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spk07: of our higher editions. We're also benefiting from the execution of two of our early 2020 strategic initiatives. Our consumer financing program, launched during the first quarter, continues to deliver great results. And the integration of our Defenders acquisition, which will be completed in a few months, is driving more efficient customer acquisition. Both initiatives are helping to create sustainable improvements to our efficiencies and costs. Now I'll turn to customer retention, which we continue to improve in the third quarter. As of September 30th, our trailing 12-month attrition is at a record-best 12.9%. The improvement of 60 basis points versus the prior year was widespread across our residential business. I'm proud of our care centers and our work-from-home performance, which actually started strong earlier this year and has steadily improved over time. During the pandemic, ADT monitoring maintained healthy customer satisfaction and net promoter scores. We're obviously very pleased with our improvements in customer retention. The magnitude of the change underscores our performance, as well as the ADP value proposition to our customers. I would note, though, as we've shared in the past, we don't look at attrition in isolation. We weigh it with other metrics, such as revenue payback and growth. We're focused on optimizing the entire economic equation for capital-efficient growth. Although we're beginning to see early signs of an uptick, our sales to commercial customers have clearly been impacted by the pandemic. On a sequential basis, total commercial revenue improved modestly in the third quarter. Monitoring and service revenue has been stable, and we've grown our RMR from commercial customers on a year-to-date basis. New installation volume is improving, and we're encouraged that our third quarter sales increased from second quarter levels, and our backlog for both installation and recurring monthly revenue ended the quarter at their best position of the year. Dollar Tree Family Dollar is off to an excellent start, and Operation Warp Speed, the federal program associated with the distribution of potential COVID-19 vaccination, was a recent win for ADT Commercial. We've been entrusted to secure distribution centers on behalf of one of the government-authorized distributors for a vaccine, and this is yet another clear validation of our business. Looking ahead, while there are still a number of economic and political uncertainties, we're optimistic about our ability to compete in the commercial space and returning to growth in 2021. High-quality commercial tuck-in acquisitions will continue to be a part of our playbook, and as the economy recovers, we remain optimistic about this part of our business. Turning to our Google partnership. We're off to an excellent start and have two important updates to provide. First, through the coordinated efforts of a number of our existing partners, Google and ADT Associates, we will be accelerating the timing of when we roll out our first ADT plus Google professional Do It For Me offering. The second update is that we finalized our interactive platform strategy. ADT will develop and own our next-generation platform. I'll share a bit more on both updates. First, the accelerated offering. We now plan to go to market with a first-generation do-it-for-me or professionally installed offering in partnership with Google in the second half of 2021. The offering will feature co-branding with Google, integrate Google Nest products, and offer their extraordinary video analytics platform. This offering will leverage our recently introduced and very well received command and control platform to the end of 2022. With this first-generation offering, we'll pull many of what we described as Horizon 2 benefits expected to occur in 2022 into 2021, allowing us to go to market as ADP plus Google much sooner. This, combined with the momentum we are already seeing in our core business, will accelerate our ability to capitalize on the growth of the home automation market. Now more about our platform decision. When we first announced the Google investment in ADP and the long-term strategic partnership, we shared that one key outcome of the relationship would be a next-generation platform with new home security and automation, products and peripherals, deeper device integration, and enhanced alarm verification. Following a comprehensive review of our alternatives, we concluded that ADT should and will own our next-generation platform, which will be developed entirely within Google Cloud. Further, the platform will be developed in coordination with Google to leverage native integration and the multitude of works with Google integration already available. Our decision allows ADT to have full control of our future roadmap and will enable ADT plus Google to deliver operational and efficiency benefits better long-term economics, and ensure that we continue to be the leader in home automation and security into the future. Our development work is already well underway with teams from both ADT and Google engaged. As a reminder, our partnership includes a commitment for Google to contribute $150 million subject to certain milestones toward the development of new technology marketing investments, customer acquisition, and related employee training and other expenditures. In summary, we're very pleased with the partnership and early progress we've made with Google. And as I already described, we're also excited about the momentum of our current business, which we expect to continue into the fourth quarter and into 2021. With that, I will now turn the call over to Jeff to cover our financial results and improve 2020 financial outlook. Jeff?
