Good evening, and welcome to the SmartRent Inc. Third Quarter 2021 Earnings Call. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Evelyn Infurna, Senior Vice President of Investor Relations. Thank you, Evelyn, you may begin.

Thank you, Operator. Good evening, everyone, and welcome to SmartRent's third quarter conference call. Joining me today are Lucas Haldeman, Chairman and CEO; and Jon Wolter, Chief Financial Officer. After the close, we issued an earnings release and a 10-Q, which are available on our Investor Relations section of our website. Before I turn the call over to Lucas, I'd like to remind everyone that the discussion today may contain statements related to our business that may be considered forward-looking, including statements concerning our plans to execute on our growth strategy, our ability to maintain existing and acquire new customers and other statements regarding our plans and prospects. Forward-looking statements are often identified with words such as we expect, we anticipate, we believe, or similar expressions. These statements reflect our view only as of today, November 10, 2021, and should not be considered our views as of any subsequent date. We do not undertake an obligation to update or revise any forward-looking statements. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our registration statement on Form S-1 filed with the SEC on September 23, 2021, and our quarterly report on Form 10-Q, which are available on the Investor Relations section of our website and on the SEC's website at sec.gov. Finally, during today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release issued after the close today. And with that, let me turn the call over to Lucas to review our results. Lucas?

