Vivint Smart Home, Inc.

Good afternoon. Thank you for attending today's Vivint Smart Home first quarter 2022 financial results conference call. My name is Nate, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I'd like to pass the conference over to our host, Nate Stubbs with Vivint. Nate, please go ahead.

Good afternoon, everyone. Thank you for joining us to discuss the results of Vivint Smart Home for the three months ended March 31st, 2022. Joining me this afternoon are David Bywater, Vivint Smart Home's Chief Executive Officer, and Gail R. Gerard, Vivint's Chief Financial Officer. I would like to begin by reminding everyone that the discussion today may contain forward-looking statements, including with regard to the company's future performance and prospects. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated in any such statements. We describe some of these risks and uncertainties in the risk factors section in our annual report on Form 10-K, which was filed on March 1st, 2022, and in other filings we make with the SEC from time to time. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. In today's remarks, we will refer to certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP to the extent available without unreasonable effort are available in the earnings release and accompanying presentation, which are available in the investor relations section of our website. I will now turn the call over to David.

Great. Thank you, Nate. And good afternoon, everyone. We appreciate your ongoing interest in the Vivint story. We continue to work hard every day to earn your confidence and your support. To that end, I am pleased to report that our strong track record of execution as a public company continued to the first quarter of 2022 as we grew total revenue by nearly 15% and adjusted EBITDA by almost 26%. We originated over 66,000 new smart home subscribers, which was a record for the first quarter period. Our last 12-month attrition rate was 11.2%, which was a 15-quarter low and a 60 basis point improvement versus the prior year. We believe our attrition rate is the lowest among national smart home companies by a significant margin. Our improving customer retention is the result of years of work and collaboration to improve the overall credit quality of our customers, as well as performance enhancements across our portfolio products and services. We end in Q1 with net service costs per subscriber near all-time lows. a strong indication that we are operating the business efficiently and effectively while delighting our customers. Our recurring revenue model has proven resilient during challenging economic times, and we believe the peace of mind and security we provide is relevant in any environment. We believe the momentum in the first quarter sets the stage for us to meet our full-year targets for total subscribers, revenue, and adjusted EBITDA. that we communicated to the market in late February. Given the challenges presented by rising interest rates and supply chain constraints, we are lowering the bottom end of our guidance range for free cash flow while leaving the top end of the range unchanged. Dale will speak the specifics of this change in his remarks. We are focused on redefining the home experience with technology, products, and services that create a smarter, greener, safer home, while saving our customers money every month. Our integrated platform is the core enabler that allows us to deliver on this mission. We process more than 1.1 billion events per day across our subscriber portfolio. Our average customer has about 15 devices in their home and interacts with their system nearly 11 times per day and stays with us for approximately nine years. Our proprietary platform allows us to not only protect our customers' homes and families, but to make their homes more enjoyable and intelligent as we integrate solutions with artificial intelligence to make smart decisions on their behalf. As we work to also bundle smart energy and smart insurance, we will leverage our integrated, easy-to-use operating system to help customers save money on their electric bills and insurance premiums. We believe our strategy provides distinct advantages that will allow us to increase the lifetime value of our customers. which in turn should drive strong economic value for our shareholders. We expect that the unit economics of our customers should also improve, further enhancing the cash flow generation of the company and allowing us to reinvest in compelling value accretive initiatives. We are confident in our strategy as our data indicates that at scale, a customer who bundles smart home with smart energy and or smart insurance has a greater lifetime value than a smart home customer alone. Moreover, the lifetime value of a smart home customer increases by $200 to $400 with each additional year they remain on the platform. And we believe that customers who bundle services will remain with us longer than the current nine-year average. We believe our broader platform strategy will further cement Vivint as being in the category of one. And as we leverage the advantages from our intelligent and integrated platform, we will further extend our leadership in the do-it-for-me smart home segment. Of course, executing on our strategy of making smart homes smarter, greener, and safer requires us to focus on operational excellence, continuous product innovation, and a commitment to enhancing the experience of our customers. I am pleased to welcome Rasheesh Patel, our new chief operating officer, to the Vivint team. Rasheesh will join us in mid-May, and he brings to Vivint 20-plus years of experience in building technology service businesses, driving innovation, and improving the customer experience. Most recently as the Chief Product and Platform Officer of AT&T Business, a segment with $35 billion in annual revenue. He will oversee all of our customer facing operations, as well as our technology and product platform. We look forward to Roshish helping us refine our approach to expanding the lifetime value of our customers. Turning to our key strategic adjacencies, as one of the first smart home companies to expand into smart energy, We are very encouraged by the momentum we saw in the first quarter. Due to the seasonality of our business, we would expect the majority of our sales to come in the back half of the year, and we remain on track to double the 45 megawatts we sold in 2021. Our Vivint Salesforce and strategic partners, who seamlessly bundle a Vivint smart home system with solar, are seeing a considerably better sales realization rate than those who are only selling solar. This is an incredible demonstration of the power we bring by offering a bundled solution, and it strikes directly at one of the issues the solar industry struggles with, wasted upfront costs on the cells of a solar system that never get installed. Our long-term vision is to combine energy production and consumption into an integrated platform that uses data-infused AI to manage power consumption more intelligently. Our nationwide footprint and ability to install our award-winning smart home solution up with solar, we believe is a game changer for the industry and for our customers. We believe that as we grow and solidify our go-to-market partnerships, we will prove to be a powerful and differentiated combination to grow and retain smart home customers. Evan Pack, who I've worked with for several years at Vivint Solar, joined the Vivint leadership team a few months back to lead our smart home energy initiative. and manage our relationships with these key partners. I'm confident he is the right person to lead our smart home energy business in this next phase of growth. Surveys show that less than 4% of the addressable homes in the U.S. have adopted solar at this point. With our nearly 1.9 million customers across North America, we believe there is a significant opportunity to provide bundled smart energy to our existing customers, as well as the hundreds of thousands of new subscribers we add to our portfolio every year. Now, to briefly discuss our Smart Insurance Initiative, we continue to believe that our data-rich platform can help better price the risk of a customer who has a professionally installed and actively monitored smart home system that can potentially mitigate the severity of lost events. We believe that when customers present a lower risk than homeowners without a smart home system, or with an unmonitored DIY system that was inadequately scoped and poorly installed. We continue to invest in this initiative. And in March, we welcomed Ron Davies to a newly created role as the chief insurance officer. In this role, Ron leads all aspects of the smart insurance business, including the development of our marketing strategy, as well as the process of becoming a managing general agent, which will allow us to develop specific homeowner coverages and enables us to provide proprietary insurance offerings. Ron is a proven leader that has showcased his ability to transform and build insurance companies over a career spanning more than two decades at universally recognized brands, such as Progressive, Allstate, and most recently, Safe Auto, which was recently purchased by Allstate. In closing, we're extremely pleased with our performance in the first quarter of 2022, and we're excited about the future. The markets in which we operate are large. They're growing and provide a significant headroom for growth. Our business model provides a platform for growth in smart home as well as adjacencies like smart energy, smart insurance, and more. We believe that we continue to grow at a much faster rate than our do-it-for-me peers and do so in a profitable way while generating positive free cash flow that we can invest in value accretive opportunity. With that, I will turn the call over to Dale to further discuss our first quarter results and our outlook for the year.