Black Knight Reports Fourth Quarter and Full Year 2021 Financial Results
Black Knight reported strong financial results for Q4 2021, with revenues of $386.2 million, marking a 13% increase. Operating income grew by 32% to $82.9 million, achieving an operating margin of 21.5%. Net earnings reached $60.7 million, resulting in a diluted EPS of $0.39. For the full year, revenues totaled $1,475.2 million (up 19%) but net earnings fell to $207.9 million compared to the previous year. CEO Anthony Jabbour emphasized strong momentum heading into 2022, driven by robust organic growth.
- Q4 revenues increased by 13% to $386.2 million.
- Operating income rose by 32% to $82.9 million with a 21.5% operating margin.
- Adjusted EPS grew by 10% to $0.66.
- Full-year revenues increased by 19% to $1,475.2 million.
- Full-year net earnings decreased to $207.9 million from $264.1 million.
- Diluted EPS for the year fell to $1.33 from $1.73.
JACKSONVILLE, Fla., Feb. 15, 2022 /PRNewswire/ -- Black Knight, Inc. (NYSE: BKI), a leading provider of software, data and analytics solutions to the mortgage and consumer loan, real estate and capital markets verticals, today announced unaudited financial results for the fourth quarter and year ended December 31, 2021, as compared to the prior year period.
Fourth Quarter 2021 Highlights:
- Revenues of
$386.2 million , an increase of13% ; Organic revenue growth of11% - Operating income of
$82.9 million , an increase of32% ; Operating margin of21.5% compared to18.3% - Earnings before equity in (losses) earnings of unconsolidated affiliates, net of tax of
$56.3 million , an increase of37% - Net earnings attributable to Black Knight of
$60.7 million compared to$47.1 million ; Diluted EPS of$0.39 compared to$0.30 ; Net earnings margin of14.5% compared to12.3% - Adjusted EBITDA of
$187.9 million , an increase of12% ; Adjusted EBITDA margin was48.7% compared to49.0% - Adjusted operating income of
$150.0 million , an increase of11% ; Adjusted operating margin of38.8% compared to39.3% - Adjusted net earnings of
$102.3 million , an increase of9% ; Adjusted EPS of$0.66 , an increase of10% - As of December 31, 2021, we had cash and cash equivalents of
$77.1 million , debt of$2,395.1 million and available capacity of$744.0 million on our revolving credit facility
Fourth Quarter 2021 Segment Highlights:
Software Solutions
- Revenues of
$329.2 million , an increase of13% ; Organic revenue growth of11% - EBITDA of
$185.5 million , an increase of11% ; EBITDA margin of56.3% compared to57.5% - Operating income of
$151.3 million , an increase of10% ; Operating margin of46.0% compared to47.3%
Data and Analytics
- Revenues of
$57.0 million , an increase of11% ; Organic revenue growth of8% - EBITDA of
$18.8 million , an increase of19% ; EBITDA margin of33.0% compared to30.8% - Operating income of
$14.7 million , an increase of21% ; Operating margin of25.8% compared to23.6%
Full Year 2021 Highlights:
- Revenues of
$1,475.2 million , an increase of19% ; Organic revenue growth of10% - Operating income of
$303.0 million , an increase of14% ; Operating margin of20.5% compared to21.5% - Earnings before equity in (losses) earnings of unconsolidated affiliates, net of tax of
$177.3 million compared to$178.7 million - Net earnings attributable to Black Knight of
$207.9 million compared to$264.1 million ; Diluted EPS of$1.33 compared to$1.73 ; Net earnings margin of12.2% compared to19.8% ; The effect of our investment in Dun & Bradstreet Holdings, Inc. ("DNB") was an increase in Net earnings attributable to Black Knight of$2.6 million , or$0.02 per diluted share, compared to$62.1 million , or$0.41 per diluted share, primarily related to a non-cash gain recognized as a result of DNB's initial public offering and concurrent private placement in the prior year - Adjusted EBITDA of
$724.2 million , an increase of19% ; Adjusted EBITDA margin was49.1% compared to49.2% - Adjusted operating income of
$578.2 million , an increase of22% ; Adjusted operating margin of39.2% compared to38.3% - Adjusted net earnings of
$371.5 million , an increase of15% ; Adjusted EPS of$2.38 , an increase of13%
Full Year 2021 Segment Highlights:
Software Solutions
- Revenues of
$1,250.0 million , an increase of20% ; Organic revenue growth of10% - EBITDA of
