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Vivint Smart Home, inc (NYSE:VVNT)
Q2 2021 Earnings Call
Aug 3, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good evening. Thank you for attending the Vivint Smart Home Second Quarter 2021 Earnings Call. All lines will be muted during the presentation portion of the call. There is an opportunity for questions and answers at the end.

I would now like to pass the conference of the to your host Nate Stubbs, VP of Investor Relations with Vivint Smart Home. Thank you. You may proceed, Mr. Stubbs.

Nate Stubbs -- Vice President-Investor Relations

Good afternoon, everyone. Thank you for joining us this afternoon to discuss the results of Vivint Smart Home for the three and six months ending June 30, 2021. Joining me on the conference call this afternoon is David Bywater, Vivint Smart Home's Chief Executive Officer; and Dale R. Gerard, Vivint's CFO.

I would like to begin by reminding everyone that the discussions today may contain forward-looking statements, including with regards to the company's future performance and prospects. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual outcome or results to differ materially from those indicated in any such statements. We describe some of these risks and uncertainties in the Risk Factors section in our annual report on Form 10-KA for our fiscal year 2020 and in other filings we make with the SEC from time to time. The company undertakes no obligation to update or revise publicly any forward-looking statements whether as a result of new information, future events or otherwise.

In today's remarks, we will also refer to certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP, to the extent available without unreasonable effort, are available in the earnings release and accompanying presentation, which are available on the Investor Relations section of our website.

I will now turn the call over to David.

David Bywater -- Chief Executive Officer

Thank you, Nate, and good afternoon everyone. I appreciate your interest in our company. Given that this is my first earnings call as the CEO of Vivint, I plan to focus my comments on four topics.

First, I'll provide my background and outline my deep relationship with Vivint. I will then outline why I'm so bullish in the company and what I've rediscovered about Vivint after being gone for the last five years. Next I'll out my preliminary thoughts on where I believe Vivint needs to focus over the next few years and why I believe that will position us to be an attractive differentiated investment. Finally, I'll touch upon a few key highlights of the quarter before turning the call over to Dale, to take you through the details of the second quarter and our outlook for the full year. I know Vivint very well. I joined the company in the summer of 2013 as a Chief Operating Officer. It's been three years helping the company during those pivotal years of transforming from being security company to a fully integrated smart home platform company. As a result, I was intimately involved in skilling company, operationalizing our service and product offerings, scaling maturing our supply chain capabilities, collaborating closely with our direct-to-home and management side sales leadership, to expand and grow, helping our leaders that are still with the company and improving our installed service in customer care operations.

It was incredible time of innovation and maturation of the company. In May of 2016, I was asked to be the CEO of Vivint Solar, our publicly traded former sister company. During my five years at Vivint Solar, we rebuilt that company across almost every sector. Key achievements including expanding our go-to-market strategy to be omnichannel, revamping our operating model to reduce costs and a truly input quality. We established new customer centric focus on delighting our customers and reigniting growth while ensuring that our growth rate was accretive to shareholders by taking share in the most attractive solar markets. We sold Vivint Solar Sunrun in October of 2020, making the combined company with clear and dominant leader in the residential solar market. As a result the market cap of Vivint Solar, one from around $300 million in May of 2016 to over $5.4 billion on the last day of trading prior to closing the deal with Sunrun. Following the transaction, I remain on the Board at Sunrun and advised the combined companies until rejoining Vivint Smart Home this past June.

Prior to my with Vivint, I spent 10 years running many of the largest service companies within Xerox which were also tech enabled and data driven. Hence, I feel right at home at Vivint and in this role as the new CEO. I pride myself on being a state shooter, as a person who enables good companies to become great companies. I also pride myself on doing what I say I'll do and working to delight our customers, employees, partners and shareholders. I demand the very best from our employees and I will tirelessly to ensure that they help build a great company, the right way and create value, while we protect our company, our reputation, our customers and our shareholders. As I've rejoined Vivint, it has been incredible to rediscover how company is. I was familiar with some of the advancements during my absence but a permanent return I've been very pleased as just how much progress has been made and on so many fronts. The transition from a company that gives us cash to when they generates cash to consumer financing agreements we have with our banking partners is a game changer. The team has achieved that, while simultaneously improving our underwriting requirements and sales processes, all while delivering consistent revenue growth. That's an incredible achievement.