spk06: Thank you, Jim, and thank you, everyone, for joining today's call. As Jim mentioned, we have performed very well during a challenging 2020 macroeconomic environment, and we are very pleased with our overall third quarter results and our improved outlook for the full year. We're even more excited about the actions we have taken and progress we have made during 2020 to position ADT for long-term growth and success. Our strong performance this year continues to demonstrate the resilience of our business and the fortitude of our team who have risen to the challenge and remain passionately focused on delivering for our customers in both the near and longer term. I will summarize some of our key financial and operational measures along with a brief update on our outlook and we'll then open the call for questions. Our total reported revenue in the quarter was essentially flat year over year, despite the 2019 disposition of our Canada operations, which previously represented approximately 4% of our revenue. Installation and other revenue increased by $46 million, driven mainly by higher reported residential outright sales revenue resulting from the defender's acquisitions. This increase was partially offset by lower installation revenue to commercial customers, resulting from the COVID-19 driven economic challenges we have encountered in that part of our business during 2020. Monitoring and services revenue declined by 4% on a total company basis and was up slightly year over year, excluding the effect of the Canada disposition. Our ending recurring monthly revenue, or RMR balance, a primary driver of monitoring and services revenue, grew by approximately 2% in the U.S. compared to the prior year, including an increase in commercial RMR. A highlight in the quarter, which Jim already mentioned, was improvement in our gross revenue attrition, which declined by approximately 60 basis points versus the prior year to a record low of 12.9%. Our improvement here was again driven by several factors, including continued focus on service, the effectiveness of our retention initiative, and some of the environmental tailwinds Jim described, including fuel relocations. Our adjusted EBITDA of $564 million was up slightly on a sequential basis compared to the second quarter. Our cash generation remained very strong, both in the third quarter and year to date, despite higher cash interest due to a shift in coupon timing, which will reverse in the fourth quarter. We generated $127 million of adjusted free cash flow during the third quarter. And through the first nine months of 2020, our adjusted free cash flow of $532 million is up more than 15% from the $459 million during the same period in 2019. Our strong year-to-date cash performance comes from a variety of factors, that more than offset the higher cash interest, including subscriber acquisition cost efficiency and the benefits from some favorable cost base trends in our current operating environment, along with some timing items. A highlight of our strong cash performance is that we have concurrently grown our subscriber and RMR base, which has been enabled by improved efficiency in Net Subscriber Acquisition Cost, or SAC. During the third quarter, we decreased our net stack by 1% while growing our additions to RMR by 7%. Excluding the effect of the Canada disk addition, our U.S. RMR additions grew by 10%. This substantial RMR growth on lower net stack led to our best-ever revenue payback at 2.2 years on a trading 12-month basis, down from 2.4 years a year ago. As Jim shared earlier, the benefits of our consumer financing program, better pricing, and other sales and marketing efficiencies, including benefits from the Defenders acquisition, contributed to this improvement. After two full quarters of our new pricing and financing model, we are very pleased with the progress we have seen in higher installation revenue per unit from our residential customers. Additionally, the mixed shift towards non-capitalized SAC, driven in the third quarter mainly by legacy Defenders outright sales, was less pronounced than during the first half due to our ongoing transition to our historical ADT ownership model, which will continue as we further integrate defenders. Overall, we delivered very solid operational and financial results during the quarter despite the COVID-19 challenges, and we did so while also improving our longer-term position due to progress on the Google partnership and several other initiatives. Turning now to the balance sheet, We also continue to improve our capital structure during the third quarter. A highlight is that we issued a billion dollars of new 2027 notes and used the proceeds to redeem our 2021 notes. We priced this issuance with a 3.38% coupon substantially lower than the 6.25% coupon on our 2021 notes, which will result in run rate interest savings of almost $30 million. Collectively, after a series of transactions during 2019 and 2020, we have decreased our average borrowing cost by approximately 100 basis points. Additionally, with the closing of the Google transaction, we received $450 million in cash for Google's investment in approximately 55 million shares of ADP Class B common stock. As we have described, we intend to use proceeds from the Google transaction for a combination of growth funding and debt repayment. And to that end, we are announcing today our intent to repay a minimum of $300 million of debt during the fourth quarter of this year. Before moving to Q&A, I want to share a brief update on our outlook for full year 2020. As Jim mentioned, our business continues to perform well and exceeded our expectations during the third quarter. We consequently are once again revising our full year outlook higher. Our new revenue range is $5.2 to $5.35 billion, up from $5.05 to $5.3 billion. Our revised adjusted EBITDA range is $2.15 to $2.225 billion, an improvement from $2.1 to $2.2 billion previously. And our refreshed adjusted free cash flow range is $650 to $725 million, compared to the prior range of $625 to $725 million. As always, we will continue to balance short and longer-term objectives with a focus on the pursuit of selected incremental growth investments to generate future period returns, some of which we are considering during the remainder of 2020. As we develop our 2021 plans, we are focused on investing in and positioning our company for long-term growth and building on our progress from the past few years. We look forward to sharing more on our next earnings call in early 2021. To conclude my comments today, I want to emphasize that we are very pleased with our strong results through the first nine months of 2020. We are thankful for our committed team of 20,000 employees and their perseverance and performance during a challenging year, and we are excited by the progress we have made positioning ADT for the longer term and by the resulting opportunities in front of us. Thank you again, everyone, for being on today's call. Operator, we will now open the line for questions.
