Q2 2021 Alarm.com Holdings Inc Earnings Call
Bakers presentation, there will be a question and answer session 2 on.
The question during the session you will need the press star 1 on your telephone please be advised that today's conference is being recorded.
And do you require any further assistance. Please press star zero and I would not like day of the conference over to your Speaker today, David Trone, Vice President Investor Relations. Please go ahead.
Thank you good afternoon, everyone and welcome to alarm Dot Coms second quarter 2021 earnings Conference call. As a reminder, this call is being recorded.
Joining us today from alarm Dot com are Steve Trundle, President and CEO and Steve Allen's whaler CFO.
Before we begin a quick reminder to our listeners may.
And as rich discussion during the call today will include forward looking statements which include.
Projected financial performance for the the third quarter and full year 2021.
The impact of emerging market dynamics, and trends and our business and on anticipated market demand for our offerings, including new product offerings.
The impact of the Covid pandemic on our global supply chain and the global economy.
Our business strategies.
Plans and objectives for future operations and integration of recent acquisitions.
Continued enhancements to our platform and offerings.
Opportunities for growth and our current markets and our plans to expand into new markets.
And other forward looking statements.
These forward looking statements are based on our current expectations and beliefs and on information currently available to us.
The statements containing words, such as anticipate began believe continue could estimate expect forecast may plan project trend will and other similar words are intended to identify such forward looking statements.
These statements are subject to risks and uncertainties, including those contained and the risk factors section of our most recent quarterly report on form 10-Q filed with the Securities and Exchange Commission on May 4.2021 and.
And and subsequent reports that we filed with the Securities and Exchange Commission from time to time, Inc.
Including our quarterly report on form 10-Q for the quarter ended June 30th 2021 that we intend to file with the Securities and Exchange Commission. Shortly after this call that could cause actual results to differ materially from those contained in the forward looking statements.
Please note that the forward looking statements made during this conference call speak only as of today's date and alarm Dot Com undertakes no obligation to update these statements.
To reflect subsequent events or circumstances, except to the extent required by law.
Also during this call management's commentary will include non-GAAP financial measures and provide non-GAAP guidance.
Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use and understanding of the company's performance and trends the.
And note that the presentation of non-GAAP financial information is not meant to be considered and in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Reconciliations between GAAP and non-GAAP metrics for our reported results can be found and the financial statement tables.
Of our earnings press release, which we have posted to our Investor relations website at investors the alarm dot com.
This conference call is being webcast and is also available on our Investor Relations website the.
The webcast of this call will be archived and a telephone replay will also be available on our website.
With these formalities out of the way I'd now like to turn the call over to Steve Trundle, you may begin.
Thank you David good afternoon, and welcome to everyone.
And we're pleased to report solid Q2 results, our SaaS and license revenue and the second quarter was $113.2 million up 18, 3% over last year, our adjusted EBITDA and the second quarter was $38 million.
I want to thank our service provider partners and the alarm dot com team for their contributions to our results and for their ongoing performance.
The residential market and the U S and Canada continued to perform well during the quarter.
Demand for Smart home security and remained strong with many new customers choosing to include our more advanced services, such as video and video analytics with the installation.
We also saw conditions improve and the small and medium sized the business and enterprise commercial markets that we serve.
Market activity for larger commercial customers, including sales pipeline of opportunities nearly returned to pre pandemic levels during the second quarter.
Our international business continues to be impacted by the ongoing pandemic.
During the quarter, our global team remains focused on developing our businesses and services. So that we can take full advantage of recoveries as they occur.
We are actively securing new partnerships with service providers, and expanding and refining our offerings across our international markets.
My focus for today's call is to provide more color on our service provider partners and to highlight how the alarm dot com platform helps them grow and supports their operations on.
And also update you on our newly released capability that we designed to enhance the monitoring services provided by our security channel partners.
Earlier this summer alarm dot com participated and ISC west the largest security industry trade conference.
And I attended and met with the number of our service provider partners.
Aside from enjoying the face to face interactions and was also invigorating to hear firsthand, how our service provider partners have continued to grow and build their businesses on the alarm dot com platform.
And we continually innovate and expand the alarm dot com platform to enable our service provider partners to deliver more value services to their customers grow recurring revenue expanded and new markets and efficiently deploy and support and increasingly complex systems.