$713.7 million , an increase of18% ; EBITDA margin of57.1% compared to58.1% - Operating income of
$582.6 million , an increase of20% ; Operating margin of46.6% compared to46.5%
Data and Analytics
- Revenues of
$225.2 million , an increase of13% ; Organic revenue growth of10% - EBITDA of
$80.2 million , an increase of24% ; EBITDA margin of35.6% compared to32.6% - Operating income of
$64.7 million , an increase of30% ; Operating margin of28.7% compared to25.0%
Commentary:
Black Knight Chairman and Chief Executive Officer Anthony Jabbour said, "We are proud to have delivered an outstanding fourth quarter that closed out an outstanding year. During the fourth quarter, we achieved Organic revenue growth of
Business Outlook
The following forward-looking statements reflect Black Knight's expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. Black Knight does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Black Knight's full year 2022 outlook reflects the purchase of the outstanding interests of Optimal Blue Holdco, LLC from co-investors Cannae Holdings, Inc. and certain investment entities affiliated with Thomas H. Lee Partners, L.P. Black Knight's full year 2022 outlook is as follows (in millions, except per share data):
2021 | 2022 | Growth | ||||||||||||
Actual | Low | High | Low | High | ||||||||||
Revenues | $ | 1,475 | $ | 1,593 | $ | 1,612 | 8 % | 9 % | ||||||
Organic revenue growth | 7 % | 8 % | ||||||||||||
Adjusted EBITDA | $ | 724 | $ | 786 | $ | 803 | 9 % | 11 % | ||||||
Adjusted EPS | $ | 2.38 | $ | 2.63 | $ | 2.72 | 11 % | 14 % |
Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules. Black Knight has not provided a reconciliation of forward-looking Adjusted EBITDA and Adjusted EPS, including certain components of the forward-looking reconciliation, to the most directly comparable GAAP financial measures, due primarily to variability and difficulty in making accurate forecasts and projections of non-operating matters that may arise, as not all of the information necessary for a quantitative reconciliation is available to Black Knight without unreasonable effort. For the same reasons, Black Knight is unable to address the probable significance of the information.
Earnings Conference Call and Audio Webcast
Black Knight will host a conference call to discuss the fourth quarter and full year 2021 financial results on February 15, 2022, at 8:30 a.m. ET. The conference call can be accessed live over the phone by dialing (877) 407–4018, or for international callers (201) 689–8471. A replay will be available from 11:30 a.m. ET on February 15, 2022, through February 22, 2022, by dialing (844) 512–2921 or for international callers (412) 317–6671. The replay passcode will be 13726378.
The call will also be webcast live from Black Knight's investor relations website at https://investor.blackknightinc.com. Following completion of the call, a recorded replay of the webcast will be available on the website.
About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that delivers innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.
Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures, including Adjusted revenues, Organic revenue growth, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating income, Adjusted operating margin, Adjusted net earnings and Adjusted EPS. These are important financial measures for us but are not financial measures as defined by generally accepted accounting principles ("GAAP"). The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making, including determining a portion of executive compensation. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations. By disclosing these non-GAAP financial measures, we believe we offer investors a greater understanding of, and an enhanced level of transparency into, the means by which our management operates the company.
These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, operating margin, net earnings, net earnings per share, net earnings margin or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
Revenues, EBITDA, EBITDA margin, Operating income and Operating margin for the Software Solutions and Data and Analytics segments are presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. These measures are reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's ("SEC") Regulation G and Item 10(e) of Regulation S-K.
