Ellie Mae Reports Second Quarter 2017 Results

Ellie Mae ® (NYSE:ELLI), a leading provider of innovative on-demand software solutions and services for the residential mortgage industry, today reported results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights
  • Revenue of $104.1 million, up 16% from $90.1 million in 2016
  • Net income of $18.8 million 1, up from $10.6 million in 2016
  • Adjusted EBITDA of $35.8 million, up 16% from $30.9 million in 2016
  • 9,600 Encompass seats booked

"Despite mortgage volumes being down 8% in the second quarter, we were able to grow revenue 16% year-over-year and increased revenue 20% in the first half of the year with volumes down 3%," said Jonathan Corr, president and CEO of Ellie Mae. "We continued to increase share with another 9,600 seats booked as lenders embrace our platform's all-in-one value proposition. Moreover, with our investments in Encompass NG, we are extending our technology lead even further."

"The mortgage market is in the process of transitioning from a refi centric one to a purchase driven one. Some of our customers experienced closed loan volume lower than we expected in the second quarter as they dealt with declining refi volume, while the tight housing inventory held back purchase volume. We also saw some enterprise customers, which comprise an increasing portion of our customer base, take longer to ramp on our platform than planned. These factors led to a lower closed loan volume than expected, so we are resetting assumptions for the year as the market completes this transition. Beyond this year, we expect the market to normalize and for our business to resume stronger growth," concluded Mr. Corr.

Financial Results

Total revenue for the second quarter of 2017 was $104.1 million, compared to $90.1 million for the second quarter of 2016. Net income for the second quarter of 2017 was $18.8 million 1, or $0.52 per diluted share, compared to $10.6 million, or $0.34 per diluted share, for the second quarter of 2016. Second quarter 2017 net income reflects the impact of changes to the GAAP tax treatment of stock compensation benefits.

On a non-GAAP basis, adjusted net income for the second quarter of 2017 was $18.2 million, or $0.51 per diluted share, compared to $16.8 million, or $0.54 per diluted share, for the second quarter of 2016. Adjusted EBITDA for the second quarter of 2017 was $35.8 million, compared to $30.9 million for the second quarter of 2016. GAAP and non-GAAP per share results for the quarter ended June 30, 2017 include the effect of an additional 3.2 million shares from the follow-on offering in August 2016.

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