SmartRent, Inc.

Good evening and welcome to the Smart Rent Inc. First Quarter 2022 Earnings Call. At this time, all participants are in listen-only mode. A question and answer session will follow management's presentation. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Evelyn Inferno, Senior Vice President of Investor Relations. Thank you, Evelyn. You may begin.

Thank you. Hello, everyone, and thank you for joining us today. Lucas Haldeman, Chairman and CEO, and Hiroshi Yakamoto, our recently appointed Chief Financial Officer, are with me and will be taking you through our results for the first quarter of 2022, as well as guidance for the second quarter. After today's market close, we issued an earnings release and filed our 10-Q for March 31, 2022, both of which are available on our investor relations section of our website, smartrent.com. Before I turn the call over to Lucas, I'd like to remind everyone that the discussion today may contain statements related to our business that may be considered forward-looking, including statements concerning our plans to execute on our growth strategy, our ability to maintain existing and acquire new customers, the benefits of strategic acquisitions, including our acquisition of site plan, expected financial results, product portfolio enhancements, expansion plans and opportunities, expectations regarding key operational metrics, and other statements regarding our plans and prospects. Forward-looking statements are often identified with words such as we expect, we anticipate, we believe, or similar expressions. These statements reflect our view only as of today, May 11, 2022, and should not be considered our views as of any subsequent date. We do not undertake any obligation to update or revise any forward-looking statements. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our most recent annual report on Form 10-K filed with the SEC on March 24, 2022. along with our quarterly report on Form 10Q, an earnings release, and current report on Form 8K filed with the SEC today, all of which are publicly available on the Investor Relations section of our website at smartrep.com and on the SEC's website at sec.gov. Finally, during today's call, we will refer to certain non-GAAP financial measures. A discussion of these non-GAAP financial measures, along with a reconciliation to the most directly comparable GAAP measure, is included in today's earnings release. And with that, let me turn the call over to Lucas to review our results. Lucas?

