Sunlight Financial Holdings, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Sunlight Financial second quarter 2021 earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Lucia Dempsey, the head of IR. Please go ahead.

Good afternoon, and welcome to Sunlight Financial's second quarter 2021 earnings call. After the close of the market today, we announced second quarter 2021 key financial metrics, filed an 8KA with the SEC, and posted an earnings presentation to our investor relations website at ir.sunlightfinancial.com. Joining me today are Matt Pateri, Sunlight Financial's Chief Executive Officer, and Barry Edinburgh, 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. Such statements are subject to a variety of risks uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Forward-looking statements include, but are not limited to, sunlight financials expectation or prediction of financial and business performance and conditions and competitive and industry outlooks. Forward-looking statements speak as of the day they are made, are subject to risks, uncertainties, and assumptions, and are not guarantees of performance. Sunlight Financial is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. The company also refers participants on this call to the press release issued by the company and filed today with the SEC, the supplemental presentation posted to Sunlight Financial's website, and Sunlight Financial's SEC filings for a discussion of the risks that can affect our business. Additionally, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in both our press release and the supplemental presentation. It is now my pleasure to turn the call over to Matt.

Thank you, Lucia. Good afternoon and thank you everyone for joining us. Today is officially our first earnings call following our listing on the New York Stock Exchange on July 12th, 2021. We're excited to have completed the business combination with Spartan Acquisition Corp 2 and are eager to execute on our strategy as a publicly traded company. I'm pleased to share some of my second quarter 2021 results as we generated excellent growth in all of our key metrics. In the second quarter of 2021, Sunlight's funded loans hit a record level of $666 million, triple the amount of loans funded in the second quarter of last year. As of June 30th this year, we reached $4.8 billion of cumulative loans funded, positioning us to exceed $5 billion in the third quarter of 2021. This outstanding growth is a testament to our ability to rapidly and effectively meet the growing demand for residential solar nationwide. Despite solar contractors indicating they're facing permitting delays and some supply chain constraints, we facilitated financing for nearly 19,000 borrowers in the quarter. Almost three times as many as in the prior year period. In addition to funding more homeowners, our average loan balance increased with our overall average loan balance rising 11% to just under $36,000. and our average solar loan balances in particular growing 15% to nearly $40,000. We also added 184 contractors to our network this quarter, representing 77% growth since the second quarter of 2020, and our largest quarterly increase to date, bringing the total number of contractors on the Orange platform to over 1,400. We're pleased to begin providing these 46 new solar contractors and 138 new home improvement contractors, our best-in-class technology platform, and unmatched service to fuel their growth. When asked about what differentiates Sunlight and drives contractor loyalty, I often talk about the four Ps, platform, products, pricing, and payments. I'd like to highlight the first two today, platform and products. We continue to be the provider of choice for an ever-growing network of contractors, thanks to our best-in-class proprietary point-of-sale platform, Orange. Orange provides both contractors and homeowners with a frictionless, simple, and fully digital process to finance high-quality loans in less than two minutes, while delivering industry-leading credit quality to our capital providers. We receive consistent feedback from our contractor network that Orange empowers salespeople to provide better options for homeowners and to close more sales. And quite simply, Orange is a real differentiator that enables us to continue expanding our market share. Earlier this month, we announced several new innovative loan products as part of our continued push toward providing contractors and homeowners with the broadest suite of loan options. These products provide homeowners the opportunity to save even more on their electricity bills. and provide contractors additional ways to grow their businesses and partner with Sunlight. In addition to these Sunlight specific factors, there continue to be several key macro drivers that support our growth trajectory and we believe will persist in the subsequent quarters and years ahead. The residential solar market is continuing its rapid ascent and it's expected to grow to nearly $18 billion in 2023. That's a 45% increase from 2020 levels. Homeowners are increasingly looking for ways to reduce their utility bills and energy usage, which drives demand for not just residential solar, but also battery storage systems, electric vehicles, and smart home appliances. We are well positioned to support this shift toward comprehensive home energy solutions. Not only is the overall solar market growing, but the systems are increasingly being funded by loans, which perfectly aligns with Sunlight's business model. Loans are expected to finance over 70% of residential solar systems, and Sunlight is well-equipped to provide homeowners a seamless financing experience with attractive pricing. Along with the market tailwinds and the rising popularity of our platform, we continue to see increasing demand for battery storage systems to supplement homeowners' residential solar systems. In the second quarter of 2021, the battery attachment rate for sunlight solar loans grew to nearly 26%, more than triple the rate of 8.6% in the prior year period. This growth is being driven by homeowners increasing desire for reliability in the face of grid instability. Importantly, this increase in battery storage demand significantly benefits sunlight. Given the inherent operating leverage of our platform, As contractors add battery storage to more systems, our average balances increase, thus creating additional revenue without any incremental expense. In short, our top-line growth flows all the way to the bottom line, driving margin expansion. And while not in our direct control, we believe we'll see a continued increase in battery storage demand over time, particularly as new suppliers enter the market and prices come down. Our ability to meet this substantial growth is supported by our strong partnerships with our diverse network of capital providers. We remain focused on providing them with attractive risk adjusted returns driven by our industry leading credit quality. And in exchange, our capital providers provide Sunlight with increased demand for Sunlight facilitated loans, attractive pricing, and the ability to continue to innovate new products to support our contractors network. While our second quarter showed substantial growth in volume and continued operational strength, as Barry will review in more detail, we have revised our full year 2021 guidance to reflect the impact of reduced platform fee margins and costs related to being a public company. While we've lowered our 2021 adjusted EBITDA guidance, I remain confident in the continued strength of Sunlight's highly profitable cash flow positive business. I'm proud to be leading Sunlight as we execute on our growth strategy, connecting solar and home improvement customers, contractors, and capital providers with frictionless financing. With that, I'd like to turn the call over to Barry Edinburgh to discuss our second quarter financial results in more detail.