Black Knight (BKI) 10-Q 2022 Q1 Quarterly report

0001627014us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-01-012022-03-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-37394

Black Knight, Inc.

______________________________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Delaware	81-5265638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
601 Riverside Avenue, Jacksoville, Florida	32204
(Address of principal executive offices)	(Zip Code)

(904) 854-5100

___________________________________________________________________

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value	BKI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 155,965,894 shares outstanding of the Registrant’s common stock as of May 6, 2022.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended March 31, 2022

TABLE OF CONTENTS

	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
A. Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2022 and December 31, 2021	1
B. Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three months ended March 31, 2022 and 2021	2
C. Condensed Consolidated Statements of Equity (Unaudited) for the three months ended March 31, 2022 and 2021	3
D. Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2022 and 2021	4
E. Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosure About Market Risk	29
Item 4. Controls and Procedures	30
Part II: OTHER INFORMATION	31
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults Upon Senior Securities	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information	34
Item 6. Exhibits	35

i

Part I: FINANCIAL INFORMATION

Item 1.Condensed Consolidated Financial Statements (Unaudited)

BLACK KNIGHT, INC.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	27.6	$	77.1
Trade receivables, net		194.3		191.8
Prepaid expenses and other current assets		85.1		83.0
Receivables from related parties		0.1		0.2
Total current assets		307.1		352.1
Property and equipment, net		151.1		154.5
Software, net		482.3		497.0
Other intangible assets, net		576.4		613.2
Goodwill		3,817.3		3,817.3
Investments in unconsolidated affiliates		170.0		490.5
Deferred contract costs, net		199.0		196.0
Other non-current assets		239.8		230.3
Total assets	$	5,943.0	$	6,350.9
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable and other accrued liabilities	$	55.4	$	64.5
Income taxes payable		139.9		11.8
Accrued compensation and benefits		69.0		91.4
Current portion of debt		33.5		32.5
Deferred revenues		68.1		64.6
Total current liabilities		365.9		264.8
Deferred revenues		74.2		81.5
Deferred income taxes		251.2		284.1
Long-term debt, net of current portion		2,697.2		2,362.6
Other non-current liabilities		63.3		78.7
Total liabilities		3,451.8		3,071.7
Commitments and contingencies (Note 10)
Redeemable noncontrolling interests		40.2		1,188.8
Equity:
Common stock; $0.0001 par value; 550,000,000 shares authorized; 160,040,598 shares issued and 155,965,390 shares outstanding as of March 31, 2022, and 160,040,598 shares issued and 155,357,705 shares outstanding as of December 31, 2021		0		0
Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, NaN as of March 31, 2022 and December 31, 2021		0		0
Additional paid-in capital		1,364.8		1,410.9
Retained earnings		1,327.4		968.2
Accumulated other comprehensive loss		(7.0)		(17.5)
Treasury stock, at cost, 4,075,208 shares as of March 31, 2022 and 4,682,893 shares as of December 31, 2021		(234.2)		(271.2)
Total shareholders’ equity		2,451.0		2,090.4
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	5,943.0	$	6,350.9

See Notes to Condensed Consolidated Financial Statements (Unaudited).

1

BLACK KNIGHT, INC.

Condensed Consolidated Statements of Earnings and Comprehensive Earnings

(In millions, except per share data)

(Unaudited)

	Three months ended March 31,
	2022		2021
Revenues	$	387.2	$	349.7
Expenses:
Operating expenses		207.9		186.2
Depreciation and amortization		91.5		87.8
Transition and integration costs		7.6		7.9
Total expenses		307.0		281.9
Operating income		80.2		67.8
Other income and expense:
Interest expense, net		(21.1)		(20.3)
Other expense, net		(1.2)		(3.2)
Total other expense, net		(22.3)		(23.5)
Earnings before income taxes and equity in earnings of unconsolidated affiliates		57.9		44.3
Income tax (benefit) expense		(1.1)		5.2
Earnings before equity in earnings of unconsolidated affiliates		59.0		39.1
Equity in earnings of unconsolidated affiliates, net of tax		303.1		6.4
Net earnings		362.1		45.5
Net losses attributable to redeemable noncontrolling interests		2.5		8.6
Net earnings attributable to Black Knight	$	364.6	$	54.1
Other comprehensive earnings:
Unrealized holding gains, net of tax(1)		4.3		0.5
Reclassification adjustments for losses included in net earnings, net of tax(2)		3.2		3.9
Total unrealized gains on interest rate swaps, net of tax		7.5		4.4
Foreign currency translation adjustment, net of tax (3)		(0.2)		(0.3)
Unrealized gains (losses) on investments in unconsolidated affiliates, net of tax(4)		3.2		(3.1)
Other comprehensive earnings		10.5		1.0
Comprehensive earnings		372.6		46.5
Net losses attributable to redeemable noncontrolling interests		2.5		8.6
Comprehensive earnings attributable to Black Knight	$	375.1	$	55.1
Net earnings per share attributable to Black Knight common shareholders:
Basic	$	2.36	$	0.35
Diluted	$	2.35	$	0.35
Weighted average shares of common stock outstanding (see Note 5):
Basic		154.2		155.6
Diluted		155.4		155.9

(1) Net of income tax expense of $1.4 million and of $0.2 million for the three months ended March 31, 2022 and 2021, respectively.

(2) Amounts reclassified to net earnings relate to losses on interest rate swaps and are included in Interest expense, net above. Amounts are net of income tax benefit of $1.1 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively.

(3) Net of income tax benefit of less than $0.1 million for the three months ended March 31, 2022 and 2021.

(4) Net of income tax expense of $1.1 million and income tax benefit of $1.0 million for the three months ended March 31, 2022 and 2021, respectively.

See Notes to Condensed Consolidated Financial Statements (Unaudited).

2

BLACK KNIGHT, INC.

Condensed Consolidated Statements of Equity

(In millions)

(Unaudited)

	Three months ended March 31, 2022
								Accumulated
				Additional				other					Total		Redeemable
	Common stock			paid-in		Retained		comprehensive		Treasury stock			shareholders’		noncontrolling
	Shares	$		capital		earnings		loss		Shares	$		equity		interests
Balance, December 31, 2021	160.0	$	—	$	1,410.9	$	968.2	$	(17.5)	4.7	$	(271.2)	$	2,090.4	$	1,188.8
Fair value adjustment to redeemable noncontrolling interests in Optimal Blue Holdco, LLC	—		—		(9.9)		—		—	—		—		(9.9)		9.9
Acquisition of remaining redeemable noncontroling interests in Optimal Blue Holdco, LLC	—		—		—		—		—	—		—		—		(1,156.0)
Grant of restricted shares of common stock	—		—		(46.6)		—		—	(0.8)		46.6		—		—
Forfeitures of restricted shares of common stock	—		—		1.0		—		—	—		(1.0)		—		—
Tax withholding payments for restricted share vesting	—		—		(10.7)		—		—	—		—		(10.7)		—
Vesting of restricted shares granted from treasury stock	—		—		8.6		—		—	0.2		(8.6)		—		—
Equity-based compensation expense	—		—		10.7		—		—	—		—		10.7		—
Net earnings (losses)	—		—		—		364.6		—	—		—		364.6		(2.5)
Equity-based compensation expense of unconsolidated affiliates	—		—		—		(5.4)		—	—		—		(5.4)		—
Foreign currency translation adjustment	—		—		—		—		(0.2)	—		—		(0.2)		—
Unrealized gains on interest rate swaps, net	—		—		—		—		7.5	—		—		7.5		—
Other comprehensive gains on investments in unconsolidated affiliates	—		—		—		—		3.2	—		—		3.2		—
Other	—		—		0.8		—		—	—		—		0.8		—
Balance, March 31, 2022	160.0	$	—	$	1,364.8	$	1,327.4	$	(7.0)	4.1	$	(234.2)	$	2,451.0	$	40.2

	Three months ended March 31, 2021
								Accumulated
				Additional				other						Total	Redeemable
	Common stock			paid-in		Retained		comprehensive		Treasury stock			shareholders’		noncontrolling
	Shares	$		capital		earnings		loss		Shares	$		equity		interests
Balance, December 31, 2020	160.1	$	—	$	2,053.7	$	757.4	$	(38.8)	3.1	$	(144.6)	$	2,627.7	$	578.0
Fair value adjustment to redeemable noncontrolling interests in Optimal Blue Holdco, LLC	—		—		(8.6)		—		—	—		—		(8.6)		8.6
Grant of restricted shares of common stock	—		—		(25.3)		—		—	(0.5)		25.3		—		—
Forfeitures of restricted shares of common stock	—		—		0.1		—		—	—		(0.1)		—		—
Tax withholding payments for restricted share vesting	(0.1)		—		(22.7)		—		—	—		—		(22.7)		—
Vesting of restricted shares granted from treasury stock	—		—		10.4		—		—	0.2		(10.4)		—		—
Equity-based compensation expense	—		—		9.4		—		—	—		—		9.4		—
Net earnings (losses)	—		—		—		54.1		—	—		—		54.1		(8.6)
Equity-based compensation expense of unconsolidated affiliates	—		—		—		0.5		—	—		—		0.5		—
Purchases of treasury stock	—		—		—		—		—	0.6		(46.7)		(46.7)		—
Foreign currency translation adjustment	—		—		—		—		(0.3)	—		—		(0.3)		—
Unrealized gains on interest rate swaps, net	—		—		—		—		4.4	—		—		4.4		—
Other comprehensive losses on investments in unconsolidated affiliates	—		—		—		—		(3.1)	—		—		(3.1)		—
Balance, March 31, 2021	160.0	$	—	$	2,017.0	$	812.0	$	(37.8)	3.4	$	(176.5)	$	2,614.7	$	578.0

See Notes to Condensed Consolidated Financial Statements (Unaudited).

