Alarm.com Holdings Inc (ALRM) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Alarm.com Q3 2023 Earnings Conference Call. (Operator Instructions) Please be advised today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 Alarm.com 2023 年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Matt Zartman, Vice President of Investor Relations. Please go ahead.

現在我想將會議交給今天的發言人，投資者關係副總裁 Matt Zartman。請繼續。

Thanks, Kevin. Good afternoon, everyone, and welcome to Alarm.com's Third Quarter 2023 Earnings Conference Call. Please note that this call is being recorded. Joining us today from Alarm.com are Steve Trundle, our CEO; Dan Kerzner, our President of our Platforms business; and Steve Valenzuela, our CFO.

謝謝，凱文。大家下午好，歡迎參加 Alarm.com 的 2023 年第三季財報電話會議。請注意，此通話正在錄音。今天，我們的執行長 Steve Trundle 從 Alarm.com 加入我們； Dan Kerzner，我們的平台業務總裁；以及我們的財務長 Steve Valenzuela。

During today's call, we will be making forward-looking statements, which are predictions, projections, estimates or 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.

在今天的電話會議中，我們將做出前瞻性陳述，即對未來事件的預測、預測、估計或其他陳述。這些陳述是基於目前的預期和假設，這些預期和假設存在風險和不確定性，可能導致實際結果與我們目前的預期有重大差異。

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 after this call 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 information which speaks as of their respective dates.

我們請您參閱我們的 10-Q 表格季度報告和 8-K 表格季度報告中討論的風險因素，這些報告將在本次電話會議後不久連同相關新聞稿一起提交給 SEC。該電話會議受到這些風險因素的影響，我們鼓勵您對其進行審查。 Alarm.com 不承擔更新前瞻性陳述或截至各自日期的資訊的義務。

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.

此外，電話會議也將討論多項非公認會計準則財務指標。公認會計原則與非公認會計原則措施的調節可以在我們投資者關係網站上今天的新聞稿中找到。

I'll now turn the call over to Steve Trundle. Steve?

我現在將把電話轉給史蒂夫·特朗德爾。史蒂夫？

Thank you, Matt. Good afternoon, and welcome to everyone. We're pleased to report another quarter of solid results. Our SaaS and license revenue in the third quarter was $145 million, up 8.9% over the same period last year. Our adjusted EBITDA in the third quarter was $41.4 million. I want to thank our service provider partners and the Alarm.com team for their continued strong performance.

謝謝你，馬特。下午好，歡迎大家。我們很高興地報告又一個季度的穩健業績。第三季我們的SaaS和授權收入為1.45億美元，比去年同期成長8.9%。第三季調整後的 EBITDA 為 4,140 萬美元。我要感謝我們的服務供應商合作夥伴和 Alarm.com 團隊持續的強勁表現。

During the quarter, we meaningfully outperformed our SaaS target despite some softness and difficult to predict hardware revenue. The diversity of our business is worth highlighting as our growth initiatives continue to make substantial contributions to our SaaS results. As many of you know, we typically conclude our third quarter call by providing a very early look at how we think the business will perform in the following fiscal year.

在本季度，儘管硬體收入出現一些疲軟且難以預測的情況，但我們的 SaaS 目標仍明顯超出了我們的目標。我們業務的多樣性值得強調，因為我們的成長計劃繼續為我們的 SaaS 業績做出重大貢獻。正如你們許多人所知，我們通常會透過儘早了解我們認為該業務在下一財年的表現來結束第三季的電話會議。

I'm going to keep my comments brief today but provide some context to the 2024 numbers that Steve Valenzuela will outline. I'm also excited to welcome Dan Kerzner, the President of our Platforms business, to the call to update you on a few product development initiatives. Before I hand things to Dan, I want to comment further on where we are strategically and what we see in the year ahead.

我今天的評論將保持簡短，但會提供 Steve Valenzuela 將概述的 2024 年數字的一些背景資訊。我還很高興歡迎我們平台業務總裁 Dan Kerzner 來電，向您介紹一些產品開發計劃的最新情況。在將事情交給丹之前，我想進一步評論我們的戰略地位以及我們在未來一年看到的情況。

Overall, I'm pleased with our growth in SaaS revenue this year and our opportunity to maintain that momentum through next year. In 2023, we successfully accomplished some belt tightening in the business and have been able to produce the same adjusted EBITDA on a real dollar basis as in 2022.

總體而言，我對今年 SaaS 收入的成長以及我們有機會在明年保持這一勢頭感到滿意。 2023 年，我們成功地在業務中實現了一些緊縮政策，並能夠以實際美元計算產生與 2022 年相同的調整後 EBITDA。

We achieved this despite an unexpected setback late last year that impacted our IP license revenues and which generated material legal costs. Even as we made these adjustments, we continue to build strong businesses in commercial intrusion and access, residential and commercial video and energy management.

儘管去年年底出現了意外的挫折，影響了我們的智慧財產權授權收入並產生了重大的法律費用，但我們還是實現了這一目標。即使我們做出了這些調整，我們仍繼續在商業入侵和訪問、住宅和商業視訊以及能源管理領域建立強大的業務。

We've built an international business that now serves over 60 countries globally and includes partnerships with some of the largest security companies in the world. We have also established toehold positions in the HVAC channel, the multifamily housing segment, the active shooter detection vertical and the IoT device monitoring space. We expect these growth initiatives to continue to generate increasing contributions to our overall performance next year and become more efficient with scale.

