Q3 2021 Sunlight Financial Holdings Inc Earnings Call
Yeah.
[music].
Thank you for standing by this is the conference operator, welcome to the Sun Life 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 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 Sun Life Financial's third quarter 2021 earnings call. After the close of the market today, we announced third quarter 2021 key financial metrics filed our 10-Q with the SEC and posted an earnings presentation to our Investor Relations website, IR well my financial Dotcom.
Joining me today are not the Terry for my financials, Chief Executive Officer, and Barry Eisenberg, 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 season.
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 semi financials expectation or predictions of financial and business performance and conditions and competitive and industry outlooks.
We're looking statements speak as of the day. They are made are subject to risks uncertainties and assumptions and are not guarantees of performance.
So my 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 semi 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 Metairie.
Thank you Lucia good afternoon, and thank you for joining us I'm pleased to share some light third quarter 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 of launch.
77% from the third quarter of last year.
We also saw strong growth in our financial metrics with the increase in our total platform fee to 4.3%.
Record high total revenue of $30 million and adjusted EBITDA.
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 change 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 lift 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 billion 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 2020 one.
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 some nice value proposition Act.
Access to distribution credit risk management and stable low cost funding.
Today I'd like to focus on the first one access to distribution.
Don't like financial consistently focuses on building loyalty by creating value for our distribution channel our network of nearly 1500 contracted 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 N T P or notice to proceed review process with robotic process automation.
This eliminates 90, what processes, we're providing contractors with approval to begin construction.
This incident and T P 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 instead of non prime solar and home improvement products. This initiative leveraged some lights credit expertise to increase approval rates and improve the value proposition for contractors, who are now able to offer some nights finding its thing options.
Even more homeworkers.
We were 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 in 62, new home improvement contractors with our best in class technology platform and 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 facilitated financing for 18189 borrowers in the quarter up 65% from the prior year period.
In addition to funding more homeowners are average loan balance rose, 8% to $35000 and average solar loan balances in particular grew 15% to a record high of $41000.
In the third quarter of 2021, the battery attach rate, where 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 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 some nice growth in the future.
With that I'd like to turn the call over to Barry Edinburg semi CFO to discuss our third quarter financial results in more detail.
Thanks, Matt.
In the third quarter of 2021 satellite generated $30 million of total revenue an increase of 72% over the third quarter of 2020 and our.
A new quarterly high for the business adjust.
Adjusted EBITDA for the quarter was $11 4 million up 97% in the third quarter of 2020.
Adjusted EBITDA margin was also up materially to 37, 9% from 33, 1% in the third quarter last year.
This was our 11th consecutive quarter of reporting positive adjusted EBITDA.
To validate our approach to the market our revenue model and the capital light nature of our business.
Free cash flow generation is another major validation of the sunlight revenue model and a unique and attractive feature of our business. We produced a substantial amount of free cash flow in the third quarter of this year and continue to convert adjusted EBITDA to free cash flow at an extremely high rate.
In last quarters earnings call, we indicated that we had negotiated improvements in pricing with our capital providers, enabling platform for the margins to rebound in the third quarter and that's exactly what happened our overall platform fee margin increased to four 3% this quarter up from 4.0% in the second quarter.
And even better indicator of our success in this regard.
Our direct channel platform fee margin improved from four 3% in the second quarter to 5.0% in the third quarter we.
We expect this momentum to accelerate in the fourth quarter as these pricing improvements flow through to more funded loans.
Sunlight ability to drive pricing on the capital provider side of our business is a testament to our industry, leading credit quality and the strong partnerships that we've developed with a diverse network of capital providers.
<unk> focused on delivering attractive risk adjusted returns for our capital providers and view these relationships as mutually beneficial partnerships. This approach has enabled us to add three new capital providers to the platform in recent months.
Extending our access to flexible low cost capital to fund loans, and furthering our ability to provide attractive pricing to the contractor market.
I'd also like to reference a few items related to our costs and expenses is there a certain items related to the business combination that closed on July 9th are materially impacted the calculation of GAAP net income leading to a net loss for the quarter.