Thank you, Evelyn. Welcome, everyone, and thank you for joining us as we review our third quarter results. SmartRent had a truly outstanding quarter. We delivered an all-time record revenue of $35.1 million, representing a 112% increase over last year. After deploying 56,000 units in the first half of 2021, we deployed a record 59,000 units in the third quarter alone, 111% more than in the same period last year. Our total aggregate units deployed and committed were just under 1 million as of the end of the third quarter. These achievements are indicative of the passion and commitment of our team, the growing demand for our enterprise IoT smart home solutions, and the benefit of having approximately $445 million of capital to deploy to support our growth as a result of our successful public debut completed in late August. Since our debut, we've used a portion of this capital to invest in the expansion of our sales force, our field installation services team, and our research and development teams. We've continued to attract seasoned, high-quality talent from leading technology and real estate service companies in keeping with our founding DNA of real estate and technology. The increase in the number of employees, which is currently pressuring our margins, is necessary so that we can deliver on our booked and committed unit pipeline and pursue additions to our product roadmap, especially as we look to capitalize on our first mover advantage in the smart building industry. We anticipate that the expansion of our workforce, particularly in our professional services revenue stream, will continue to help us effectively convert our committed unit backlog to deployed units. We believe our consultative sales process, on-site installation oversight by our field team, and our customer training and support are all key factors contributing to our success. Our extensive flexibility in integrating with a myriad of hardware devices, eight property management platforms, numerous CRMs, and maintenance software systems unlocks enormous value for real estate operators and owners. Our open architecture philosophy allows us to provide individualized solutions for property owners and managers who embrace the opportunity to enhance revenue, reduce expenses, mitigate risk, and reduce energy consumption. Our approach to the smart home or connected community business is clearly resonating with the market, as evidenced by our growth in committed units and new customers. The financial benefit and improved efficiencies from utilizing our predictive maintenance tools, auto-generated work orders, self-guided tours, and overall reduction in workflow friction are compelling. A number of our customers have stated that they are experiencing ROIs in excess of 50%. In the third quarter, we added 17 new customers, growing our base to 199 loan portfolios with both existing and new construction in the multifamily, single-family rentals, homebuilders, and iBuyer markets. Collectively, our customers control approximately 4.1 million units, the vast majority being existing units that our teams will retrofit, one of our key differentiators. These units represent a significant annual recurring revenue opportunity for SmartRent. A majority of the units in our pipeline are owned by the largest institutional multi- and single-family rental landlords. We are also making excellent inroads into what we call the long tail with thousands of property owners and managers of smaller institutional portfolios. On the product innovation front, we introduced several platform enhancements this year including Alloy Parking, video intercom, and Alloy Access, our community access product. We are experiencing more and more of our bookings include one or more of these new products, along with self-guided tours and our original smart home offering. During the quarter, we launched a white-label resident app that owners can brand for a specific property or company, which personalizes the resident experience while consolidating the control and functionality of all the SmartRent devices being utilized in the community. It also allows for other online services or marketplace operators affiliated with that community. This app is an additional offering to our legacy resident app that engages with approximately 570,000 resident users and our property staff app, where we have approximately 17,000 users. We remain focused on advancing additional product enhancements related to energy management and efficiency, given the growing importance of reducing energy consumption for our customers, their residents, and the global community. Our go-to-market smart home offering that includes a smart thermostat and leak detector, along with our data collection and reporting capabilities from these devices, was SmartRent's initial step to help owners better understand and manage water and energy consumption. Over the last several months, we have evolved our energy management offering by integrating with an energy management software platform that collects and manages data from over 300 utility companies to facilitate ESG reporting and demand response rebates. The platform also provides rebates on smart thermostats and revenue sharing related to demand response program participation. Residents also benefit from our energy management products by reducing their utility bills and other financial incentives. Another important initiative is making managed WiFi deployment a priority. We believe there is a compelling need for a robust WiFi offering, which is largely absent or of inferior quality in most rental communities today. With the continued importance of workplace flexibility and the growing demand for streaming services, property managers can no longer ignore strong, reliable WiFi as a curated amenity. We believe that property owners and managers will welcome an upgraded WiFi solution where they can participate in a thoughtful revenue-sharing program while enhancing their residents' experience. This offering is particularly timely as long-term legacy telco and cable contracts are entering an expiration cycle. Residents should also benefit as we believe that our managed WiFi product will provide superior service to in-place or legacy solutions at a lower cost and with less friction. There's no cable company to wait for, and the service can be turned on with just a tap in our resident app. Managed WiFi should have a dual benefit for SmartRent, both as a contributor to our revenue stream and as an opportunity to reduce expenses, eliminating the need for our hubs to be connected to a cellular network. The opportunity to convert these hubs to WiFi represents the potential for significant savings to the company. In recent calls with the analyst and investor community, we have been asked several questions about churn, including potential churn on our customers' property sales. In our experience, SmartRent communities sold by our customers have become stealth SmartRent product pilots in the buyer's portfolio, allowing the buyer of the community the opportunity to learn about SmartRent's value-enhancing platform firsthand. Instead of the loss of a community on our platform, we are gaining a new customer who, in turn, has multiple properties or a portfolio that we can now sell into with a relatively low CAC, a higher ARPU, and a newly cast 5- to 7-year hosted services contract. Interestingly, some of our product offerings such as Alloy Parking have become opportunities for us to penetrate non-residential real estate verticals. A number of our current customers who own multiple real estate property types are using Alloy Parking not only in their multifamily communities but also at their office properties. Our recent expansion into student housing, while still in early days, is progressing well with several student housing customers participating in pilots. We continue to recruit student housing industry experts as we build our team to further penetrate this promising real estate vertical. While our organic growth opportunity is large, we are excited by the flexibility of our platform to expand into other verticals or acquire complementary software platforms. Our business development team has been working diligently to identify and vet opportunities that will strengthen our market-leading position. As part of our long-term strategy, a successful acquisition for SmartRent must include at least one of the following criteria: advancement of our product roadmap or diversification of our product offerings; entering into another real estate vertical; diversification of customer base or the expansion of our presence in geographic markets or market segments where we are underrepresented, such as the long tail that we addressed earlier; and lastly, given our size, any acquisition or partnership that we pursue needs to be a solid cultural fit. Our current focus is on domestic opportunities, but we are also evaluating international expansion where we believe we can ramp following our proven land and expand model. With that said, we have made inroads into Canada and the U.K. During the quarter, we welcomed a Canadian customer that has recently converted from pilot to portfolio rollout, an achievement we are extremely proud of. We would also like to acknowledge the hard work of our U.K. team; they are setting the groundwork for SmartRent expansion in that market. Overall, we believe that we are well positioned to execute our growth plan, and we have the financial and human capital necessary to continue on our trajectory. We are encouraged by our accomplishments in the third quarter and believe that our achievements are just a preview of what SmartRent is capable of. Near-term headwinds related to the global supply chain notwithstanding, we are confident that SmartRent will continue to grow its customer base and revenue stream at a brisk pace. Our team is singularly focused on delivering value to our customers, growing our market share, and generating long-term shareholder value. Now I'll turn the discussion over to Jon to review the financial results. Jon?