spk04: Thank you. If you'd like to register a question, please press the one followed by the four on your telephone now. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you'd like to withdraw your registration, please press the one followed by the three. Once again, to register for a question, it is the one followed by the four. And our first question comes from the line of George Tong with Goldman Sachs. Please proceed with your question.
spk09: Hi, thanks. Good afternoon. You're accelerating the launch of professionally installed co-branded offerings with Google into 2021.
spk00: To rewind 30 seconds, press 1. To go to the start of the program, press 2. To disconnect, press the star key.
spk09: And how it relates to your partnership with Alarm Pulse? uh george we didn't there was some interference on our end could you repeat that question ah sure thing um so again you know you you talked about accelerating the launch of your professionally installed co-branded offering with google into 2021 can you elaborate on the product roadmap for for the google partnership and how it may pertain to your partnership with alarm slash pulse
spk07: Sure. So I'll give a little bit of detail on the platform decision and the roadmap and then ask Don to add anything that I may have missed. So a few points to make. First, the discussions with alarm.com that we've had, in accelerating the roadmap resulting in a great outcome for both parties and included the launch of a first generation ADP plus Google offering developed with a commitment by alarm.com that will result in several things. First, it leverages the foundation and extends command and control until the end of 2022. And then beyond that, allows that platform to support our end customers for a very long time. And we believe these customers, these command and control customers with integrated Nest product and services will perform well on an attrition basis. The second thing, integrated Google Nest devices and Google video services will be available and accelerate our go-to-market with a co-branded offering in the second half of 2021 instead of mid-2022. So, in short, the agreement that we put in place and negotiated with Alarm.com allows us to pull forward many of the benefits that are resident in the ADP plus Google partnership. Two quick additional points. First, the platform decision and the roadmap really allows us, George, to control our destiny. Our partnership with Alarm.com has been extraordinary, but we now think, in coordination with Google, that we're better positioned to own and develop our own platform. Two reasons for that, we think at a high level we'll capture efficiencies, efficiency benefits as a result. And then secondly, the point I made earlier about controlling our destiny, we can better navigate our own unique product roadmap to create differentiation for us in our products and services in a better way.
spk05: So, Jerry, this is Don. Jim covered it very well. Pulse and Command, as we've already talked, or Jim already talked about, you'll have fully integrated in that second half. That invites all the Google product suites into kind of our ecosystem. But regarding our new platform, just to add a little bit to what Jim said, we're looking not just to go to make our smart platform smarter, we're looking to make it more helpful. And that's leveraging Google's prowess in ML and AI to fuel what Google calls ambient computing. And if you can imagine for a moment, in today's world, we have to educate our customers, make them smarter so that we can leverage their system in different ways with rules and automation, that kind of thing. What we want to do is we want to make our customers not smarter necessarily, but more comfortable sharing information regarding tools that ambient computing opportunity, and actually create the rules automatically without the customer having to be intelligent to do it themselves. And we see that as a way for the customers to grow value in their system without the necessary investment of additional devices or even educating them on how to write rules themselves.
spk09: got it that's helpful you generated positive net subscriber growth organically in the quarter can you discuss the sustainability of this of this growth in that subscribers in the top factors slash initiatives to fuel this growth going forward yeah thanks jordan yes we feel really good
spk06: about our performance in the quarter. We talk often about bouncing various objectives in pursuit of strong ROI over the long term. And in this quarter, we delivered on all of those objectives. We reduced our SAC spending. We improved our customer acquisition efficiency. We exceeded our EBITDA objectives. And as I said in my prepared remarks, we're really excited that we did that while generating such strong cash flow. So there's a whole variety of factors that goes into that. Many are to do with their own performance. We've also benefited from some of the macroeconomic and macroenvironmental factors. And we think many of those will stay with us and that we will have some wind at our back for a period of time and continue to drive improvements in the business as we head into 2021. And that's what we're focused on doing.
