Q4 2021 Alarm.com Holdings Inc Earnings Call
Good day, ladies and gentlemen, and thank you for standing by welcome to alarm Dot Coms fourth quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.
Speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press Star then one on your telephone keypad.
As a reminder, this conference call is being recorded if you require any further assistance. Please press Star then zero.
At this time I would like to turn the conference over to Mr. Matt Zartman, Sir you may begin.
Thank you good afternoon, everyone and welcome to alarm Dot Com fourth quarter and full year 2021 earnings conference call.
I want to remind you that this call is being recorded.
Joining us today from alarm Dot com are Steve Trundle, our president and CEO and Steve Valensuela our CFO .
Before we begin a quick reminder, to our listeners management's discussion during today's call will include forward looking statements, which include projected financial performance for the first quarter 2022, and full year 2022, the impact of emerging market dynamics and trends on 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 International strategy, and the global economy, and our ability to manage supply chain challenges, our business strategies, including our partnerships plans and objectives for <unk>.
Future operations and integration of recent acquisitions continued enhancements to our platform and offerings.
<unk> for growth in 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.
Statements containing words, such as anticipate began believe continue could estimate.
Specced 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 in the risk factors sections of our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November four 2021 and in subsequent reports.
That we file with the Securities and Exchange Commission from time to time, including our annual report on Form 10-K for the year ended December 31, 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 in understanding the company's performance and trends, but note that the presentation of non-GAAP financial information is not meant to be considered 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 in the financial statement tables of our earnings press release, which we have posted to our Investor relations website at investors Dot alarm dot com.
This conference call is being webcast and is also available on our Investor Relations website. The webcast of this call will be archived and a telephone replay will also be available on our website.
So with these formalities out of the way I'd like to turn the call over to Steve Trundle, you may begin.
Thank you, Matt good afternoon, and welcome to everyone.
We're pleased to report fourth quarter and full year results that exceeded our expectations our.
Our SaaS and license revenue for the year 2021 was $464 million up 17, 1% over the last year.
Our adjusted EBITDA for the full year was $142 $5 million.
Our results benefited from continued momentum in both the residential and commercial connected property markets in the U S and Canada.
We closed the year with more than 10900 service provider partners, who deliver our technology to more than $8 4 million subscribers in 58 countries around the globe.
I want to thank our service provider partners and our employees for their resilience and contribution to our 2021 performance.
As we get the new year underway I will use today's call to discuss our strategy and how we plan to continue to grow.
I will also highlight a few examples of the new capabilities that we introduced to our markets in 2021.
Our strategy is to be the defining security oriented Iot platform for four different property types resident.
Residential multifamily small business and commercial or institutional enterprises.
For each of these property types, we have a roadmap to deploy fully integrated best in class applications that span security and surveillance automation energy management water management and health.
The key areas that drove much of our growth in 2021 and that I expect to continue to drive growth in 2022 and beyond.
Our expansion into commercial markets, our video software initiatives are expanding international business.
And our energy management business.
I'll begin with our commercial opportunity.
As I reported to you during the year commercial market activity returns to pre pandemic levels in the second quarter.
Our strategy is to develop software based capabilities that will deliver unique value to commercial customers through the deep integration of security video access control and energy management solutions.
We initially built a solid toehold in the small business segment.
And have been growing upstream.
Last year, we released an innovative.
<unk> analytics service called business activity analytics, which we designed for mid tier commercial customers.
This segment consists of properties that require more elaborate video surveillance solution and then much higher number of cameras than a typical small business.
Business activity analytics provides occupancy tracking people counting monitoring and detection of crowd gathering.
It also includes a robust enterprise business intelligence reporting.
Subscribers can analyze activity trends and heat maps and monitor foot traffic and customer flows.
The initial uptake of this capability has been solid with nearly 17 100, new accounts per month activating business activity analytics as we exited 2021.
We have also been growing open eye.
