Thank you for standing by. Welcome to Alarm.com's first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthew Zartman, Vice President of Investor Relations. Please go ahead. Thank you, Operator. Good afternoon, everyone. Joining us today are Steve Trundle, Alarm.com's CEO, and Kevin Bradley, 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 discussed in our quarterly report on Form 10-Q and our Form 8-K, which will be filed shortly with the SEC, along with the associated press release. This call is subject to these risk factors, and we encourage you to review them. Alarm.com assumes no obligation to update these forward-looking statements or other information that speak as of their respective dates. In addition, several non-GAAP financial measures will be discussed on the call. A reconciliation of GAAP to 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 financial results for the first quarter that exceeded our expectations. SaaS and license revenue in the first quarter grew to $163.8 million and adjusted EBITDA was $43.5 million. Our stronger-than-expected SaaS results were driven by contributions from our growth initiatives in the commercial and energy markets and higher revenue retention on the residential side of the business. We did not see any material changes to demand during the quarter due to the evolving macro environment. Before going much further, I'd like to welcome our new CFO, Kevin Bradley. Kevin has worked his way up through our finance organization and has been with the company since 2009. For the last eight years, Kevin has been our Vice President of Financial Planning and Analysis. He has been the key financial partner for our business leaders and has been instrumental in shaping all aspects of our financial strategy. Because he already has a deep understanding of our business models, markets, and financial levers, he has been able to hit the ground running since becoming our CFO. I look forward to continuing to introduce Kevin to our investors and analysts over the coming months. During the quarter, I attended ISC West, our largest security industry trade event. This year, we unified our booth presentation with the full breadth of our residential and commercial solutions, including OpenEye, Shooter Detection Systems, and CHeKT. One positive takeaway from the event was that most of the service provider partners I spoke with are steadily expanding their use of our commercial services. They expect Alarm.com to continue to innovate for this market, which enables them to gain operational efficiency through more standardization around our commercial offerings. As more Alarm.com services are installed into a given commercial site, we see improved revenue retention, which is currently 98% for our commercial subscribers, well above our consolidated revenue retention target range of 92%-94%. Turning to our video solutions, I want to provide an update on the 729 Floodlight video camera product, as it has now been in market for just over a year. We designed the 729 to leverage our video analytics-based proactive deterrence capabilities and our remote video monitoring software. Since launch, our partners have increasingly incorporated the 729 and associated services into their offerings. This product is being installed into nearly 4,000 properties per month now, and we're seeing strong attachment rates of our video analytics services. Over 85% of installed 729 cameras also have a subscription to access our proactive deterrent solution called Perimeter Guard. Our video services are also beginning to take more of a hold in the international markets. During the first quarter, 30% of new international accounts included video, about twice the rate of the same period a year ago. To build on that progress, we will upgrade our entry-level video camera later this year. The new 516 Wi-Fi camera will offer even better capabilities at a lower price point and should further broaden the adoption of our video analytics service in residential markets, particularly internationally. I'll now turn to an update on Energy Hub. As a quick reminder, Energy Hub supports utilities as they adapt to the long-term structural shift towards further electrification. Demand for EnergyHub's platform is growing as EV adoption, the proliferation of AI data centers, and extreme weather all stress the grid. In addition, electricity supply is increasingly difficult for utilities to manage and forecast when intermittent renewable energy sources make up a growing portion of electricity production. EnergyHub provides load flexibility solutions for managing demand and matching it to supply in real time. In the first quarter, EnergyHub announced a strategic partnership with General Motors Energy to integrate GM EVs and home battery storage solutions into the EnergyHub ecosystem. Through this program, owners of eligible GM electric vehicles will be able to receive meaningful incentives from their local utility to enroll in flexibility programs managed by EnergyHub software. This new partnership with GM adds to the relationships that EnergyHub has with other EV makers, which include Tesla and Toyota. Over time, we expect managed charging will significantly contribute to Energy Hub's market position and strategic value to its electric utility partners. Lastly, I want to touch on tariffs briefly, which