我們已經建立了國際業務，目前為全球 60 多個國家/地區提供服務，並與世界上一些最大的安全公司建立了合作夥伴關係。我們也在暖通空調通道、多戶住宅領域、主動射擊偵測垂直領域和物聯網設備監控領域建立了立足點。我們預計這些成長措施將繼續為我們明年的整體業績做出越來越大的貢獻，並隨著規模的擴大而變得更加高效。

In 2024, we will continue to pursue our core strategy. We will invest back into the residential and commercial solutions that our service providers sell and deliver to the market every day while also continuing to build and invest in our growth initiatives. We continue to see good results from the investments we have made in video, commercial, international and energy management and expect these areas will steadily be drivers of our overall growth in the future.

2024年，我們將繼續奉行我們的核心策略。我們將重新投資於我們的服務提供者每天向市場銷售和交付的住宅和商業解決方案，同時繼續建立和投資我們的成長計劃。我們繼續看到我們在視訊、商業、國際和能源管理方面的投資取得了良好的成果，並預計這些領域將穩步成為我們未來整體成長的驅動力。

In summary, I'm pleased with our third quarter results and the execution of our plan, and I want to thank our investors for their continued trust in our business.

總之，我對我們第三季的業績和計畫的執行感到滿意，我要感謝我們的投資者對我們業務的持續信任。

And with that, let me turn things over to Dan Kerzner to provide an update on our video business. Dan?

接下來，讓我將事情轉交給 Dan Kerzner，以提供我們視訊業務的最新情況。擔？

Thanks, Steve. I'm pleased to join our call today and speak with our investors and analysts. The platforms business includes all product development for our core commercial and residential platforms as well as our sales and marketing for our largest market, North America.

謝謝，史蒂夫。我很高興參加今天的電話會議並與我們的投資者和分析師交談。平台業務包括我們核心商業和住宅平台的所有產品開發以及我們最大市場北美的銷售和行銷。

We drive profitable revenue growth across global markets through new product releases that expand our market opportunity, increase ARPU and build on our service provider partners' strong competitive position. While the team is focused on a range of technology domains, I'll use today's call to update you on several new enhancements to our user experience and video platform.

我們透過新產品發布來推動全球市場的獲利性收入成長，從而擴大我們的市場機會、提高 ARPU 並增強我們的服務供應商合作夥伴的強大競爭地位。雖然團隊專注於一系列技術領域，但我將利用今天的電話會議向您介紹我們的用戶體驗和視訊平台的幾項新增強功能。

Updates to our user experience have been motivated by the fact that the typical connected property solution on the Alarm.com platform has become increasingly sophisticated with more and different devices. This increase, particularly focused on video, has influenced how subscribers use and interface with their system. We continually refine and optimize our user experience to provide frictionless and intuitive access to the information and commands that subscribers value most.

Alarm.com 平台上典型的互聯財產解決方案隨著越來越多不同的設備而變得越來越複雜，這一事實推動了我們對使用者體驗的更新。這種成長，尤其是影片方面的成長，影響了訂閱者使用系統和與其係統互動的方式。我們不斷完善和優化我們的用戶體驗，以提供對訂閱者最重視的資訊和命令的無障礙、直觀的存取。

During the quarter, we launched an enhanced version of our mobile app. The modernized navigation provides one-tap access to high-use features. Design also integrates a curated graphical activity feed that incorporates video clips directly into a comprehensive time line of activity at the property.

本季度，我們推出了行動應用程式的增強版。現代化的導航提供對高使用率功能的一鍵存取。設計還整合了精心策劃的圖形活動來源，將影片剪輯直接納入飯店活動的綜合時間軸中。

We also developed an enhanced interactive scrubbing interface for our continuous video reporting solutions. This is a crossover feature that both increases usability for residential customers and fits the commercial market. The use cases for commercial subscribers include quickly checking to see which employees opened or closed a store on time or tracking unexpected entries or exits to an office.

我們還為我們的連續視訊報告解決方案開發了增強的互動式清理介面。這是一項交叉功能，既提高了住宅客戶的可用性，也適合商業市場。商業訂閱者的用例包括快速檢查哪些員工按時打開或關閉商店或追蹤意外進入或退出辦公室。

The enhancements and new capabilities designed into the mobile app were informed by our extensive subscriber usage data. In a single month, earlier this year, nearly 100 million live video streams were initiated in our app and over 50 million swipes between video feeds. This data supports the new user experience design, which expands the touch points for video content within the app experience.

行動應用程式中設計的增強功能和新功能是根據我們廣泛的訂戶使用資料而設計的。今年稍早的一個月內，我們的應用程式中啟動了近 1 億個即時視訊串流，且視訊來源之間的滑動次數超過 5000 萬次。這些數據支援新的使用者體驗設計，擴展了應用程式體驗中影片內容的接觸點。

Now I'll shift to several new products that highlight the continued evolution of our video platform. The upcoming release of our new 729 floodlight video camera product line leverages our intelligent video-based proactive deterrence capabilities into a new camera form factor that we believe will gain traction.

現在我將轉向幾款新產品，以突出我們視訊平台的持續發展。我們即將發布的新型 729 泛光燈攝影機產品線將我們基於智慧視訊的主動威懾功能融入新的攝影機外形中，我們相信該產品將獲得青睞。

The new 729 video camera includes a 4-megapixel sensor, wide area lighting, responsive multicolor LED lights and sirens and 2-way voice, which allows the central station operator to mic down through the camera to an outdoor location. It also operates our enhanced video analytics software called Perimeter Guard, which seamlessly connects to our alarm response software. The 729 will be used by our service providers to detect potential bad actors and engage them with a series of escalated responses designed to proactively deter malicious activity.