Adjusted revenues - We define Adjusted revenues as Revenues adjusted to include the revenues that were not recorded by Black Knight during the periods presented due to the deferred revenue purchase accounting adjustment recorded in accordance with GAAP. These adjustments are reflected in Corporate and Other.
Organic revenue growth - We define Organic revenue growth as Adjusted revenues, as defined above, for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenues of acquired businesses for the portion of the prior year matching the portion of the current year that we owned the acquired businesses.
Adjusted EBITDA - We define Adjusted EBITDA as Net earnings attributable to Black Knight, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
- Depreciation and amortization;
- Impairment charges;
- Interest expense, net;
- Income tax expense;
- Other expense (income), net;
- Equity in losses (earnings) of unconsolidated affiliates, net of tax;
- (Gains) losses on sale of investments in unconsolidated affiliate, net of tax;
- Net earnings (losses) attributable to redeemable noncontrolling interests;
- deferred revenue purchase accounting adjustment;
- equity-based compensation, including certain related payroll taxes;
- costs associated with debt and/or equity offerings;
- acquisition-related costs, including costs pursuant to purchase agreements; and
- costs associated with expense reduction initiatives.
These adjustments are reflected in Corporate and Other.
Adjusted EBITDA margin - Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Adjusted revenues.
Adjusted operating income - We define Adjusted operating income as Operating income, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
- deferred revenue purchase accounting adjustment;
- equity-based compensation, including certain related payroll taxes;
- costs associated with debt and/or equity offerings;
- acquisition-related costs, including costs pursuant to purchase agreements;
- costs associated with expense reduction initiatives; and
- the net incremental depreciation and amortization adjustments associated with the application of purchase accounting.
These adjustments are reflected in Corporate and Other.
Adjusted operating margin - Adjusted operating margin is calculated by dividing Adjusted operating income by Adjusted revenues.
Adjusted net earnings - We define Adjusted net earnings as Net earnings attributable to Black Knight with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:
- equity in losses (earnings) of unconsolidated affiliates, net of tax;
- (gains) losses on sale of investments in unconsolidated affiliate, net of tax;
- the net incremental depreciation and amortization adjustments associated with the application of purchase accounting;
- deferred revenue purchase accounting adjustment;
- equity-based compensation, including certain related payroll taxes;
- costs associated with debt and/or equity offerings;
- acquisition-related costs, including costs pursuant to purchase agreements;
- costs associated with expense reduction initiatives;
- costs and settlement (gains) losses associated with significant legal matters;
- adjustment for income tax expense primarily related to the tax effect of the non-GAAP adjustments; and
- adjustment for redeemable noncontrolling interests primarily related to the effect of the non-GAAP adjustments.
Adjusted EPS - Adjusted EPS is calculated by dividing Adjusted net earnings by the diluted weighted average shares of common stock outstanding.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on Black Knight management's beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Black Knight undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
The risks and uncertainties that forward-looking statements are subject to include, but are not limited to:
- changes in general economic, business, regulatory and political conditions, including those resulting from pandemics such as COVID–19, particularly as they affect foreclosures and the mortgage industry;
- the outbreak of COVID–19 and measures to reduce its spread, including the effect of governmental or voluntary actions such as business shutdowns and stay-at-home orders;
- security breaches against our information systems or breaches involving our third-party vendors;
- our ability to maintain and grow our relationships with our clients;
- our ability to comply with or changes to the laws, rules and regulations that affect our and our clients' businesses;
- our ability to adapt our solutions to technological changes or evolving industry standards or to achieve our growth strategies;
- our ability to protect our proprietary software and information rights;
- the effect of any potential defects, development delays, installation difficulties or system failures on our business and reputation;
- risks associated with the availability of data;
- the effects of our existing leverage on our ability to make acquisitions and invest in our business;
- risks associated with the recruitment and retention of our skilled workforce;
- our ability to successfully consummate, integrate and achieve the intended benefits of acquisitions, including our ability to successfully achieve the intended benefits of our acquisition of Optimal Blue, LLC ("Optimal Blue");
- risks associated with our investment in DNB; and
- other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information", "Risk Factors" and other sections of our Annual Report on Form 10–K for the year ended December 31, 2020 and other filings with the SEC.
