Alarm.com Holdings, Inc.

Good day, and thank you for standing by. Welcome to the alarm.com second quarter 2022 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthew. Please go ahead.

Good afternoon, everyone, and welcome to Alarm.com's second quarter 2022 earnings conference call. Please know that this call is being recorded. Joining us today from Alarm.com are Steve Trundle, our president and CEO, and Steve Valenzuela, our CFO. Before we begin, a quick reminder. Management's discussion during today's call will include forward-looking statements, which include, among others, projected financial performance, the impact of emerging market dynamics, trends, and anticipated market demand, the impact of the COVID-19 pandemic, challenging global supply chain dynamics, and adverse macroeconomic conditions. Our business strategies, plans and objectives, and integration of recent acquisitions, continued enhancements to our platform and offerings, opportunities for growth and expansion in our current and new markets. These forward-looking statements are based on our current expectations and beliefs and on information currently available to us. These statements are subject to risks and uncertainties, including those contained in today's earnings press release and in the risk factors section of our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2022, and in subsequent reports that we file with the SEC from time to time, including our quarterly report on Form 10-Q for the quarter ended June 30, 2022, that we intend to file with the SEC 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 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 to understand the company's performance and trends. However, 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 replay will be available on our website. Let's now turn the call over to Steve Trundle. You may begin.

Thank you, Matt. Good afternoon and welcome to everyone. We are pleased to report solid second quarter results. Our SAS and license revenue in the second quarter was $129.5 million, up 14.4% over last year. Our adjusted EBITDA in the second quarter was $37.1 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. Our continued SaaS growth and profitability during the quarter was driven by strong new account creation by our service providers in both our residential smart home and our business markets. Their outstanding performance on subscriber additions suggest that demand for installations remains healthy. As we look to the back half of the year and consider the current economic uncertainty, We continue to feel well positioned to execute on our annual plan across our diversified revenue streams. This includes our market leadership in North American residential security, our growing momentum in commercial markets, our expanding presence in many global markets, and the continued progress of our long-term growth businesses. On today's call, I will highlight several product updates we released during the second quarter Then I'll hand things over to Steve Valenzuela to review our financial results and our outlook for the remainder of the year. Starting with our smart home solutions, we recently introduced a new capability called smart arming for our residential subscribers. This enables intelligent, automatic system arming and disarming that adjust in real time based on activity in the home. Subscribers select periods when they want their system to monitor activity in the property and then either automatically arm or disarm the system. For example, you might want to automatically arm your system each night between 10 PM and midnight, depending on when you head to bed. During that time, the system begins to monitor motion sensors and other designated sensor activity in the home. After an extended period of inactivity, the system then arms itself for the night. The system can automatically disarm in the morning when it detects designated internal motion, indicating that people are up and about. We believe that SmartArming is unique in the market. It's a capability that we have long offered our commercial business subscribers, which we have now enhanced to suit the needs of our residential users. It's a convenient and intelligent way to control the state of the security system, and we believe that it will further drive daily engagement with the central station monitoring aspect of the smart home system. Smart arming is also another element of our strategy to differentiate professional monitoring services that our service provider partners typically include with alarm.com powered systems. We will continue to invest in developing market leading capabilities that can enhance the life safety services that millions of homeowners depend on each day to protect their families and property. Shifting to our commercial services, I want to give you an update on our software offering for small and medium-sized businesses, which we refer to as SMBs. We address this space through our alarm.com for business platform. This includes integrated services for smart security, video monitoring, video analytics, and access control. During the quarter, we introduced mobile credentials for our cloud-based access control solution. This allows subscribers to use smartphones to access locked doors in a property instead of key cards or fobs. An administrator can virtually provision and manage access credentials directly to a smartphone through our administrative interface, including managing the days and times when a user is allowed to access the property. We believe that mobile credentials can further streamline access management for administrators, reduce costs associated with access cards, and improve the experience for credential holders. We estimate the SMB opportunity that we are targeting with features like mobile credentials to consist of about 5.5 million business properties in the US and Canada. The segment is heavily penetrated with legacy technology. We believe that our integrated services and unified interface deliver unique functionality that will incentivize many of these businesses to upgrade over time. SMB properties typically offer a higher SaaS ARPU opportunity than we see in the residential market. For example, an SMB property with a security system, an eight-channel video system, and an access control solution would drive about six times the ARPU of a typical residential account. In summary, I'm pleased with our second quarter results and with the execution of our plans through the first half of 2022. Looking ahead, I want to make sure our investors understand that we plan to continue to invest in the key growth areas of our business in the back half of 2022 and in 2023, even in a macroeconomic environment that may be less certain. We are entering a seasonally strong recruiting and new employee onboarding period. I'm anxious to get our growing team fully deployed on the growth opportunities we are pursuing in commercial, international, active shooter episode control, and energy management. Finally, 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?