3

BLACK KNIGHT, INC.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Three months ended March 31,
	2022		2021
Cash flows from operating activities:
Net earnings	$	362.1	$	45.5
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		91.5		87.8
Amortization of debt issuance costs and original issue discount		0.9		1.0
Loss on extinguishment of debt		0		2.5
Deferred income taxes, net		(135.8)		(1.8)
Equity in earnings of unconsolidated affiliates, net of tax		(303.1)		(6.4)
Equity-based compensation		10.7		9.4
Changes in assets and liabilities, net of acquired assets and liabilities:
Trade receivables, including receivables from related parties		(2.5)		0.1
Prepaid expenses and other assets		(11.9)		(35.1)
Deferred contract costs		(12.3)		(11.0)
Deferred revenues		(3.8)		6.4
Trade accounts payable and other liabilities		89.3		(21.0)
Net cash provided by operating activities		85.1		77.4
Cash flows from investing activities:
Additions to property and equipment		(6.6)		(5.2)
Additions to software		(20.8)		(24.7)
Business acquisitions, net of cash acquired		0		(20.0)
Asset acquisitions		0		(10.0)
Net cash used in investing activities		(27.4)		(59.9)
Cash flows from financing activities:
Revolver borrowings		460.1		167.8
Revolver payments		(115.1)		(98.5)
Term loan borrowings		0		1.6
Term loan payments		(7.2)		—
Payments made for redeemable noncontrolling interests		(433.5)		—
Purchases of treasury stock		0		(46.7)
Tax withholding payments for restricted share vesting		(10.7)		(22.7)
Finance lease payments		(0.8)		(1.2)
Debt issuance costs paid		0		(7.6)
Net cash used in financing activities		(107.2)		(7.3)
Net (decrease) increase in cash and cash equivalents		(49.5)		10.2
Cash and cash equivalents, beginning of period		77.1		34.7
Cash and cash equivalents, end of period	$	27.6	$	44.9
Supplemental cash flow information:
Interest paid, net	$	(29.3)	$	(29.1)
Income taxes paid, net	$	(0.3)	$	(0.9)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

4

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1)Basis of Presentation and Overview

The accompanying Condensed Consolidated Financial Statements (Unaudited) of Black Knight, Inc. (“BKI”) and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our") were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated.

The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission ("SEC") on February 25, 2022 and other filings with the SEC.

Description of Business

We are a premier provider of integrated, innovative, mission-critical, high-performance software solutions, data and analytics to the U.S. mortgage and real estate markets. Our mission is to transform the markets we serve by delivering innovative solutions that are integrated across the homeownership lifecycle and that result in realized efficiencies, reduced risk and new opportunities for our clients to help them achieve greater levels of success.

Principles of Consolidation

The Condensed Consolidated Financial Statements (Unaudited) include the accounts of BKI, its wholly-owned subsidiaries and non-wholly owned subsidiaries in which we have a controlling financial interest either through voting rights or means other than voting rights. Intercompany transactions and balances have been eliminated in consolidation. Where our ownership interest in a consolidated subsidiary is less than 100%, the noncontrolling interests’ share of these non-wholly owned subsidiaries is reported in our Condensed Consolidated Balance Sheets (Unaudited) as a separate component of equity or within temporary equity. The noncontrolling interests’ share of the net earnings (loss) of these non-wholly owned subsidiaries is reported in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) as an adjustment to our net earnings to arrive at Net earnings attributable to Black Knight.

Redeemable Noncontrolling Interests

Prior to February 15, 2022, Optimal Blue Holdco, LLC (“Optimal Blue Holdco”) was a non-wholly owned subsidiary and considered a variable interest entity. We were the primary beneficiary of Optimal Blue Holdco through our controlling interest and our rights established in the Second Amended and Restated Limited Liability Company Agreement of Optimal Blue Holdco dated November 24, 2020 (the “OB Holdco LLC Agreement”). As such, we controlled Optimal Blue Holdco and its subsidiaries, and we consolidated its financial position and results of operations. Prior to February 15, 2022, we owned 60% of Optimal Blue Holdco. Redeemable noncontrolling interests represented the collective 40% equity interest in Optimal Blue Holdco owned by Cannae Holdings, LLC ("Cannae") and affiliates of Thomas H. Lee Partners, L.P. ("THL"). As these redeemable noncontrolling interests provided for redemption features not solely within our control, they were presented outside of shareholders' equity.

On February 15, 2022, we entered into a purchase agreement with Cannae and THL and acquired all of their issued and outstanding Class A units of Optimal Blue Holdco through Optimal Blue I, LLC (“Optimal Blue I”), a Delaware limited liability company and our wholly-owned subsidiary, in exchange for aggregate consideration of 36.4 million shares of Dun & Bradstreet Holdings, Inc. (“DNB”) common stock valued at $722.5 million and $433.5 million in cash, included as a financing cash outflow on the Condensed Consolidated Statements of Cash Flows (Unaudited), funded with borrowings under our revolving credit facility. The aggregate consideration of $1.156 billion and number of shares of DNB common stock paid to Cannae and THL was based on the 20-day volume-weighted average trading price of DNB for the period ended on February 14, 2022. As of February 15, 2022, we own 100% of the Class A units of Optimal Blue Holdco.

5

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Reporting Segments

We conduct our operations through 2 reporting segments: (1) Software Solutions and (2) Data and Analytics. See further discussion in Note 13 — Segment Information.

Reclassifications

Certain reclassifications have been made to the prior year amounts to conform to the classifications used in 2022. Certain receivables previously included in Trade and other receivables, including receivables from related parties on our Condensed Consolidated Statements of Cash Flows (Unaudited) are now included in Prepaid expenses and other assets. We also reclassified certain deferred compensation plan assets and liabilities between Prepaid expenses and other assets and Trade accounts payable and other liabilities on our Condensed Consolidated Statements of Cash Flows (Unaudited).

Merger Agreement

On May 4, 2022, we entered into a definitive agreement to be acquired by Intercontinental Exchange, Inc. (“ICE”), a leading global provider of data, technology, and market infrastructure, in a transaction valued at approximately $13.1 billion, or $85 per share, with consideration in the form of a mix of cash (80%) and stock (20%) (the “Transaction”). The aggregate cash consideration in the Transaction consists of approximately $10.5 billion and the aggregate stock consideration is valued at approximately $2.6 billion based on ICE’s 10-day volume weighted average price as of May 2, 2022 of $118.09. Black Knight shareholders can elect to receive either cash or stock, subject to proration, with the value of the cash election and the stock election equalized at closing. The Transaction is expected to close in the first half of 2023, following the receipt of regulatory approvals, Black Knight shareholder approval and the satisfaction of customary closing conditions. The Transaction has been approved by the Boards of Directors of Black Knight and ICE.

(2)Condensed Consolidated Financial Statement Details

Cash and Cash Equivalents

Cash and cash equivalents are unrestricted and include the following (in millions):

	March 31, 2022		December 31, 2021
Cash	$	21.1	$	24.0
Cash equivalents		6.5		53.1
Cash and cash equivalents	$	27.6	$	77.1

Trade Receivables, Net

A summary of Trade receivables, net of allowance for credit losses is as follows (in millions):

	March 31, 2022		December 31, 2021
Trade receivables — billed	$	149.4	$	147.4
Trade receivables — unbilled		47.8		47.1
Trade receivables		197.2		194.5
Allowance for credit losses		(2.9)		(2.7)
Trade receivables, net	$	194.3	$	191.8

6

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in millions):

	March 31, 2022		December 31, 2021
Prepaid expenses	$	52.4	$	44.7
Contract assets, net		21.6		23.0
Income tax receivables		0.9		6.5
Other current assets		10.2		8.8
Prepaid expenses and other current assets	$	85.1	$	83.0

Other Non-Current Assets

Other non-current assets consist of the following (in millions):

	March 31, 2022		December 31, 2021
Contract assets, net	$	90.3	$	80.2
Property records database		60.6		60.6
Right-of-use assets		30.7		32.9
Deferred compensation plan related assets		26.5		25.2
Contract credits		23.1		23.6
Prepaid expenses		6.2		4.5
Other		2.4		3.3
Other non-current assets	$	239.8	$	230.3

Trade Accounts Payable and Other Accrued Liabilities

Trade accounts payable and other accrued liabilities consist of the following (in millions):

	March 31, 2022		December 31, 2021
Accrued interest	$	3.1	$	12.3
Lease liabilities, current		10.3		10.8
Trade accounts payable		10.1		7.9
Other taxes payable and accrued		5.7		4.8
Accrued client liabilities		3.7		3.8
Other		22.5		24.9
Trade accounts payable and accrued liabilities	$	55.4	$	64.5

Deferred Revenues

During the three months ended March 31, 2022 and 2021, revenues recognized related to the amount included in the Deferred revenues balance at the beginning of each year were $20.9 million and $17.7 million, respectively.

7

BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Depreciation and Amortization

Depreciation and amortization includes the following (in millions):

	Three months ended March 31,
	2022		2021
Other intangible assets	$	36.8	$	38.8
Software		35.5		30.6
Property and equipment		9.9		10.2
Deferred contract costs		9.3		8.2
Total	$	91.5	$	87.8

Other Non-Current Liabilities

Other non-current liabilities consist of the following (in millions):

	March 31, 2022		December 31, 2021
Lease liabilities, non-current	$	22.9	$	26.4
Deferred compensation plan		24.8		24.4
Unrealized losses on interest rate swaps (Note 7)		2.1		13.9
Other		13.5		14.0
Other non-current liabilities	$	63.3	$	78.7

A

(3)Business Acquisitions

2021 Acquisitions

On March 16, 2021, we completed the acquisition of the technology assets and business of NexSpring Financial, LLC (“NexSpring”), which is reported within our Software Solutions segment, and is expected to broaden our ability to serve mortgage brokers.

On May 17, 2021, we completed the acquisition of 100% of the equity interests in eMBS, Inc. (“eMBS”), a leading data and analytics aggregator for residential mortgage-backed securities, which is reported within our Data & Analytics segment, and is expected to solidify and further expand our market leadership in solutions and data for agency-backed securities.

On July 7, 2021, we completed the acquisition of 100% of the equity interests in TOMN Holdings, Inc. and its subsidiaries (“Top of Mind”), which is reported within our Software Solutions segment. Top of Mind is the developer of Surefire^SM, a leading customer relationship management and marketing automation system for the mortgage industry.

We did not record any measurement period adjustments related to our prior year acquisitions during the three months ended March 31, 2022. The estimates related to our 2021 acquisitions of eMBS and Top of Mind are preliminary and subject to adjustments as we complete our valuation process with respect to certain assumed liabilities, including estimated liabilities for pre-acquisition tax exposure.

(4)Investments in Unconsolidated Affiliates

DNB is a leading global provider of business decisioning data and analytics. On January 8, 2021, DNB completed its acquisition of Bisnode Business Information Group AB (the “Bisnode acquisition”). In connection with the Bisnode acquisition, DNB issued 6.2 million shares of common stock, which resulted in a decrease in our ownership interest in DNB from 13.0% to 12.8% at that time.