BLACK KNIGHT, INC. | ||||||
Consolidated Balance Sheets | ||||||
(In millions) | ||||||
(Unaudited) | ||||||
December 31, | ||||||
2021 | 2020 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 77.1 | $ | 34.7 | ||
Trade receivables, net | 191.8 | 182.2 | ||||
Prepaid expenses and other current assets | 83.0 | 70.4 | ||||
Receivables from related parties | 0.2 | — | ||||
Total current assets | 352.1 | 287.3 | ||||
Property and equipment, net | 154.5 | 163.1 | ||||
Computer software, net | 497.0 | 498.3 | ||||
Other intangible assets, net | 613.2 | 692.3 | ||||
Goodwill | 3,817.3 | 3,613.4 | ||||
Investments in unconsolidated affiliates | 490.5 | 470.5 | ||||
Deferred contract costs, net | 196.0 | 172.3 | ||||
Other non-current assets | 230.3 | 193.3 | ||||
Total assets | $ | 6,350.9 | $ | 6,090.5 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Trade accounts payable and other accrued liabilities | $ | 76.3 | $ | 88.1 | ||
Accrued compensation and benefits | 91.4 | 79.3 | ||||
Current portion of debt | 32.5 | 73.0 | ||||
Deferred revenues | 64.6 | 50.9 | ||||
Total current liabilities | 264.8 | 291.3 | ||||
Deferred revenues | 81.5 | 92.7 | ||||
Deferred income taxes | 284.1 | 284.0 | ||||
Long-term debt, net of current portion | 2,362.6 | 2,121.9 | ||||
Other non-current liabilities | 78.7 | 94.9 | ||||
Total liabilities | 3,071.7 | 2,884.8 | ||||
Redeemable noncontrolling interests | 1,188.8 | 578.0 | ||||
Equity: | ||||||
Additional paid-in capital | 1,410.9 | 2,053.7 | ||||
Retained earnings | 968.2 | 757.4 | ||||
Accumulated other comprehensive loss | (17.5) | (38.8) | ||||
Treasury stock, at cost | (271.2) | (144.6) | ||||
Total shareholders' equity | 2,090.4 | 2,627.7 | ||||
Total liabilities, redeemable noncontrolling interests and shareholders' equity | $ | 6,350.9 | $ | 6,090.5 |
BLACK KNIGHT, INC. | ||||||||||||
Consolidated Statements of Earnings | ||||||||||||
(In millions, except per share data) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Revenues | $ | 386.2 | $ | 342.1 | $ | 1,475.2 | $ | 1,238.5 | ||||
Expenses: | ||||||||||||
Operating expenses | 207.7 | 184.5 | 793.9 | 669.6 | ||||||||
Depreciation and amortization | 93.2 | 90.4 | 365.0 | 270.7 | ||||||||
Transition and integration costs | 2.4 | 4.6 | 13.3 | 31.4 | ||||||||
Total expenses | 303.3 | 279.5 | 1,172.2 | 971.7 | ||||||||
Operating income | 82.9 | 62.6 | 303.0 | 266.8 | ||||||||
Other income and expense: | ||||||||||||
Interest expense, net | (20.8) | (20.5) | (83.6) | (62.9) | ||||||||
Other (expense) income, net | (1.1) | (0.7) | (6.4) | 16.4 | ||||||||
Total other expense, net | (21.9) | (21.2) | (90.0) | (46.5) | ||||||||
Earnings before income taxes and equity in (losses) earnings of | 61.0 | 41.4 | 213.0 | 220.3 | ||||||||
Income tax expense | 4.7 | 0.3 | 35.7 | 41.6 | ||||||||
Earnings before equity in (losses) earnings of unconsolidated | 56.3 | 41.1 | 177.3 | 178.7 | ||||||||
Equity in (losses) earnings of unconsolidated affiliates, net of | (0.4) | 0.9 | 2.6 | 67.1 | ||||||||
Net earnings | 55.9 | 42.0 | 179.9 | 245.8 | ||||||||
Net losses attributable to redeemable noncontrolling interests | 4.8 | 5.1 | 28.0 | 18.3 | ||||||||
Net earnings attributable to Black Knight | $ | 60.7 | $ | 47.1 | $ | 207.9 | $ | 264.1 | ||||