I thought I would spend a few minutes of this quarter highlighting 1 of our longtime service provider partners and how they have leveraged the alarm dot com platform through time to evolve and grow their business.
I believe this will provide our investors with some appetite and.
And to the service provider channel relationships that we cultivate.
Which have been a significant driver of our success.
Tightened the alarm is the local dealer with the dedicated focus on the Phoenix market and Arizona.
Heightened founders, Mike and tailored profit exemplify the entrepreneurial energy and vision that we see across our service provider community.
And its formative days tightened alarm was exclusively of residential dealer focused primarily on originating and selling new accounts to 1 of alarm Dot coms dealer program partners.
Gradually as they built their balance sheet and borrowing capacity the began to not only originate new alarm dot com accounts, but to retain and service those accounts. So that they can build their companies recurring monthly revenue referred to and the industry as RMR.
And the last 5 years Titan has more than doubled its base of RMR and continues to accelerate its growth.
The backbone of Titans growth strategy has been premium connected property services and high touch professional support.
A key selling point to their customers is the value of a single security centric service that also connects to a wide ecosystem of connected devices.
Titan has increasingly deployed our video solutions to create higher RMR accounts.
Titan has also deeply integrated alarm dot comes back and and servicing tools and the all aspects of it the installation and customer support processes.
Tightens technicians have standardized on alarm dot coms tools to help ensure accurate and dependable installations.
And all of their new sales technician and support hires of 10 full training programs at the alarm Dot Com Academy.
As a result tightened has been able to efficiently service theyre growing base of subscriber accounts and provide a premium customer experience that differentiates them and the market.
Tightens management team also uses our business intelligence insights to drive the sales and installation and use of the system capabilities that result, and highly engaged long term accounts.
As a result tightens customers use of alarm dot coms, most engaging and sticky capabilities at higher rates than our average service provider.
Along with their attention to customer support and service and this has helped tightened maintain attrition rates that are below industry average.
More recently as alarm dot com build out its commercial offering Titan also expanded and the commercial market and has made full use of our differentiated capabilities.
They adopted our integrated access control and commercial video solutions instead of the Standalone offerings. They previously deployed on.
Enterprise Dashboards have supported tightened sales team as they have targeted multi location businesses.
The unique implementation of our auto Army and capability has also served as a key selling point to commercial customers at.
At the time specified by of businesses security manager, our auto arming feature performs the extra step of monitoring the property for a period of and activity before it automatically arms of the system.
We designed this feature to help eliminate of common cause of false alarms and reassure commercial subscribers that their properties are secured each day.
We appreciate tightened alarm for their long term partnership with us.
We often share ideas with our management team as we attack the market together.
They are a great example of the entrepreneurial businesses that make up our service provider partner community.
I also want to update you on some of our product development initiatives related to monitoring stations and alarm response of them.
We're continuing to develop technology that applies AI and adaptive machine learning to define the next generation of smart monitoring security.
We recently introduced the capability and this area called ambient insights for alarm response.
This back and capability evaluates and alarm signal and then provides the real time the termination to the monitoring station as to the likelihood that the property owner will cancel the alarm.
This will help operators prioritize multiple alarm events. So they can dispatch emergency services faster to the highest priority alarms and can also help produce false alarm dispatches.
Coupled with our visual verification service.
Monitoring stations can provide a broad range of critical information and public safety dispatchers and first responders.
And for consumers. This is another differentiator of the monitoring services associated with the alarm dot com powered systems.
For monitoring stations more efficiently responding to alarm events can create operational capacity for extending monitoring services to more devices and systems and homes and businesses.
For communities and reduces the demand placed on first responders and supports them during emergencies, while also improving overall public safety.
And then insights is built on our AI and adaptive and machine learning platform called insights engine the.
And the platform evaluates the evaluate each of alarm signals based on a range of data points and trends, including the history of alarm signals from the location and activity levels of detected and the property prior to the alarm event and the time of day.
Leveraging the scale of our platform, we will deploy and increasingly intelligent alarm signal of assessments and insights.
This will create more value for our subscribers and concert with our monitoring station partners.
In summary.
I am pleased with our Q2 results and with our execution against our plan through the first half of 2021.
Our revenue performance has been particularly strong through the pandemic period, and despite challenges and the global supply chain.
We plan to increase our investment and key growth areas of our business such as international commercial and video.