On February 15, 2022, we exchanged 36.4 million shares of DNB common stock in connection for a portion of the remaining Class A units in Optimal Blue Holdco we acquired from Cannae and THL. The number of shares of DNB common stock was valued at $722.5 million based on the 20-day volume-weighted average trading price of DNB for the period ended on February 14, 2022. We recognized a

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

gain of $305.4 million, net of tax of $102.6 million, related to this transaction. As of March 31, 2022, we own approximately 4.3% of DNB’s outstanding common stock.

We hold less than 20% of the outstanding common equity of DNB, but we continue to account for our investment under the equity method because we continue to have significant influence over DNB primarily through a combination of an agreement with certain other DNB investors pursuant to which we agreed to collectively vote together on matters related to the election of DNB directors for a period of three years following the initial public offering of DNB, our shared Chief Executive Officer and our investment.

As of March 31, 2022, DNB’s closing share price was $17.52, and the fair value of our investment in DNB was $323.7 million before tax.

Summarized consolidated financial information for DNB is presented below (in millions):

	March 31, 2022		December 31, 2021
Current assets	$	732.3	$	718.0
Non-current assets		9,124.9		9,279.2
Total assets	$	9,857.2	$	9,997.2
Current liabilities, including short-term debt	$	973.4	$	1,004.9
Non-current liabilities		5,174.9		5,247.0
Total liabilities		6,148.3		6,251.9
Total equity		3,708.9		3,745.3
Total liabilities and shareholders' equity	$	9,857.2	$	9,997.2

	Three months ended March 31,
	2022		2021
Revenues	$	536.0	$	504.5
Loss before provision for income taxes and equity in net income of affiliates		(39.8)		(33.7)
Net loss		(29.8)		(23.3)
Net loss attributable to DNB		(31.3)		(25.0)

Equity in earnings of unconsolidated affiliates, net of tax consists of the following (in millions):

	Three months ended March 31,
	2022		2021
Equity in losses of unconsolidated affiliates, net of tax	$	(2.3)	$	(3.5)
Non-cash gain related to DNB's issuance of common stock, net of tax		—		9.9
Gain related to DNB investment, net of tax		305.4		—
Equity in earnings of unconsolidated affiliates, net of tax	$	303.1	$	6.4

(5)Earnings Per Share

Diluted net earnings per share includes the effect of unvested restricted stock awards, restricted stock unit awards (“RSUs”) and Optimal Blue Holdco profits interests units (“OB PIUs”). For the three months ended March 31, 2021, the OB PIUs were excluded from the diluted

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

earnings per share calculation because the effect of their inclusion would have been antidilutive. The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share amounts):

	Three months ended March 31,
	2022		2021
Basic:
Net earnings attributable to Black Knight	$	364.6	$	54.1
Shares used for basic net earnings per share:
Weighted average shares of common stock outstanding		154.2		155.6
Basic net earnings per share	$	2.36	$	0.35
Diluted:
Net earnings attributable to Black Knight	$	364.6	$	54.1
Shares used for diluted net earnings per share:
Weighted average shares of common stock outstanding		154.2		155.6
Dilutive effect of unvested restricted shares of common stock and OB PIUs		1.2		0.3
Weighted average shares of common stock, diluted		155.4		155.9
Diluted net earnings per share	$	2.35	$	0.35

(6)Related Party Transactions

Our service arrangements with related parties are priced within the range of prices we offer to third parties. We believe the amounts earned from or charged by us under each of the following arrangements are fair and reasonable. However, the amounts we earned or that were charged under these arrangements were not negotiated at arm's length and may not represent the terms that we might have obtained from an unrelated third party.

DNB

DNB is considered to be a related party primarily due to the combination of our investment in DNB and our shared Chief Executive Officer. Refer to Note 4 — Investments in Unconsolidated Affiliates for additional details.

In June 2021, we entered into a five-year agreement with DNB to provide them with certain products and data over the term of the agreement, as well as professional services, for an aggregate fee of approximately $34 million over the term of the agreement. As of March 31, 2022, related party deferred revenues of $6.6 million are included in Deferred revenues (current) in our Condensed Consolidated Balance Sheets (Unaudited). As of December 31, 2021, related party deferred revenues were $7.6 million, of which $6.2 million was included in Deferred revenues (current) and $1.4 million was included in Deferred revenues (non-current). During the three months ended March 31, 2022, revenues from related parties of $1.0 million are included in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).

In June 2021, we also entered into an agreement with DNB for access to certain of their data assets for an aggregate fee of approximately $24 million over the term of the agreement. In addition, we will jointly market certain solutions and data. As of March 31, 2022 and December 31, 2021, related party prepaid fees were $1.1 million and $2.3 million, respectively, which are included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets (Unaudited). During the three months ended March 31, 2022, expenses from related parties of $1.1 million are included in Operating expenses in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).

As of March 31, 2022 and December 31, 2021, we had related party receivables from DNB of $0.1 million and $0.2 million, respectively.

Trasimene

Prior to June 16, 2021, Trasimene Capital Management, LLC ("Trasimene") was considered a related party because the former Chairman of our Board of Directors (the “Board”) owns a controlling interest in Trasimene. As of June 16, 2021, our former Chairman retired from

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

the Board and became our Chairman Emeritus, and Trasimene is no longer considered a related party. For the three months ended March 31, 2021, we recognized $0.3 million in fees paid to Trasimene related to our acquisition of NexSpring, which are included in Transition and integration costs in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited).

(7)Long-Term Debt

Long-term debt consists of the following (in millions):

	March 31, 2022		December 31, 2021
Term A Loan	$	1,142.8	$	1,150.0
Revolving Credit Facility		601.0		256.0
Senior Notes		1,000.0		1,000.0
Other		5.8		8.9
Total long-term debt principal		2,749.6		2,414.9
Less: current portion of long-term debt		(33.5)		(32.5)
Long-term debt before debt issuance costs and discount		2,716.1		2,382.4
Less: debt issuance costs and discount		(18.9)		(19.8)
Long-term debt, net of current portion	$	2,697.2	$	2,362.6

As of March 31, 2022, principal maturities, including payments related to our finance leases, are as follows (in millions):

2022	$	22.4
2023		33.7
2024		57.5
2025		57.5
2026		1,578.5
Thereafter		1,000.0
Total	$	2,749.6

2021 Credit Agreement

On March 10, 2021, our indirect subsidiary Black Knight Infoserv, LLC (“BKIS”) entered into a second amended and restated credit and guaranty agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto.

The 2021 Credit Agreement provides for (i) a $1,150.0 million term loan A facility (the “Term A Loan”) and (ii) a $1,000.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term A Loan, collectively, the “Facilities”), the proceeds of which were used to repay in full the indebtedness outstanding under the previous term A facility and revolving credit facility. As a result of the refinancing, we recognized $2.5 million of expense during the three months ended March 31, 2021 in Other expense, net on the Condensed Consolidated Statement of Earnings and Comprehensive Earnings (Unaudited).

As of March 31, 2022, the interest rate for the Facilities was based on the Eurodollar rate plus a margin of 150 basis points and was approximately  1.9%. As of March 31, 2022, we had $399.0 million capacity on the Revolving Credit Facility, and the unused commitment fee was 20 basis points.

The Facilities are guaranteed by BKIS’s wholly-owned domestic restricted subsidiaries, as defined by the 2021 Credit Agreement, and Black Knight Financial Services, LLC, and are secured by associated collateral agreements that pledge a lien on the majority of BKIS’s assets and the assets of the guarantors, in each case, subject to customary exceptions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Senior Notes

On August 26, 2020, BKIS completed the issuance and sale of $1.0 billion aggregate principal amount of 3.625% senior unsecured notes due 2028 (the "Senior Notes"). The Senior Notes have a coupon rate of 3.625% and mature on September 1, 2028. Interest is paid semi-annually in arrears on September 1 and March 1 of each year, and commenced on March 1, 2021. The obligations under the Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by the same guarantors that guarantee the 2021 Credit Agreement (collectively, the “Guarantors”). The Senior Notes are effectively subordinated to any obligations that are secured, including obligations under the 2021 Credit Agreement, to the extent of the value of the assets securing those obligations. The Senior Notes are structurally subordinated to all liabilities of BKIS’ subsidiaries that do not guarantee the Senior Notes.

Other Debt

Other debt includes financing agreements primarily related to certain data processing and maintenance services and finance lease agreements for certain computer equipment. For the three months ended March 31, 2021, non-cash investing and financing activity was $3.3 million related to the unpaid portion of our finance lease agreements.

Fair Value of Long-Term Debt

The fair values of our Facilities and Senior Notes are based upon established market prices for the securities using Level 2 inputs. The fair value of our Facilities approximates their carrying value at March 31, 2022. The fair value of our Senior Notes at March 31, 2022 was $950.0 million compared to its carrying value of $990.0 million, net of original issue discount and debt issuance costs.

Interest Rate Swaps

We enter into interest rate swap agreements to hedge forecasted monthly interest rate payments on our floating rate debt. As of March 31, 2022, we had the following interest rate swap agreements (collectively, the "Swap Agreements") (in millions):

Effective dates	Notional amount		Fixed rates
April 30, 2018 through April 30, 2023	$	250.0	2.61	%
January 31, 2019 through January 31, 2023	$	300.0	2.65	%

Under the terms of the Swap Agreements, we receive payments based on the 1-month LIBOR (approximately 0.46% as of March 31, 2022).

During the three months ended March 31, 2022, the following interest rate swap agreement expired (in millions):

Effective dates	Notional amount		Fixed rate
March 31, 2017 through March 31, 2022	$	200.0	2.08	%

We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive loss is reclassified into Interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

The estimated fair values of our Swap Agreements are as follows (in millions):

	March 31, 2022		December 31, 2021
Other current liabilities	$	2.7	$	1.0
Other non-current liabilities	$	2.1	$	13.9

A cumulative loss of $4.8 million ($3.6 million net of tax) and $14.9 million ($11.1 million net of tax) is reflected in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2022 and December 31, 2021, respectively. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive earnings (loss) ("OCE") on the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) (in millions):

	Three months ended March 31,
	2022				2021
			Amount of loss				Amount of loss
	Amount of gain		reclassified from		Amount of gain		reclassified from
	recognized		Accumulated OCE		recognized		Accumulated OCE
	in OCE		into Net earnings		in OCE		into Net earnings
Swap agreements	$	4.3	$	3.2	$	0.5	$	3.9

Approximately $4.9 million ($3.6 million net of tax) of the balance in Accumulated other comprehensive loss as of March 31, 2022 is expected to be reclassified into Interest expense, net over the next 12 months.

