CLGX - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the CoreLogic third quarter 2018 earnings conference call. Please also note that this event is being recorded. I would now like to turn the conference over to Dan Smith, Head of Investor Relations. Please go ahead, sir.

Dan L. Smith

Thank you and good morning. presentation for call XXXX. the investor our we our results financial third to and where conference present Welcome quarter of

today President CFO, CoreLogic's will Frank Speaking and Martell; and Jim CEO, Balas. be

let me few Before we make begin, important a points.

presentation, posted details on includes we results First, which our financial on additional slide our website. our

plans, meaning acquisition our that securities laws, federal growth during note may expected please our industry the and presentation, we expectations and make conditions. statements of concerning performance forward-looking strategies and Second, today's statements and business operational within outlook the regarding including

known All cause of these and materially the statements unknown to results and are from could subject that statements. described in to forward-looking uncertainties differ those risks actual

filings, and including Form most Report concerning on subsequent Annual the the further please and For details SEC these recent XX-K risks our XX-Qs. uncertainties, refer to

are Our on duty any and available we undertake to update not currently reason. these us information no intend statements for and to forward-looking do statements based

financial that basis. presentation. Unless on equivalents Additionally, is reference periods results today's prior the to today's comparisons GAAP presentation appendix XXXX. of the non-GAAP year-over-year of in included understood their measures contains should quarter to in are specifically a non-GAAP measures. to reconciliation be That financial third measures is financial quarter of these to identified, A third

yourselves one limit follow-up. question to please Finally, with a brief

and introduce President the time permits. as our end Frank Thanks. call We now take of at and let questions will me the additional Martell. Thanks, CEO,

Frank D. Martell

trends Despite takeaways. with nine of our financial in Q&A third and we guidance year-to-date year. we margins insurance to recent will up continued Thank footprint, our and management CoreLogic benefits I'm noteworthy notable quarter our the overall discussion revenue operations months first market my months off highlights will revenues our U.S. solutions were a volumes, quarter leadership the The evolution most of to the first, cost international results operating and today and purchased going third and strong and our be today financial Today, leverage we of call our of you, takeaways months the what consider down grow of a first this I CoreLogic's most quarter expanded earnings positive cover double-digit and and Dan, outstanding four mortgage mix. and X% are: of lead nine aggressively conditions loan a results continue focus and Jim contraction and for in call. the and our past Operationally, return. X% from nine and third I the morning the the quarter. the for core good and housing set and and shares. Welcome discuss everyone. our mortgage; and diversification profits, I market of to third remarks wrap will on underwriting quarter to capital and will in the mortgage operating secondly, session. drove of with areas outperformance delivered XXXX, grew

by and decline. home mid-single-digit than view significant QX to our is the a for have economy. increasing lenders regards the mortgage With in unit prices has lack unit to On capital will and XX% capital market that mortgage among positive latest we year, by that for at more and homes continue margin of unexpected progressed purchase XXXX. finally, transactions, volumes market for and be recently to outlook stock, transactions. in through U.S. has as strategy trends important allocation mortgage burdens costs least borrowing headwinds, intensified as drops costs, paced decline a regulatory affordable XX% XX% it's growth volumes more and market the likely the which from and to it full offset offset productivity, reducing headwinds. and and uplift money expected for the These a employment in to and conditions, volumes our aggressive modestly conditions We market into return. down entered underpins great subject higher to updated housing include a note, in money XXXX Mid-year, have we assuming that head our of year pressures XX%. prudent success QX reinvestment, our remember grow Third, purchase well-known full and transactions year indicate refinancing management smart into that been market fourth debt leadership our U.S.

this Over discussed the just by market and volumes down driven quarters clients of service. appraisal of the that by major was decline The three two X%. mortgage of headwinds diversification I were first year, revenues our the

the of growth solutions. the through Over headwinds of mortgage continued these line we've non-U.S. the been course XXXX, and the gains, to our substantially price of able of offset implications our core operations, top mortgage outperformance

are non-U.S. revenues the total increased adjacent our of non-cyclical have footprint line steadily growth, into offers potential revenues, generating least mortgage verticals. It significant provides scale months quarter, year of scaling XX% mortgage, sources. in nine of in we and largest the new property international U.S. affords approaching note Further first credit, platforms. and tax, data the the significantly insurance our revenues. trends us our long-term to third in with which to important and goal from which mortgage remains the our this XXXX, insights that us volume residential XX% in of unit sourced is leadership of our market valuation opportunity outperformed we with Over flood, for and and now the expand and non-U.S. critical consumer in world, Since of continued our at

CoreLogic data assets and the a analytics to We as claims and insurance our natural data underwriting definitive The application solutions. while well in hazard is we and mobility enterprise new into with capabilities in acquire allow our coverage underwriting effectively the cloud-based has geospatial progress clients Symbility workflow provider and innovative week property our provide processing and Symbility continue insurance headquartered of claims. should risk Toronto as of and to This insights industry unique in goal. Europe, expected transaction operates and make existing against property should software Western agreement North modestly and to is and steady into EPS XXXX in Zealand. New close combination The entered to be a of property-related Symbility, adjusted to the this accretive Australia, leading announced company America, end that by XXXX. and

distribution In insurance and footprint, platforms analytics These build and addition data expanding for our property real also the in continue that connect sector, constituencies stream a a our our ecosystem. annuity and provide revenue the key platforms and we insurance. international efficiently out help housing to to high-margin estate, to in vehicle are public

