Snap One (SNPO) 7 Nov 212021 Q3 Earnings call transcript

Good afternoon. Welcome to Snap One Holdings Corp.'s Fiscal Third Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Snap One's Vice President of Investor Relations, Eric Steele. Sir, please proceed.

Great. you. Thank welcome fiscal and earnings quarter Snap call. conference to afternoon, third One's XXXX Good

this being call reminder, a As is recorded.

Joining us and CEO; John are today from Mike Snap Carlet, One Heyman, CFO.

performance our would may future management additional events therefore, of performance. placed but forward-looking and to financial remind begin, not statements, response make like These in and not questions, them. we contain forward-looking upon future should we everyone Before guarantee reliance statements expectations, that not your prepared statements limited remarks and statements future to undue do including, to, be

reasonable, All Although involve could undertake after we believe with directly those of in time-sensitive differ inherent of are based measures materially. press required and is section measure. by are expectations that on these reconciled expectations to including identified extent in that the obligation are statements revise These the to SEC. occur our statement statements reflect law. Factors to of changes company's also current call date This as management in GAAP call accurate information referenced this we most the the any the registration broadcast, risks Risk X, on release November Actual XXXX. results to or of uncertainties, except the call, only our and this no today's S-X non-GAAP comparable earnings Form contains filed financial events

the investors.snapone.com. to our conference will that CEO, website is call turn made Relations a everyone Finally, webcast, like Heyman. for will John? our this call available Investor remind I over I John on to would at now be recording being replay and

financial of busy thank on a we what our know position Mike recent quarter. much results joining overview highlights, today's start our thank and for he'll for really I'll there, and and closing begin so business share our questions. model, to some and Eric, over updates up discuss market you and Carlet, To I'll I'll our an welcome, We'll remarks turn then it growth long-term discussion, and it with strategy. is and you, for From everybody, afternoon. review us open then the

By their smart every need products, and The integrated revolution strengthen from our that us, increase our can while that job. partnering trade businesses. integrators infrastructure one focusing for deliver professional value we earnings, the build have embraced profitable integrators Integrators thriving leveraging on tools to that and the their proposition, partner base. creating with and it through entrenched untapped. growing believe that large is customers relationships our Here positioned connectivity small to to serve tech-enabled founded to distribute on over and of as professional we developed a site Through further we security we've business with to third-party and our do-it-for-me living well be end for professional joy, platforms a deliver One, at and solutions XX,XXX support integrators, platform integrator their Snap proprietary a residential brick-and-mortar workforce integrators to One and global empowers as customers. consumers that our We revenue and strategically our our opportunity integrators. aspire and Snap power living patterns successfully network. scale. smart products visibility and growing to them network our spending e-commerce proprietary enhance software integrator integrators We living smart was to our is integrator the our allow by facilities, reoccurring and we're

experiences need professional stay. of are rise, consumer rely and adoption, increasing turn, growth solutions like anticipate drivers we consumers As drivers for done. business. the get development. and number view platform, demand the as our One of end end The local on to professionals on here scaled deliver commercial long-term integrators an primary the smart promise We of demand new only successfully these industry to job continues smart those to residential secular for a and home Snap living In will to has,

in have the to around of XX% United the only States adoption. a Statista, smart First, According homes device.

Over the to next five years, almost to anticipated that's grow XX%.

will those not smart more hundreds be homes potential. an a manage will from every perspective tens, Our realize and will devices, and project. if spend and more integrator help have now, them decade will that of per homeowners adoption complexity and drive to this Simply, navigate is projects and home want connected this

experiences. demand consumer end for new Second,

ones, existing broadcasting drive a consumer, that as the technology and demand accelerates you. upgrade end and upgrades new will significant cycle You, experiences continue X-K to starts with to will video that

from X, use new integrator, place from your your Wi-Fi these drive on more mill the more access you'll services and network cases, use and on and business and at-home want As demand such then you without cases, will X or software you home as simply in rises Wi-Fi you pressure demand of depending apps innovations and will demand to disparate multiple products. to aging

growth through commercial sales significant residential will is term. and benefit of homes, stay, demand upgrades to ability our the have under to the States the given in that have construction. home and is amount housing short to integrators and linked our also and term existing add long installations chain we the over for an Third, delays muscle in supply Further, light a United from housed the is construction in while in here the shown constraints robust phenomenon caused