(8)Fair Value Measurements

Fair Value of Financial Assets and Liabilities

Fair value represents the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of financial assets and liabilities are determined using the following fair value hierarchy:

● Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access.

● Level 2 inputs to the valuation methodology include:

o quoted prices for similar assets or liabilities in active markets;

o quoted prices for identical or similar assets or liabilities in inactive markets;

o inputs other than quoted prices that are observable for the asset or liability; and

o inputs that are derived principally from or corroborated by observable market data by correlation or other means.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in millions):

	March 31, 2022								December 31, 2021
	Carrying		Fair value						Carrying		Fair value
	amount		Level 1		Level 2		Level 3		amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents (Note 2)	$	27.6	$	27.6	$	—	$	—	$	77.1	$	77.1	$	—	$	—
Liabilities:
Interest rate swaps (Note 7)		4.8		—		4.8		—		14.9		—		14.9		—
Contingent consideration		4.7		—		—		4.7		4.9		—		—		4.9
Redeemable noncontrolling interests		40.2		—		—		40.2		1,188.8		—		—		1,188.8

The fair value of redeemable noncontrolling interests and contingent consideration was primarily determined based on significant estimates and assumptions, including Level 3 inputs. The estimates and assumptions include the projected timing and amount of future cash flows and discount rates reflecting the rate inherent in the future cash flows. Refer to Note 1 — Basis of Presentation and Overview for additional information.

The following table presents a summary of the change in fair value of our Level 3 fair value measurements (in millions):

Beginning balance, December 31, 2021	$	1,193.7
Contingent consideration adjustments related to prior year acquisition(1)		(0.2)
Acquisition of remaining outstanding Class A redeemable noncontrolling interests in Optimal Blue Holdco (Note 1)		(1,156.0)
Fair value adjustment to redeemable noncontrolling interests in Optimal Blue Holdco		7.4
Ending balance, March 31, 2022	$	44.9

(1) The adjustments to contingent consideration for prior year acquisitions are included in Transition and integration costs in the Condensed Consolidated Statement of Earnings and Comprehensive Earnings (Unaudited).

(9)Income Taxes

Our effective tax rate for the three months ended March 31, 2022 and 2021 was (1.9)% and 11.7%, respectively. Our effective tax rate for the three months ended March 31, 2022, includes the effect of a $14.1 million discrete income tax benefit related to the establishment of a deferred tax asset as a result of our reorganization of certain wholly-owned subsidiaries within the Optimal Blue partnership investment structure. Our effective tax rate for the three months ended March 31, 2021 differs from our statutory rate primarily due to the effect of excess tax benefits related to the vesting of restricted shares of our common stock.

(10)Commitments and Contingencies

Legal and Regulatory Matters

In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, some of which include claims for punitive or exemplary damages. Our ordinary course litigation may include class action lawsuits, which make allegations related to various aspects of our business. From time to time, we also receive requests for information from various state and federal regulatory authorities, some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations of regulations or settlements with such authorities requiring a variety of remedies. We believe that none of these actions depart from customary litigation or regulatory inquiries incidental to our business.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

We review lawsuits and other legal and regulatory matters (collectively "legal proceedings") on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. Actual losses may materially differ from the amounts recorded, and the ultimate outcome of our pending cases is generally not yet determinable. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present, we do not believe the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition.

PennyMac Litigation

On November 5, 2019, Black Knight Servicing Technologies, LLC (“BKST”), an indirect, wholly-owned subsidiary of Black Knight, filed a Complaint and Demand for Jury Trial (the “Black Knight Complaint”) against PennyMac Loan Services, LLC (“PennyMac”) in the Circuit Court for the Fourth Judicial Circuit in and for Duval County, Florida. The Black Knight Complaint includes causes of action for breach of contract and misappropriation of MSP^® System trade secrets in order to develop an imitation mortgage processing system intended to replace the MSP^® System. The Black Knight Complaint seeks damages for breach of contract and misappropriation of trade secrets, injunctive relief under the Florida Uniform Trade Secrets Act and declaratory judgment that BKST owns all intellectual property and software developed by or on behalf of PennyMac as a result of its wrongful use of and access to the MSP^® System and related trade secret and confidential information. PennyMac filed a motion to compel arbitration of the action, and the court granted the motion on April 6, 2020. After the court denied BKST's motion for reconsideration of the court’s order compelling arbitration, BKST filed a notice of appeal with the Florida First District Court of Appeal on May 6, 2020. On January 6, 2021, the appellate court affirmed the trial court's ruling.

Shortly after the filing of the Black Knight Complaint, on November 6, 2019, PennyMac filed an Antitrust Complaint (the “PennyMac Complaint”) against Black Knight in the United States District Court for the Central District of California. The PennyMac Complaint included causes of action for alleged monopolization and attempted monopolization under Section 2 of the Sherman Antitrust Act, violation of California’s Cartwright Act, violation of California’s Unfair Competition Law and common law unfair competition under California law. The PennyMac Complaint sought equitable remedies, damages and other monetary relief, including treble and punitive damages. Generally, PennyMac alleged that Black Knight relies on various anticompetitive, unfair and discriminatory practices to maintain and to enhance its dominance in the mortgage servicing platform market and in an attempt to monopolize the platform software applications market. Black Knight moved to dismiss the PennyMac Complaint or have the action transferred to Florida based upon a forum selection clause in the agreement with BKST. On February 13, 2020, the judge granted Black Knight's motion to transfer the case to Florida and denied as moot the motion to dismiss. On April 17, 2020, PennyMac filed a notice of dismissal of this action without prejudice and indicated that they intended to bring the claims raised in the dismissed PennyMac Complaint as defenses, third party claims and/or counterclaims in arbitration. On April 23, 2020, the court entered an order dismissing the action without prejudice and directing that the clerk close the case. On April 28, 2020, PennyMac submitted this matter to the American Arbitration Association ("AAA") for arbitration. On May 27, 2020, Black Knight filed its answering statement with the AAA. The arbitrator was confirmed by the AAA on July 21, 2020.

The arbitrator set Black Knight's trade secret case for a 10-day final hearing beginning on January 9, 2023 and set PennyMac's antitrust case for a 10-day final hearing beginning on January 23, 2023.

As these cases continue to evolve, it is not possible to reasonably estimate the probability that we will ultimately prevail on our lawsuit or be held liable for the violations alleged in the PennyMac Complaint, nor is it possible to reasonably estimate the ultimate gain or loss, if any, or range of gain or loss that could result from these cases.

Indemnifications and Warranties

We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such, no accruals for warranty costs have been made.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Indemnification Agreement

We are party to a cross-indemnity agreement dated December 22, 2014 with ServiceLink Holdings, LLC ("ServiceLink"). Pursuant to this agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of ServiceLink’s business or any action, suit or proceeding in which we or any of our subsidiaries are named by reason of being a successor to the business of Lender Processing Services, Inc. and the cause of such action, suit or proceeding relates to the business of ServiceLink. In return, we indemnify ServiceLink for liabilities relating to, arising out of, or resulting from the conduct of our business.

(11)Revenues

Disaggregation of Revenues

The following tables summarize revenues from contracts with clients (in millions):

	Three months ended March 31, 2022
	Servicing		Origination		Software		Data and
	Software		Software		Solutions		Analytics		Total
Software solutions	$	204.0	$	92.5	$	296.5	$	9.5	$	306.0
Professional services		18.6		12.3		30.9		—		30.9
Data solutions		—		0.5		0.5		46.4		46.9
Other		—		2.8		2.8		0.6		3.4
Revenues	$	222.6	$	108.1	$	330.7	$	56.5	$	387.2

	Three months ended March 31, 2021
	Servicing		Origination		Software		Data and
	Software		Software		Solutions		Analytics		Total
Software solutions	$	184.1	$	77.8	$	261.9	$	8.7	$	270.6
Professional services		18.6		11.8		30.4		0.2		30.6
Data solutions		—		1.2		1.2		44.4		45.6
Other		—		2.3		2.3		0.6		2.9
Revenues	$	202.7	$	93.1	$	295.8	$	53.9	$	349.7

Our Software Solutions segment offers leading software and hosting solutions that facilitate and automate many of the mission-critical business processes across the homeownership lifecycle. These solutions primarily consist of processing and workflow management software applications. Our servicing software solutions primarily include our core servicing software solution that automates loan servicing, including loan setup and ongoing processing, customer service, accounting, reporting to the secondary mortgage market and investors and web-based workflow information systems. Our origination software solutions primarily include our solutions that automate and facilitate the origination of mortgage loans, offer product, pricing and eligibility capabilities and provide an interconnected network allowing the various parties and systems associated with lending transactions to exchange data quickly and efficiently. Professional services consists of pre-implementation and post-implementation support and services and are primarily billed on a time and materials basis. Professional services may also include dedicated teams provided as part of agreements with software and hosting solutions clients.

Our Data and Analytics segment offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, behavioral models, a multiple listing service software solution and other data solutions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Transaction Price Allocated to Future Performance Obligations

Our disclosure of transaction price allocated to future performance obligations excludes the following:

● Volume-based fees in excess of contractual minimums and other usage-based fees to the extent they are part of a single performance obligation and meet certain variable allocation criteria;

● Performance obligations that are part of a contract with an original expected duration of one year or less; and

● Transactional fees based on a fixed fee per transaction when we have the right to invoice once we have completed the performance obligation.

As of March 31, 2022, the aggregate amount of the transaction price that is allocated to our future performance obligations was approximately $2.7 billion and is expected to be recognized as follows: 19% by December 31, 2022, 61% by December 31, 2024, 84% by December 31, 2026 and the rest thereafter.

(12)Equity

Share Repurchase Program

On February 12, 2020, our Board of Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our outstanding common stock through February 12, 2023, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. During the three months ended March 31, 2021, we repurchased 0.6 million shares of our common stock for an aggregate of $46.7 million at an average price per share of $75.19. We did not repurchase any shares during the three months ended March 31, 2022. As of March 31, 2022, we have 8.0 million shares remaining under our share repurchase authorization.

