Q3 2023 Alarm.com Holdings Inc Earnings Call

November 9, 2023

Yeah.

Good day, and thank you for standby smokers the alarm Dot Com Q3, 2023 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

A question during this session we need to press star one on your telephone.

Here, an automated message passing your interest rate to withdraw your question. Please press star. One again. Please be advised today's conference is being recorded I would now like to turn the conference over to your speaker today.

Vice President of Investor Relations. Please go ahead.

Thanks, Kevin Good afternoon, everyone and welcome to alarm Dot Coms third quarter 2023 earnings Conference call. Please note that this call is being recorded joining us today from alarm Dot com are Steve Trundle, our CEO, Dan <unk>, our president of our platforms business and Steve Valensuela, our CFO 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. We refer you to the risk factor.

As 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 Dot Com assumes no obligation to update forward looking statements or information.

Which speaks as of their respective dates. 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.

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

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 eight 9% over the same period last year.

Our adjusted EBITDA in the third quarter was $41 4 million.

To thank our service provider partners and the alarm Dot com team for their continued strong performance during.

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 in the <unk>.

Following fiscal year.

I'm going to keep my comments brief today, but provide some context to the 2024 numbers.

Developers whaler will outline.

I'm also excited to welcome Dan Kirshner, 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 at what we see in the year ahead.

Overall, I am pleased with our growth in SaaS revenue this year and our opportunity to maintain that momentum through next year.

In 2023, we successfully accomplish some belt tightening in the business and have been able to produce the same adjusted EBITDA on a real dollar basis as in 2022.

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 continued to build strong businesses and commercial intrusion and access residential and commercial video and energy management.

We 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 a toehold positions and 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.

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.

In summary, I am 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.

And with that let me turn things over to Dan <unk> to provide an update on our video business Dan.

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 sales and marketing for our largest market North America.

We drive profitable revenue growth across global markets through new product releases that expand our market opportunity increase <unk> and build on our service provider partners strong competitive position.

While the team is focused on a range of technology domains I use today's call to update you on several new enhancements to our user experience in video platform.

Updates to our user experience have been motivated by the fact that the typical connected property solution on the alarm dot 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.

During the quarter, we launched an enhanced version of our mobile App modernized navigation provides <unk> access to highest features design also integrates a curated graphical activity feed that incorporates video clips directly into a comprehensive timeline of activity at the property.

We also developed an enhanced interactive scrubbing interface for a continuous video recording solutions. This is a crossover feature that both increases visibility for residential customers and fits the commercial market to.

The use cases for commercial subscribers include quickly checking to see which employees opened or closed a store on time are tracking unexpected entries or exits to an office.

Enhancements and new capabilities designed into the mobile App, we're informed by extensive subscriber usage data in a single months earlier. This year nearly 100 million live video streams were initiated in our app and over $50 million swipes between video needs. This.

This data supports the new user experience design, which expands touch points for video content within the App experience.

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.

The new 749 video camera includes a four megapixel sensor wide area lighting responsive multi color led lights, and sirens and two way voice, which allows the central station operator to make down through the camera to an outdoor location. It also operates our enhanced video analytics software called Premier Guard, which seamlessly connects to our loan.

In response software to 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.

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 are 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 alerted to.

Subscribers about package deliveries over 700000 times to.

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.

That I will turn things over to Steve Valenzuela to review our financial results Steve.

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.

Third quarter, SaaS and license revenue of $145 million grew eight 9% from the same quarter last year.

Excluding debit license revenue third quarter 2023, non-GAAP adjusted SaaS and license revenue grew 13, 9% year over year on a comparable basis.

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.

Hardware another revenue in the third quarter was $76 8 million down seven 5% from Q3 2022 as the year ago quarter benefited from heavy LTE cellular module sales in advance of the <unk> 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 two 6% year over year.

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 64% in the year ago quarter, mainly due to the improvement in hardware margins.

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 an increase in headcount and related compensation expenses.

We ended the third quarter with 1100 16 employees in R&D up from 981 employees in Q3 2022.