Open eye isn't an alarm dot com business and a leading provider of video surveillance as a service for large scale enterprise commercial customers.
These enterprises have robust video surveillance requirements and include universities banks national retail chains schools and property management companies.
Since we acquired open in 2019, the team has developed new platform capabilities, including integrating our AI software and this has allowed them to expand their market opportunity and begin to shift their business model.
To one that also drives SaaS revenue.
Next I'll shift to the residential market.
We saw solid demand for smart home security in North America throughout 2021.
Consumers are investing in their homes and security remains the primary purchase driver of Smart home technology.
Our homebuilder program has been one of several bright spots in the residential market.
We launched the program in mid 2018, and our team has worked hard to engage potential partners and tailor our offerings for builders.
These investments put us in an advantaged position as demand for new housing accelerated.
Currently 18 of the top 20 builders now use alarm dot com.
Some of which have standardized on alarm dot com for all of their new home developments.
In the fourth quarter, we also launched the alarm dot com smart thermostat HD to round out our thermostat lineup with a premium offering.
It has a high resolution full color touchscreen display and our cloud based energy management software provides intelligent next level comfort and control.
An important element of our residential strategy is our initiative to apply our AI software to monitoring stations and alarm response to that.
Last year, we introduced a first to market capability called MBS insights for alarm response.
It evaluates alarm signals and then provides a real time determination to the monitoring station as to the likelihood that the property owner will cancel the alarm.
Operators can then more effectively prioritize multiple alarm events as.
As a result, they can dispatch emergency services faster to the highest priority alarms and can also help produce also alarm dispatches.
Coupled with our visual verification service monitoring stations can provide a broad range of critical information to public safety dispatchers and first responders.
Another tenet of our strategy is to deliver the most capable video monitoring offering and a broadly accessible price points.
Investments in our video platform has led to innovative new capabilities that drive growth for our service providers significantly increased customer engagement and improve installation efficiency and performance.
I'll give a few recent examples.
In 2021, we began broadly deploying video analytics capabilities designed to proactively deter braking and other security incidents.
The alarm Dot Com 770, <unk> video doorbell fully launched last year with a market leading video analytics package that can identify people and monitor them based on a range of customizable settings.
We also launched perimeter guard.
This video analytics capability identifies people anywhere around the perimeter of the property.
Coupled with our new 724 outdoor camera permanent guard can respond with both audible alerts and flashing lights. This increases the deterrence value of our systems by putting a potential intruder on notice that they are being actively watched.
Our international business is another area of growth and a key element of our strategy.
In 2021, we continued to expand our global presence and product offerings and grew our solid base of international service providers.
During the fourth quarter and despite a difficult international Covid environment SaaS.
SaaS revenue from our international business increased by over 25% from a year ago.
We believe that we are in a good position to continue to meaningfully grow our international business in 2022.
The final key element of our strategy is the expansion of our addressable market through our segment businesses.
These include quite central energy hub and building 36.
Each business is focused on an attractive market opportunity and are in different stages of development.
As reported in our other segment SaaS revenue for these businesses grew 26, 9% in 2021.
<unk> central supports vacation rental property management companies and apartment properties. It solution fully integrates devices sensors and systems to give property managers and enterprise service for access control energy management and property security.
Building 36 partners with HVAC servicing companies provide energy water and air quality solutions.
The building 36 team also leads our product development efforts in these domains, including the development of our new Smart thermostat HD.
In 2021, they made solid progress expanding their product and partner base.
Energy hub provides enterprise software services that enable energy utilities to flexibly manage demand on the electricity grid through customer owned and enrolled distributed energy resources.
These resources include smart thermostats batteries, commercial and industrial resources solar and burgers and electric vehicle Chargers.
Energy hub has expanded its customer base and now works with 60 of North America's leading energy utilities.
Platform manages over 700000 grid edge devices the.
The largest fleet of any distributed energy resource management solution provider in North America.
To conclude.
Our key growth initiatives are delivering an increasingly meaningful contributions to our business.