Net earnings per share attributable to Black Knight | ||||||||||||
Basic | $ | 0.39 | $ | 0.30 | $ | 1.34 | $ | 1.74 | ||||
Diluted | $ | 0.39 | $ | 0.30 | $ | 1.33 | $ | 1.73 | ||||
Weighted average shares of common stock outstanding: | ||||||||||||
Basic | 154.1 | 155.4 | 155.1 | 152.0 | ||||||||
Diluted | 155.6 | 156.5 | 155.8 | 152.9 |
BLACK KNIGHT, INC. | ||||||
Consolidated Statements of Cash Flows | ||||||
(In millions) | ||||||
(Unaudited) | ||||||
Year ended December 31, | ||||||
2021 | 2020 | |||||
Cash flows from operating activities: | ||||||
Net earnings | $ | 179.9 | $ | 245.8 | ||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Depreciation and amortization | 365.0 | 270.7 | ||||
Amortization of debt issuance costs and original issue discount | 3.9 | 3.4 | ||||
Loss on extinguishment of debt | 2.5 | — | ||||
Deferred income taxes, net | (17.0) | (20.6) | ||||
Equity in earnings of unconsolidated affiliates, net of tax | (2.6) | (67.1) | ||||
Equity-based compensation | 41.7 | 39.4 | ||||
Changes in assets and liabilities, net of acquired assets and liabilities: | ||||||
Trade receivables, including receivables from related parties | (5.9) | 6.0 | ||||
Prepaid expenses and other assets | (42.5) | (3.6) | ||||
Deferred contract costs | (57.9) | (46.9) | ||||
Deferred revenues | (3.9) | (20.7) | ||||
Trade accounts payable and other liabilities | (13.3) | 9.0 | ||||
Net cash provided by operating activities | 449.9 | 415.4 | ||||
Cash flows from investing activities: | ||||||
Additions to property and equipment | (28.5) | (23.9) | ||||
Additions to computer software | (85.1) | (89.3) | ||||
Business acquisitions, net of cash acquired | (302.6) | (1,869.4) | ||||
Investment in DNB | — | (100.0) | ||||
Asset acquisitions | (10.0) | (15.0) | ||||
Other investing activities | (3.6) | 8.4 | ||||
Net cash used in investing activities | (429.8) | (2,089.2) | ||||
Cash flows from financing activities: | ||||||
Net proceeds from issuance of common stock, before offering expenses | — | 484.6 | ||||
Costs directly associated with issuance of common stock | — | (0.4) | ||||
Issuance of senior unsecured notes, net of original issue discount | — | 990.0 | ||||
Revolver borrowings | 660.4 | 600.6 | ||||
Revolver payments | (452.1) | (862.9) | ||||
Term loan borrowings | 1.6 | — | ||||
Term loan payments | — | (54.7) | ||||
Contributions received for redeemable noncontrolling interests | — | 578.0 | ||||
Purchases of treasury stock | (146.7) | — | ||||
Tax withholding payments for restricted share vesting | (25.6) | (22.4) | ||||
Finance lease payments | (3.6) | (13.0) | ||||
Debt issuance costs paid | (7.7) | (2.4) | ||||
Other financing activities | (4.0) | (4.3) | ||||
Net cash provided by financing activities | 22.3 | 1,693.1 | ||||
Net increase in cash and cash equivalents | 42.4 | 19.3 | ||||
Cash and cash equivalents, beginning of period | 34.7 | 15.4 | ||||
Cash and cash equivalents, end of period | $ | 77.1 | $ | 34.7 | ||
Supplemental cash flow information: | ||||||
Interest paid, net | $ | (80.4) | $ | (46.8) | ||
Income taxes paid, net | $ | (52.7) | $ | (52.5) |
BLACK KNIGHT, INC. | ||||||||||||
Segment Information | ||||||||||||
