SUNL - Earnings call transcript Q2 2021 | Sunlight Financial Holdings Inc.

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Operator

Good afternoon and welcome to Sunlight Financials Second Quarter 2021 Earnings Call. After the close of the market today we announced second quarter 2021 key financial metrics filed an 8-K [ph] with the SEC and posted an the earnings presentation to our Investor Relations website at irs.sunlightfinancial.com.

Joining me today are Matt Potere, Sunlight Financial's Chief Executive Officer; and Barry Edinburg, Chief Financial Officer.

Before we begin, I'd like to remind everyone that this webcast may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, beliefs, estimates, plans and prospects. by to can of differ cause those or subject other uncertainties materially are indicated that factors actual implied statements a risks, variety and from Such statements. such results to

prediction outlooks. but include, and to, expectation business not Forward-looking of competitive statements and industry are financial and Sunlight limited Financial's or conditions, performance

the expressly of to as this and Sunlight today assumptions the affect with and and Forward-looking statements company day any the refers no required uncertainties of except presentation disclaims Financial risks they The are law. under the not a participants future update, SEC. otherwise, risks, The can otherwise call guaranteed company performance. of to to speak as and press made, Sunlight on is the events are discussion statements, website supplemental new Sunlight Financial's information, also alter for of subject that by business. any and revise obligation are or to posted Financial's filed result by issued whether obligation or as filings SEC forward-looking our release

is supplemental It can GAAP GAAP. in with presentation. the call to my both, and should isolation Additionally, A presentation useful over reconciliation turn of for can this be performance. in our accordance non-GAAP be the call, The will found results measures the Matt. press or in not measures as directly information comparable in which a be we pleasure prepared evaluating these most to non-GAAP additional considered we our during to measures today's believe release of discuss now substitute

Matt Potere

of completed Good listing July business eager officially first joining combination are Spartan results XXXX New Stock on of level second afternoon Corp. In in in XXXX, funded the earnings excellent We're funded pleased of have [ph]. last call quarter a Acquisition with as traded key Sunlight's of the on growth thank to company. and you, amount our year. quarter quarter for is strategy a triple share all I'm our publicly and hit you, our of XXXX. to second the loans Exchange we execute us. II loans the to as metrics. York excited Sunlight's million, following our generated on XX, Today Thank second everyone $XXX Lucia the record

Despite the the in and As times financing of are to for XX,XXX This almost contractors, meet the us cumulative demand chain XXXX. loans we to prior of residential nearly borrowers the constraints, period. $X.X $X year permitting they quarter, nationwide. in XX, June to a is solar billion this year, our funded facing indicating effectively growth and billion delays positioning as many exceed third testament three facilitated quarter solar growing rapidly some ability reached in of supply for we've outstanding as

growing addition average In average funding XX% in with $XX,XXX. balances our rising particular to loan our balance In sober nearly homeowners, to overall our loan under more $XX,XXX. average just XX% increased loan to balance

second first highlight drives talk often asked unmatched home the new technology like our and their service contractor We're XXXX. We to quarter bringing largest to improvement I increase date, loyalty, representing platform and pricing quarterly to also providing the pleased of network on products, number and products. about platform these begin to to contractors contractors over since total growth of quarter added platform, an platform, today, I'd When this to contractors our XXX the XXXX, Sunlight and about what XX Orange XX% and best-in-class our payments. four Ps; the differentiates two the new XXX solar fuel contractors growth.

both, to point capital received of in contractors be growing and quality provide quality of industry-leading delivering finance our contractor announced options. better differentiator Orange close to provides products network quite ever Orange their credit push the towards and loan to innovative contractors businesses, contractors. and share. process even a best-in-class minutes is loans homeowners, bills, less a platform, homeowners simply, an opportunity We this homeowners more Thanks for to see ways to sales. salespeople with And continue Orange the the fully provider continue homeowners, month, frictionless, loan and enables market proprietary These two options our simple We Orange. Sunlight. to of contractors consistent providers. digital than partner with products choice for to network feedback grow Earlier to that while our empowers of high from continued our and part their electricity expanding as broadest real with and us suite more to that our new of providing on we provide several provide sale additional

XX% to in home bills billion XXXX usage, these factors, which energy macro and believe electric In trajectory, residential are the ahead. their that's increasingly levels. demand drives The reduce and battery also key appliances. quarters several support be storage systems, is it's Homeowners and vehicles increase residential to to and drivers not but looking utility a $XX XXXX, growth nearly addition continuing continue solar for to in solar to from it's smart just persist for ways grow rapid and we Sunlight specific subsequent market there our ascent, years will that expected

Not to are being for perfectly well for pricing. homeowners with the storage residential battery rising see rate loans Sunlight's the popularity attachment driven prior solar for the the and of in which of support We to attractive provide reliability quarter solar being the business year Loans seamless positioned with of the instability. residential but grew a is over triple in second finance grid XXXX, growing, supplement model. this X.X% experience financing loans, continue with period. solar our shift market platform, Sunlight face to of overall is we are funded increasing tailwinds desire growth to Along XX% the of and toward homeowners demand than systems to This systems. is expected to solar more increasing are systems nearly market comprehensive homeowners XX%, aligns Sunlight equipped home In battery well rate systems, by only the by the increasingly energy solutions.

