Alarm.com(US:ALRM)2019-03-02 01:10Financial Data and Key Metrics Changes - SaaS and license revenue for Q4 2018 was $77.8 million, up 19% year-over-year, with full-year 2018 revenue at $291.1 million, a 23% increase from 2017 [8][25] - Total revenue for Q4 2018 was $111.4 million, a 25% increase from Q4 2017, with full-year total revenue growing 24% to $420.5 million [26] - Adjusted EBITDA for Q4 2018 was $20.9 million, with full-year adjusted EBITDA at $93.1 million, up 30% from 2017 [29] - GAAP net income for Q4 2018 was $7.9 million compared to $320,000 in Q4 2017, while non-GAAP adjusted net income increased to $14.5 million from $13 million year-over-year [29] Business Line Data and Key Metrics Changes - Hardware and other revenue in Q4 2018 was $33.6 million, up 42% from Q4 2017, primarily driven by increased sales of video cameras [26] - SaaS and license gross margin for Q4 2018 was 85.1%, slightly down from 85.5% in Q4 2017, while hardware gross margin decreased to 18.8% from 21.9% [26] Market Data and Key Metrics Changes - The company reported more than 8,000 service providers using its technology across over 6.1 million properties globally, with over 90 million connected devices enabled [9] - International subscriber accounts reached 100,000 in early 2018, with ongoing expansion in Europe, Turkey, Australia, New Zealand, and Latin America [17][19] Company Strategy and Development Direction - The company aims to drive growth through innovation in core channels, enhance video services, develop international markets, and build vertical businesses [10] - Product innovation is central to the company's strategy, with new offerings like Alarm.com for Business targeting small and medium-sized businesses [11][12] - The expansion of the artificial intelligence platform for video services is a key focus, with video analytics launched to enhance service offerings [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and growth opportunities, despite a more cautious outlook for 2019 compared to previous years [46] - The company noted that its core business remains strong, with mid-teens growth expected [46] Other Important Information - The company ended Q4 2018 with $146.1 million in cash and cash equivalents, with cash flow from operations at approximately $25.7 million [30] - The company plans to continue investing in R&D, with expenses in Q4 2018 at $24.4 million, up from $18.9 million in Q4 2017 [27] Q&A Session Summary Question: Differences between ADT Pulse and ADT Command - Management highlighted that ADT Command is a significant upgrade with a new SaaS architecture and feature sets, while continuing to enhance ADT Pulse [33] Question: Subscription revenue guidance for 2019 - Management explained that guidance is based on current knowledge and does not factor in potential growth initiatives [34] Question: Payback rules for marketing investments - Management noted that investments in other segments have longer payback periods, focusing on long-term goals rather than immediate returns [38] Question: Impact of commercial initiatives - Management indicated that both existing and new service providers are being engaged to expand commercial services [51] Question: Adoption rates for new builds - Management estimated a take rate of 40% to 50% for security services in new builds when there is a relationship with the homebuilder [81]