Kevin will expand on. U.S. tariff policies are obviously difficult to predict, and the trade environment can substantially change with little warning. We are in a position to effectively manage the 10% baseline tariffs that are currently in place. We have also significantly improved and diversified our supply chain over the last several years. Currently, less than 10% of our hardware revenue is derived from products shipped from China. In closing, I'd like to thank our service provider partners and our Alarm.com team for their dedication and our investors for their ongoing support. With that, I'll turn the call over to Kevin Bradley for a review of our financial performance. Kevin? Thank you, Steve. I appreciate the opportunity and the confidence that you and the board have placed in me. I want to share a little bit about my background as I start the process of introducing myself to our investors and analysts. 16 years ago, I was Alarm.com's 27th employee, settling into the company as the founding finance team member at my desk in a storage closet that also happened to serve as a hardware test lab for our engineers. Over the years since, I have been fortunate to work with Steve and many other talented people to help shape the company's strategy as it moves through various stages. Prior to our IPO 10 years ago, I stood up a formal FP&A function. As part of this, I created and have continued managing our earnings guidance philosophy throughout our time as a public company. Thanks in no small part to his mentorship, I have been able to become a key partner to Steve and the rest of the executive management team here, providing a bridge between finance, strategy, and operational execution. I'm thankful to have the support of a strong finance and accounting team filled with tenured colleagues, and I also want to thank Steve Valenzuela for his support, particularly through the smooth transition process. I'm excited to engage more directly with Alarm.com's investors going forward. I'm happy to report a strong start to 2025 on my first call. SaaS and license revenue grew 9% year- over- year to $163.8 million, exceeding our first quarter guide of $160.3 million. We exceeded our guidance due to a handful of structural dynamics. Energy Hub was a primary contributor to our beat. As Steve indicated, Energy Hub's distributed energy resource management programs continue to grow rapidly, and enrollments in Q1 exceeded our expectations. Alarm.com's security account creation activity in both the residential and commercial markets met our expectations during the quarter. We did not discern any material changes in account origination activity during the quarter due to deteriorating consumer sentiment or recession fears. During the first quarter, total revenue grew 7% year- over- year to $238.8 million, and total gross profit grew 9.4% year- over- year to $160.6 million. Total operating expenses were $130.9 million during the first quarter. Excluding stock-based compensation and other items we adjust from G&A for non-GAAP purposes, total operating expenses were $114.4 million, a 4.6% increase year- over- year. R&D expense in the quarter, inclusive of stock-based compensation, was $68.4 million, up 3.7% year- over- year. Excluding stock-based comp, it was $62.4 million, up 6.4% year- over- year. We are off to a nice start in driving some of the operating margin efficiency that we signaled late last year. GAAP net income grew 18.4% year- over-y ear to $27.7 million, and our GAAP EPS per diluted share was $0.52. Non-GAAP adjusted EBITDA grew 17.5% year- over- year to $43.5 million. Non-GAAP adjusted net income grew 11.3% year- over- year to $30.4 million. A combination of revenue growth, revenue quality, and operating leverage contributed to our profitability. Non-GAAP adjusted EPS grew 8% year- over- year to $0.54 per diluted share. We ended the quarter with $1.19 billion of cash and cash equivalents and produced $17.9 million of free cash flow during the quarter. I want to speak for a moment about the tariff environment. In addition to significantly reducing the company's exposure to products originating from China since 2018, we proactively built some inventory in late 2024 and early 2025 prior to Liberation Day. We have approximately nine months on hand, which is higher than we would carry in normal times. Outside of China, we are operating as if the baseline 10% tariff will remain in place. We anticipate passing that tax through when we start selling inventory imported under the new tariff policies. Our guidance incorporates this plan. To the extent that some component of our hardware revenue becomes a pure pass-through, gross margin will be diluted slightly, even though gross profit dollars will remain unchanged. Related to this, let me share some thoughts on price elasticity. We and our service providers have experienced a period of hardware cost inflation in the recent past, specifically as a result of the global supply chain disruptions in 2022. Over a 12-month period, the impact on Alarm.com's hardware pricing at that time exceeded 10%. We did not see meaningful demand deterioration. We have long-term symbiotic relationships with our service provider partners. Increasing prices is not a step that we take lightly, but given our experience in 2022, we think it's possible that we