We are entering a seasonally strong recruiting and onboarding period and are commencing more traditional sales and marketing activities.
And I anticipate that we will be able to execute upon greater investment and those key areas and the second half of the year.
Finally, I want to thank our service provider partners and our team for their hard work and our investors for their continued trust and our business.
And with that let me turn things over to Steve Valensuela to review, our financial results and provide guidance Steve.
Thanks, Steve I will begin with the review of our second quarter of 2021 financial results and then provide our increased guidance before opening the call for questions.
SaaS and license revenue and the second quarter grew 18, 3% from the same quarter last year to $113.2 million.
This includes connect software license revenue of approximately $8.3 million per the second quarter.
And as expected from $9.8 million and the year ago quarter.
Vas and license revenue.
Our alarm Dot Com segment grew 18% year over year and our other segment of grew 22% over the same period.
Our SaaS and license revenue visibility remains high with.
With a revenue renewal rate of 95% and the second quarter, which is above our historical range of 92% to 94%.
As we mentioned last quarter, we believe the slightly higher revenue renewal rate could be the result of fewer people moving homes at the start of the pandemic and we could see a return to the historic range and the next quarter or 2.
Hardware and other revenue and the second quarter was $75.7 million up 64, 7% over Q2.2020.
Strong hardware sales were driven by increased adoption of our video cameras and the residential segment and improvement and our North American commercial business with open eye and alarm dot com per business recovering to pre pandemic sales levels.
Cameras and video doorbell accounted for approximately 58% of hardware revenue and the quarter.
Sales of our thermostat increased significantly in the quarter up over 300% from the year ago quarter and represented about 6% of our hardware sales.
I do want to point out 1 thing related to our increased thermostat sales.
We believe the thermostats and enabled the consumer to reduce energy consumption.
And our Smartwater of valve plus meter enables the consumer to better monitor and reduce water usage and the solutions, therefore contribute positively to a more sustainable and less dilutive environment.
We are pleased our service providers are increasing deployment of our solutions to more homes and businesses and together. We believe we are making a positive contribution to improving the environment.
Let me get back to the numbers.
Total revenue of $188.9 million for the second quarter grew 33, 3% year over year.
SaaS and license gross margin for the second quarter was 84, 8% down approximately 160 basis points from Q2.2020 gross margin mainly due to higher revenue from our other segment, which has a slightly lower gross margin.
Hardware gross margin was 25% per the second quarter compared to 21, 6% for the same quarter last year, mainly due to product mix and somewhat due to increased supply chain costs.
The global supply chain continues to present challenges, which required us to expedite shipments and incur higher airfreight costs.
Total gross margin and the second quarter was 59% down from 65, 4% and the year ago quarter, mainly due to the higher hardware sales and to a lesser extent product mix.
Turning to operating expenses.
R&D expenses and the second quarter were $43.5 million compared to $36.6 million for the second quarter of 2020.
We ended the second quarter with 792 employees and R&D up from 721 employees and the same quarter last year.
Total head count increased to 14, 121 employees and the second quarter compared to 1300.17 employees a year ago.
Sales and marketing expenses and the second quarter were $20.5 million or 10, 9% of total revenue compared to $16.9 million or 11, 9% of revenue and the same quarter last year.
Our G&A expenses and the second quarter were $23.3 million up from $17.4 million and the same quarter last year.
G&A expense and the second quarter includes non ordinary course litigation expense of $3.7 million.
And <unk> to $1.6 million for Q2.2020.
Non ordinary course litigation expenses are part of our adjusted measures and are excluded from our measurement of our non-GAAP financial performance.
Non-GAAP adjusted EBITDA, and the second quarter increased 31% year over year to $38 million up from $29.2 million and the second quarter of 2020.
And the second quarter GAAP net income was $14.7 million compared to GAAP net income of $17 million for Q2.2020.
Non-GAAP adjusted net income increased to $27.7 million or <unk> 54 per diluted share in the second quarter compared to $20.6 million of <unk> 41 per share for the second quarter of 2020.
Turning to our balance sheet, we ended the second quarter with $662.7 million of cash and cash equivalents.
In the second quarter, we generated approximately $24.1 million and cash flow from operations compared to $35.1 million for the second quarter of 2020.
Our free cash flow for the second quarter was $20.8 million compared to $31.8 million for the same quarter last year.