Omnibus Incentive Plan

A summary of restricted shares and RSUs granted in 2022 is as follows:

	Number of shares	Grant date fair		Vesting period
Dates	granted	value per share		(in years)	Vesting criteria
March 10, 2022(1)	809,166	$	57.18	3.0	Service and Performance
March 31, 2022	1,035	$	57.99	3.0	Service

(1) This award is subject to an independent performance target for each of 3 consecutive 12-month measurement periods. Vesting of each tranche is independent of the satisfaction of the annual performance target for other tranches.

Activity related to restricted stock and RSUs in 2022 is as follows:

		Weighted average
		grant date
	Shares	fair value
Balance, December 31, 2021	1,269,789	$	70.79
Granted	810,201	$	57.18
Forfeited	(20,429)	$	71.72
Vested	(562,223)	$	65.61
Balance, March 31, 2022	1,497,338	$	65.36

Equity-based compensation expense related to our restricted shares and RSUs was $8.5 million and $7.2 million for the three months ended March 31, 2022 and 2021, respectively. These expenses are included in Operating expenses in the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). As of March 31, 2022, total unrecognized compensation cost was $89.1 million and is expected to be recognized over a weighted average period of approximately 2.0 years.

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Profits Interests Units

The fair value of OB PIUs is measured using the Black-Scholes model. The OB PIUs vest over three years, with cliff vesting after the third year. If no public offering has been consummated as of the third anniversary of the acquisition of Optimal Blue, holders of the OB PIUs have an option to put their profit interests to us once per quarter for the twelve months that begins six months after the OB PIU holder’s vesting date, and once per year thereafter. The units may be settled in cash or Black Knight common stock or a combination of both at our election and will be settled at the current fair value at the time we receive notice of the put election. As the OB PIUs provide for redemption features not solely within our control, we classify the redemption value outside of permanent equity in redeemable noncontrolling interests. The redemption value is equal to the difference in the per unit fair value of the underlying member units and the hurdle amount, based upon the proportionate required service period rendered to date.

Equity-based compensation expense related to the OB PIUs was $2.2 million for the three months ended March 31, 2022 and 2021. As of March 31, 2022, the total unrecognized compensation cost related to non-vested OB PIUs is $14.5 million, which is expected to be recognized over a weighted average period of approximately 1.7 years.

(13)Segment Information

Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting ("ASC 280") establishes standards for reporting information about segments and requires that a public business enterprise reports financial and descriptive information about its segments. Segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our chief executive officer is identified as the CODM as defined by ASC 280. To align with the internal management of our business operations based on service offerings, our business is organized into 2 segments. Refer to Note 11 — Revenues for a description of our Software Solutions and Data and Analytics segments.

Separate discrete financial information is available for these 2 segments, and the operating results of each segment are regularly evaluated by the CODM in order to assess performance and allocate resources. We use EBITDA as the primary profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, net, Income tax (benefit) expense and Depreciation and amortization. It also excludes Equity in earnings of unconsolidated affiliates. We do not allocate Interest expense, net, Other expense, net, Income tax (benefit) expense, equity-based compensation and certain other items, such as purchase accounting adjustments and acquisition-related costs to the segments, since these items are not considered in evaluating the segments’ overall operating performance.

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BLACK KNIGHT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (Continued)

Segment asset information is not included below because we do not use it to evaluate performance or allocate resources. Summarized financial information concerning our segments is shown in the tables below (in millions):

	Three months ended March 31, 2022
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	330.7	$	56.5	$	0		$	387.2
Expenses:
Operating expenses		142.5		37.5		27.9	(1)		207.9
Transition and integration costs		0		0		7.6	(2)		7.6
EBITDA		188.2		19.0		(35.5)			171.7
Depreciation and amortization		35.1		3.8		52.6	(3)		91.5
Operating income (loss)		153.1		15.2		(88.1)			80.2
Interest expense, net									(21.1)
Other expense, net									(1.2)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									57.9
Income tax benefit									(1.1)
Earnings before equity in earnings of unconsolidated affiliates									59.0
Equity in earnings of unconsolidated affiliates, net of tax									303.1
Net earnings									362.1
Net losses attributable to redeemable noncontrolling interests									2.5
Net earnings attributable to Black Knight								$	364.6

	Three months ended March 31, 2021
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	295.8	$	53.9	$	0		$	349.7
Expenses:
Operating expenses		124.9		34.2		27.1	(1)		186.2
Transition and integration costs		0		0		7.9	(2)		7.9
EBITDA		170.9		19.7		(35.0)			155.6
Depreciation and amortization		31.2		3.8		52.8	(3)		87.8
Operating income (loss)		139.7		15.9		(87.8)			67.8
Interest expense, net									(20.3)
Other expense, net									(3.2)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									44.3
Income tax expense									5.2
Earnings before equity in earnings of unconsolidated affiliates									39.1
Equity in earnings of unconsolidated affiliates, net of tax									6.4
Net earnings									45.5
Net losses attributable to redeemable noncontrolling interests									8.6
Net earnings attributable to Black Knight								$	54.1

(1) Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $11.2 million and $10.5 million for the three months ended March 31, 2022 and 2021, respectively.

(2) Transition and integration costs primarily consists of costs associated with acquisitions.

(3) Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding expectations, hopes, intentions or strategies regarding the future. Forward-looking statements are based on Black Knight, Inc. and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our") management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties that forward-looking statements are subject to include, but are not limited to:

● the occurrence of any event, change, or other circumstance that could give rise to the right of us or Intercontinental Exchange, Inc. (“ICE”) to terminate the definitive merger agreement governing the terms and conditions of the proposed transaction;

● the outcome of any legal proceedings that may be instituted against us or ICE;

● the possibility that the proposed transaction does not close when expected or at all because required regulatory, stockholder, or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect us or ICE or the expected benefits of the proposed transaction)

● the diversion of management’s attention and time from ongoing business operations and opportunities on merger-related matters;

● security breaches against our information systems or breaches involving our third-party vendors;

● our ability to maintain and grow our relationships with our clients;

● our ability to comply with or changes to the laws, rules and regulations that affect our and our clients’ businesses;

● our ability to adapt our solutions to technological changes or evolving industry standards or to achieve our growth strategies;

● our ability to protect our proprietary software and information rights;

● the effect of any potential defects, development delays, installation difficulties or system failures on our business and reputation;

● changes in general economic, business, regulatory and political conditions;

● impacts to our business operations caused by the occurrence of a catastrophe or global crisis, including the spread of COVID-19 variants;

● the effects of our existing leverage on our ability to make acquisitions and invest in our business;

● risks associated with the recruitment and retention of our skilled workforce;

● risks associated with the availability of data;

● our ability to successfully consummate, integrate and achieve the intended benefits of acquisitions;

● risks associated with our investment in DNB; and

● other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2021 and other filings with the Securities and Exchange Commission ("SEC").

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022 and other filings with the SEC.

Overview

Black Knight is a premier provider of integrated, innovative, mission-critical, high-performance software solutions, data and analytics to the U.S. mortgage and real estate markets. Our mission is to transform the markets we serve by delivering innovative solutions that are integrated across the homeownership lifecycle and that result in realized efficiencies, reduced risk and new opportunities for our clients to help them achieve greater levels of success.

We believe businesses leverage our robust, integrated solutions across the entire homeownership lifecycle to help retain existing clients, gain new clients, mitigate risk and operate more efficiently. Our clients rely on our proven, comprehensive, scalable solutions and our unwavering commitment to delivering exceptional client support to achieve their strategic goals and better serve their customers.

We have a focused strategy of continuous innovation across our business supported by strategic acquisitions – and even more importantly, the integration of those innovations and acquisitions into our broader ecosystem. Our scale allows us to continually invest in

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our business, both to meet ever-changing industry requirements and to maintain our position as a leading provider of platforms for the mortgage and real estate markets.

Deep business and regulatory expertise and an unparalleled, holistic view of the markets we serve allow us the privilege of being a trusted advisor to our clients, who range from the nation’s largest lenders and mortgage servicers to institutional portfolio managers and government entities, to individual real estate agents and mortgage brokers. Clients leverage our software ecosystem across a range of real estate and housing finance verticals through multiple digital channels, using our offerings to drive more business, reduce risk and deliver a best-in-class customer experience, all while operating more efficiently and cost-effectively.

The table below summarizes active first and second lien mortgage loans on our mortgage loan servicing software solution and the related market data, reflecting our leadership in the mortgage loan servicing software solutions market (in millions):

	First lien				Second lien				Total first and second lien
	as of March 31,				as of March 31,				as of March 31,
	2022		2021		2022		2021		2022		2021
Active loans	33.4		32.3		3.1		3.4		36.5		35.7
Market size	53.3	(1)	53.2	(1)	12.3	(2)	12.3	(2)	65.6		65.5
Market share	63	%	61	%	26	%	28	%	56	%	55	%

Note: Percentages above may not recalculate due to rounding.

(1) Estimates according to the Black Knight Mortgage Monitor Report as of March 31, 2022 and 2021 for U.S. first lien mortgage loans. These estimates are subject to change.

(2) Estimates according to the April 2022 and 2021 Equifax National Consumer Credit Trends Report as of March 31, 2022 and 2021 for U.S. second lien mortgage loans. These estimates are subject to revision.

We have long-standing relationships with our clients – a majority of whom enter into long-term contracts that include multiple, integrated products embedded into mission-critical, client-side workflow and decision processes. This speaks to the confidence our clients, which include some of the largest financial institutions in the world, have in our solutions and our commitment to serve them. The contractual nature of our revenues and stickiness of our client relationships make our revenues both highly visible and recurring in nature. Our scale and integrated ecosystem of solutions drive significant operating leverage and cross-sell opportunities, enabling our clients to continually benefit from new and greater operational efficiencies while simultaneously allowing us to generate strong margins and cash flows.

Our Markets

The Black Knight ecosystem stretches across four core “pillar” verticals: mortgage loan servicing, mortgage origination, capital markets and real estate; with our data and analytics flowing throughout and between the interconnected ecosystem of solutions. As we integrate our innovations and acquired technologies, we are committed to continually improving the end consumer experience, driving further efficiencies for our clients and helping them to win new customers and retain existing customers.

Recent Developments

Optimal Blue Transaction

On February 15, 2022, we entered into a purchase agreement with Cannae and THL and acquired all of their Class A units of Optimal Blue Holdco, LLC (“Optimal Blue Holdco”) through Optimal Blue I, LLC (“Optimal Blue I”), a Delaware limited liability company and our wholly-owned subsidiary, in exchange for aggregate consideration of 36.4 million shares of DNB common stock valued at $722.5 million and $433.5 million in cash, funded with borrowings under our revolving credit facility. The aggregate consideration of $1.156 billion and number of shares of DNB common stock paid to Cannae and THL was based on the 20-day volume-weighted average trading price of DNB for the period ended on February 14, 2022. As of February 15, 2022, we own 100% of the Class A units of Optimal Blue Holdco. Refer to Note 1 — Basis of Presentation and Overview for additional information.