Thank you, Evelyn, and thank you to the investors and analysts on the call for your continued support and interest in SmartRent. We are excited to share our first quarter results and our outlook for the second quarter. SmartRent started 2022 with strong tailwinds from the groundwork laid in 2021. We had an extremely productive quarter focused on execution and expansion of our market share. This focus translated to record revenue of $37.4 million above our guidance and record units booked, indicating continued momentum into the second quarter. We also deployed over 51,000 units, ahead of the top end of our unit's deployed guidance, and expanded our customer base by 80% year over year to 290 customers. In addition, we made the strategic step of acquiring SitePlan, a leader in multifamily workflow management software. Our powerful combination sets SmartRent even further apart from other real estate enterprise platforms, and we anticipate that the level of demand we are experiencing, which exceeds our expectations already, will only continue to build. We believe our progress in the first quarter has positioned SmartRent for another strong year. We now have over 390,000 total units deployed on our platform, up 108% from the first quarter of 2021. Our 290 customers own or control 5.1 million units, a 76% increase from a year ago. And our 760,000 committed units are up 26% year over year. Using our key performance metrics as a guide, units booked and bookings provide an assessment of the health and trajectory of our business on a unit and dollar value basis. For the first quarter, our sales team delivered 101% growth in units booked, setting a company record of over 91,000 units, compared to 46,000 units a year ago. Our units booked typically convert to live units deployed in the subsequent quarter. The dollar value of units booked is represented by bookings, which provides a near-term estimate of the potential revenue generated by units booked. Bookings reflect the aggregate dollar value, net of any discounts, associated with a signed master services agreement or binding purchase orders executed during the period for all hardware, including smart hubs and professional services, as well as the dollar value of the first year of software services included in the purchase order. For the quarter, bookings totaled $72 million as compared to $32.4 million in the first quarter of 2021. The dollar value of the first year of SAS revenue for these bookings totaled $4.6 million as compared to $2.2 million in the first quarter of last year. On a per unit basis, the SAS bookings ARPU was $4.17 across all booked units and $7.44 for new customers. This compares favorably to the same metrics in the fourth quarter, $3.69 and $6.72 for the overall average and new customers, respectively. At the time of our acquisition in late March, SitePlan's forecast for 2022 ARR was approximately $13 million. This translates to an increase in smart rent SaaS ARR of approximately $10 million for the remainder of 2022. SitePlan generated a 60% compound annual growth rate on its revenue since its formation through the end of 2021. We believe that there is potential to improve upon initial expectations as SitePlan is fully integrated with us and our combined sales team begins to market the SitePlan product suites along our IoT enterprise platform. Our longer-term indicator of organic growth is committed units, another of our key operating metrics. As of March 31, 2022, committed units totaled 760,000, up 26% from 604,000 committed units at the end of the first quarter of 2021. As a reminder, committed units represent the aggregate number of smart hubs that are subject to binding purchase orders together with units under a master services agreement that are expected to be deployed within the next two years. Our future prospects are even more compelling with the addition of SitePlan to our real estate enterprise platform. The acquisition of SitePlan affords us the opportunity to significantly advance our product roadmap, specifically resident engagement through an online app, resident CRM, and a robust work order application, while also offering property inspection and audit applications. Like SmartRent, SitePlan is constantly enhancing its product suite by implementing features and developing new products. There are a number of these initiatives in the works that we believe will add incremental value to our investment. We look forward to sharing more information about these new features and products in the coming quarters. SitePlan is rolling out its real estate enterprise solutions across larger customer portfolios. They are currently deployed in approximately 1.3 million units with an additional 200,000 unit pipeline. These rollouts can occur relatively quickly, and since this is software, deployment is not subject to supply chain headwinds. We believe that the opportunity for the combined platform is vast and that our unified real estate enterprise platform will significantly improve the way properties are operated and managed. We also believe that the resident experience will be greatly enhanced. This translates to operating efficiencies, increased asset value for our customers, and satisfied residents who are more likely to renew their leases, all of which are increasingly important in the current economic backdrop. We acquired SitePlan for $135 million in an all-cash transaction. As of March 31, 2022, we had approximately $286 million of cash on our balance sheet and full access to our $75 million revolving line of credit. We have been and will continue to be disciplined with the use of our capital. We are focused on integrating and maximizing returns on our recent acquisitions and remain confident that our liquidity position supports our internal growth initiatives. I am pleased with the gains we are making on top line growth, as well as across our key performance metrics. The continuing rollout of our solutions throughout the portfolios of our large legacy customers, as well as our ability to increasingly attract property owners and managers in the long tail, is testimony to the value that our real estate enterprise platform delivers. The majority of our new units deployed in 2022 will come from our current 290 customers that collectively own or control over 5.1 million units. In what has been an arguably volatile macro environment, our ability to advance our footprint by harvesting organic growth gives us confidence in our ability to deliver on our expectations. We accomplished a great deal in the first quarter and over the last several years. During this time, our team has evolved and grown. After quarter end, we welcome the newest members of the SmartRent executive team, Hiroshi Okamoto, our chief financial officer, and Robin Young, our chief marketing officer. Hiroshi and Robin bring depth of experience and fresh perspective that will further strengthen our executive team, and we look forward to their contributions. As we welcome Hiroshi and Robin, we're also saying farewell and thank you to John Walter, our outgoing CFO. John was instrumental in structuring our financial processes and procedures, and he played a critical role as we navigated the listing process. We appreciate John's service over the last two years and wish him great success in his future endeavors. While he will not be participating on today's call, John will continue to work with us through the end of this month to ensure a smooth transition. With that, I'm going to turn the call over to Hiroshi to discuss our financial results. Following Hiroshi's remarks, I will share an update on the supply chain and our operational outlook before opening the call for questions. Hiroshi?