Alarm.com Holdings, Inc.

Good day and thank you for standing by. Welcome to the Alarm.com second quarter 2024 earnings 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, you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I want to like hand the conference over to your speaker today, Matthew Zartman, Vice President, Strategic Communication and Investor Relations. Please go ahead.

Thank you, Kevin. Good afternoon, everyone, and welcome to Alarm.com's second quarter 2024 earnings conference call. Please note that this call is being recorded. Joining us today are Steve Trundle, our CEO, and Steve Valenzuela, our CFO. During today's call, we'll be making forward-looking statements, which are predictions, projections, estimates, and 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 8-K, which will be filed shortly with the SEC, along with the associated press release. The call is subject to these risk factors and we encourage you to review them. Alarm.com assumes no obligation to update forward-looking statements or other information which speak as of their respective dates. In addition, several non-GAAP financial measures will be discussed on the call. A reconciliation of the GAAP to the 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. Steve?

Thank you, Matt. Good afternoon and welcome to everyone. We are pleased to report financial results for the second quarter that exceeded our expectations. SAS and license revenue in the second quarter grew to $155.9 million, and adjusted EBITDA was $42.8 million. During the quarter, Alarm.com and our service provider partners continued to drive organic growth in the commercial, international, and energy hub businesses. We also increased our balance sheet flexibility with a $500 million convertible notes offering. I want to thank our service provider partners and our employees for their contributions to our results. On today's call, I'll cover recent developments in our residential and commercial businesses. In the second quarter, we continued to see that turn in the residential account base remained below the historical averages. This is consistent with our expectations and in line with our experience in prior periods of economic softness. With mortgage rates remaining elevated, people are moving less. Instead, they are investing into their existing home and staying put. We believe that an additional factor contributing to lower residential churn in the last few quarters has been the fact that a higher percentage of systems today include a number of capabilities that are used routinely by the consumer. System engagement and the attachment of advanced devices or capabilities like video and video analytics smartalarm.com thermostats, and smart locks significantly increase account survival and lifetime value over time. So we are pleased to see that the attachment rate of video services on new residential accounts nudged higher to 53% during the second quarter. This followed several quarters of the rate hovering around 50%. Since launching our video analytics solution in the fourth quarter of 2018, the video attachment to new accounts has increased more than two and a half times. Several recent new products, including our 750 video doorbell and our new floodlight camera, combined with our enhanced remote video monitoring central station integrations, appear to be well received by the residential markets we serve. To better service our partners who are delivering these more advanced systems to the market, we recently introduced a generative AI capability to our service provider support platform. We trained a large language model on our complete database of product information, support, installation, and training content. The chat-based interface we created is accessible to technicians in our mobile tech app. This allows technicians to seamlessly access synthesized information from all our support resources while they are in the field actively engaged in installations or supporting subscribers. Nearly 2,000 of our partners have adopted and used this capability since its release. Now let me shift to an update on our commercial business. We believe that the commercial market remains fragmented and is in the early stages of a significant transition to cloud-based solutions that are more capable across the enterprise less expensive to maintain, and easier to install and use. As this market shift unfolds, we are leveraging our competitive advantages in SAS software, reliability, and our service-oriented partner business model to capture share. Our commercial offering is a purpose-built, end-to-end solution that unifies intrusion, access control, and video capabilities. We're also enabling integrated solutions for fleet management and active shooter response. I'm particularly pleased with the progress we have made with our access control solution, which we brought to market several years ago. The team has worked closely with our partners to drive a steady cadence of enhancements like mobile credentials, which allow users to access a property using just their smartphone. We also added elevated enterprise management so that larger commercial customers can create and manage access plans that align with their more complex organizational structures. And we launched Cell Connector so that our access control solution can operate without the challenges of deploying connected devices on the customer's IT network. This quarter, we also began to introduce elevator control with our access control solution. The steady work by our access control team has expanded our product fit, and our partners have successfully introduced our solution in more sales cycles. As a result, we surpassed a few nice milestones in the second quarter. Our access control platform now powers over 100,000 doors and 2 million active user credentials. We have a diverse base of access control customers across approximately 30 different worldwide markets. They range from small businesses with two to three doors to large-scale enterprise customers with hundreds of doors to manage. One of our multi-location accounts includes nearly 1,000 doors. Another commercial account manages over 15,000 employee access credentials through our service. We are pleased that our service provider partners and our platform can serve such a wide market and are excited to continue advancing our solution and driving growth in this area. Before I hand things over to Steve Valenzuela, I want to touch upon the convertible senior notes offering that we closed during the second quarter. We took advantage of what we felt was a strong convertible bond market to put more dry powder into our business so that we could continue to be optimistic in our corporate development initiatives. We're pleased with the strong market interest in our bond offering and the terms we secured, including the 2.25% interest rate. As I have indicated in the past, our corporate development strategy is to be deliberate in pursuing acquisitions that are consistent with our strategy and support our partners. The convertible bond transaction included a $75 million stock buyback and a capped call transaction to reduce future dilution. We anticipate continuing buyback activity from time to time consistent with our board's authorization. In summary, I'm pleased with our quarterly results and the growth we continue to see across the business. 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. With that, I'll hand things over to Steve Valenzuela to review our financials.