Merger Agreement

On May 4, 2022, we entered into a definitive agreement to be acquired by ICE, a leading global provider of data, technology, and market infrastructure, in a transaction valued at approximately $13.1 billion, or $85 per share, with consideration in the form of a mix of cash (80%)

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and stock (20%) (the “Transaction”). The Transaction is expected to close in the first half of 2023, following the receipt of regulatory approvals, Black Knight shareholder approval and the satisfaction of customary closing conditions. The Transaction has been approved by the Boards of Directors of Black Knight and ICE. Refer to Note 1 — Basis of Presentation and Overview for additional information.

Business Trends and Conditions

Market Trends

Market trends that have spurred lenders and servicers to seek software, data and analytics solutions are as follows:

Integral role of technology in the U.S. mortgage loan industry. Over the past few years, the homebuyer’s processes have become more digital, and banks and other lenders and servicers have become increasingly focused on automation and workflow management to operate more efficiently and meet their regulatory requirements as well as using technology to enhance the consumer experience during the mortgage loan origination, closing and servicing processes. We believe technology providers must be able to support the complexity and dynamic nature of the market, display extensive industry knowledge and possess the financial resources to make the necessary investments in technology and software to support lenders and servicers. This includes an enhanced digital experience along with the application of artificial intelligence, robotic process automation and adaptive learning.

Heightened demand for enhanced transparency and analytic insight. As U.S. mortgage loan market participants work to minimize the risk in lending, servicing and capital markets, they rely on the integration of data and analytics with solutions that enhance the decision-making process. These industry participants rely on large comprehensive third-party databases coupled with enhanced analytics to achieve these goals. Mortgage loan market participants are eager for timely data and insights to help them plan and react to the changing environment.

Regulatory changes and oversight. Most U.S. mortgage loan market participants are subject to a high level of regulatory oversight and regulatory requirements as federal and state governments have enacted various new laws, rules and regulations. It is our experience that mortgage lenders and servicers have become more focused on minimizing the risk of non-compliance with regulatory requirements and are looking toward solutions that assist them in complying with their regulatory requirements. We expect this trend to continue as additional governmental programs and regulations have been recently enacted to address the economic concerns resulting from the pandemic, and our clients have had to adapt their systems and processes in record time to the shifting landscape. In addition, our clients and our clients’ regulators have elevated their focus on privacy and data security while many of our clients’ employees are working from home and in light of an increased level of cybersecurity incidents. We expect the industry focus on privacy and data security to continue to increase.

Lenders increasingly focused on core operations. As a result of regulatory scrutiny, a decline in refinance origination volumes due to a rising interest rate environment and the higher cost of doing business, we believe lenders have become more focused on their core operations and customers. We believe lenders are increasingly shifting from in-house solutions to third-party solutions that provide a more comprehensive and efficient solution. Lenders require these providers to deliver best-in-class solutions and deep domain expertise and to assist them in maintaining regulatory compliance.

Our Business Segments

Our business is organized into two segments: Software Solutions and Data and Analytics.

Software Solutions

Our Software Solutions segment offers software solutions that support loan servicing, loan origination and settlement services. Our software solutions revenues were 85% of our consolidated revenues for both of the three months ended March 31, 2022 and 2021.

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The following table summarizes our software solutions revenues (in millions):

	Three months ended				% of segment
	March 31,				revenues
	2022		2021		2022		2021
Servicing software solutions	$	222.6	$	202.7	67	%	69	%
Origination software solutions		108.1		93.1	33	%	31	%
Software Solutions	$	330.7	$	295.8	100	%	100	%

Our servicing software solutions primarily include our core servicing software solution that automates loan servicing, including loan setup and ongoing processing, customer service, accounting, reporting to the secondary mortgage market and investors and web-based workflow information systems. Our servicing software solutions primarily generate revenues based on the number of active loans outstanding on our system, which has been very stable; however, we have some exposure to foreclosure and bankruptcy loan volumes, which can fluctuate based on economic cycles and other factors.

As a result of the effects of the broad-based response to the COVID-19 pandemic, we have seen lower foreclosure-related transactional revenues due to the mortgage loan foreclosure moratorium in the prior year period. We expect higher foreclosure-related transactional revenues in 2022 as a result of the expiration of the federal foreclosure moratorium. As of April 26, 2022, Black Knight’s McDash^SM Flash Forbearance Tracker estimated 0.7 million homeowners, or 1.3% of all U.S. mortgage loans, were in COVID-19 mortgage loan forbearance plans.

Our origination software solutions primarily include our solutions that automate and facilitate the origination of mortgage loans and provide an interconnected network allowing the various parties and systems associated with lending transactions to exchange data quickly and efficiently. Our exposure to origination volumes is limited as our loan origination system revenues are based on closed loan volumes subject to minimum base software fees that are contractually obligated, and our secondary marketing technologies’ revenues are primarily subscription-based. Some of our origination software solutions are exposed to variances in origination volumes, primarily related to refinance volumes due to the nature of the services provided. While we saw elevated refinance origination volumes for a prolonged period of time, we have seen lower refinance origination volumes in 2022 due to record volumes in prior years and a rising interest rate environment. We expect the effect of lower refinance origination volumes to be partially offset by higher purchase origination volumes based on the most recent Mortgage Bankers Association forecast for 2022. Our origination software solutions that are more sensitive to origination volumes were approximately 3% of our consolidated revenues for the three months ended March 31, 2022.

Data and Analytics

Our Data and Analytics segment offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, behavioral models, a multiple listing service software solution and other data solutions. Our data and analytics business is predominantly based on longer-term strategic data licenses, other data licenses and subscription-based revenues. For both of the three months ended March 31, 2022 and 2021, our data and analytics revenues were 15% of our consolidated revenues. Our data and analytics solutions that are more sensitive to fluctuations in home buying activity and origination volumes were approximately 3% of our consolidated revenues for the three months ended March 31, 2022, and relate to services where we provide data necessary for title insurance and other settlement service activities.

Results of Operations

Key Performance Metrics

Revenues, EBITDA and EBITDA margin for the Software Solutions and Data and Analytics segments are presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. These measures are reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non-GAAP financial measures under the SEC’s Regulation G and Item 10(e) of Regulation S-K.

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Consolidated Results of Operations

The following table presents certain financial data for the periods indicated (in millions, except per share data):

	Three months ended March 31,
	2022			2021
Revenues	$	387.2		$	349.7
Expenses:
Operating expenses		207.9			186.2
Depreciation and amortization		91.5			87.8
Transition and integration costs		7.6			7.9
Total expenses		307.0			281.9
Operating income		80.2			67.8
Operating margin		20.7	%		19.4	%
Interest expense, net		(21.1)			(20.3)
Other expense, net		(1.2)			(3.2)
Earnings before income taxes and equity in earnings of unconsolidated affiliates		57.9			44.3
Income tax (benefit) expense		(1.1)			5.2
Earnings before equity in earnings of unconsolidated affiliates		59.0			39.1
Equity in earnings of unconsolidated affiliates, net of tax		303.1			6.4
Net earnings		362.1			45.5
Net losses attributable to redeemable noncontrolling interests		2.5			8.6
Net earnings attributable to Black Knight	$	364.6		$	54.1
Net earnings per share attributable to Black Knight common shareholders:
Diluted	$	2.35		$	0.35
Weighted average shares of common stock outstanding:
Diluted		155.4			155.9

Segment Financial Results

Revenues

The following table sets forth revenues by segment for the periods presented (in millions):

	Three months ended
	March 31,				Variance
	2022		2021			$	%
Software Solutions	$	330.7	$	295.8	$	34.9	12	%
Data and Analytics		56.5		53.9		2.6	5	%
Total	$	387.2	$	349.7	$	37.5	11	%

Software Solutions

Revenues were $330.7 million in the three months ended March 31, 2022 compared to $295.8 million in the 2021 period, an increase of $34.9 million, or 12%. Our servicing software solutions revenues increased 10%, or $19.9 million, primarily driven by an increase of $8.0 million in foreclosure-related revenues due to the expiration of the foreclosure moratorium, higher revenues from new clients, usage-based revenues on MSP^® and sales of new innovative solutions. Our origination software solutions revenues increased 16%, or $15.0 million, primarily driven by higher revenues from new clients, revenues of $6.8 million related to acquired businesses, the network effect in Optimal Blue, partially offset by the effect of lower refinance volumes on our Exchange and eLending platforms primarily as a result of a decline in refinancing origination volumes.

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Data and Analytics

Revenues were $56.5 million in the three months ended March 31, 2022 compared to $53.9 million in the 2021 period, an increase of $2.6 million, or 5%. The increase was primarily driven by strong sales execution and revenues of $1.3 million from an acquired business, partially offset by the effect of lower origination volumes.

EBITDA and EBITDA margin

The following tables set forth EBITDA (in millions) and EBITDA margin by segment for the periods presented:

	Three months ended
	March 31,				Variance
	2022		2021		$		%
Software Solutions	$	188.2	$	170.9	$	17.3	10	%
Data and Analytics		19.0		19.7		(0.7)	(4)	%

	Three months ended
		March 31,				Variance
		2022		2021		Basis points
Software Solutions		56.9	%	57.8	%	(90)
Data and Analytics		33.6	%	36.5	%	(290)

Software Solutions

EBITDA was $188.2 million in the three months ended March 31, 2022 compared to $170.9 million in the 2021 period, an increase of $17.3 million, or 10%, with an EBITDA margin of 56.9% compared to 57.8% in the 2021 period. The EBITDA margin decrease was primarily driven by revenue mix and increased investments in innovation and client support.

Data and Analytics

EBITDA was $19.0 million in the three months ended March 31, 2022 compared to $19.7 million in the 2021 period, a decrease of $0.7 million, or 4%, with an EBITDA margin of 33.6% compared to 36.5% in the 2021 period. The EBITDA margin decrease was primarily driven by revenue mix and higher data costs.