First as compensation expense taken in the third quarter of approximately $25 million related to equity based awards driven by the close of the business combination.
The second is the amortization and depreciation amounting to approximately $20 million in the third quarter that primarily relates to amortizing intangible assets established in the context of the business combination.
We will amortize these intangible assets as described in our 10-Q and such amortization will continue to reduce GAAP net income until the assets had been fully amortized it.
It is important to note however that neither of these items impacted adjusted EBITDA as they are noncash transaction related expenses.
As Matt referenced earlier, we've adjusted our full year 2021 guidance for funded loans to $2 45 for 2.55 billion.
We're reaffirming the remainder of our full year 2021 guidance metrics for total revenue $113 million to $121 million for adjusted EBITDA $46 million to $51 million for adjusted EBITDA margin, 38% to 42%.
Industry wide challenges with supply chain labor shortages and permanent delays have negatively impacted project installation timelines. These.
These macro slowdowns reduced third quarter funded loans relative to our expectations and we believe this dynamic will continue through the fourth quarter of 2021, However, a robust improvement in platform fee margins should offset this impact enabling us to affirm our previously provided guidance ranges for total revenue adjusted EBITDA and adjusted EBITDA margin.
With that I'd like to turn it back to Matt.
Thanks, Barry at this time sunlight plans to initiate full year 2022 guidance on our fourth quarter full.
Full year 2021 call in March of next year in the meantime, we remain committed to delivering on our plans for the remainder of 2021 and setting the company up for continued success next year.
Before we shift to Q&A I'd like to highlight a couple of drivers for continued long term growth.
Our residential solar business will benefit from robust growth across the market, adding new contractors to our platform, increasing our market share with existing contractors and higher average loan size, partially driven by increased demand for battery storage.
The growth of our home improvement business will be driven by a large and highly fragmented addressable market. The addition of new contractors on our platform and growth in home improvement margins as we add direct channel capital providers to fund home improvement loans.
Finally, we continue to generate strong free cash flow and deploy that capital in ways that support the long term growth and success of suddenly including contractor advances growth in new verticals and potential M&A opportunities I'd like to now turn the call over to the operator for Q&A.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear atone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
We will pause for a moment as callers join the queue.
Our first question comes from Philip Shen of Roth Capital Partners. Please go ahead.
Hey, guys. Thanks for taking my questions first one is on the.
For margins as we get into Q4 and even into Q1, you know you've negotiated this.
The new credit agreements and so it seems like you'll have more.
The benefits are in the coming quarter. So was wondering you know we could back into some of it with the affirmation of the EBITDA, but was wondering if you might be able to speak to you know from a basis point standpoint, if you're going from you know the.
<unk>.
The current Q3 level, how much higher could it go from 4.3.
5% five point O.
And then also as it relates to the credit agreements.
I'm.
Just wanted to check in to see if.
They might be dynamic at all in other words the <unk>.
You know the ABS market are that your peers tap into continues to.
Trend lower and so or those credit agreements with your credit unions and then the new partners that you have are they dynamic at all where they can.
Help you kind of stay with the market moves if they continue to go along.
Yeah. Thanks for the question. So I appreciate that as far as the dynamic nature of the of the agreements.
And.
They're not dynamic as a general rule with our credit unions and that has positive aspects of negative aspects of the positive aspects or that we're able to go back and asked for improved pricing periodically and other positive aspects are that in a rising rate environment. We don't have to worry about you know immediate negative changes.
Our pricing and so we view that as a positive.
As far as margins in the fourth quarter I'm not going to quote a specific number but you know we talked about what we're trying to do last quarter and since that time, we further improved our pricing in a bunch of ways with a number of our carbon provider such that we expect the fourth quarter platform the margins would be materially higher than the third quarter.
We also think its materially higher than even we would have thought just a few months ago.
We've done a really good job executing on things, we can control and pulling levers that we are able to pull them in order to benefit our platform anymore.
Our next question comes from Moses Sutton of Barclays. Please go ahead.
Hi, Thanks for taking my question, how do you see average loan balance trending as inflation sort of peaks in the solar system, and then potentially dissuades specifically the average loan balance pushed to a 41000 from 39, eight and solar quarter over quarter. Despite the battery attached dropping so how do we sort of bridge that.