Total head count increased to 19 286 employees for the third quarter, which includes employees from companies we acquired during 2023.

Compared to 699 employees in the year ago quarter.

Sales and marketing expenses in the third quarter were $23 9 million or 10, 8% of total revenue.

Third to $23 1 million or 10, 7% of revenue in the same quarter last year, mainly due to increased head count.

Our G&A expenses in the third quarter with $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.

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 <unk> 56 per diluted share in the third quarter compared to $30 1 million or 55 per share for the third quarter of 2022.

Turning to our balance sheet. We ended the third quarter was $680 million of cash and cash equivalents up $57 8 million from our cash balance at December 31, 2020 to.

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.

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.

During the quarter, we used $6 2 million to repurchase 105285 shares of our common stock at an average price of $58 20.

Turning to our financial outlook.

For the fourth quarter of 2023, we expect SaaS and license revenue of 146 to $146 2 million.

For the full year of 2023, we are raising our expectations for SaaS and license revenue to $566 nine to $567 1 million up from our prior guidance of 560 to three to $562 7 million.

We have projected total revenue for 2023 of 878 nine to $881 1 million compared to our prior guidance of $872 three to $887 7 million, which includes estimated hardware and other revenue of 312 to 340 million.

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 to $94 2 million or $1 69 to one.

<unk> 73 per diluted share.

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.

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.

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.

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 and with that operator. Please open the call for Q&A.

Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered you can lose yourself from the queue. Please press star one again, we will pause for a moment, while we compile our Q&A roster.

Our first question comes from Adam Tindle with Raymond James Your line is open.

Okay. Thank you I'm just trying to do the the SaaS math here on that guidance here Stephen.

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 roadmap here. It looks like if I did the math correctly youre 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% comparisons so not much <unk>.

<unk> 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 and in particular, what the ADT assumption is in there.

Hey, 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.

So that's right.

What we are using the same I think data points that others have on ADT, where public communication has been that theyre going to initiate some activity by the end of this year with the transition 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 rolled through.

Rolled through the early part of next year.

And then Adam you are right its 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 beaten raise in there as a kid challenging macro economic environment out there I mean, we've done quite well, but if you look at last year. The initial look.

We initially guided to.

To about six 3% growth and we're coming in at about eight.

Eight 6% growth for the year, So we always have.

Some room that we allow ourselves there to be able to do have been raised during the year.

Great.

That's clear and it looks like a healthy initial look I guess.

A question on the quarter, you had alluded to the hardware piece and I know the store.

<unk> is more about the SaaS line here <unk> dot 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.

Look at the Q4 guidance it looks like it might be flat to slightly up sequentially.

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 it looks like maybe some temporary items in Q3 and a healthy healthy our Q4 outlook wondering if you could unpack the drivers in the hardware piece and assumptions. Thanks.

Yes.

So.

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 stop that were seeing orders.

Kind of go away, we're just seeing the cycles.

Longer than we expected so.

And 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 are seeing.

A couple of things going on fewer first many many fewer.

LTE modules being sold because the upgrade cycle from <unk> to LTE is mostly over at this point. So that's kind of been drying up 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 we are.

You are having fewer moves on the residential side.

So you are not doing as many new installations necessarily.

But youre also having less churn on the residential side, where.

We expect probably revenue retention will trend up a little bit so thats, but you see slightly less hardware.

Yes.

That side as well.

Got it thank you.

One moment for our next question.

Yes.

Our next question comes from Tucker Kelly with Barclays. Your line is open.

Okay, Great Hey, guys. Thanks for taking my questions here.

Steve Trundle, maybe maybe for you can.

Can you 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 its changed much.

And just one quarter, but curious if you could just expand on kind of what youre seeing in a couple of those biggest growth businesses.

Yes first your recollection.

Correct.

I think what we communicated last quarter was 30% of the.

Yes.

30%.

<unk>.

Those businesses represented around 30% of the SaaS and we're growing at around 25%. So that's continued.

The the drivers there are really.

Energy hub being one where we did recently put out a press release about this past year being.

Really sort of a record setting year for us with the number of events called in a number of I think it was over 1800 events, we've called year to date meeting demand response events on behalf of utilities.