Our operating cash flow and free cash flow are lower than Q2, 2020, mainly due to a proactive purchases and prepayments of hardware, we made and the second quarter to address the challenges within the supply chain on.
On a year to date basis through June 30 of 2021, our free cash flow is about $3 million left and the same period last year.
And the second quarter, our capital equipment purchases were about $3.3 million down slightly from $3.4 million and the second quarter of 2020.
Turning to our financial outlook.
For the third quarter of 2021, we expect SaaS and license revenue of $114.9 to $115.1 million for.
And for the full year of 2021, we expect SaaS and license revenue to be between 450 to 3 to $452.8 million up from our prior guidance of $445.5 million to $446 million.
We are now projecting total revenue for 2021 of 707, 3 the $717.8 million increase from our prior guidance of $685 million to $691 million, which includes estimated hardware and other revenue of 255 to 2.
$265 million.
We continue to monitor issues around the global chip shortage, which we were able to navigate in the first half of this year, but could impact our revenue and the second half depending on how the supply shortages workout.
As we look ahead to the second half of 2021, 1 area of focus is on our commercial markets, where we're seeing our pipeline build we have an opportunity to continue building durable long term SaaS models for commercial services.
As of commercial properties tend to have larger physical spaces that require a more devices to fully monitor the ratio of hardware the SaaS revenue will skew towards hardware.
We anticipate this will lead to growth and our SaaS revenue for our commercial business as a subscription volume build over time.
We also expect increased hardware costs and continued challenges with the global supply chain, which we have factored into our guidance based on the information we have available today.
We estimate the non-GAAP adjusted EBITDA for 2021 will be between 133 to $134.5 million up from our prior guidance of $124 million to $130 million.
We have factored and more travel and trade show expenses and the back half of 2021.
As we attended and exhibited at the annual ISC West Trade show and July and we expect to hold our annual partner summit in October.
Of which were canceled last year due to the pandemic.
We also expect that the bulk of our 2021 head count additions will be and in the third quarter of this year.
Non-GAAP net income for 2021 is projected to be 93 to $93.7 million per $1.77 to $1.79 per diluted share up from our prior guidance of 85, 6% to $90 million or $1.63 to $1.72 per diluted.
Sure.
We currently project, our non-GAAP tax rate for 2021 to remain at 21% under current tax rules.
EPS is based on an estimate of $52.4 million weighted average diluted shares outstanding.
We expect full year 2021 stock based compensation expense of $40 million to $43 million.
In summary, we are pleased how well our service providers and our alarm dot com teams continued to perform during these challenging times.
We are focused on executing on our business strategy and investing and our growth opportunities.
While continuing to deliver profitable growth and.
And with that operator, please open the call for Q&A.
As a reminder, task of question you will need to press star 1 on your telephone.
John on your question breath of the bounty please standby, while we compile the Q&A roster.
Our first question comes from the line of Sterling Auty from JP Morgan. Your line is now open.
Yeah. Thanks, Hi, guys. So curious your thoughts with the Delta <unk> and being all of the headlines here how.
Have you seen that already impacting your business, both in North America, and Europe, and how are you anticipating.
And any potential impacts here in the coming quarter.
Hey, Sterling.
Thus far knock on wood, we haven't seen any any impact on the service provider's ability to.
Sal and install systems. So it's probably pretty early at the moment, we of course feel some impact in terms of people's willingness to meet in person.
Come to the event.
On to the office of those types of things. So people are obviously taken a more cautious stance.
But its probably early but thus far we haven't.
And we haven't seen any impact.
I would anticipate depending on how this thing goes I don't think of any of us know exactly how delta 1 unfold, but.
If we went back to sort of a.
The state that we're in 2 or 3 quarters ago with the pandemic, then we would see businesses probably.
Begin to to shutter some of their operations and we may see some impact on the commercial side just at the point that.
And we're feeling like we've recovered on commercial but thus far we haven't we haven't seen anything to suggest that's going to occur.
Alright, Great and then how should we think about within the context of the guidance on SaaS subscription.
And what the momentum and the pipeline looks like on the residential side again, both North America, which has been strong in Europe that you've been anticipating that uptick towards pre pandemic levels.
Yes, Sterling, it's the Valensuela. So Europe continues to be impacted by Covid and its actually still quite a bit below the pre COVID-19 levels pre pandemic levels.
