Good day, and thank you for standing by, and welcome to the Latch's First Quarter 2022 Earnings 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 one on your telephone. Please be advised this call is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your host today, Kevin Toomey, Latch's Director of Investor Relations. You may begin. Thank you, operator. Good afternoon and thank you for joining us today to review Latch's first quarter 2022 financial results. With me on the call today are Luke Schoenfelder, Chief Executive Officer and Co-founder, Barry Schaeffer, Interim Chief Financial Officer, and Garth Mitchell, transitioning Chief Financial Officer. After prepared remarks, we will open up the call for a question- and- answer session. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance but rather are subject to a variety of risks and uncertainties. Our actual results could differ materially from these expectations reflected in any forward-looking statements. Forward-looking statements made today speak only to our expectations as of today, and we assume no obligation to publicly update or revise them. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the Risk Factors section in our annual report on Form 10-K, available on the SEC's EDGAR system and our website, as well as other risks and other important factors discussed on today's call. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release in the investor relations portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Chief Executive Officer, Luke Schoenfelder. Thank you, Kevin. It's great to be here to discuss Latch's first quarter 2022 results and provide an update on the progress we've made on our strategic priorities. Latch continued its strong growth trajectory this quarter. We delivered software revenue growth of 88% year-over-year to $3 million in Q1, which exceeded the high end of our guidance range as we are experiencing shortened timelines between hardware sales and the initiation of software agreements. Our total revenue guidance for the full year implies a 112% year-over-year growth at the midpoint. Now, in addition to reporting and guiding to software revenue on a quarterly and annual basis going forward, we are now reporting ARR each quarter and providing guidance on an annual basis. Our ARR is defined as the annualized value of our active software contract and is net of promotional term and any other discounts. Our ARR at the end of the first quarter was $7.9 million, representing 137% year-over-year growth. We are also now reporting a new metric, spaces, which is defined as the quantity of units with active software contracts and buildings that generate ARR, where units represent apartments, other dwelling units, or commercial spaces in a building. We now have almost 127,000 spaces at the end of the first quarter, up 129% year-over-year or 22% sequentially. The spaces metric is an important concept to Latch, as it is the leading indicator and factor in our resident engagement strategy and the revenue potential that it brings to both Latch and our building owner customers. We're excited about the growth in the Latch software business demonstrated by these metrics, and Barry's gonna speak more about our full year guidance in his prepared remarks. We continue to see opportunities to better serve our customers' needs across the life cycle of a project's activation and ongoing operations. Direct deployment contributed over $1.5 million of revenue from these activities in the first quarter alone, despite its recent introduction, accounting for 10% of our total revenue in the quarter. Our investments here helped us win more business, better square off with competitors that previously offered a deeper level of infield installation support, and now set up a foundation for more service offerings going forward. The market for our products and services remains incredibly exciting, and we continue to see increased demand from real estate owners, increasing buyer sophistication, and increased recurring monetization opportunities that drive our confidence in the market opportunity. We have created hardware, software and services that our customers love, and the market is expanding. Now I'd like to speak to progress on some of our strategic initiatives outlined last quarter. We continue to see 2022 as a high growth year in our core North American multifamily market, with lots of opportunities for the expansion of Latch's initiatives to make more spaces better places to live, work, and visit. We're focused on executing on this massive market opportunity, and we've made and will continue to make the required changes to continue to be successful. In February, we outlined a number of these strategic initiatives, and I'd like to quickly speak to supply chain, organizational changes, sales compensation, partnerships, and product progress. I'll start first with construction delays and supply chain. As we look back on the first quarter, our teams continued to deliver products for our customers despite a challenging macroeconomic backdrop. We have not seen significant changes in our customers' construction timelines due to their own supply chain constraints, with extended shutdowns internationally due to COVID and ongoing geopolitical conflicts adding more uncertainty. Our own teams have continued to deliver with improved