BKI - Earnings call transcript Q1 2021

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Operator

Welcome to the Black Knight First Quarter 2021 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Steve Egerton, Investor Relations with Black Knight, for opening remarks. Please go ahead.

Steve Egerton

Thanks, good morning everyone and thank you for joining us for the Black Knight first quarter 2021 earnings conference call.

Joining me today are Chief Executive Officer, Anthony Jabbour; and Chief Financial Officer, Kirk Larsen.

this have the website. been released supplemental release were presentation slide posted results morning press and and Our to our call and on recorded is be This available made will our later website. being of will include forward-looking to future are This conference our statements and call company the related expected results statements. therefore

Form from our may subject non-GAAP and uncertainties to that include XX-K statements projections are a earnings The number Today's Our actual also our uncertainties. and results of are financial risks in described to, release, differ materially filings. will SEC due risks and other measures. forward-looking remarks to references

Additional for provided information the in financial via Knight's Black replay information, call website slide to is release press financial conference and webcast supplemental investor.blackknightinc.com. over through information between turn including Relations I'll the now reconciliation Investor call presentation. available the at Anthony. be non-GAAP to This GAAP will

Anthony Jabbour

thank first to this joining great delivered you, our everyone for Knight, as continued financial us Steve. very put, initiatives. growth strategic Simply against you call. we strong our and results for was for earnings Black and morning Good execute quarter Thank a quarter

the XXXX X%, Specifically, highest moratorium. since the growth related despite foreclosure to we transitory of which rate headwinds delivered revenue organic is

We basis EPS growth expansion also of of adjusted margin points delivered XX%. EBITDA XXX and adjusted

to only innovations servicers don't lifecycle. together they and strong of the This momentum quarter. the usually to and with start we've support which some take, mortgage throughout take to lenders guidance the one delivered how we give going ongoing that is after strong our a along Our us confidence recent and morning, fit step to sales discuss raise we're full-year

These mentioned Union. this first and ahead X,XXX say clients and servicers our again call, registered our enterprise, our sales quarter, we this wins well a clients, on of each software XXXX of that business pleased are We was virtually have year. plans our this earlier. the has million MSP illustrate ahead last new extremely meeting as in X.X XXXX, their are or signed that the to clients. now shared and XX In our results continue and all event strength approximately Arvest I'm finished showcase units of momentum winning and continued. significant Hudson service sales we has sales last feedback with Through and Bank These new our sales of an us we Cadence value signed MSP Bank, the to and momentum we I nature the Valley value forward-thinking Last of of laser-focused As loans. are including beginning representing talent clients, on business, earnings premiere with this Credit clients momentum clients their realize and organization. us record Whether since the from solutions demonstrate sides I our our with in client the markets, and has we held conference. deep the annual meet the five with event. MSP. interact new three-day our from person held We for and to the The lenders competitive of allows been year, and we virtually, have to relationships solutions allowed positive the event of needs month, respective trusted servicers the that of

clients XX generation three clients Digital to next offering. signed recently Servicing to also and launched Service We Customer our

consumers are clients' more solution clients important, the doubled number seven retention the using months. payments, XX and clients origination their of for of these client, these customer Customer It's a six the solution In in which result, than learn who important and Servicing and equity Digital our has added note in software since satisfaction the results as Service Servicing their are the using have first Digital options, we and now customers Empower mortgage existing sales quarter home higher Equally As to this clients making in Empower seven refinance this adoption have that rates. last in that our new to to channel the introducing strong solutions. signed is possible addition further business, one in we consumer about more demonstrating that we leading pipeline. signed momentum

we've sign in degree XXXX. two we As high so we us XX this XXXX. our of in signed year the ability confidence three times new a reminder, to clients to that this Empower number far had The clients than a did Empower success of gives in year

other We AIVA to and also continue Empower Close new and with dividends. as which, deals dedicated selling in quarter. Within systems technologies the loan that augment solutions seven a marketing in has The first Compass $X of that PPE our deals have than signed was secondary of in locked XX loans. origination organizational solution, is see X,XXX Expedite PPE Eligibility all our signed these change lenders this XX% we independent and group in the made Product team closed trillion a XXXX sales PPE combination reminder, or of the representing LOS, XX Blue To to success late perspective, to significant more solutions, businesses, paid of clients Optimal using XX application our clients. in hedging than put on approximately more solution. the now new Analytics a have and XXXX, We team volume and Pricing sell

have year is at and So, this pipeline far a the very strong high. historical been

Optimal We extremely be continue to strategic of pleased the with acquisition Blue.