can approach the market together and pass through the current baseline tariffs without dramatically impacting demand. We are also mindful to consider that the macro backdrop in 2022 was different from today. We are therefore allowing for a little bit of a wider outcome in our revised hardware revenue guidance. I'll turn now to our financial outlook. For the second quarter of 2025, we expect SaaS and license revenue of $167.2 million. For the full year of 2025, we are raising our expectations for SaaS and license revenue to between $675.8 million and $676.2 million, an increase of $4.5 million over our prior guidance at the midpoint as a result of the structural outperformance from Q1. We are now projecting total revenue for 2025 of between $975.8 million-$991.2 million, which includes estimated hardware and other revenue of $300 million-$315 million. As I noted, we are implementing a wider range here as we navigate tariff and macro uncertainties. We are also raising our estimate for non-GAAP adjusted EBITDA for 2025 to between $190 million-$193 million, an increase from our prior guidance of between $188 million-$192 million. Non-GAAP adjusted net income for 2025 is projected to be $131.5 million-$132.5 million, or $2.32-$2.33 per diluted share. This is an increase from our prior guidance of $130 million-$131 million, or $2.28-$2.29 per diluted share. EPS is based on an estimate of 60.5 million weighted average diluted shares outstanding. As a reminder, this share count includes a full year of dilution associated with our outstanding convertible notes on an if converted basis of 9.125 million shares split across two issuances. We currently project our non-GAAP tax rate for 2025 to remain at 21% under current tax rules. We expect full year 2025 stock-based compensation expense of $40 million-$43 million. In closing, I'll share my conviction that Alarm.com is strongly positioned for quality growth in the large and often under-penetrated markets that we serve. The executive management team shares a long-term vision and has built a company-wide culture of collaboration, innovation, and humility that will drive Alarm.com's long-term expansion, and I am humbled and thankful to continue contributing to it. With that, operator, please open the call for Q&A. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one when on your telephone. If your question has been answered or you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Matt Bullock with Bank of America. Your line is open. Great. Thanks for taking the question and looking forward to working more closely together, Kevin. My question's on commercial. Great to hear about the gross retention in that business line and the positive video attach rate trends. Sounds like you're landing larger. Could you maybe talk for a moment about recent average revenue per account trends in commercial and then give us an update on the upsell opportunity still there? Sure. Hey, Matt. This is Steve Trundle. Yeah, the reason we think we're seeing that retention metric look so positive is really a land and expand type of dynamic where we get into a site, let's say it's an access control location, and they install four doors, and then a year goes by, two years goes by, the business expands, and they want to install another four doors. We add to the account with that addition to the access control system. Maybe they want to add a video system. The result of that is we're getting some positive dynamics on the ARPU and not only on new accounts where we're installing more, but also some uplift on the base. The trend on ARPU there is upward. I think in the past we've commented that sort of the average ARPU is more than twice the average ARPU that we see on the residential side. In certain situations, as we get into bigger locations, it can be many, many, many times the residential ARPU. Super helpful. One just quick follow-up if I could here. Sounds like the plan is to pass through some pricing on the hardware side. Can you just help us think about quantifying revenue contribution from those tariff-related pricing increases for 2025 embedded in the guidance? Yeah, sure. Yeah. Hey, Matt. This is Kevin. We started with the fact that we were planning for about $300 million+ of hardware revenue at a 25% gross margin-ish. A 10% cost increase would equate to about a 7.5% price increase, which if you applied that to the full 300 would lead you to something around $20 million on an annualized basis. We sort of backed out the fact that we're not doing this until halfway through the year, and not everything that we procure and sell comes from overseas. You get to something that's sort of a little bit less than that as an impact on the high end. You could think about it as sort of a difference between what our midpoint used to be and what the high end is now. Really helpful. Thanks, Kevin. One moment for our next question. Our next question comes from Adam Tindle with Raymond James. Your line is open. Okay. Thanks. Good afternoon and congrats to Kevin as well. Looking forward to working with you. Kevin, I wanted to start with you if I could. Obviously, this quarter, if I'm looking at the SaaS revenue, we had a strong start, I think up 9%, close to 10% in the quarter on that metric. If we look at guidance for Q2, I think it's closer to 7% and then implied in the