Sunlight Financial Holdings Inc. (SUNL) on Q3 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by. This is the conference operator. Welcome to the Sunlight 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. I would now like to turn the conference over to Lucia Dempsey, Head of Investor Relations. Please go ahead.
Lucia Dempsey: Good afternoon and welcome to Sunlight 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 at ir.sunlightfinancial.com. Joining me today, are Matt Potere, Sunlight Financial’s Chief Executive Officer; and Barry Edinburg, 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. 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, Sunlight Financial's expectation or prediction of financial and business performance and conditions, and competitive and industry outlooks. Forward-looking statements speak as of the day they are made, are subject to risks, uncertainties and assumptions and are not guaranteed of performance. Sunlight 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 Sunlight 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 Potere.
Matt Potere: Thank you, Lucia. Good afternoon and thank you for joining us. I am pleased to share Sunlight’s 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 loans, up 77% from the third quarter of last year. We also saw strong growth in our financial metrics with increase in our total platform fee to 4.3%, record high total revenue of $30 million and adjusted EBITDA up 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 chains, 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 less 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 and its 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 2021, 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 drives Sunlight’s value proposition, access to distribution, credit risk management and stable low cost funding. Today, I’d like to focus on the first one, access to distribution. Sunlight Financial consistently focuses on building loyalty by creating value for our distribution channel, our network of nearly 1500 contractor 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 NTP or notice to precede review process with robotic process automation. This eliminates manual processes when providing contractors with approval to begin construction. This instant NTP 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 a set of non-prime solar and home improvement products. This initiative leveraged Sunlight’s credit expertise to increase approval rates and improve the value proposition for contractors who are now able to offer Sunlight’s financing options to even more homeowners. We are already seeing the positive effect of these and other efforts to build contractor loyalty. As of today, we have established first look exclusivity in buying 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 are pleased to begin providing these 30 new solar contractors and 62 new home improvement contractors with our best-in-class technology platform and unmatched product suite to fuel their growth. We are also continuing to see strong year-over-year growth in other key operational metrics despite the industry-wide issues impacting funded loan volumes, we facilitated financing for 18,189 borrowers in the quarter, up 65% from the prior year period. In addition to funding more homeowners, our average loan balance rose 8% to $35,000 and average solar loan balances in particular grew 15% to a record high of $41,000. In the third quarter of 2021, the battery attach rate for Sunlight’s 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 phase of creating stability. The slight dip from the last quarter is likely due to the 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 Sunlight’s growth in the future. With that, I’d like to turn the call over to Barry Edinburg, Sunlight’s CFO to discuss our third quarter financial results in more detail.
Barry Edinburg : Thanks, Matt. In the third quarter of 2021, Sunlight generated $30 million of total revenue, an increase of 72% over the third quarter of 2020, and a new quarterly high for the business. Adjusted EBITDA for the quarter was $11.4 million, up 97% from 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 recording positive adjusted EBITDA, continuing 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 quarter’s earnings call, we indicated that we had negotiated improvements in pricing with our capital providers enabling platform fee margins to rebound in the third quarter and that’s exactly what happened. Our overall platform fee margin increased to 4.3% this quarter, up from 4.0% in the second quarter. An even better indicator of our success in this regard is that our direct channel platform fee margin improved from 4.3% in the second quarter to 5.0% in the third quarter. We expect this momentum to accelerate in the fourth quarter as these pricing improvements flow through to more funded loans. Sunlight’s 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 for the diverse network of capital providers. We remain focused on delivering attractive risk-adjusted returns for our capital providers and lead these relationships as mutually beneficial partnerships. This approach has enabled us to add three new capital providers to platform in recent months, expanding 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 relating to our costs and expenses as there are certain items relating to the business combination that closed on July 9 that materially impacted the calculation of GAAP net income leading to a net loss for the quarter. The first is 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 have been fully amortized. It is important to note however, that neither of these items impact adjusted EBITDA as they are non-cash transaction-related expenses. As Matt referenced earlier, we’ve adjusted our full year 2021 guidance for funded loans to $2.45 billion to $2.55 billion, but we are 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 chains, labor shortages and permitting delays have negatively impacted project installation timelines. These macro slowdowns reduced third quarter funded loans relative to our expectations, and we believe this dynamic will continue into the fourth quarter of 2021. However, our 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 margins. With that, I’d like to turn it back to Matt.
Matt Potere: Thanks, Barry. At this time, Sunlight plans to initiate full year 2022 guidance on our fourth quarter full year 2021 call in March of next year. In the mean time, 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, and 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 Sunlight 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.
Operator: Our first question comes from Philip Shen of ROTH Capital Partners. Please go ahead.