efficiency in the first quarter. We made fewer spot purchases in the short term electronics market, and we were able to recognize improvements in our hardware gross margins in the first quarter as a result. While we are pleased to see these positive results and over the long term the trend in margins will be positive, we expect spot buying in the current environment to put pressure on hardware margin for at least the remainder of 2022. Turning to organizational changes. In Q1, we announced some key changes to the leadership team. After more than three years, Garth Mitchell transitioned out of the company to pursue other opportunities, and Latch's Senior Vice President of Finance, Barry Schaeffer, was appointed as Interim Chief Financial Officer, and we're excited to continue with his expertise in the business. We're in the midst of an ongoing search process for a new CFO to support Latch's continued growth. As part of this organizational evolution, Junji Nakamura also assumed a new role as chief accounting officer, while Latch's Chief Operating Officer, Ali Hussain, stepped down as an executive officer and principal operating officer, enabling him to focus his efforts on special projects and strategic initiatives across the company at this important inflection point. These changes are an important part of this next phase of our growth, and I am extremely grateful to have worked with Ali and Garth in their roles. Turning now to our sales compensation structure. We made a move early in the year towards compensating our sales teams on what we believe matters most to our growth, continuing to increase recurring software and services revenue and delivering for our shareholders and customers in 2022. We reported software revenue exceeding the high end of our guidance range today, and as a result, we are raising our outlook for full year software revenue and introducing full year ARR guidance. We're making continuing improvements to our go-to-market motion to continue to deliver a great experience around our existing products for our customers, but also find more efficient ways to deliver new products to them as well. We look forward to continuing to provide updates around our sales progress throughout the year. Turning to partnerships, we've made enormous progress in finding ways for our customers to get the benefits of LatchOS through an expanded set of hardware, software, and service partnerships. This includes many of the partnerships announced at the end of 2021 and more that we expect to announce later this year. In Q1, we had more than $1 million of revenue from second-party devices and associated software. We are excited to see this strategy begin to contribute in the first quarter. The combined effect of the Latch Lens program and our active support of the open Matter device standard will allow us to continue to rapidly scale Latch-enabled spaces through second-party and third-party products that are brought to life with differentiated Latch software and services. Building on a trusted, high experience, high-quality ecosystem of first, second, and third-party devices provides us the ability to drive recurring software per space without having to incur the cost of first-party product development for each of our spaces. This broader strategy is particularly helpful in the retrofit market, as it allows Latch to more flexibly pursue the activation of a wider set of spaces through the addition of partner products. This further push into the retrofit market is having a positive impact on our near-term results as retrofit projects are less subject to construction delays. We expect to continue to build on this strategy throughout the year and grow the ecosystem of partners for LatchOS. As we spoke about on our last earnings call, we have reorganized our product and engineering organization to get back to the basics of building, shipping, and selling amazing products to our customers. At our core, Latch has always been a product company, delivering hundreds of product and feature releases over our lifetime, with our work resulting in 131 pending or granted patents worldwide. Through this recent reorganization, we have returned to our foundation and are poised to deliver consistent and increasing value to all of our stakeholders through our products this year and beyond. Two years ago, in September of 2020, we announced the first version of our full building operating system, Latch OS, which now powers over 100,000 spaces. We're excited to release our first major update later this year. Built in close partnership with some of the world's leading real estate companies, the products and features of this next Latch OS release, many of which we spoke about last quarter, will once again push the industry forward, solving customer problems and delivering on an enhanced user experience. From payments for rent and experiences to open standard Matter-based smart home sensor management to new capabilities around deliveries and living services to new integrations and collaborations to a conversational interface between residents and their spaces, Latch OS will further bridge the needs of real estate operators, their residents, and all of the partners and services that operate in spaces. To complement the expansion of LatchOS to more spaces, we will also be releasing two new retrofit products specifically