Good News For Ellie Mae

Origination vendor Ellie Mae made waves when it successfully went public. Now, Stonegate and PHH have joined its Total Quality Loan Program, which advances the vendor’s approach to automating the loan process on behalf of its lender clients. Year over year Ellie Mae’s revenue looks strong, but the fourth quarter was a bit soft. Here are the specifics:

Full year 2013 Highlights:

>> Record revenue of $128.5 million, up 26% from $101.8 million in 2012

>> Adjusted EBITDA of $39.4 million, up 20% from $32.8 million in 2012

>> $32.0 million increase in cash and investments

>> 39,000 new SaaS Encompass® seats booked

>> 92,000 active Encompass users, up 25%

>> 64,000 active SaaS Encompass users, up 54%

Fourth Quarter 2013 Highlights:

>> Revenue of $30.4 million compared to $29.9 million in Q4 of 2012

>> Adjusted EBITDA of $7.3 million compared to $10.3 million in Q4 of 2012

>> 9,800 new SaaS Encompass seats booked, including a record 6,500 seats at new customers

“We delivered strong operating results in 2013,” said Sig Anderman, CEO of Ellie Mae. “Revenues were up 26% to a record $128.5 million, despite a year over year national mortgage volume decline of 14%. Adjusted EBITDA increased to $39.4 million, up 20% from 2012.

“Key to our long-term growth strategy, we booked a record 39,000 new SaaS Encompass seats during the year,” he continued. “Contracted SaaS seats, the primary driver of our recurring revenues, increased to 95,000 up almost 60% from a year ago. We ended the year with 92,000 active Encompass seats, a 25% increase from 2012, with many of the newly booked seats still to be implemented during 2014. We are very pleased with our steady market penetration, as new lenders, driven by ever increasing regulations and operational challenges, are attracted to our comprehensive offerings.”

Total revenue for the year ended December 31, 2013 was $128.5 million compared to $101.8 million for the year ended December 31, 2012.  Net income for 2013 was $12.6 million, or $0.44 per diluted share, compared to net income of $19.5 million, or $0.76 per diluted share, for 2012.

On a non-GAAP basis, adjusted net income for 2013 was $28.3 million, or $0.99 per diluted share, compared to $27.9 million, or $1.09 per diluted share, for 2012. Adjusted EBITDA for 2013 was $39.4 million, compared to adjusted EBITDA of $32.8 million for 2012.

“To serve our customers and facilitate long-term growth,” stressed Anderman, “we made significant investment in 2013, expanding our organization in key functional areas, such as professional services, new user implementations, customer support, data center operations and research and development. And even with that investment, we were able to deliver strong financial results for the year.”

“Our strong sales continued in the fourth quarter,” added Mr. Anderman.  “We booked 9,800 new Encompass seats during the fourth quarter and were particularly pleased that 6,500 of these seats were new customers, the highest new customer quarterly bookings in the history of the Company.”

Total revenue for the fourth quarter of 2013 was $30.4 million, compared to $29.9 million for the fourth quarter of 2012. Net income for the fourth quarter of 2013 was $1.6 million, or $0.06 per diluted share, compared to net income of $4.0 million, or $0.14 per diluted share, for the fourth quarter of 2012. Diluted share count for the fourth quarter of 2013 was 28.9 million as compared to 27.9 million during the fourth quarter of 2012.

On a non-GAAP basis, adjusted net income for the fourth quarter of 2013 was $5.3 million, or $0.18 per diluted share, compared to $7.6 million, or $0.27 per diluted share, for the fourth quarter of 2012.  Adjusted EBITDA for the fourth quarter of 2013 was $7.3 million, compared to $10.3 million for the fourth quarter of 2012. At December 31, 2013, Ellie Mae had $136.1 million in cash, cash equivalents and investments, an increase of $9.3 million from the third quarter of 2013 and $32.0 million for the year.

“Looking ahead, we remain optimistic and believe Ellie Mae is well-positioned to continue to grow market share and revenues despite the currently expected decline in 2014 mortgage origination volumes. We continue to see a long runway for new SaaS customer additions, existing customer conversions and expansion of the functionality we can offer our clients in order to keep them compliant and efficient,” concluded Anderman.

About The Author

[author_bio]

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.