Network that X,XXX Mercury mode how used AMCs, XX,XXX-plus now la examples smart Our almost and a end-to-end we and recent collateral are acquisitions connects professionals. to scaling valuations leading-edge of unique acquisitions great lenders, a platform build of appraisal out XXX

management margins remain in for CoreLogic. operating of In margins towards team. and addition major evident are mortgage adjusted in to unit successfully and implemented our lower Optimizing our XX% progression growing results we XXXX productivity focus revenues, driving our XXXX, are the year, costs have our and cost margins this focus insurance of drive at and the increased have basis XXXX. our life long-term platform of productivity impact way to and The aggressive a volumes cost international support to points. XXXX U.S. actions EBITDA mitigate in This results. our over of XXX help From of a

line In operating reduced margins points. XX.X%, QX, X% we market X% I For by adjusted XX.X% we expenses our up prior XXX with total a the nine months volumes basis essentially margin, for despite Year EBITDA respectively. to and first in the drop were discussed of earlier. adjusted years, EBITDA this date is year, reported QX, in which and

our cost full at $XX line expect year targets. the in of For to we XXXX, in least savings, million with achieve

or Looking this on to take have lower run by ahead, costs actions based in an taken million $XX expect to XXXX. we rate we additional operating year, planned

improvements Platform, contribute as the element or and substantial our ongoing major recently our program. foundational areas transformation GCP, cost that announced a to and the of will of business efficiencies Cloud One technology Google adoption operational of is

consistently has next of strategic our plan to help the a of system levels all model consistently over solutions in should to and complete facilitate in high to the various to initial generates adjusted have of experienced EBITDA free the of GCP XX% The the over reliability months. expect the to resulted and business flow. XX% unique performance of we've best-in-class converted We flow. resilient implementation cash deployment five that deployment cash achieve XX we of us years, Through successful cycles the the years GCP past our market free The ahead.

shareholders. long-term of We this billion. have shares flow repurchased our of cash Since XX we've $X.X to our used million approximately significant common free XXXX, portion for reward a

about our will Jim to current holders, in an XX%. cover translates of increase activity our long-term year later. For that repurchase percentage their ownership

our significant a holders. Although long-term ongoing years, source value significantly has view, numbers several remains of past capitalization the of over for in shares repurchase market our our creation the of our common increased substantial

returning portion debt down we've of flow also to shareholders, to $XXX in addition In our paid the million prudently our reinvest a being business. this shareholder-friendly to and our significant continue year and of cash free

conclude to our even and to their and today. the thanking invest building clients, is the financial innovative to Thanks sets want market in for truly us up, pass our it to of market the face joining CoreLogic today in support. As participants against capabilities, sum I'll my key us over clients, results. and out market and Jim. operating our apart strong pillars to call I remarks shareholders to team partner strategic what of conditions. prepared continues for an other deliver by a execute challenging ability sometimes leading-edge leader continued employees, plan from our strategic continue To

James L. Balas

return third financial and morning, views going updated then results financial Frank, quarter provide I'm Thanks, Today, our on capital XXXX discuss good guidance. and to and everyone.

performance As delivered and CoreLogic the operating financial mentioned, third quarter. Frank in strong

growth and the Third PIRM market greater outperformance volume than in offset revenue a quarter as originations. more of loan in U.S. mortgage first, UWS $XXX segment financial X%, totaled decline down the organic than by were million, segment in XX% the included, highlights

quarter, achieve the revenues. to greater continued technology higher-margin we and during towards Second, mix non-mortgage-based subscription

margin quarter. of up by organic Year lower EBITDA million, impact with as line also prior impact XX%, the of prior adjusted a total strong points points partially EBITDA basis benefits XXXX totaled offset reported XXX our largely in we as unit margin the of exclude basis $XXX when approximately and to last the mortgage Third, over year recognition more volumes. XXX is over and cost higher market revenue date, the adjusted management growth than year, accelerated

CoreLogic of impacts of quarter, free share finally, Based benefit $XXX generated negative adjusted repurchases to sustained our third improvements, raising Next, XX repurchase of XX, million of lower on in lower capital ending at than we for performance, strong for million And of enabling shares. flow the our quarter. as September in taxes, XXX,XXX are cash XXXX revenues. common via productivity EPS X months the totaled and share the offset more cash $X.XX the amount repurchase XXXX, least targeted the return shares the flow,

organic Third were currency revenues were translation. clients, unit as more in PIRM volumes, vendor volumes as completed key X%. quarter event-related contributions million, estate-related XXXX driven property with offset spatial the solutions compared counterpart. operations. $XXX and $XXX weather income the and as also revenues period, the impacts two million, XX% third the the totaled by mortgage as tax, valuation acquisition insurance mortgage a Operating of XXXX, in and scaling U.S. and from market UWS for la well market U.S. of headwinds to XXXX down acquisitions third a unit the offset and aggressive UWS of well settlement same which Operating mortgage lower through than foreign same million of growth organic offset had the outperformance technologies. which growth the management million XXXX $XX solutions market diversification with period, operations, & by revenues of quarter totaled segment's real previously. charge, legal discussed acquisition-related million and international XXXX of benefited mode credit, property organic largely revenues, $XX as by for prior-year insights, CoreLogic's were lower equivalent Mercury segment income $XXX totaled revenue growth management by declining Network quarter flood unfavorable for platform impacts in compared including in $XXX also as from appraisal no to a cost and million included decrease the

approximately to XX%. operating Third quarter XX margin income basis was points up

expense the totaled transition same primarily tax million one-time $XX in Act. Jobs foreign $XX operations million for compared continuing certain to $X from the The period. income the tax in to was of XXXX and provisional with $XX million earnings net with quarter Tax Third related million attributable Cuts connection a decrease

totaled EBITDA period. platform totaled the X% levels volumes, at previously, which currency decline lower unfavorable diluted with offset higher driven of pricing totaled third Adjusted revenues, were events, $X.XX, by Third $X.XX foreign Adjusted $X.XX and the XXXX. U.S. mortgage cost loan line XX%. revenues weather-related translation The adjusted management. million partially in EPS appraisal lower with aggressive the was quarter third quarter and EPS from in with XXXX. by EBITDA discussed continuing EBITDA impact revenues of unit primarily Adjusted line from largely benefits with the operations in $XXX prior-year compared compared quarter XXXX was of same in $XXX million margin in in reduced