新型 729 攝影機包括 400 萬像素感測器、廣域照明、響應式多色 LED 燈和警報器以及 2 路語音，可讓中心站操作員透過攝影機向室外位置進行麥克風錄音。它還運行我們稱為 Perimeter Guard 的增強型視訊分析軟體，該軟體無縫連接到我們的警報響應軟體。我們的服務提供者將使用 729 來檢測潛在的不良行為者，並讓他們參與一系列旨在主動阻止惡意活動的升級回應。

We've grown our video business to a significant scale. Our AI-powered video analytics software has identified about 22 billion events for subscribers through the detection of either people, vehicles or animals over just the last 12 months. We recently added package detection to our video analytics offering. Since it began rolling out in September, we have alerted subscribers about package deliveries over 700,000x.

我們的視訊業務已經發展到了相當大的規模。我們的人工智慧視訊分析軟體在過去 12 個月內透過偵測人、車輛或動物，為訂閱者識別了約 220 億個事件。我們最近在視訊分析產品中新增了包裹檢測。自 9 月開始推出以來，我們已向訂閱者發出超過 70 萬次包裹遞送提醒。

To summarize, our research and development program is enabling us to address opportunities in both commercial and residential markets so we can continue to deliver SaaS growth. We're leveraging the unique strengths of our channel to deliver a differentiated and difficult-to-replicate set of capabilities that align with the long-term growth drivers of our service provider partners.

總而言之，我們的研發計劃使我們能夠抓住商業和住宅市場的機遇，以便我們能夠繼續實現 SaaS 的成長。我們正在利用我們管道的獨特優勢來提供一系列差異化且難以複製的功能，這些功能與我們的服務提供者合作夥伴的長期成長動力相一致。

With that, I'll turn things over to Steve Valenzuela to review our financial results. Steve?

這樣，我將把事情交給 Steve Valenzuela 來審查我們的財務表現。史蒂夫？

Thanks, Dan. I'll begin with a review of our third quarter 2023 financial results and then provide our guidance for Q4 and full year 2023 and conclude with our initial thoughts on 2024 before opening the call for questions.

謝謝，丹。我將首先回顧我們 2023 年第三季的財務業績，然後提供我們對 2023 年第四季和全年的指導，並在開始提問之前總結我們對 2024 年的初步想法。

Third quarter SaaS and license revenue of $145 million grew 8.9% from the same quarter last year. Excluding Vivint license revenue, third quarter 2023 non-GAAP adjusted SaaS and license revenue grew 13.9% year-over-year on a comparable basis.

第三季 SaaS 和授權收入為 1.45 億美元，比去年同期成長 8.9%。不包括 Vivint 授權收入，2023 年第三季非 GAAP 調整後 SaaS 和授權收入在可比基礎上年增 13.9%。

SaaS and license revenue includes Connect software license revenue of approximately $5.7 million for the third quarter, down as expected from $6.5 million in the year ago quarter. Our SaaS and license revenue visibility remains high with a revenue renewal rate of 93% in the third quarter, consistent with our historical trends.

SaaS 和授權收入包括第三季 Connect 軟體授權收入約 570 萬美元，低於去年同期的 650 萬美元，低於預期。我們的 SaaS 和授權收入可見度仍然很高，第三季營收續約率為 93%，與我們的歷史趨勢一致。

Hardware and other revenue in the third quarter was $76.8 million, down 7.5% from Q3 2022 as the year ago quarter benefited from heavy LTE cellular module cells in advance of the 3G cellular sunset that occurred at the end of last year and some slowing of hardware sales in the commercial enterprise market. Total revenue of $221.9 million for the third quarter grew 2.6% year-over-year.

第三季的硬體和其他收入為 7,680 萬美元，比 2022 年第三季下降 7.5%，因為上一季度受益於去年底 3G 蜂窩日落之前的大量 LTE 蜂窩模組單元以及硬體的一些放緩商業企業市場的銷售。第三季總營收為 2.219 億美元，年增 2.6%。

SaaS and license gross margin for the third quarter was 84.9%, up slightly quarter-over-quarter from 84.6%. Hardware gross margin was 22.6% for the third quarter, up from 19.1% in Q3 2022 mainly due to favorable product mix and improved supply chain dynamics. Total gross margin was 63.3% for the third quarter, up from 60.4% in the year ago quarter, mainly due to the improvement in hardware margins.

第三季 SaaS 和授權毛利率為 84.9%，較上一季的 84.6% 略有上升。第三季硬體毛利率為 22.6%，高於 2022 年第三季的 19.1%，主要是由於有利的產品組合和供應鏈動態的改善。第三季總毛利率為63.3%，高於去年同期的60.4%，主要得益於硬體利潤率的改善。

Turning to operating expenses. R&D expenses in the third quarter were $61 million compared to $55.6 million in Q3 2022, mainly due to the increase in head count and related compensation expenses. We ended the third quarter with 1,116 employees in R&D, up from 981 employees in Q3 2022. Total headcount increased to 1,986 employees for the third quarter, which includes employees from companies we acquired during 2023 compared to 1,699 employees in the year ago quarter.