Going forward, our focus is on blocking and tackling as we continue to execute the strategy. We have laid in place. So that we can further grow these areas in 2022 and beyond.
And with that let me turn things over to Steve Valensuela.
Steve.
Thanks, Steve ill begin with a review of our fourth quarter and full year 2021 financial results and then provide guidance for 2022 before opening the call for questions.
SaaS and license revenue in the fourth quarter grew 15, 4% from the same quarter last year to $121 7 million.
This includes connect software license revenue of approximately $7 4 million for the fourth quarter.
As expected from $9 million in the year ago quarter.
SaaS and license revenue for our alarm Dot Com segment grew 14, 2% in the fourth quarter.
In our other segment grew 39% year over year.
For the full year of 2021, SaaS and license revenue of $464 million grew 17, 1% over 2020.
Our alarm Dot Com segment grew SaaS revenue by 16, 4% year over year and our other segment grew 26, 9% in 2021.
Our SaaS and license revenue visibility remains high.
Our revenue renewal rate of 94% in the fourth quarter is that the high end of our historical range of 92% to 94%.
Hardware and other revenue in the fourth quarter was $73 5 million up 22, 4% over Q4 2020.
The increase in hardware revenue was primarily due to an increase in sales of our video cameras.
Total revenue of $195 3 million for the fourth quarter grew 17, 9% from Q4 2020.
For the full year of 2021.
Total revenue grew 21, 2% to $749 million.
SaaS and license gross margin for the fourth quarter was 86, 1% an increase of approximately 80 basis points quarter over quarter, mainly due to mix.
Hardware gross margin was 11, 1% for the fourth quarter compared to 15, 2% for Q3 2021.
Lower hardware margin is mainly due to increased shipping costs and supplier price increases.
We are increasingly having to address global supply chain challenges.
Tactically using airfreight transportation for certain products.
Because our costs are significantly higher we have also announced price increases on some of our products.
Which will be phased in starting this quarter.
We anticipate gross margins gradually improving from Q4 levels. This year barring additional supplier price increases or the need to airfreight products beyond our current plans.
Total gross margin was 57, 8% for the fourth quarter compared to 58, 2% for Q3 2021.
Mainly due to the lower hardware margins and a higher mix of hardware revenue.
Turning to operating expenses R&D expenses in the fourth quarter were $47 6 million compared to $38 9 million in the fourth quarter of 2020.
We ended 2021 with 837 employees in R&D up from 780 employees at the end of 2020.
Total head count increased to 500 employees compared to 1400 four employees the prior year.
Sales and marketing expenses in the fourth quarter were $24 6 million or 12, 6% of total revenue compared to $23 6 million or 14, 2% of revenue in the same quarter last year.
Our G&A expenses in the fourth quarter were $22 6 million compared to $23 million in the year ago quarter, mainly due to lower legal and acquisition related expenses.
G&A expense in the fourth quarter includes non ordinary course litigation expense of $1 8 million compared to $2 5 million for Q4 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 in the fourth quarter was $31 3 million compared to $32 4 million in Q4 2020.
For all of 2021, adjusted EBITDA was $142 5 million up 13, 7% from.
From adjusted EBITDA of $125 3 million for 2020.
Sure.
In the fourth quarter GAAP net income was $9 1 million compared to GAAP net income of $16 million for Q4 2020.
non-GAAP adjusted net income was $22 6 million or <unk> 43 per diluted share in the fourth quarter compared to $23 1 million or <unk> 45 per share for the fourth quarter of 2020.
non-GAAP adjusted net income for 2021, with $103 5 million or $1 99 per diluted share a 15, 8% from non-GAAP net income of $89 4 million or $1 75 per share for 2020.
Turning to our balance sheet, we ended the fourth quarter with $710 $6 million of cash and cash equivalents up from $253 5 million on December 31 2020 the.
The increase in cash was mainly due to the net proceeds of $484 3 million from our convertible bond offering in January 2021, and our positive free cash flow for 2021.