EBITDA of the million, decreased the X% decreased related data solution adjusted while $X adjusted quarter UWS million. capabilities. adjusted R&D in enhancement visualization to PIRM Third to $XX to million EBITDA company's delivery included expenses EBITDA $XX XX%

Finally, flow. despite to in volumes, generate continued we decrease origination the free significant of mortgage levels cash significant

close XX, rate updates on of ending capital XX% discussion million, will XXXX, our last XX months with flow my today a months XX the EBITDA. totaled September cash $XXX For regarding guidance. adjusted remarks and return conversion prepared financial free a I

of of capital nine enabled overall strong via the XXXX, invest us first of significant total shares we cash a future our months million Through million. for of return, managing terms In repurchases. balances share $XX flow while growth, X.X and CoreLogic's returning for amounts to debt has repurchased free capital

full at million to repurchase expect shares. the For common we year, least X

fourth on million. our revenue, quarter With projecting to would in which third as cost to fourth mortgage patterns, expect and earlier, Regarding environments. to are be higher we reduction will achieved deliver the quarter, the solid close despite compared based seasonality $XX current mix adjusted see in imply discussed million we first positioned approximate margin our our of on U.S. XX% difficult housing of market months continue the we towards the respect and well revenue progress financial revenues market for year results nine strong are to guidance, Frank $XXX we to despite mortgage technology XXXX typical X% and believe an to actuals. We've favorable subscription headwinds range that efficiency, EBITDA out revenues the a non-mortgage-based quarter to and we financial

after mentioned on build-out EBITDA Frank XX%-plus solutions remains committed earlier, As U.S. CoreLogic achieving valuation to market of normalized a adjusted margins for the in and based our mortgage accounting platform. XXXX

the expect mix cost well to profitable operator of for business over through a I model and Thanks now to today. your favorable transformation our time margin growth, combination as achieve will Q&A. We back as revenue turn call goals for productivity. the

Operator

session. Ladies much. will the Thank Q&A you very and gentlemen, begin now we

is Darrin question first ahead. Our Please Wolfe of go from Peller Research.

Darrin Peller

are but not you some indirectly on overall, the Frank, granularity maybe just into just mortgage international? understand, to of Hey businesses? more give the that first us of are us saw I gave, generally of do look speaking, little if just I both businesses want the color. XXXX them when know mortgage give there, all, how you guys. mean as market, then of growth and by some you or of touched a And with can a moment? I little what happening those for start related, beyond, more we the on mortgage-sensitive, think breakdown you a capability bit you we we off see Could but Thanks. for

Frank D. Martell

– I time. a Thanks, Yeah. Yeah. one the them I'll take at Look, think Darrin.

growth good quarter the from little in international, we continue third haircut we quarters. A there. a currency of bit in see past seen that haven't So, to

So, the you continue solid expect currency take would have rates those local I pretty but to continue. to be growth that consideration, and into to

digit, there. platform I at realtor a rates areas, solutions think the we growth good area, look other have as high-single in the growth we low-double-digit

had bit a then The insurance only results. of tenant in in good we which in spatial, fact as this remembered think third quarter is resurgence our I And didn't a the I was screening have that but country was a a a in well, that last repeat business we've had events fortunately think and we've of thing companies from as of nuance good. major benefit quarter the a was I'm I from events third occur that you the offering did little the accretive hurricanes confluence Symbility that the because certainly, a the of of there other and a revenue may think year perspective, year for year, exclude weather combination we I last and strong business once perspective pleased progress weather addition think very and number win will the of close two is from didn't of But a themselves. that, acquisition, pretty if with certainly you of in that market. frankly, perspective us margin the the be bit

Darrin Peller

mean, right. – think overall to are mortgage I given mid-single-digit I understand expected. we're more what had And to about growth is years? businesses of But just wondering in to for we but for those forward, you as what businesses just drivers helpful. it there's again, well, was your being grow potential guess it the those some your That's when couple low- of what level confidence businesses – those all the I little the sensitivity next a company was going below

Frank D. Martell

we've always than in or businesses very past. I been in confident rates those have the – same similar it's higher the – at growing

Darrin Peller

looking we could that we right. mean, questions you what then forecast I incremental now, implications the in guys. margins Thanks side. But if that the understand the of quarter at that look on I then we when on carrying extra think thinking sort my follow-up revenue origination the XX% like XX% and to All market? forward, and fourth guys. lost further we swings about mean, be there's Okay. you're should more Thanks margins. expecting? I margins at incremental/decremental just of get are dollar or be the when related still origination And material decremental to dollar again

Frank D. Martell

guess pressure mix. a and say a year, mortgage the ability back seen just offset obviously demonstration our of step this to I a I and activities would management of fair cost amount Yeah. through you've take business

don't I decremental – So, much, I margins that or the incremental will frankly. think think change margins

cost doesn't completely ability help it. our obviously, it cushion actions It offset take it cushion think I to pressure. should additional but helps

So, that our I going drive been big record next additional couple GCP move Google, the over of of cloud great the the for one for is that company proven has that able think productivity. think And track ones to yield continue a the years, example, is and benefit. being I to to the example to significant

leverage So, some think mortgage. change reduction I the side. any characteristics in we're which the of kind gives and operating I see don't costs get obviously. we the in going year, or all signaled that headroom $XX more cost why And us margin to next in productive on million just That's efficient

Darrin Peller

Okay, that's helpful, guys. Thank you.