home We our integrator smart States investing On thousands disruption. operate third-party our recovering business commercial new in integrators their and future. requires solutions, the we've is building through workforce support our outside base the millions, integrator hundreds that in built in needs channels strengthen business following an commercial to entering and serve of and integrators. in growing our required To COVID that partnerships We're software products and smart relevance and applications. refining aspire side, home date, enterprise business to space and to the and the of United the owners to the focused of into commercial serves

software Besides fast-growing which market, increase growth our network distribution executing new become, connected one, software and long-term and OSX become developing sustainable spaces integrator existing more two, share products, strategy; living participating four, professionals software the mission and a mergers our global and includes the tech-enabled revenue around residential, wallet OvrC strategy five is commercial like three, Of continuing workflow pillars: key omnichannel applications; solutions; services in more innovate focused our to and security and , new rooted in course, with critical. expanding with with on execute our acquisition. five models; will integrators,

And view our record, scale, that to to a track our in and believe continue competency the integrators. Snap access core we M&A in driver ourselves and our with capital, environment. have our strategic established of for operates value a industry. company We we business a for One the acquirer as as of target-rich choice

pursue us our to that and solutions to acquisitions products, and We serve disciplined, accretive discussed workflow expect and enhance us best expand help geographies, we've software markets to our integrator adjacent enabling into continue the base.

recent updates, me well. year, turn chain as XXXX in talk highlights. few financials, look we net and our to through some constraints outperformed supply the sales forward I'll and terms will Now and notwithstanding expectations have of profitability seen strong quick let a the Mike this in but a many cover QX industries QX, to we

branches distribution XX to three building Tennessee. expand and as domestic omnichannel to in First, Florida; and This the footprint end. entered brings presence we momentum Nashville, quarter opened Texas; on quarter, Hollywood, fast-growing markets. continue nationwide the our our new local Austin, from locations second We of

to local these our engagement. training sales, internationally of omnichannel support make All One's our for and leading forward. now expanding immediately products locations offering plan We extending Snap service available both while integrators and capabilities, domestically through deeper going

exciting The announcements we of devices Most efficiency to walls. software major growing noted this commercial feedback Last the OvrC and us clients by integrator several of the adds have beta and support with and increased for that commercial lighting, that multi-display systems we release We're with integrator recent market. for notably, our platform OS search control OvrC and industry. remote early and video a cameras and product upgrade of for front connectivity with OS the Pro consumers, connected brings in We're end energized excited to recent rollout we faster OSX enhancements partners in software and our cables. encouraged of by recently make for product further new improved OSX Composer X.X.X workflow control both also installations consumers. quarter, allows their brings shared about fundamental and native the for ControlX designed also opportunity rooms contemporary and integrator service upgrade and including deployments, made integrators through NVRs, including enhancements speed end and to features efficient the management upgrade platform. provides another personalization This new X.X.X. mounts integration enhancements, OvrC more including Second, ControlX quarter remotely releases,

new we more Our robust committed development. innovation our remain to investments and product driving catalog in through product is ever, than continued

Third, we and year, portfolio continue strategy. products. the wear experience. added We've the our one-stop we've In on expand last greatly by of Yamaha third-party shop distribution to Klipsch, provide expanded pros integrators strategically audio with to product our KEF, Parasound, a

This meet integrators addition specifically investment plus proprietary Marantz the to we portfolio, Sound of in leading and end the to quarter, brands, increased third-party our and our we audio our a proprietary lineup we're of brands, our needs up proud and customers. with sale. brands, solutions to Together of curated for announce built United and Denon the

the current environment, and Mike. I'll over turn about Let to then me quickly talk it

we the have leading As current broader indicators assess demand and sensors remained of our strong. environment, market many

living that are the including is many extremely are out COVID already has integrators produced challenges, booked smart also quarter. commercial industry fueling healthy availability. continuing trends, Our and advance. busy, product residential and in durable, months into uptake COVID fourth many accelerated adoption

to solutions. Our of to to and management continue serve for strong, new our enabled volume spend strong basis, tenets navigate year-over-year with efficiency, overall have integrator increase and on challenges Order us strategy. strategic per integrator inventory both we to demand team's our and along these a add growth key operational has commitment remained successfully integrators

our sales August, beginning we which saw price partially As noted strength we proprietary in lift contribution the and previously, responsible on the was also approximate margin an products X% quarter. during enacted increase for

largely end cost bear integrators to and with our protect provided advanced believe correspondingly increase, that us our inputs has we raised leads as been as of MSRP profit to we increases notice which positive, needed, this and integrators can markets rise. the if and reception Importantly, our

technology In the security, commercial market, other to and continue drive long-term channels: develop to international we home to domestic three addition growth.

