Sunlight Financial Holdings, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Sunlight Financial third quarter 2021 earnings 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, Head of Investor Relations. Please go ahead.

Good afternoon and welcome to Sunlight Financial's third quarter 2021 earnings call. After the close of the market today, we announced third quarter 2021 key financial metrics, filed our 10Q with the SEC, and posted an earnings presentation to our Investor Relations website at ir.sunlightfinancials.com. Joining me today are Matt Viteri, Sunlight Financial's Chief Executive Officer, and Barry Edinburgh, Chief Financial Officer. Following their prepared remarks, we will open the call to Q&A. 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, some light 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 our 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 their 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 Pateri.

Thank you, Lucia. Good afternoon and thank you for joining us. I'm pleased to share Sunlight's third quarter of 2021 results as we experienced excellent year-over-year growth in all of our key metrics. In the third quarter of 2021, Sunlight funded $639 million in loans, up 77% from the third quarter of last year. We also saw strong growth in our financial metrics, with an increase in our total platform fee to 4.3%. record high total revenue of $30 million, and adjusted EBITDA up 97% to $11.4 million. Despite robust year-over-year growth, our funded loans in the third quarter came in below our forecast due to industry-wide challenges with supply chains, labor shortages, and permitting delays. We have seen these macro issues lengthening project installation times, which subsequently reduces our levels of funded loans. While these challenges have been building for several months, they particularly accelerated late in the third quarter and have persisted into the fourth quarter, leading us to reduce our full year 2021 funded loan guidance to $2.45 to $2.55 billion. However, I am pleased to affirm our full year 2021 guidance range for total revenue, adjusted EBITDA, and adjusted EBITDA margins as increased platform fee margins offset lighter-than-expected funded volume in the third quarter of 2021 and are expected to improve further in the fourth quarter of 2021, which Barry will discuss in greater detail. Many of you have heard me talk about the three pillars that are critical for any financing business and which drive Sunlight's value proposition, access to distribution, credit risk management, and stable, low-cost funding. Today, I'd like to focus on the first one, access to distribution. Sun Life Financial consistently focuses on building loyalty by creating value for our distribution channel, our network of nearly 1,500 contractor partners. In addition to maintaining competitive pricing, we have implemented several initiatives in the last few months to improve process efficiency and expand our product suite. First, we've upgraded Orange. our proprietary point-of-sale technology platform by adding enhanced NTP or notice-to-proceed review process with robotic process automation. This eliminates manual processes when providing contractors with approval to begin construction. This instant NTP not only improves process efficiency for contractors, but it also reduces our operational time and the expense associated with it. Second, we've launched a program called Sunlight Max, which offers a set of non-prime solar and home improvement products. This initiative leveraged Sunlight's credit expertise to increase approval rates and improve the value proposition for contractors who are now able to offer Sunlight's financing options to even more homeowners. We're already seeing the positive effect of these and other efforts to build contractor loyalty. As of today, we have established first look exclusivity and volume commitments with contractors representing more than $1 billion in expected 2022 funded loans. In addition to improving value for our existing network, we continue to grow the overall size of our contractor base, adding 92 contractors in this quarter, representing a 54% increase from the third quarter of 2020. And we're pleased to begin providing these 30 new solar contractors and 62 new home improvement contractors with our best-in-class technology platform, an unmatched product suite to fuel their growth. We're also continuing to see strong year-over-year growth in other key operational metrics. Despite the industry-wide issues impacting funded loan volume, we've facilitated financing for 18,189 borrowers in the quarter. up 65% from the prior year period. In addition to funding more homeowners, our average loan balance rose 8% to $35,000, and average solar loan balances in particular grew 15% to a record high of $41,000. In the third quarter of 2021, the battery attach rate for sunlight solar loans was 24%. That's nearly twice as high in the prior year period. And this growth is being driven by homeowners' increasing desire for reliability in the face of grid instability. The slight dip from the last quarter is likely due to the lower availability of batteries, as multiple manufacturers have cited delays in production and shipping. And positively, the demand for backup storage remains strong and will continue to support Sunlight's growth in the future. With that, I'd like to turn the call over to Barry Edinburgh, Sunlight CFO, to discuss our third quarter financial results in more detail.