Yeah most of the thanks for the thanks for the call overtime, just kind of step back over the last couple of years, we've seen average balance rise part of that is due to the growth in battery storage, but part of that is also due to the increasing size of systems.
The ability as solar becomes more and more in the money.
Dolby for solar installers to be able to upsell and add other energy efficiency offerings alongside solar and so you're right. We saw a slight dip in in and battery attach rates. This quarter, we feel really good about the long term trend.
But even despite that we saw some saw some growth. So as we look out we don't explicitly forecast.
And provide guidance around average balance, but we think the we think the trends are certainly very favorable.
Got it got it that's helpful. And then you know films. They can ask some questions on the back end of the of the margin. The platform margin question I had really was on the competitive side of it on the front end you know last quarter, you were giving you an update sort of on where the market was moving things, we're tightening a bit on the competition side.
Any sense on how that's changed since then.
Still probably a great amount you know benign capital going against yours, but just trying to think of how we can see the shift dynamically between last quarter and now with where we are into next year.
Yes sure Great question. So certainly this is a this is an attractive market it will oh, it'll be a competitive market too.
Barry talked about the expansion in our margin I think one of the things. That's important to note is our margin expanded substantially and we expect it to expand and have material improvement, even further improvement and accelerate in the fourth quarter and that's despite us being able to make some improvements to get our contractors like even better pricing and so.
So we feel like we're very well positioned there.
It's also important to note that we do compete beyond as we wind contractor relationships and we've been really successful there.
We compete beyond just just price so we and I talked about some of the new products that we've rolled out some write backs enhancements that we've made to orange and that also has helped us attract.
Attract contractors and while we have to be competitive on price and we don't necessarily have to have the lowest price do we go and feel like we're really well positioned.
Got it got it very helpful and last one for me and I'll jump back in the queue can you elaborate on any labor constraints, you know where those most severe maybe anything specific to California, and then Conversely, where are you seeing the strongest momentum on a quarter over quarter basis.
Yes, what's interesting is on the labor side, we see and what we hear from our contractors. Fortunately, we don't feel it directly so they extended which there's inflation and labor cost for instance, we don't directly realized I realized that but we do feel it in that project timelines have have lengthened.
What we hear is it's not just in storage on the roof. In fact, many cases, it's the trade, meaning a master electrician.
Who needs to come onsite in some jurisdictions and are just like all trades, it's been challenging to get that we really hear that from contractors across the country.
And it's something that they're focused on trying to trying to ramp up but we didn't hear that and then the other place I'd say, it's it's indirectly labor.
In permitting offices permitting offices has been backed up is both the result of significant demand, but we also suspect that theres also some labor pressure there like there are in.
Many service related positions.
Got it got it very helpful. Thank you.
Our next question comes from Chris Donat of Piper Sandler. Please go ahead.
Hey, good afternoon. Thanks for taking my questions just wanted to follow up on the last one there with the.
The labor issues.
Emitting and then to tack on supply chain as we think about 2022.
Is there anything either positively or negative leave that youre looking at with those three issues you cited in the release of the labor supply chain and permitting did you expect to materially change for better for worse.
Yeah. Thanks for the question, Chris So first I think a little bit of context around this we saw these issues are really start to accelerate in the back half of the third quarter. The end of August into September you'd see that and what we reported in our in our third quarter.
And then for our full year guidance is reflective of this environment today.
Today, we're not giving guidance on 2022 I can't tell you when we look at full year guidance for this year it does take into account.
In this current environment and we don't see a reason why you would abate in the near term, we do think over time.
You know what we'll start to see you know as supply chains loosen up really across the country. We should we should start to see those issues improve and hopefully we start to see some of the labor shortage improve as well, but we're not we're not in a position today to forecast timing around that.
Okay I understood Yeah, I didn't mean to put you on the spot for it it's just.
Hum.
They're tough issues to get your arms around and the effect in different direct and indirect ways.
And then just shifting gears.
Go ahead, Chris.
Because I was going to say one other note that I think might be might be important is because.