轉向營運費用。第三季的研發費用為 6,100 萬美元，而 2022 年第三季的研發費用為 5,560 萬美元，主要是由於人員數量和相關薪酬費用的增加。截至第三季末，我們的研發員工人數為1,116 人，高於2022 年第三季的981 人。第三季員工總數增加至1,986 人，其中包括我們在2023 年收購的公司的員工，而去年同期為1,699 人。

Sales and marketing expenses in the third quarter were $23.9 million or 10.8% of total revenue compared to $23.1 million or 10.7% of revenue in the same quarter last year, mainly due to increased headcount. Our G&A expenses in the third quarter were $31.5 million, up from $28 million in the year ago quarter, mainly due to higher legal fees. G&A expense in the third quarter includes non-ordinary course litigation expense of $5.9 million compared to $3.1 million in the year ago quarter. Non-ordinary course litigation expenses are part of our adjusted measures and are excluded from our measurement of our non-GAAP financial performance.

第三季銷售和行銷費用為 2,390 萬美元，佔總收入的 10.8%，而去年同期為 2,310 萬美元，佔總收入的 10.7%，這主要是由於員工人數增加。第三季的一般管理費用為 3,150 萬美元，高於去年同期的 2,800 萬美元，主要是因為法律費用增加。第三季的一般管理費用包括 590 萬美元的非常規訴訟費用，而去年同期為 310 萬美元。非普通訴訟費用是我們調整後衡量標準的一部分，不包括在我們對非公認會計準則財務表現的衡量中。

In the third quarter, GAAP net income was $19.5 million compared to GAAP net income of $18.3 million in the year ago quarter. Non-GAAP adjusted EBITDA in the third quarter was $41.4 million, up slightly from $40.8 million in Q3 2022. Non-GAAP adjusted net income increased to $30.6 million or $0.56 per diluted share in the third quarter compared to $30.1 million or $0.55 per share for the third quarter of 2022.

第三季 GAAP 淨利為 1,950 萬美元，而去年同期 GAAP 淨利為 1,830 萬美元。第三季非GAAP 調整後EBITDA 為4,140 萬美元，略高於2022 年第三季的4,080 萬美元。第三季非GAAP 調整後淨利增至3,060 萬美元，即稀釋後每股收益0.56 美元，而去年同期的淨利潤為3,010 萬美元，即稀釋後每股收益 0.55 美元。2022 年第三季。

Turning to our balance sheet. We ended the third quarter with $680 million of cash and cash equivalents, up $57.8 million from our cash balance at December 31, 2022. Operating cash flow for Q3 was $62.8 million compared to $10.2 million in the year ago quarter and free cash flow was $60.9 million, up from $8.4 million in Q3 2022.

轉向我們的資產負債表。截至第三季末，我們的現金和現金等價物為6.8 億美元，比2022 年12 月31 日的現金餘額增加5,780 萬美元。第三季的營運現金流為6,280 萬美元，而去年同期為1,020 萬美元。美元，自由現金流為60.9 美元百萬美元，高於 2022 年第三季的 840 萬美元。

The increase in cash flow was from strong operating results and improvement in working capital with collections driving down accounts receivable days sales outstanding to 45 days and a slight decrease in inventory.

現金流的增加得益於強勁的經營業績和營運資金的改善，收款將應收帳款天數減少至 45 天，庫存略有減少。

During the quarter, we used $6.2 million to repurchase 105,285 shares of our common stock at an average price of $58.20.

本季度，我們使用 620 萬美元以平均價格 58.20 美元回購了 105,285 股普通股。

Turning to our financial outlook. For the fourth quarter of 2023, we expect SaaS and license revenue of $146 million to $146.2 million. For the full year of 2023, we are raising our expectations for SaaS and license revenue to $566.9 million to $567.1 million, up from our prior guidance of $562.3 million to $562.7 million. We are projecting total revenue for 2023 of $878.9 million to $881.1 million compared to our prior guidance of $872.3 million to $887.7 million, which includes estimated hardware and other revenue of $312 million to $314 million.

轉向我們的財務前景。 2023 年第四季度，我們預計 SaaS 和授權收入為 1.46 億美元至 1.462 億美元。對於 2023 年全年，我們將 SaaS 和授權收入的預期提高至 5.669 億美元至 5.671 億美元，高於先前的指導值 5.623 億美元至 5.627 億美元。我們預計 2023 年的總收入為 8.789 億美元至 8.811 億美元，而我們先前的指引為 8.723 億美元至 8.877 億美元，其中包括估計的硬體和其他收入 3.12 億至 3.14 億美元。

We are raising our estimate for adjusted non-GAAP EBITDA for 2023 to $143 million to $144 million, up from our prior guidance of $128 million to $131 million. Adjusted non-GAAP net income for 2023 is projected to be $103.5 million to $105 million or $1.90 to $1.92 per diluted share, up from our prior guidance of $92.2 million to $94.2 million or $1.69 to $1.73 per diluted share.

我們將 2023 年調整後非 GAAP EBITDA 的預期上調至 1.43 億至 1.44 億美元，高於我們先前指引的 1.28 億至 1.31 億美元。 2023 年調整後的非GAAP 淨利潤預計為1.035 億美元至1.05 億美元，或稀釋後每股1.90 至1.92 美元，高於我們之前的指導值9220 萬美元至9420 萬美元，或稀釋後每股1.69至1.73 美元。

EPS is based on an estimate of 54.6 million weighted average diluted shares outstanding. We currently project our non-GAAP tax rate for 2023 to remain at 21% under current tax rules. We expect full year 2023 stock-based compensation expense of $48 million to $50 million.

