New Jazz arena sponsor is rapidly growing home-monitoring company

Vivint, the company that just added its name to the home court of the Utah Jazz, has been losing money. But that's a good thing, company execs said Monday.

The losses are a reflection of the Provo company's rapid growth, and officers say they are confident that profitability will follow.

When, they don't know, but believe they are well-positioned to continue to lead in the expanding market for home security and management systems and monitoring that can be accessed on smartphones, tablets and computers.

Vivint believes it is the biggest North American company in its market and it is putting its cash — $564 million in revenue in 2014 — into signing up even more customers, said CEO Todd Pedersen.

"We have tremendous cash flow but our growth is outpacing our cash flow, which is actually a really good thing," Pedersen said after he helped Utah Jazz owner Gail Miller officially rename what has in recent years been EnergySolutions Arena.

Vivint soared to the top of Utah's homegrown businesses in 2012, when Blackstone Capital Partners and others bought the home-security and automation company for more than $2 billion, likely the largest such deal in state history.

But the 2012 leveraged buyout and other borrowing have left the company with $1.9 billion in debt.

Pedersen said the company foots the bill for installing equipment into the homes of new customers, then collects monthly fees that eventually will cover those costs and provide a profit once growth slows.

"I wouldn't say it's going to be in the next year or two because we had the best year we've had ever on all metrics," he said.

Pedersen founded the company in 1999 in a trailer in Arizona to sell other companies' home-security systems. Since then, he and others have grown Vivint to sell its own systems and expanded into things such as doorbell monitors, inside and outside cameras, CO2 detectors and smart thermostats that can be programmed and monitored on phones and other devices.

Before changing its name in 2011, Vivint was known as APX Alarm Security Solutions. The company had revenue growth every year since at least 2006, reaching $397 million in 2012 before the Blackstone deal, but it also recorded a net loss every year from at least 2008.

Terms of the Jazz deal were not disclosed and Alex Dunn, Vivint president, said the company didn't believe it was big enough to require disclosing it in federal regulatory filings.

Splashing its name on the arena will help the company recruit tech employees who are in short supply when Utah's economy is growing as it is now, Dunn said. Buying the naming rights will only add to the company's previous Jazz sponsorship, he said.

"For us, it was about making sure we take the partnership to the next level," Dunn said, "and that we establish ourselves as one of the great Utah companies."

Vivint had 3,200 full-time employees at the end of last year, the majority of whom work in Utah.

Blackstone owns 73 percent of Vivint and Pedersen 12 percent, with 6 percent owned by Summit Funds and the rest by various other people or entities.

As of Dec. 31, 2014, the company had 894,000 subscribers who, Pedersen said, stayed with the company an average of nine years.

The company hires an army of college students during the spring and summer months who fan out across the country going door to door selling the Vivint's products and services.

That sales force, whose earnings are dependent on signing up customers, also has caused APX and Vivint some regulatory headaches.

Since 2013, Ohio, Kansas, Nebraska and Georgia have taken regulatory actions against the Utah company, with allegations that include sales reps providing false or misleading information to consumers.

The Better Business Bureau gives the company a B- rating for the 3,463 complaints it has received.

Vivint officers and employees also were among the top donors to former Utah Attorneys General Mark Shurtleff and John Swallow.

tharvey@sltrib.com