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Ellie Mae Reports Third Quarter 2013 Results

Ellie Mae ® (NYSE: ELLI), a leading provider of on-demand, enterprise level automation solutions for the residential mortgage industry, today reported results for the third quarter and nine months ended September 30, 2013.

Third Quarter Highlights
  • Revenue up 20% year over year to $33.0 million
  • 93,577 active Encompass ® users, up 39% year over year
  • 9,700 new Encompass seats booked
  • Adjusted EBITDA of $10.4 million, up from $9.8 million for the third quarter of 2012
  • Adjusted net income of $7.1 million, down from $9.5 million in the third quarter of 2012

“Ellie Mae delivered strong operating performance in the third quarter. Revenue grew 20% year over year to $33 million in the face of an estimated 25% decline in national mortgage origination volume,” said Sig Anderman, CEO of Ellie Mae. “And we booked 9,700 new Encompass seats during the quarter, our second highest quarterly booking results in the history of the company.”

“Although we had impressive revenue growth year over year, it was not as strong as we had expected,” said Anderman. “The decline in mortgage applications in August and September was steeper and more sudden than we expected, and the larger customers we signed earlier in the year took longer to implement than we anticipated. Additionally, two of our legacy self-hosted clients, which were subscribers of our Doc Prep solution, exited the business in the quarter, leading to a reduction of revenues for that product in the third quarter. The impact on revenues, combined with our increased investment in R&D, customer support and sales, produced operating results that were lower than we forecasted.”

“We knew this was going to be a challenging year when we adopted the strategy to build out our organization and invest for long-term growth. Despite the revenue shortfall, we are sticking to that strategy,” continued Mr. Anderman. “We are intensifying our marketing efforts, reinforcing our implementation and customer support teams and investing in research and development. We remain confident that this will strengthen our competitive advantage and bring sustainable, long term value for our customers and our stockholders.”

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