GreenSky, Inc. Reports Strong First Quarter Profitability; Record First Quarter Adjusted EBITDA; Raises Full Year Guidance
GreenSky, Inc. (NASDAQ: GSKY), a leading financial technology company Powering Commerce at the Point of Sale®, reported financial results today for the first quarter ended March 31, 2021.
"I am delighted to share that GreenSky's strong performance for the first quarter of the year has us on an early pace to materially exceed our 2021 performance goals," said David Zalik, GreenSky's Chairman and CEO. "During the first quarter, we delivered strong profitability across all key metrics and are encouraged by the continued momentum in transaction volume growth. Specifically, our Home Improvement business saw a record amount of first quarter application approvals, while our Elective Healthcare business continued to restore and normalize. Enterprise-wide transaction volume was up 28% from February to March, compared to 21% for the same period in 2019, reflecting accelerated growth compared to pre-pandemic levels. Moreover, during the quarter we enjoyed tremendous Home Improvement new merchant enrollments in the windows & doors, HVAC, roofing and kitchen and bath categories, positioning us for exceptional volumes in the coming quarters." Zalik continued, "For the first quarter, when compared to the first quarter of 2020, GreenSky's Net Income increased by $23 million, Pro Forma Net Income increased by $24 million and Adjusted EBITDA more than doubled to a record $35 million, reflecting a first quarter Adjusted EBITDA margin of 28%."
Andrew Kang, Chief Financial Officer, said, "Building off a successful launch to grow and diversify our funding in 2020, through the first four months of 2021, we have completed an additional $2.3 billion in new funding initiatives across a diverse set of investors and with improved economics compared to 2020. We increased the commitment of our existing forward flow agreement, completed additional loan sales in the quarter and increased our bank waterfall commitment with an existing, long-standing bank partner and extended that commitment for an additional 2 years." Mr. Kang continued, "Our strong first quarter results were driven by an 11% year-over-year improvement in Cost of Revenue and the ongoing positive credit performance of our servicing portfolio, which has us well positioned to exceed budget for the full year. As a result, we are raising our 2021 net income and Adjusted EBITDA guidance."
First Quarter Financial Highlights:
(1) Adjusted Pro Forma Net Income, Adjusted Pro Forma Diluted Earnings per Share, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Refer to "Non-GAAP Financial Measures" for important additional information.
Updated 2021 Guidance:
Conference call and webcast:
As previously announced, the Company's management will host a conference call to discuss first quarter 2021 results at 9:00 a.m. ET on May 5, 2021. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliation of non-GAAP measures to their most directly comparable GAAP measure, can be accessed through the Company's Investor Relations website at http://investors.greensky.com. A replay of the webcast will be available within 2 hours of the completion of the call and will be archived at the same location for one year.
About GreenSky, Inc.
GreenSky, Inc. (NASDAQ: GSKY), headquartered in Atlanta, is a leading technology company Powering Commerce at the Point of Sale® for a growing ecosystem of merchants, consumers and banks. Our highly scalable, proprietary and patented technology platform enables merchants to offer frictionless promotional payment options to consumers, driving increased sales volume and accelerated cash flow. Banks leverage our technology to provide loans to super-prime and prime consumers nationwide. We currently service a $9.3 billion loan portfolio, and since our inception, approximately 3.9 million consumers have financed approximately $29 billion of commerce using our paperless, real time "apply and buy" technology. For more information, visit https://www.greensky.com.
This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, its operations; and 2021 performance and financial guidance. You generally can identify these statements by the use of words such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe," "expect," "plan," "intend," "estimate" or "anticipate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would," "likely" and "could." These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in GreenSky's filings with the Securities and Exchange Commission and include, but are not limited to, risks related to the extent and duration of the COVID-19 pandemic and its impact on the Company, its bank partners and merchants, GreenSky program borrowers, loan demand (including, in particular, for elective healthcare procedures), the capital markets (including the Company's ability to obtain additional funding or facilitate additional whole loan or loan participation sales) and the economy in general; the Company's ability to retain existing, and attract new, merchants and bank partners or other funding sources, including the risk that one or more bank partners do not renew their funding commitments or reduce existing commitments; its future financial performance, including trends in revenue, cost of revenue, gross profit or gross margin, operating expenses, and free cash flow; changes in market interest rates; increases in loan delinquencies; its ability to operate successfully in a highly regulated industry; the outcome of litigation and regulatory matters; the effect of management changes; cyberattacks and security vulnerabilities in its products and services; and the Company's ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, GreenSky disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
Non-GAAP Financial Measures
This press release presents information about the Company's Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Pro Forma Net Income, and Adjusted Pro Forma Diluted Earnings Per Share, which are non-GAAP financial measures provided as supplements to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We believe that Adjusted EBITDA and Adjusted EBITDA Margin are key financial indicators of our business performance over the long term and provide useful information regarding whether cash provided by operating activities is sufficient to maintain and grow our business. We believe that this methodology for determining Adjusted EBITDA and Adjusted EBITDA Margin can provide useful supplemental information to help investors better understand the economics of our platform. We believe that Adjusted Pro Forma Net Income is a useful measure because it makes our results more directly comparable to public companies that have the vast majority of their earnings subject to corporate income taxation.
We are presenting these non-GAAP measures to assist investors in evaluating our financial performance and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
These non-GAAP measures are presented for supplemental informational purposes only. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income. The non-GAAP measures GreenSky uses may differ from the non-GAAP measures used by other companies. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is provided below for each of the fiscal periods indicated.
ITEXPO #TECHSUPERSHOW Exhibit Hall Open
Part I: AI and Machine Learning: Customer Care Applications and Challenges