back half of the year, kind of mid-single digits to get to the full year. If I think about that trajectory from a SaaS growth standpoint, what are the key factors driving the moderation in growth as the year progresses? I'm looking at the year-over-year comparisons, and they're kind of similar throughout the year, so I couldn't blame comps on that. I wonder if you could also maybe tie in your expectation for ADT embedded in that. I think previously Steve had talked about 200 basis points. I wonder if that's changing at all. Yeah, sure. I'll address this and then maybe turn it over to Steve to see if he has any color on ADT. I think if we start with what the composition was of the Q1 beat, Steve mentioned in his prepared remarks, as did I, that Energy Hub had a strong quarter in their thermostat demand response programs. You could think about that as being about half of the Q1 outperformance, probably. And as a reminder, that business model is annual and recurring in nature as opposed to monthly and recurring in nature. That will show back up again next January, but it won't reoccur in future quarters. That's one of the reasons that it sort of steps down, principally because that performance will not reoccur in future quarters. We mentioned that the revenue retention rate for the third straight quarter was above the high end of our range at 95%. If you applied that to 1% of retention on $670 million of revenue, it is about $6 million-$7 million a year. The other half of our overperformance in Q1 was basically that. The way that we are modeling right now is that that metric returns to our historical range, which would be the other primary reason that you see some of that compression come out, as well as us taking a little bit. You see the wide range on the hardware revenue guide, and we took a little bit of conservatism on the SaaS line, not much, but just to allow for some possible fluctuations in demand as the year goes on. I will jump in on ADT. I guess I'd make the point that on an annual basis, we went ahead and took the implied growth rate up by about 50 basis points coming out of this quarter. But with ADT, Adam, not a lot's changed there since last quarter. I haven't seen much different. There was nothing related to ADT that impacted either our beat in the first quarter or our new guide for the year. So we're sort of following the model at this point and then watching the public remarks to kind of get updates on where they are with deployment. But I think the metrics we've given there in the past in terms of how we've modeled them are still the same today. Got it. Okay. Yeah, that makes sense. Steve, maybe just to follow up for you, just continuing this topic on a bigger picture level, if we look at the annual growth rate of the SaaS piece of the business, it's kind of in that 6% or 7% range. Acknowledging that you guys have done a good job of outperforming that. If we kind of think about that, how should investors think about that level of growth? Is this kind of a business that might be expected to kind of stay in that range but continue to improve profitability, or what would it take to push to a new level, say, getting closer to double digits like in the past? Yeah, I guess what I would say is you almost have to, you really have to decompose the consolidated number a little bit. And we've provided a little color on that where we at times have referenced the growth initiatives, which are Commercial, Energy Hub, International. I think last quarter we indicated they were producing 26% of the SaaS and growing at around 25% annually. And then, Adam, as you know, I mean, the residential piece in North America with some of the headwinds we've discussed in the past is a slower-growing business. What you see is sort of a tale of two worlds. One business that is more stable, probably pulling down the consolidated growth rate, that being the residential North America side. The other growing substantially. The big if is how long will this sort of 20%+ growth hold up in the various growth initiatives? How long can we sustain that? Obviously, at some point, as those businesses reach higher orders of scale, you could envision the potential for those contributions having more impact on the consolidated number than they are today. That is kind of how I look at the growth rate. I think the second part of the question is sort of a philosophical one on what we think about operating margin. We have shifted a bit to a posture of pushing more operating leverage into the business. We have moved up the EBITDA margins. I think in the initial look for the year, the first guide of the year, we were like 19.4%, which is up from the prior year. I think you'll see us continue to, as we're sort of in this current growth range, I think you'll see us continue to focus some on the operating margins and make some progress there. Very helpful. Thanks. Yep. One moment for our next question. Our next question comes from Saket Kalia with Barclays. Your line is open. Hey, great. Hey, guys. Thanks for taking my question. Kevin, echo my welcome as well. Actually, maybe for you, just along the lines of the last line of questioning and what Steve mentioned, I was wondering, Kevin, can you just remind us for this quarter, for Q1, how big was sort of that emerging bucket and how fast did it grow this