And when we guide we don't try to factory and the upside we've been seeing over the last year from Covid. So we've certainly seen good growth and residential we've seen good growth as we said on the call for a commercial actually coming back to pre pandemic levels, but we do need to be cautious with our guidance. So we can't.
That into our guidance and we also have to anticipate that there are things that can go wrong and so obviously in Q2 and the first half of the year, we've seen of very good performance overall and.
Things have gone extremely well.
Got it thank you.
Thanks.
Thank you. Our next question comes from the line of second Calia from Barclays. Your line is now open.
Okay, Great Hey, folks thanks for thanks for having me on the call here.
Second maybe hey, maybe first for you Steve Steve Trundle.
A lot of focus on on sort of the the the health and commercial can you. Just can you just remind us how much of the commercial market makes up of the total business roughly and maybe more higher level. What indicators do you look at the sort of gauge that pace of recovery.
Yeah.
The answer the first question commercial has been on a growing component of the base and is just under around 10% of the business at this moment.
I think if I were answering the same question a couple of years ago, it would've been 7% or 8%. So you can see residential continues to grow commercial's growing slightly faster and gradually becoming a more meaningful chunk of the base.
And we expect that will continue.
In terms of indicators.
The the indicators, we're looking at are really the.
The sales pipeline that we hear about from service providers.
The and we haven't sort of a bird's eye view on what's going on through the integrator channel with our open eye of business, which is very focused on commercial and enterprise video so.
And we can speak directly to our team there and find out what the inbound demand looks like how much activity are they seeing and.
Based on that.
And the second quarter, we felt like things were almost back to sort of pre pandemic levels. As we look forward and the next couple of quarters. So far so good and the last question was about potential Delta impact I don't think we have a crystal ball, where we can absolutely anticipate.
And what that may be but at the moment, we continue to see.
The checks that were making any way it looked like there they're still solid.
Got it got it and maybe for my follow up for you Steve Venezuela.
Great to hear of the building pipeline and commercial and also that the SaaS. The hardware ratio kind of early on I was wondering if you could just maybe as part of that just in broad brush kind of touch on how the <unk> per subscribers sort of differs between commercial versus residential and perhaps maybe talk about it from a gross margin perspective as well.
Is that part of the business growth.
Sure Yeah, absolutely so commercial actually has the higher ARPA growth.
So of armed our comfort business on average the <unk> and it is kind of vary all over is going to be about $10.
Per month versus on the residential side and again it varies quite a bit but the average I would say is in the upper $5 range $5 per month that we would charge and needs of the charges. We would charge the service provider and then of course of the service provider charges.
And increased the amount of course for the and subscriber typically for our commercial business theyre going to charge over $100 to the business and per residential it's going to be anywhere from 35 to maybe as much of $70 per month for the and subscriber but the.
The good news about commercial is that it is a business that is certainly.
Given that there is a higher non of our Peru. It is a little bit higher margin the.
The increased costs are not that significant there are some increased costs. So the margin of a little bit higher.
And the.
The good thing about both both sides of the businesses. The retention is very high the life of the customer is very high in terms of most of the residential and commercial.
Quite having manage the the supply chain activities and issues effectively the date.
It's not as if we don't have to at least anticipate we could have a surprise.
And on some components somewhere and the quarter. So we have to we have to allow for that possibility as well.
Great.
And then may be for Steve key if I could handle on off on the ambient insights.
How is this different and <unk> ADT is working on on.
And I think that yeah, obviously cutting down on false alarms is going to be key but is really key to a customer of making a decision at this point or is this just you looking ahead and and planning for those higher costs from police departments and this holidays.
Yeah, I think that.
And.
Yeah and in terms of of the first part of the question I'm not familiar with out of detailed level with with what anyone other than us is working on but for some time we've been.
Driving down the false dispatches of alarms and giving the user a lot more control of how things are.
Being handled.
During the alarm event.
The most recent and innovation really is geared around using the pattern of history on the property the.
We assure the consumer that the value of monitoring and is there and that the.
There are safeguards in place to reduce.
And also arms.
Alright, thank you.
Sure.
Thank you. Our next question comes from the line of Darrin of coffee from Roth Capital Partners. Your line is now open.
Hi, guys. Thanks for taking my question and congrats on the on a quarter.
Sure.
To your comment about enterprise. So it sounds like you tried to procure as much hardware as you can just given your your view and of the pipeline.