(In millions) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended December 31, 2021 | ||||||||||||
Software | Data and | Corporate | ||||||||||
Solutions | Analytics | and Other | Total | |||||||||
Revenues | $ | 329.2 | $ | 57.0 | $ | — | (1) | $ | 386.2 | |||
Expenses: | ||||||||||||
Operating expenses | 143.7 | 38.2 | 25.8 | (2) | 207.7 | |||||||
Transition and integration costs | — | — | 2.4 | (3) | 2.4 | |||||||
EBITDA | 185.5 | 18.8 | (28.2) | 176.1 | ||||||||
Depreciation and amortization | 34.2 | 4.1 | 54.9 | (4) | 93.2 | |||||||
Operating income (loss) | 151.3 | 14.7 | (83.1) | 82.9 | ||||||||
Interest expense, net | (20.8) | |||||||||||
Other expense, net | (1.1) | |||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 61.0 | |||||||||||
Income tax expense | 4.7 | |||||||||||
Earnings before equity in losses of unconsolidated affiliates | 56.3 | |||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (0.4) | |||||||||||
Net earnings | 55.9 | |||||||||||
Net losses attributable to redeemable noncontrolling interests | 4.8 | |||||||||||
Net earnings attributable to Black Knight | $ | 60.7 | ||||||||||
Three months ended December 31, 2020 | ||||||||||||
Software | Data and | Corporate | ||||||||||
Solutions | Analytics | and Other | Total | |||||||||
Revenues | $ | 290.9 | $ | 51.3 | $ | (0.1) | (1) | $ | 342.1 | |||
Expenses: | ||||||||||||
Operating expenses | 123.5 | 35.5 | 25.5 | (2) | 184.5 | |||||||
Transition and integration costs | — | — | 4.6 | (3) | 4.6 | |||||||
EBITDA | 167.4 | 15.8 | (30.2) | 153.0 | ||||||||
Depreciation and amortization | 29.8 | 3.7 | 56.9 | (4) | 90.4 | |||||||
Operating income (loss) | 137.6 | 12.1 | (87.1) | 62.6 | ||||||||
Interest expense, net | (20.5) | |||||||||||
Other expense, net | (0.7) | |||||||||||
Earnings before income taxes and equity in earnings of | 41.4 | |||||||||||
Income tax expense | 0.3 | |||||||||||
Earnings before equity in earnings of unconsolidated affiliates | 41.1 | |||||||||||
Equity in earnings of unconsolidated affiliates, net of tax | 0.9 | |||||||||||
Net earnings | 42.0 | |||||||||||
Net losses attributable to redeemable noncontrolling interests | 5.1 | |||||||||||
Net earnings attributable to Black Knight | $ | 47.1 | ||||||||||
BLACK KNIGHT, INC. | ||||||||||||
Segment Information (Continued) | ||||||||||||
(In millions) | ||||||||||||
(Unaudited) | ||||||||||||
Year ended December 31, 2021 | ||||||||||||
Software | Data and | Corporate and | ||||||||||
Solutions | Analytics | Other | Total | |||||||||
Revenues | $ | 1,250.0 | $ | 225.2 | $ | — | (1) | $ | 1,475.2 | |||
Expenses: | ||||||||||||
Operating expenses | 536.3 | 145.0 | 112.6 | (2) | 793.9 | |||||||
Transition and integration costs | — | — | 13.3 | (3) | 13.3 | |||||||
EBITDA | 713.7 | 80.2 | (125.9) | 668.0 | ||||||||
Depreciation and amortization | 131.1 | 15.5 | 218.4 | (4) | 365.0 | |||||||
Operating income (loss) | 582.6 | 64.7 | (344.3) | 303.0 | ||||||||
Interest expense, net | (83.6) | |||||||||||
Other expense, net | (6.4) | |||||||||||
Earnings before income taxes and equity in earnings of | 213.0 | |||||||||||
Income tax expense | 35.7 | |||||||||||
Earnings before equity in earnings of unconsolidated affiliates | 177.3 | |||||||||||