Operator

Thank Compass from very Please you is of go Gamaitoni ahead. The Point. next question much. Chris

Chris Gamaitoni

Good morning. my Thanks call. for taking

look down G&A to date at cost side, year. year $X is to The the points. far gross year so – percentage margin Going over X million is down I the

in numbers the the is million much guidance reduction? how currently cost So year-to-date $XX of

James L. Balas

the It's of XX% of probably back-end back loaded. half XX% the pretty year. front year, It's half

the million to tracking ultimately. $XX So we're

Chris Gamaitoni

it... Is Okay.

James L. Balas

the other the have you year. factor, thing need to that some then did added Chris, course of is And the we during acquisitions

the to get that when strip later the to had analysis way XX-Q you if the you acquisitions, do the So be would out today.

Chris Gamaitoni

the line margin of rather is service in the or that's line? the reduction of And transparent cost cost most Okay, line that than gross SG&A helpful.

James L. Balas

of good it's a Yes, in portion SG&A.

Chris Gamaitoni

update I'm give recognition year. on could us It other work X% that's volume-related considering. should the was wondering year down some if how we from And you revenue all on if tax be the there's Okay. business? an curves nuances over or

James L. Balas

volumes continues to outperform change the we well. portfolio, to the No The are the business, there the on in – due quarter. changes real and times the in it in at perform revenue to continues the calculate tax adjustments well it but perform market way

Chris Gamaitoni

previously finally, in then new how revenue be diversification of there to able large sense any much And couple clients and if of Okay. to you quarters two contribution we disclosed do clients have provide is AMC, you'd the your in where a go, ago? of the are further the

Frank D. Martell

Chris, is Frank. this

the surprise diversification. the and are obviously, – clients. really business was don't I genesis announced two but We plan the progressive appraisal of have different that there, they was clients involved So the captive our diversification We would We no here. calls, of specifically our name operations that planned. obviously then is than that AMC in bought clients no – honestly. say and a there's though two

and individual are bit their the fluctuating, is there. one think case, I beyond which the obviously, shares that factor in swing anybody's fact that volumes a one particularly is control

is on that But there. nuance side say there. diversifying there. fact, one would making one the plan diversification, So progress in are good base it, I the change real we no revenue of the there's of terms other

growth We a clients, growth a year, see more should clients, year. expect significant rate new this those next and that double than those to from fairly rate

together next we the flow going to the the finally that meaningful strategy benefit actually we place when So more into pipes see become those these two clients year, companies benefit a the revenue put business. diversification put through of we're in as

marketplace So I how signing any surprise the little on we're the clients think and up. the existing a standpoint, news on fare a no given base, client good quarter, that surprise in don't they any of in terms maybe but there's diversification then in additional from bit

Chris Gamaitoni

just – sense can to sense of Is relative large base track? just there or any – of type that us how for any be gauge dollars any

Frank D. Martell

clients? about Are new talking the you

Chris Gamaitoni

yes, clients. The new the new clients,

Frank D. Martell

-probably add XX% come is from clients. to it's my guess to next the think I revenue of XX% – new we're will going year

Chris Gamaitoni

you thank so much. Okay,

Operator

is go question next The you. Bill Please Thank Warmington ahead. Fargo. from of Wells

William A. Warmington

everyone. morning, Good

Frank D. Martell

morning. Good

William A. Warmington

proper having what it's we've XXXX debate this for a of into an EBITDA bridge a XXXX on We ask to to your and do like that I'd base been build little the not should that help And about want bridge, I say be. normally calculation. to So bit a issue.

in guidance – your a is some in range, and But of you and portion is a one-timer, then that this year, But $XX we have that. that range, being You off that benefit. that's build that you also have spent. somewhere million of you come

talked about million million to R&D. You maybe $X that of $XX going into

so going And be at. get with be million? you let's help million trying million at to forward I'm little range say, me $XXX bit serve as The what that's Should to calculation? Can real to looking we $XXX really, $XXX that that million. would $XXX maybe base to a really

Frank D. Martell

Frank. is this Bill,

contract I item. profit, think under and is. to single the $XX so that is think accounting is recognize it discrete million a event renegotiation a I revenue was to rules, have it you the related some obviously – a of what It's a that

I you narrowing whenever do range. which top to update, you the a XXXX want your Jim line the So – of emphasize. gave for his EBITDA guidance is numbers in

that market we remains condition, our range. outside so much a ability despite the that our narrowed have all is – it's note it base. of We not guidance deteriorating guidance should cost our same. And the held important year throughout the We're through year which to manage EBITDA of have resulting be pretty for to think the previous our range, I

of None changed. So that changed. hasn't that's

whatever to the going to I you So discrete XXXX. and to Jim that get for numbers indicate gave the then you you're can factor think math item in use

William A. Warmington

that announced, along in it. in $XX in actions is that XXXX? is savings cost going $XX XXXX to is those million XXXX, and in Got to you in million partially benefit the in benefit taken the lines, be partially then XXXX, or going be it And

James L. Balas

XXXX. in realized be will It

William A. Warmington

right, much. it. Got thank All you very

Frank D. Martell

Thanks, Bill.

