Sunlight Financial shares rise after results and share buyback program


By Michel Dabaie

Shares of Sunlight Financial Holdings Inc. rose 19% to $4.09 after the company backed its full-year outlook and unveiled a buyback program.

The solar point-of-sale finance company said first-quarter revenue increased to $28.2 million. FactSet’s consensus was for sales of $29.8 million.

Total revenue, including the realized gain on contractual derivatives, was $30.1 million.

Net loss was $22.6 million, compared to net profit of $2.7 million in the same period a year earlier, due to non-cash accounting related to the business combination.

Adjusted earnings per share of 3 cents was in line with the FactSet consensus.

“Despite the macro-industrial uncertainties, we are on track to continue executing our growth strategy in 2022,” Chief Executive Matt Potere said.

In July 2021, Sunlight completed its business combination with Apollo Global Management sponsored special purpose acquisition company Spartan Acquisition Corp. II.

The company backed its 2022 guidance for total revenue of $145-155 million and adjusted earnings before interest, taxes, depreciation and amortization of $55-60 million.

Sunlight has also authorized a share buyback program of up to $50 million over an 18-month period.

“We are encouraged by maintaining good health [free cash flow] conversion that allowed the board to authorize a share buyback program,” Cowen analysts said in a note. “Management has mitigated interest rate risk through deposit financing, and we believe the company is well positioned to benefit from strong solar demand…as component shortages allow for the easing of constraints.”

Cowen noted that the results were in line with internal company expectations, supporting management in maintaining guidance for 2022.

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