Equity in earnings of unconsolidated affiliates, net of tax | 2.6 | |||||||||||
Net earnings | 179.9 | |||||||||||
Net losses attributable to redeemable noncontrolling interests | 28.0 | |||||||||||
Net earnings attributable to Black Knight | $ | 207.9 | ||||||||||
Year ended December 31, 2020 | ||||||||||||
Software | Data and | Corporate and | ||||||||||
Solutions | Analytics | Other | Total | |||||||||
Revenues | $ | 1,040.2 | $ | 198.7 | $ | (0.4) | (1) | $ | 1,238.5 | |||
Expenses: | ||||||||||||
Operating expenses | 435.6 | 133.9 | 100.1 | (2) | 669.6 | |||||||
Transition and integration costs | — | — | 31.4 | (3) | 31.4 | |||||||
EBITDA | 604.6 | 64.8 | (131.9) | 537.5 | ||||||||
Depreciation and amortization | 120.9 | 15.1 | 134.7 | (4) | 270.7 | |||||||
Operating income (loss) | 483.7 | 49.7 | (266.6) | 266.8 | ||||||||
Interest expense, net | (62.9) | |||||||||||
Other income, net | 16.4 | |||||||||||
Earnings before income taxes and equity in earnings of | 220.3 | |||||||||||
Income tax expense | 41.6 | |||||||||||
Earnings before equity in earnings of unconsolidated affiliates | 178.7 | |||||||||||
Equity in earnings of unconsolidated affiliates, net of tax | 67.1 | |||||||||||
Net earnings | 245.8 | |||||||||||
Net losses attributable to redeemable noncontrolling interests | 18.3 | |||||||||||
Net earnings attributable to Black Knight | $ | 264.1 |
_______________________________ | |
(1) | Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP |
(2) | Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of |
(3) | Transition and integration costs primarily consists of costs associated with acquisitions and expense reduction initiatives. |
(4) | Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the
|
BLACK KNIGHT, INC. | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(In millions) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Reconciliation of Revenues to Adjusted Revenues and Organic Revenue Growth | ||||||||||||||||
Three months ended December 31, | ||||||||||||||||
2021 | 2020 | Organic | ||||||||||||||
Pre-acquisition | Adjusted | revenue | ||||||||||||||
As reported | As reported | revenues(1) | base | growth | ||||||||||||
Servicing Software | $ | 217.5 | $ | 203.5 | $ | — | $ | 203.5 | 7 % | |||||||
Origination Software | 111.7 | (2) | 87.4 | 5.8 | 93.2 | 20 % | ||||||||||
Software Solutions | 329.2 | 290.9 | 5.8 | 296.7 | 11 % | |||||||||||
Data and Analytics | 57.0 | (3) | 51.3 | 1.3 | 52.6 | 8 % | ||||||||||
Corporate and Other | — | (0.1) | ||||||||||||||
Revenues | 386.2 | 342.1 | ||||||||||||||
Deferred revenue purchase accounting adjustment | — | 0.1 | ||||||||||||||
Adjusted revenues | $ | 386.2 | $ | 342.2 | $ | 7.1 | $ | 349.3 | 11 % | |||||||
_______________________________ | ||||||||||||||||
Note: Amounts may not recalculate due to rounding. | ||||||||||||||||
(1) Includes pre-acquisition revenues of TOMN Holdings, Inc. ("Top of Mind"), eMBS, Inc. ("eMBS") and NexSpring Financial, LLC ("NexSpring") for the three months ended | ||||||||||||||||
(2) Includes revenues of | ||||||||||||||||
(3) Includes revenues of | ||||||||||||||||
Year ended December 31, | ||||||||||||||||
2021 | 2020 | Organic | ||||||||||||||
