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Ellie Mae Reports Fourth Quarter and Full Year 2017 Results

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Pleasanton, CA – February 08, 2018 (BUSINESS WIRE) Ellie Mae® (NYSE:ELLI), the leading cloud-based platform provider for the mortgage finance industry, today reported results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017 Highlights

  • Revenues of $112.9 million, up 17% from $96.2 million in 2016
  • Net income of $9.9 million(1), down from $10.9 million in 2016
  • Adjusted EBITDA of $28.5 million, down from $29.4 million in 2016
  • 11,000 Encompass seats booked

Full Year 2017 Highlights

  • Revenues of $417.0 million, up 16% from $360.3 million in 2016
  • Net income of $52.9 million(1), up from $37.8 million in 2016
  • Adjusted EBITDA of $122.6 million, up from $113.1 million in 2016
  • 40,800 Encompass seats booked

“It was a great finish to the year as we continued to gain market share and extend Encompass further into the enterprise segment,” said Jonathan Corr, president and CEO of Ellie Mae. “Our fourth quarter financial results exceeded expectations while seat bookings of 11,000 were also better than expected as more lenders are recognizing the power of the Encompass NG Lending Platform to increase productivity and efficiency.”

“During the year we made significant progress extending our leadership position. We introduced new products, including our Encompass Connect Suite of solutions, which leverage our new open and scalable architecture, completed the acquisition of Velocify which accelerates our delivery of the front end digital experience, and continued the development and rollout of our next generation lending platform. We see tremendous long-term growth opportunities as we drive toward our goal of end-to-end automation of the mortgage process,” concluded Mr. Corr.

Financial Results

Total revenue for the fourth quarter of 2017 was $112.9 million, compared to $96.2 million for the fourth quarter of 2016. Net income for the fourth quarter of 2017 was $9.9 million(1), or $0.28 per diluted share, compared to $10.9 million, or $0.31 per diluted share, for the fourth quarter of 2016. Fourth quarter 2017 net income(1) reflects the impact of changes to the GAAP tax treatment of stock compensation benefits(1) and a benefit resulting from the Tax Cuts and Jobs Act of 2017.

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1. Please see paragraph titled, “Note Regarding Employee Share-Based Payment Accounting Standard.”

On a non-GAAP basis, adjusted net income for the fourth quarter of 2017 was $11.8 million, or $0.33 per diluted share, compared to $16.2 million, or $0.46 per diluted share, for the fourth quarter of 2016. Adjusted EBITDA for the fourth quarter of 2017 was $28.5 million, compared to $29.4 million for the fourth quarter of 2016. GAAP and non-GAAP per share results for the quarters ended December 31, 2017 and December 31, 2016 include the effect of an additional 3.2 million shares of Common Stock from our follow-on equity offering in August 2016.

Total revenue for 2017 was $417.0 million, compared to $360.3 million for 2016. Net income for 2017 was $52.9 million1, or $1.48 per diluted share, compared to $37.8 million, or $1.15 per diluted share, for 2016. Full year 2017 net income1 reflects the impact of changes to the GAAP tax treatment of stock compensation benefits1 and a benefit resulting from the Tax Cuts and Jobs Act of 2017.

On a non-GAAP basis, adjusted net income for 2017 was $58.9 million, or $1.64 per diluted share, compared to $60.6 million, or $1.85 per diluted share, for 2016. Adjusted EBITDA for 2017 was $122.6 million, compared to $113.1 million for 2016. GAAP and non-GAAP per share results for the years ended December 31, 2017 and December 31, 2016 include the effect of an additional 3.2 million shares of Common Stock and 1.3 million weighted average shares of Common Stock, respectively, from our follow-on equity offering in August 2016.

First Quarter and Full Year 2018 Financial Outlook

Our guidance is provided utilizing ASC 605. We are in the process of finalizing our guidance under ASC 606, and we will present an updated guide under both ASC 606 and ASC 605 when we report results for the first quarter of 2018. We will adopt ASC 606 using the modified retrospective method. The adoption of ASC 606 could have an effect on the timing of both revenue recognition and the recognition of costs to obtain contracts including commissions.