strategic COVID developed as we a plan quarter, presence to the outside our the expand has subsided. U.S. During

around As in today, present do the U.S., significant the opportunity future. a we outside markets these and a reminder, we believe $XXX for million us

grow. commercial security international, businesses continuing and Our to are

Mike smart for a in rate together, operational in financial mid-teens We quarter our key focus. discuss million quarter. channels detail. over adjusted shortages accelerating In third increase continue increase faster over organic to a the even positive from growth the living serving in COVID-accelerated sustained fact, enabled in during Put greater the integrators highlights our long-term market outperformance the home the period, the QX X-year solutions. a deliver are chain a quarter. out us than to headwinds believe bit a remained moderate technology supply year. adjacent each I demand in record we for results Financial quarter $XXX at the to grew CAGR during our EBITDA domestic strong will these Carlet, to that, sales approximately zooming turn million CFO, With non-GAAP $XX.X our to include relative in developments and When grow net X% XX% our period. business the it remains net Despite in Mike? last sales sales and resulting these to a to further, in to

Thanks, John.

results the financial XXXX. ended which quarter, third now So our for to XX, on fiscal September turning

XX% Our the from $XXX.X to net period. sales year increased $XXX.X in million million ago comparable

markets Those net during over supply growth major was grew a with to solid continued and portfolios the estimate Both we our to product all impact X% proprietary with regions in on and by negative against headwinds. the demand categories, supply third-party sales growth chain execution in quarter product experiencing X% strength have geographic headwinds, represented XX% Our driven quarter. chain QX.

quarter This quarter June. with our the included results first Networks also full our acquisition Access following represented in for

of ramp-up August. from local most the of And we the in price end eight from the net beginning continued increase our quarter enacted additional with the Additionally, benefited across branches - opening sales between in benefited the XXXX. proprietary the and a quarter third our the quarter end finally, continued recent of of branches third of of product portfolio XXXX

chain supply the stack annual branch the three Despite total As local growth a reported net said, the on forma opened mentioned, local in a count on John business growth we and the growth brings our our sales as recent algorithm X-year it includes this basis. above And pleased growth. we the new long-term with headwinds branches XX. to pro was of we're basis, most teens quarter, experienced in third low faced, quarter

Our sales, year and million, from which sales cost sales, $XXX.X exclusive in of to of increased in XX% sales of comparable higher to the ago net of of amortization, of period. is cost net primarily exclusive depreciation representing and sales increase depreciation XX.X% $XXX.X The XX% attributable volume. amortization, was million,

August, Our year of margin, representing third representing increase million, to supplier in sales inbound increased period. logistics proprietary period. ago $XX.X in XX% performance, primarily was price sales the in operating the net costs a to non-GAAP million, offset contribution in by a from contribution and across the the from measurement increase margin net The of of our as sales benefit portfolio quarter, net XX.X% fiscal in a $XXX.X partially comparable product increased XX% cost net of percentage due up

impacts Our increase to net in selling, card $XX their increase in was and to expenses due year agreement of in sales connection tax by in driven The credit our to initiatives fees return expenses with general paid the and becoming growth and our the in period. in including $XX.X the primarily SG&A increased actions to from normalized net operating pre-IPO spending reduction variable levels, higher investments for in and support associated ongoing XX.X% was mitigate increased to the XX% SG&A remaining XXXX. their in lapping a associated costs interest participation operating lieu million with as representing of expenses, COVID-XX due increases administrative shipping, in million IPO. comparable a to and owners in and The IPO compensation costs volume, processing into sales taken warranty outbound $XXX XX.X% sales million, recognition of cost public of company, while compensation strategic million, expenses of equity-based the entered ago certain $XX.X to receivable expense representing

