Vivint Smart Home, Inc. (VVNT) Reports Q3 Revenues Beat; Offers FY20 Revenue Guidance

Vivint Smart Home, Inc. (NYSE: VVNT) reported Q3 EPS of $. Revenue for the quarter came in at $319 million versus the consensus estimate of $316.82 million.

Key Highlights

• Total revenues increased by $28.2 million year over year to $319.0 million
• Net loss increased by $5.5 million year over year
• Adjusted EBITDAa increased by $53.8 million year over year to $154.5 million
• Attrition rate improved by 90 basis points sequentially to 12.8%, a seven-quarter low

“We are pleased to report another quarter of very strong performance,” said Todd Pedersen, CEO of Vivint. “Our results underscore the importance of having a proprietary, fully integrated, AI-driven smart home platform, which is the backbone of our predictable and consistent recurring revenue model. Touching briefly on a few financial highlights for the quarter, total revenue and total subscribers grew by nearly 10 percent, reflecting healthy consumer demand for smart home and security services, along with our ability to retain a higher percentage of our customer portfolio. Our adjusted EBITDA margins continued to build upon previous quarters and expanded to new highs. Finally, we have stated our desire to operate the business in a more cash efficient way, and we are tracking to be cash flow positive by more than $100 million in 2020.”

“As we continue our focus on optimizing the business, we saw solid improvement across the board in many of our key performance metrics for the quarter,” continued Pedersen. “Notably, the last twelve-month attrition rate improved by nearly a full point in the quarter and continues to exceed our forecasts. Our LTM attrition rate for Q3 was the lowest in the past 7 quarters, and I believe it speaks to the fact that our core value proposition—proven over two decades—of reliably taking care of our customers and their families, is as relevant today as ever.”

GUIDANCE:

Vivint Smart Home, Inc. sees FY2020 revenue of $1.23-1.28 billion, versus the consensus of $1.26 billion.

“We believe that the fundamental characteristics of Vivint’s high-margin, recurring revenue model are compelling,” said Dale R. Gerard, CFO of Vivint. “More than 95% of our revenue is recurring, which provides long-term visibility and predictability to our business. Many of our new subscribers initially sign up for five-year contracts and remain on the Vivint platform for approximately eight years, producing significant lifetime margins,” continued Gerard. “Despite the many uncertainties pertaining to the COVID-19 pandemic, our recurring revenue model has proven resilient, and we remain comfortable with our previous revenue guidance. Our better than expected attrition rate performance and improving unit economics have prompted us to update our guidance for total subscribers and Adjusted EBITDA. In summary:

• We are raising our guidance for total subscribers to between 1.66 and 1.70 million vs. previous guidance of between 1.62 and 1.68 million
• We are reaffirming our guidance for total revenue of between $1.23 and $1.28 billion
• And finally, we are raising our adjusted EBITDA guidance to between $570 and $580 million vs. previous guidance of between $555 and $565 million.”

For earnings history and earnings-related data on Vivint Smart Home, Inc. (VVNT) click here.

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