spk09: Got it. Thank you.
spk04: And our next question comes from the line of Seth Weber with RBC. Please proceed with your question.
spk09: Uh, Hey guys, good evening. Um, I guess just first on the Google announcement, can you just, I'm just trying to make sure I'm understanding is the, the pull forward. Is that a, um, you know, more simplified version of what you were planning on rolling out and sort of mid 2021, or is it basically the same, the same offering that just got accelerated? Uh, and then I guess, you know, can you just talk to how that, uh, the acceleration um, you know, weighs on the $150 million marketing spend and how we should think about timing of that from both you and Google. Thanks.
spk07: Sure. So Jim, the, the, um, What we will roll out with Alarm.com and Google Resideo as part of that offering, what we roll out and go to market with is ADT plus Google in the second half of 21 is very nearly what we had anticipated rolling out in mid-22. It's not precisely what we had intended to roll out in 2022, but it has almost all of the benefits and features that we had envisioned and will be pulling forward. In terms of the $150 million from Google, that comes in three tranches. The second and third tranche are dependent on volume commitments that we're exceptionally confident we'll achieve. The first $50 million will go towards product development, marketing, training in some way, in some proportion that we've not yet finalized. A healthy portion of it will be for product development, but exactly how much is yet to be determined.
spk09: Okay. And then maybe if I could just switch to the commercial side for a second. I mean, your commentary was pretty positive about the backlog and sort of sequentially improving trends there. Can you talk to, you know, that was a part of your business that was growing, you know, double digits pretty nicely pre-COVID. Do you envision that getting back to sort of a double digit revenue growth once the environment kind of settles back down?
spk07: Absolutely. We're very optimistic about the commercial business. Total revenue is up sequentially in Q3. We believe we'll return to growth in 21. The business includes a large recurring revenue base, 35% of the revenue in that business is recurring, so it's buoyant and durable. highly diversified stuff. I think we're just shy of 250,000 customers in the commercial business. We have upside and new and growing verticals, healthcare, education, government, critical infrastructure. Uh, and, uh, as we've talked about a number of times before, we have the best service in the space and that's the most critical source of differentiation. Uh, so we're, um, we're optimistic about the, uh, commercial space and expect to grow again next year.
spk09: Perfect. I appreciate you guys. Thank you very much.
spk04: And our next question comes from the line of a nap at night with Barclays. Please proceed with your question.
spk03: Hi, this is actually Greg calling on. Maybe to stick on the commercial side, just wondering what you're seeing from, you know, small business customers as we go further along here and some of the stimulus wears off. You know, are those guys hanging in and what's the outlook after that?
spk07: Yeah, we feel good about small business. Your question with regard to how they're doing is the stimulus wears off. We so far feel good about attrition levels. Delinquency in that area of our business is held strong. And generally speaking, we feel great about the SMB business, and it's continued to perform in a healthy way for us.
spk06: Yeah, a way I might describe it is that our small business customers in general have performed more analogous to our residential customers than to our larger commercial customers.
spk03: Okay, that makes sense. And then maybe, again, on the Google partnership, I think you said that very nearly what you anticipated for 2022. Any color on that? you know, what will be the things that need to be added from there? What's missing versus initial expectations? And how do you continue to grow once you get the product out in 2021? Yeah, this is Don. So
spk05: We have mentioned before we're going to have the Google products be fully integrated with our command and control and pulse platforms. On the newer platform, we're looking to go beyond just device integration. We're looking to go ahead and leverage the ML AI I mentioned before and ambient computing in addition to something I didn't mention, which is alarm verification. great opportunity to go in and collect data, analyze it, and help verify and even score alarm activity in the future. We think that's an added value to our customers as a result of some of the strains that police departments have across the country, first responders, and we're excited about that. There's also a bit of an imagination phase that begins in 2022, kind of the opportunity of the possible, and we're looking forward to that.
spk03: Okay. Thank you.
spk04: Our next question comes from the line of Gary Bisbee with Bank of America. Please proceed with your question.
