SmartRent, Inc.

Thank you for standing by. My name is Van, and I will be your conference operator today. At this time, I would like to welcome everyone to the Smart Rent Quarter 1 2025 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kristen Lee, Chief Legal Officer. Please go ahead.

Hello, and thank you for joining us today. My name is Kristen Lee, Chief Legal Officer for SmartRent. I'm joined today by our Interim Chief Executive Officer, John Dorman, and Daryl Stem, Chief Financial Officer. Before the market opened today, we issued an earnings release and filed our 10-Q with the SEC. both of which will be available on the investor relations section of our website, smartrent.com. Before I turn the call over to John, I would like to remind everyone that the discussion today may contain certain forward-looking statements that involve risks and uncertainties. Various factors could cause our actual results to be materially different from any future results expressed or implied by such statements. These factors are discussed in our SEC filings, including our annual report on Form 10-K, and quarterly reports on Form 10-Q. We undertake no obligation to provide updates regarding forward-looking statements made during this call, and we recommend that all investors review these reports thoroughly before taking a financial position in SmartRent. Also, 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. We would also like to highlight that a fourth quarter and full year earnings presentation will be available on the investor relations section of our website. And with that, I will turn the call over to John.

Good morning, and thank you for joining Smart Rent's first quarter 2025 earnings call. We appreciate your continued engagement as we execute a focused plan designed to position Smart Rent for long-term sustainable growth and value creation. I've been a board member for over three years, chairman of the board for the past year, and now interim CEO. Given this unique position, I thought it would be helpful to use my time this morning to give investors some perspective on the evolution of Smart Rent, our plan to drive the company toward meaningful and sustainable long-term value creation, and where we are in executing that plan. The Smart Rent story really isn't all that complicated, and I hope to make it a little clearer this morning. SmartRent was founded with a unique vision to deploy IoT technology to transform property operations and resident experiences. Because SmartRent was built on the foundation of experience from the multifamily and single-family rental operating businesses, the company's solutions were built with a very deep understanding of the needs and challenges of our customers. Three key and distinct elements differentiated our initial solutions drove our early success and still largely distinguish our platform today. Number one, integrating IoT hardware devices through an enterprise scale software platform to fully deliver and maximize the ROI potential for property owners while enhancing the resident experience. Number two, designing the software platform to fully and seamlessly integrate with existing systems in third party hardware devices rather than constraining solutions to our own branded hardware. And number three, delivering solutions with the unique expertise to deploy them in a retrofit environment, rather than limiting them to new build or major renovations. This focus addresses the needs of the largest portion of the addressable market. The power and clear differentiation of these core products launched SmartRent on an initial phase of high growth. during which we successfully deployed our platform with 15 of the top 20 multifamily owners and operators in the country, as well as several of the largest single family rental operators and iBuyers. These early customers are still with us today. This early and rapid success enabled the establishment of first mover advantage in a massive TAM. However, the company's operational processes and infrastructure including in its sales organization, did not adapt quickly enough to the size the business had become. They reflected a culture that was too siloed and dependent on a small number of individuals and was therefore neither scalable nor sufficient to enhance our market-leading position and best serve our customers. Over the past nine months, we have made significant progress in redesigning an organization that we believe will enable sustained growth as we move to the next stage of the company's evolution. This includes the addition of seasoned leaders across sales and customer success, most notably Chief Revenue Officer Natalie Cariola. who are leading the build out of a scalable customer centric sales organization and a high impact customer success function to support long term growth. And while CEO changes are not actions that any board takes lightly, they are often necessary. I'm pleased to announce we are now in the final stages of our search. We have found multiple highly qualified candidates to assume the permanent CEO role and expect to be able to make an announcement in the coming weeks. Over the past year, in addition to completing internal organizational changes, we've strengthened the board of directors by appointing three highly experienced and proven leaders. Collectively, they bring a strong track record in operating financial and technology leadership at scale, experience that is directly relevant to guiding smart rent through our next phase of growth. Enhancing board strength and ensuring we have a fit for purpose