and in of income, items. ago was EBITDA, $XX.X performance, XX.X% the of compared following increases well compared net fiscal net million, driven extension temporary The participation due chain as increase The to net XX, or for to million, against vendor protect increase year in we increase million decrease by increases last uncertainty payable in period. period. cash EBITDA net increased as end of sales year-over-year net to in increases Our an sales XXXX, a X% growth, $XX.X result the year-end. million contribution in disruption. non-GAAP in cash million of operating of loss $XX.X cash ended as administrative million period. September levels adjusted in million to increased quarter, $X.X comparable those and and Adjusted terms of all the ago to that IPO-related $XX.X the net operating increases compensation XX, SG&A previously compared loss the of attributable non-GAAP comparable those net in in comparable net and compared as primarily to negative return year X.X% from and to adjusted by made and we activities, expenses X.X% income measurement period. selling, year-over-year expenses. operating representing $XX.X equivalents $XX.X cash primarily normalized The flow sales year non-GAAP year million to to measurement our a expenses income received cash $XX.X XX% totaled the comparable XXXX ago to SG&A totaled supply anticipation sales prepaid due of At COVID by related or in we've the a used nine net primarily the was to net And $XX.X measurement growth, general inventory of the were of of expense margin performance, deposits in The lieu operating margin million months free referenced offset in sales net in in was or net adjusted equity-based or just the contribution to third mentioned. compensation Adjusted of of payouts XX.X% free was in sales million performance, TRA $XX.X offset representing flow, a December prior to of

remainder to So before the back of couple financial I'll I the minutes take outlook turn provide over for the call a to just year. John, of our

be as to As reminder, this the as of these for indicators EBITDA business. a we as our for sales at adjusted provide guidance metrics overall key we time, performance annual net believe well

As for quarter, we continue smart fourth upcoming living demand we the strong at to look see technology.

to note confident also with to with our up outlook proactive a the pushing take from City that the we'd we quarters cash our our continue, like has throughout originally to inventory work XXXX execute teams Our are expenditures seen supply of and and our timing a ability position From office in as shore perspective, relocation to flow measures chain Lake capital remainder capital regards to Salt anticipated. QX out several expenditure shift year.

our moving guidance. to Now

December XXrd fiscal reminder, ends our and includes As a week. a for on XXXX, year XX

As fourth pressures in remain, well we those pressures anticipate quarter. supply continue that impact while they managed the we through said, our QX, and chain we to

of to full between billion, of are Our XX.X% fiscal compared to $X quarterly we strong on as-reported million year our increase increases represent revising confidence call, year and to XX.X% guidance an in outlook, our QX prior performance range in would as the sales which and today's the net $XXX an basis.

a million, of health confident remain compared and to in ability fiscal sustainably range to our for of XX.X% between also prior $XXX revising Overall, the financial as the adjusted the an increase our our are foreseeable XX.X% highly business estimate year. well as we representing grow to $XXX EBITDA to We up million future.

I'll that now John to call my turn for over additional back So comments. summary. the completes John?

across Thanks, quarter. term. in with We're Mike. Demand of in in energized robust. are and what Look, One trends more is we're secular the future. term we've doing makes is high. at The here the the long us, talked both team tremendous by we The And opportunity front fronts. pleased very relevant even all really the Snap is the executing about the industry short

markets and growth We geographies, have experienced incredibly healthy product categories. across

resilient have thus in Our navigate it proven for to future confident we'll macroeconomic integrators face remain open our With up ability successfully in any and backdrops we challenging far the of Q&A. uncertainties. that,

[Operator Instructions] line of from Morgan from the Our first Woodring question is Erik Stanley.