Philip Shen : Hey guys. Thanks for taking my questions. First one is on the outlook for margins as we get into Q4 and even into Q1, you’ve negotiated these new credit agreements. And so, it seems like you have more benefits in the coming quarters. So, I was wondering we could back into some of it with the affirmation of the EBITDA but was wondering if you might be able to speak to, from a basis point standpoint if you are going from the current Q3 level, how much higher could it go from 4.3% - 5%, 5.0%? And then also, as it relates to the credit agreements, just wanted to check in to see if they might be dynamic at all. In other words the market, the ABS market that you heard, peers tap into continues to trend lower. And so, are those credit agreements with your credit unions and 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 galore? Thanks.
Matt Potere: Yes. Thanks for the questions, Phil. I appreciate that. As far as the dynamic nature of the improvements and they are not dynamic, as a general rule they are credit unions and that has positive aspects and negative aspects. The positive aspects of that we are able to go back and ask for improved pricing periodically. And other positive aspects are that rising rate environment we don’t have to worry about immediate negative changes to our pricing. And so, we view that as a positive. As far as margins in the fourth quarter, I can’t quote a specific number, but we talked about what we are trying to do last quarter and since that time further improved our pricing in a bunch of ways with a number of our capital providers such that we expect our fourth quarter platform fee margin to be materially higher than the third quarter. We’ve also been materially higher than even we would have thought just a few months ago. So, we’ve done a really good job executing on things that can control and pulling levers that we are able to pull in order to benefit our platform fee margins.
Operator: Our next question comes from Moses Sutton of Barclays. Please go ahead.
Moses Sutton: Hi. Thanks for taking my questions. How do you see average loan balance trending as inflation sort of peaks in the solar system and then potentially deflates? Specifically, the average loan balance pushed to $41,000 from $39,800 in solar quarter-over-quarter despite the battery attach dropping. So how do we sort of bridge that?
Matt Potere: Yes. Thanks for the call. Over time, it’s going to 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 and the ability as solar becomes more and more in the money. The ability for solar installers to be able to upsell and add other efficiency offerings alongside solar. And so, you are right, we saw a slight dip in battery attach rate this quarter. We feel really good about the long-term trends. But even despite that, we saw some growth. As we look out, we don’t explicitly forecast and provide guidance around average balance, but we think the trends are certainly very favorable.
Moses Sutton: Got it. Got it. That’s helpful. And then, Phil asked some questions on the back-end of the margin – on the platform margin. The question I had really was on the competitive side of it on the front end. Last quarter you were giving an update sort of on where the market was moving. Things were tightening a bit on the competition side. Any sense on how that’s changed since then? There is still probably a great amount of benign capital going against, George. But just trying to think of how we could this shift dynamically between last quarter now and where we are into next year?
Matt Potere: Yes, sure. Great question. So, certainly, this is an attractive. It will 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 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 improvement to give our contractors even better pricing. And so, we feel like we are very well positioned there. It is also important to note that we do compete beyond as we win contractor relationships and we’ve been really successful there. We compete beyond just price that we talked about some of the new products that we rolled out, Sunlight Max, enhancements that we made to Orange and that also has helped us attract contractors and while we have to be competitive on price, we don’t necessarily have to have the lowest price. So we feel like we are well positioned.
Moses Sutton: Got it. Got it. Very helpful. And last one for me. I’ll jump back in the queue. Can you elaborate on any labor constraints where those most severe, maybe anything specific to California and then, conversely, where you think the strongest momentum on a quarter-over-quarter basis?
Matt Potere: 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 to the extent which there is inflation and labor cost for instance, we don’t directly realize that. But we do feel like in that perhaps these timelines have lengthened. What we hear is, it’s not just installers on the roof. In fact many cases, it’s the trade needing a maestro electrician who needs to com onsite in some jurisdictions. And just like all trades, it’s been challenging to get that. We really do that from contractors across the country. And it’s something that they are focused on trying to ramp up. But we do hear that and then the other point I’d say, it’s indirectly labor in permitting officers, permitting officers has been backed up Our party that can add value to Sunlight as a capital provider. And so, we are looking forward to finalizing the agreement and getting them started, but it was at the terms agreed at the time and sort of bring those. I’d also note that we announced that we acquired or added three new capital providers to the platform in the pass of a month, they were not one of them. So, to the extent that we move forward, then they would be a fourth. But the three are not inclusive of that one that you mentioned, Chris.
Unidentified Analyst: Okay. And then, just to tackling on your, would it be reasonable to assume that terms with these new capital providers are similar to existing terms with their current and prior capital providers are – any reason we would expect something different?
Matt Potere: Yes, 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 on finding partners who otherwise add value to Sunlight. Definitely not adding partners just to add them. We have lots of capacity. So, when we are adding partners, it’s for a good reason and it’s for partners that we think will be good long-term relationships for Sunlight. Q - Unidentified Analyst Alright. Understood.