Thanks, Lucas. It's a pleasure to share SmartRent's financial results with you this evening. The primary driver of our growth to date in 2021 is the number of new units deployed. I'm pleased to share that new units deployed reached a company record with 59,347 units in the quarter as compared to 28,190 new units deployed last year. With the addition of new units deployed in the quarter, we have grown our total units deployed base to 270,772, an increase of 117% from a year ago. Units booked, which represents the aggregate number of smart hubs associated with binding orders in the period increased 134% to 49,706 from 21,272 last year. Year-to-date, units booked rose 151% to 134,054 as compared to 53,488 on a year-to-date basis for the third quarter of 2020. As a reminder, units booked are typically converted into units deployed in the subsequent quarter from the time they are booked. We use units booked to help us assess near-term resource demand and as an indicator of post-deployment revenue that we will earn and record. Committed units increased to 704,242, up 16% on a sequential quarter basis. Again, as a reminder, committed units is the aggregate number of smart hubs that are subject to binding orders together with units under master services agreements for which we have been informed that will be deployed within 2 quarters of that notice. Growth in new units deployed were the primary reason for SmartRent's achievement of record quarterly revenues of $35.1 million, up 112% from $16.6 million in the third quarter of 2020. Total deferred revenue, which provides us with near and medium-term revenue visibility was approximately $84.7 million at the end of the third quarter, growing 14% from $74.5 million sequentially and by 100% from $42.4 million for the same period a year ago. We expect to recognize 45% of our total deferred revenue within the next 12 months, 31% of our total deferred revenue between 13 and 36 months with the balance being earned between 37 and 60 months from the end of the third quarter. Annual recurring revenue, or ARR, which we define as the annualized value of our recurring SaaS revenue earned in the current quarter, was $8.7 million, up more than 24% sequentially from the second quarter and up 158% as compared to the third quarter of last year. As a reminder, our ARR does not include annual recurring revenue that could be attributed to committed units, representing significant additional upside. Hosted services ARPU in the quarter increased to $6.81 per unit per month as compared to $6.29 per unit per month in the third quarter of 2020. The year-over-year improvement in ARPU is driven by the introduction of new products and expanded customer base that is opting for more of our products, the upselling of legacy customers and signing new customers at a higher subscription rate than early adopters. We anticipate continued incremental improvement in hosted services ARPU as we add new customers, expand service offerings for existing contracts, and launch and cross-sell new products. Our hardware gross profit was reduced by $5.7 million of warranty provision related to deficient batteries in some of our smart hub units. Additionally, we want to share that we have pivoted to another battery supplier in order to avoid future warranty allowances related to this issue. It is important to note that excluding the $5.7 million warranty charge, our hardware gross margin improved to 14% from 11% sequentially and from a negative margin in the third quarter of 2020. Operating expenses in the quarter increased by 145% to $19.7 million from $8.1 million last year, reflecting several factors, including an increase of $3.4 million in personnel expense as a result of our increased headcount as we ramp our workforce to meet our growing demand. Other drivers of expense in the quarter included public company-related expenses, such as insurance, professional fees, and noncash stock-based compensation of approximately $4.3 million. Adjusted EBITDA for the quarter was a negative $16.1 million compared to a negative $6.8 million in the third quarter of 2020. And net loss in the third quarter was $26.7 million compared to $8.7 million a year ago, reflecting primarily the gross profit decline and increased operating expenses. At quarter end, total shares outstanding were approximately 194 million and diluted shares outstanding were approximately 220 million. For the third quarter, there were approximately 86 million weighted average shares outstanding. As of September 30, 2021, we had a cash balance of $472.5 million and $3.6 million of outstanding term debt. We received $445 million in net cash proceeds related to our business combination with Fifth Wall Acquisition Corp. As a reminder, proceeds from the business combination are being used for the continued expansion of our workforce, the development of products on our roadmap, and selected external growth opportunities. With respect to our outlook, we remain on track to deliver approximately 161,000 deployed units in 2021 and are refining our revenue projections to a range of $100 million to $105 million from $119 million. We anticipate that hardware revenue will be the primary revenue driver in 2021, reflecting the thousands of units that we are currently deploying. Our revision to 2021 revenue reflects supply chain constraints, which have created a backlog in the deployment of the Fusion Hub and our Alloy Access product. With respect to our 2022 expectations, given the uncertain nature of the global supply chain and logistics, we will provide updated guidance on adjusted EBITDA, units deployed, and revenue for 2022 when we report our year-end 2021 results. That concludes our prepared remarks. Operator, please open the line for questions.