And.

Moved around quite a few gigawatt hours of power.

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.

And then the teams focused right now on expanding into the broader.

Resource space to include Evs.

In particular, so there are a lot of work going on there and we see that as sort of another growth vector in that business.

The other couple of places or 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.

Lastly, 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 has sort of moved from.

The basic interactive security offering to a full offering that includes video and elements of our automation solution.

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 open our video segment 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.

Sure.

SaaS growth rates were the same and we expect that.

Continue to give us some tailwind next year.

Got it got it maybe for my follow up for you Steve Valenzuela.

So very helpful 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.

Yes, it's a good point.

We have factored in some legal costs, it's important to point out though that.

A good portion of the legal spend for the some of the.

The major programs are now adjusted out to get to a certain stage.

We factored that out that into our adjusted EBITDA Guide.

Got it very helpful. Thanks, guys alright. Thank you. Thank you.

Our next question.

Yes.

Our next question comes from Darren <unk> with Roth Your line is open.

Hey, guys. Thanks for taking my questions.

The questions and 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 it 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.

Hearing that correctly.

Yes.

That's there and that's what I was attempting to communicate so.

And again this wasn't a major pullback, but it was just enough that it was sort of noticeable.

And we just from what we can tell really beginning sort of mid August we started seeing some.

Slower.

Delayed purchasing cycles were orders that were sort of in process might normally close in.

Three or four weeks seem to drag on drag out of the quarter.

Yes.

So that's sort of what I think we saw in the second half.

<unk> is just some tapering of intensity.

On the <unk> at the enterprise level, primarily meaning larger customers.

Large facilities large big box retailers.

Quick serve restaurants and places like that that would 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.

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, what we saw.

Just a little bit of.

The slowdown in the third quarter in that space.

That's helpful. Thank you and then maybe one for Steve Venezuela. Your free cash number is exceptionally strong I'm just curious with the collections.

DSO 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 guidance.

Yes, Q3, certainly wasn't extraordinary cash flow quarter everything came together, we can expect that on an ongoing basis Q4 typically would be.

Weaker cash flow quarter.

Seasonality in that as well so Q3, we had very favorable dsos.

Had inventory coming 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 congress doesn't change that rule and so.

Yes, Q3 is certainly an extraordinary quarter for cash flow, but generally if you look at the year to date cash flow of around $90 million generally on a normal basis year to date.

For the year cash flow, usually is around $90 million to $100 million.

Q3, everything came together and generate that amount of cash flow.

Got it thank you.

Thank you.

Number four our next question.

Yes.

Our next question comes from Matt <unk> with Bank of America. Your line is open.

Alright awesome, Thanks, Yes, I'm on for Mike Funk Gray.

Great to see the strong EBITDA performance I am curious if you could provide us an update with whether or not the <unk>.

Impact to revenue EBITDA and I guess, the legal expenses has tracked with the initial guidance provided I guess it was about a year ago I'm, 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 thank you sure.

Hey, Matt, Yes, the EBITDA outperformance comes from.

A little bit stronger business, and we expect at the beginning of the year.

I'd say success in executing on some belt tightening initiatives.

And driving more profitability in the business, but we also did get some benefit I think at the beginning of you kind of referenced about a year ago in that.

Private matter.

Came up initially we didn't really know I think I, probably said I don't know exactly.

How broad or how intense or legal burpee, but I've got a budget for it at a reasonable reasonably.

A reasonably aggressive level. So we did budget for it we haven't we haven't burned at quite the level I think I telegraphed.

Ballparkish $16 million.

That at that time for this year and we haven't burned at quite that level, but we've learned a healthy amount and it's still an ongoing client matter in the years. The year is not done, but I would say, it's been a little less intense than what I anticipated.

Super helpful. Thank you.

Okay, just one moment for our next question.

Yeah.

Okay.

Our next question comes from Matthew Pfau with William Blair. Your line is open.

Hey, great. Thanks, So just one more clarification on the legal expenses there was a decent sequential uptick what drove that in the quarter.