Because we have a network of contractors and it's a diversified network of contractors.
We think what we experienced is pretty reflective of the overall market and so we.
We don't believe we have significant exposure to any individual.
Hum OEM for instance, or at least directly and.
So while the while they're systemic issues with supply chain for instance, and certainly we feel the effects of some of that we have we have less risk than an individual OEM had a significant issue, there's a bit of diversification and some benefit by having a broad network of contractors.
Okay. Okay.
That makes sense to me and then.
Our topic, but but away from your release in your slide deck, a there's an announcement earlier this morning of <unk>.
A merger between American Challenger Development Corp, and Patriot National Bank Corp, and within that press release, It mentioned, a new multi year loan purchase agreement involving sunlight and up to 107, Oh, sorry up to 1.75 billion of residential solar loans and battery lines and.
It also says in the release that it's.
Theres not a definitive documentation yet so any comment on that one or is that something that's not.
Not quite the T's are crossed and i's dotted at this stage.
Yeah.
Thanks for that question as well so we as they put in their release, we have signed a term sheet with them and we're hopeful that we will finalize the documentation.
And we're hopeful of a solid partnership with them I think they are the type of cutting edge counterparty that can add value.
So sunlight and <unk>.
Top runner.
And so we're looking forward to finalizing the agreement and getting them started but.
It was just in terms of the re sign just everybody knows him I'd also note that we announced that we acquired or added three new capital providers to the platform in the past couple of months. They were not one of them. So to the extent that we move forward with them there would be a fourth so the three are not inclusive of that one that you mentioned Chris.
Okay, and then just to tack one on here.
Would it be reasonable to assume that.
The terms with these new capital providers are similar to existing terms with your.
Current and prior capital providers or any reason, we would expect something different.
Yeah, I wouldn't I wouldn't expect something different I mean, the way we think about it is that we will add capital providers to the platform selectively and we'll focus on both lowering our cost of capital and I'm finding partners through otherwise add value to sunlight I'm definitely not adding partners just to add them, we have lots of <unk>.
So when we're adding partners. It's a it's for a good reason and it's for our partners everything will be good long term.
Relationships for song.
Alright understood. Okay. Thanks for that Oh, Yeah sure. We often yeah now we often talk about being focused on originating high quality assets and how that attract capital and as Barry said, adding those three.
Capital providers and then the announcement from this morning.
The term sheet are just examples of why we're so focused on originating high quality assets because it creates demand for us to ultimately get to lower and lower cost of capital with with really good flexible long term partners.
Okay. It makes sense to me thank you.
Our next question comes from Erin <unk> of Citi. Please go ahead.
Thanks, just another question on the competitive dynamics. There there are some other folks that have talked about piloting programs and and.
Entering into the market in the fourth quarter and into next year.
Could you remind investors just you know what your competitive moats are and how you might be able to withstand some of the rising competition.
Yeah, I think there's probably two ways to look at this one as we always talk about platforms like ours need to do three things they have to have access to distribution.
We have relationships with nearly 1500 contractors need to underwrite risk and make sure it's priced appropriately and they need to have access to diverse and low cost capital and we've spent the last six years refining our model for each of those three.
If you look at the first access to distribution.
For new for new entrants don't need to create relationships with hundreds if not thousands of contractors and we've been very successful winning those relationships. We've got competitively priced products, our technology platform Orange, which is proprietary to.
It's used by 15000, plus salespeople and it gets very very high reviews, because it's so easy to use and we have a very diverse set of products and again you can see that the example of rolling out to somebody not Max products the wide range of products that we offer.
All the innovation that we got and so we think we compete really well to win contractors, but we think that new entrants will need to not just be good at the front end also need to really understand risk and they'll need to have access to diverse and low cost capital if they want to be well priced.
And so again, it's an it's an attractive market and we have no doubt it'll it'll attract new entrants, but we think it's you.
We think it would be challenging for a new entrant to come in and we think we're well positioned you think you can see that by the 60 contractors roughly 60 contractors, who have who have made commitments to us for for next year and we think those are produced that $1 billion plus in bi.
Great. Thank you.