Your line is now open.

on Congrats quarter. the

about Just in talk but that a on have confidence KPIs your the not on outlook, quick just Can then the follow-up. the one demand you in XXXX? And XQ, into outlook. that just some from give demand you of you me see a end I

John. Erik, is this

we what factors. I our kind a think, our which I kind first then drive - part. both spend integrators is think of of number the the number of that is driving And always there see and drives those all, of things of the have, are business capacity we

So part, of to see brick-and-mortar we coming opening continue In more and by our company. our integrators to fueled that's facilities. more

facilities. to have open to continue We plans brick-and-mortar

think our brings when Marantz, products. company know do And say which in I own important. second that so market bringing new that, like that partners that really reveres look we install our Denon know with to our at we the aren't are and to we we I'd our products is that industry what development product thing we're and into the together new products

our products, perspective, kind that with them on what attach we supply because in three, homes there's installed if then as of and is their products. to know see a as as even we cetera, built a And get XXX,XXX construction installed own with a when we of X.X So ControlX - talk from with that kind we of built million There's building issues, little history being that these in integrators. chain $X.X we going about a we enter et rates about what's under of plenty are proxy, see homes getting year. what homes backlog, we housing - U.S. being our lighter our is is million the

making security see factors. of that the newer channels those are investments international. commercial whether or it's we we So see And for or kind we're in then us, also

of all think XXXX. those give I a very So confidence in things us strong

at. So those metrics are look the we generally

delays? can guys And our Maybe the to to clarify maybe of side. versus which just the are impact daily manufacturing what you'd clarify just it operations? headwind three thanks. those a - that's on more significant more component attribute potential logistics having curious, are and Just disruptions me, chain supply factors of And then on for shortages you then

breakout issue can them - sourcing. Yes. I been of great What you. I we component all I'm sure of that have you not for of is a an tell have

is Some China unloading are of we have logistics, situation behind the at product the in right with And - of now. us. energy containers plant then just probably port ships now lot shutdowns on the a

third at outperformed fourth to orders amazing so evolve team, we're about that able the this. how our might throughout supply - still of and quarter, team of end and chain logistics in successful we cautious that. And they've our been the those clear of quarter. And some the because But were being

of think continuing our see watching would from our and less that more talking with logistics. through we And standpoint but it. And half of manage we're of And during so will say supply I first issue, continue I time, kind also - still an not year, of that partners, the and we are componentry to an but chain confident next be issue. through we'll it

from question from Next Steve line the Volkmann is of Jefferies.

is open. now line Your

John. with sticking chain question, Maybe the supply just

schedule something that. on were sell think had XX% of given or like some there to I that KPI you us like you able orders

I'm you that that Forgive us me where on wrong, just but can there update slightly remembering if stands?

you? How It's Yes. are Mike.

time. our things. you're inventory we One, which our of availability SKUs what referencing a what point metric, percentage in available any are So measure is of couple at

continued QX has and low what at so to XX%, to our mentioning, mid-XXs. And into on the we given up John out you we're an translate cleared ports. through could was almost XX% that's that continued moves typically, the the at as any And depending as order metric, talked down It QX. through day ability of about, running rate. week-by-week that - container same to around dropped upon, date fulfill gets of And into it's north

XX%. standpoint, we're that the availability XX% match, an fill we're darn From one-for-one pretty So to orders. means an able at about exact of it's not but close. It's

QX seen so would little them a chain that team. anticipated, And we've into probably pressures about in also chain But I seen the were QX continue. supply all rate. that supply given the actually for say bit our continue less than we work the we've hard same at

in So And the X% impacted X% top the line about about by again, got QX. same in best guess, impact to that's feel think as our we'll we QX.

time the and on that to I But this price And X% why is the it environment. hold of think increases in I us XXXX? assume be about kind been that seeing you as wouldn't enough tell then enough you're can't neutral kind offset increase, cost just can it's we of it's sticking. that imagine everything

cost look what's we held. at that. the as position. cost then And to We'll was there our at closely in put out into has continue through environment, that price to But to the Obviously, place at be was forward. we that we continue looking our adequate X% and date. enough constantly our the it time, and the that position, offset the saw evaluating future. to cost we'll base market always It we managing We're looking monitor go are at increases

out in think way, I market obviously, of our - industries, by there, whole the the the everyone's is pressure in industry there. feeling that is a is lot

with put industry and we like the place holding price And has so done the very consistent into increases are fine. and just are

I'll that, on quickly way, has raised industry the by just very entire the prices.

and have alone, two, than we when of so not made give integrators. and focused them they the them quotes many we business we number can there thing surprise other I And on meaning integrators notice is multiple percentages the and will are Number We say out give times their one. generally that lots been notice protect have have. in larger done that so very we customers our that, we're do So would negatively. honor not already

So think them doing handled it. this, continued to we've build we of while more frankly, think, and in I how expect integrators terms I that even trust have been with we've

We from UBS. Chris have next line question Snyder the our from of

Your now line open. is

So the sequential for margin which, just QX down at implied but is in QX, revenue question big on driving the in calls guidance, you pretty my my math, implied color QX, Can least is provide by step on in a with some first EBITDA. what largely line decline?