mortgage deals sales estate products multiple segments. business also in signing the Analytics across and all Our Data both various real for markets, including strong had and

in this for tool. addition new Rapid Analytics Platform, XX already deals to analytics is Additionally, which signed our we cloud-based four using the clients powerful

an innovative them great pipeline integrated momentum sales So, industry-leading, responding with a quarter, revenue, provide urgency new believe solutions our to robust. and Each addressing our our clients in result have to can trends, and off innovative our regulatory see how start and needs help for of support on update is regulations. like focus We year as the I to a we delivered the summary, perspective industry we're our client is including solutions and from changing a on sales margins expand because compliance. grow

right our to provide analytics. positioned time. to these lifecycle For mortgage deliver right link we AI, at Assist solution, to with which advanced data often recently underwriter quickly help of our discuss are our delivered decisioning them leverages the lender clients, point and package to to any along Because We documents. actions our uniquely the loan at our review ability during assets we actionable the actionable comprehensive our together, take clients ability analytics capabilities

on at about the innovative example has unique property a launched another the tells any this analytics marketplace. tells that lenders interactive level through proactively Just of some disaster. working loan Also our from early the Empower AIP can address solution experienced that loan risk inspection property recently our enhanced a before action. Warning by adding closes, we see incurring their What's for is take actionable or risk This information front, so platform one reduces the our This in that they are loan is and data directly lender disaster closing. into can analytics system. loss, type so pipeline of request it delays at of lenders RAP knowledge in fed the it new This experiencing appropriate a solution customer we and a if lenders because natural Early our anyone the an if the analytic recently is reappraisal necessary. of

together real-time We and explore view easily data, rental platform's lenders and can servicers to analytics. rate so data. U.S. to daily commercial RAP through they single-family more offer data and create for like prices, RAP our mortgage clients. data previously the users make near real deliver efficiencies expanded to shared greater data, enable elements informed how Together, available daily decisions. and home and can data data analytics, more we real-time comprehensive So, solutions disaster our the I lock estate significantly elements include the robust work

new continue solutions. introduce We to

ability existing retain an enhance morning, So, I'd to like how and customers. their on this provide our further to our solutions new client's update

Servicing Digital, necessary the work the simply with in Working in Digital. allows potential of sets pull-through offer can by identify leveraging is refinance the an answer offer, is offer example Because general action But to to consider, which officer way. issues pushes application turn offer rate, present PPE our then concert the point-of-sale it's automatically an RAP information allows Loan the our our consumer the not just let's-do-this made, to top-load our pre-matched their data Digital. button application. how automated the be into the and valuation enhanced in models has tailored to To offer. This along the MSP fee Borrower mortgage offer and ecosystem value. all personalized from questions Servicing a in with the to our rates. refi information the documents. increase comprehensive lender exact to a point-of-sale and the the candidates. services, customer This exact to that loan the consumer fed time the accept and other with Digital address directly any customer, the exact Officer to MSP solution so a fees proactively data system, records one Here's at delivers term, Then customer can present retention public can helps

back the point-of-sale closing. so conduct application the higher our loan can help transform underwriting the of high-level Regulatory This they also Expedite the consumer status the throughout is business just complete, process, system, address as even identifies customer solution loan The the of to working of soon As how levels with work their automatically the our into with customer It application. retention, information needs is removes refi hybrid one loaded in knowledgeable can and documents our Assist The develop conduct them. which or illustrates significant then check seamless together point-of-sale resolve to our also internal remote powerful how electronically AI, which team lending DocVerify, allows can and updated and the greater improved acquisition and in experts, in clients' reduced with lender our the reach out refi our results to our uses innovations the of help to success. grow issues the a the close our completed customer online any achieve businesses. integration in can commitment customer clients so example our costs is solutions automatically our our Close MSP clients, solutions our loan system. friction is solution, of This process satisfaction. is triggered officer notarizations. to and investing recent in lender And After

recent regulations. One regulation to clients and innovative example is Another example regulatory said recently support ahead application delivered times investment CFPB regulatory technology, data The offerings. prepare, time of and to is across Uniform look analytic well to help the before unprepared is of heightened solutions them support that Application we've had and new goes regulatory of in all and our new help deadline to to of By stay seen Empower changing the to before of us at early, effect. into the URLA, servicers in changing our oversight, And test the environment. proven it implement lenders respond Residential the unacceptable. continued for clients that delivering compliance our successfully Loan we or our industry functionality

a March, augment building LOS lending which a In In NexSpring mortgage new using innovative our digital acquire be connected addition and wholesalers technologies platform that experience. platform we'll integrated digital seamlessly for the new comprehensive acquired cloud-based offerings. will and with platform using to brokers also innovative from so is streamlined designed This Empower benefit we solutions, lending will specifically platform the brokers. Empower

Analytics Additionally, Validation with developing such suite Compliance a to order point as we solutions of Loansifter Actionable services and single obtain comprehensive our and will origination PPE, be fees. integrations Testing,

Thank a are results had the for integrate your Our over dedicated sales grown comprehensive really made will turn existing you integrated Black the call lending Knight great natural Kirk. In nearly for digital acquisition delivering ability the on and provide I our and to and over market, for seeing last seamlessly will powerful we a support. few to now has focus this and today. quarter platform innovative, summary, solutions providing time years. client functionality tuck-in our first adding a of superior which support brokers XX% for

Kirk Larsen

everyone. Thanks, Anthony. good And morning,

raised was quarter full first for margin EPS through outlook new the said, measure; our Anthony revenue said, the As for I'll any first With strong growth, growth. and by the expansion take and very that the year. sales, quarter you details

basis, $X.XX, earnings GAAP were a on X%. of to X, Black to revenues Optimal increase amortization particularly was was Slide X% earnings Diluted compared the were accounting, the million, reflecting $XX the to to $XXX year attributable of Blue. Net from Turning EPS increase an of Knight and related compared an margin Net to purchase XX.X%. XX% higher depreciation resulting prior increase million, quarter. XX% acquisition an of