Matt Potere: Thanks very much.
Unidentified Analyst: And then on.
Matt Potere: Oh, yes. Sure.
Unidentified Analyst: We often talk about being focused on originating high quality assets and how that attracts capital? And as Barry said, adding those three capital providers and then, the announcement from this morning of signing the term sheet are just examples of why we are so focused on originating high quality assets, because it creates demand for us to ultimately get to lower and lower cost of capital with really good flexible long-term partners.
Matt Potere: Okay. It makes sense to me. Thank you.
Operator: Our next question comes from Arren Cyganovich of Citi. Please go ahead.
Arren Cyganovich: Thanks. Just another question on the competitive dynamics. There are some other folks that have talked about piloting programs and entering into the market in the fourth quarter and into next year. Could you remind investors just what your competitive notes are? And how you might be able to withstand some of the rising competition?
Matt Potere: Yes, I think that there is two ways to look at this. One is, we always talk about platforms like ours need to do three things that is access to distribution, which, yes relationships with 1,500 contractors need to underwrite risk and make sure it’s priced appropriately and they need to have access to diverse to low cost capital and we spent the last six years, we refining our model for each of those three. If you look at the first, access to distribution, for new entrants who will 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 that’s used by 15,000 plus sales people and gets very, very high reviews that 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 the Sunlight Max products the wide range of products that we offer and all the innovation that we had. 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, they also need to really understand risk and they’ll need to have access to diverse to low cost capital if they want to be well priced. And so, again, it’s an attractive market. We have no doubt. It will attract new entrants. But we think it’s – we think it would be challenging for a new entrant to come in and we think we are well positioned and you can see that by the 60 contractors – roughly 60 contractors who have made commitments to us for next year and we think those will produce $1 billion plus in volume.
Arren Cyganovich: Great. Thank you.
Operator: Our next question comes from Maheep Mandloi of Credit Suisse. Please go ahead. Maheep Mandloi of Credit Suisse, your line is live. Is it possible you are in mute? Our next question comes from Jeff Osborne of Cowen. Please go ahead.
Jeff Osborne: Hey great. I just had a few questions. One, I was wondering on the Max rollout. Can you just talk about when that happened? And what parameters there are on how subprime are going here and what the impact to margins are?
Matt Potere: Sure. So, we rolled that out in the third quarter. We rolled it out for both solar and home improvement. So they are separate products for those particular contractors in 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 risk here for this broader buy box and that these assets are priced appropriately. So while we don’t disclose margins product-by-product, I can tell you we’ve been thoughtful about the risk-adjusted returns that the capital providers will receive. So that it makes sense for them as long-term partners and also the margins that we would earn on that as well. So we really start to take a thoughtful approach and it’s been very well received as the premier engine by contractors.
Jeff Osborne: And just two follow-ups. Is there a minimum in terms of like how subprime will go? Is there a minimum FICO score that you are putting in on drawing a line in the sense or is it on a case-by-case basis and then maybe for Barry, is one of the three capital providers dedicated exclusively to those products or is there a variety of new or existing people that you had in the past?
Matt Potere: So, yes, happy to take the first one, we don’t disclose minimum FICOs, because our credit strategy is beyond just FICO. So it’s proprietary and it uses multiple attributes. But we did work with the capital providers to make sure that we could maximize the buy box and to make sure that we are picking up at the right guesses. So that they are priced appropriately. Barry, happy to let you answer the second question.
Barry Edinburg : Yes, and we generate public accounting coupons what pools of loans but it’s safe to say that these loans are intentionally originated to give our capital providers good returns and then one of the providers that we brought on is focused on these types of loans. Yes.
Jeff Osborne: Got it. Makes sense. And the last question I had is, just can you remind us of what the typical timeline is of getting a contract signed at the dining table for the release, relative to funding a loan and where that is - where it was last quarter, where it is today? What’s your expectations for Q4? Any type of commentary about the lengthening timeline as it relates to the new guidance would be helpful to put in perspective?
Matt Potere: Yes. Sure. So, I would think about first two steps. There is at the kitchen table signing. It’s the credit – running credit and agreeing to go solar. Then customers sign the load agreement which is sometimes days or couple weeks later and then the system is installed. That whole process typically takes in the 90-day range. We don’t disclose the cycle times and the moves in the cycle times. But what I can tell you just to give you little context is, the delays that we are seeing as a result of those three issues, supply chain, labor tightness, and permitting is not delaying credit approval for loan signing, it’s delaying loan signing to installation. So it is on the back end. It’s not demand-driven. We are not seeing delays because it’s demand, we are seeing delays because of these macro issues. So, we are not giving specific numbers around that timeline. But to give you a sense for the impact, if you look at the midpoint in the change of our guidance, full year, really in the back half of the year, it’s a $200 million impact of delays that will get pushed out into subsequent quarters. So, hopefully that gives you some sense of the order of magnitude and fortunately we had good success rates increasing our margins in the third and we will in the fourth quarter to help offset that.