Consolidated Financial Results

Operating Expenses

The following table sets forth operating expenses by segment for the periods presented (in millions):

	Three months ended
	March 31,				Variance
	2022		2021		$		%
Software Solutions	$	142.5	$	124.9	$	17.6	14	%
Data and Analytics		37.5		34.2		3.3	10	%
Corporate and Other(1)		27.9		27.1		0.8	3	%
Total	$	207.9	$	186.2	$	21.7	12	%

(1) Operating expenses for Corporate and Other include equity-based compensation, including certain related payroll taxes, of $11.2 million and $10.5 million for the three months ended March 31, 2022 and 2021, respectively.

The increase in Operating expenses in the three months ended March 31, 2022 compared to the 2021 period was primarily driven by higher compensation costs, including salary, benefits and equity-based compensation, and higher software subscription and maintenance costs.

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Depreciation and Amortization

The following table sets forth depreciation and amortization by segment for the periods presented (in millions):

	Three months ended
	March 31,				Variance
	2022		2021		$		%
Software Solutions	$	35.1	$	31.2	$	3.9	13	%
Data and Analytics		3.8		3.8		—	—	%
Corporate and Other(1)		52.6		52.8		(0.2)	(0)	%
Total	$	91.5	$	87.8	$	3.7	4	%

(1) Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

The increase in Depreciation and amortization in the three months ended March 31, 2022 compared to the 2021 period is primarily related to the amortization of software and deferred contract costs.

Transition and Integration Costs

Transition and integration costs were $7.6 million in the three months ended March 31, 2022 compared to $7.9 million in the 2021 period. Transition and integration costs in the 2022 and 2021 periods primarily consisted of costs associated with acquisitions, including costs pursuant to purchase agreements.

Interest Expense, Net

Interest expense, net was $21.1 million in the three months ended March 31, 2022 compared to $20.3 million in the 2021 period, an increase of $0.8 million, or 4%. The increase was primarily driven by our higher average outstanding debt balances.

Other Expense, Net

Other expense, net was $1.2 million in the three months ended March 31, 2022 compared to $3.2 million in the 2021 period. The 2022 amounts primarily related to legal fees. The 2021 amounts primarily related to the debt refinancing and legal fees.

Income Tax (Benefit) Expense

Income tax (benefit) expense was $ (1.1) million in the three months ended March 31, 2022 compared to $5.2 million in the 2021 period. Our effective tax rate was (1.9)% in 2022 compared to 11.7% in 2021. Our effective tax rate for the three months ended March 31, 2022, includes the effect of a $14.1 million discrete income tax benefit related to the establishment of a deferred tax asset as a result of our reorganization of certain wholly-owned subsidiaries within the Optimal Blue partnership investment structure. Our effective tax rate for the three months ended March 31, 2021 differs from our statutory rate primarily due to the effect of excess tax benefits related to the vesting of restricted shares of our common stock.

Equity in Earnings of Unconsolidated Affiliates, Net of Tax

Equity in earnings of unconsolidated affiliates, net of tax consists of the following (in millions):

	Three months ended March 31,
	2022		2021
Equity in losses of unconsolidated affiliates, net of tax	$	(2.3)	$	(3.5)
Non-cash gain related to DNB's issuance of common stock, net of tax		—		9.9
Gain related to DNB investment, net of tax		305.4		—
Equity in earnings of unconsolidated affiliates, net of tax	$	303.1	$	6.4

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Refer to Note 4 — Investments in Unconsolidated Affiliates in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2 for additional information.

Liquidity and Capital Resources

Cash Requirements

Our primary sources of liquidity are our existing cash balances, cash flows from operations and borrowings on our revolving credit facility. As of March 31, 2022, we had cash of $27.6 million, debt principal of $2,749.6 million and available capacity of $399.0 million on our revolving credit facility.

Our primary cash requirements include operating expenses, debt service payments (principal and interest), capital expenditures (including software development, equipment and property related expenditures) and tax-related payments and may include business acquisitions and share repurchases.

We believe that our cash flows from operations and available cash and cash equivalents are sufficient to meet our liquidity needs, including the repayment of our outstanding debt, for at least the next 12 months. We anticipate that to the extent we require additional liquidity, it will be funded through borrowings on our revolving credit facility, the incurrence of other indebtedness, equity issuance or a combination thereof. The loss of the largest lender on our revolving credit facility would reduce our borrowing capacity by $90.0 million. Additionally, our liquidity and our ability to meet our obligations and fund our capital requirements are also dependent on our future financial performance, which is subject to general economic, financial and other factors that are beyond our control. Accordingly, we cannot be assured that our business will generate sufficient cash flows from operations or that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or issue additional equity to finance such acquisitions.

As of March 31, 2022, our income tax payable was $139.9 million compared to $11.8 million as of December 31, 2021. The increase is primarily related to the income taxes owed as a result of the shares of DNB common stock that we exchanged as part of the aggregate consideration for acquiring the remaining outstanding Class A Units in Optimal Blue Holdco from Cannae and THL. Refer to Note 1 — Basis of Presentation and Overview for additional information.

The CARES Act allows us to defer payments of our share of social security taxes until December 31, 2022. As of March 31, 2022, we have deferred $7.6 million of payments related to employer social security taxes.

DNB Investment

As of March 31, 2022, we own 18.5 million shares of DNB common stock for an ownership interest in DNB of approximately 4.3% of DNB’s outstanding common stock. As of March 31, 2022, DNB’s closing share price was $17.52 and the fair value of our investment in DNB was $323.7 million before tax. Assuming a statutory tax rate of 25.3%, the estimated after-tax value of our investment in DNB is $283.7 million. Refer to Note 4 — Investments in Unconsolidated Affiliates in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.

Cash Flows

The following table provides a summary of cash flows from operating, investing and financing activities for the periods presented (in millions):

	Three months ended March 31,
	2022		2021		Variance
Cash flows provided by operating activities	$	85.1	$	77.4	$	7.7
Cash flows used in investing activities		(27.4)		(59.9)		32.5
Cash flows used in financing activities		(107.2)		(7.3)		(99.9)
Net (decrease) increase in cash and cash equivalents	$	(49.5)	$	10.2	$	(59.7)

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Operating Activities

The $7.7 million increase in cash provided by operating activities in the three months ended March 31, 2022 compared to the 2021 period is primarily related to higher earnings adjusted for non-cash amortization and the gain related to our investment in DNB, partially offset by higher incentive compensation payments related to the prior year.

Investing Activities

The $32.5 million decrease in cash used in investing activities in the three months ended March 31, 2022 compared to the 2021 period is primarily related to business and asset acquisitions in the prior year period.

Financing Activities

The $99.9 million increase in cash used in financing activities in the three months ended March 31, 2022 compared to the 2021 period is primarily related to the cash paid as part of the aggregate purchase consideration for acquiring the remaining outstanding Class A Units of Optimal Blue Holdco from Cannae and THL, partially offset by higher net borrowings and share repurchases in the prior year period.

Financing

For a description of our financing arrangements, see Note 7 — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2.

Contractual Obligations

Our long-term contractual obligations generally include our debt and related interest payments, software subscription, cloud computing and hardware and software maintenance commitments and operating and finance lease payments for our offices, data centers, property and equipment. There were no significant changes to our contractual obligations from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021. Our interest rate swaps represent our material off-balance sheet arrangements.

Share Repurchase Program

On February 12, 2020, our Board of Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our outstanding common stock through February 12, 2023, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. Refer to Note 12 — Equity in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Part I Item 2.

Indemnifications and Warranties

We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such no accruals for warranty costs have been made.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 3. Quantitative and Qualitative Disclosure about Market Risk

Market Risk

We regularly assess market risks and have established policies and business practices designed to protect against the adverse effects of these exposures. We are exposed to market risks primarily from changes in interest rates. We use interest rate swaps to manage interest rate risk. We do not use interest rate swaps for trading purposes, to generate income or to engage in speculative activity.

Interest Rate Risk

In addition to existing cash balances and cash provided by operating activities, we use fixed and variable rate debt to finance our operations.

Our Senior Notes represent our fixed-rate long-term debt. Refer to Note 7  — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q. The carrying value of our Senior Notes was $990.0 million as of March 31, 2022. The fair value of our Senior Notes was approximately $950.0 million as of March 31, 2022. The potential reduction in fair value of the Senior Notes from a hypothetical 10 percent increase in market interest rates would not be material to the overall fair value of the debt.

We enter into interest rate swap agreements to hedge forecasted monthly interest rate payments on our variable rate debt. We are exposed to interest rate risk on our variable rate debt obligations and related interest rate swaps. As of March 31, 2022, we had $1,743.8 million in long-term debt principal outstanding from our Facilities, all of which is variable rate debt, as described in Note 7  — Long-Term Debt in Item 1 of Part I of this Quarterly Report on Form 10-Q.

As of March 31, 2022, the Facilities represent our long-term debt obligations exposed to interest rate risk. We performed a sensitivity analysis on the principal amount of debt as of March 31, 2022, as well as the effect of our interest rate swaps. Further, in this sensitivity analysis, the change in interest rates is assumed to be applicable for an entire year. An increase of 100 basis points in the applicable interest rate would cause an increase in interest expense of $15.0 million on an annual basis ($11.2 million including the effect of our current interest rate swaps). A decrease in the applicable interest rate to 0% would cause a decrease in interest expense of $8.0 million on an annual basis ($5.0 million including the effect of our current interest rate swaps) as the 1-week and 1-month LIBOR were approximately 0.36% and 0.46%, respectively, as of March 31, 2022.

As of March 31, 2022, we have the following interest rate swap agreements (collectively, the "Swap Agreements") (in millions):

Effective dates	Notional amount		Fixed rates
April 30, 2018 through April 30, 2023	$	250.0	2.61	%
January 31, 2019 through January 31, 2023	$	300.0	2.65	%

Under the terms of the Swap Agreements, we receive payments based on the 1-month LIBOR rate (approximately 0.46% as of March 31, 2022).

During the three months ended March 31, 2022, the following interest rate swap agreement expired (in millions):

Effective dates	Notional amount		Fixed rate
March 31, 2017 through March 31, 2022	$	200.0	2.08	%

The Swap Agreements were designated as cash flow hedging instruments. A portion of the amount included in Accumulated other comprehensive loss is reclassified into Interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The inputs used to determine the estimated fair value of our interest rate swaps are Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of March 31, 2022, under the supervision and with the participation of our Chief Executive Officer ("CEO") and Executive Vice President and Chief Financial Officer ("CFO"), management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Based on that evaluation, our CEO and CFO concluded that as of March 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit with the SEC are recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2022 covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II: OTHER INFORMATION

Item 1. Legal Proceedings

See discussion of legal proceedings in Note 10 — Commitments and Contingencies in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated by reference into this Item 1 of Part II.