Sure.

work being the an between about week can the think a week. of about on a you week QX, think done week, holiday you margin there. And extra the if imagine between So XXrd operating that week. there's you EBITDA so not cost, adjusted of that's the that's profitable week, there, there's less QX an lot We've got actually and one, fixed cost fixed in out extra

that have Networks some. on If come obviously, Access we've costs about think we got, it, them. drives associated with we So year-on-year, and board,

a We that also bite quarter. out are in taking public costs have the that company profitability our are out there of our

expect see as don't going seeing, some that IPO the changes term. at are we costs we forward revenue particularly we're short the would fluctuations corresponding that So there, going see company the basis, with - changes, look to we public costs out a we but adjusted quarter-to-quarter in on and would the EBITDA we're

or about something John in talk for actually to And the mentioned prepared remarks. that wanted on just follow-up, then my ask

$XX,XXX-plus said thinks maybe walk at how be us will smart - company, just that some market, to factor think could expect I household at every when the through a every an income home. limiting point that about point it's sorry, the But range, or because you some home the it can price? U.S. average job whether you addressable integrator a in feels country. we TAM, every the in home the home Just see in or like total you be company

that. your be kind I'd hearing just in interested thoughts of on So

Thanks, Chris.

that view devices. quickly, I think home would not very of that's XX-year every tens, just if a I will hundreds have say,

second So of I to want for my I around some market. the I architecting want is the say more would affordable to be be part there. to do remarks our products clear caveat thing we're

think I in There I've States. the XX,XXX our are inside that United our make happen. there's in spoken before software integrators investments about to about minds, -

that discerning and the that kind technology commercial through look we are because we home so And is first at security the integrators. customer thing serving discerning of integrator,

sell, per an about $XXX,XXX XX,XXX about So market. when - - a integrator. of addressable integrators That spend those total integrator about we we one in think make that's results that average billion products we the $XX on

time. just numbers, let spending of we're $XXX,XXX more And on of States, now a products me in we doing sell. multiply business with through which about XX,XXX TAM. the like billion They're United integrators you when them. those it's So year Again, XX,XXX each over those numbers run a one $XX

me There's clarify. market out XX,XXX let just expand lot market. more today. our addressable that a - our That have is addressable XX,XXX John, integrators and integrators actually there

One after. actively there's actively we trying servicing continue that to But to. technology who today. it define that's marking to. Those home people how so go We're smart we'll that look And into are the folks Snap are ecosystem to to other attract just are

our from from BMO Ketan Markets. have next We question Capital Mamtora

line now open. Your is

security? can areas, two in you other in residential, with, more the start of your and as to focus well saw commercial that Maybe growth little about of kind all a you but as talk kind

that that segments touch commercial point, Sure. the disclosing not, we this I on if quarter, our home doing, I be at security say rate residential to it and a How that going can was you we're and grew than at at briefly. I'll market say market. would the faster Ketan? What is both growth rates. separate look are

in all growth a have of faster we'll is we continued very of so And commercial our the in some there. different pleased but the today lot growth security our future with rate get of confidence a we're lives, are at in and and market. we rates residential markets, say Maybe than sometime reporting, into our can types growing

Got it. Okay.

tail and there, - so but that's international had our COVID we've very outpacing And there. And great longer they seen quickly, Ketan recovery the is probably been growth. a just market,

you you've then gone these of curious follow-up, these want you've in changed my that your That's of which at And of kind of open the pace Understood. I'm helpful. opened view you just branches, branches? terms has kind kind as as to with And grow branches? learned and all what as

opened now, think I new - we've least XX we're have kind at year, this of we're time right branches. we'll the - opened by done