I'll X. Slide results our quarter. the to now Turning first adjusted for discuss

increase to XX% basis Organic XX% growth adjusted quarter Adjusted increase points. $XXX First adjusted an million, increase million, year. XX%. of $XX.X an revenue $XXX an was the $X.XX, was EBITDA were were compared last quarter net earnings was XX%. Adjusted of Adjusted margin XXX of increase of increase revenues and EBITDA an EPS million, of first X%. XX.X%, an was

now Slide Turning discuss X. Software our I'll result. segment to Solutions

organic growth segment the to X%. increased Software was $XXX and revenue million for revenues First quarter XX% Solutions

growth Our MSP, by consulting the servicing partially and in Optimal driven usage-based revenues and new revenues solutions, volumes. acquisition by resulting driven headwinds clients software Blue, increased higher was The the software origination In offset clients, specialty from revenues origination of by the higher primarily foreclosure X%. on moratorium. solutions XX%, new primarily higher increased servicing transitory revenues

EBITDA margin EBITDA $XXX was XX.X%, of increase XX an increased and million XX% basis points. First quarter to

X. Slide to Turning

across quarter XX.X%, Analytics corporate business. higher was First revenues million. in Adjusted primarily sales basis prior loss driven million, strong business segment the $XX XX% revenue acquired nearly increased of origination year the revenue to an of $XX quarter EBITDA from EBITDA XX% segment XXX points. $XX execution for first and the increased to million an for a was Data volumes Organic EBITDA compared lines, million was by in and growth XX%. all $XX margin the to increase quarter.

cash a X, billion March the net $X,XXX to $XXX our facility. cash on Total facilities of A structure. a facility We debt of ratio facilities we revolving Turning million. $XX debt million Slide had our of and the a expanded as equivalents end walk secured refinancing credit and Term new $X.XX XX Term times basis. revolving of billion and completed was an X.X of I'll through credit Both On credit March have and March, capacity million. At we XX, $X We senior principal, our Loan had leverage revolver A five-year with tenure. was loan replaced facility. our

for per XXX,XXX of share. During shares the first quarter, for we million an repurchased $XX.XX average stock our of common $XX

As repurchase our XX, had of approximately March X.X shares million we remaining under share authorization.

go Before & details I investment Dun walk through our outlook for the XXXX, through shares. I'll of Bradstreet in our

XX.X Turning we XX. of based on to shares. D&B million the investment on was this closing The X, $X,XXX March of DNB price Slide own million market $XX.XX value

million. after-tax unrealized capital our and is invested That $XXX $XXX Our pre-tax gain puts unrealized our $XXX at million gain at million.

outlook. guidance adjusted effectively the Turning effect is XXXX will and of now nature. acquisition, pre-revenue robust to gave its Slide from the quarter on full-year also It early raised through the we walk strong have NexSpring but stage year X. this in outlook to which due the for I'll reduce EBITDA our you February based the we first which reflects

to XX% For top to million by to of represents NexSpring. are top expected range $X,XXX end $X of adjusted and This expected be and in of range the is year, range X% million bottom of $X.XX. the in $XXX in that included which $X.XX which approximately maintaining represents from and top headwind in the range the X%. represents not by $X range from raising of be to a the and approximately which $X.XX is headwind outlook. Adjusted to the the revenues bottom range million, and EBITDA was considering the raising of of be in EPS NexSpring $XXX organic of to the This growth light million. XX% million million million range X our million, $X,XXX end range GAAP $X.XX, to the $X the the end the end nearly revenues billion of end the Adjusted raising by reported by of range the growth original the of to $XX by $X.XX is the represents of bottom expected

plan details headwinds XXXX least headwind in we to underlying experienced higher-than-planned first with delayed foreclosure with no to a headwind we until of of million we follows: modeling volume continue compared first the quarter; the the XXXX; in year. expect a $XX Additional outperformance revenues outside full-year as origination the remaining of quarter, to quarters decline the continue our incremental in for the be quarter of are at first outlook expect to the million $XX incremental we approximately

expect interest to earnings million; expense $XX excluding to of depreciation million to Optimal $XXX of accounting; that and XX%; In interest we Blue from million million. relates amortization don't incremental approximately and net non-controlling we resulting the adjusted depreciation approximately purchase weighted XXX XX% addition, outstanding shares million, million to to $XX the of approximately full-year and attributable rate average $XXX of $XX own; $XX approximately of and expense tax amortization million, to effective this portion of

we guidance, progress we Although not provide do the want you to color provide how some to quarterly as year. expect with through I to

year the see we from couple step to percentage for That the the volume partially turn Q&A. progresses. second as concludes increase a revenue, due to course year quarter staff offset new then quarter expect of QX increase by a over revenue quarter And first we typical NexSpring we over seeing. bring percentage couple the from the I'll the remarks. call from headwinds third expect to expenses our origination sequential sequentially client and seasonality. the of now that up operator the then strong point's to on operating growth to my to as We to QX professional expect points in small from the are fourth and increase sequential We demand services due quarter of teams another by

