Propel Holdings Inc.

Welcome to Propel Holdings' fourth quarter and year-end 2021 financial results conference call. As a reminder, this conference is being recorded on March 21st, 2022. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for research analysts to queue up for questions. I will now turn the call over to Sarika Aluwalia, Senior Vice President, Corporate Affairs, and Chief Compliance Officer. Please go ahead, Sarika.

Thank you, Operator. Good morning, everyone, and thank you for joining us today. Propel's fourth quarter and year-end 2021 financial results were released this morning. The press release, financial statements, and MD&A are available on CDAR, as well as the company's website, propelholdings.com. Before we begin, I'd like to remind all participants that our statements and comments today may include forward-looking statements within the meaning of applicable security laws. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions, and management plans for future operations or similar matters which are subject to certain risks and uncertainties. These statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them. The company's actual results could differ materially from those projected or suggested in the forward-looking statements due to several important factors or assumptions, many of which are beyond the company's control, including those risks and uncertainties described in our annual information form for the year, ended December 31, 2021, filed on CDAR today. Any forward-looking statements we make today are only as of today's date. Except as required by applicable securities laws, we undertake no obligation to publicly update or review any forward-looking statements. Additionally, during the call, we may refer to non-IFRS measures. Participants are advised to review the section entitled Non-IFRS Measures and Industry Metrics in the Company's Management Discussion and Analysis for the quarter and year ended December 31st, 2021 for definitions of our non-IFRS measures and reconciliation of these measures for most comparable IFRS measures. I am joined on the call today by Clive Kinross, Founder and Chief Executive Officer, and Sheldon Sadakoski, Founder and Chief Financial Officer. Gary Edelstein, President of Propel, and I will also be available for the question and answer period. I will now pass the call over to Clive.

Thank you, Shalka, and welcome everybody to our Q4 and year-end 2021 conference call. I will start today's conference call with a quick overview of our operations. I will then move to an overview of our recent financial performance. Sheldon will provide a detailed analysis of our financial results. I will introduce our operating and financial targets for 2022 and 2023, and then we will close with an update on Propel's strategic direction. Propel is a consumer-focused fintech lending platform operating at scale. Our primary objective is to facilitate access to credit for millions of underserved consumers. With our focus currently in the United States markets, Since inception, we have facilitated over 800,000 loans and lines of credit for Propel and our bank partners, which totals over $600 million in total originations funded. We have a cloud-based mobile-first proprietary technology stack built with an open architecture that uses artificial intelligence and processes thousands of attributes to provide credit opportunities to underserved consumers who are otherwise shut out of traditional credit options. Our technology allows us to provide automated credit decisions very quickly, most often in under 10 seconds. We are also an institutional-grade operator. Today, we offer direct lending products, and we also partner with three U.S. banks to facilitate lines of credit in 28 unique states. Our technology also allows us to seamlessly integrate with 28 marketing partners that help drive originations for our direct lending and bank partner offerings. In fiscal 2021, on top of completing our IPO, Propel delivered exceptional financial performance, achieving records in total originations funded, which increased 123% in 2021, ending combined loans and advanced balances, increasing 115% over the prior year, and revenue, which increased 76% in fiscal 2021. Propel also delivered a record adjusted EBITDA in 2021 of over $25 million, which is a 27% increase over fiscal 2020, and recorded adjusted net income of $12.9 million, a 40% increase over fiscal 2020. These record results were driven by several factors. First, we added one new bank partner program in 2021. Second, two of our bank partners rolled their products out in 10 new states each, expanding our collective product and service offerings geographically. Third, we have added marketing partners to our platform and expanded existing marketing channels, notably our direct channels, which include direct mail and paid search. And fourth, on a macro level, we have seen a strong return to consumer demand in the U.S., as well as an accelerated movement from brick and mortar to online. Another growth driver which made a significant impact was the introduction of new variable pricing and credit graduation capabilities on our platform. In brief, credit graduation allows us to facilitate the graduation of consumers to lower cost of credit products once a proven repayment history has been established, and variable pricing allows for lower cost products at origination to consumers with better risk profiles from the outset. We are very excited about the potential of these programs for our consumers as well as for our business as they significantly expand the addressable market for Propel and our bank partners. The programs help to retain our customer base as their financial situation improves and they help fulfill on our collective values of providing lower cost of credit products and the right products for the right consumers. As we highlighted in our operational update back in February, originations attributable to variable pricing and graduation have significantly exceeded our expectations. We are very excited about the long-term potential of these programs as they will help accelerate growth and contribute to profitability in a significant way. Sheldon will provide more detail on our financial performance later in this call, but it is important for us to highlight that the rapid increase in our originations in the second half of 2021 led to record quarterly revenues and a record ending combined loan and advance balances for the year. This level of growth also impacts profitability in the short term through the recognition of non-cash provisioning charges that are required with IFRS. As a reminder, in periods of high growth, we recognize the cash cost of acquisition and data, and we also book significant non-cash expenses related to provisioning on new originations. In quarters like Q4, we incur both the cash and the non-cash costs of an origination with very little attributable revenue. Despite these dynamics and corresponding accounting treatment in the short term, growth in the loan book ultimately leads to growth in revenue and increased profitability. With that, I will now pass the call over to Shelton.