quarter? I think Steve said 26% last quarter and grew 25%. I can't imagine it's too different, but just to make sure we keep track of that because it is such an important part of the growth rate going forward. How did that look here in Q1? Sure. As we mentioned, Energy Hub had a pretty strong Q1. I would say for the quarter, maybe slightly bigger as a percentage of total revenue simply because of that overperformance, but growing at about the same clip as we had indicated in the prior quarter. Got it. Yeah, no big quarter-over-quarter change there, but yeah. Understood. Understood. That's helpful. Steve, maybe for you, just a bit higher level. It was great to hear about sort of the higher video attach internationally. I just wanted to get just kind of a state of the union a little bit on maybe one or two of your countries outside of the U.S. Maybe the question is, how do you feel about Alarm.com's position competitively in some of those markets as international maybe becomes a bigger part of the business in the future? Yeah. Thanks, Saket. Yeah, those are, I mean, the international markets are very competitive, much like the North American market. I think we're sort of earlier inning there. We're probably in the third inning right now. We're in the process of kind of moving from establishing the initial beachhead customers, which tend to be the larger service providers, brands people would know. Now we're doing some of the real hard work of building out the long tail of the dealer base rest of world. One of the great things here about our North American business is we have a fairly distributed long tail of dealers who contribute every month. Internationally, we haven't had the bandwidth cycles or the attention necessarily to go down into the smaller service provider segments of these markets. We're just sort of getting started on that. That will create some tension on what we have to do with the product and what we have to do with distribution to meet the needs of that longer tail. That's, I'd say, sort of a key part of our 2025 objective is to build out more of that tail. I would say macro level, it's early innings. We're feeling pretty good about the growth we continue to see internationally. It's growing faster than the domestic business, particularly strong in Latin America and Europe. As I noted, also very competitive, particularly on cost. You see a lot of products coming in from China and elsewhere that are super low cost, not as capable, usually don't have a back end that enables a service provider to meet all the needs of a customer, but are there nonetheless. Thus far, we haven't seen a lot of change since the trade wars began. Hopefully, we don't see much change, but that's generally the state of things. Super helpful. Thanks, guys. One moment for our next question. Our next question comes from Samad Samana with Jefferies. Your line is open. Hey, guys. This is Billy Fitzsimmons, on for Samad. I just want to double-click on macro. Steve, you were clear about how you did not discern any material changes in account origination activity during the first quarter due to deteriorating consumer sentiment or recession fears. Just as we think about the outlook in the second quarter guide, were there any material changes in account origination or consumer sentiment in early April post the formal tariff announcements? Yeah, good question, Billy. I mean, we do watch things very closely. I would say first two weeks of April looked a little different on the commercial side than the last two weeks of April. To the extent we do not get too wrapped around the axle looking at week-over-week data, but we saw maybe the market take a breath and then sort of get back to business. We really did not see that on residential. We only saw that on commercial. As we kind of finished out April and coming into this report, we felt that we are not really able to discern any meaningful macro change at this moment affecting things. Got it. Helpful. Kevin, I'll congrats on the CFO role. You've obviously been at the company for a while and have worked closely with Steve and team for years. Just taking a big step back in very high level, what do you kind of view as your initial priorities as CFO? Yeah. Hey, Billy. Thank you very much. My initial priorities, I think, are things like this, getting sort of more intimately familiar with speaking on behalf of the company to external stakeholders. I think from an internal perspective, as you said, I've been here for quite some time. I know everybody. Everybody knows me. I think much of the work inside the company will sort of be business as usual, with the exception of maybe getting a little bit more familiar with some other aspects of the accounting team. My primary focus right now is getting through earnings here and then sort of getting out and beginning to become a little bit more externally focused. Perfect. Thank you both very much. Thanks, Billy. One moment for our next question. Our next question comes from Stephen Sheldon with William Blair. Your line is open. Hey, everyone. You have Matt Filek on for Stephen Sheldon. Thank you for taking my questions and congrats on the new role, Kevin. I think you have said before that around 50% of new residential subscribers add video, with only around 30% of existing subscribers using video. I was wondering