board remains a priority as we continue to position SmartRent for long-term value creation. Now pivoting to today and what we are executing. First, we are well into the process of addressing the company's go-to-market strategy and capabilities with our new sales organization and approach. Second, we initiated a significant restructuring by breaking down silos and ensuring our infrastructure is scalable. We are also refocusing our operations organization around the needs of our customers. We believe our customers will begin feeling the benefits of these changes in the near term. And third, we have shifted our focus and technology investment away from developing and selling our own branded hardware components and are executing a strategy based on our four strategic pillars, which are first, Sustainable and predictable ARR growth. Our value will be built by focusing on our hardware-enabled SaaS model, not on selling our own hardware. Second, platform superiority. The ROI of our solutions for customers will be maximized by delivering a fully integrated enterprise-scale software platform. Third, operational excellence. As a SaaS company, our success will be highly dependent upon the success of our customers in deploying and maintaining our solutions. And finally, collaborative innovation. Rapid and continuous innovation in building out our software platform will be critical to maintaining our position as market leader. We announced these strategic pillars in the third quarter of 2024, along with $10 million in strategic investments to accelerate our change. We believe the fruits of that focus and investment became visible to our customers in the most recent quarter with meaningful enhancements to our smart operations solutions. We also started to deliver more focused customer engagement as we began to build a more robust customer success organization. As we have proceeded with our operational reorganization and refocusing of technology investment, we've been successful in completing over $10 million in annualized cost savings that we believe will improve cash flow and produce a more rapid return to profitability. Quite simply, we believe we can operate more efficiently and more effectively at the same time. Our conviction remains unchanged. The challenges we faced are largely execution related and solvable. Over the past nine months, our work has enhanced the board's belief that improving operating effectiveness and maturing our organization will unlock scalable long-term growth and value creation. Our confidence is grounded in several levers. First, SmartRent's IoT platform solution has a long-term moat due to our hardware-enabled SaaS offering. We sustained a customer retention rate above 99.9% over the past three years. While our hardware and hardware implementation revenues have declined over the past year, Our SAS revenues grew by more than 17%, and our net revenue retention exceeded 100%. Number two, SmartRent has unrivaled scale and product advantage. We believe that the unique product advantages that drove our initial wave of success and rapid growth remain. With over 800,000 units deployed, we remain the market leader. Number three, the TAM is large and under-penetrated, with secular tailwinds driving smart home adoption in the long term. The total market opportunity is estimated to be at least $11 to $13 billion, and even our current target of Class A and B buildings owned and operated by larger companies is a $3 to $4 billion opportunity. As first mover and market leader, we seek to continue to capture a large share of this market opportunity. Number four, our customers see real business ROI from adopting smart rent. While our execution challenges have impacted relationships with our customers, they remain committed to smart rent and want us to succeed. In a recent survey, 96% of property managers indicated that smart rent has had a positive impact on their customer experience, and 90% view actual realization of NOI expansion as a key driver of continued investment in smart home adoptions. And number five, SmartRent is executing a plan to accelerate the return to delivering sustainable growth combined with profitability. While our performance in 2025 will continue to reflect that we are building our foundation for future growth, we remain confident that we will be able to show evidence of continued progress in coming quarters. Looking forward, we remain focused on scaling the business with greater efficiency while maintaining the strategic flexibility required in a dynamic market. Our aim is to achieve non-GAAP adjusted EBITDA profitability without sacrificing long-term growth. The strategic foundation we've laid, anchored by a growing base of high-margin SAS revenue, a more streamlined cost structure, and operational focus, gives us confidence in our ability to deliver sustainable progress toward that goal. As always, execution discipline remains key. To close, the last nine months have resulted in significant change at SmartRent that has strengthened our conviction that we are on the right path. We appreciate investors' active engagement with us as we continue to execute this plan. Our North Star is unchanged to deliver long-term shareholder value by scaling a high-quality recurring revenue business that drives meaningful ROI for our customers and long-term value for shareholders. The work underway is intentional, the pace of change is accelerating, and we look forward to updating you on our continued progress. With that, I will turn it to Darrell to take you through our financials and key results.