Our first question comes from Rod Hall of Goldman Sachs.

So I wanted to ask about the deployed unit guide for fiscal year '21 that was reiterated unchanged. But then your revenue guidance is a little bit lower and ARPU is a little bit below what we anticipated. So I wonder, is that related to Fusion Hub delays? Or can you kind of dig into what's happening with ARPU right here a little bit? And then I have a follow-up.

Rod, it's Lucas. Yes, you're correct. The delay we are experiencing is due to the Fusion Hub. We are still facing supply chain issues with that specific device, which is why you are noticing a higher ARPU and contribution margin. Additionally, we are also encountering delays with the Alloy Access product, which is not an in-unit device for common area doors like the front door, gym, and amenities. We remain confident in maintaining our unit count and achieving our targets. However, the revenue is coming in a bit lower and will be deferred into '22.

And you think, Lucas, that, that ARPU kind of hangs a little bit lower because of those factors into early '22? And then as these supply chain issues loosen, we start to see ARPU trajectory moving up the way we kind of thought it would originally or...

Yes, that's how we're feeling. I think we're going to make sure we give you much better guidance when we do our Q4 call in Q1, but that's the way we're seeing it right now, Rob.

I wanted to ask about the competition. There's a lot of noise in this market, and I'm curious about what you're observing regarding competitors. Are you finding yourselves competing with other products, or are you essentially the only option available? Is it mainly a question of whether someone will choose to install smart technology? I'm interested in your perspective on the competitive landscape.

Yes, you're right, there are many competitors in the market. There always have been, even when we were the pioneers in this business. We remain confident in our ability to win requests for proposals. We are actively using the IPO proceeds to strengthen our sales and marketing teams, increasing the number of sales personnel. We believe that if we are invited to participate in an RFP, we have a strong chance of winning, but it is essential that we get that invitation. Currently, we perceive a lot of noise in the market, but we believe our platform is genuinely differentiated.

But if you guys get invited to the RFP, is there any other typical bidders? Or can you kind of say who you see the most competitively?

Yes, it really depends on the owner, and there are also some regional differences. All the names we discuss are familiar; no name is surprising. What has been surprising over the past two years is that more people are leaving this business and returning to their traditional consumer-based models, moving away from multifamily sales. I think we are witnessing a good consolidation in the market. You will likely continue to see consolidation in this space, with announcements of such happening today. As a result, we are seeing fewer but stronger players emerge.

Our next question comes from Ben Sherlund of Cantor Fitzgerald.

I'm curious about how your discussions are progressing with customers regarding construction timelines and their plans for both retrofitting and new builds. Any updates or insights would be appreciated.

Yes, I appreciate the question, Ben. I really value our business model that allows us to conduct most of our work in retrofits. We don’t have to wait for new units to be built; the existing ones are ready for us to work on. As long as we can avoid hardware delivery issues, which we largely have outside of Q2 this year, we can keep progressing. We are noticing delays with new development projects, but most of our clients have adapted by deciding to focus on 3,000 existing units instead of 3,000 new builds for next year. This flexibility to shift our focus between retrofits is something I really appreciate.

