SUNL - Sunlight Financial trades lower on revised FY22 guidance Q2 results miss

Sunlight Financial Holdings ( SUNL ) was trading ~30% lower after FY22 revenue guidance was revised down to reflect rising interest rates and an increase in indirect channel loans.

The company's Q2 non-GAAP EPS of $0.01 misses by $0.03 and revenue of $31.6M (+17.5% Y/Y) misses by $2.71M.

The increase in revenue was primarily driven by an increase in platform fee margin.

Loans were funded to ~21K borrowers in Q2 , up 11% Y/Y. Solar loans averaged $45K, up 12% Y/Y.

Adjusted EBITDA was down on a yearly basis to $6.8M from $11.5M, primarily driven by incremental public company costs and the delayed sale of funded volume to 2H.

"While the company continues to perform strong operationally and our direct channel margins are stable, the increased reliance on the indirect channel and the rapid change in market conditions will impact our indirect channel platform fees in the second half of 2022," Rodney Yoder said during the bank's Q2 earnings call.

American Challenger had entered into a term sheet on a strategic partnership with Sunlight Financial for a new multi-year loan purchase program of up to $1.75B. The transaction, however, did not close and a $85M in loans as well as additional loans in the pipeline will shift to the indirect channel, according to the call.

FY22 revenue guidance was revised down to $130M - $140M from $145M - $155M (vs. consensus of $148.20M).

Total funded loan volume is expected to be in the range of $2.8B to $3B and adjusted EBITDA in the range of $35M to $40M.

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