And a curious like what your comfort level is just kind of given the current state we're in and the demand youre seeing from the commercial side.
A couple of comfort level with with.
With meaning.
Do you feel like you have enough hardware and your service provider channel has enough hardware to install the kind of demand you see in the pipeline with the commercial side.
Yes, good question.
I would say at the moment.
Estimate, but if I were to put a number on it I would say, we're probably 90 I have we have out there right now of about $85, 90% of what we would like to have.
Floating around so are there shortages of some components, yes, there are shortages of some components of our they materially impacting the.
And the commercial service providers today no. The service provider can say, okay. I don't have this particular device at the moment, but I have a substitute device that is almost as good or almost as effective and the situation and I'm going to install of that 1.
So I wouldn't say that it's blue sky, but thus far we have been able to deploy capital and securing the supply chain and keep things.
Moving I think pretty effectively and we feel like that will likely be the case as we go into Q3 and Q4, but it's not perfect.
Okay.
Got it fair enough and I appreciate the answer and then second 1 I think of the last call you talked about attach rates of video installs around 70% of just curious what the metric was in the second quarter.
The attach rate for video and installs I think in the past we've talked about there's a couple of different metrics there that we watch a little bit.
1 of the attach rate of of.
Video as a solution to.
And intrusion system and the other is.
The and it may not be answering the question of the attach rate of video analytics on every video install so.
And the number you stated 70% resonates because that is the.
Percentage of customers, who buy a video camera.
And with 1 of our service plans and take video analytics, which is pretty important and that means they're getting great service and we're getting a bit higher.
On the <unk> and they are really leveraging all of the R&D investment, we've made and making the video experience pleasant and in terms of the attach rate, meaning what percentage of new customers are actually putting.
Video systems on their home or their business that right now is around 46%.
And.
And that's a healthy healthy improvement continues to grow.
Did I answer the cash.
Okay.
Thank you.
Thank you. Our next question comes from the line of Jack Vander Arent from Maxim Group. Your line is now open.
Okay.
Great.
Guys. Congrats on the solid results across the board.
And my actions.
Steve Trundle, Gist and nice to hear of commercial business momentum really picked up its keeping the bulk of pre COVID-19 levels of its great to hear and.
It sounds like residential and North America of at least has continued to climb as well. So that's good I'm just wondering if you could talk about maybe.
The split that that return of momentum.
Between just RPI increases because of these increasing video catches and <unk>.
The commercial and and.
The residential and then also just new installations and general is it kind of and even balance of what's driving both the strength and those 2 markets or is it is 1 time skewed more towards <unk> and increases or new property installations.
I would say the.
Roughly.
There so.
Roughly 25% of the.
Outperformance is driven by a wider assortment of products being install of especially more video so that translates and do some.
Some are true gain and <unk>.
Even some of our <unk> gain on the existing base of accounts quite of few of the cameras do go back to customers that have already been customers, who choose to upgrade their systems and roughly 75% of the momentum thus far.
Is driven by.
Higher than planned levels of installation.
That's been a little lumpy.
Steve Valensuela mentioned recovered we haven't seen.
We've made up for some weakness internationally with stronger performance domestically.
For a while we were making up of course, some weakness on the commercial side with stronger than expected residential results second quarter I think of it became more balanced and North America were both commercial and residential.
Form nicely and now we are.
Sort of anxiously awaiting to see more full recovery internationally.
Great. Thank you and then just.
Follow up to that and maybe maybe for Steve bounce whaler.
And just as it relates to commercial strength is rebounding and that's great to hear and then.
The subsidiary businesses and like with vacation rentals at the point Central and just all the all of the superior business in general.
1 can you just remind me what the the other.
Software and SaaS revenue was for the quarter and then I'll.
Also what are you seeing in terms of.
And points.
<unk> central and vacation rentals and some of the subsidiary business the strength, what's driving those the is it similar to commercial and those are returning to strength the 12.
Sure Jack Yes, the other segment and the quarter was $8.3 million of 22% year over year continues to perform well I will say, though that the the case for rental.
Yeah.
Got it really appreciate the color guys and again strong results that's it for me. Thanks.
Thank you.
Thank you and this concludes today's conference call. Thank you for participating you may now disconnect.
Uh huh.
Yeah.
And.
Okay.
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