APX — Debt Investor Presentation (July 2018)
27 slides from APX's debt investor presentation, Jul 16, 2018
Slide 1: Investor Meetings July 2018
APX Group Holdings, Inc. Exhibit 99.1 Investor Meetings July 2018
Slide 2: Preliminary Statement
Preliminary Statement This presentation includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements with respect to certain preliminary unaudited financial results for the Company’s quarter ended June 30, 2018, whic
Slide 3: Presenters
Presenters Alex Dunn President Mark Davies Chief Financial Officer Dale R. Gerard SVP Finance and Treasurer 3
Slide 4: A leading Smart Home company in North America
A leading Smart Home company in North America Leader $984MM - $1.0B Nationwide Growth #1 smart home Annual recurring revenue Sales, installation, and service Significant growth services platform¹ and $536 - $560 million footprint with 98% coverage opportunities in existing and Adjusted EBITDA2 new c
Slide 5: Accelerating Momentum as the Smart Home Leader
Accelerating Momentum as the Smart Home Leader 5
Slide 6: In the past, three main types of smart home competitors existed
In the past, three main types of smart home competitors existed Full Service Providers • Offer installation, customer service and post-install service • Comprehensive product offering Platform Products • Connecting other companies’ devices • Mostly DIY DIY Hero Products • Sold and function standalon
Slide 7: A lot has changed
A lot has changed Full Service Providers • Offer installation, customer care and post install service • Comprehensive product offering Platform Products • Connecting other companies’ devices • Mostly DIY DIY Hero Products • Sold and function standalone • Some hoping to become a platform 7
Slide 8: Winning smart home model will combine mass market penetration with high margin services
Winning smart home model will combine mass market penetration with high margin services Tech platform players pursuing share Smart device customers • Broader penetration across the market • Initially entering Smart Home cautiously, with single devices and limited service charges • Interested in deep
Slide 9: There are barriers to mass market adoption in Smart Home
There are 8 barriers to mass market adoption in Smart Home 1 Lack of compelling use cases 2 Difficulty educating consumers through typical sales channels 3 Burden on consumers to understand interoperability 4 High up-front pricing 5 Difficulty of installation 6 Poor product and system reliability 7
Slide 10: By addressing these barriers, our end-to-end model is driving mass market adoption
By addressing these barriers, our end-to-end model is driving mass market adoption in smart home Consultative Highly trained Direct-to-Home and Inside Sales 1 1 professionals producing record sales rep average, sales best in class Smart Home adoption and Industry leading RMR Smart In-home 7 2 Smart
Slide 11: Our curated platform delivers a best-in-class Smart Home experience
Our curated platform delivers a best-in-class Smart Home experience through product innovation and integration “A one-stop-shop to “…the experience is magical.” “Highest in building a smart home.” Customer 4.6 star rated app Satisfaction” Smart Doorbell Ping Camera Element Smart Home SmartHub Panel
Slide 12: Vivint's Paths to Subscriber Growth
Vivint’s Paths to Subscriber Growth Grow what we know New sales channels Acceleration in Same value proposition, existing channels new paths to market Pull through Adjacent markets Integration and co- Using smart home to marketing with high solve critical problems in volume products large adjacent m
Slide 13: Four key drivers define Vivint's economic model
Four key drivers define Vivint’s economic model Key Business Drivers Unit Economic Model Description A Recurring Monthly Revenue: billed to an A Revenue per user (RPU) Revenue per user o - (RPU) individual smart home subscriber Net servicing costs, B net of one-time service fees = B Service margin (
Slide 14: Industry Leading Smart Home Financials
Industry Leading Smart Home Financials Revenue Adjusted EBITDA in millions in millions $511 - $517 $965 - $971 $490.3 $882.0 $444.1 $757.9 $387.2 $653.7 $563.7 $309.4 2014 2015 2016 2017 LTM 2Q18E 2014 2015 2016 2017 LTM 2Q18E Total Subscribers Total Net Subscriber Additions in thousands DTH IS 1,43