tailored to the needs of the more than 30 million existing apartments in the U.S. They'll help us land and expand at new spaces with a more basic set of features and upsell our entire ecosystem over time. These retrofit products will provide us a unique and differentiated way to distribute our software and experiences relative to other players in the market. We've already begun piloting these specific retrofit products with customers and can't wait to officially announce and ship these products later this year. Through LatchOS, our suite of first, second, and third-party products, and our new retrofit products, Latch will be able to offer an unmatched range of functionality to the multifamily market, serving the needs of small legacy buildings and the largest multifamily skyscrapers through a unified platform of software, services, and devices. We're grateful for the opportunity to serve our customers and our shareholders by consistently delivering value through our products, laying the foundation for years of software and services growth to come. In closing, we had a strong set of results in Q1, made significant operational improvements, and are anticipating strong continued growth in 2022. I have never been more excited to lead this company into the future, working alongside such a dedicated set of teammates to continue to deliver for our customers, users, partners, and shareholders. Thank you all for your support. With that, let me turn the call over to Garth Mitchell, transitioning CFO, and Barry Schaeffer, Latch's interim CFO. Garth? Thanks, Luke. When I joined Latch in early 2019, we were a private company with about 100 employees, four people in finance, some exceptional products, and a lot of enthusiasm. Today, we're a public company with a global base of employees, over 100,000 spaces, and hundreds of thousands of the world's best real estate owner-operators on the platform. Although I've decided to leave the company to pursue other opportunities, the market opportunity and differentiated products have only become clearer, and the same enthusiasm remains. I'm extremely grateful to have been a part of this team and for the opportunity to have built a world-class public company finance organization ready to support the company's continued growth. I'm proud to hand the reins of the team over to Barry Schaeffer, whose decades of finance experience at fast-growing technology companies in hardware and software and collaborative leadership style give me high confidence that I'm leaving the company and CFO role in very capable and prepared hands. Thank you to our customers, shareholders, and teammates at Latch for the opportunity to serve the company for more than three years. I will be cheering for your continued success, and I can't wait to see what's next. With that, I'll turn it over to Latch's interim CFO. Barry? Thanks, Garth, and thank you, Luke. Q1 was another quarter of strong growth for the company. I am going to share our first quarter results in addition to providing an update on our fiscal year 2022 and Q2 2022 guidance. I'd like to quickly point out that I'll be discussing some non-GAAP metrics going forward. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in the earnings release we issued earlier today. Today, in addition to quarterly software and total revenues, we reported two new KPIs, ARR net of promotional, term, and any other discounts and spaces that are active on the platform. These metrics most closely reflect the scale and revenue-generating potential of our platform and the recurring cash collected from our customers to provide our services. The company reported ARR of $7.9 million, up 137% year-over-year, and almost 127,000 spaces, up 129% year-over-year. The strong growth in ARR and spaces in the quarter was primarily the result of Latch software going live in more units. In the case of ARR, we have also seen strong attach rates of intercom, smart home, and Latch delivery assistance, which gives us confidence in our potential to grow customer lifetime value as we launch new products and services. Beginning today, we have also provided full year 2022 guidance for ARR, introducing a range of $11.1 million-$11.9 million and spaces guidance of 182,000-194,000. We believe the growth we've seen in ARR and SaaS best represents the opportunity of our business, although macro headwinds leading to construction delays for our customers may in turn cause variability in these metrics. Turning now to our first quarter results. Software revenue of $3 million grew 88% year-over-year in the first quarter, and total revenue of $13.7 million was up 106% year-over-year. Software revenue beat the midpoint of our guidance by 11% and exceeded the high end of our guidance, driven by acceleration of software contracts. Total revenue, which includes hardware, was in line with the midpoint of our first quarter guidance range. There are a number of differences between ARR growth and software revenue growth, including timing of large deals, timing of when we recognize revenue, and that software revenue includes term discounts while ARR is net of such discounts. Adjusting for these items in the quarter, our software revenue growth would more closely reflect our ARR and SaaS growth. Moving now to hardware revenue. As we told you last quarter, we have a meaningful amount of booked hardware