Sunlight Financial Reports Fourth Quarter and Full-Year 2021 Results
Sunlight Financial reported significant growth for 2021, with total funded loans surging 72% to $2.5 billion and total revenue increasing 73% to $120.6 million. However, the company experienced a GAAP net loss of $(241.0 million), a stark contrast to the prior year's net income of $10.6 million. Adjusted EBITDA saw a substantial rise of 121% to $52.9 million. For 2022, Sunlight anticipates funded loan volume between $2.9 - $3.1 billion and revenue between $145 - $155 million, reflecting a positive outlook despite challenges.
- Total funded loans increased 72% to $2.5 billion.
- Total revenue rose 73% to $120.6 million.
- Adjusted EBITDA grew 121% to $52.9 million.
- Free cash flow improved to $44.3 million with an 84% conversion rate.
- GAAP net loss of $(241.0) million, compared to a net income of $10.6 million the prior year.
- Material write-down of business combination-related goodwill impacted financial results.
- 2021 Funded Loan Volume up
- 2021 Total Revenue up
- GAAP Net Loss in 2021 of
- 2021 Adjusted EBITDA up
“2021 was a momentous year for
"In 2022, we will build on our success by focusing on the pillars that make Sunlight a leading point-of-sale finance platform," added Potere. "Sunlight's industry-leading credit quality earns the trust of capital providers, increasing our access to attractive and low-cost capital, ultimately enabling us to offer attractive pricing and diverse products to our contractors. This virtuous cycle drives our scalable, capital-light, cash-generative business model and positions Sunlight for continued success this year and for years to come."
Full-Year 2021 Key Financial Metrics
-
Total Funded Loans of
, up$2.5 billion 72% from the prior year -
Total Revenue of
, a$120.6 million 73% increase from the prior year -
GAAP Net Loss of
, relative to GAAP Net Income of$(241.0) million in the prior year, driven by non-cash business combination-related accounting and a material write-down in the fourth quarter of business combination-related goodwill$10.6 million -
Adjusted EBITDA of
, a$52.9 million 121% increase from in the prior year$24.0 million -
Adjusted EBITDA Margin of
43.9% , up materially from34.4% in the prior year -
Total Platform Fee Percentage of
4.4% and Solar Direct Channel PlatformFee Margin of5.1% compared with4.7% and5.3% , respectively, in the prior year -
Free Cash Flow of
and a$44.3 million 84% Adjusted EBITDA to Free Cash Flow conversion rate, relative to Free Cash Flow of and a$9.0 million 37.6% conversion rate in the prior year -
Cash and cash equivalents at
December 31, 2021 , of , relative to$91.9 million at$49.6 million December 31, 2020
Fourth Quarter 2021 Key Financial Metrics
-
Total Funded Loans of
, compared with$638 million in the prior-year period$636 million -
Total Revenue of
, a$36.6 million 27% increase from the prior-year period -
GAAP Net Loss of
, relative to GAAP Net Income of$(226.7) million in the prior-year period, driven by non-cash business combination-related accounting and a material write-down of business combination-related goodwill in the fourth quarter of 2021$7.3 million -
Adjusted EBITDA of
, an$18.5 million 18% increase from in the prior-year period$15.7 million -
Adjusted EBITDA Margin of
50.6% compared with54.4% from the prior-year period -
Total Platform
Fee Margin of5.3% (up from4.8% in the prior-year period) and Solar Direct Channel PlatformFee Margin of5.7% (up from4.9% in the prior-year period)
A reconciliation between historical GAAP and non-GAAP information is provided in the tables below.
Full-Year 2022 Outlook
The company is initiating 2022 guidance ranges for the following key metrics:
-
Full-Year Funded Loan Volume of
-$2.9 $3.1 billion -
First Quarter 2022 Funded Loan Volume between
and$580 $590 million -
Full-Year Total Revenue of
-$145 $155 million -
Full-Year Adjusted EBITDA of
-$55 $60 million
The company does not intend to regularly provide quarterly funded loan volume guidance but considers it useful for the first quarter of 2022 given the timing of this release and the impacts of normal seasonality, as well as the Omicron variant, on first quarter 2022 funded volume.
