options for camera placements while providing the coverage, area, and image quality their security installations require. The Pro Series line enables our sophisticated new video analytics service for commercial customers. Business Activity Analytics identifies and tracks the movements of people and captures business performance and operational data. It enables occupancy tracking, people counting, queue monitoring, detection of crowd gathering, and occupancy heat mapping. Each analytics capability can be customized with specific virtual tripwires, multi-directional counting configuration rules, and ground zone demarcations that can monitor activity in specified areas. We designed business activity analytics to keep managers and business owners aware of issues in their business. For example, a manager can customize alerts so that they can know in real time if the customer wait time in a checkout line exceeds the predetermined limit or if occupancy restrictions are exceeded. Lastly, business activity analytics provides robust, enterprise business intelligence reporting. Commercial subscribers can analyze activity trends, monitor and measure foot traffic and customer flows, allowing them to optimize operations and staffing levels. Our goal with these enhancements to our commercial video software is to enable our service providers to introduce alarm.com's video solutions to a larger segment of their commercial customers. As we build our inventory of Pro Series products, our partners will be able to service more of their mid-market commercial customers with our fully integrated security and video solutions. This benefits both our partners and their customers. We will continue to invest in our video platform to expand our market opportunity and build new revenue for our service providers. We also provide a broad suite of tools and solutions for service providers through our partner services platform. These cutting-edge enterprise-grade capabilities unlock the full breadth of opportunities and value enabled by IoT technology. Partner services enables our service providers to leverage data and insights from connected property solutions to optimize business operations, lower their cost to serve, and build customer lifetime value, and dramatically enhance and differentiate the professional monitoring services they provide. We work closely with our partners to identify and develop innovative new solutions for our partner services platform. We recently launched a package of enterprise software updates that we call Jetstream. The focus of Jetstream is to drive efficiency and reduce cost by enabling our software capabilities to further support are service providers' internal operations. Jetstream includes appointments, which is a feature that seamlessly pushes information about customer support appointments from a service provider's CRM system to the alarm.com customer-facing mobile app and web interface. This capability automates and unifies customer communications. It can also reduce missed service appointments when traditional email confirmations are inaccurately filtered as potential spam or junk mail. Jetstream also includes our Service Dashboard. This new tool is designed for service managers with day-to-day responsibilities overseeing technicians and customer support operations. Service Dashboard provides a unified interface for monitoring key operational metrics and customer experience indicators generated by Alarm.com. It displays scores for technician performance, system reliability, and customer engagement, and highlights critical trouble conditions across the account base. The service dashboard also supports service managers in implementing operational efficiency goals through our full range of service provider solutions, including the award-winning on-site wrap-up capability and our system check tool. We believe that our partner services software platform adds significant mutual value to our relationship with service providers and contributes to our competitive advantage in the market. Lastly, I want to update you on a new agreement that we reached with Brinks Home that extends our partnership for another three years. In addition to enabling our ongoing partnership, the agreement will support a significant opportunity that Brinks Home is managing to upgrade AT&T Digital Life customers to Brinks Home services in 2022. The agreement also ties in our deep integration of IoT devices with new market verticals and opportunities that Brinks Home is pursuing. For example, Brinks Home can both reduce carbon emissions and generate additional revenue each time one of their customers enrolls an energy management device in a demand response program that is managed by Energy Hub. We are excited to continue our long-term partnership with the Brinks Home team and we're pleased to have completed this renewal in the third quarter. In summary, I'm pleased with our third quarter results and with our execution against our plans. 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 to review our financial results and provide guidance. Steve?