The team has streamlined cost and redirected aspirants to fund innovation and growth. The technology has gotten so much better as well. And we believe the product and service offerings we provide to the market, are incredible. I am more convinced now than ever that it's illogical for any consumer to trust the protection of the largest financial asset, their home, to inferior products that are often incorrectly scoped, in property installed and other incorrectly or not monitored and maintained by DIY or mutant solutions.

Our fully integrated solution is intended to align every person within the Vivint. To ensure that the solutions meet or exceed customer needs, they're sold, installed and service correctly, resulted in an average contract term of over eight years, and what we believe to be among the lowest customer attrition rates in the industry. I've also rediscovered the incredible core asset we own with an average of 15 devices per home. We own a data rich environment that helps us not only protect our customers, but also the efficiency of their homes and elevate [indecipherable]. This proprietary solution that we design, engineer, deploy and manage, provides a platform upon which we believe we can continue to integrate and leverage additional solutions that logically leads to our smart home platforms. We believe this will lead to new solutions that will create deeper value and savings for our customers.

Finally, it has been a delight to reunite with so many employees and leaders that I had previously worked with. They are professionals who share my deep conviction to delight our customers, to bring innovative solutions in the market that create more value for our customers, to work in a respectful and professional environment that's all bridge and diversity and to do the right thing in every situation every time. Vivint isn't a perfect company. Like every company out there, it has room for improvement, but it is a company that learns and improves. One has an incredible culture and DNA to win and win the right way. We will continue to learn from our mistakes and get better every day. I'm so delighted to innovate forward with this company and with this team.

Going forward, we will aim to deepen our competitive advantage within our core smart home platform and business. We expect to continue to introduce industry leading smart home products that our customers trust and value. We believe these products and solutions will further intrench us in the homes of our customers and allow us to create more value than our peers. We will continue to work to strengthen our balance sheet, deliver smart growth and invest intelligently, defend and expand our market position. An example of the smart growth is the recent announcement of our strategic partnership with Freedom Forever, one of the nation's largest and fastest growing solar installers. This partnership will expand upon our smart home solution to include clean energy and will allow us to continue our exclusive arrangement with Sunrun for solar PPAs. The partnership will work to bundle of Vivint Smart Home solution with each new solar cell. We believe this is one of the most desired bundled solutions for solar customers and it allows a home to truly be smart by producing smart energy and consuming energy more intelligently through our integrated smart home platform.

Our goal is to enable consumers to make better decisions regarding their energy consumption as they better understand what is happening in their homes. We are just beginning to introduce a solution into select markets, but given my experience and background in those smart home and solar, I'm confident this will be another game changer. More details will be forthcoming on future calls. Another example of smart growth is our insurance pilot. We are working with a variety of large insurance companies to develop solutions for our customers that will leverage the data we have on their homes. We collect data around occupancy and other usage patterns, derived from our smart home devices that will allow insurance carriers to underwrite home insurance policies more intelligently. We believe the consumer that has our solution, which includes significant home occupancy data and properly working sensors, that reduce the risk of fire, flood or theft catastrophes, should pay less than the consumer without our solution. Our customers should save money on the home insurance because of our solutions. This is another logical growth opportunity for us to leverage our core smart home solutions and expand the value we bring to our customers. More details will follow as we work to bring this solution to market in controlled and effective manner.

Finally wrapping up, we delivered a strong second quarter across all key metrics, revenue, adjusted EBITDA and cash, and we expect to deliver on our full year guidance. The debt refinancing, we recently completed underscores the strength of our business model and the confidence that capital markets have in our team and path forward. I appreciate the incredible teamwork across our Company to deliver that result.