Conference Call Information
Sunlight will host a conference call and webcast to discuss its fourth quarter and full year 2021 financial and operational results and business outlook at
Earnings Presentation
A supplemental earnings presentation is available at ir.sunlightfinancial.com. Additional information is available in the Form 10-K, which Sunlight filed with the
About
Sunlight is a premier, technology-enabled point-of-sale finance company. Sunlight partners with contractors nationwide to provide homeowners with financing for the installation of residential solar systems and other home improvements. Sunlight’s best-in-class technology and deep credit expertise simplify and streamline consumer finance, ensuring a fast and frictionless process for both contractors and homeowners. For more information, visit www.sunlightfinancial.com.
Forward-Looking Statements
The information included herein and in any oral statements made in connection herewith may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements may generally be identified by the use of words such as “could,” “should,” “would,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “plan,” “continue,” or the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Sunlight disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. Sunlight cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Sunlight. Such risks and uncertainties include, among others: risks relating to the uncertainty of the projected operating and financial information with respect to Sunlight; risks related to Sunlight’s business and the timing of expected business milestones or results; global supply chain shortages, competition for skilled labor, and permitting delays; the effects of competition and regulatory risks, and the impacts of changes in legislation or regulations on Sunlight’s future business; the expiration, renewal, modification or replacement of the federal solar investment tax credit, rebates and other incentives; the effects of the COVID-19 pandemic on Sunlight’s business or future results; Sunlight’s ability to sustain profitability and to attract and retain its relationships with third parties, including Sunlight’s capital providers and solar contractors; changes in the retail prices of traditional utility generated electricity; the availability of solar panels, batteries and other components and raw materials; and such other risks and uncertainties discussed in the “Risk Factors” section of Sunlight’s Form 10-K as filed with the
Non-GAAP Financial Measures
Some of the operating and financial information and data contained in this press release, such as Total Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow have not been prepared in accordance with
CONSOLIDATED BALANCE SHEETS |
||||||||
dollars in thousands |
|
|
|
|
||||
|
|
|
|
|||||
Assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
91,882 |
|
|
$ |
49,583 |
|
Restricted cash |
|
|
2,018 |
|
|
|
3,122 |
|
Advances |
|
|
66,839 |
|
|
|
35,280 |
|
Financing receivables |
|
|
4,313 |
|
|
|
5,333 |
|
|
|
|
445,756 |
|
|
|
— |
|
Intangible assets, net |
|
|
365,839 |
|
|
|
4,533 |
|
Property and equipment, net |
|
|
4,069 |
|
|
|
1,192 |
|
Other assets |
|
|
21,531 |
|
|
|
7,030 |
|
Total Assets |
|
$ |
1,002,247 |
|
|
$ |
106,073 |
|
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
|
||||
|
|
|
|
|
||||
Liabilities |
|
|
|
|
||||
Accounts payable and accrued expenses |
|
$ |
23,386 |
|
|
$ |
15,782 |
|
