Alarm.com Holdings, Inc.

Good day and thank you for standing by. Welcome to the Alarm.com first quarter 2023 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'll need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Matt Sartman, please go ahead.

Good afternoon, everyone, and welcome to Alarm.com's first quarter 2023 earnings conference call. Please know that this call is being recorded. Joining us today from Alarm.com are Steve Trundle, our CEO, Steve Valenzuela, our CFO, and Jeff Bedell, president of our Ventures Business and Corporate Strategy. During today's call, we will be making forward-looking statements, which are predictions, projections, estimates, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. We refer you to the risk factors discussed in our quarterly report on Form 10-Q and our form 8K, which will be filed shortly after this call with the SEC, along with the associated press release. This call is subject to these risk factors, and we encourage you to review them. Alarm.com assumes no obligation to update any forward-looking statements or information, which speaks as of their respective dates. In addition, several non-GAAP financial measures will be used in this call. A reconciliation of the GAAP and non-GAAP measures can be found in today's press release on our investor relations website. I'll 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 first quarter results that exceeded our expectations. SAS and license revenue in the first quarter was $135.4 million resulting in a non-GAAP growth rate of 14.9% over the last year, excluding Vivint. Our adjusted EBITDA in the first quarter was $30.6 million. I'm going to touch on a couple of things in the core Alarm.com business, and then I'm excited to have Jeff Bedell, the president of our Ventures Business and Corporate Strategy, join in the call today. I'll be looking to include Jeff or Dan Kersner, the president of our platforms business, in future quarterly updates so that we can provide a deeper review of some areas of the business. I'll start things off with a few takeaways from our recent presence at ISC West, the largest trade show for the physical security industry. Alarm.com's presence this year reflected our increasingly diversified business profile with Alarm.com, OpenEye, and shooter detection systems each having a dedicated presence. Overall attendance at the show returned to pre-pandemic levels. The commercial market was a significant theme during IFC West. Most of the Alarm.com service provider partners that I met were expanding their use of our commercial services. Recently released products have also helped our partners become better at targeting our platform at specific verticals where they are developing expertise. One of the things we highlighted was our expanded range of third-party camera support. Our video solution will be able to support 80% to 90% of third-party cameras that have been installed in mid-sized and large commercial settings since 2018. With a more flexible video solution, our service providers can support businesses that want the benefits of our integrated video solution without the costs of replacing existing installed video cameras. As we've expanded and enhanced our access control solution, it continues to gain momentum. During the first quarter, access control door installations increased 45% over the first quarter of last year. At ISC, we introduced a new access control product called Cell Connector. Cell Connector is a door controller that leverages our work with 4G, LTE cellular networks to connect directly to the alarm.com platform where system data is aggregated. Bypassing the customer's local network reduces installation complexity and enables an affordable and effective access control system. For example, larger, more sophisticated commercial customers and corporate accounts typically have rigorous approval processes for third-party devices to connect to their local area network. Cell Connector significantly streamlines the sales and installation process and makes it easier for these customers to acquire an alarm.com system. In the residential market, our service providers continue to report steady demand. Despite the macro environment, we've also continued to expand our partnerships with builders. New RMR creation from our home builder program increased 14% during the first quarter as compared to last year. We also continue to expand our services to fully address the long-term opportunity we see in the residential market. A recent report by Strategy Analytics estimated that about 40% of households with an active, professionally monitored security system are still limited to traditional system capabilities that do not include any smart home capabilities like those that alarm.com service providers offer. Our goal is to maintain and build on our service providers strong competitive position so they can steadily expand their account base as the market continues shifting to smart home systems. Shifting to our operations during the first quarter, we continue to focus on driving increased efficiency and focus which will allow us to perform against our corporate EBITDA objectives for the year. We did this without undermining the R&D investments that drive future opportunities and feel like we have struck the right balance overall. We will continue to invest in innovation to continue to build the company for the future while also maintaining discipline through profitability. Overall, I'm pleased with our first quarter results. Our performance reflects our continuing momentum, and the significant and diverse opportunities that we are addressing. 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. Now I'll hand things over to Jeff to provide a little more detail on two of the areas he oversees. Jeff?