With that, we can turn over to Dale to take you through the details of the second quarter and the guidance for the full year.

Dale?

Dale Gerard -- Chief Financial Officer

Thanks, David, and welcome back. This afternoon, I will provide an overview of our second quarter and year-to-date results as well as our updated thoughts on guidance for the full year. We will open the call for Q&A after my prepared remarks. I will be referencing the slides from our second quarter earnings presentation that was posted to our Investor Relations website prior to this call.

Turning to Slide 6 to highlight a few of our key subscriber portfolio metrics. Total subscribers as of June 30, 2021 were 1.78 million up 10.6% from June 30, 2020. Average monthly recurring revenue per user or AMRRU for the quarter increased by 2.6% versus the prior-year period, driven by customers purchasing more smart home and security products at the point of sale. The combination of growth in total subscribers and growth in AMRRU lifted total monthly recurring revenue by 13.8% year-over-year to $114.8 million.

Moving to Slide 7. We highlight our revenue for the second quarter and six-month period ended June 30, 2021. For the second quarter of 2021, revenue was $355.2 million, an increase from the prior period of 16.9% or $51.3 million. The primary drivers of the revenue growth was $34.5 million from the increase in total subscribers and $5.6 million from the increase in average monthly recurring revenue per user. Our sales pilot initiatives also contributed $9.5 million to the year-over-year revenue growth. The 16.9% revenue growth in the second quarter of 2021, was more than doubled the growth rate for the same period in 2020. Revenue for the six months ended June 30, 2021 was $698.5 million, an increase of 15.1% from the six-month period in the prior year. Like the second-quarter, growth in total subscribers AMRRU and sales pilots were the primary drivers of the revenue growth during the six-month period in 2021.

On Slide 8. Adjusted EBITDA was up 3.6% in the second quarter of 2021 versus the year ago period. The adjusted EBITDA growth in the second quarter was in line with our expectations. As we have stated on previous calls, we plan to make investments in brand, innovation and information technology during 2021 with a large portion of the spend hitting in the second and third quarters. The investment spending for the three aforementioned items in the second quarter was roughly $11 million. The other year over year anomaly when comparing adjusted EBITDA growth is the impact that the COVID-19 pandemic had on our second quarter 2020 results. As a reminder, we paused our entire direct-to-home sales program for six weeks which delayed the normal start of the summer selling season.

Due to the noise in the second quarter of 2020 related to the pandemic, we believe it's appropriate to look at the comparison of adjusted EBITDA growth in the second quarter of 2021 versus the second quarter of 2019. Adjusted EBITDA in the second quarter of 2021 grew by 76.7% as compared to the same period in 2019. And our adjusted EBITDA margin expanded from 31.4% in the second quarter of 2019, than 43.9% in 2021. Adjusted EBITDA for the six-month period ended June 30, 2021 was $318.1 million, up 11.4% compared to the same period in 2020 and up 62.6% compared to 2019. Adjusted EBITDA margins for the six-month period in 2021 remains strong at 45.5%.

Now moving to Slide 9. We highlight new subscriber originations during the second quarter of 2021. Led by 22.4% year-over-year growth and our national inside sales channel, we installed 121,599 new subscribers during the quarter. We continue to focus on underwriting high quality profitable customers. For the second quarter of 2021, more than 99% of new subscribers either paid in full or financed the purchase of their equipment. For the six-month period ended June 30, 2021, the Company added 181,726 new subscribers, up 15% from the same period in 2020.

Turning to Slide 10, I will cover net service cost per subscriber and net subscriber acquisition costs for new subscribers. Net service cost per subscriber for the second quarter of 2021 was essentially flat versus the second quarter of 2020 at $10.03. Our net service margin in the second quarter of 2021 remained robust at 79%. While we've seen customer interactions in our call centers and in home service business rebound from the abnormally low levels during the height of the pandemic in the second quarter of last year, I'm pleased that our teams have been able to provide exceptional service to our customers, while managing net service cost per subscriber to be essentially flat versus the same period last year. I would note that given the seasonality of how we generally put on new subscribers, particularly in the summer, we tend to see an increase in service costs during the third and fourth quarter of the year.