每股盈餘是基於 5,460 萬股加權平均稀釋後流通股的估計。目前，我們預計 2023 年的非 GAAP 稅率將根據現行稅收規則維持在 21%。我們預計 2023 年全年股票薪酬費用為 4,800 萬美元至 5,000 萬美元。

Finally, while we are in the initial planning stages, I will provide some early thoughts on 2024 noting that these are preliminary. We currently estimate our SaaS and license revenue for 2024 will be between $608 million to $612 million.

最後，當我們處於初始規劃階段時，我將提供一些關於 2024 年的早期想法，並指出這些都是初步的。目前，我們預計 2024 年 SaaS 和授權收入將在 6.08 億美元至 6.12 億美元之間。

Total revenue for 2024 could range between $908 million to $927 million. We currently project our non-GAAP adjusted EBITDA for 2024 to be between $148 million to $150 million. We will provide our initial guidance for 2024 when we report our fourth quarter 2023 financial results early next year.

2024 年的總收入可能在 9.08 億美元至 9.27 億美元之間。目前，我們預計 2024 年的非 GAAP 調整後 EBITDA 將在 1.48 億美元至 1.5 億美元之間。當我們明年初報告 2023 年第四季財務表現時，我們將提供 2024 年的初步指引。

In summary, we are focused on executing on our strategic business plan and investing in our long-term strategy while continuing to deliver profitable growth.

總而言之，我們專注於執行我們的策略性業務計劃並投資於我們的長期策略，同時繼續實現獲利成長。

And with that, operator, please open the call for Q&A.

那麼，接線員，請打開問答電話。

(Operator Instructions) Our first question comes from Adam Tindle with Raymond James.

（操作員說明）我們的第一個問題來自 Adam Tindle 和 Raymond James。

I'm just trying to do the fast math here on that guidance here, Steve. Curious what it implies in terms of the drivers of the SaaS line. In particular, obviously, ADT has been a little bit more public about their road map here.

史蒂夫，我只是想根據該指導進行快速數學計算。很好奇這對 SaaS 產品線的驅動因素意味著什麼。特別是，顯然，ADT 在這裡公開了他們的路線圖。

It looks like if I did the math correctly, you're going to be guiding to about 8% or at least the initial thought for SaaS growth for 2024 is around 8%, which is very healthy coming off of a 9% comparison. So not much deceleration. And I know you tend to be conservative on that. So maybe just some of the drivers that led you to this initial look on 2024, in particular, what the ADT assumption is in there?

看來，如果我計算正確的話，您將指導 8% 左右，或者至少最初認為 2024 年 SaaS 增長約為 8%，與 9% 的比較相比，這是非常健康的。所以減速幅度不大。我知道你對此持保守態度。那麼，也許只是一些驅動因素讓您初步了解 2024 年，特別是 ADT 假設是什麼？

Adam, this is Steve Trundle. I'll start with the ADT assumption, and then if Steve wants to pick up on anything else. But yes, you did the math correctly, first, so that's right. And what -- we're using the same, I think, data points that others have on ADT where public communication has been that they're going to initiate some activity by the end of this year with the transition.

亞當，這是史蒂夫·特朗德爾。我將從 ADT 假設開始，然後如果 Steve 還想了解其他內容。但是，是的，首先你的數學計算是正確的，所以這是對的。我認為，我們正在使用與其他人在 ADT 上相同的數據點，其中公共溝通表明他們將在今年年底之前透過過渡啟動一些活動。

So what in our model we're doing is we have that activity, meaning that transition modeled in to occur mostly in the first quarter of next year, sort of again late this year and then roll through the early part of next year.

因此，在我們的模型中，我們正在做的是我們有這樣的活動，這意味著過渡模型主要發生在明年第一季度，今年晚些時候再次發生，然後滾動到明年年初。

Yes. And then, Adam, you're right, it's about 8% growth we're projecting. And as we always do in the initial look, it's 15 months out. So we're giving ourselves some room here for hopefully some beat and raise. And there is a challenging macroeconomic environment out there.

是的。然後，Adam，你是對的，我們預期成長率約為 8%。正如我們在最初的設計中一貫所做的那樣，它已經過去了 15 個月。因此，我們在這裡給自己一些空間，希望能夠得到一些擊敗和加註。宏觀經濟環境充滿挑戰。

I mean we've done quite well. But if you look at last year's initial look, we initially guided to about 6.3% growth, and we're coming in at about 8.6% growth for the year. So we always have some room that we allow ourselves there to be able to do a beat and raise during the year.

我的意思是我們做得很好。但如果你看去年的初步情況，我們最初指導的成長率約為 6.3%，而今年的成長率約為 8.6%。因此，我們總是有一些空間，讓自己能夠在這一年中進行突破和進步。

Great. Yes. That's clear. And it looks like a healthy initial look. I guess maybe a question on the quarter, you had alluded to the hardware piece. And I know the story is more about the SaaS line here for Alarm.com, but do want to ask a little bit more on hardware? If you could unpack some of the drivers that led to the weakness in the quarter.

偉大的。是的。很清楚。它看起來像是一個健康的初始外觀。我想也許是關於本季的問題，您提到了硬體部分。我知道這個故事比較是關於 Alarm.com 的 SaaS 產品線，但想多問一點關於硬體的問題嗎？如果您能解開導致本季疲軟的一些驅動因素。

And if I look at the Q4 guidance, it looks like it might be flat to slightly up sequentially if I did the math right on there for the full year. I know Q4 is typically a little bit of a seasonally soft hardware quarter given weather and installs and stuff like that. So looks like maybe some temporary items in Q3 and healthier Q4 outlook. I wonder if you could unpack the drivers in the hardware piece and assumptions.

