Adjusted EBITDA is a Non-GAAP measure. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures, beginning on page 54 of the attached Annual Report on Form 10-K, for reconciliation to GAAP net income.
See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation-Business Metrics, beginning on page 55 of the attached Annual Report on Form 10-K, for additional information about these metrics.
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To Our Stakeholders
2020 will be remembered as a year of profound challenges brought about by the COVID-19 pandemic. However, what I will likely remember most about the past year is how GreenSky's 1,100 plus associates came together to meet every challenge presented and continued to innovate while remaining vigilantly focused on the Company's core mission: "To help businesses grow and delight their customers."
In the past year, GreenSky has successfully advanced its market position, significantly diversified and strengthened its funding sources and further developed its risk management policies and procedures, all while working diligently to enhance the Company's financial transparency.
At our inaugural Investor Day held in January 2021, GreenSky introduced its "10x 9x 30 Plan," a strategy to grow annual transaction volumes to over $10 billion, annual revenues to over $900 million, and annual adjusted EBITDA margins to in excess of 30% by calendar year 2025. In 2021, we expect to grow transaction volume by 15% or more compared to 2020. Over
the longer term, achievement of these growth metrics implies
five-yeartransaction volume compound annual growth rate ("CAGR") of approximately 13%. Very few financial technology businesses are capable of operating at scale (with over $5.5 billion in transaction volume in 2020 alone), while profitably growing compound annual transaction volume at a mid-teens rate, and generating sustainable 30+% adjusted EBITDA margins. Because of (1) our unique business model, (2) our unrivaled operating leverage, (3) the vast addressable markets we serve and
(4) the continued growth of our technology moat, we are optimistic about our strategic plan.
Despite the many challenges we faced last year, including the temporary shutdown of our patient solutions business as a result of nearly all states prohibiting the performance of elective medical procedures, I am pleased with GreenSky's resilience, having generated 2020 revenues and adjusted EBITDA of $526 million and $106 million, respectively, effectively equivalent to the Company's 2019 results.
"GreenSky's mission is to help businesses grow and delight their customers. Our vision is to lead the future of payments, enabling accelerated commerce and transparency for all."
Chairman and Chief Executive Officer
"10x 9x 30 Plan"
Adjusted EBITDA Margin
Source: Management forecast updated as of April 2021
Note: $ figures reflected in millions
GreenSky currently services a loan portfolio of over $9.5 billion, and since our inception, over 3.7 million consumers have financed approximately $28 billion of commerce using our paperless, real time "apply and buy" technology. Innovation remains at the core
of GreenSky's value proposition. We will continue to expand what we believe to be our leading market position in the $400 billion domestic home improvement market and become a top market disrupter in the $200 billion domestic elective health care market. Our network of leading home improvement merchants and elective healthcare providers is further enhanced and expanded by GreenSky's continued innovation and valued-added services that help businesses grow and delight their customers.
I am incredibly proud of the GreenSky team for how it addressed last year's many significant challenges brought about by the pandemic, including seamlessly migrating to a work- at-home program while safely continuing to ensure that GreenSky delivered best in class service to our funding partners, merchants, and consumers.
With optimism for a return to normalcy and with markets restoring this year, the GreenSky senior management team has confidence in our growth prospects in 2021. Further, we have never been more excited about the Company's prospects for delivering outstanding long-term growth and profitability.
Thank you for your continuing support and interest in GreenSky.
Chairman and Chief Executive Officer GreenSky, Inc.
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