On the right side of Slide 10, we highlight the significant reduction in net subscriber acquisition cost over the past three years. Net subscriber acquisition cost per new subscriber for the period ended June 30, 2021 decreased to $70, an 88.9% or $560 reduction from the prior year period, while the average proceeds collected at the point of sale increased to $2,144. For the period ended June 30, 2021 we are seeing the full impact of the changes we made in the upfront product and installation pricing in April of 2020, the reduction arracks to approximately 1% and the impact of discontinuing direct-to-home sales in Canada.

Moving to Slide 11, our last 12 month attrition rate was 11.6% for the period ended June 30, 2021, 210 basis points lower than the same period last year, any 12-quarter low per customer attrition. We are very pleased with the resilience of our subscriber portfolio and we continue to see favorable trends in key leading indicators. In terms of cash from operating activities, we had another strong quarter, generating over $78 million. I would note that our cash flow from operations in the quarter includes the impact of the change in timing of payments associated with the new citizens agreement, the investments in brand innovation and IT, as well as cash costs associated with changes in executive management. We finished the second quarter with over $345 million of cash on hand and a solid liquidity position of approximately $661 million. In July, we completed a global refinancing of our existing debt structure, which decreased our total debt outstanding by approximately $90 million, lower average cost of debt and increased our revolving credit facility from $334 million to $370 million. We expect the refinancing to save the company approximately $50 million in annualized interest expense.

Finally, in terms of guidance for the full year on Slide 12, the top of the slide reiterates several of the attractive fundamental characteristics of our financial model, including monthly reoccurring revenue from long-term subscriptions, a highly predictable business model and the ability to thrive in all economic environments, which we believe has been proven out during the past year. As we have reviewed on this call, our second quarter results were strong across the board. We believe there is a lot of positive momentum in our business and we remain optimistic about the rest of the year despite a few of the following headwinds.

Recent flare-ups of COVID variance across the US continued disruption in the global supply chain and manufacturing environment and inflationary pressures and hiring constraints. While any or all of the above mentioned factors could affect our performance during the second half of the year, we still expect to achieve the guidance we previously provided for 2021. As such, we are reaffirming our original guidance for the full year as follows. Total subscribers in the range of 1.8 million to 1.85 million. Total revenue in the range of $1.38 billion to $1.42 billion and adjusted EBITDA between $640 million and $655 million.

This concludes our prepared remarks. Operator, please open the call for Q&A.

Questions and Answers:

Operator

Certainly. We will now begin the question-and-answer and answer session. [Operator Instructions] The first question from the line of Rod Hall with Goldman Sachs. You may proceed.

Unidentified Participant

Hi, this is RK on behalf of Rod. Thanks for taking my question and nice results. David, could you talk about what are the areas where you think there is needs to improve the most?

David Bywater -- Chief Executive Officer

Sure. Thanks for the question and your interest in the company. I think for us as a company, there is still a lot of ways we can improve on around reaping for our customers. So we want to keep in that the team has done a great job on is, you can see the investment nutrition and also the value that we're bringing the customer around the number of devices in the home and just -- the solution. I think, am also looking in is to continue to figure out how we bring more value to them. So when you think about the adjacent growth opportunities, they're all focused on helping consumers, save more money. How we bring more solutions in the home, how to be more central to who they are and then the -- joining the home, you can say for the home, having to work more efficient and to me that all really draws upon this core asset that we have with the smart home platform which is proprietary. We own them -- all the technology we own install, we own the maintenance [Phonetic].