Operator

KBW. next question The you. of ahead. Please Bose go George Thank from is

Thomas McJoynt-Griffith

guys. is This Bose. Hey McJoynt for on Tommy

see. Let's

it the Just out I numbers insurance and to kind year with Symbility, that kind revenue of of from the add did starting looks it XX% judging revenues incremental line put like about item. would special last what

lost? all, already of forward, overlap does be see CoreLogic? has that you that do where some is of to there would of those some or right number at going sort And what then comparing business margins that First how sound

Frank D. Martell

a the I comments, think, add my in as said great Symbility for I is company.

rough it's the Your numbers order my magnitude percentage of roughly in of are in but I top you off the number don't that – can't addition a ballpark. exact head, give ballpark.

So it's cannibalization. has Actually we synergy a quite company together. and company a the effect I I contrary, two significant growth, for – it see growth growth gets the historically. us think there's no of don't the potential a multiplier or companies been putting

there's cannibalization there. no So

Thomas McJoynt-Griffith

us the by in much Could Okay. bulk that property PIRM mentioned give breakdown on kind from more of that understand you well come a over on as mortgage the time come declining guys as of basis that? of deals in a transaction And usage. And how in from revenue was each then piece some in XQ. unit the I revenues weakness segment, ratably U.S. volumes the you of insight both kind

Frank D. Martell

sensitivity I comes PIRM analytics, for the some mortgage is fraud of analytical primarily in the where areas, in in think example.

to there's not a there term license contracts; volume a from there direct – So perspective, bulk not longer those so is are sensitivity. correlation

that value some property valuation done So in analytics is more and the are these licensing revenues. there versus the data volume fraud sensitivity – of

an that Now base is lending obviously markets other indirect much, there facing muting significant is have a effect obviously, the client mortgage you headwinds market. much when market in more in the and

PIRM lenders, a of this propensity at the kind that at of So those does to the is in otherwise have conditions or around those spend all so couple you in it volume simply in effect. relates you But big look where model – if is to muting the we're if discretionary seeing disclosure general, reduced market or as look their pressures areas.

Thomas McJoynt-Griffith

business longer term? seen me. you the one How offering GSEs waivers changes or and come Has your impacting valuation your those property do policy more then the for business And inspection Okay. for last impact appraisals? automated push any out appraisal treasuries see from

Frank D. Martell

days. early It's

it's I the are – area. a because think the your really say small But predict, answer, that been see a really big de focused don't again, rounds relatively clients certainly is to it's is we question at just impact. There's in to this answer impact. I'd a short The on a future point, this we really are we been juncture. minimis few small but hard impact. at

Thomas McJoynt-Griffith

thanks. Okay,

Operator

is much. Thank Sheldon question next you from of very Stephen Please go The William ahead. Blair.

Stephen Hardy Sheldon

headwinds? insights Yeah. the quantify my more first insurance you the impact the impacts from maybe there can PIRM tougher the drive Good comps comps both in currency the morning. recent segment, some on Thanks in may hurricanes I deceleration and the caused activity. fourth guess and of that in detail period some the questions. quarter, maybe And and also the taking but for there's tough some of moving spatial property pieces then provide the events year-ago also that have weather in and you

on of you're about businesses any trajectory how So, in the color fourth those the quarter? thinking

Frank D. Martell

I terms the on million currency million, so quantifying, dollars the at if think on line, of $X the it's you top several look millions line. implications, of in top $X

So you to EBITDA fortunately and that as this on And kind weather – not slightly year, having clearly maybe less quantum use can events impact. I the to we're – year. a side, to the get year, weather last they're it's rate over hard number similar year of think the predict range as use weather then that more severe events our margin our

but severe, So last know in don't achieved so in that this had the fourth same weather less third less, what have we're events we the the kind from, at we've the benefiting. think but that benefiting quarter, whether fourth we'll that wait the year been revenue have – have of see hurricanes we There see don't to the and quarter I of achieve I is moment, in fall through some we'll quarter. certainly been are I

Stephen Hardy Sheldon

the little Symbility which how maybe after insurance competitor your sector a kind That's was see, point, then was helpful. in you this of the – good especially of your to wanted deeper it. biggest capabilities dig to to broader on And addition relation view that at there. in Got

claims & data Symbility, Marshall had have now Swift. tools with you You already the the with cost pricing workflow

modeling have You small business. the cap kind of

more set value to in solution how guess So broader would maybe customers? to your compete provide or view globally your and where I in just insurance do add need you insurance ability expand to you to

Frank D. Martell

there's and think been last insurance CoreLogic property really Yeah, have over lot assets we or insights. the we information of to clients think good that has years acquired three between a four that unique the synergy insights, the offer

our So that the offer – and additional some we most unique offer clearly, we of capabilities I capabilities. think competitors

to ability our add insights value and have compete to add. We unique on

of acquisition great we one the think more with I base. for Symbility a offerings, because is so – integrates fully can them effectively a our present be it us client really

and team. and we we've Obviously like it's for great booster products know a their Symbility a think what great only additional I there a of They've great I really surface a scratched are got long And So think value time. confidence what lot. that in We team synergistic we a addition. have. the terms

they. I think pretty good also international do footprint, frankly, we so have a

think Zealand that, we some they're they're to there's New Australia, Europe. New So leverage and opportunity in in in and Zealand, Australia Europe, we're

the we think combo as So global can go well.

lot revenues and platform area money make been good areas. our about I I into a we've pretty focus getting of the big what has feel of company, in assembled. revenue, the So platform that which a of We there more think is good

Symbility I think full think it's So good all of really integration of and benefits I we plenty insurance as realize the in and potential CoreLogic. upside

Stephen Hardy Sheldon

Great, thank you.