spk01: Hey, this is Jay. And I'm on for Gary tonight. My first question just you earmarked 300 million of the 450 from the Google investment for debt reduction. Is it safe to assume the remaining 150 will be used
spk06: also for these two um initiatives you guys have coming with google yeah so we we said a minimum of 300 million dollars we feel really good about our capital structure and the progress we've made over the last couple of years. We've done, I think it's four refinancing transactions between 2019 and 2020 collectively reduced our cost of debt by almost a full point. And the Google proceeds, because of our strong cash generation, as we've said, are available for a combination of debt repayment and growth. And the reason for now we're saying $300 million or minimum thereof is because we are continuing to evaluate some of the questions that have already come up and the exact amounts and timing in addition to some other things unrelated to Google that are on our radar screen for the fourth quarter headed into next year.
spk01: Okay. So that could potentially be a reference to those account acquisitions that were mentioned in the slides?
spk06: Yes. I'd say the normal course of business things we might pursue, M&A, that we may pursue and just trying to remain flexible and nimble as we work our way through budgeting and planning for 2021 and look out into the horizon, not just for the fourth quarter, but into next year. And again, we even set a minimum of $300 million, but depending on how that plays out, the exact timing, the exact mechanics, and even the exact amount is a little bit still to be determined.
spk01: Okay. And then just with regard to defenders, could you even update on how that's, I guess, helping drive customer acquisition and some efficiencies?
spk07: Yeah, it's going very well. The integration has resulted in us capturing both the cost synergies and the revenue synergies that we anticipated. One of the great strengths of Defenders was their direct marketing capability. And together with our own marketing organization, we're seeing terrific benefits in terms of stack efficiency. And I feel great so far about the integration of the vendors.
spk06: And one thing I would add, and I love when people ask that question, we even talk about it internally, we have so many things. that are working in the positive direction that it becomes difficult to disaggregate each of those things to figure out what's the precise contribution of each one. But when you look at our improvement in our subscriber acquisition efficiency, you have the Defenders integration and some improvements that we've made in marketing more generally have the benefits of our new pricing model. that we rolled out just in the first quarter of this year, and then also exposure to some of these trends that you see on slide five on our deck around the organization, household formation, and each of those dynamics. So we feel really good about all of them, but to be honest, we struggle to precisely parse out our performance into the exact contribution from any one of those factors. All right.
spk01: All right. Thank you.
spk04: And ladies and gentlemen, as a reminder to register for a question, it is the one followed by the four. Our next question comes from the line of Jeff Kessler with Imperial Capital. Please proceed with your question. Thank you.
spk08: Can I follow on with regard to some of your metrics, your cost to create, and then again, and your cost to serve? and attrition. To some extent, they are interrelated. Getting good customers obviously, you know, potentially makes them longer live. But what I'm asking about is beyond offenders and getting into your third-party financing, how are you using that And how are you finding the ability to effectively make it efficient that they finance the right customers for you and you either take on or finance those other customers that don't meet the standards so that you don't have So you don't have upticks in attrition so that everybody knows who's playing on what board here.
spk07: Jeff, this is Jim. I'll take the attrition question, answer it a little more broadly, and then come back to a point on defenders. And then you touched on consumer financing and how that's going. I'll ask Jeff if he'll comment on consumer financing. So I'll start at a high level on attrition. You know, we feel great about retention in the third quarter. As we announced, it was a record low, 12.9% for us. The improvement was super widespread across geographies, all categories, across all business areas. SMB was flat, but residential and core commercial improved. But a couple of reminders on attrition and one of them precisely addresses your question. The first is, while attrition is an important metric and all attrition is bad attrition, it's only a part of the value equation along with other measures. cost to acquire probably the most important. And then secondly, and to your question, when we acquired Defenders, we continued to receive chargeback benefits for accounts sold to the acquisition. and that benefit expires over a 12-month period and will be a slight metric headwind in the subsequent 12-month period for us. So we feel great about customer retention. We're optimistic about it from a long-term perspective, especially as we enter the smart home space more assertively. We know more customers use their systems, the more devices are plentiful in the home. The more the systems are integrated into their daily activities, their retention improves. But because that chargeback from defenders will go away in January, it will be a slight metric headwind in the subsequent 12 months.