So I'm really excited about the stuff that we've already got going. These pilot insurance proved logical. It can really help our customers see additional value in their wallets by leveraging more and this pilot -- with this partnership we have with freedom, is another extending to meet the smart home members smarter. And I think it will also bring additional savings to consumer. So, I think if we continue to push down that avenue, will be more value to customers and it really just leads with how the technology suite and those on quality has really tried manifest itself with the customers. I mean we don't talk about our servicing costs are in Q2. If you can read into that, it's really incredible to be flat what we were last year, despite the fact that call volumes were up and have full cost are back from the system to service those customers, to see the manifestation in that low-cost per month, per subscriber, is really incredible because there's a lot of things that come to fruition around the technology stack being that much more effective.

I mean the number of calls really bring consumers, it's much less around all of the people that we've increased more cameras in the home. So I think just the just the operational and technical sophistication of our solution has improved. We still see room for improvement. The way we install our solutions, day one and the reduction in the number of issues that to be resolved has gone down. So there is always room for improvement and then for us they will articulated value that we can share to our customers and they trust as we expand our relationship with them, continue to improve. And then, we're also looking more additional ways to meet the customer on how they want to engage with us. So we love our direct-to-home team, phenomenal. It is the right thing for so many customers. We love our inside sales team. They write in so many customers and we're always looking at other partnerships and other way, we can meet the customer.

So, a lot of improvement but I'm really pleased with what I am seeing that the team has already accomplished.

Unidentified Participant

Appreciate all that color, David. Are you seeing any difference in the spending environment or attrition as we enter reopening?

David Bywater -- Chief Executive Officer

What you mean, attrition with customers or --

Unidentified Participant

Yes, just either the demand environment in terms of your new subscriber adds or attrition within your customer base. Is there any change as we moving to reopening?

David Bywater -- Chief Executive Officer

You know, it's -- we're seeing customers purchase new cameras. So it's interesting. There's definitely been a shift more and more of that adoption with our customers. And so the number of devices they have at home, that's been going up not down, so that's been very very positive. And if I see -- inside sales, so you have seen, I mean, more people in the home -- and that should stay. And so we've seen stronger demand in inside sales has given strong 20% growth. So we're trying to be customer-centric and give them a solution and meet them where they want us to be. So it's very positive. So, I mean our attrition, you've seen our trend there that actually doing the right direction. So I think the model will be proven to be very robust. It was robust before pandemic. It's been very robust during the pandemic, and has been robust in the pandemic -- very robust. So there is a validation there for me, like I said before, I think the fact that we own the technology stack, both the back-end and solution stack and the installed service stack. We're delighted with the every interaction with them. So I think that the customers are more pleased which bodes well for us from referrals for them to continue to trust us. So I am seeing positive trends [Phonetic].

Unidentified Participant

Great. And last question from me, where you supply constrained in the quarter and how much cost inflation are you seeing? Thanks.

David Bywater -- Chief Executive Officer

I was a little north data is like 97% or 95% of all of the global Fortune 500 having some kind of supply constraints, where we impact, we were, but the team did an incredible job of managing through it. So -- and that's manifested in us maintaining our full year guidance. So were we impacted? Yes. Does the team work hard with our partners to find solutions they did? Were we able or we confident that we are able to navigate through that the year, we are reiterating our guidance with full year but it had been a challenge, shout out to our entire team who would worked tirelessly to make that happen into our performance. We really appreciate our partners that started with us and help us and support us in the process. But I think it was a function of good planning and good relationships and also some just good old fashion grid by our team to find solutions. And so we've navigated through it so far to build consumer confidence for the balance of the year.

So, we have managed through and that's what you going pay us to do that's the team delivered on. The cost in terms of additional shipping cost and all those are factored into our full year guidance. So that doesn't change. What we're saying for full year.

Unidentified Participant

Great. Thanks, guys.

David Bywater -- Chief Executive Officer

Thank you, RK.

Operator

Thank you Mr. Hall. The next question is from the line of Erik Woodring with Morgan Stanley. You may proceed.