Okay, great. And then maybe a follow-up, if I could. From your perspective, you guys just got a pretty big influx of capital. How have the labor shortages been impacting kind of your timelines for your deployment of capital building out additional professional services headcount or sales teams? Is there any delays to your kind of timeline there?

No. Actually, we're hiring ahead of plan. We're able to attract incredible talent. We thought it would be tougher, but we've been pleasantly surprised by our ability to attract and retain outstanding talent. Our unfavorable turnover remains very low compared to industry standards, and we're successfully bringing in high-caliber new talent. Therefore, we're not currently facing any issues with the labor market.

Our next question comes from Sidney Ho of Deutsche Bank.

Congratulations on the solid progress. My first question follows up on your full year target. I know you reiterated the full year unit deployed guidance. Have supply constraints affected that unit deployment, suggesting that you could have achieved a higher number of deployments? Additionally, regarding the low revenue with the same number of units deployed, does this indicate that your customers are deploying units with a less favorable mix? How do you view your ability to recover some of the revenue mix in future quarters?

Yes, Sidney, thank you for your question. We definitely expect to recover that revenue in upcoming quarters. I want to highlight two key points. First is the Fusion Hub, our touchscreen hub, which has a higher average revenue per user but has faced delays that are not due to us holding back on bringing units online. Once the Fusion Hub is completed, it will be an additional feature for units that already include a smart lock, smart thermostat, and leak sensors, enhancing our smart home offerings. This contributes to our unit guidance while we adjust our revenue expectations. The second point is about the Alloy Access product. For a community with 250 units, we can deploy to all 250, but we are currently delayed on the front door, elevator, and parking garage installations. We will return to complete those once we have the necessary hardware. That is how we are meeting our unit targets while slightly lowering our revenue guidance.

Yes, that makes a lot of sense. Maybe a follow-up question is, my understanding is that the occupancy rate across the country has been pretty high. How does that impact the negotiation with your customers? Are they more willing to spend on capital investment projects like all the smart home, smart building thing because they can easily pass that along to the residents? Or do they tend to take more time to make their decisions because they don't feel a rush to upgrade?

Yes. On that point, I think that's where it's really important that we sell the benefits of the overall platform, which is both an expense reduction, headache reduction, and makes it easier to run your property. There's ROI on utility savings, there's ROI on protecting your assets better. And so that's where it's not always about occupancy and residents. We're not reliant on this being passed through to the residents to get the owner to buy in. That's great ROI, and it's there and owners take advantage of that but that's not sort of the lead to our pitch. And to answer the macro question, I think, for us, we're not really tied to the occupancy rate and that the owners that we target tend to be large institutional owners and they have budgeted to capital improvements throughout any cycle. And so part of why we love this business is it's sort of cycle proof. And owners in a down cycle, they need to spend less and cut the expense side. In an up cycle, they're able to charge more in rent.

Our next question comes from Tom White of D.A. Davidson.

Great. This is Tevis on for Tom. I just have one question. Could you provide more insight into the overall demand trends in the industry? On one hand, the pandemic has accelerated digital disruption and shifted consumer tastes, but on the other hand, we've encountered challenges in the construction industry. Could you share your thoughts on this and whether there is a difference between new construction and the retrofit segment of the market?

Thank you for the question, Tevis. I appreciate this opportunity to discuss our business, which primarily focuses on retrofit, keeping us less influenced by macro trends impacting the construction industry. I want to highlight our committed unit number, which has increased to 704,000. Last quarter, we were at 606,000, but that figure excludes the 59,000 we deployed. Therefore, we actually added a net new 157,000 committed units this quarter. We believe demand remains strong and continues to grow, supported by long-term trends pushing the real estate sector towards adopting more advanced technology. We are excited about the demand and are working hard to meet it, and we feel we are in a favorable position.

This concludes the question-and-answer session. I would like to turn the conference back over to the presenters for any closing remarks.

Thank you all for joining us on the call. We had a tremendous quarter. We're excited by the future and appreciate the questions and we look forward to seeing you in person at some of these conferences and talking again next quarter. Thanks a lot.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a wonderful day.