GreenSky, Inc. (NASDAQ:GSKY) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 08:00 am ET


GreenSky, Inc. (NASDAQ:GSKY) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. And welcome to the GreenSky Q3 2019 Earnings Conference Call. At this time all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to Rebecca Gardy, Senior Vice President of Investor Relations. Please go ahead ma'am.

Rebecca Gardy

Thank you, Michelle and good morning everyone. Earlier this morning GreenSky issued a press release announcing results for its third quarter ended September 30th 2019. You can access this press release on the Investor Relations section of the GreenSky website. In addition, we have also posted our third-quarter investor presentation, which we will refer to during today's call. Joining me on the call this morning are David Zalik, Chairman and Chief Executive Officer; Gerry Benjamin, Vice Chairman and Chief Administrative Officer; and Rob Partlow, Chief Financial Officer.

Before we get started, let me remind you that our presentation and discussions will include forward-looking statements. These are statements that are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. We disclaim any obligation to update any forward-looking statements except as required by law. Information about these risks and uncertainties is included in our press release issued this morning as well as in our filings with regulators.

We will be discussing certain non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results, and we encourage you to consider all measures when analyzing GreenSky's performance. These non-GAAP measures are described and reconciled to their GAAP counterparts in their presentation -- in the presentation materials, the press release dated November 5th 2019 and on the Investor Relations page of our website. Following our prepared remarks, we will take your questions. [Operator Instructions]

And finally, a replay of this call will be available later today on our website at

And with that I will turn it over to David.

David Zalik

Thanks, Rebecca. Good morning everyone and thank you for joining us. I'll start off this morning by providing a brief overview of our third quarter performance. For those of you familiar with GreenSky you know that our unique business model consistently delivers double-digit growth in transaction volume and revenue, the attractive profitability and strong free cash flow.

Revenue in the third quarter grew 35%, driven by transaction volume growth and increased servicing fee revenue. We reported transaction volume this quarter of $1.6 billion, as a result of our expanding ecosystem of nearly 17,000 merchants and elective health care providers. Excluding solar transactions, our third-quarter volume increased 19% over the prior year and we are on pace to deliver 20% plus growth for the full year.

Adjusted EBITDA for the third quarter was $57.5 million and cash flow generated from operations for the