Item 1A. Risk Factors

In addition to the normal risks of business, we are subject to significant risks and uncertainties, including those listed under Item 1A- “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. Any of the risks described in our Annual Report on Form 10-K for the year ended December 31, 2021 could result in a significant or material adverse effect on our results of operations or financial condition.

Except as set forth below, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Risks Related to the Proposed Merger with Intercontinental Exchange, Inc. (“ICE”)

Because the market price of ICE common stock may fluctuate, holders of our common stock cannot be certain of the market value of the consideration they will receive in the Merger.

On May 4, 2022, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Intercontinental Exchange, Inc. (“ICE”), pursuant to and subject to the terms of which a wholly-owned subsidiary of ICE (“Sub”) will merge with and into Black Knight, with Black Knight surviving as a wholly-owned subsidiary of ICE (the “Merger”). At the effective time of the Merger (the “Effective Time”), each share of our common stock issued and outstanding immediately prior to the Effective Time (other than shares of our common stock held by us as treasury stock, any of our subsidiaries (other than with respect to the Black Knight Employee Stock Purchase Plan), by ICE or any of ICE’s subsidiaries (including Sub), or by any holder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the General Corporation Law of the State of Delaware and not effectively withdrawn or lost such holder’s rights to appraisal (collectively, “Excluded Shares”) will be converted into the right to receive, at the election of the holder thereof, the following consideration (the “Merger Consideration”):

● (i) an amount in cash equal to the sum, rounded to the nearest one tenth of a cent, of (x) $68.00 plus (y) the product, rounded to the nearest one tenth of a cent, of 0.1440 (the “Share Ratio”) multiplied by the average of the volume weighted averages of the trading prices of ICE common stock on the New York Stock Exchange on each of the ten consecutive trading days ending on (and including) the trading day that is three trading days prior to the date on which the Effective Time occurs (the “Average ICE Stock Price”) (such amount, the “Per Share Cash Consideration”);

● (ii) a number of validly issued, fully paid and nonassessable shares of ICE common stock as is equal to the quotient, rounded to the nearest one ten thousandth, of (x) the Per Share Cash Consideration divided by (y) the Average ICE Stock Price (such number of shares, the “Per Share Stock Consideration”); or

● (iii) if no election is made by such holder, such Per Share Stock Consideration or Per Share Cash Consideration as is determined in accordance with the proration mechanism described below.

The election right for the holders of shares of our common stock will be subject to proration in accordance with the terms of the Merger Agreement such that (a) the total number of shares of our common stock to be converted into the right to receive the Per Share Cash Consideration will be equal to the quotient, rounded down to the nearest whole share, of $10,505,000,000 divided by the Per Share Cash Consideration and (b) all shares of our common stock not receiving the Per Share Cash Consideration (other than Excluded Shares) will be converted into the right to receive the Per Share Stock Consideration.

This Share Ratio is fixed and will not be adjusted for changes in the market price of either ICE common stock or our common stock. Changes in the price of ICE common stock prior to the Merger will affect the value that holders of our common stock will receive in the

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Merger. We and ICE are not permitted to terminate the Merger Agreement as a result, in and of itself, of any increase or decrease in the market price of ICE common stock or our common stock.

There will be a time lapse between the date on which our stockholders vote to approve the Merger Agreement at the special meeting and the date on which our stockholders entitled to receive the Merger Consideration actually receive such consideration. The market value of ICE common stock may fluctuate during these periods as a result of a variety of factors, including general market and economic conditions, regulatory considerations, including changes in U.S. monetary policy and its effect on global financial markets and on interest rates, changes in ICE’s or our business, operations and prospects, the global coronavirus pandemic and the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on ICE, us or the customers or other constituencies of ICE or us, many of which factors are beyond ICE’s or our control. Therefore, at the time our stockholders must decide whether to approve the Merger Agreement at the special meeting, they will not know the market value of the consideration to be received by holders of our common stock at the Effective Time of the Merger.

We and ICE are expected to incur significant costs related to the Merger and integration.

We and ICE have incurred and expect to incur certain non-recurring costs associated with the Merger. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, printing costs and other related costs. Some of these costs are payable by either us or ICE regardless of whether or not the Merger is completed.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on ICE following the Merger.

Completion of the Merger is conditioned on, among other things, the expiration or termination of any waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). If regulatory approvals are granted, they may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of ICE’s business following the completion of the Merger or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of preventing or delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of ICE following the Merger or otherwise reduce the anticipated benefits of the Merger if the Merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, limitations, obligations or restrictions will not result in the delay or abandonment of the Merger.

Under the Merger Agreement, we and ICE have agreed to use our respective reasonable best efforts to cause the transactions contemplated by the Merger Agreement to be consummated as soon as practicable, including in connection with obtaining all consents required to be obtained from any governmental authority or third party that are necessary, proper or advisable to consummate the Merger. ICE has also agreed to use its reasonable best efforts to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers under U.S. antitrust laws so as to enable the parties to the Merger Agreement to close the Merger as soon as practicable. However, ICE is not obligated to agree to any structural or behavioral remedy required by any governmental authority.

The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed, which could negatively affect us.

If the Merger is not completed for any reason, including as a result of our stockholders failing to approve the transaction, there may be various adverse consequences and we may experience negative reactions from the financial markets and from our customers and employees. For example, our business may have been affected adversely by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger. Additionally, if the Merger Agreement is terminated, the market price of our common stock could decline to the extent that the current market prices reflect a market assumption that the Merger will be completed.

If the Merger Agreement is terminated under certain circumstances, we may be required to pay a termination fee of $398 million to ICE and/or we may be required to reimburse ICE for its reasonable and documented out-of-pocket costs and expenses incurred in connection

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with the Merger Agreement and the Merger in an amount not to exceed $40 million. Additionally, we and ICE have incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of filing, printing and mailing the proxy statement/prospectus, and all filing and other fees paid to the SEC in connection with the Merger. If the Merger is not completed, we and ICE would have to pay these expenses without realizing the expected benefits of the Merger.

We will be subject to business uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on us. These uncertainties may impair our ability to attract, retain and motivate key personnel until the Merger is completed, and could cause customers and others that deal with us to seek to change existing business relationships with us. In addition, subject to certain exceptions, we have agreed to use reasonable best efforts to carry on our business in the ordinary course and, to the extent consistent therewith, use reasonable best efforts to preserve substantially intact our current business organizations, to keep available the services of our current officers and employees and to preserve our relationships with significant customers, suppliers, licensors, licensees, distributors, lessors and others having significant business dealings with us during the period between the date of the Merger Agreement and the closing of the Merger, and we have agreed not to take certain actions, which could cause us to be unable to pursue other beneficial opportunities that may arise prior to the completion of the Merger.

Litigation related to the Merger could prevent or delay completion of the Merger or otherwise negatively affect our and ICE’s businesses and operations.

We and ICE may incur costs in connection with the defense or settlement of any stockholder or other lawsuits filed in connection with the Merger. Such litigation could have an adverse effect on our and ICE’s financial condition and results of operations and could prevent or delay the completion of the Merger.

The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us.

The Merger Agreement contains covenants that restrict our ability to, directly or indirectly, initiate, solicit, knowingly encourage or knowingly facilitate any acquisition proposal, engage or participate in any negotiations or discussions with any person concerning any acquisition proposal, or provide any confidential or nonpublic information or data to any person relating to any acquisition proposal, subject to certain exceptions. In addition, subject to certain exceptions, our Board of Directors is required to recommend that our stockholders approve the Merger.

If the Merger Agreement is terminated under certain circumstances, we may be required to pay a termination fee of $398 million to ICE and/or we may be required to reimburse ICE for its reasonable and documented out-of-pocket costs and expenses incurred in connection with the Merger Agreement and the Merger in an amount not to exceed $40 million.

These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of us from considering or proposing that acquisition.

The Merger will not be completed unless important conditions are satisfied or waived, including approval of the Merger Agreement by our stockholders.

Specified conditions set forth in the Merger Agreement must be satisfied or waived to complete the Merger. If the conditions are not satisfied or, subject to applicable law, waived, the Merger will not occur or will be delayed and we and ICE may lose some or all of the intended benefits of the Merger. The following conditions must be satisfied or waived, if permissible, before we and ICE are obligated to complete the Merger: (i) the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon, (ii) the expiration or early termination of the applicable waiting period under the HSR Act; (iii) the absence of any law, injunction, order or other judgment, in each case whether temporary, preliminary or permanent, that restrains, enjoins or otherwise prohibits the consummation of the Merger, (iv) the effectiveness of the registration statement on Form S-4 to register the shares of ICE common stock to be issued pursuant to the Merger Agreement, (v) authorization for listing on the New York Stock Exchange of the shares of ICE common stock to be issued in the Merger, (vi) compliance by ICE and Black Knight in all material respects with their respective obligations under the Merger Agreement and (vii) subject in most cases to exceptions that do not rise to the level of a

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Material Adverse Effect or a Parent Material Adverse Effect (each as defined in the Merger Agreement), as applicable, the accuracy of representations and warranties made by Black Knight and ICE, respectively. The respective obligations of Black Knight and ICE to consummate the Merger are also subject to there not having occurred since the date of the Merger Agreement an event that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or a Material Adverse Effect, respectively.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

(a) Exhibits

Exhibit
No.	Description
2.1	Purchase Agreement, dated as of February 15, 2022, by and among Black Knight, Optimal Blue I, Cannae, THL, Optimal Blue Holdco and Black Knight Technologies (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Black Knight, Inc. on February 15, 2022 (No. 001-37394))
2.2	Agreement and Plan of Merger, dated as of May 4, 2022, among Intercontinental Exchange, Inc., Sand Merger Sub Corporation and Black Knight, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Black Knight, Inc. on May 5, 2022 (No. 001-37394))
10.1	Form of Notice of Restricted Stock and Restricted Stock Award Agreement (2022) under Black Knight, Inc. Amended and Restated 2015 Omnibus Incentive Plan (1)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2	Certification by Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
101.INS	Inline XBRL Instance Document*
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
104	Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101

(1) A management or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 601(b)(10)(ii) of Regulation S-K.

* The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BLACK KNIGHT, INC.
	(registrant)
Date: May 9, 2022	By:	/s/ Kirk T. Larsen
		Kirk T. Larsen
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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