Operator

from first Stephens, The comes with go question John ahead. Instructions] [Operator Inc. Please

John Campbell

and guys, morning on Hey, the year. a congrats great good to start

Anthony Jabbour

John. Thanks,

Kirk Larsen

Good John. morning. Hey,

John Campbell

Good morning.

in client quarter new So, was the that seven the Empower great. wins

said up You XX picked last you guys, think I you all of year.

extent a then just think color clients provide adding it's kind just more rapid you of a maybe of So, the types what the little good on can guys and drove you're you what of wins. start. To bit rate of maybe

Anthony Jabbour

on around kind plan the maybe clients capabilities. is And that our executing resonate it's them. aggressively. I or of Well, the the focused would think aggressively range. been basis, in we've that We've of really very X,XXX client, here minus, I on and mid-sized John, think them. focused type plus We've very been client, annual an what from has We've got loans very been the on game with integrating really mid-tier been innovating on and great reason

said, walked components I best-in-class. back, -- side, origination you we're drives we fix its works and on those So, side, as it of you every talking the of any all their think that how value. make breed. there help what's it right it the best now our the showing like that hangs of on but to reasons. sacrifice kind no I bundle. it of and also And have through our are listen are clients I on wins. Empower case I together know they think longer integration really that see industry it in my servicing prepared use them of here is for of integrated I really in Each us When the use kind remarks, is exciting to to front case is was always, Integration

Analytics Our Data is best-in-class. and

is Technologies Marketing Secondary Our best-in-class.

market together and that, resonating it capability think, what's the is just with clients now. anything, integrating I more right best-in-class than with our bringing So, and and really

John Campbell

be are maybe helpful. the for things of maybe around the call pace for diligence Anthony. that particular? here two the bigger that's one the relative or more you it's guys? process anything would I Maybe you to it's today, to or you, mean, around And one what around picture sit Blue, integration, maybe out that Okay, can you'd synergies. point then, surprises as you of question are work kind integration due But Optimal positive maybe the

Anthony Jabbour

thing mission, their visited the a I'll ago Well, job teams the just pleased I'll and three tell the mission. and three my Kirk and similar -- Everyone passed worked I months we think that. culture is you, the on visited had tell Scott understands both years I -- actionable team two it common with I going Black at them, how and Kirk and -year away really that to and went to It's with Knight I the diligence I really they the what months I'm to two this about being think you, I on, commented together. during And anniversary. went was have my have and in, we very walked what him and and impressed on they had, felt prior and

of have that who on We're has as what got to legacy who And and they're Knight. Knight obviously with the start thought those teams we we're Joe, team. They our we're members like XX-years. equals a of family, great been Knight so pleased the team over President, the the is family not equal here and here, between all be, exactly I'm surprised, we've amount excited cross-sells like here OB but Black going just it's I'm Black part off that of it would a the been know and here Black

just And so, coming surprise, all working. how it's about and I how not pleased more together a again, but with am

John Campbell

guys. Thank you, helpful. very it's Okay,

Anthony Jabbour

John. Thank you,

Operator

The Ryan next go ahead. KBW. Please question comes from with

Ryan Tomasello

Good morning, questions. the thanks for taking

revenue think this that confidence all in business year? do to Thanks. hoped? outlook, vice that the say, three can was a OB next that Just you maybe around progressing Blue, and for speak Empower you I Optimal report cross-selling down, could for momentum progress what to XX% And in us Blue's Is I cross-selling have and more was to following-up both of on to that to a years between versa. as boiling over bit on KPIs detail, terms five the growth you growth you date. more And guidance give integration Optimal cross-selling what wondering if relative

Anthony Jabbour

can the Thanks, Ryan. in Yes, start views. I'll and Kirk on longer-term chime

equally channel I pleased perspective, have well, just We with teams the integrated how on integration the an wholesale nature implementation channels and again that's a than correspondent Certainly, we're on cross-selling solution, are bi-directional working retail currently working products an say, and our the currently working. of from think are cross-selling. actual longer the integrations satisfied it's From integration PPE and the for perspective, well. cycle coming cycle I'd Empower are. and very it's sales

So, what we're seeing.

So, the pipelines we look because cross-sell again bundle. client, good in obviously bundle for an take both, just but we product is our to what traction Empower it's PPE sell a we're put integrated seeing the really of that and integration

that. we're so, And doing

and mention a want outlooks. to and well anything matter you in momentum Kirk, that obviously, got working I on of don't Just great we've way. course it's future if

Kirk Larsen

Optimal Sure. we'll to combination be is that technologies year indistinguishable, so They and of marketing combining we market the From Compass. which one. will as continue in a secondary and going be for we the growth spoke and confident perspective XX% be one Blue Ryan, to business, this the organization of products

in aggregate. And we to so it get once the

in this about start. quarter, So, for to first good discussed off good remarks. the are very in prepared off to a his start, good Sales so a to Anthony as XX% year very XX% very the

year we years. the and be year, several we several that XX% it in entering with to about expect for higher think growing that this next near the about years, the a the next over range we talked area little term in As and

those still momentum, see continue Anthony about lot that, good described a limit feel for we'd growth we those with on and very at about at several beyond next very the just but call confident So, think as next we of as opportunity feel the levels the And the for years performance level. feel growth that several rather but I the to good business, of years. the we cross-selling the the for solutions