Jeff Osborne: Thanks, Matt. That’s all I have. I appreciate it.
Operator: Our next question is from Philip Shen of ROTH Capital Partners. Please go ahead.
Philip Shen : Hey guys. Thanks for taking my follow-ups here. Just as a tag on to the last question, I think, Matt, you just talked about that you are not seeing delays in your credit approvals. So – and so, just to push out from the credit approval to the inflation. That said, I was wondering if you are seeing at some level, your contractors fall short of the growth or volumes that they perhaps worked with you on at the beginning of the year and not relative to inflations, but maybe perhaps to the credit approvals. We have picked up on some share shifting, if you will and I wanted to understand if there is some other competitive dynamics beyond the reasons why you cited for the funded loan volumes being challenged, meaning supply chain, labor shortage, and permitting. The reality is the market grew – I mean, Sunlight grew I think 18% quarter-over-quarter in Q3. I think from other data sources, quarter-over-quarter, the industry was up. And so, just 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.
Matt Potere: Yes. So, I think it’s important to note, demand for Sunlight has definitely remained strong. So, if we look at top of funnel, I gave a little bit of context to $200 million the midpoint of our guidance range is. That’s how much volume we believe is getting pushed out as a result of these issues. And so, if you add that on, you can see fairly substantial growth in the third quarter alone. And we think it was north of 10% of our volume. At least 10% lower as a result of these types of pressures. So we don’t think it’s demand-related. We do think it’s the result of these three issues. And if you look at other signs for contractors and contractors’ interest, the 60 commitments from contractors, it’s I think a pretty strong procedure from contractors of their vote and their opinions of the value proposition that we provide to them.
Philip Shen : Thanks, Matt. Appreciate that. And then, looking into 2022, I know you are not giving official guidance. But I was wondering if you might be able to sketch a little bit of what it might look like, I guess, from a growth standpoint or margin standpoint, and for example do you expect margins to flatten out quarter-over-quarter as a cadence of quarterly performance from Q1 through for next year? Any color there could be helpful from a long lead standpoint?
Matt Potere: Yes. So, we are not providing 2022 guidance now. I think broadly, I think a few broad things I think are important. Historically, we’ve been high growth company. We are profitable. You can see that from the history of our adjusted EBITDA quarter-over-quarter and we are a 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, we will provide 2022 guidance. But we’ve been winning in the market and we expect to continue to win in the market.
Philip Shen : Okay. Great. One last one for me. As it relates to approval levels, given the competition that’s been out there, I historically have thought of you guys as kind of in the low – in the 70 – low 70% type range for approval levels versus the competition that’s like 80%. You guys come in with a lower dealer fee, the competition has a higher dealer fee. Just wondering if that dynamic has changed at all. Are you guys increasing your approval rates at all? How are the dealer fees changing around if at all? Thanks.
Matt Potere: Yes. There is no perfect measure for – or there is no perfect market data for what others’ approval rates in the market. We can tell you what we believe is that our approval rates has been north of market average and that’s because we think we are better at thinking the goods from the bads and it lets us have a robust approval rate. But still have the credit quality – quantify we are the best credit quality in the industry. That doesn’t mean that we have the absolute highest rates, but we think we are better than market average and we compete really well. Since we’ve added Sunlight Max, we are now providing publicly the lift in approval rates. But I can’t say it’s substantial. And so, feedback from contractors has been really favorable, because it just further accelerates our approval rate well above – we believe well above market average and our pricing remains competitive. And that’s because we’ve got that – we got the capital providers that are well priced and let us turn to good margin and still have competitive price.
Philip Shen : Okay. Thank you, Matt. I’ll pass it on.
Matt Potere: Thanks, Phil.
Operator: Our next question comes from Moses Sutton of Barclays. Please go ahead.
Moses Sutton: Yes, just one follow-up for me. So, you had a 18,189 borrowers in the quarter. Can you provide the solar specific number there?
Matt Potere: Yes, Moses, we are generally not breaking out home improvement and solar, the number of borrowers. So we are just reporting on the total.
Moses Sutton: Got it. Thank you.
Matt Potere: Yes, maybe for a little context is, overwhelmingly, our volumes are still solar, but I can’t tell you we do see good momentum on the home improvement side.
Moses Sutton: Great. Thanks.
Operator: This concludes the question and answer session. I would like to turn the conference over to Mr. Potere for any closing remarks.
Matt Potere: Great. Thank you. And thanks for all the great questions and for your continued interest in Sunlight. We are really excited by the momentum in our business and the opportunity ahead of us and we appreciate you joining us today. Thank you all and have a great evening.
Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