Funding commitments |
|
|
22,749 |
|
|
|
18,386 |
|
Debt |
|
|
20,613 |
|
|
|
14,625 |
|
Distributions payable |
|
|
— |
|
|
|
7,522 |
|
Deferred tax liabilities |
|
|
36,686 |
|
|
|
— |
|
Warrants, at fair value |
|
|
19,007 |
|
|
|
5,643 |
|
Other liabilities |
|
|
843 |
|
|
|
1,502 |
|
Total liabilities |
|
$ |
123,284 |
|
|
$ |
63,460 |
|
|
|
|
|
|
||||
Temporary Equity |
|
|
— |
|
|
|
664,516 |
|
|
|
|
|
|
||||
Stockholders' Equity |
|
|
|
|
||||
Other ownership interests' capital (predecessor) |
|
|
— |
|
|
|
1,439 |
|
Class A Common Stock |
|
|
9 |
|
|
|
— |
|
Additional paid-in capital |
|
|
764,366 |
|
|
|
— |
|
Accumulated deficit |
|
|
(186,022 |
) |
|
|
(623,342 |
) |
Total Capital |
|
|
578,353 |
|
|
|
(621,903 |
) |
|
|
|
(15,535 |
) |
|
|
— |
|
Total Stockholders' Equity |
|
|
562,818 |
|
|
|
(621,903 |
) |
Noncontrolling interests in consolidated subsidiaries |
|
|
316,145 |
|
|
|
— |
|
Total Equity |
|
|
878,963 |
|
|
|
(621,903 |
) |
|
|
|
|
|
||||
Total Liabilities and Equity |
|
$ |
1,002,247 |
|
|
$ |
106,073 |
|
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
dollars in thousands |
|
For the Three Months
|
|
For the Year Ended
|
||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Revenue |
|
$ |
35,154 |
|
|
$ |
29,045 |
|
|
$ |
114,738 |
|
|
$ |
69,564 |
|
Costs and Expenses |
|
|
|
|
|
|
|
|
— |
|
||||||
Cost of revenues (exclusive of items shown separately below) |
|
|
5,032 |
|
|
|
4,996 |
|
|
|
20,429 |
|
|
|
13,711 |
|
Compensation and benefits |
|
|
12,214 |
|
|
|
6,703 |
|
|
|
62,158 |
|
|
|
26,174 |
|
Selling, general, and administrative |
|
|
4,089 |
|
|
|
1,079 |
|
|
|
10,869 |
|
|
|
3,806 |
|
Property and technology |
|
|
1,586 |
|
|
|
1,150 |
|
|
|
5,878 |
|
|
|
4,304 |
|
Depreciation and amortization |
|
|
22,848 |
|
|
|
801 |
|
|
|
45,077 |
|
|
|
3,231 |
|
|
|
|
224,701 |
|
|
|
— |
|
|
|
224,701 |
|
|
|
— |
|
Provision for losses |
|
|
963 |
|
|
|
562 |
|
|
|
2,389 |
|
|
|
1,350 |
|
Management fees to affiliate |
|
|
— |
|
|
|
100 |
|
|
|
204 |
|
|
|
400 |
|
Total Costs and Expenses |
|
|
271,433 |
|
|
|
15,391 |
|
|
|
371,705 |
|
|
|
52,976 |
|
Operating income (loss) |
|
|
(236,279 |
) |
|
|
13,654 |
|
|
|
(256,967 |
) |
|
|
16,588 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other Income (Expense), Net |
|
|
|
|
|
|
|
|
— |
|
||||||
Interest income |
|
|
72 |
|
|
|
150 |
|
|
|
411 |
|
|
|
520 |
|
Interest expense |
|
|
(263 |
) |
|
|
(237 |
) |
|
|
(1,158 |
) |
|
|
(829 |
) |
Change in fair value of warrant liabilities |
|
|
12,467 |
|
|
|
(5,444 |
) |
|
|
17,079 |
|
|
|
(5,510 |
) |
Change in fair value of contract derivatives, net |
|
|
149 |
|
|
|
589 |
|
|
|
(24 |
) |
|
|
1,435 |
|
Realized gains on contract derivatives, net |
|
|
1,489 |
|
|
|
(188 |
) |
|
|
5,858 |
|
|
|
103 |
|
Other realized losses, net |
|
|
— |
|
|
|
(171 |
) |
|
|
— |
|
|
|
(171 |
) |
Other income (expense) |
|
|
(121 |
) |
|
|
(220 |
) |
|
|
435 |
|
|
|
(634 |
) |
Business combination expenses |
|
|
(1,987 |
) |
|
|
(880 |
) |
|
|
(10,091 |
) |
|
|
(878 |
) |
Total Other Income (Expense), Net |
|
|
11,806 |
|
|
|
(6,401 |
) |
|
|
12,510 |
|
|
|
(5,964 |
) |
Net Income (Loss) Before Income Taxes |
|
|
(224,473 |
) |
|
|
7,253 |
|
|
|
(244,457 |
) |
|
|
10,624 |
|
Income tax benefit (expense) |
|
|
(2,180 |
) |
|
NA |
|
|
3,504 |
|
|
|
— |
|
||
Net Income (Loss) |
|
|
(226,653 |
) |
|
|
7,253 |
|
|
|
(240,953 |
) |
|
|
10,624 |
|
Noncontrolling interests in loss of consolidated subsidiaries |