Ryan Tomasello

term over ones we questions buyback Black And shares. we Great. years, the current quarter, say which seven investors see underperformance I that three pinpoint think to view of the longer most your next of years, five of around I Black think Knight's stock. five speak maturation. And signaling And outlook, inevitable with the certainly are levels might get considering the confidence in in Knight this is be nice the drivers to one the -- the just the growth around of to MSPs revenue to trying

proliferation private level to also high innovation seeing technology Blue? the use you the of and that and Knight across the markets with opportunity that innovation confidence So, are the we I the Black keeping housing guess, space that to residential there space, that considering innovation level bring to long-term? think some you Optimal mortgage-related do of is gives question, And end, over you what that in this then, faster did an remain competitive similar with to is growing Thanks. meaningful M&A of a what way to in-house pace

Anthony Jabbour

just servicing and lots I had passed clients an relentlessly how act vision you we're be Knight that that market customer startup. the momentum as do performing we're level three on innovation, AIP these have back have come innovating a Knight, we'd next-generation of loss exceptionally the be Black you a I pleased after three I business And I'm how said my as do have we more so versus more years just in such about years, and accomplished high I had operating us I when ago couldn't we at covering small relentlessly we is you large and great vision share helping each on clients here. which great business, at name as our I'll we're hard look Black hard now digital, will it. that like that. of done we a new the We've also Ryan, selling tell together, those. three-year in with both be solutions, I'm for be also when similarly than but I so with mitigation, many servicing anniversary company to growth when servicing, opportunities grow years, focused we've I service, tell thing focused now pleased very to I'll We'd organization. a joined we'd one and Well, had

So, We our capabilities there, strongly just we've performing got growing. how it's about there. we the systems great loan have and that momentum great how well origination spoke earlier and in winning the market, it's

business, Our this and look mid and fit together over here. with We we perfect well getting executing having we're thing. will at An and scale being a business work to excited us. We to But Blue. did continued XX% we've And data when growth. it's analytics that with pointed well margin down together. lastly lead company, one just there It's to family for the acquisition well. single-digits. growing and thrilled and the of very how and acquisition because care Optimal about We're size it's this I'm same road a together We got working another. in it's fun and I

their our drive us just is, in clients in their kind we we I help how to here can at to value else of is we're and the you there and the anyone's for going anyone really their in that end that do matter efficiencies, so, what integrate, your said, to business, revenues, day, for doing think of that's them we're clients. coming, in where cannot it. offer innovating, out We're ready companies which one-off urgency of what's of can drive clients. like compliance, value again and And thing the terms to close don't with type I in the is And their

having our got future excited tremendous we're fun. momentum so and And very we've we're and about

Kirk Larsen

look in into Ryan, that add quarter. we it clients in years in MSP I momentum. at the what an the the Look momentum that new a number going is, you two the sales, from had at of first last perspective, look would at whether and to

at signings the look You Empower over course couple number last the of of accelerating the years. of

look and success quarter, based You in all raised growth for and for X% bottom we sales performance an at the that we're organic the both growth the year end the upon that outlook top that's the and having. end the

drive then and you that's a a it's And quarters good evidence next sales been growth one of over. that that series year. are talked about. Anthony transitory. So, I are all think demonstrable It's would perspective those not It's just from not quarter, the into have what of successful things

be As will deliveries sell going in forward, XXXX. we we into selling

about very So, years the planted you're seeds the of performance that you talking several strong see next for. can

important at growth? that's we it being what's firmly is. with our all believe that to the think And look of I driving it sustainable? So, Is that

so And that questions you're be those would getting. response my to that

Ryan Tomasello

the congrats And commentary. on start appreciate I to the guys, the strong year. Thanks

Anthony Jabbour

Thank you, Ryan.

Kirk Larsen

Ryan. you, Thank

Operator

question next Please with from go comes ahead. JPMorgan. The Tien-Tsin

Tien-Tsin Huang

everyone. Hey, thanks, morning good

course, Of results here. good

-- takes high would we've know and lots seen quite to of I in So, at and the I you here. how plan, know to? don't would time, that of some attribute puts what X% your come organic watermark what versus the you there's growth the in some upside

--. better understand trying of Just a have set upside to where I the from? And came

Kirk Larsen

I Yes. --.

Tien-Tsin Huang

well. as Outlook

Kirk Larsen

drove Yes. the Tien-Tsin, let's start with what X% growth.