如果我看一下第四季度的指導，如果我對全年進行數學計算，它看起來可能會持平甚至略有上升。我知道，考慮到天氣和安裝等因素，第四季度通常是季節性軟硬體季度。因此，看起來第三季可能會有一些臨時項目，第四季的前景會更健康。我想知道您是否可以解壓縮硬體部分和假設中的驅動程式。

Yes. So that's right, pretty much flat Q4. The drivers there were -- and really even looking into next year. First, starting with this year, A little bit of weakness in the commercial enterprise space. We just -- it's not that we're seeing orders kind of go away. We're just seeing the cycle taking longer than we expected.

是的。沒錯，第四季幾乎持平。那裡的車手們甚至都在展望明年。首先，從今年開始，商業企業領域有點疲軟。我們只是——並不是說我們看到訂單消失了。我們只是看到這個週期比我們預期的要長。

So in the last quarter, we saw a little weakness there. We had a couple of little supply chain issues that were more modest. And then even on the residential side, we're seeing a couple of things going on, fewer -- first, many, many fewer LTE modules being sold because the upgrade cycle from 3G to LTE is mostly over at this point. So that's kind of been drying up.

因此，在上個季度，我們看到了一些疲軟的情況。我們遇到了一些較小的供應鏈問題。即使在住宅方面，我們也看到了一些事情正在發生，越來越少——首先，LTE 模組的銷售量減少了很多很多，因為從 3G 到 LTE 的升級週期此時已基本結束。所以這有點乾了。

And then the last on the hardware side would just be the macro conditions are creating a world which is sort of good and bad for us in a way where you're having fewer moves on the residential side. So you're not doing as many new installations necessarily, but you're also having less churn on the residential side, where we expect probably revenue retention will trend up a little bit. So that's -- but you see slightly less hardware on that side as well.

最後一個硬體方面的問題是，宏觀條件正在創造一個對我們有利有弊的世界，住宅方面的搬遷減少了。因此，您不一定要進行那麼多的新安裝，但住宅方面的客戶流失也較少，我們預計收入保留可能會略有上升。所以，但是你會發現這一側的硬體也稍微少了一些。

Our next question comes from Saket Kalia with Barclays.

我們的下一個問題來自巴克萊銀行的 Saket Kalia。

Steve Trundle, maybe for you. Can we just talk a little bit about the growth businesses that you touched on last quarter. I can't remember if it was 30% of the business growing at 25% or vice versa, but it was a really interesting stat. I don't expect it's changed much in just one quarter. But curious if you could just expand on kind of what you're seeing in a couple of those biggest growth businesses.

史蒂夫·特朗德爾，也許適合你。我們可以簡單談談您上季提到的成長業務嗎？我不記得是 30% 的業務成長了 25%，還是相反，但這是一個非常有趣的統計數據。我預計在短短一個季度內不會發生太大變化。但很好奇您是否可以擴展您在幾個最大的成長型業務中看到的內容。

Yes. First, your recollection is correct. That's -- I think what we communicated last quarter was 30% of -- the growth businesses represented around 30% of the SaaS, and we're growing at around 25%. So that's continued.

是的。首先，你的記憶是正確的。我認為我們上季度傳達的訊息是成長業務的 30%，約佔 SaaS 的 30%，而我們的成長速度約為 25%。所以就這樣繼續了。

The drivers there are really EnergyHub being one, where we did recently put out a press release about this past year being really a record-setting year for us with the number of events called and the number of -- I think it was over 1,800 events we've called year-to-date, meaning demand response events on behalf of utilities and moved around quite a few gigawatt hours of power.

EnergyHub 就是其中之一，我們最近發布了一份新聞稿，稱過去的一年對我們來說確實是創紀錄的一年，我們接到的活動數量和活動數量——我認為超過 1,800 場活動我們稱之為年初至今，這意味著代表公用事業公司進行了需求響應事件，並轉移了相當多吉瓦時的電力。

I believe more than 200% more power, we moved off the grid at key moments this year versus last year. So you're just seeing a lot more usage there, which allows us to keep growing that business.

我相信，與去年相比，今年我們在關鍵時刻脫離了電網，發電量增加了 200% 以上。因此，您會看到那裡的使用量增加了很多，這使我們能夠繼續發展該業務。

And then the team is focused right now on expanding into the broader resource space to include EVs in particular. So a lot of work going on there, and we see that as sort of another growth vector in that business.

然後，團隊現在專注於擴展到更廣泛的資源空間，特別是電動車。因此，那裡正在進行大量工作，我們將其視為該業務的另一個成長向量。

The other couple of places are the international business, which continues to clip along at roughly that same growth rate in terms of their SaaS growth can be a little lumpy, but we still see mostly greenfields internationally, where we're in the early days of a bunch of new relationships and trying to help partners get up to scale and to adopt the full platform to sort of move from the basic interactive security offering to a full offering that includes video and elements of our automation solution.

另外兩個地方是國際業務，它們繼續以大致相同的成長率成長，SaaS 的成長可能有點不穩定，但我們仍然看到國際上大部分是未開發的領域，我們正處於早期階段。一系列新的關係，並試圖幫助合作夥伴擴大規模並採用完整的平台，從基本的互動式安全產品轉向包括視訊和自動化解決方案元素的完整產品。

And then the next would be just sort of the overall commercial play, both commercial intrusion, commercial access, and I guess, I should say also commercial video. Still fairly early there for us, continue to make good headway there, both in our core business and with the OpenEye video segment.

