GreenSky, Inc.

Good morning and welcome to GreenSky's second quarter 2021 financial school. As a reminder, this event is streaming live on the GreenSky Investor Relations website and a replay on the same site approximately two hours after the completion of the call. We will begin the opening remarks and introductions. At this time, I would like to turn the call over to Brinker Daly, Head of Investor Relations. Mr. Daly, you may begin.

Thank you and good morning, everyone. Yesterday, GreenSky issued a press release announcing results for its second quarter ended June 30th, 2021. You can access this press release on the investor relations section of GreenSky's website. In addition, we have posted our second quarter 2021 earnings presentation, which we'll refer to during today's call. Today, you will hear prepared remarks from David Zalek, our chairman and chief executive officer, and Andrew Kang, our executive vice president and chief financial officer. We are also joined by Jerry Benjamin, our Vice Chairman and Chief Administrative Officer. Before we begin, let me remind you that the presentation and discussions will include forward-looking statements. These are statements that are based on current assumptions and are subject to risk and certainties and could cause actual results to different material than those projected. We disclaim any obligation to update any forward-looking statement except as required by law. Information about these risks and uncertainties is included in our press release issued yesterday, as well as in our filing with regulators. We will also be discussing non-GAAP financial measures on today's calls. These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results, and we encourage you to consider all measures when analyzing GreenSky's performance. These non-GAAP measures are described and reconciled to their GAAP counterparts in the presentation materials. The press release dated July 28, 2021, and on the investor relations page of our website. At this time, I will turn the call over to David.

Thank you, Brinker. Good morning, everyone, and thank you for joining us today to review our second quarter 2021 results. GreenSky achieved record earnings and delivered on a number of key initiatives in the second quarter. The strength of the company's performance reflects the longstanding commitment we have made to our merchants, consumers, and funding partners, and this past quarter's operating results could not have been achieved without the dedication and hard work of our GreenSky associates. Our strong start to the year has continued and was highlighted by strong profitability metrics and the achievement of several important accomplishments that I will elaborate upon. Throughout our remarks today, you'll notice two consistent themes. First, GreenSky has made great progress leveraging our strategic relationships and investments in merchants and sponsors that will maturely grow transaction volume in the future. Second, our continued focus on the lifetime profitability of each loan originated on our platform is directly reflected in our record earnings this quarter. Turning to slide three, During the second quarter, GreenSky delivered record net income of $47 million, which represented a $33 million increase from the second quarter of 2020 and was a direct result of the improvement in our cost of funds and the scalability of our operations. Adjusted EBITDA of $61 million, also a company record, resulted in a 45% adjusted EBITDA margin for the quarter, accelerating our path towards sustaining long-term annual adjusted EBITDA margins exceeding 30%, consistent with what we outlined during Investor Day this past January. Green Sky's 30-plus day delinquency rate, a leading indicator of our portfolio performance, was 0.7% at the end of the quarter, an improvement of 29 basis points in the last six months from 0.99% at the end of last year. While our portfolio benefited from the macroeconomic environment and improved consumer liquidity, we could not have achieved these results without the contributions from our significant investments in people, process, and technology. Additionally, and as Andrew will expand upon shortly, The benefits from our stronger, more diverse funding model has allowed us to optimize our cost of funds, driving a 33% lower cost of revenue, which directly contributed to GreenSky's dramatic profitability this quarter. Transaction volume for the quarter increased to $1.5 billion, representing a 14% improvement from the same period of the previous year. While we are pleased with the growth year over year, we also recognize that second quarter transaction volumes continued to be impacted by a challenging supply chain and labor market, which both continue to be constrained, directly impacting a number of our sub-verticals in home improvement. More importantly, we're optimistic that recent key merchant and sponsor wins and the strong momentum we saw in the first quarter continued to demonstrate positive leading indicators, including the all-time quarterly record of approved credit lines in the second quarter. We expect that this trend will translate into third and fourth quarter transaction volume contributions that would elevate transaction volumes above our historical seasonality trends. Relating to the previously disclosed CFPB matter, we are proud of our record of consumer advocacy and have already implemented many of the protocols and business practices called for by the agreements. These enhanced protocols and practices have been very well received by our ecosystem and will only serve to enhance our best-in-class merchant and consumer experience. Andrew will provide further details on the financial implications relating to the resolution of the CFPB matter, which will not have any adverse impact upon our ongoing operations or our growth target. Moving on to slide five, GreenSky made significant enhancements to its technology offerings throughout the quarter, Specifically, we released version 6.5 of our mobile application, which migrates our point-of-sale platform to a new cloud environment. The updated mobile application using GPS technology provides qualifying consumers immediate access to credit in a highly secure environment. We believe that these enhancements further extend our competitive technology advantages and are examples of our commitment to innovation, security, speed, and feature functionality. We remain committed to innovation around our process and technology as our continuous improvement was a key factor in a number of large strategic sponsors and merchant wins this quarter. As we look to further build our momentum on transaction volume growth, I'd like to briefly outline some of the key recent merchant and sponsor wins across a diverse array of subverticals. Most notably, we finalized a very important contract with one of the nation's largest HVAC sponsors, EGIA. This five-year exclusive first look deal will shift valuable market share from competitors to green sky. This relationship is expected to generate an incremental $300 million in 2022 transaction volume and targets $1 billion in annual transaction volume over the course of the agreement. The company's best-in-class technology, tools, service, and commitment to continuous improvement provided EGIA with the best value proposition when compared to other market competitors. While this expanded sponsor relationship should provide meaningful incremental transaction volumes to GreenSky in the coming years, it was also a testament to our longstanding mutually beneficial relationship with EGIA and could not have been accomplished without the valuable contributions of many GreenSky team members. We also grew our industry-leading position in windows and doors, and we made significant strides in our other home improvement categories through the completion of new partnerships with leading national manufacturers in the kitchen and bath space. Lastly, we finalized an innovative alliance with Angie Inc., a leading digital marketplace for home services. These wins combined with our transitions from this quarter alone are expected to contribute in excess of $500 million in incremental transaction volume in 2022, with the opportunity for additional significant growth beyond that. Finally, I'm very pleased to announce that GreenSky is planning to expand our residential solar offering in the coming quarters. We're excited about the large addressable market and profit profile. Our second quarter results highlight our ability to execute on the strategic investments we've made in our merchant and sponsor relationships. Technology and process improvements have helped land many new key strategic wins and record-approved credit lines show strong consumer demand for GreenSky's platform. We're excited that recent trends and wins will fuel growth in the second half of 2021 and beyond. I will now turn it over to Andrew to discuss our quarter's financial highlights.