I over X. that around kind now open think right year we we're next estimating can of

calls enter a a for a have when we that We that - geography. ramp model shows

typically growth. that we seeing as We have outpaced have and conservative, generally been our models

it local finding things we to need they So because of buy there's the a cetera, through e-commerce Number one, market. two happen when set of into to who through et buy want relationships, distribution and that go we're that day. don't traditionally product, integrators access

seen And new facilities. a so we've coming type into brick-and-mortar integrator those of

or morning the first The the thing they second that who even buy integrators e-commerce, our not might on thing we're carry have but finding that or existing more it products at we the through need day next third-party because branch buy is website. frequently they need products that

things has that office - not one seeing accurate saying, single local virtually every a I are we're I think And two the don't with that in disappointed we've I'm us. think so those opened.

shift so that's conventional would I distributors those generally locals. driving, say, more from in And share

very three don't as markets - for locations still We're I what we I go or markets And but XX into. to of - choose reset for number. so. we'll to is then might other evaluate of going we level, open as as six think our model underwrite next try we're we view underwriting. at opening next probably the But or sort this it's of our years we we're through. long-term changed go year, strong about six still four to think the evaluate We'll point

Yes.

I because commercial our buying our facilities. at XX. power we're continue the be term in to is to the fill XX open and lines, out extent think made called strong each for XX expands than longer a XX, that was more we is product case And market there - to and to model security

Tindle from Raymond James. Adam Next is

now Your line open. is

dealer environment, tackled Maybe could John. through think quantify Has bookings to backlog stable, a give were you or a booked been on ask level? robust on out. about this? how And much get Last supply, update an way if wanted so I any the I us up at or you talked to down backlog months this? to how still since we've call, dealers question demand, are

Yes.

new in things: future. of terms - depend I surveys terms on also there around industry. indication of we but basically, one, business reports from two think the of and in bookings, of in no our in of dealer is base, optimism about terms integrator demand buying the sizable slowing groups the And

the So is that simple. answer

John, to Yes. the ask to I that the strategic wanted plan also, expand outside Yes, U.S. sense. makes on

on $XXX in that's new acquisition. I about sort double-click commercial You I talked about as more your and dealer that future. plan? security Could probably think that but in But expansion. existing this significant imagine in million international the would strategic base of you about today, maybe dealer expansion opportunity plan,

what recruitment So I'd brings be Snap how perspective dealers you'd curious lines use that just that a approach and existing internationally? from versus

Sure.

it's a question. good I think

up. Let me back

Snap all, terms ago, be billion business. very estimate today, before it's First The international with in $XXX outside years seen. based U.S., had a merged of data market the we us. One it for an business of to over ControlX little of on million $XXX couple And we've the is about we

XXXX integration the We So with XXXX. not XXXX while with immediate came the by OvrC COVID in there. and And our on product ControlX to we there's plans One Snap huge opportunity because did the focused early in market understand the interrupted that late it a line, at was companies from go all two international of merger.

unable studying the months. we so down able had time the actually four much in quite did so of were many bit it And more United shut three Business in States. over travel. parts to a to than past we've been And spend the globally, market or

built near markets. the our key so million basically for we've business to markets, And where many an we of fit. in calls target for we don't worth a Notwithstanding to out immediate the United the direct $XXX specifically that, build internationally, worth continue term it's the has is of where when the us It over there's dollars more business from of and of us $XXX know size international investment of in already think go-to-market say in areas development will States. three next today kind standing because of in will which same, what it limited size go-to-market plan grown for we to a million. we the near product think some our hundreds that call expand that because of others, tweak strength on certain we've to standpoint call similarly opportunity think directly term, our a And product on the a up that's I presence market, years, the growth it's has indirect in of market. millions the an nor done five to That do presence a based model, investment products to gotten

I the So ControlX itself is, forget stat. exact

comment are have do such applicability. it's actually the great but the we technology the close in out a power, penetration market. integrators relevance business I while XXX - United the the today need by we're XX% there. of what and question. way, in areas think do And Security commercial, XX% and inside lower the other we on confident about security commercial part products just of with integrators I different have of some States, there. want product security and - to There to our We almost level to countries much call - the tweaking home in as to highly a do largely installed of did your again, we'll

more that we're business market, of XX,XXX so with in or So X,XXX doing integrators.

and through similar commerce integrator focus inside or lot our are our acquisition to and security site facilities. of So either a our on brick-and-mortar commercial strategies the international strategy

from is line from Hughes Truist. the Keith question of Next

Your line now is open.