接下來就是整體商業遊戲，包括商業入侵、商業訪問，我想，我應該說還有商業影片。對我們來說還處於相當早的階段，我們的核心業務和 OpenEye 視訊領域將繼續取得良好進展。

As I noted in my comments and as Steve noted, in the third quarter, there was a little bit of a slowdown in the amount of hardware being sold through that channel. But overall, SaaS growth rates were the same, and we expect that to continue and to give us some tailwinds next year.

正如我在評論中和史蒂夫指出的那樣，在第三季度，透過該管道銷售的硬體數量略有放緩。但總體而言，SaaS 成長率是相同的，我們預計這種情況將持續下去，並在明年為我們帶來一些推動力。

Got it, got it. Maybe for my follow-up for you, Steve Valenzuela. So very helpful. It was very helpful to get a preliminary look at next year in Q3. And I know it is preliminary, but curious how you're thinking about legal costs for 2024?

明白了，明白了。也許是為了我對你的後續行動，史蒂夫·瓦倫蘇埃拉。非常有幫助。對明年第三季的初步了解非常有幫助。我知道這只是初步的，但我很好奇您如何考慮 2024 年的法律費用？

Yes, it's a good point. Clearly, we have factored in some legal costs. It's important to point out, though, that a good portion of the legal spend for the major programs are now adjusted out to get to a certain stage. So we factored that into our adjusted EBITDA guide.

是的，這是一個好點。顯然，我們已經考慮了一些法律費用。不過，需要指出的是，主要項目的合法支出的很大一部分現在已經進行了調整，以達到某個階段。因此，我們將其納入調整後的 EBITDA 指南中。

Our next question comes from Darren Aftahi with ROTH.

我們的下一個問題來自羅斯的達倫·阿夫塔希 (Darren Aftahi)。

Congrats on the quarter. If I could double tap, Steve Trundle, on the commercial comments. I'm just trying to understand the relationship between is the sort of cycle for hardware a little elongated, and that's what kind of contributed to maybe some of the weakness in the quarter, but the underlying strength for the commercial demand is still there. Am I hearing that correctly?

恭喜本季。如果我可以雙擊史蒂夫特朗德爾的商業評論。我只是想了解硬體週期有點延長之間的關係，這可能導致了本季的一些疲軟，但商業需求的潛在優勢仍然存在。我聽得對嗎？

Yes. That's -- Darren, that's what I was attempting to communicate. So we -- and again, this wasn't a major pullback, but it was just enough that it was a sort of noticeable. And we just -- from what we can tell, really beginning sort of mid-August, we started seeing some slower or delayed purchasing cycles were orders that were sort of in process might normally close and 3 or 4 weeks seem to drag on, drag out of the quarter.

是的。這就是——達倫，這就是我試圖傳達的訊息。所以我們——再說一遍，這並不是一次重大的回調，但足以引起人們的注意。據我們所知，真正開始於 8 月中旬，我們開始看到一些較慢或延遲的採購週期，正在處理的訂單通常可能會關閉，並且似乎會拖延 3 或 4 週，拖累季度外。

So that's sort of what I think we saw in the second half of the third quarter is just some tapering of intensity on the -- at the enterprise level primarily, meaning larger customers, large facilities, large big-box retailers, quick-serve restaurants, places like that, that would typically be installing at a certain rate that's pretty predictable. That rate came down a bit in the second half of the third quarter.

因此，我認為我們在第三季下半年看到的只是在企業層面的強度有所減弱，這意味著更大的客戶、大型設施、大型零售商、快餐店，像這樣的地方，通常會以一定的速度安裝，這是相當可預測的。第三季後半段這一比率略有下降。

We assume -- we don't know, but we assume like many people that folks are kind of trying to get a read on the overall economy right now and thinking about the velocity of their CapEx, expenditures and whether it's better to be in conservation mode or better be in sort of growth mode at the moment. So that's our best guess. We saw just a little bit of a slowdown in the third quarter in that space.

我們假設——我們不知道，但我們假設像許多人一樣，人們正在嘗試了解目前的整體經濟情況，並思考他們的資本支出、支出的速度以及是否最好保持節約模式或目前最好處於某種成長模式。這是我們最好的猜測。我們在第三季看到該領域略有放緩。

That's helpful. And then maybe one for Steve Valenzuela. Your free cash flow number is exceptionally strong. I'm just curious with the collections and the DSOs, I mean, is that a sustainable sort of working capital sort of pass-through beyond adjusted net income? I mean, how should we think about free cash flow in the fourth quarter based on the implied guide?

這很有幫助。也許還有史蒂夫·巴倫蘇埃拉 (Steve Valenzuela) 的作品。您的自由現金流量非常強勁。我只是對收藏品和 DSO 感到好奇，我的意思是，這是一種超出調整後淨收入的可持續營運資本嗎？我的意思是，根據隱含的指導，我們該如何看待第四季的自由現金流？

Yes. Q3 certainly was an extraordinary cash flow quarter. Everything came together. We can't expect that on an ongoing basis. And Q4 typically would be a weaker cash flow quarter. There is seasonality in that as well.

是的。第三季無疑是現金流非凡的季度。一切都在一起了。我們不能期望這種情況會持續發生。第四季通常是現金流較弱的季度。這也有季節性。

So Q3, we had very favorable DSOs. We had inventory come down a bit. Q4, we also have the potential tax payment related to the new tax rules around R&D capitalization, which might have to be paid if the Congress doesn't change that rule. And so yes, Q3 is certainly an extraordinary quarter for cash flow.