Partially offset by the payoff of our senior revolving debt facility of $110 million.
In the fourth quarter, we generated approximately $20 million in cash flow from operations compared to $35 4 million for the fourth quarter of 2020.
Our free cash flow for the fourth quarter was $17 8 million compared to $29 9 million for the same quarter last year.
In the fourth quarter, our capital equipment purchases were about $2 1 million compared to $5 5 million in the fourth quarter of 2020, mainly due to less facility build out costs.
Through the 12 months ended December 31, 2021, we generated $103 2 million of cash flow from operations compared to $102 1 million for 2020.
Our free cash flow for 2021 was $92 1 million compared to $85 9 million for 2020.
Turning to our financial outlook.
For the first quarter of 2022, we expect SaaS and license revenue of 121 to $121 2 million.
For the full year of 2022, we expect SaaS and license revenue to be between $508 million to $509 million.
We are projecting total revenue for 2022 of $808 million to $819 million, which includes estimated hardware and other revenue of $300 million to $310 million.
I want to note that the global supply chain continues to be very challenging.
While we have factored in some additional airfreight.
We have anticipated some improvement in 2022.
We have decent visibility through the first couple of quarters of the year.
The supply chain becomes more constrained and we are not able to get access to key components or need to continue to ship products via airfreight further into the year than anticipated and this will impact our results and our guidance.
We estimate that adjusted EBITDA for 2022 will be between $149 million to $150 million.
We expect adjusted EBITDA in the first quarter to represent approximately 17% to 18% of our annual guide with the remaining EBITDA spread about evenly over the following three quarters of 2022.
We have factored in more travel and trade show expenses and our plans for 2022 as we are seeing a return to in person activities and events such as the ISC West trade show, which is scheduled to be held in Las Vegas on March 22 2005.
non-GAAP net income for 2022 is projected to be 104 $3 million to $105 million or $1 86 to $1 88 per diluted share.
EPS is based on an estimate of 56 million weighted average diluted shares outstanding.
Which now includes approximately $3 4 million shares on an if converted basis.
We are required to include these shares in our outstanding share count.
Related to our convertible bonds with our adoption of ASU 2020, Dash <unk> accounting for that with conversion and other options.
This noncash impact reduces our non-GAAP EPS by approximately 12 to 13 for 2022.
Which is reflected in our guidance.
We currently project, our non-GAAP tax rate for 2022 to remain at 21% under current tax rules.
We expect full year 2022 stock based compensation expense of $50 to $52 million.
In summary, we are pleased how well our service providers and internal teams have navigated this challenging time.
We are focused on executing on our business and investing in our long term strategy, while continuing to deliver profitable growth.
And with that operator, please open the call for Q&A.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
If your question has been answered or you wish to remove yourself from the queue simply press the pound key.
Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
Our first question or comment comes from the line of Adam Tindle from Raymond James Your line is open.
Okay. Thanks, good afternoon, and congrats on a strong finish obviously the very strong hardware growth is continuing and I would imagine that creates an opportunity to up sell services over time as you see the market with many units. So maybe a two parter one for Steve <unk>.
You talked about an up sell engine a couple of quarters ago, maybe you could talk about the progress and what you are experiencing there and then Steve the from a financial standpoint, I'm noticing that the net dollar retention metrics are very healthy and up again and I would imagine that this maybe ties into this theme where do you think that that metric could go over.
Todd.
Hey, Adam.
Yes, upsell continues to be.
A driver of some of the hardware growth.
<unk>.
Primarily centered on video, which is great because that also allows us to.
Pushed some SaaS growth from the existing base as well and we think that.
We will probably continue I believe that we saw growth in sales of video cameras last year to existing customers of around 36%.
So pretty happy with that number and I wouldn't say, we're doing everything.
Possible to.
Do all that we can do there because we also had a pretty meaningful focus on the <unk> upgrades.
Which is even a lot of the cycles that are.