|
|
78,511 |
|
|
|
— |
|
|
|
87,528 |
|
|
|
— |
|
Net Income (Loss) Attributable to Class A Shareholders |
|
$ |
(148,142 |
) |
|
$ |
7,253 |
|
|
$ |
(153,425 |
) |
|
$ |
10,624 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss Per Class A Share |
|
|
|
|
|
|
|
|
||||||||
Net loss per Class A share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(1.75 |
) |
|
|
|
$ |
(1.81 |
) |
|
|
||||
Diluted |
|
$ |
(1.13 |
) |
|
|
|
$ |
(1.17 |
) |
|
|
||||
Weighted average number of Class A shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
84,824,109 |
|
|
|
|
|
84,824,109 |
|
|
|
||||
Diluted |
|
|
131,146,326 |
|
|
|
|
|
131,146,326 |
|
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
|
For the Year Ended
|
||||||
|
|
|
2021 |
|
|
|
2020 |
|
Cash Flows From Operating Activities |
|
|
|
|
||||
Net income (loss) |
|
$ |
(240,953 |
) |
|
$ |
10,624 |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
45,171 |
|
|
|
3,338 |
|
|
|
|
224,701 |
|
|
|
— |
|
Provision for losses |
|
|
2,389 |
|
|
|
1,350 |
|
Change in fair value of warrant liabilities |
|
|
(17,079 |
) |
|
|
5,510 |
|
Change in fair value of contract derivatives, net |
|
|
24 |
|
|
|
(1,435 |
) |
Other expense (income) |
|
|
(435 |
) |
|
|
634 |
|
Share-based payment arrangements |
|
|
29,664 |
|
|
|
126 |
|
Deferred income tax expense (benefit) |
|
|
(5,524 |
) |
|
|
— |
|
Increase (decrease) in operating capital: |
|
|
|
|
||||
Increase in advances |
|
|
(31,533 |
) |
|
|
(17,877 |
) |
Decrease (increase) in due from affiliates |
|
|
— |
|
|
|
— |
|
Decrease (increase) in other assets |
|
|
(14,238 |
) |
|
|
(3,000 |
) |
Increase (decrease) in accounts payable and accrued expenses |
|
|
(1,149 |
) |
|
|
6,918 |
|
Increase (decrease) in funding commitments |
|
|
4,363 |
|
|
|
(1,123 |
) |
Increase (decrease) in other liabilities |
|
|
390 |
|
|
|
(40 |
) |
Net cash provided by (used in) operating activities |
|
|
(4,209 |
) |
|
|
5,025 |
|
|
|
|
|
|
||||
Cash Flows From Investing Activities |
|
|
|
|
||||
Return of investments in loan pool participation and loan principal repayments |
|
|
1,542 |
|
|
|
1,316 |
|
Payments to acquire loans and participations in loan pools |
|
|
(1,886 |
) |
|
|
(2,839 |
) |
Payments to acquire property and equipment |
|
|
(4,502 |
) |
|
|
(3,280 |
) |
Payments to acquire |
|
|
(304,570 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(309,416 |
) |
|
|
(4,803 |
) |
|
|
|
|
|
||||
Cash Flows From Financing Activities |
|
|
|
|
||||
Proceeds from borrowings under line of credit |
|
|
20,746 |
|
|
|
8,713 |
|
Repayments of borrowings under line of credit |
|
|
(14,758 |
) |
|
|
(5,899 |
) |
Proceeds from issuance of private placement |
|
|
250,000 |
|
|
|
— |
|
Payments of stock issuance costs |
|
|
(19,618 |
) |
|
|
— |
|
Payments for share-based payment tax withholding |
|
|
(26,424 |
) |
|
|
— |
|
Payment of capital distributions |
|
|
(7,522 |
) |
|
|
(1,987 |
) |
Payment of debt issuance costs |
|
|
(491 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
201,933 |
|
|
|
827 |
|
|
|
|
|
|
||||
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash |
|
|
(111,692 |
) |
|
|
1,049 |
|
|
|
|
|
|
||||
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period |
|
|
52,705 |
|
|
|
51,656 |
|
|
|
|
|
|
||||
Cash, Cash Equivalents, and Restricted Cash, End of Period |
|
$ |
93,900 |
|
|
$ |
52,705 |
|
RECONCILIATION OF GAAP MEASURES TO ADJUSTED FINANCIAL MEASURES |
|||||||||||||