Erik Woodring -- Morgan Stanley -- Analyst

Thank you. David. Very nice to meet you over the phone here. Looking forward to working with you into the future. I guess if I wanted -- if I started just at the top here. So over the last few years, you've generated about 48% of your annual revenue in the first half of the year. Right now based on your annual guidance, you're trending at about 50%. So a little bit more front end loaded of the year. Is that how we should think about that the front half of the year being more front-end loaded or would you say your guidance for the full year is a bit conservative and you think you can achieve that and if so, what are the major constraints in the back half of the year, if any? And then, I have a follow-up. Thanks.

David Bywater -- Chief Executive Officer

We do look forward to meet in person and working with you. I think 48%-50%, I think there is a difference. I think key among that is our inside sales are the year-end model, so that strong growth we see in inside sales in practically a bit of that planning because we're working -- the demand for our solutions is it just the seasonal demand, it's a year around demand. So, I think with the growth there in inside sales that's not surprising. So if I see a bit more of a flattening, in the second year. But Dale I like you to say [indecipherable].

Dale Gerard -- Chief Financial Officer

Yes, I think you are right there. I mean if you [indecipherable] we got this one subscription business, recurring revenues, so we come into the full year. And so each year we know we've got 85% customers revenue for that year. And as David said, because we're seeing this more kind of ratable volume, our new subscribers come along because of that inside sales channel. We'll see it just probably a little shift. So again, 2% -- sometimes by the way, it's also related to the fact that we have sales pilot and in previous years of sales pilot we're really insignificant in terms of the dollars that we said we call out the sales pilot for the first half of the year, we're about $50 million of year-over-year increase. And so as these pilots, as David talked about earlier around insurance, solar continue to grow and we continue to look at other initiatives and adjacencies that -- kind of it, what I call the core smart home that revenue mix may change a little bit in terms of whether the growth in the first half year versus second half.

David Bywater -- Chief Executive Officer

As Dale mentioned a bit on the adjusted EBITDA, we did have a bit of a bit late last year on direct-to-home. Direct-to-home is super important to us. This should provide the channel, but it was a bit late last year to this year, it went out on schedule. So, if I stop [indecipherable] but I think we'll it evolve over time yet it will, but we think it's all good evolution. We're -- all our channels will grow and we are looking forward to that.

Erik Woodring -- Morgan Stanley -- Analyst

Okay. That color is really helpful. Thank you very much both of you guys. Maybe my follow-up will just be somewhat of RK just in terms of component constraints and supply -- the supply chain. So your inventory balance came down fairly considerably this quarter. If we look past back at the last few years, it's come up. Is there -- maybe I'd add to that, you see other companies trying to build inventory ahead of what could be costs -- further cost inflation or further constraints. So, just any thoughts there on how you expect your inventory on the balance sheet to trend overtime? Are there any issues or when it comes to issues procuring components, are they acute in any certain products or [Phonetic].

Okay. No, that's great. And then maybe just, just a quick one to end it there is. Dale, you maybe were talking about servicing costs and how you guys have been able to basically serve the higher call volumes and maintain your higher service margins. So just curious, do you think higher-high 70% is more sustainable now versus kind of mid '70s before or it was mid-70 still how we should think about the more run rate net service margins and that's it for me. Thank you, guys.

David Bywater -- Chief Executive Officer

Yes, I still see it a different way. I think our operations team and -- because it's really because we have this integrated platform, we all are working together to make sure we're drive the past experience and the best products for the customers that we can. Again, I'm still the same in terms of how I think about it. We're probably in that mid to maybe to in 76% or 77% service margin but I still think for your model, how I feel about it is still coming to that and I mean mid-70 range.

Erik Woodring -- Morgan Stanley -- Analyst

Perfect. Thanks, guys. And congrats.

David Bywater -- Chief Executive Officer

Thank you.

Dale Gerard -- Chief Financial Officer

Thanks.

David Bywater -- Chief Executive Officer

Thank you, Mr. Woodring. The next question comes from the line of Brian Ruttenbur with Imperial Capital. You may proceed.