That our service providers have in terms of going back to the existing customers, but I think that.
But that will continue to be something that we can push in.
Hopefully, even expand beyond video and get into the thermostat.
Water valve the flex since you're in some of the other devices, but it is increasingly a meaningful chunk of our business.
For your second part, it's Steve Valenzuela, the 94% dollar retention rates certainly has been very strong I would say in the short term in the near term with the <unk> upgrades, we might see a slight decline there, but we think longer term and hard to define longer term given all of the upgrades and the video and video analytics in our <unk>.
Telling the solution is with those features we think over the long term, we should see that retention rate.
Over over the next couple of years, it would be nice to see over 100%.
Saying that we would hit that point, but.
I think once you get a system like this with video and video analytics, it's very hard to go without it. So it's a very compelling solution.
Understood and maybe just as a quick follow up I mean balance.
Balance sheet remains very healthy.
In light of secure Thompson Stanley combination recently here I thought I might ask you about M&A priorities again.
Given some of those things that are going on and maybe you could double click on that deal specifically if that has implications for you, but would you consider something of that size and maybe just kind of revisit your priorities for M&A given balance sheet. Thank you.
Sure.
So on that deal specifically I mean, we are we have a good partnership with superior ties.
And.
That yes, there is not a lot of commenting on that deal because it's still subject to some regulatory review and I believe that it closes a little bit later this year. So we're not probably able to comment too much on whats going on there.
With regard to.
Our own view, yes, we're sitting on.
A pretty active corporate development pipeline of opportunities. We're looking at we don't really.
We're looking for the right opportunities as opposed to the right size. So its something were sizable but really represented the right opportunity for the company. Then that's something we would consider doing I don't think that will be.
Actively buying service providers, because we our customers are service providers and we like it that way. So I think we're looking more on the.
Looking at opportunities that further our technology stack or further the addressable market that we are able to.
Tax too.
Some of them will be smaller opportunities, some large, but but but.
Certainly an area of focus for us and I would say, probably it's getting better.
Now than it was last year slowly, but surely we are seeing some.
More reasonable discussions of <unk>.
<unk> and probably.
A higher likelihood that a strategic.
Can be effective in the current market than maybe what we saw six months ago.
When things were essentially were a bit more frothy.
Very helpful. Thanks, and congrats again.
Thanks, Ed.
Thank you. Our next question or comment comes from the line of Sterling Auty from Jpmorgan. Your line is open.
Hi, guys. This is <unk> on for Sterling.
Can you give color on the demand environment around Tomas.
And how should we think about the revenue contribution from the.
Solution.
Sure. So thermostat HD is a new new product.
It rounds out our lineup of <unk> the <unk>.
Weakness in our lineup historically has been.
We've had a great first at good value proposition there at a great price point has been very useful in our service provider channels.
If youre doing a new home build often times you want to really.
We haven't had a thermostat that had a <unk>.
Super elegant touch screen on it very vibrant display that sort of thing our strategy has been to sort of blend into the wall and then do all of the thinking.
In the cloud and on the App itself and let the user drive everything from that location.
Especially in our builder market there is demand for a higher end thermostat.
And Thats, what thermostat HD is servicing also in the HVAC trade there is demand for our higher end thermostats. So.
Incremental contribution I don't think its going to be a a dial mover in terms of incremental contribution of hardware revenue I think it's just an incremental improvement.
And the range of offering we bring to the market and then.
Service, that's important to us because it allows us to.
Better serve our customers in the multifamily space and in the builder space and in the HVAC trade.
And then has some downstream value to our energy hub business as well. So it's an important product, but I wouldn't say, it's going to drive a massive incremental hardware.
Hardware contribution I could be surprised but it will drive incremental improvement.
Thank you. Our next question or comment comes from the line of Brian Ruttenberg from Imperial Capital. Your line is open.
Yes, thank you very much great quarter and year cut.
A couple questions on gross profit first of all.
I think that you came in around 12% gross profit on the hardware.