revenue in the pipeline. It can be difficult to predict the timing of hardware revenue recognition in any given quarter due to ongoing macro supply chain challenges which may lead to construction delays. Also, given our relatively low base of revenue, any change in the mix of hardware products sold or a shift towards second and third-party hardware that deliver our software can impact hardware revenue. We are also breaking out services revenue for the first time this quarter. As we mentioned last quarter, we have historically under-monetized customer success, support, and activation, and we see direct deployment, activation, and training as all presenting real opportunities for growth in services revenue in 2022. Services now represent over 10% of our total revenue in the quarter, and we anticipate that magnitude continuing into the second quarter. Turning now to margins. First on software margin. Our software margin was 89% for the first quarter, fairly consistent with both the first and fourth quarters of 2021. We believe Latch's high software margin demonstrates the scalability and positive impact on our overall gross margin from our hardware-agnostic software. Now on the hardware side. In the first quarter, we saw a solid quarter-over-quarter improvement in hardware margin from -50% to -21%. The current volatile supply chain environment may cause temporary fluctuations in hardware margin in any particular quarter. Although we believe our hardware margin will improve over time, we expect spot buying in the current component environment to put pressure on hardware margin for at least the remainder of 2022. Over time, we expect software revenue to increase as a percentage of our revenue mix, which along with improving hardware margin, will be a key driver for long-term gross margin expansion. Operating expenses were $51.2 million for the first quarter, down 10% versus Q4 2021, due primarily to one-time items in Q4. Adjusted EBITDA in the first quarter was a loss of $36.8 million as compared to a loss of $44.4 million in the fourth quarter of 2021. This adjusted EBITDA result was better than our guided loss range, with higher hardware gross margin driving much of the sequential improvement. Turning now to our balance sheet. As of March 31st, 2022, we had total cash plus marketable securities, $335 million, including cash and cash equivalents of $91 million and $244 million in marketable securities, which compared with $46.5 million total cash + 0 in marketable securities as of March 31st, 2021. The increase in cash and cash equivalents and marketable securities was primarily due to proceeds received in connection with the June 2021 closing of the business combination with TS Innovation Acquisitions Corp. Now let me turn to guidance. We are introducing full year 2022 ARR guidance of $11.1 million-$11.9 million, representing 74%-87% year-over-year growth, and Spaces guidance of 182,000-194,000, representing 75%-86% year-over-year growth. We are raising our full year recurring software revenue guidance to a range of $14.3 million-$15.3 million, a 74%-86% year-over-year increase. For our second quarter software revenue guidance, we are projecting a range of $3.3 million-$3.4 million, an 82%-88% year-over-year increase. For our full year total revenue guidance, we are maintaining a range of $75 million-$100 million, an 81%-142% year-over-year increase. This is unchanged from our guidance provided in February. For our second quarter total revenue guidance, we are projecting a range of $16.5 million-$18.5 million, an 83%-105% year-over-year increase. We are updating our adjusted EBITDA guidance for full year 2022 to a loss of $176 million-$156 million, which represents a $4 million improvement over our previous guidance. For our second quarter, we expect an adjusted EBITDA loss of $40 million-$36 million. We are continuously evaluating operating efficiency and believe there are opportunities to continue to improve. You can expect we will move quickly to implement improvements while balancing efficiency with growth. Our guidance continues to reflect no meaningful change in supply chain challenges seen at the start of 2022 and reflects a cautiously optimistic ramp in go-to-market investments and software launches. In addition, as we ramp up on second and third party hardware, we anticipate that this could have a downward impact on hardware revenue. Accordingly, we are maintaining our wider implied range of hardware revenue outcomes in our provided guidance ranges. In summary, we delivered strong growth in the first quarter, introduced ARR and Spaces guidance, and raised our software revenue and adjusted EBITDA guidance for the full year. We remain committed to delivering sustainable growth for the long term in a massive and expanding market. With that, we will now open up the call for questions. Operator? Thank you. We will now open the call for question- and- answer session with Latch's CEO, Luke Schoenfelder, and Interim CFO, Barry Schaeffer. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by. We'll compile the Q&A roster, and we do ask that you limit yourself to one question and one follow-up. Again, we ask that you limit yourself to one question and one follow-up. Our first question comes from Joe Vruwink with Baird. Your line is now open. Great. Hello, everyone. This is Peter on for Joe tonight. My first question would be, when you think of, I know it's pretty early on, it's been about a month, but, when you think about the communication and the planning of the rollout of the new compensation alignment for sales, you know, how has this gone, first of all? Any early proof points of this having the desired effect that you talked to us last quarter about? Hey, Peter. Thanks so much for the question. You know, as we reported in the quarter, we exceeded the high end of our software guidance range and actually raised our software for the year. We're really focused on making sure that we continue to compensate our sales teams to deliver on the high margin recurring software services that we offer. You know, we're excited about continuing to see that develop throughout the year. Okay, great. Just one on the macro. Clearly with the guide, it sounds like you're still expecting mostly the same, but anything kinda incrementally more positive or worse you're seeing in the markets versus last quarter? What are you kinda looking for it to get better throughout the year, maybe to outperform those expectations? On just retrofit versus new, you spoke to retrofits being a little stronger there and, you know, kind of what are those factors? Yeah. Thanks, Peter. Yeah. I think as our guidance sort of implies, we expect no real change over our annual sort of guidance that was provided, meaning the sort of supply chain environment and construction environment stays about status quo. We did see, you know, a positive movement, fewer spot buying activities within the first quarter. It would be great if we see an opportunity to do that in the future, but we're not planning for that to be the case. As we look at the sort of retrofit growth, you know, we continue to be excited about our growth in retrofit for our existing products, but also for the growth of second and third-party products and our ability to serve more spaces. We also have some exciting new products that are specifically tailored for the retrofit market that we'll, you know, be able to speak in more detail about later this year that are already piloting with customers. Expect to hear more from us on the retrofit side. We're very excited about that market opportunity. Awesome. Thank you. Thank you. Our next question comes from Stephen Sheldon from William Blair. Your line is now open. Hey, guys. Congrats on a nice quarter. This is actually Pat on for Stephen today. Just a couple of questions here. My first one, a few quarters ago, you guys announced integrations with some of the other property management software providers, some of the major ones like Yardi and Entrata, I believe, and mentioned plans to deepen those connections over time. I just wanted to ask at this point how those have progressed and, given what, you know, can be somewhat fragmented tech stacks, and if you've seen any incremental sales traction from those capabilities. Hey, thanks, Pat. We announced over the last series of quarters, RealPage, Yardi, Entrata, and we're always looking for ways to expand the ways that we can work with partners. We're deeply committed to an open partner ecosystem approach. I think as we think about the problems that we're trying to solve with building, you know, Latch is a product company, and we wanna create the best possible experience for folks who manage large amounts of spaces and for people who live in spaces. We see numerous opportunities to improve the experiences by integrating with the best-in-class partners, some of whom you mentioned and that we've spoken about before, and more that we haven't yet announced. You'll continue to see partner announcements from us throughout the year. We're very excited about continuing to expand our ecosystem and increase functionality over time through partnerships. Got it. Thanks. As a follow-up, you mentioned this quarter some pilots for the new retrofit products. I think last quarter you talked about some pilots that you were running on the commercial side, related to commercial office space. Just wanted to ask how those have progressed and if you can talk a little bit generally about how you're thinking about the opportunity there. Absolutely. Yeah, we remain excited about the commercial office market. We continue to have pilots in that space. We don't have anything new to announce today, but we continue to view that as a large opportunity on top of our focus in the multifamily North American market. We'll continue to focus deeply in the multifamily North America market but look opportunistically for commercial office and European expansion opportunities with the right partners and the right pilot customers. Understood. That's helpful. Thanks for the time. Thank you. Our next question comes from Rod Hall from Goldman Sachs. Your line is now open. Yeah. Hi, guys. This is Max on for Rod. Thank you for taking my questions. Also, Garth, best of luck in your next endeavor. It's been very nice working with you. To my questions, wanted to get some color on your initiatives with second and third-party hardware providers. You did touch on this on the call, but you've previously mentioned that the Latch M locks, one of your flagship products, goes for around $599 versus the Latch Lens, which is used along with second-party locks, generally goes between $50-$100. So that trade-off in hardware revenue is