Slide 1: Third Quarter 2016 Earnings Conference Call, November 2, 2016
APX Group Holdings, Inc. – Third Quarter 2016 Earnings Conference Call, November 2, 2016 C O R P O R A T E P A R T I C I P A N T S Dale R. Gerard, Senior Vice President, Finance & Treasurer Todd Pedersen, Chief Executive Officer Alex Dunn, President Mark Davies, Chief Financial Officer C O N F E R E
Slide 2: 3rd Quarter 2016 Results
APX Group Holdings, Inc. 3rd Quarter 2016 Results November 2, 2016
Slide 3: Participants
participants Todd Pedersen Chief Executive Officer Alex Dunn President Mark Davies Chief Financial Officer Dale R. Gerard SVP, Finance & Treasurer
Slide 4: Industry, market and competitive position data
APX Group Holdings, Inc. (the ”Company”, “Vivint”, “we”, “our”, or “us”) obtained the industry, market and competitive position data included in this presentation from its estimates and research as well as from industry publications, surveys and studies conducted by third parties. Industry publicati
Slide 5: Non-GAAP financial measures
non-GAAP financial measures This presentation includes Adjusted EBITDA which is a supplemental measure that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA is not a measurement of our financial performance u
Slide 6: Vivint is a leading Smart Home company
Vivint is a leading Smart Home company One of the Largest Smart Home platforms in the world Fully integrated across cloud, hardware, sales, install, service, and support Over 1.1 million customers 18.4 million smart home devices installed Over $780 million in annual recurring revenue and $470 millio
Slide 7: Successful transition to Smart Home has driven significant Avg RMR per New Subscriber growth
Successful transition to Smart Home has driven significant Avg RMR per New Subscriber growth Ave RMR per New Subscriber USD $ Smart Home package vs. security only offering Package % More Vivint customers are choosing Smart Home packages… …which is improving Vivint’s Avg RMR Per New Subscriber 2009 2
Slide 8: Customers rate the Vivint Smart Home experience #1
Customers rate the Vivint Smart Home experience #1 Ratings of all versions from App Store, June 2016
Slide 9: Key operating results
key operating results Adjusted EBITDA Quarter ended September 30, Revenue ($ in Millions) Growth: 14.8% 17.6% Growth: 30.3% 14.9% Revenue Adjusted EBITDA YTD ended September 30, ($ in Millions) Growth: 16.4% 15.6% Growth: 26.8% 14.1%
Slide 10: Service and creation costs
service and creation costs(1) Net Creation Cost Multiple LTM Ended September 30, Net Service Cost Quarter Ended September 30, (1) Excludes wireless internet business Improving service margins, while improving NPS (0.8x): Equipment, overhead and fixed scaling, partially offset by shift to RMR based p
Slide 11: New smart home subscriber originations
new smart home subscriber originations(1) 11,332 11,888 22,453 (1) All subscriber portfolio data presented excludes wireless internet business (2) RMR is stated as of the end of each period New Subscribers Smart Home Adoption Rate Growth: 20.7% 6.6% DTH 15.0% -3.7% NIS 49.6% 46.8% Growth: -2.4% 12.3
Slide 12: Smart home subscriber portfolio data
smart home subscriber portfolio data(1) (1) All subscriber portfolio data presented excludes wireless internet business (2) RMR is stated as of the end of each period As of September 30, $54.92 $54.50 $53.05 ($ in Millions) Total RMR(2) Total Subscribers Avg. RMR Per Subscriber(2) Growth: 13.9% 16.9
Slide 13: Subscriber account attrition
subscriber account attrition(1) ~ 15% of portfolio reaching initial end of contract term in 2016, similar to 2015 2012 42-mo contracts (4Q15 – 1Q16) 2013 42-mo contracts (4Q16 – 1Q17) (1) All subscriber attrition data presented excludes the wireless internet business for all periods presented LTM Qu
Slide 14: vivint.SmartHome
vivint.SmartHome
Slide 15: Quarters Ended September 30, 2016 and 2015 Consolidated Financial Statements
APX Group Holdings, Inc. Quarters Ended September 30, 2016 and 2015 Consolidated Financial Statements
Slide 16: Condensed consolidated balance sheets
condensed consolidated balance sheets APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited) September 30, December 31, 2016 2015 ASSETS Current Assets: Cash and cash equivalents 192,439 $ 2,559 $ Accounts receivable, net 10,296 8,060 Inventories 58,340 26,321 Prepaid expenses and othe
Slide 17: Consolidated statements of operations
consolidated statements of operations APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited) 2016 2015 2016 2015 Revenues: Recurring revenue 189,032 $ 161,440 $ 528,950 $ 456,647 $ Service and other sales revenue 6,005 5,503 16,842 17,720 Activation fees 3,298 1,634 7,603 4,320 Total r
Slide 18: Summary of consolidated statements of cash flows
summary of consolidated statements of cash flows APX Group Holdings, Inc. and Subsidiaries (In thousands) (Unaudited)
Slide 19: Annex A
APX Group Holdings, Inc. Annex A
Slide 20: Reconciliation of non-GAAP financial measures – APX Group
reconciliation of non-GAAP financial measures – APX Group ($ in Millions) Reflects costs associated with the restructuring and asset impairment charges related to the transition of our wireless internet business and the sales of contracts in New Zealand and Puerto Rico. Excludes loan amortization co
Slide 21: Certain definitions
certain definitions Total Subscribers – The aggregate number of active security and home automation subscribers at the end of a given period RMR – The recurring monthly revenue billed to a security and home automation subscriber Total RMR – The aggregate RMR billed for all security and home automati