Brian Ruttenbur -- Imperial Capital -- Analyst

Great. Thank you, guys, very much for taking my call. A couple of quick questions. First of all, David. Welcome. And I just have a couple of questions for you then maybe some questions that you may want to pawn off that you mentioned attacking some issues facing the Company, as you step into this new role. Can you talk about maybe selling practices that Vivint has had in the past in terms of current and past lawsuits and other things like that and how you plan to address that? And then I have a follow-up.

David Bywater -- Chief Executive Officer

Sure. So, I mentioned in my comments after that no company is -- all companies are running out of time and we always find areas for improvement in this scenario for improvement. The company actually address a lot of issues. I have been working on the past. So, of course, so there will be proactive. I'm going to close those gaps that they had and doing a good job. They work closely with the government agencies to approve that they close those gaps. And we have an ongoing compliance that we've invested heavily to do that. So there is a good to regular cadence trust me, where we have to keep point out and we had experience -- others working with us, and also what would our internal audit team and they're are very, very attentive to making sure we address identified gaps and hit those gap's closed as well as convenience has all the process you going to pour. So, I think the level investment there is and we are pleased with the results I've seen from all of our audits. I appreciate all the folks who are involved.

Also it's really important to mention, this is company [indecipherable] unfortunately come to the feedback after this and feel diligent to making sure that are not of the company and you have to be diligent you making sure that we are always retesting, retesting, retesting. And so I know I know some Fortune companies and some good company and people are great. So, I think we got a really good job addressing those issues. We will continue to be very diligent. We just hired a Chief Compliance Officer who will join shortly. We're excited about [indecipherable] back of this individual will bring our efforts there that Compliance Officer reports directly to our audio committee and also to me. So important this person is to continue to probably end up diligently on this.

Brian Ruttenbur -- Imperial Capital -- Analyst

That's great. Thank you, And then --

Dale Gerard -- Chief Financial Officer

I think it's very serious, Brian. So if whenever having question about that. This is a very, very important. I know that team [Phonetic].

Brian Ruttenbur -- Imperial Capital -- Analyst

That's great, thank you. Maybe a easier question or harder, whatever way you want to look at it is attrition. Right now, you're at a record low 11.6%. Where can that go? Can it hold fast here? Can you, can you get below 11%? Can you get into the 10%? What is realistic over the next couple of quarters, next year?

David Bywater -- Chief Executive Officer

I don't know. We'll use models more. I'm actually really pleased with where it's at. I was the CEO of this company even choose to. We talked about attrition then and I think where is the company right now, I am just proud of what they've done, so all continue to this one and feel like more it was always trade-offs. So, low attrition can [indecipherable] high attrition within that. When compared to our peers and I compared our DIY competitors [Phonetic]. We're really, really well. So, hey, if you could just below 11% to and then 10%, fantastic. So, you get until the costs are. So I don't have a very good answer for you right now, look into it, but we'll try to make the right decision.

Brian Ruttenbur -- Imperial Capital -- Analyst

Great, thank you so much.

Dale Gerard -- Chief Financial Officer

Brian, looking forward to update you. Thank you.

Brian Ruttenbur -- Imperial Capital -- Analyst

Thank you.

Operator

Thank you, Mr. Ruttenbur. [Operator Instructions] The next question is from the line of Michael Fisher with Evercore. You may proceed.

Michael Fisher -- Evercore -- Analyst

Great, thanks for taking my question. Wanted to get a little more detail around the Sunrun deal, specifically looking at the go-to-market strategy there. Is this going to be more Sunrun salesforce selling Vivint equipment or the other way around or a bit of a mix?

David Bywater -- Chief Executive Officer

Probably got as well, Michael, look forward a bit as well. It's David. So the, we always had in the last few years selling solar in certain aspects. There is a bundle desire by our customers to do well and so we've been [indecipherable] the relationship we have, it's freedom forever. Freedom forever that was announced is one of the largest installers in the country, priceless relationship we have with Sunrun it was selling some PPAs compound. So that relationship will continue -- to continue work PPAs through settlement. I know that company very well. They bought my own company in a very, very company and really deliver an important part of that brings. And so it's a very natural extension for us to partner with Freedom who has a very broad array of installation across the country and the key for this relationship is they are also very committed to installing Vivint Smart package each with of their -- really get a true destination of a smart home. Smart home has smart production of power on the roof and really intelligent consumption of power in the home and our platform is uniquely positioned to do that.