Importantly, benefits demand this significantly increase battery Sunlight. in storage

while to in see prices and enter battery driving new our as And not control, the direct overtime, of as continued operating In the demand growth market inherent we'll we revenue all margin additional battery suppliers thus contractors expense. increase to line leverage balances the a creating the particularly our storage any bottom top in add our platform, believe incremental Given flows systems, more line way increase, expansion. come down. storage average short, our without

ability industry-leading providing Sunlight partnerships credit this to diverse adjusted for quality, We new to supported facilitated network ability with with in Our the of our by by focused on increased and substantial support products to driven demand is attractive capital pricing, returns, meet our exchange, continue providers. contractors and risk attractive our remain them growth our provide capital Sunlight loans, providers with strong innovate our network.

company. and guidance Barry quarter continued detail, growth costs revised While have second of public reduced fee being our margins review year as showed platform full impact and our we substantial reflect related to will the a to XXXX in operational more in volume strength,

improvement sunlight flow in EBITDA on guidance, to of frictionless financial strategy XXXX positive and that, the be more discuss home over to and While in I'm leading detail. With we solar Edinburg our strength to to quarter we've finance. our I'd capital connecting continued contractors turn results customers, providers call as proud like Barry confident I profitable our business. Sunlight's growth with remain lowered execute adjusted cash the highly second

Barry Edinburg

further in second quarter second the was validation million quarter adjusted total quarter market, $XX.X the business. $X.X approach EBITDA, million XXX% $XX.X XXXX, recording this light the from million, quarter the In of tenth to of and revenue, of an of Adjusted our XXXX; EBITDA million. generated $XX.X capital increase of revenue a reflects XXXX significant and quarter of total our of Matt. positive Thanks, over Sunlight of our for the second increase model, our nature revenue consecutive it's

operating increase second adjusted second quarter the the per our [ph] year X.X% XX% business improved margin to in EBITDA adjusted to addition, operating of second XXXX, taking from An to Total enabled leverage to our reduction. $XX from last $X,XXX indicator XXXX the In in is from year. of last of operating expense quarter hold additional in under in year just in that XX% this quarter. increased of leverage the quarter EBITDA recent the $XXX $XXX per our borrower borrower most has

that with fully remainder important note previously operating of the see X.X%. our been with been compares competition level with unfavorably During enacted business effect. take leverage as second expect variances improvements overall the margin X%; impacted impact the both market quarter quarter fee throughout pricing providers quarterly the margins in the platform fee fee of changes growth in experiencing, by XXXX, Platform margins. this the from XXXX capital we've of the It's but we were to together in fee and margins offset this XXXX platform partially second our to have negatively our platform that of solar

of free $XX negative As model. our result in quarter and year this rate. year of cash feature contribution a from and flow of converted at EBITDA cash business, our the free contribution this a and of of quarter year. revenue the cash attractive of in second of margin in to was is approximately based sunlight last cash high is the second flow extremely nature an We margin free the X.X%, flow unique Positive up the second a generated adjusted million quarter

to growth. and EBITDA year-over-year growth we well strong with and are funded continue regard long-term revenue for poised expect While loans, to total adjusted

billion We EBITDA million following XXXX revenue funded ranges; million, XX% key $XXX and XX%. EBITDA adjusted the are for for million, to to to outlook for total for for revising $X.X year $XXX adjusted metrics billion, $XX loans to full our million $X.X $XX our margin, for

these negatively total company, previous has between updated the fee roughly forecast for relating to guidance, updated operating our of EBITDA to as a forecasts account of half consistent platform relative higher expectation; anticipated than updated difference adjusted this and loans funded each for guidance. costs public our the transitioning by our EBITDA previous revenue, been midpoint margin with drivers remained to EBITDA for reduced adjusted has and and adjusted two in impacted margins and guidance Although

increased portion initial do we will costs of costs side, smaller of a expect beyond business the or expense part company that the base the setup the the expense the We not anticipate that costs to become XXXX. grows. our a portion impact increased as of On remaining

bit context. the business expect improvement regard we to With described in With One our side, adjusted relating the revenue, to improvements housekeeping market total little will like up expenses noted from platform as overtime. The adjusted to to would on half guidance, and fourth and it loans, margins funded On that with midpoint plan guidance EBITDA will turn than year, believe that for anticipated the but in a margin, drive be to February. platform by year note adjusted year quarter to of for full for Q&A. the just guidance will ranges fee operating EBITDA of previously, revenue EBITDA. to competitive. XXXX XX% that, more the for material the continue full in operator want XXX% the the margin second I'd back discussion fee I call follow-up be our initiate XXXX XXXX of and to XX% margins the actual results we I through stabilize, revision continue we leverage to

Operator

webcast. you, joining questions. Instructions] to queue. we day. [Operator the that, floor for look have Okay, Have close questions you open I'd and a it like this now With Thank Thank like doesn't in does the today. conclude coming is for out the any great

Sunlight Financial (SUNLQ) 17 Aug 212021 Q2 Earnings call transcript