Operator

you much. Thank very

Baird. is from Please Jeff question Meuler ahead. Next go from

Jeffrey P. Meuler

Yeah. Thank you.

in Just two business side. mortgage market conditions maybe when it's just on comment on the your get you? RFP three base opportunities I or – of the given solutions about, the sizable tougher they'll your for that challenges favorable that Can us examples prior you're optimistic client new a give you don't about know most more represent environment

Frank D. Martell

clarify comment RFP, generally a not. you say are about RFPs didn't though, anything made to we just Jeff,

Jeffrey P. Meuler

environment. selling tougher A

Frank D. Martell

spatial, the very that connect We remarks, market, think estate real business. platform excited we're and about the high margins about excited the think my excited so very at to about want that. really Okay, just I sorry. talked discussed platform Look, that. on business; I growth and we I good that Number prepared about valuations getting we're business just in insurance one,

clearly, of think area. I in a that the lot real we opportunities have estate

XXX,XXX platform nicely that realtors is with We realtor tools, for that's, an a so us. connects have again, growing that workflow area quite

So those come mind to immediately. that are areas three

you kind the outperformance gyrations AMC of it's – look the on at better, the the market a think down quarter, specific the I chunk on call, if think unique revenue you not even that situation you and the clients, that's to mortgage at that's me, – if was earlier pointed diversification the market even our third market is look actually out situation somebody look and those of X%, of I related. as though at a and necessarily side,

our in out, even pure if I a sense. that less even you market So back becomes X% think

of our that trajectory to at that's need doing when thing in So, bit great you little of We're factor a analytics. a business. the in mortgage look you

and tax, credit strong think flood business. platforms the I really are valuation businesses,

needs I of then in and to very we're And So is encouraging diversification are think still we're making hard through it little piece the and be lost and got think what's to the market, the to really you, in bit pressure there come we the it. to getting with the appraisal it the make I progress honest working efficient, in release AMC very workflow also, more good working quite a still process we there. but the traction transform

come in progress and strategic is appraisal So much the but underlying process remains as been more we always quicker that more the to to and there making user-friendly. are make on there well. that And XXXX, much implication has

Jeffrey P. Meuler

then for normalized a margin that, sense. Okay. got the question, market, just XX% And target clarifying based being on XXXX makes

of as margin a after there of part XXXX second the relates exactly that, to platform, saying for accounting you target? build-out it are the the – VSG what The

Frank D. Martell

been margin genesis XX% the time discussed. AMC acquiring time comment which conditions the that also and has initiative, it established, was the at was the of and at obviously was since looking the as strategic at established XX% business, Jeff, just assets, were So underlying target I that transform the looking we at that fact the target appraisal the market that was the consistent – to came reflects which which throughout

reflecting reflects. So that that, to that that's comment what related about costs after

to costs there. grand out absolutely scheme Those nothing have new there's turned So things. be not the that of in material

you So that money, do no make with but of it that understand that make we've – we don't no still that contours do we the so that's to because to inevitably, that want the happened so comment that – or just people within to resources and but sure P&L. that we space been transform a able need

Jeffrey P. Meuler

from few that left something, Cloud if just I And the done now and be me, you a Okay. Google consumed? Google you – or the just get heard, and TTI to then until be And initiative. how done the you how to ago, I of finally of you, re-platforming, for improvement, is back what's clients your years think on what's more guess tech you continuous with or tech I I improvement? and mostly was have point think is on the those about on cost it efficiency think, side, about left but several investments to (XX:XX:XX) different interface waves back the solutions end are

Frank D. Martell

Yes.

lot we had seven, a look, as company, years ago, obviously. of a eight cost all, portion structure, our spun of a first analytics off of of centers, IT So platforms. had When a is data spending we significant lot data we

that in expect where as so a and additional addressing taking in TTI That a environment data Dell. is Google we centers The debt the to described, as was obviously operating But well get our move that into as derive into addition, basic derive that, next the benefits. putting it public achieved we a well certain lot cloud benefits was what taking first with which was cost XXXX-XXXX. that's additional systems the was the TTI, about as performance was expect private the to environment, logical So, cloud-based centralizing tech you which step, is which theory efficiencies environment, you from there.

debt. So it is a structural play, better security, addresses additional tech

obviously. deal us addressing data of if and I and every especially that you Obviously, regard. Google technology, in next you're investing it, capabilities terms But and the step you're talk really to not finished, get in unique we – the never everybody's are to never a take company. company, sure we're cloud. I'm You're analytics finished doing so allows that in around the leading-edge the think

Jeffrey P. Meuler

you. thank Okay,

Operator

John Stephens Please of from go Inc. The next question is Campbell ahead.

John Campbell

afternoon Good yes. guys. Hey,

Frank D. Martell

John, Hey, good morning.

