Home security provider Scout Security Ltd (ASX: SCT) has continued to gain momentum announcing increased platform subscribers through its white labelled home security solution.
The news comes a few months after the launch of its Kinetic Secure Home product into the US communications market. The Kinetic product is a white-label product that includes a security package and subscription service. In August 2021, a Master Service Agreement (MSA) was established with US telco provider Windstream to develop a customised smart security platform along with a branding and marketing plan.
The MSA was essential for Scout as they leveraged Windstream’s 500 person strong sales team, eCommerce site, and its 25 retail stores located around the US. They planned to target approximately 10% of their 1.4m residential customer base in the first 18-24 months.
Scout’s white labelled product was marketed through Windstream’s eCommerce channel, GoKinetic.com with Scout’s future revenue coming from hardware sales and recurring revenue from subscriptions.
As of March 2022, monthly paying subscriptions provided Scout with more than $1m in annualised recurring revenue. $100k of this was added through Windstream sales, equating to more than 1,000 new security systems distributed to customers every month.
“With new monthly telco sales growing by double digits month-on-month, and potential new partnerships progressing through our pipeline, we retain a positive outlook for sustainable growth in revenue and net operating cash flow,” said Scout CEO, Ryan McCall.
Scout offers two different subscription packages linked to any one of their cameras, sensors or doorbells. For AU$107 annually, customers will have access to basic functions, including; notifications, SMS and phone call alerts and most importantly, the use of their cameras. The premium package, costing AU$215 annually, will give you access to 24/7 professional monitoring, police and fire dispatch, email notifications and free cloud storage.
Additionally, Windstream packages the same products and services but charges $360 (AU$507) annually, where the security equipment can be included for a one-off charge of $240 (AU$338).
In Scout’s most recent half-year report ended 31 December 2021, the Company generated revenue of $2.4m, up 174% year-over-year. EBITDA for the period was a loss of $1.4m. The main drivers of the loss were fees related to outsourced engineering and development of their web applications, plus the costs of a new CEO search.
Scout has some ambitious goals for the future. Their plan is to progress its US telecommunication partners further, launch another white-label security system with Prosegur along with a launch into a second Spanish-speaking country, and continue to pursue future white-label partners. Currently, Scout has a partnership with Prosegur where they launched their white-label product in Puru under the brand Qido with over 500,000 alarm systems already installed – now they are in the works to launch into another international country that has not yet been named.
“Our partnership with Windstream has exceeded expectations in penetrating the US market and achieved consistent month-on-month recurring revenue growth since its commencement. Scout has also continued to progress marketing activities in Peru, alongside our partner Prosegur, while also preparing for the launch of Qido in a second Spanish-speaking market.”
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