Inside Look at Vivint’s Impressive Q3 Data

Vivint reports 13.8% subscriber growth, $1,886 average installation price, and $63.59 in RMR per client in Q3 investor report.

Inside Look at Vivint’s Impressive Q3 Data

Thanks to a strong Q3, Vivint raised its outlook for 2021 to between 1.66 and 1.70 million vs. previous guidance of between 1.62 and 1.68 million.

Vivint Smart Home, Inc. (NYSE: VVNT), the No. 1 company in the CE Pro 100, seems to be pressing most of the right buttons in terms of higher installation revenue, lower attrition rates, and increased subscribers and revenues. The only chink in the armor is a drop in its average monthly service revenue per customer, according to its latest quarterly report to investors.

Overall, Provo, Utah-based Vivint continues to add smart home customers at a record rate. The company reports for Q3 2020 it added 126,847 new accounts, up 13.8% from the 111,425 new subscribers in the previous quarter.

From a revenue standpoint for the quarter ending on Sept. 30, 2020, Vivint had revenues of $319 million, an increase of $28.2 million or 9.7%, as compared to the same period in 2019. EBITDA for the quarter was $154.5 million, up from $152.7 million last quarter.

Some other key data from Vivint:

  • The company now has 1,687,892 total subscribers.
  • The average monthly monitoring fee per customer is $63.79, a drop from the $64.53 per month the company earned per account back in Q3 of 2019.
  • The company’s attrition rate is 12.8%, down from 13.9% one year ago.
  • Vivint’s net subscriber acquisition cost is $209 for the past 12 months. That is down from $1,033 per customer for the same period one year previous.
  • The average system installation revenue is $1,886, that is up from $1,106 for the same period in 2019.
  • 95% of company revenues are recurring.
  • Most clients sign up for 5-year contracts.

“We are pleased to report another quarter of very strong performance,” says 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.”

Vivint Upgrades 2021 Outlook

“We believe that the fundamental characteristics of Vivint’s high-margin, recurring revenue model are compelling,” says 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.”

“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,” he adds.

The company raised its outlook for 2021 to between 1.66 and 1.70 million vs. previous guidance of between 1.62 and 1.68 million. It also affirmed its revenue outlook for next year to between $1.23 billion and $1.28 billion.