James L. Balas

morning. Good

John Campbell

you just several back technology efforts. reduction done following cost guys sounds the years It into you're last efforts, real Frank, on in I'm the pretty you've had question on the sizable now getting side, estate and consolidation side. sounds have it efficiency curious. up lot on row a the a like like of just

of plan, what curious lifting, remains? your we're just Have it at heavy look late kind long-term most innings or you innings? done the in, As is you what of

Frank D. Martell

look. No,

ago, of obviously mortgage-focused, so the the composition we changed. of one the about. changed we years have things talked the XX%, we is CoreLogic John, rebuilt has company now XX% I years, over and think the Seven have composition were I we're

the So changes with that comes structure. in cost

think us So you're a little $XX optimizing over a ever I for don't your margin. done cost structure. point is million of

it's like not it's do do as well. investing like it context to of I'd the more, but to in So astronomical nature. we in have

a that's don't number look, So it's large unachievable. I think

costs. – lot phenomenon, I is be a reduce and benefit. trim We're that. intelligence, artificial doing a a back again which to going companies to not we're personally we're automation new continue offers are of learning I our think think to and like That investing able in machine things significant

a a on that ginormous think we've it's work we'll something So expect probably continued granular think There's the way is for it's that of continue maintain. I no something I lot but – to be a life of got that I company able to room. level, and

John Campbell

the $X And that right, for great. million Okay, I'm called on assuming quarter, guys the Is in that's also spend the you that then in all reinvestment out segment? PIRM.

Frank D. Martell

yes. The vast majority,

John Campbell

Okay.

guess way to that there flattish year think is the So over the ex year spend, I about it? margins

James L. Balas

EBITDA and from you have pointed have out also million You $X in about FX, then Frank the there from that the weather-related FX some earlier.

John Campbell

margins, just us again you think get there, margins long-term far you to. can what remind And as business Okay. where peak as about that

Frank D. Martell

talking are sorry, you talking you about... – Are

John Campbell

Just PIRM.

Frank D. Martell

we're of case. that's – believe we forward-guide and on always we've I we I PIRM, not the think said, it's Just think XX% still but that north margin, don't the segments,

John Campbell

Okay, great. Thanks, guys.

Operator

you. Thank

from Next question go of ahead. is Andrew SunTrust. Jeffrey Please

Andrew Jeffrey

I One big helpful. overall good gone is I the of I squeezing in guess just picture guess lot couple portfolio we've appreciate composition. is detail, which because through Hi, here. morning. you a questions me a the of

future You're of operations. remains anything have a sub-segments long-term insurance different much that growth is other make of LOS, lot of there Are in or in businesses your especially And else maybe valuation, mortgage doesn't it with feels and or obviously business strategic focus, that that exposure a I'm your is fit rationalize? might as the there to thinking of well about doesn't plans? the for nice businesses. like some sense

Frank D. Martell

sell residential property and I mortgages. of is for sell primarily business – We it policies for underwriting look, is we information. we property do areas. what and all, two verticals first in secondarily we and bunch So think really casualty insurance a One the to of sell

diversified provide is from we solutions, for so we're – information the it's well. vertical-wise and vast good as revenue of majority underwriting is that. news frankly the we've So management where more really selling and risk internationally The property

and in management the So in we'll a chain think thing very We that's mortgage value all cyclical and I it provides to it concentrated to basically we people the operate that so continue our to in opportunity good spots, do of U.S. there. along scale as very for because a as those very market because been I need positions That's growth a risk believe we invest it's we large has underwriting are important continue scale why scale. at leader tell and leadership.

terms have think out at been non-core assets. we very aggressive in the portfolio, of terms of looking I weeding in

business years, add units we the continued last couple value. to we've down don't will and that bleed Over revenue streams think

looking that and do to so. always are We continue at will

where but value we don't we and where add are So always we be a and at can rest therefore think can looking I doing shouldn't can't we speak assured value to you it. that think add frankly can specific, we we

that. do to continue will we So

Andrew Jeffrey

maybe was price you magnitude and of perhaps growth drivers, Okay, value? thank one some just I it of then to the think opportunity where out, of can just And pricing, initiatives characterize in you. sort order to called the to areas you regard see with you

James L. Balas

Pricing so has rate indicated we a nothing organic become as the renewals contribute programmatic growth continues profile past calls, growth the in It the continued the it's new there. forth. and good rate more as to annual to support margin on that and on so and be contract to indicated we've

continued strong. be it So, to

Andrew Jeffrey

that as frame point we maybe trying out? Can about Okay. growth, two growth, it of points to a just of think

James L. Balas

things the the grand larger the of organic growth. probably It's on contributor scheme in

Andrew Jeffrey

you. thank Okay,

Operator

you next Glenn much. The of is from question Greene Oppenheimer. proceed. very Please Thank

Glenn Greene

Thanks. Good morning.

quarter? First question, EBITDA and saw you in the revenue the the quantify us help drag you from unit could decline volume

James L. Balas

Yeah.

On the Jim. – it's Glenn, revenue hey,

On about it the was revenue, $XX million.

Glenn Greene

Okay. And EBITDA?

James L. Balas

the think I right. is probably EBITDA, age-old about to XX% XX%

Glenn Greene

so drag, or then on helpful $X was million revenue and get that was EBITDA, weather the to And it it million weather $X Okay. the to basically was $X million the on FX rather?