Once again, if you have a question. Please press Star then one.
Our next question comes from my deep mentally of credit Suisse. Please go ahead.
My D mentally of credit Suisse. Your line is live.
Is it possible you're on mute.
Our next question comes from Jeff Osborne of Cowen. Please go ahead.
Hey, Greg I just had a few questions. One I was wondering on the the Maxx rollout can you just talk about when that happened and what parameters. There are on how subprime, we're going here and what the impact the margins are.
Sure. So we rolled that out in the third quarter, we rolled it out for both solar and home improvements are there separate products for those particular contractors and those those loan purposes.
What's important is we talk a lot about our credit and our credit expertise. We think what's the right way to think about credit is ensuring that assets are priced appropriately for their risk and so we spent significant time with our capital providers to make sure that we really understand the incremental rescue for this broader buy box unless he's asked.
Are priced appropriately.
So while we don't disclose margins.
By product.
I can't tell you we've been thoughtful about the risk adjusted returns that the capital providers from overseas. So that it's it makes sense for them as long term partners and also the margin that that we would earn on it as well.
So we we really tried to take a thoughtful approach and it's been very well received as you probably mentioned by up by contractors.
And just to follow up is there a minimum in terms of White House subprime will go is there a minimum FICO score that you're putting in.
Drawing a line in the sand or is it on a case by case basis, and then maybe for Barry as one of the three capital providers dedicated exclusively to this product or a variety of new and existing people that you had in the past.
Yeah.
Yeah, So happy to take the first one we don't disclose.
Minimum FICO because our our credit strategy is beyond just FICO. So it's it's proprietary and it and it uses multiple multiple attributes, but we did work with the capital providers to.
To make sure that we can maximize the buy box and to make sure that we're picking up the right. The right. Yes, it's so that they're they're priced appropriately very happy happy to let you answer the second question.
Yeah, I mean, we generally don't publish public economy, who funds what pools of loans, but it's safe to say that these loans are intentionally originated to give our capital providers. You know good returns and then one of the providers that we brought on is focused on these types of months yes.
Got it and last question I have is just can you remind us of what the typical timeline is of getting a contract signed at the dining room table proverbially relative to funding alone and you know where that is where it was last quarter, where it is today. What's your expectations are for Q4 any type of commentary about the lengthening timeline as it relates to the new guidance would be.
Helpful to put into perspective.
Yeah sure. So I would think about first two steps there's at the at the kitchen table signing there. It's the credit agreement running credit and agreeing to go solar than customer signed a loan agreement, which is sometimes days or a couple of weeks later and then system is installed that whole process.
<unk> takes in the 90 day range, we we don't disclose the cycle times and the moves and the cycle times.
But I can what I can tell you just to give you a little context is the delays that we're seeing as a result of those three issues supply chain labor tightness.
And permitting is not the land credit approval to loan signing it's delaying loan signing the installation. So it is on the back end, it's not demand driven we're not seeing delays because of demand we're seeing the delays because of these these macro issues. So.
We're not giving specific numbers around that timeline, but to give you a sense for the impact if you look at the midpoint and the change of our our guidance full year or really into the back half of the year. It says it's a 200 billion dollar impact of delays that'll get pushed out into subsequent quarters. So hopefully that gives you some sense of the order of magnitude.
And Fortunately, we've we've had good success raising our increasing our margins in third and we will in the fourth quarter to help offset that.
Thanks, Matt that's all I have I appreciate it.
Once again, if you have a question. Please press Star then one.
Our next question is from Philip Shen of Roth Capital Partners. Please go ahead.
Hey, guys. Thanks for taking my follow ups here I'm just as a.
Kind of a tag on the last question.
I think Matt you just talked about that you're in.
Not seeing delays in your credit approvals, so and and so it's just a push out from the credit approval to the installation.
That said was wondering if you are seeing at some level your contractors are.
Fall short of the growth or volumes that they <unk>.
Perhaps worked with you one at the beginning of the year.
And not relative to installations, but maybe perhaps to the credit approvals.
We have picked up on some.
Sure sure shifting if you will and wanted to understand you know if theres some other.