pretty substantial. I was wondering what percentage or an estimate maybe on what percentage of your deployed spaces going forward are expected to come from second and third-party locks, and then the revenue implications of that, and more importantly, the gross margins impact that we should expect? Then I have a follow-up. Hey, thanks so much for the question, Max. So, as we think about sort of continuing to grow the number of spaces that we serve with our products and experience, what we really wanna make sure we do is continue to deliver for our customers with the right mix of products for their spaces. If we think about the typical apartment building, there's going to be lots of different products that are required to complete the entire experience. In some cases, that'll be a first-party product. In some cases, it'll be a second-party product, which is a product built with the Latch Lens. In some cases, it'll be a product that doesn't include any Latch hardware. Our, you know, implied full-year guidance on the hardware side has a bit more range given that we wanna be flexible in meeting the needs of our customers and given that it's still relatively early in the rollout of second- and third-party products that work with LatchOS. We're not, you know, breaking out specific revenue there, but we did say in our prepared remarks that we derived over $1 million in hardware and associated software revenue from second- and third-party products in the first quarter. We're excited to continue to do that over time. You know, as we focus to, you know, continue to expand those efforts, we're always focused on maintaining our high-margin, high-value software. You know, continue to look at that as an area to focus on is the number of spaces and the amount of software revenue we derive from those spaces. Got it. Thank you. Another question. I think the spaces units disclosure, that's a very helpful disclosure, and thank you for that, additional data point. And diving in a little bit deeper on that, in your guidance, you noted that you expect to have about 188,000 total spaces, I think at the midpoint of your guidance, which is about 80% year-over-year increase. Then you ended the Q1 with about 126,000 units. So, I believe that points towards about roughly 22,000 deployed units in the quarter, if I'm thinking about that correctly. That would imply, I guess, an additional 60,000 deployed units to be over the course of the year or for the remainder of the year, or I guess 20,000 new spaces a quarter. That's actually a little bit roughly in line or even slightly below your deployments in Q1. Wondering if that's a conservative guidance going forward, if you're expecting some kind of slowdown in deployed units. Yeah, that would be helpful. Thank you. Yeah. Hi, Max. Sorry, I know it wasn't Rod. I was just trying to see what your name was. Hey, Max, this is Barry. Yeah, so the guidance that we're giving for the rest of the year on spaces is we still see the macro headwinds, and we just want to be cautious about you know, how the impact to you know, construction delays will be. This is the guidance that you know, we feel most confident with. You know, that's the guidance. You know, this reflects our best guess. Got it. Thank you. Thank you. Our next question comes from Ryan Tomasello from KBW. Your line is now open. Hi, everyone. This is actually Kayla on for Ryan tonight. Thank you so much for taking the question. Can you provide an update on your appetite for M&A, and have you seen an increase in the number of opportunities with recent volatility? What areas of the business do you think could benefit most from an acquisition? Thank you. Hey, Kayla. Thanks for the question. You know, Latch is a product company, and we always look at ways that we can solve our customers' problems. As we think about the tools in our toolkit to solve customer problems, build, buy, and partner is really the lens that we approach every opportunity. We've seen amazing opportunities over the last, you know, nine years to build great products for our customers. We've built partnerships with some of the leading technology companies and product companies in the space, and we also think there will be opportunities to acquire opportunistically, you know, going forward. We have, you know, continued to see strong inbound on the M&A opportunity side, and we're continuing to field those. I think those opportunities will persist, particularly as you see earlier stage technology companies that. You know, PropTech is a relatively new category. A lot of folks have raised money in the last couple years. As the market dynamics change, we think there will be opportunities to acquire and integrate smaller providers to complete, you know, a more full solution for our customer problems. You know, at the moment, we don't have anything specifically to announce. Got it. Thank you. As a follow-up, is there any framework that you can provide to bridge the path to cash flow breakeven? Maybe at what level of ARR do you expect to drive profitability? Maybe have you explored any cost rightsizing initiatives to accelerate the timeline? Hey, Kayla. Yeah, you know, we're really focused on operating the business as efficiently as possible and getting to free cash flow breakeven. We have a fully funded plan, and we remain committed to continuing to balance growth