For the first quarter of 2018, our revenue is expected to be in the range of $107.0 million to $109.0 million. Net loss is expected to be in the range of $(9.0) million to $(8.0) million, or $(0.26) to $(0.23) per basic share, which reflects additional implementation costs related to the adoption of ASC 606 and the amortization of intangible assets and integration costs related to the Velocify acquisition. On a non-GAAP basis, adjusted net income is expected to be in the range of $2.4 million to $3.4 million, or $0.07 to $0.09 per diluted share, which reflects the non-GAAP tax adjustment. Adjusted EBITDA is expected to be in the range of $13.6 million to $15.6 million. Per share guidance assumes a weighted average share count of approximately 36 million.

For the full year 2018, revenue is expected to be in the range of $495.0 million to $505.0 million. Net income is expected to be in the range of $10.0 million to $14.0 million, or $0.28 to $0.38 per diluted share. On a non-GAAP basis, adjusted net income is expected to be in the range of $61.0 million to $65.0 million, or $1.68 to $1.78 per diluted share, which reflects the non-GAAP tax adjustment. Adjusted EBITDA is expected to be in the range of $126.7 million to $132.0 million. Per share guidance assumes a weighted average share count of approximately 37 million.

Additional information about the non-GAAP financial measures presented in this release, including a reconciliation of the non-GAAP financial measures to their related GAAP financial measures, is set forth below under the section entitled, “Use of Non-GAAP Financial Measures.”

Quarterly Conference Call

Ellie Mae (the “Company”) will discuss its fourth quarter and full year 2017 results today, February 8, 2018, via teleconference at 4:30 p.m. Eastern Time. To access the call, please dial 877-723-9502 or 719-325-4835 at least five minutes prior to the 4:30 p.m. Eastern Time start time. A live webcast of the call will be available on the Investor Relations section of the Company’s website at http://investor.elliemae.com. An audio replay of the call will be available through February 22, 2018 by dialing 888-203-1112 or 719-457-0820 and entering access code 3311197.

Use of Non-GAAP Financial Measures

Ellie Mae provides investors with the non-GAAP financial measures of adjusted net income, adjusted EBITDA, adjusted gross profit, and free cash flow in addition to the traditional GAAP operating performance measure of net income as part of its overall assessment of its performance. Adjusted net income consists of net income plus stock-based compensation expense, amortization of intangible assets, acquisition-related costs, and the non-GAAP income tax adjustments. EBITDA consists of net income plus depreciation and amortization, amortization of intangible assets, and income tax provision, less other income, net. Adjusted EBITDA consists of EBITDA plus stock-based compensation expense. Adjusted gross profit consists of gross profit plus stock-based compensation and amortization of intangible assets that are included in cost of revenues. Free cash flow consists of net cash provided by operating activities less acquisition of property and equipment and internal-use software. Ellie Mae uses adjusted net income, adjusted EBITDA, and adjusted gross profit as measures of operating performance because they enable period to period comparisons by excluding potential differences caused by variations in the age and depreciable lives of fixed assets, amortization of intangible assets, acquisition-related costs, and changes in interest expense and interest income that are influenced by capital market conditions. The Company also believes it is useful to exclude stock-based compensation expense from adjusted net income, adjusted EBITDA, and adjusted gross profit because the amount of non-cash expense associated with stock-based awards made at certain prices and points in time (a) do not necessarily reflect how the Company’s business is performing at any particular time and (b) can vary significantly between periods due to the timing of new stock-based awards. The non-GAAP income tax adjustments are calculated based on the annual non-GAAP effective tax rate, which quantifies the tax effects of the non-GAAP adjustments and reverses the one-time measurement of the tax impact from the enactment of the Tax Cuts and Jobs Act, and the excess tax benefits from the adoption of ASU 2016-09 for GAAP purposes. These non-GAAP financial measures are not measurements of the Company’s financial performance under GAAP and have limitations as analytical tools. Accordingly, these non-GAAP financial measures should not be considered a substitute for, or superior to, net income, operating income, gross profit, operating cash flow or other financial measures calculated in accordance with GAAP. The Company cautions that other companies in Ellie Mae’s industry may calculate adjusted net income, EBITDA, adjusted EBITDA, adjusted gross profit, and free cash flow differently than the Company does, further limiting their usefulness as comparative measures. A reconciliation of net income to adjusted net income, EBITDA and adjusted EBITDA, gross profit to adjusted gross profit, and operating cash flow to free cash flow is included in the tables below.