spk06: Jeff, you started your question where you talked about cost to create, cost to serve, and attention. Similar to George's question, those things along with growth, along with cash generation, are what we seek to balance every period. We talk about how we're not trying to optimize anyone, but in the third quarter, We achieved or exceeded our objectives on every single one of those, so we feel really good about our performance in that regard. And then there's some noise in the year-on-year because of the candidate disposition, the defender's acquisition rollout of the financing and the ownership model that goes with it. But really good about overall performance is the way we feel. And then when you ask more specifically about financing and customer selection, I would emphasize that the growth that we generated in our RMR additions is coming at higher average install revenue per unit. And a significant driver for that, notwithstanding my earlier point about the difficulty parsing every factor, but one of the drivers is for sure our new pricing and our financing model. So we're using that as a selling tool. by and large, as a selling tool for all customers, but all customers don't end up taking the financing option. In many cases, we use it as a selling tool, but we end up collecting upfront in cash. And then your question about how we select, it's based on a combination of the customer and the order size and the credit scoring and the same kinds of things that we've used historically. And then just a reminder, in terms of how it works, The customer's relationship is with ADT. We offer the financing via ADT, and then we monetize it in partnerships with Nzuho Bank with an advance rate based on some of those same characteristics I just described. But we're only two full quarters in, off to a really, really good start, and we will continue to fine-tune exactly how we present the offer to maximize the effectiveness and utilization over time.
spk08: Okay. Okay. My follow-up is – my follow-up obviously could be with Don or the attendant discussion, so I don't want to do that at this point. The follow-up question is actually on your commercial industrial business. I know it's been touched on a couple of times, but could you give us a little bit more clarity on which areas – maybe which verticals or which types of accounts, you know, you have national account businesses and then you have, you know, and then you have like a large one campus types of businesses. Where are you able to start seeing people being able to get on premises to start installing again? Or where are you able to negotiate you know, agreements where if it, you know, to make it a little bit easier now that given the fact that this is this pandemic is not going to go away anytime soon, and yet companies are learning how to deal with it. What are you doing to learn how to deal with it on the commercial side so that you can you can keep those keep those numbers going?
spk07: Yeah, Jeff, it's Jim. I think as customers learn to deal with the pandemic, we realize the benefits as a result. And our ability to get on premise today is markedly better versus what our ability was three or four months ago. We think there's a ways to go for the overall market as a pandemic and economy are still somewhat unknown. But we finished Q3 with strong backlogs, the highest of the year, roughly equivalent September 30th of this year to September 30th of last year. And we have solid sales and install in October as well. So it's broadly diversified. Much of it tied with getting access to the premises. And as I mentioned earlier, we feel really good about the commercial business and returning to growth next year.
spk06: And Jeff, I would add to that, building a little bit on some of what I was saying earlier about all the factors that go into this year between Canada and Defenders, the new pricing model. It's also, of course, a higher degree of uncertainty with COVID-19 and some of the challenges to the top line, especially in the commercial business. They're partially offset by some benefits from lower spending. In other parts of the business, our teams have performed very, very well. It's increasingly clear that we have this exposure to these favorable environmental trends. But as we go into 2021 planning, for sure there's a higher degree of uncertainty that we're managing through to build on those trends, manage the uncertain environment, including commercial recovery, return to normal behaviors more generally. And we're really focused on strengthening our capability to grow our subscriber and RMR additions for the long term, including consideration of an investment in the Google partnership platform, other initiatives. And we'll, of course, talk more about the future in 2021 on our earnings call early in the new year. Great.
spk08: Thank you very much.
spk00: Next question comes from the line of with JP Morgan. Please proceed with your question. Next question from the line of . Please proceed with your question.
spk02: Hi. I'm wondering if you're going to take any steps to better align your compensation to your ESG metrics and execution. And then as a follow-up to that, I'm wondering what is being done at the board level with regard to the underperformance of the stock? Thank you.
spk07: Yeah, I'll answer the question. So in terms of management compensation, we have a compensation program that is heavily weighted towards equity. The management team is exceptionally aligned to shareholders, and we think that the way that the annual incentive plan is designed sufficiently incents management to drive lead indicators that will ultimately be realized in the stock price. In terms of your question on the board, we're not prepared on this call to talk about board interaction and planning.
spk00: And we have no further questions from the phone lines at this time.
spk05: Jim, if you want to make some closing remarks.
spk07: Yeah, just a couple things. So needless to say, we're very pleased with our operational and financial results, our 10% growth in RMR additions, record low revenue payback. of 2.2 years, net sub growth, record low attrition, all served to underscore our strong operating capability and a really highly durable business model. The Google partnership's off to an outstanding start, and we're very optimistic about our trajectory going forward. So thank you, everybody, for calling in tonight, and have a great evening.
spk00: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.
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