Competitive dynamics beyond you know the reasons why you decided for the funded loan volumes being challenged meaning supply chain labor shortage and permitting.
The reality is that the market grew I mean, sunrun grew I think 18% quarter over quarter in Q3.
I think from other data sources.
Every quarter the industry was up and.
And so just curious.
Curious if you could walk us through kind of some of the.
Perhaps share shift or competitive dynamics that you can.
Provide that might be beyond what you've commented on thus far thanks.
Yeah. So.
I think it's important to note.
Demand for solar demand for sunlight has definitely remained strong. So if we look at we look at the top of funnel and I gave a little bit of context to $200 million the mid point of our.
Mid point of our guidance ranges.
Yeah. That's that's how much volume we believe it is getting pushed out as a result of these issues and so if you add that on you can you can see fairly substantial growth in the third quarter alone. We think it was north of north of 10% of our volume.
We are buying them as temporary at least 10% lower as a result of these types of pressures. So we don't think it's the it demand related.
We do think it's the result of these three issues.
And if you look at other signs for for contractors and contractors to interest the 60 commitments from contractors.
You know, it's a I think a pretty pretty strong statement from contractors.
Their vote and their opinions of the value proposition that we provide for that.
Thanks, Matt appreciate that and then looking into 'twenty, two I know, you're not giving official guidance.
But was wondering if you might be able to sketch.
A little bit of what it might look like either from a growth standpoint or margin standpoint. For example, do you expect margins to flatten out a quarter.
You know as the cadence of our quarterly.
Quarterly performance from Q1 through for next year.
Color there could be helpful from a modeling standpoint.
Yeah. So we're we're we're not providing 2020 guidance now I think broadly I think a few a few broad statements that I think are important.
Historically, we've been high growth company.
Profitable you can see that's been the history of our of our adjusted EBITDA.
Quarter over quarter, and we're cash flow positive business and so this business has tremendous momentum and we feel good about the momentum into 2022, we get out into the first quarter will provide 22.
'twenty two guidance, but.
But we've we've been winning in the market and we expect to continue to win in the market.
Okay, Great one last one for me as it relates to approval levels given the competition. That's been out there you know a historically have thought of you guys as kind of you know in the <unk>.
And the 70 low 70% type of range for approval levels versus competition that like 80% you guys come in with a.
Lower deal what would be the competition has a higher dealer fee just wondering if if that dynamic has changed at all.
Are you guys are increasing your approval rates at all how are the dealer fees are changing around if at all thanks.
So there's no perfect measure for or there's no perfect market data for what others approval rates are in the market.
We can tell you what we believe is that our approval rates.
He has been a north of market could average and that's because we think we're better at picking the goods from the beds and it lets us have a robust a robust approval rate.
But still have the best credit quality Quantifiably, the best credit quality in the industry. It doesn't mean that we have the absolute highest approval rate, but we think we're better than market average unit compete really well since we've added sunlight Max E.
We're we're not providing publicly the lift in approval rates, what I can say, it's substantial and so feedback for contractors has been really favorable because it it just further accelerates our approval rate.
All above we believe well above market average and our pricing remains competitive and that's because we've got that network of capital providers that are well priced and let us turn a good margin and still have competitive pricing.
Okay. Thank you I'll pass it on.
Thanks, Phil.
Our next question comes from Moses Sutton of Barclays. Please go ahead.
Hi, Yeah, just one follow up for me. So you had a 18189 borrowers in the quarter can you provide the solar specific number there.
Yeah.
Yep.
Where we're generally not breaking out our home improvement and and so although the number of borrowers. So we're just reporting on that we're putting on the total.
Got it thank you.
Yeah.
Maybe for a little little context is overwhelmingly our volumes are are still solar but I can tell you. We do see good momentum on the on the home improvement side.
Great. Thanks.
This concludes the question and answer session I would like to turn the conference over to Mr. Terry for any closing remarks.
Great. Thank you and thanks for all the great questions and for your continued interest in sunlight, but we're really excited by the momentum in our business.
And the opportunity ahead of us and we appreciate you joining us today. So thank you all and have a great evening.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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