FinTech: Black Knight Reports Strong Q1 Earnings on Flat Revenue

May 7, 2020 | FinTech, News, Real Estate
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However, the fintech factored in the impact of COVID-19 and lowered its annual guidance.

Financial technology specialist Black Knight Inc. (NYSE: BKI) reported robust earnings during the first quarter. Earnings per share of $ 0.34 beat estimates by $ 0.08. Revenue of $ 290.8 million, which was up 2.7% year-on-year, beat estimates by $ 4.21 million. (Seeking Alpha)

Company fundamentals

“Our underlying business fundamentals remain strong and our performance highlights the strength of our comprehensive solution set,” said Chairman Bill Foley. “While there have been significant industry impacts due to COVID-19, Black Knight is well-positioned to meet the challenges presented by the current pandemic while continuing to execute against our long-term strategic initiatives.”

However, the company clarified that the Covid 19 outbreak had delayed the timing of certain revenues, particularly in the Specialty Servicing software business due to the foreclosure moratorium and the forbearance plans offered under the CARES Act. As a result it revised guidance for the full year 2020.

Q1 earnings

First Quarter 2020 revenues were $290.7 million, up 3%. Net earnings grew 93% to $50.1 million at a margin of 17.2%. Diluted EPS surged 89% to $0.34.

The company is a leading provider of integrated software, data and analytics solutions that facilitate and automate many of the business processes across the homeownership lifecycle.

Segment -wise, the Software Solutions business grew revenue by 0.5% to $ 244.7 million, and reported an EBITDA of $ 139.4 million, down by 1% year-on-year.

The Data and Analytics business reported revenue of $ 46.1 million, up 16% over the prior year quarter. EBITDA zoomed 47% to $ 14.6 million.

Outlook for the full year 2020

The company revised its outlook for the full year of 2020 as follows.

It estimates revenue to be in the range of $1.164 billion to $1.184 billion. That’s down from a previous range of $1.190 billion to $1.214 billion.

Adjusted EPS is expected to be in the range of $1.90 to $1.97, down from $1.97 to $2.06.

Black Knight acquisitions

In March, Black Knight acquired Collateral Analytics, a provider of automated valuation models and other property valuation tools for appraisers, lenders, investors, and government agencies.

Collateral Analytics holds proprietary assets including data representing approximately 600,000 neighborhoods across the nation; property-specific traits that influence valuation; household demographics on over 100 million individual households; and commercial market sales comps, rent prices and capitalization rates.

In February, Black Knight purchased Quicken Loans “Cyclops” mortgage servicing customer relationship management software.

“The Cyclops software provides a number of tools Quicken Loans uses to meet the needs of today’s mortgage consumers,” Black Knight said in a statement. “This software suite will serve as the foundation for a highly advanced customer service solution that Black Knight will be offering to clients of its industry-leading MSP servicing system.”

Related Story:   Real Estate: Green Street Advisors Talks Coronavirus and Real Estate                                                

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