所以第三季度，我們有非常有利的 DSO。我們的庫存有所下降。第四季度，我們還有與研發資本化新稅收規則相關的潛在稅款，如果國會不改變該規則，可能需要繳納這些稅款。因此，是的，第三季對於現金流來說無疑是一個非凡的季度。

But generally, if you look at the year-to-date cash flow of around $90 million, generally, on a normal basis, the year-to-date or the year cash flow usually is around $90 million to $100 million. It's just that Q3, everything came together and generated that amount of cash flow.

但一般來說，如果你看一下年初至今約 9,000 萬美元的現金流，一般來說，在正常情況下，年初至今或全年現金流通常在 9,000 萬美元至 1 億美元左右。只是在第三季度，一切都聚集在一起並產生了那麼多的現金流。

Our next question comes from Matt Bullock with Bank of America.

我們的下一個問題來自美國銀行的馬特布洛克。

Yes, I'm on for Mike Funk. Great to see the strong EBITDA performance. I'm curious if you could provide us an update with whether or not the Vivint impact to revenue, EBITDA and I guess, legal expenses has tracked with the initial guidance you provided, I guess, it was about a year ago. Just trying to parse through whether or not some of this strong EBITDA performance is related to potentially lower legal expenses or how that's evolving?

是的，我支持麥克·芬克。很高興看到強勁的 EBITDA 表現。我很好奇您能否向我們提供最新情況，說明Vivint 對收入、息稅折舊攤銷前利潤(EBITDA) 和法律費用的影響是否與您提供的初步指導相符，我想是大約一年前的情況。只是想分析一下這種強勁的 EBITDA 表現是否與潛在的較低法律費用有關，或者它是如何演變的？

Sure. Matt, yes, the EBITDA outperformance comes from a little bit stronger business than we expected at the beginning of the year. I would say success in executing on some belt tightening initiatives and driving more profitability in the business. But we also did get some benefit.

當然。馬特，是的，EBITDA 的優異表現來自於業務比我們年初的預期稍強一些。我想說的是成功執行了一些勒緊褲腰帶的舉措並提高了業務的盈利能力。但我們也確實得到了一些好處。

I think at the beginning of -- you kind of referenced about a year ago, when that Vivint matter came up initially, we didn't really know. I think I probably said I don't know exactly how broad or how intense our legal burden would be, but I've got to budget for it at a reasonable -- a reasonably aggressive level. So we did budget for it. We haven't burned at quite the level.

我認為，大約一年前，您提到過，當 Vivint 問題最初出現時，我們真的不知道。我想我可能說過我不知道我們的法律負擔到底有多廣泛或多嚴重，但我必須以合理的預算 - 一個合理激進的水平。所以我們為此做了預算。我們還沒有達到那種程度。

I think I telegraphed ballpark is $16 million on that at that time for this year. And we haven't burned at quite that level, but we've burned a healthy amount, and it's still an ongoing manner, and the year is not done, but I'd say it's been a little less intense than what I anticipated.

我想我當時電報今年的預估金額為 1600 萬美元。我們的燃燒程度還沒有達到那個水平，但我們已經燃燒了一個健康的數量，而且這仍然是一種持續的方式，這一年還沒有結束，但我想說，它的強度比我預期的要小一些。

Our next question comes from Matthew Pfau with William Blair.

我們的下一個問題來自馬修·普福和威廉·布萊爾。

Great. So just ask for one more clarification on the legal expenses. There was a decent sequential uptick. What drove that in the quarter?

偉大的。因此，請再要求對法律費用進行進一步說明。出現了不錯的連續上升。是什麼推動了本季的發展？

There is a lot of legal activity going on as you can see -- you'll be able to see in the 10-Q. And so it's really hard to predict the legal expense, right? Because depending on the timing of events and circumstances, so it's very difficult to predict.

正如您所看到的，有很多合法活動正在進行 - 您將能夠在 10-Q 中看到。所以很難預測法律費用，對吧？因為取決於事件發生的時間和情況，所以很難預測。

But yes, it was up in the third quarter. I think it was $5.9 million compared to $3.1 million a year ago. And so it will fluctuate quarter-to-quarter depending upon timing of certain events.

但是，是的，第三季度有所上升。我認為這一數字為 590 萬美元，而一年前為 310 萬美元。因此，它會根據某些事件的發生時間而逐季度波動。

Okay. Got it. And then as we think about the hardware guidance for 4Q and for 2024, does ADT rolling off to its own platform have any impact on the hardware line? Or is that just on the subscription line?

好的。知道了。然後，當我們考慮第四季度和 2024 年的硬體指導時，ADT 推出到自己的平台會對硬體產品線產生任何影響嗎？還是只是在訂閱線上？

No. That also impacts the hardware line, and that is in our initial look model that we provided. So we would expect to see fewer devices we make cameras, door bells, et cetera, being sold as they execute their transition. So it does have an impact on the hardware line.

不會。這也會影響硬體系列，這就是我們提供的初始外觀模型。因此，我們預期在轉型過程中，我們生產的相機、門鈴等設備的銷售量將會減少。所以它確實對硬體線路有影響。

Ladies and gentlemen, this does conclude the Q&A portion of today's conference and also concludes the conference itself. You may now disconnect, and have a wonderful day.

女士們、先生們，今天會議的問答部分到此結束，會議本身也結束了。您現在可以斷開連接，並度過美好的一天。