So, since as up Anthony said growth of the as picked on, rate you XXXX. and it's highest

variances. itself, of So, kind say let's into that the the what various I'll quarter with that and start drove get then and

simply clients organic revenues would on from new points and our drove I percentage summarize So, that platforms its of XX cross-sales growth. from as it revenues

was active that growth things was to us. opposed driven a So, very as that just happened really it to

percentage So, that's from that. XX points

all to gets XX% or the from so volumes be So, the down origination price really and things you it X% transitory could annual other you talk headwind it whether the all thing, netted X%. the to or about, a other volume closure that headwind, out

super quality, quarter client, driven So, high new solution overall. new

one a volumes our thought As far than say, you And was, little as three how can better see in, origination things. how we from were really move something from expectations And up, it in. there's that would coming I outside varied coming control, can rates cycles not on go of it the our rates focusing It's because a up, intellectual lot of spend around. whole frankly went rates can down. is we back those week-to-week bit came

temper it our than a I volumes first bit So, expectations move, a for for that that the better versus the in with did rates expectations. said, during the came three plan. think quarter, That with -- our our saw rising full-year, it final the will quarters bit but we

to year, into. expect the So, full $XX headwind we the million continue for that we same came

to in little relates of the saw usage a but MSP We of a bit would the it of quarter. elevated I rest a there the is things. the So, than that reversal of year? a better say And quarter, first in few little

in great. the and new to that finding clients the some terrific, have MSP. core system because activity We operations. that are use revenues is are it they growing. the That's their think taking They're using We when see they're more there They value using portfolios. are that And additional that's that are on Clients up. we that more. is means platform

related Empower. think So, expected the then, particularly terrific. And we little than better that's piece we professional was services, origination in bit to actually a last that's

processes So, looking forward help improve to for domain and they want are to them to optimize we they how as they see automation look look increase to operations. as that clients expertise

more see we services. so, for those demand professional And

So, the active at it what three a very, but overall coming the expected, X%. I than growth sales core fundamentally oriented areas of would those was we're is, little very are we say, that better drove in, the

Tien-Tsin Huang

Thanks that complete. Very clear for and Kirk.

importantly, you build yes, So, real on close I just my is and next and the in confidence will good the quick you XX of just replenishing a the pipeline follow-up me, come But like growth couple feel pace? here sounds closing guys think pipeline, so and do those up forgive backlog confidence the deals. to on at It points of like of a -- then, timeliness sales organic more quarters selling strong.

Anthony Jabbour

I is well said against confident game on how with we're like plan, and executing clients. Yes. the pipeline Tien-Tsin, sales resonating we the doing, very we're feel our

Tien-Tsin Huang

it know broad very based. is Terrific. I

year. so well done know up So, take taken lightly early I you guidance don't in the and it guys

So, for that. thanks

Anthony Jabbour

Thanks.

Kirk Larsen

Tien-Tsin. you, Thank

Operator

Stephen Please ahead. comes with Blair. The go next question William from

Stephen Sheldon

Hey, questions. Thank good for morning. my you, taking

Anthony Jabbour

Good morning.

Stephen Sheldon

combined platform the opportunities. know better the have Really I across XX%. how appreciate low rates industry, can recapture the example help recapture Anthony been by client's detailed I for think below

average So, your have you at client client you actually them able to within that there be broad-based seen integrated base capabilities Have to an be leverage rate? base? your seen above recapture adopted have

Anthony Jabbour

improvement seek servicing Obviously, digital, I I it's rates? bit have. broke recapture some to basis, won't itself. have them have. the your or to was indications in we them of broad-based any up say a our providing think And a you but question Stephen, technologies Yes we we speak leveraging of to seen I improve that our clients our directly, more to can than And ask retention on are rates double-digit but resulted, you that, to their a early

sticky. using having an digital are this So, it's it Customers ongoing basis. in application,

is a when touch connection you of most financial go like you in want. mortgage products. comes other connection more, with plain more there's refi, anywhere up of more a versus You're just for it There services a

that help there's we're integrating So, we're retention think candidate. happening we're think and rates. more lot the lot of at their improve beginning that certainly seeing improvements journey clients can and we We and so can do ways a a we the we our the

Stephen Sheldon

really Thanks. for hear in about okay. the been guidance, year? from some EBITDA Got it, origination it's about expected more strategically, will you've fit has NexSpring And that's me included the that on how existing drag the adjusted helpful. with hopefully, Talk And what can you acquisition the the assets? it,

Anthony Jabbour

this $X and a million I invest shared Yes, we're drag we we think about opportunity. as excited this in

up that after we matters. companies broker for want smaller to there's the components they everything really focusing bring it's when integration together, that many and when you the market. broker for have, market go so start because So, look even at it, And on

for many of You're these capabilities. have power through propositions of we us, changing value the integration and so

capabilities. can regulatory integrate excited to lot at our to about data, we look our can have integrate exchange to said, it AIP, this we're to we e-close loan sector our we expedite tap these assist PPE, So, a NexSpring, of well into really we we

again have tissue the on between its had So, where bigger own. than this connectivity adding can some impact could a much just ever all is really capabilities, more we have next [indiscernible]

I at opportunity relatively what like. opportunity remarks, opportunity but pretty acquisitions risk get exciting. significantly we look the of pretty we're of excited looks mean into we so these in that my like prepared said volumes think low and in as grown And it again another can have I could that be And one easily that it the pretty, in make, the about space, that we

Operator

question next ahead. with Tom The from Securities. comes Please Truist go

Tom Blakey

to Anthony. speak our and taking good for Thanks with again you call guys. Hey

Anthony Jabbour

too, You Tom.