James L. Balas

EBITDA. $X was with million about the on FX $X The million,

Glenn Greene

then And Okay. weather. out similar a call for

James L. Balas

Weather that is big. not million, like $X

Glenn Greene

know Okay. sort XXXX stake here early. of it's a – put XX% moderate, do thinking do And in unit to the XX%, and but purchase we ground, are want growing, of talked view but or modestly I that view then But don't just you sit things how you – today? volume in Do as about decline? still was still terms I for interesting outlook market sort of the it the we type you outlook, how

Frank D. Martell

for the Frank. Thanks is question. – I this think, Glenn

it. to I have and year, in slowed be is is up we going what It bit up everybody go of but some thought continue this most people the thought. come down and think I Just think pushed the on think has news increasing. lot. the significantly. back, market gone Mortgage good mortgage really this we will as The rates last growth down purchase a bunch what It's a re-fi in to calls, about and rates. Fed purchase year's But have into durable talked – that from

is I think housing significantly. up also price going

I a People cautious. activity. little dampening are on think it's a had re-fi more effect

than quicker that as So think. has – think anybody I down come thought, I

mean I into I year, market. lot you of the has the out look as come of So I air – think think next a re-fi's

as we in re-fi year. significant year So I wouldn't as saw significant this a decline next expect activity –

through the for would forecasts year. the down but certainly they've progressed moderate. of external So them ratcheted they the year, indicate as certainly projection expect that, kind I they've That's trends this I their to to – think would seem

that expect And quantum But terms changes be of year. not probably volatile, for I I obviously and year bit hazard be to what specifically would but that that to point little into purchase so a entry a year. saw decline it next can't next be. the will the in certainly of we this solid re-fi guess

the think major but... indices there, I out are

Glenn Greene

or were some kind natural you of thought you side assume at floor answering on to you're guess what I the the I get would the – was question I certain you target, point way then re-fi there? a actually question, the level you with that's get your get there the confidence EBITDA market can final just so XX% might, environment to of helpful. margin this And with kind

Frank D. Martell

out, years so on Look, we're I a working it. think it's still couple

of – think the from need the external perspective been interesting necessary planning internally take and have they on units of – is we revenue little a XX% and dollar all I actions one we processed. to the always to a an the we at take of bit people, get origination elements based to margin look volumes our of with things the discussion that's that,

a unit. obviously you got pricing, X% you if deflate increase get have to that the to So to in

I said there, out volumes market be. going try know the remiss always We've that be unit I we on in depends get I it it volume. don't out see the they're on we depends if to as So XXXX, to what there would project

is, enough those you I kind confidence, we've to you have definitely we margin put see XX% contours and our see target of action that. of we drive can think think I of actions. of prepared forward for judge So mapped always the the a that plans we're taken determined, those as cost in have so necessary that's the you but talked is the can going think out, indicated. the I next thing some The year, one lot about and reductions we whether XX% my can hit to of to we actions, we've GCP think we the about certainly, I get most There's the margin be yourself as to to I that important remarks talked actions, that

Glenn Greene

Okay, thank you. Appreciate it.

Operator

Associates. of much. very is & question Zelman you Kaczmarek from next ahead. Kevin The Please Thank go

Kevin Kaczmarek

on How guys, many two for more will be be Hey questions phase? like I on I mentioned Google Cloud couple a how years. taking details. much phase occurs my thanks guess guess initial initial that the call. I had there you one, the the announcement, phases or might that in

Frank D. Martell

Hey, Yeah. Kevin. thanks,

X think look, from our of Google is them, – legacy is our level, I revenue those core the applications, it's summary hey, number generated, is re-platform really So Phase basically to we that's Cloud. them and take in the where one move And legacy. bulk the

that's X. So of focus Phase the

So involved dictated work by is just the the it's by really, applications. timeline

that what that's So is.

So – that's underway. and

I think good on all – things application. that are look

ago. a of you built couple Foundry X will kind into which the additional, the built place years X. Cloud so applications, we slide they have are don't will, to into Phase if being over platform you they're pivotal that's So can get residual Phase them, already, put that on the re-platform being because

So being built involved work those already new less cloud-enabled, applications there. are public there's so

So that's second why they're the as phase. coming

Kevin Kaczmarek

from there in point at when that, a with there center be equipment Okay. do making would And to or could the the CapEx move? needed? I the data expenses guess related not when this shift guess income what you talking be own statement I to you're NTT about And

Frank D. Martell

be it's the think a as things shift get moved implication as Dell of a balance multi-year. is the there's sheet encumbrances There of the I of P&L kind to the shifting so look, shift, obviously We center; between – you things have center, in don't Dell going no No, data there described... there, is terms commitment revenue so long-term no really data and the over.

Kevin Kaczmarek

the expense of is $XX next year's expenses next guess from much in reduction? I one year's Google is And right. Cloud? The All how million last the

Frank D. Martell

small. Relatively

Kevin Kaczmarek

Okay, all That's I thanks. had.

Operator

Thanks very much.

Jason from of is question last Piper Our go ahead. Deleeuw Jaffray. Please

Jason S. Deleeuw

squeezing here. me for Thanks in

of companies capital, What's kind and digital see? estate help see There's mortgage you CoreLogic initiatives, the been years, that risks lay last new new you Just some estate especially in real few for is starting the space, a operating private opportunities a and landscape this models, buyers, up of also question. real develop. of is of that lot a brokerage the of to lot and a high trying CoreLogic there

Frank D. Martell

by there's tremendous into I and new and – amount and in Look, being housing a put the money by way, that's existing players. think players of mortgage going

driving more the So is everybody the news making is better efficient. constituencies insight. making, kind bucket good we're of all The connecting housing focused about and on

end – who for up. adding housing the they're what makes will are there with you going think terms better matter will and it's – all and no it our necessary value do think and of lot growth contribute kind is that that anything of is of CoreLogic to experience forward. But constituencies, we see at about some matter I as how – our I because go of mortgage So the no property in if models all the players using terms it, be X% they're I think as and data, data these the or X% – potential we're it to being good, will, so is partnering brokerage. I those I good into A we'll don't in know the doing.

Jason S. Deleeuw

much. Great, thank you very

Operator

call. may Thank then conference and you lines. you today's and you much. Thank that very your joining Ladies presentation for includes this disconnect gentlemen, now

Corelogic (CLGX) 25 Oct 182018 Q3 Earnings call transcript