Note Regarding Employee Share-Based Payment Accounting Standard

Ellie Mae adopted an accounting standard issued in 2016 whereby excess tax benefit generated upon the settlement or exercise of stock awards are no longer recognized as additional paid-in capital but are instead recognized as an income tax benefit. The adoption was effective January 1, 2017, and the Company recognized a benefit to GAAP net income of $15.9 million for the year ended December 31, 2017. This also had the accounting effect of increasing net cash provided by operating activities by $10.2 million and $4.8 million and a corresponding $10.2 million and $4.8 million decrease in net cash provided by financing activities for the full year and fourth quarter ended December 31, 2016, respectively.

Disclosure Information

Ellie Mae uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors should monitor Ellie Mae’s investor relations website in addition to following Ellie Mae’s press releases, SEC filings, and public conference calls and webcasts.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.

Forward-Looking Statements

This press release contains forward-looking statements under the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These forward-looking statements include projected revenue, net income, adjusted EBITDA, and adjusted net income for the first quarter and fiscal year 2018, as well as statements regarding Ellie Mae’s ability to successfully integrate Velocify’s software solutions with Ellie Mae’s software solutions and the potential benefits of the combined software solutions. These statements involve known and unknown risks, uncertainties, and other factors that may cause Ellie Mae’s results to be materially different than those expressed or implied in such statements. Such differences may be based on factors such as changes in the volume of residential mortgages in the United States; changes in other macroeconomic factors affecting the residential real estate industry; the impact of the Company’s implementation of Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers on its results of operations, including its projected revenue, net income, adjusted EBITDA, and adjusted net income for the first quarter and fiscal year 2018; changes in strategic planning decisions by management; the Company’s ability to manage growth and expenses as it continues to scale its business; reallocation of internal resources; costs incurred and delays in developing new products; changes in anticipated rates of SaaS seat additions, and new customer acquisitions; the possibility that economic benefits of future opportunities may never materialize, including unexpected variations in market growth and demand for the acquired products and technologies; delays and disruptions, including changing relationships with partners, customers, employees or suppliers; the satisfactory performance, reliability and availability of the Company’s products and services; the amount of costs incurred in connection with supporting and integrating new customers and partners; ongoing personnel and logistical challenges of managing a larger organization; changes in other macroeconomic factors affecting the residential real estate industry, and other risk factors included in documents that Ellie Mae has filed with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2016, as updated from time to time by the Company’s quarterly reports on Form 10-Q and its other filings with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Ellie Mae’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Ellie Mae cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Ellie Mae expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances, unless otherwise required by law.

© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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Luxury Home Prices Up 7 Percent In The Fourth Quarter

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Stock Market Rally Drove Demand for High-End Homes as Supply Waned for the Third Consecutive Quarter

Seattle, WA – Jan. 25, 2018 (PRNewswire) (NASDAQ: RDFN) Luxury home prices rose 7.4 percent year over year to an average of $1.76 million in the fourth quarter of 2017, according to the latest luxury market report from Redfin (www.redfin.com), the next-generation real estate brokerage. The analysis tracks home sales in more than 1,000 cities across the country and defines the luxury market as the top 5 percent most expensive homes sold in the city in each quarter. The average price for non-luxury homes was $333,000, up 6 percent compared to a year earlier.

Persistent demand, fueled by stock market gains, along with shrinking supply contributed to the price increase. The number of homes for sale priced at or above $1 million fell 23.8 percent compared to the same period last year, marking three consecutive quarters of declines in luxury supply. The number of homes priced at or above $5 million followed the same trend, down 23.4 percent.

“The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest homebuyers,” said Redfin chief economist Nela Richardson. “As a result, we saw double-digit growth in luxury home sales in the last months of the year.”

Sales of homes priced at or above $1 million were up 15.2 percent from a year ago, and sales of homes priced at or above $5 million were up 13.7 percent.

Luxury homes moved off the market quickly, typically finding a buyer in an average of 75 days, eight fewer days than in the fourth quarter of 2016.

Seven Florida beachfront communities saw the average sale price of luxury homes increase by more than 25 percent year over year. In Sarasota and Delray Beach, luxury prices shot up 45.6 percent and 41.3 percent respectively, the highest fourth-quarter luxury price gains of all cities Redfin analyzed.

San Francisco posted the largest year-over-year decline in luxury home prices, down 12 percent to an average $5.03 million.

While the strong stock market boosted confidence in other housing markets, some would-be luxury buyers in San Francisco held back.