It's down by about half year over year in <unk>.
Sequentially been going down I guess im stating the obvious here are we at a bottom here.
Yes.
We look for anything worse than that it looks like.
We hit a bottom here or at least it slowed can you talk about.
What kind of surprises would we have I guess.
Are they getting any worse on the hardware side.
Yes. Good question, Brian Youre correct margins on hardware has slid we haven't we.
We haven't I'll, just be clear and so we havent worried about at a time, meaning our business as a SaaS business and our primary goal has been to get the service providers the product they need to.
To get the installations done and ideally at a good value. So that we don't create too much acquisition cost for them. When they are attempting to create new subscribers. So that's always our primary goal and then.
To run a sustainable business you need to drive some margin on the hardware.
I think that.
I think Steve commented that we.
We did.
Finally go ahead and put through a <unk>.
This increase in the first quarter.
That will gradually lift margins.
So are we absolutely at the bottom.
I think we're probably at the bottom at the moment unless we were to make a strategic decision in some way shape or form about just the overall hardware margin profile, but in terms of running the business. The way we've traditionally run at I think we're probably at the bottom.
That said.
The supply chain is it's still a fairly volatile place.
Things change week to week. So we will continue to emphasize getting our service providers the product they need and if something comes up that we need to.
Worked through even at the expense of hardware margins will do it but if I were to guess I would say, we're probably at about the bottom right now.
Great and just as a follow up on that.
You mentioned a price increase can you.
<unk> I'm sure there's multiple products and it gives us an average on how much you increase prices and has already gone through that the system was there any pushback and then the last part of that very long question was.
How long before we get back to the <unk> on the hardware is that two years out three years out.
Yes.
First part of the question.
On average as you noted it vary dramatically by by SKU, but on average probably eight or 9%.
It was the effective price increase in.
That is mostly through the system at this point.
Did we get.
When people call us up and thank exploration.
No.
Are they in and understanding kind of mode at the moment I would say they are because most of our peers and competitors in the industry pushed through multiple price increases last year.
Our focus has been sort of to provide.
Best value, we can and where possible to be the last to increase prices. So I think most of our service providers were conditioned to expect something.
Now they are working through the process of increasing the prices that they take to the market as part of this inflationary cycle.
So we felt like we handled it well it's pretty much done at this point.
Will we get back to 20% hardware margins.
B a function primarily.
Of mix there are some places where our real focus on the hardware is enabling fast.
If we see.
Situation, where lower hardware margin can be a driver of <unk>.
Much higher service revenue, then that will be our approach and thats. The approach in some parts of the market today, I would say, particularly on the residential side and other places.
<unk> contribution from our hardware is not quite as high so when we look at the commercial side.
On a dollar for dollar basis.
It's more typical that to run some higher margin on the commercial side.
For every $1000 of hardware sold youre not generating quite as.
SaaS as you do on the residential side, even though youre getting higher ARPA per site. So.
There, we will see higher margins and I would say that will gradually pull the overall blended up.
Some through time, as well and Thats, probably about where I'd leave it do I know that we're going to get to 20% I don't want it is still our preferred practice there is a level where just to cover your cost capital allocation cost inventory management that sort of thing if youre running much below that then.
You really have to have a good reason for it.
Thank you.
Thank you our next question or comment comes from the line of Darrin.
<unk> from Roth Capital Your line is open.
Hey, Thanks for taking my questions Dillon on for Darren.
First of all on.
Could you talk about.
Some of the masked man made shopping across the country, if you've seen any pickup there.
Alright.
Activity in the commercial channel.
Coming down a little bit how that pipeline might look now versus three months ago.
Yes, I'm not sure it's been coupled to.
It's dropping.
We saw recovery in the commercial channels.
Start to happen in the third quarter of last year last year, if I remember correctly, that's when we started to see the pipelines.
Fill back up we saw.
Yeah.
Yeah.
Ladies and gentlemen, please standby.
Okay.