in a massive market with the operating efficiency that's required to continue to move forward effectively. We're really excited about what we're seeing in the market growth. We're really excited about what we're seeing internally, and we're really excited about how customers are responding to our products. You know, we have a fully funded plan to make sure that we're here to serve spaces forever. Very excited to continue to move forward, and appreciate the question, Kayla. Awesome. Thank you so much. Thank you. Our next question comes from Ben Sherlund from Cantor Fitzgerald. Your line is now open. Ben, your line may be on mute. Hey, sorry about that, guys. Thanks so much for taking the question, and I appreciate the added disclosures. You know, using one of the disclosures from last quarter on kind of the cumulative booked home units, you know, it looks like you guys have you know a pretty big backlog of you know booked units. Could you kinda you know give us any indication of you know what we should be looking for you know that signals maybe you know supply chains are easing? Then you know if there were to be you know easing pressure on supply chains, kinda what would that fulfillment of that backlog look like? Hey, Ben. Thanks so much for the question. So, as we looked at the market historically as we were focused on new construction, bookings allowed us to look 24 months into the future, and sort of project our growth with our customers based on LOI. With the supply chain challenges that we've seen, you know, we and our focus on driving our sales teams to deliver in-year software revenue, we really are excited to use that historic backlog of bookings as an important source of pipeline for us to continue to deploy over the coming years. We have not seen any, you know, material changes to sort of conversion rates. Obviously, given what we are experiencing just with supply chain and construction delays, it's hard for us to predict exactly when those things will land. We're remaining confident in our full year guidance and are excited to continue to deliver out of that backlog and have extensive, you know, pipeline coverage for our go-forward growth. Okay. Thank you. Maybe a follow-up on You know, I'm looking at the ARR of the units you're signing in the quarter, and it looks like, you know, starting in Q4, you started to see some, you know, re-acceleration of that ARPU for newer units. Is there anything that, you know, is causing that? Was there a new product that was seeing success? Any color you can provide there? Hey, Ben. Yeah. I think, just speaking broadly, you know, we're always focused on making sure that we drive two things, number of spaces on the platform and increased recurring revenue across the platform. There are gonna be times when you see higher attach rates of particular modules lead to higher perceived ARPU. There's also gonna be times when we add more spaces with lighter weight software solutions. So for us, we really think looking at ARR and looking at spaces growth both as leading positive indicators is more important than trying to create a ratio between the two of those. That was something we kind of spoke about last quarter. As we continue to accelerate some of our retrofit initiatives and also continue to add more software modules, the skew between the highest attach rate unit and the lowest attach rate unit is gonna continue to be higher. We don't think that that's sort of what we previously called ARPU calculation is necessarily as valuable as looking at the total number of spaces as the opportunity for upsell and then the total amount of recurring revenue kind of as two distinct line items. Okay. Thanks so much, guys. Thank you. Our next question comes from Wamsi Mohan from Bank of America. Your line is now open. Hi. This is John on behalf of Wamsi. Thanks for taking my question. Can you just give us some sense of the right multiplier between spaces and number of units with active software contracts? What do you think that multiplier will be exiting 2022? Thank you. Hey, John. This is Barry. The definition of spaces is it actually is the number of units with active software contracts. Maybe you wanna ask the question a different way if that doesn't capture it. It would be one for one based on your exact question. I'm afraid you might be asking something a little bit different. Okay. Got it. Could you just talk about maybe like some macro uncertainties that's affecting the guide and how you see that playing out? Yeah. You know, there are two, probably the two biggest macro uncertainties that we've been talking about. One is, you know, the impact of just the global supply chain or the global economic situation on construction delays, and the other one would be on the margin side, would be on spot buys. You know, despite the fact that we saw some favorable spot buy situations in Q1 and got hardware revenue margin upside Q1, in both those cases on construction delays and just overall, you know, supply chain and spot buying situation, we are assuming no sustainable improvement, you know, kind of from where we were when we entered FY 2022. That's all baked into our guidance. Okay. There's no sustainable improvement. Okay. Got it. Thank you. Thank you. Our next question comes from Tom White from D.A. Davidson. Your line is now open. Good afternoon, guys. Thanks for