TOTAL REVENUE, ADJUSTED EBITDA AND FREE CASH FLOW RECONCILIATIONS |
|||||||||||||
|
|
For the Three Months
|
|
For the Year Ended
|
|||||||||
dollars in thousands |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
GAAP Revenue |
|
$ |
35,154 |
|
$ |
29,045 |
|
|
$ |
114,738 |
|
$ |
69,564 |
(+) Realized gain on contract derivatives, net |
|
|
1,489 |
|
|
(188 |
) |
|
|
5,858 |
|
|
103 |
Total Revenue |
|
$ |
36,643 |
|
$ |
28,857 |
|
|
$ |
120,596 |
|
$ |
69,667 |
|
|
For the Three Months
|
|
For the Year Ended
|
||||||||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net Income (Loss) |
|
$ |
(226,653 |
) |
|
$ |
7,253 |
|
|
$ |
(240,953 |
) |
|
$ |
10,624 |
|
Amortization of Business Combination intangibles |
|
|
22,693 |
|
|
|
— |
|
|
|
43,152 |
|
|
|
— |
|
Accelerated postcombination compensation expense |
|
|
— |
|
|
|
— |
|
|
|
20,979 |
|
|
|
— |
|
Non-cash change in financial instruments |
|
|
(12,471 |
) |
|
|
5,075 |
|
|
|
(17,492 |
) |
|
|
4,709 |
|
Intangible impairment |
|
|
224,701 |
|
|
|
— |
|
|
|
224,701 |
|
|
|
— |
|
Expenses from the Business Combination |
|
|
1,987 |
|
|
|
880 |
|
|
|
10,091 |
|
|
|
878 |
|
Adjusted Net Income (Loss) |
|
$ |
10,257 |
|
|
$ |
13,208 |
|
|
$ |
40,478 |
|
|
$ |
16,211 |
|
Depreciation and amortization |
|
$ |
155 |
|
|
$ |
801 |
|
|
|
1,925 |
|
|
$ |
3,231 |
|
Interest expense |
|
|
263 |
|
|
|
237 |
|
|
|
1,158 |
|
|
|
829 |
|
Income tax expense (benefit) |
|
|
2,180 |
|
|
|
— |
|
|
|
(3,504 |
) |
|
|
— |
|
Equity-based compensation |
|
|
4,825 |
|
|
|
14 |
|
|
|
8,685 |
|
|
|
126 |
|
Fees paid to brokers |
|
|
867 |
|
|
|
1,434 |
|
|
|
4,162 |
|
|
|
3,561 |
|
Adjusted EBITDA |
|
$ |
18,547 |
|
|
$ |
15,694 |
|
|
$ |
52,904 |
|
|
$ |
23,958 |
|
Interest expense |
|
$ |
(263 |
) |
|
$ |
(237 |
) |
|
$ |
(1,158 |
) |
|
$ |
(829 |
) |
Income tax expense (benefit) |
|
|
(2,180 |
) |
|
|
— |
|
|
|
3,504 |
|
|
|
— |
|
Fees paid to brokers |
|
|
(867 |
) |
|
|
(1,434 |
) |
|
|
(4,162 |
) |
|
|
(3,561 |
) |
Expenses from the Business Combination |
|
|
(1,987 |
) |
|
|
(880 |
) |
|
|
(10,091 |
) |
|
|
(878 |
) |
Provision for losses |
|
|
963 |
|
|
|
562 |
|
|
|
2,389 |
|
|
|
1,350 |
|
Changes in operating capital and other |
|
|
15,143 |
|
|
|
3,667 |
|
|
|
(47,595 |
) |
|
|
(15,015 |
) |
Net Cash Provided by (Used in) Operating Activities |
|
$ |
29,356 |
|
|
$ |
17,372 |
|
|
$ |
(4,209 |
) |
|
$ |
5,025 |
|
Capital expenditures |
|
$ |
(1,313 |
) |
|
$ |
(747 |
) |
|
$ |
(3,168 |
) |
|
$ |
(3,280 |
) |
Changes in advances, net of funding commitments |
|
|
(6,232 |
) |
|
|
7,552 |
|
|
28,969 |
|
|
|
19,000 |
|
|
Changes in restricted cash |
|
|
241 |
|
|
|
(511 |
) |
|
|
1,718 |
|
|
|
(1,193 |
) |
Payments of Business Combination costs |
|
|
802 |
|
|
|
— |
|
|
|
8,319 |
|
|
|
— |
|
Other changes in working capital |
|
|
(7,328 |
) |
|
|
(11,089 |
) |
|
|
12,720 |
|
|
|
(10,552 |
) |
Free Cash Flow |
|
$ |
15,526 |
|
|
$ |
12,577 |
|
|
$ |
44,349 |
|
|
$ |
9,000 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income (Loss) |
|
$ |
10,257 |
|
|
$ |
13,208 |
|
|
$ |
40,478 |
|
|
$ |
16,211 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income (Loss) per Class A Share, Diluted |
|
$ |
0.08 |
|
|
|
|
$ |
0.31 |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220329005980/en/
Media Contacts:
Investor Relations
investors@sunlightfinancial.com
888.315.0822
Public Relations
media@sunlightfinancial.com
Source:
FAQ
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