Ladies and gentlemen, please standby deadline disconnected, we're waiting for them to call back.
Hi.
We're back we had a long journey.
We're back.
I think the last question that I answered. This is Steve Trundle speaking was regarding the commercial pipeline. The summary on that was simply that.
The pipeline began to strengthen in the third quarter of last year.
Whether it's going to continue that as a result of mask mandates being dropped I don't know, but I believe that as small businesses or more.
Or more robust with more customers out in about that we would continue to see that.
That part of the business be strong and I indicated that on that.
Open eyes indication, which is very focused on enterprise.
Enterprise level sales.
Grew their business, 51% last year. So that was that's a summary of the last question I had before we realize the line had.
Rob and I will take any other questions we have.
Okay.
Dylan do you have any other questions. I think you were the last person to ask the question.
Yes, I have one more if you can hear me.
Sure.
Yes, So I think you mentioned about.
25% International growth.
Care to call out any countries that youre seeing.
Some over indexing.
Yes.
Yes, we can call out the one that has.
Pleasantly surprised me has been Argentina.
Principally because of a very strong service provider in that market has been doing well I'd say Latam in general has been stronger over the last year.
International as a whole I am happy with 25% because it is a tough.
Covid environment last year.
For our international service providers.
I think on several calls we talked about the international market being tougher than the <unk>.
North American market as a result of Covid, even with that our international teams still grew that business.
25% clip and I think we are.
Really kind of anxious as we move into this year to get very very focused there.
Sure.
Hopefully see more growth coming out of out of Europe , and southeast Asia as well.
Great. Thank you.
Thanks.
Thank you. Our next question or comment comes from the line of Jack Vander Ark from Maxim Group. Your line is open.
Great Nice quarter guys. Thanks for taking my questions. Thanks, Steve Steve Trundle.
I think you said in your prepared remarks, I mean, you laid out your 2022 kind of key growth focus areas and then I think I heard an update total subscriber count was that $8 4 million.
That's correct $88 4 million subscribers, yes, Sir.
Got you Okay cool.
Great growth in the subscriber count just maybe for some context, Steve <unk> I'm sure you can help too.
Whenever you're able to provide I know you don't explicitly do this normally but.
Just to get context, a rough breakout of maybe residential versus commercial versus <unk>.
International residential within that subscriber group.
Sure I can give you just some ballpark numbers.
Steve Trundle speaking so international we're right up against about half a million subscribers now so very happy with how the team has built that business getting to the point that yes.
They are real numbers, there and if we can begin to grow that business.
The current level of scale.
That'd be great.
Commercial.
Same type of range I am going to say 400 to 500000 total subscribers with maybe closer to 400 right now.
Adding around 25000 sites per quarter.
On commercial subscription so pretty happy with.
With that as well still have a lot of time to explore there but.
And then the rest I would say you break those two categories you breakout commercial breakout international another is a little bit of overlap between international and commercial some of our international customers are commercial but you break those out and then everything left is going to be primarily.
Residential either single family home or multifamily or vacation.
Great that's really helpful color.
Then just maybe over the next couple.
Maybe this year, maybe the next year or two or three years out.
It's great to see the international subscriber count is that kind of $5 million, but where do you how do you see that.
Trending now is there a way to quantify it in any way maybe like when do you expect to hit a $1 million.
Or more.
As soon as possible.
I would say.
Yes.
That'll be a big help but.
The.
International is growing at the moment and probably will continue to grow faster than the company's overall growth rate.
And believe that we will continue to be the case, if we look forward.
Some period of time, our belief has always been that our our rest of world market would be.
About the same in terms of size and contribution as the domestic.
And we include Canada, our friends in Canada in the domestic market. So.
So that's what we're shooting for right now I'll give you a timeline, where we get to a million I don't have that info.
Im not sure, but I would just say that we.
Our goal is certainly for international to be.
Of the same size as our North American business.
Okay, Great I appreciate the color that's it for me thanks.
Yes.
Okay.
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