And the integration of all this, we have and the information we bring for our customers, it's really compelling. So there is -- there is global partners that are working together on financing, which is through Sunrun PPAs Mosaic for the loans, in order of Freedom Forever on the installation and they have solar piece and of course we will take all of the smart home -- the relationship with smart home. So, we think it's, we will sell that ourselves. And our dealers that were for Freedoms Forever and for some who can also sell because I think it's very compelling to the consumer. So we're excited about it. We're very measured and how we are investing to make sure we have really good integration. We measured in how we roll it out, which will delight our customers.

There will be a learning curve. I learn quickly, make sure we have delighted customers, but it is a very exciting partnership with each of the right partners, we know that and that is very high, but really our teams. We will go back to our thesis what would be, so all boxes and we do it.

Michael Fisher -- Evercore -- Analyst

Yes, thanks for the color. And then the other thing I wanted to dig into a little bit was the national marketing campaign. I think it's been going about six-seven months now and I was just curious maybe reflect on it a little bit. Do you think it's been successful so far and how are you thinking about your marketing spend going forward?

David Bywater -- Chief Executive Officer

Yes, I'll take that one as well. Dale is just shy to this question so I am taking more. I think we're pleased so far. We are pleased so far with the results and early data what rebranding has a long gestation cycle and long payback period, but we've seen it's really in a market that we or next on a low investment that we've got names. We've seen an improvement in our average sales per person. So we're still collecting all the data. So what is valid in all we are doing revisions to that, but the early days have been encouraging but definitely, we're encouraged.

Michael Fisher -- Evercore -- Analyst

Great. Thanks for taking my question.

David Bywater -- Chief Executive Officer

Thank you.

Dale Gerard -- Chief Financial Officer

Thank you.

Operator

Thank you, Mr. Fisher. [Operator Instructions] There are no additional questions waiting at this time. I would like to pass the conference back over to David Bywaters for any closing remarks.

David Bywater -- Chief Executive Officer

Great, thank you. We appreciate your interest. We continue to grow the company, make the decisions and work to create value for our customers and our shareholders and our employees. I think it was a solid, solid quarter we think about growth on revenue up to 17%, subscribers up 30%, that's really, really impressive. Attrition is at 12 quarter low. Our Sachs does now somewhat $70, amazing and almost 90% from last year. Servicing costs are $10 and that it was a fully workload and that's a function of the benefits from our innovation team and operation team really working together to bring down costs. Our EBITDA growth, on a true apples to apples campaign, 2019 is up considerably. so I think the cost management really to perhaps the team what we've done there, but quite incredible.

Cash, it's accretive, it's pretty amazing. And that's going to normalize. It's I think it's a really impressive level. We further delevered the company. We're now at 2.9 2.8 that continue to trend down, which is nice. And the refinancing, I thought it was an incredible endorsement of what the team has done in the business model. And we've also -- we're reaffirming our full year guidance. We've done that while also advancing our strategic initiatives around logical extensions of solutions to our customers that provide by our continued relationship.

So, pretty pleased with all that. We have a lot of work to do still if [Phonetic] you break down and keep going forward. So thank your interest in company and we'll talk again.

Operator

[Operator Closing Remarks]

Duration: 51 minutes

Call participants:

Nate Stubbs -- Vice President-Investor Relations

David Bywater -- Chief Executive Officer

Dale Gerard -- Chief Financial Officer

Unidentified Participant

Erik Woodring -- Morgan Stanley -- Analyst

Brian Ruttenbur -- Imperial Capital -- Analyst

Michael Fisher -- Evercore -- Analyst

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