if you could talk about some of the strategies your service providers may be using to drive higher video adoption among that existing customer base, especially since video can meaningfully expand our pool. Yeah, that's a good question. This is Steve speaking. I'd say at the moment, it's probably a bit more of an opportunity than something we see the service providers uniformly focused on. The great news is, yes, they're getting attached of greater than 50% on new installations. We're getting very high attached on video analytics there, which helps with ARPU and also the quality and the capability of the system being delivered to the consumer. The downside is the dealers are, for the most part, relatively busy. They don't have a ton of additional tech capacity out that they can use to go back and do upgrades to existing accounts. I haven't seen as much promotion as I would like of the video services back to the existing base. What I will say is we have some product pipeline. I think there's kind of a two-pronged fork. A tactic they can use is video today is just so much better than it was four or five years ago. I think they can go back to customers that were created four or five years ago that are coming to the end of their contract term and offer to update them and upsell them into a video service plan if they renew their service contract with the dealer. I would expect we can get more of our dealers to run that. On the product pipeline side, we're doing a product that we think will have some relevance to a growing body of residential customers. It will be a camera that is completely wireless and also battery powered, which for a lot of use cases, traditionally, people have not loved indoor cameras, but quite a few people do have cases where they want to put one camera in one room when they are traveling and then move it to a different room when they are leaving their pet at home and that sort of thing. That has been hard to do if you are primarily delivering a solution that needs to be plugged in all the time. I think getting that product to market later in the year will also help us kind of create a message to go back to that base and ideally drive some additional video upsell. Got it. Thank you, Steve. That is helpful color on that front. And then just quickly on NRR. At a high level, would it be fair to assume that NRR roughly stays at this elevated level throughout 2025 under the assumption that home sales volumes remain subdued over the remainder of the year? Do you want to take that one, Kevin? Sure. Yeah. That's not the way that we're currently modeling it. So we're modeling that that tailwind sort of was in Q1. We see it in place at least through April at this point. That's kind of what you saw a little bit in our Q2 guide lift. At this point, we're not assuming that it stays elevated at that level in Q3 and Q4. It may be the case that it will, but that's not what's baked into our outlook currently. Okay. Got it. Thanks for clarifying that, Kevin. Thank you both. Thank you. One moment for our next question. Our next question comes from Darren Aftahi with ROTH. Your Your line is open. Hey, thanks for taking my questions. And congrats to Kevin as well. I look forward to working with you. True, if I may, just clarification on your SaaS guidance. You talked a lot about sort of that pause in April and then sort of business as usual. I guess looking at those two spectrums, your SaaS guidance, where does that fall? Does it fall more on the business-as-usual side, or is there some conservatism built in that the wind kind of blows a different way if tariffs become a bigger issue? Then secondly, in the past, you guys have talked about education of your service provider base on residential or commercial. I'm just kind of curious what the overlap is and if there's kind of an initiative to get more of your service providers to try and sell commercial just given the ARPU uplift and the growth you've been seeing there. Thanks. Sure. Hey, Darren. Yeah, I think what is baked into our model currently is on the tariff stuff. Aside from widening the range on the hardware, we're not modeling that a lot of impact there. We feel pretty good having watched all of April that things are looking okay at the moment. We're not yet trying to guess what's going to come out. If you go back to the initial presentation in the Rose Garden after Liberation Day, some of the tariffs that were presented were much higher than the baseline tariff that everyone's experiencing at the moment, which is 10%. We're not attempting to predict what may come to pass in July, August, that sort of thing. Based on what we see today, we feel like demand is holding up. Things look okay. The second piece that maybe is that element of conservatism in our guide is the model of somewhat of a return to traditional revenue retention rate. We may see that revenue retention remains elevated. That will be positive for us. Your question about service providers on commercial, I mean, we still like the residential market, and it is a big market. We do not want to be too quick to push everyone out of the residential market. Markets kind of move in ebbs and flows. We have seen through time there are years where residential is particularly strong, and there are years where S&B and commercial is particularly strong. The best