Tom Blakey

Our datasets. second client that then, was I question around would the is be selling wondering Blue given on maybe from Blue verticals on groups expansion into Optimal new and Optimal that. this cross-sell HAMP you're be question regard opportunities helpful. to the and color I'm that wondering but with great will and around And

or about intermediate be know would but datasets thoughts the thoughts and days term I expanding around have? long cross-selling its Is that more the and early this you updates, your Just wondering here, platform? where datasets you'd going TAM datasets need for the existing like is the forward, that you. or there holes additional Thank in some some add data with that to findings to there early

Anthony Jabbour

Tom. Sure,

things. a So, couple of

expansion going clients. the shifter us to is capability. general expansion continue is There to now mortgage of example. room grow number terms as an of the long as and to We lot into capital just for obviously the capabilities and expansion, In in go ways a about smaller markets further PPE talked of tied there insurance, to into possibilities -- TAM a we're more NexSpring see but with -- us is we and for to

have I'm what this of right. to really out again it do, the there everyone the that. asked and proud meeting, me this every You'd team, sitting that come datasets what are datasets about on own, isn't in And exciting is doing some directing their of really everyone

and I exhaust insights in our of more find we've data with Our cetera team off data our analytics great coming Blue is there'll for coming there et be something and team think doing. we coming either and clients we'll and information two value. together, have rate teams in that's dataset, their combining looking data Optimal at creating we're and on there there it together more new that And data driving some with lock that our more currently got what

and ways clients. data possibilities being that can curate we see help we area certainly integrate, it where in there us our that can but for we New an is

Tom Blakey

you Thank I'll take the so opportunity. Anthony. much, great

Anthony Jabbour

Tom. you, Thank

Operator

The next America. question Bank comes ahead. from of go Please Mihir with

Mihir Bhatia

Hi, for question. my thank you taking

let a we do just again Is monetize different question product that integrations sure Empower? And its just done? building getting be back think selling first the when as kind or understand, start be I The as that? will for to we rolled a you the do you to should pre-revenue, want will wanted I capability, when XXXX, then, it you it make you, when will NexSpring of it of XXXX monetizing is into going second, and ask to I is

Anthony Jabbour

No.

So be will it Mihir, will we're starting kick some get as you And XX, it. obviously to we it in it a more than sell but into behind it Yes, right momentum ' XXXX integrate product. now. separate

So, will be it broker but the be integrated model, it Empower into for will Empower. branded from differently

that's who nice creating lenders Empower, real NexSpring. two be again between again etc. So, integration using efficiencies, with integration what streamlining the so and the there'll our for is wholesale are plan

Mihir Bhatia

it? already who Empower using that there imagine So, does is a Empower make, for be I clients, guess, again, just they I or already clients on and who a use Would that have there's existing this broker channel. just a first staying are enhances that cross-sell solution existing opportunity

Anthony Jabbour

clients using Mihir, that Yes. I it for it enhances are today. think

Mihir Bhatia

client, was you NRZ the all Okay. implications ahead to an it still this on thinking this is then, scheduled and you on or of your I expand having I year. opportunity M&A. to think relationship with are And going for get that about into wanted are part and are? a Caliber ask and about that a like switching come for NRZ for BKI The how what big Is They obviously second, gears with to going what's guess with I

Anthony Jabbour

very management They to far happening it's and are with ours MSP. we're other MSP, at But to areas outside as Caliber. of yes Caliber's close urgency. both Yes, NRZ teams clients conversion as Sure. both of and

So, us. how People's Financial. for real excited BBVA, it. and so Working feel acquiring M&T TCF a M&A them with in benefiting us about more acquiring what's with forward absolutely is net Huntington and Bank. We're it's positive. as happening about which it. is P&C Bank United I good closely excited acquiring moving

consolidation So, or to Caliber great and addition acquisition. benefiting capital that us the in just NRZ are well in trends some as

Mihir Bhatia

since a the the for did think you. be it. remaining rest the very just from and -- it then, business just quite me. to the we volumes, Maybe analysts that question because on back. often, to Thank your And Look, you just to we you. size be so thank it, me. go last potential I not one the headwind is get you sensitive wanted Got the can call question mention mentioned headwind. part as for continues most a since will that of it just I origination you of but That of from just understand all

Kirk Larsen

Yes, take let that. me

XX% are of volumes our origination to sensitive That's revenues So, revenues. XX%. it

it's And what so, volumes are how innovating, and which is about delivering. about were as going grow, we why not predicting selling we before about integrating, to talking do, it's

there it's is to but it. that is stub we minor because day, to every and action so, not oriented. that And It's that that not something related people employ sit forecast

XX% up little bit only it's a be there yes, little a could bit it but revenues. bit, that so, down And little of a is

Mihir Bhatia

you. Thank

Anthony Jabbour

our I think to here the incentives are on can us hear we control. from is, focus up overriding us for hope lined what you feedback I

innovate and service. company. really our this hoping servicing integrating, in whenever do day not whatever and every repeat waking then we're back company go drive moves deliver clients, will clients and delivering selling, the us. do, wash, rinse, That's or up innovating, what for and So, what our sell, what integrate, driving again, helps waking don't volumes on what's that's our up needle focused That's

Mihir Bhatia

there. like that. questions. strong, my the stop sounds for appreciate Thank I quarter and taking Thank execution but I'll the you. had first you Look, very year you Right. outlook good it the anyway in for No, clearly I is mean very

Anthony Jabbour

Thanks, Mihir.