Slide 15: Objectives: Next 12-18 Months
Objectives… Next 12-18 Months Where we are now Where we are going Fundamentals of core business are strong Enterprise scale and productivity Smart home adoption healthy, strong new We’re focused on driving cash flow neutrality subscriber growth . Flex Pay and new subscriber underwriting At
Slide 16: 2Q 2018 Key Metrics (Estimates): Revenue and Adj'd EBITDA
2Q 2018 Key Metrics (Estimates): Revenue and Adj’d EBITDA Revenue Adjusted EBITDA $ in millions $ in millions $134 – $140 $253 - $259 $120.5 $212.1 Q2 2017 Q2 2018 Q2 2017 Q2 2018 Y-o-Y % growth 19.3% - 22.1% Y-o-Y % growth 11.2% - 16.2% LTM Revenue LTM Adjusted EBITDA $ in millions $ in millions $9
Slide 17: 2Q 2018 Key Metrics (Estimates): New Subscribers
2Q 2018 Key Metrics (Estimates): New Subscribers New Subscribers Vivint Flex Pay Mix (US Only)1 Three Month Period ended June 30, CF Paid In Full Legacy RIC DTH NIS Retail 100% 117,000 - 118,000 90% 20% - 21% 31% 31% 32% 101,334 5,000 – 5,300 80% 43% 41% 92,837 8% - 9% 33,000 – 33,300 70% 23,047 8%
Slide 18: 2Q 2018 Key Metrics (Estimates): LTM Attrition
2Q 2018 Key Metrics (Estimates): LTM Attrition Quarterly TTM Rate 14.0% 13.0% 12.6% LTM 12.0% 12.5% 12.2% Attrition Estimate 11.0% 11.3% 11.0% 10.7% 10.0% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Average L
Slide 19: Consolidated Financial Statements First Quarters Ended March 31, 2018 and 2017
APX Group Holdings, Inc. Consolidated Financial Statements First Quarters Ended March 31, 2018 and 2017 19
Slide 20: Condensed Consolidated Balance Sheets
condensed consolidated balance sheets APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited) March 31, December 31, 2018 2017 ASSETS Current Assets: Cash and cash equivalents $ 3,473 $ 3,872 Accounts and notes receivable, net 41,452 40,721 Inventories 109,236 115,222 Prepaid expenses a
Slide 21: Consolidated Statements of Operations
consolidated statements of operations APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited) Three Months Ended March31, 2018 2017 Revenues: Recurring and other revenue $ 246,597 $ 196,858 Service and other sales revenue - 5,391 Activation fees - 3,104 Total revenues 246,597 205,353 Co
Slide 22: Summary of Consolidated Statements of Cash Flows
summary of consolidated statements of cash flows APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited) Three Months Ended March 31, 2018 2017 Net cash used in operating activities $ (59,582) $ (6,153) Net cash provided by (used in) investing activities 46,586 (8,036) Net cash provided
Slide 23: Annex A
APX Group Holdings, Inc. Annex A 23
Slide 24: APX Group Capital Structure
APX Group Capital Structure as March 31, 2018 ($ in millions) 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 3/31/2018 Senior Secured Notes 2019 $925.0 $925.0 $925.0 $925.0 $719.5 $269.5 $269.5 Senior Secured Notes 2022 - PPM $0.0 $0.0 $0.0 $300.0 $270.0 $270.0 $270.0 Senior Secur
Slide 25: Reconciliation of Non-GAAP Financial Measures – APX Group
Reconciliation of Non-GAAP Financial Measures – APX Group Three Months Ended June 30, LTM Months Ended June 30, 2018 2017 2018 2017 Net loss $ (144.0) — $ (150.0) $ (84.2) $ (472.0) — $ (478.0) $ (307.9) Interest expense, net 59.5 — 62.0 54.9 235.4 — 237.9 213.2 Other expense, net 2.2 — 5.9 (1.9) 25
Slide 26: Reconciliation of Non-GAAP Financial Measures – APX Group
Reconciliation of Non-GAAP Financial Measures – APX Group FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 LTM 2Q 2018E Net loss $ (124.5) $ (238.7) $ (279.1) $ (276.0) $ (410.2) $ (472.0) $ (478.0) Interest expense, net $ 113.0 $ 146.1 $ 161.2 $ 197.5 $ 225.6 $ 235.4 $ 237.9 Other expense (income), net $ 0.
Slide 27: Certain Definitions
Certain Definitions Total Subscribers – the aggregate number of active smart home and security subscribers at the end of a given period. This metric excludes subscribers originated under pilot programs. New Subscribers – the aggregate number of net new smart home and security subscribers originated
APX Group Holdings — Debt Investor Presentation (July 2018) on 6ix