is the I believe got implemented increases during pricing. Question you quarter, the X% about legal but the quarter. price mentioned you intra

into give As of fourth, you'll to can the growth you idea realize? more revenue you much how there acquisitions Another will you an contributed the price too, question, in think go quarter? be higher us

price Mike, maybe August was implemented roughly acquisition X. It one. The X%. you do increase the was

also the we our have increase there like So another two we the in one say market months quotes for got see integrators were need cost, we feel on flow-through don't We year. certain of we it. in one the fourth another protect based X% our I honor of should quarter. this but We profits. don't to will planned price

basis. acquisition is on quarter, the a it, Access disclose As did M&A in LTM in Networks. revenue our they what Access was John, bought far as We we've goes, had of M&A only the activity that mid-XXs we when don't an specifically but

So - what been there. the can would it that's you about can - you have impact in you assume if X, results split that, quarter assume that's in of full the that the quarter by

Next William Merkel from is Blair. Ryan

is line Your now open.

XQ implied wanted I the to again. follow-up on guide

to down should Just something of on sort we in margin gross terms of is sequentially? there where gross assume margin, stable? come Or going

and do just a is QX coming some QX different. little a we to versus in mix QX, issues If come bit you're supply pressures chain expect those in as bit it down little comparing in. mix come The

at which lower happened, much that, benefit Friday and We we sales, from a part. Black TV have that's but

mix in versus profile does bit the the rest year. of change And QX so our little a

is. of other always bps be around it lower that, So tens margins moving extraordinary as the QX margin in way no than activity one or other will But another.

strategic management, your drive a inventory you are sort on short? just little of mentioned sales. you you more unpack are Can And And help Or that inventory to also, still carrying than you then you levels, want inventory bit? protect? comment

of couple A things.

the of the is a on piece, might area And very and supply a And other contract make about or be chain headwinds there. our we talked is visibility that team component third talked One supply and we is better is closely on them, as have we What probably we've week, - managing the chain our challenges. manufacturers effectively There's our long-term to we QX went activity logistics. we expected out in the So three that sure on componentry about where taking having manufacturing working there John issues managing issues we're through as we and is our componentry in get. have all the piece, manufacturing team through. don't is no earlier, really is are quite than with those. frankly, did partners that JDM and the

We're our inventory. things expectations. try is either performance There's think in challenging is your - more one question to Logistics, of obviously, That of ahead we trying stay it QX to have or water airfreight inventory. we of We on curve the was lot on that stay the constantly than to around so into on the part of with top environment. avenues tied have using on a with get second other And up I a to hung of top inventory that. typically some would it. is and our

of we overall never much team levels, the going chain I amount not is I'm right listen, of things. things and top Our I'm wrong I'm supply CFO. the to telling that. we always too of folks, inventory with have of on inventory enough But think really be happy the have. overall, the our

We our lead long have times on products.

a inventory have the do We it. manage to water. on have do of we So lot

the have number We stores. of increased

So bit every local time we our a inventory more open we a at stores. little store, get

plays all it. into that So

be, obsolescence a want, our I little should X. we By had is the inventory other little inventory typically that a really inventory some right wish the the about our bit where overall bit but we of less now almost is I of way, of more think stuff. it

as have write-offs we business go through very, in our very low inventory We it.

more intermittent think We to to work around. with than the continue have anything the will issues some of challenge bit on be a we'll continue a again, supply aspects chain, componentry that optimistic. to we're So logistics else

is do is sheet more especially getting into those against we had go the different commitments that to like balance those, I think strength to of our identifying ours, but components component things to market. doing some are strategic haven't before, of things competitors suppliers, making what a we're products, the the in smaller down

gotten we haven't cycles normal more there double-click in and about. that And done so to worry we've had commitments a

At session. closing our remarks. this turn concludes back for like now I'd to time, Mr. this his over to question-and-answer the Heyman call

so Snap can a, me. to your the amazing us is earnings our our team appreciate at I doing for just the they a delivering amazing joining again, everyone, time season. really got to I inspiring It's busy Thanks world. One, deliver results again, they're today. consumers joining for around applaud integrators work

lot thanks really of forward today speaking time to for a at look to your the QX. end you and So

joining for quarter for third fiscal earnings today Snap us XXXX Thank conference call. One's you

You may now disconnect.