Operator

comes with ahead. Manav Barclays. next go from Please The question

Manav Patnaik

apologize, it. line Can this just get Thank you. tell in if I you Blue trying I us quarter? be? organic was software missed the I to guess the contribution the toward I'm origination Optimal growth what would

Kirk Larsen

$XX contributed million quarter. Blue Optimal So, this of revenue

Manav Patnaik

on touch one Okay, I XX%. data all and analytics. mean there organic the just the growth And think I to I right. area, was wanted

one-time what would items, of just rest wondering, going was any I think there you good. just outlook I for what's that be? the was the on there said and is pretty the year

Kirk Larsen

no quarter. were no the first there there Manav, were across one-timers enterprise frankly across the the business, So one-timers in

and and look and take and solutions. were, delivering what you growth growth in by data delivering, of the that the the driven at innovative was majority selling If and analytics drivers selling

underlying And the volume is inching I'll headwind growing X% on half full-year single-digits was year. the highlight forward toward that it's similar is really And that within of underlying we and that terrific. underlying businesses on but we there of element in so that mid performance each which high talked volume an that margins, that basis. kind back business full look in The still the area but of the at is across for that as was in basis, it single-digits benefit was What analytics. up about, data mid-XXs right X%, still the for is business of

Manav Patnaik

Got guys. you, it. Thank

Kirk Larsen

Manav. Thanks,

Anthony Jabbour

Thank you.

Operator

[Operator ahead. question Please next Zelman Kevin go Instructions] comes The Associates. from with

Kevin Kaczmarek

guys. Hey,

You average given repurchases more it last price per the as mid-XXs the you capacity level? and systematic any steady mentioned your this now range and you of of how or and Do ramping much repurchases you the somewhere repurchase quarter. if is share in directionally, opportunistic about the payments the stock stays in at see How terms the get from if least, the up do on term stock think in revolver? more here, for aggressive there aren't required at loan could dips more

Anthony Jabbour

of not invested the here that growth changed. we're helps increased revolver in stand see first you always quarter. highest ready us first have do if shares the get told growth, focused out very to we're game fits balance our Go are look returns, excess drive the fund for to capital, and that we we the there that to will our expansion and in to with always back to here and that sheet's has project good do our and going acquisitions our return It's going continue the it there, focus shape. way. strategy. long-term obviously but very attractive innovation to going for We leadership opportunity capital in on our capital clients plan We're is look on us strategy, on to focused our every M&A investment. that. We team Kevin, after central available we're investing internal on I've saw buy it through great

Kevin Kaczmarek

$X.X loss accounting us I the steady interest, there trajectory mean, decent quarter. more I could versus be of a about year? one point to of --should EPS remainder your lot the be Can the realize amount. a it be at the could item, some and for an it And a does guidance are or $XX-ish of Okay. a non-controlling then, really first operational in million on sense swing give of bit you earnings in of it bumpy is in million pieces it for accounting addition factors. But there

to your of outlook just there? So, get wanted forward sense

Kirk Larsen

an Kevin $XX $X.X million number. minus in is number. is quarter to GAAP The the $XX that adjusted the million million first

So, performance the underlying Black looking at same way for we business measure the Knight.

the So, accounting we take like. the purchase out effect of and

a is our believe item QX line reconciliation adjustment we And increasing there non-GAAP the profit from -- consistent, the so conceptually number is in is, separately, business. be should it to I that as can that in what walk but there that think QX relatively sequentially growth GAAP I through but to shows

course from It's it should to be, relatively so loss a of And linear. to bounce not over around going year. the but income the

called So, redeemable million, if very our an press sorry adjustment, that's non-controlling is interest relates you of to here, adjustment Page line look release, that of what there's specific a item that be to. XX $XX.X at

Kevin Kaczmarek

the that a very one the lenders I different attract they on more product helpful. where of this network maybe kind guess understand is but you numbers a a broker NexSpring like rollout broker this were I the here? did tech to Is paying acquisition. much. networks misspoke those you big And have the is who I Yes, product it I of or Okay. have of mortgage a client where that more bit, is a platform more the Thank end volume. provides is their customer where one they last wholesale guess to

Anthony Jabbour

gave. No. the example It's you former

Kevin Kaczmarek

I all That's had. Okay, thank you.

Kirk Larsen

direction. just number I earnings in I Black to Kevin, something Knight, actually we already. net the start said. pointed with wrong non-GAAP our to In the clarify to attributable GAAP that's net you Hey

$XX $XX the million, conceivably across linear past. would but So, be relatively million the

on So, there. we're looking the that's fly

Kevin Kaczmarek

you. Kirk, Okay thank

Operator

like This closing Anthony concludes back to would any the I the turn remarks. conference to Jabbour over question-and-answer session. for

Anthony Jabbour

the I'd their Enjoy for my and the the remainder colleagues for for year in Thank strong Thank on us our your for of our our higher efforts their the joining day. like Knight start the in exceptional closing, you. partnership In great dedication. we're year. rest confident of pleased to Black strong to are and thank with company. our outlook today, for and call your you clients interest

Operator

conference concludes call. This today’s

You may day. for disconnect your lines. Thank participating have a pleasant and you

Black Knight (BKI) 9 May 212021 Q1 Earnings call transcript