GreenSky, Inc. Reports Record Third Quarter Financial Results

Staff Report From Metro Atlanta CEO

Thursday, November 8th, 2018

GreenSky, Inc., a leading financial technology company Powering Commerce at the Point of Sale, announced financial results for its third fiscal quarter ended September 30, 2018.

"With record performance this quarter, we continued a strong fiscal 2018 in terms of both growth and profitability,” said David Zalik, Chairman and CEO of GreenSky. “We are in the early stages of penetrating addressable home improvement, elective healthcare and e-commerce domestic markets that, in the aggregate, exceed $1 trillion. As we look ahead, we maintain our heightened focus on innovation, while recalibrating our full year expectations to reflect anticipated fourth quarter seasonal headwinds, coupled with a much steeper yield curve than initially anticipated as we entered the year. Notwithstanding, I continue to be confident in GreenSky's ability to deliver exceptional growth, profitability and free cash flow."

Financial highlights (1):

  • Transaction volume grew 33 percent to $1.40 billion from $1.05 billion in the third quarter of 2017.

  • Revenue grew 29 percent to $113.9 million from $88.3 million in the third quarter of 2017.

  • GAAP Net income was $45.7 million, or $0.20 per diluted share, and reflects tax expense only on the portion of GreenSky’s earnings attributable to the C-corporation ownership.

  • Pro Forma Net income was $38.8 million, or $0.21 per diluted share, net of tax, and adjusted for non-recurring expenses at an assumed effective tax rate of 21.8 percent.

  • Adjusted EBITDA increased by 27 percent to $58.9 million from $46.4 million in the third quarter of 2017. Adjusted EBITDA margin was 52 percent in the third quarter of 2018, consistent with the third quarter of 2017.

  • As of September 30, 2018, unrestricted cash totaled $294.3 million.


Key business metrics:

      Q3 2018     Q3 2017     Growth
Active Merchants     14,163       10,094       40 %
Transaction Volume ($ millions)     $ 1,400       $ 1,049       33 %
Cumulative Consumer Accounts     2,082,364       1,443,778       44 %
Origination Productivity Index(2)     22.2 %     22.1 %     n/m  
Loan Servicing Portfolio ($ millions)     $ 6,880       $ 4,919       40 %



Pro Forma Net Income, Pro Forma Diluted EPS and Adjusted EBITDA are non-GAAP measures. Refer to “Non-GAAP Financial Measures” for important additional information.


This index captures projected future net cash flows related to the respective quarter's originations, expressed as a percentage of the quarter's originations. Refer to the Q3 2018 Supplemental Financial Presentation for additional information.


Business update:

Bank Partner Commitments

  • The Company added two new bank partners, Chicago-based BMO Harris Bank, a wholly-owned subsidiary of Bank of Montreal (the eighth largest bank in North America), and Troy, Michigan-based Flagstar Bank, FSB to its lending consortium since the end of the second quarter. Combined with increases in funding commitments by existing Company bank partners, the Company has aggregate commitments of $11.5 billion today, or an increase of $3.5 billion since June 30, 2018.

American Express Alliance

  • American Express cross-marketing of the GreenSky technology platform to Amex card-accepting home improvement merchants commenced in early September, with more than 1,000 Amex merchant referrals received during the past 8 weeks.

  • Development and integration of the GreenSky technology required to launch the Amex consumer direct installment loan pilot is on-track for a kick-off in the first quarter of fiscal 2019 in the following five cities: Atlanta, Chicago, Dallas, Los Angeles, and Tampa. Notably, Amex will be marketing a highly attractive promotional home improvement loan “powered by GreenSky” to select pre-approved American Express card members with such loans to be funded by American Express Bank, FSB.

  • Integration of the American Express vPayment virtual payments system is well underway, which will allow GreenSky Program borrowers to transact and settle with merchants over American Express rails.

2018 Financial Guidance:

Based on the Company's performance through the end of the third quarter, and current market conditions, GreenSky now expects the following for full year 2018:

  • Transaction volume to increase between 30 and 35 percent to between $4.9 and $5.1 billion.

  • Adjusted EBITDA to grow between 4 and 10 percent to between $165 and $175 million.

2019 Financial Guidance:

Based on the Company's fiscal 2018 expectations and fiscal 2019 planning, GreenSky expects the following for full year 2019:

  • Transaction volume to increase 28 to 36 percent over fiscal 2018 to between $6.4 and $6.8 billion.

  • Adjusted EBITDA to grow between 23 and 32 percent over fiscal 2018 to between $210 and $225 million.

Share Repurchase Program:

The Company announced that its Board of Directors has approved the repurchase of up to $150 million of the Company's Class A common stock. Repurchases may be made at management's discretion from time to time on the open market or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. Any shares acquired will be available for general corporate purposes. The Company had approximately 189.2 million shares of Class A common stock outstanding on a fully diluted basis as of September 30, 2018. "We are pleased that GreenSky’s strong balance sheet and cash flows enable us to return value to shareholders through share repurchases, while at the same time continuing to invest in internal and external opportunities that will further drive long-term growth," said Robert Partlow, Chief Financial Officer. "In light of the perceived significant variance between the current market value and the intrinsic value of the Company’s Class A common shares, GreenSky’s Board of Directors and management team believe that the Company's shares are an attractive investment and opportunistically repurchasing stock is an important part of our capital allocation strategy."