businesses are those that can be advantaged by positive trends in one while the other might be a bit negative. We think that the best place for most service operators to be is one where they have some diversity in their own business with 20%-30% of the business being commercial and 60% or so being residential. That said, there are an entire class of service providers who really are commercial integrators, and that's all they do. We do have a team focused on prospecting within that class. That's a class of service provider that we haven't, through the years, had as much access to because we started in residential and have moved more into commercial and S&B. We are out there working hard to continue to expand into that class of service providers that are almost exclusively commercial. That's helpful. Thank you. Yep. One moment for our next question. Our next question comes from Jack Vander Aarde with Maxim Group. Your line is open. Okay. Great. Welcome to Kevin. And good to see the strong results and outlook, especially when many other companies are kind of hitting pause. So great to see. Steve, I know you guys don't provide an explicit total subscriber or connected property count. And ARPU is obviously increasing with strong attach rates. But can you maybe just speak in general to your install base in North America residential and in commercial? Are both of those actually growing in terms of new subscriber connections? And any impact from the homebuilder channel on subscriber growth in North American residential and commercial? Thanks. Sure. Hey, Jack. Thanks for that. Yeah. I actually don't know the exact metric because it's not one that we're reporting. What's happened is the definition of what is a subscriber has evolved some. In the commercial business, a subscriber can be a door or it can be a video camera. That camera may be with analytics producing the same ARPU as an entire home. We have subscribers on the Energy Hub side that are different in their profile. When we add all those numbers up, we get to a number that's a little bit inconsistent with what we used to report, which was really a pure residential number. That said, both numbers are continuing to go up. The total number of subscribers continues to grow. We're not at a point where we're seeing a retreat on either the commercial or the residential side. Generally, the outlook is that both are increasing. The housing market has been a domain where we've had a bit of a headwind now for a couple of years. The elevated interest rates have reduced the frequency of moves, the frequency of new builds being permitted. It hasn't been the end of the world, but it has been a softer spot that's been a headwind to new account creation for our service providers now for a couple of years. We don't necessarily see that changing this year, but it continues to be impactful. The positive aspect of that is that when people are not moving, when they're staying put, then we see some benefits on the revenue retention line. Okay. Great. I really appreciate the color there. That makes a lot of sense, especially on the kind of moving the definition of the lines get blurred with the definition of what a connected subscriber is as well. I appreciate that. In general, I guess you kind of touched on ADT a little bit. I do not want to go there specifically, but there is positive momentum in your channel. It sounds like there is positive momentum in your marketplace. Any updates on actual competitive landscape as it relates back to your guys' guidance that largely remains, I would say, incrementally positive? Any impact on the competitive environment as it relates to your outlook? Thanks. Sure. As it relates to ADT, we're still a partner with ADT. We're not really seeing any, we don't really think of them as a sort of a competitive factor, I would say. If we look at the broader market and think about what's going on, particularly on the residential side, I think the thing that we pay a lot of attention to is just the proliferation of products coming across, typically from Asia, that are directly sold to end consumers to solve some type of video need. There's no doubt that quite a few people are buying cameras off of TikTok, off of other sites at low cost. The cameras are not as functional, not as capable, don't really provide real security, but I think nonetheless represent somewhat of a competitive threat that we monitor. I'd say the good news, though, for our investors is this is no different than for the last decade, we've seen some entity selling video cameras direct to consumers at a lower price point. We've survived that. We expect we'll continue to survive that. We think that the market has basically bifurcated into those who are serious about security and view security and video as an investment in their home, and then those that are looking for sort of a temporary point solution. We want to stay focused on the former set. Those are the better customers. They're the more profitable customers, and they're the ones that benefit the most from our service providers' attention. In that domain, we're feeling pretty good, I would say. Okay. Fantastic. I appreciate the color. Thanks. Thank you. I'm not showing any further questions at this time. As such, this does conclude today's presentation. You may now disconnect and have a wonderful day.