There is a lot of legal activity going on as you can see youll 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.

It's very difficult to predict 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.

Okay got it and then as we think about the.

Hardware guidance for <unk> 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.

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.

Cameras doorbell et cetera.

Being sold as they execute their transition so it does have an impact on the hardware line.

Okay, great. Thank you.

Ladies and gentlemen, this does conclude the Q&A portion of today's conference and also includes the conference itself.

You may now disconnect and have a wonderful day.

Thank you. Thank you.

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[music] Good day, and thank you for standby and welcome to the alarm Dot Com Q3, 2023 earnings conference call. At this time all participants are in a listen only mode. After the speech.

This presentation, there will be a question and answer session to ask a question during the session need to press star one on your telephone you will then hear an automated message advising your hands right.

Your question. Please press Star one again, please be advised today's conference is being recorded I would now like to hand, the conference over your speaker today, Matt serving Vice President of Investor Relations. Please go ahead.

Thanks, Kevin and good afternoon, everyone and welcome to alarm Dot Com third quarter 2023 earnings Conference call. Please note that this call is being recorded joining us today from alarm Dot com are Steve Trundle, our CEO, Dan <unk>, our president of our platforms business and Steve Valensuela, our CFO 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. We refer you to the risk factors disk.

<unk> and 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.

Call is subject to these risk factors and we encourage you to review them alarm Dot Com assumes no obligation to update forward looking statements or information, which speaks as of their respective dates.

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, I will now turn the call over to Steve Trundle steep.

I want to thank our service provider partners and the alarm dot com team for their continued strong performance.

During the quarter, we meaningfully outperformed our SaaS target, despite some softness and difficult to predict hardware revenue.

Diversity of our business is worth highlighting as our growth initiatives continued 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.

Following fiscal year.

I'm going to keep my comments brief today, but provide some context to the 2024 numbers, let's develop whaler wildlife.

I'm also excited to welcome Ben Kirshner, 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 at what we see in the year ahead.

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 accomplish some belt tightening in the business and have been able to produce the same adjusted EBITDA on a real dollar basis as into 2022.

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 continued to build strong businesses and commercial intrusion and access residential and commercial video and energy management.

We build 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 a toehold positions and the HVAC channel the multifamily housing segment, the active shooter detection vertical and the Iot device monitoring space we.

We expect these growth initiatives to continue to generate increasing contributions to our overall performance next year and become more efficient with scale.

In 2024, we will continue to pursue our core strategy.

In summary, I am 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 and.

And with that let me turn things over to Dan <unk> to provide an update on our video business Dan.

Thanks, Steve I'm pleased to join our call today and speak with our investors and analysts.

Our platforms business includes all product development for our core commercial and residential platforms as well as sales and marketing for our largest market North America.

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 in video platform.

We continually refine and optimize our user experience to provide frictionless and intuitive access to the information and commands that subscribers value most.

We also developed an enhanced interactive scrubbing interface for our continuous video recording solutions. This is a crossover feature that both increases visibility for residential customers.

The commercial market.

Use cases for commercial subscribers include quickly checking to see which employees opened or closed our store on time are tracking unexpected entries or access to an office.

Enhancements and new capabilities designed into the mobile App. We are informed by 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 needs.

This data supports the new user experience design, which expands touch points for video content within the App experience.

Now, let's shift to several new products that highlight the continued evolution of our video platform.

The upcoming release of our new 749, 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.

The new 729 video camera includes a four megapixel sensor wide area lighting responsive multi color led lights, and sirens and two way voice, which allows the central station operator to mic down through the camera to an outdoor location. We also operate our enhanced video analytics software called perimeter guard, which seamlessly connects to our <unk>.

Response software to 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.

We have 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 are 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 to.

Subscribers in a package deliveries over 700000 times.

That I will turn things over to Steve Valensuela to review our financial results Steve.

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.

Third quarter, SaaS and license revenue of $145 million grew eight 9% from the same quarter last year.

Excluding debit license revenue third quarter 2023, non-GAAP adjusted SaaS and license revenue were 13, 9% year over year on a comparable basis.