taking my question. You know, as you guys increase your support of 2P and 3P hardware, I presume that kind of more of the product would be going through the channel partners used by the kind of lock and access manufacturers. Can you talk about how you guys might be able to kind of build on that and develop those relationships and whether, you know, that might be an effective way for you guys to kinda, you know, either upsell or additional products or SaaS modules. Then I had a quick follow-up. Hey, Tom. Great question. Yeah. We haven't spoken specifically about sort of the 2P and 3P strategy being also kind of having an integrated channel strategy, but I think it's an astute observation. We think there's a really unique opportunity to use those 2P and 3P relationships and their relationships with distribution to sort of distribute our software on a wider basis in addition to our direct selling efforts. We don't have anything specifically to comment on you know financially what that would look like. You know, we also see that same opportunity and are excited about creating a larger base of spaces that we can then monetize with further software upsells over time. Okay. That's great. Just to follow up, following up on one of the earlier questions about hardware mix, I realize it's kinda still early in terms of the kind of, you know, revamped strategy around 2P and 3P. Luke, if you had a crystal ball in front of you and were to look out, you know, two, three, four years out, you know, what do you think the mix looks like, kind of just broad strokes in terms of, you know, 1P versus 2P, 3P? The answer is gonna be somewhat unsatisfying in that I don't have a crystal ball. You know, as we think about serving a wide variety of spaces, I think you're gonna see certain types of spaces that are gonna make sense with first party products, and then you're gonna see a lot of spaces where there's a mix of the two. I would say the trend over time will be more second and third party spaces, you know, as we go forward. That's gonna be the trend, and that's sort of what we're planning for internally, is that we'll have a consistent software experience that serves all of the stakeholders at a building, with a declining set of first party products. Got it. Thanks for the color. Thank you. If you have a question, star one. Again, if you'd like to ask a question, that is star one. Our next question comes from Brian Ruttenbur from Imperial Capital. Your line is now open. Yes. Thank you very much. Maybe you mentioned this a little bit, but with rising prices, the potential recession, I know historically security-related companies have weathered, you know, recessionary environments very well. Can you talk about your plans and what you're seeing out there? And if there is a slowdown, is your plan to pull back on the spending or continue on the current plan? Hey, Brian, thanks so much for the question. Yeah. We're of course managing the business, you know, with the market and, you know, looking with an eye towards what our customers need, and what's best for, you know, continuing to operate with the right level of growth and the right level of efficiency. I think what, you know, to echo what you said, historically, these types of products have continued to do well even in recessionary environments. You know, we're cautiously optimistic that if the North American market was to enter more of a recession type territory, that the macro trends which are a dramatic shortage of housing, the need for new multifamily units, the need to outfit buildings to make them more efficient, better places to live, will continue to work to our advantage, and the need for our products will persist and perhaps even increase in some instances. At this point in time, you know, we have no reason to be anything but optimistic about the massive opportunity that's in front of us. We will of course be responsive to you know, what we need to do to make sure that our plan remains fully funded and that we can balance our top line growth with operational efficiency going forward. Thank you very much. As a follow-up, is there any restrictions or are there any restrictions on you, given where you are trading, you know, at or near cash to buying back stock, aggressively? I don't know what kind of restrictions you may be under, given you know, how you came public and when you can buy back stock. It's a great question, Brian. It's not something that we have any specific restrictions around. We don't have anything in particular to announce at this point in time. We are fortunate to have a large cash position, be operating in a very large market and are excited about our opportunity. You know, we're excited to have more shareholders benefit from our growth in the years to come and understand that some companies have used moments like this to buy back their own stock. We don't have anything to announce today. Thank you. Thank you. I am showing no further questions. I would now like to turn the call back over to Luke Schoenfelder for closing remarks. Thank you so much everyone for joining today. We'll look forward to speaking to many of you in the days to come. Appreciate your support of Door, and thanks again for the time today. Hope you have a great rest of the week. This concludes today's conference call. Thank you for participating. You may now disconnect.