What happened
Shares of home-security company Vivint Smart Home (VVNT) jumped as much as 28.1% in trading on Friday after the company reported first-quarter 2021 financial results. At 12:50 p.m. EDT, shares were still up 24.4% for the day.
So what
Revenue was up 13.2% in the quarter to $343.3 million, and new subscribers added increased 20.1% versus a year ago to 60,127. Net loss improved from $145.1 million a year ago to $87.4 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped by $27.2 million to $162.1 million.
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Analysts were only expecting $332.8 million in revenue, so growth is topping what the market might have been expecting. And management said they expect full-year revenue to be between $1.38 billion and $1.42 billion with adjusted EBITDA of $640 million to $655 million.
Now what
This was certainly a solid earnings beat and investors should be happy that Vivint Smart Home is growing double digits. But the fact that the company is still losing nearly $100 million per quarter is not a good sign for operations long term.
Until that bottom-line performance improves, I'll stay out of the stock, despite the market's bullish sentiment today.