“The luxury market in San Francisco slowed through 2017,” said Miriam Westberg, a Redfin agent from San Francisco. “An unusually low number of initial public offerings among local companies meant fewer cash-flush buyers. Competition, and therefore prices, dropped as many affluent buyers opted to invest in the stock market instead.”

To read the full report, complete with city-specific data and charts, as well as a list of the five highest-priced home sales in Redfin markets in the fourth quarter, visit: https://www.redfin.com/blog/2018/01/luxury-report-q4.html

About Redfin
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.

RealPage® Reports Moderate Apartment Rent Growth for Calendar Year, Normal Seasonal Pricing Cuts in the Fourth Quarter

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Occupancy remains tight, helped by demand bumps in hurricane-impacted markets

Richardson, TX – January 3rd, 2018 (BUSINESS WIRE) U.S. apartment rents climbed at a moderate pace of 2.5 percent in calendar 2017, according to real estate technology and analytics firm RealPage, Inc. (NASDAQ: RP). Nationally, typical monthly apartment rent is now $1,330.

Effective rents for new leases slipped 0.9 percent during the fourth quarter. Those slight rent cuts late in the year reflect normal seasonality, as slower leasing activity in the colder-weather months can spur housing owners and operators to offer more pricing deals.

“While the apartment rent growth pace has slowed from the performance seen a couple years ago, it’s the longevity of the current cycle that’s so impressive,” said Greg Willett, RealPage’s chief economist. “Rents have climbed substantially for eight consecutive years.”

Few local markets are experiencing the price spikes that were common in 2014-2015. Sacramento’s yearly growth is currently the strongest among the country’s bigger metros at 6.5 percent, but the California capital is the only large market posting an increase of more than 6 percent.

Two years ago, more than a dozen big metros registered rent jumps topping 6 percent, with the pace of increase reaching as high as 12 percent in Portland, Oregon, then the country’s rent growth leader. Rents in Portland climbed just 1.9 percent in 2017.

Apartment rents held largely flat during 2017 in several of the nation’s big markets. Rent growth proved minimal at less than 1 percent across Kansas City, Nashville, San Antonio, Pittsburgh, West Palm Beach and Washington, D.C. Prices even dipped a bit in Austin, where average rent slid 0.4 percent.

Occupancy Remains Healthy

National apartment occupancy stands at 95.1 percent at the end of the fourth quarter, unchanged from the year-ago performance.

While year-end occupancy inched down 20 basis points from 95.3 percent in the third quarter, the decline is less than the normal seasonal drop of about 50 basis points that occurs when leasing activity slows as the temperature cools.

That smaller-than-typical seasonal occupancy drop reflected market tightening in a handful of locations where hurricane damage sent displaced households to the apartment stock. In Texas, occupancy jumped 140 basis points on a quarterly basis in the big Houston metro and 220 basis points in the smaller Corpus Christi market. Florida metros, which have received households leaving Puerto Rico, tended to register small occupancy increases in the fourth quarter.

“The country’s apartment market remains tight, with product availability generally limited to recently-completed properties moving through initial leasing,” Willett said. “Unless a renter can afford that expensive new stock, finding a ready-to-lease unit takes some real work in most locations.”

Among the country’s bigger markets, Minneapolis/St. Paul stays atop the occupancy leaderboard, with 97 percent of the existing stock now full.

The Outlook Holds Stable

RealPage market analysts anticipate that 2018’s apartment performance fundamentals will register at levels very similar to the 2017 results. “Minimal shifts in momentum are expected over the coming year,” Willett said. “Apartment demand should stay very solid, but new supply will continue to be delivered at a pace that will keep leasing conditions competitive in the top-tier product niche. In turn, rent growth should remain moderate.”

“The biggest question mark for 2018 may be the construction starts volume,” according to Willett. “At this late stage of the cycle, new building sites are difficult to source, and construction costs have climbed notably. With fewer starts likely in the coming year or so, delivery volumes should fall quite a bit by 2019 and 2020.”

About RealPage

RealPage is a leading global provider of software and data analytics to the real estate industry. Clients use its platform to improve operating performance and increase capital returns. Founded in 1998 and headquartered in Richardson, Texas, RealPage currently serves nearly 12,500 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit http://www.realpage.com.

Contacts

RealPage, Inc.
Jay Board
(972) 820-4915
jay.board@realpage.com