Pre-acquisition | Adjusted | revenue | ||||||||||||||
As reported | As reported | revenues(1) | base | growth | ||||||||||||
Servicing Software | $ | 838.9 | $ | 777.7 | $ | — | $ | 777.7 | 8 % | |||||||
Origination Software | 411.1 | (2) | 262.5 | 94.5 | 357.0 | 15 % | ||||||||||
Software Solutions | 1,250.0 | 1,040.2 | 94.5 | 1,134.7 | 10 % | |||||||||||
Data and Analytics | 225.2 | (3) | 198.7 | 5.5 | 204.2 | 10 % | ||||||||||
Corporate and Other | — | (0.4) | ||||||||||||||
Revenues | 1,475.2 | 1,238.5 | ||||||||||||||
Deferred revenue purchase accounting adjustment | — | 0.4 | ||||||||||||||
Adjusted revenues | $ | 1,475.2 | $ | 1,238.9 | $ | 100.0 | $ | 1,338.9 | 10 % |
_______________________________ | |
(1) | Includes pre-acquisition revenues of Optimal Blue, Top of Mind, eMBS, DocVerify, Collateral Analytics, LLC ("Collateral Analytics") and NexSpring for the year ended |
(2) | Includes revenues of |
(3) | Includes revenues of |
BLACK KNIGHT, INC. | |||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) | |||||||||||||
(In millions, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Reconciliation of Net Earnings to Adjusted EBITDA | |||||||||||||
Three months ended December 31, | Year ended December 31, | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
Net earnings attributable to Black Knight | $ | 60.7 | $ | 47.1 | $ | 207.9 | $ | 264.1 | |||||
Depreciation and amortization | 93.2 | 90.4 | 365.0 | 270.7 | |||||||||
Interest expense, net | 20.8 | 20.5 | 83.6 | 62.9 | |||||||||
Income tax expense | 4.7 | 0.3 | 35.7 | 41.6 | |||||||||
Other expense (income), net | 1.1 | 0.7 | 6.4 | (16.4) | |||||||||
Equity in losses (earnings) of unconsolidated affiliates, | 0.4 | (0.9) | (2.6) | (62.1) | |||||||||
Gain on sale of investment in unconsolidated affiliate, net | — | — | — | (5.0) | |||||||||
Net losses attributable to redeemable noncontrolling | (4.8) | (5.1) | (28.0) | (18.3) | |||||||||
EBITDA | 176.1 | 153.0 | 668.0 | 537.5 | |||||||||
Deferred revenue purchase accounting adjustment | — | 0.1 | — | 0.4 | |||||||||
Equity-based compensation(1) | 9.4 | 10.1 | 42.9 | 40.6 | |||||||||
Debt and/or equity offering expenses | — | — | — | 0.1 | |||||||||
Acquisition-related costs | (1.5) | 3.7 | 8.0 | 26.1 | |||||||||
Expense reduction initiatives | 3.9 | 0.9 | 5.3 | 5.2 | |||||||||
Adjusted EBITDA | $ | 187.9 | $ | 167.8 | $ | 724.2 | $ | 609.9 | |||||
Net earnings margin | 14.5 % | 12.3 % | 12.2 % | 19.8 % | |||||||||
Adjusted EBITDA margin | 48.7 % | 49.0 % | 49.1 % | 49.2 % | |||||||||
_______________________________ | |||||||||||||
(1) Includes accelerated recognition of equity-based compensation expense of | |||||||||||||
Reconciliation of Operating Income to Adjusted Operating Income | |||||||||||||
Three months ended December 31, | Year ended December 31, | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
Operating income | $ | 82.9 | $ | 62.6 | $ | 303.0 | $ | 266.8 | |||||
Deferred revenue purchase accounting adjustment | — | 0.1 | — | 0.4 | |||||||||
Equity-based compensation | 9.4 | 10.1 | 42.9 | 40.6 | |||||||||
Debt and/or equity offering expenses | — | — | — | 0.1 | |||||||||
Acquisition-related costs | (1.5) | 3.7 | 8.0 | 26.1 | |||||||||
Expense reduction initiatives | 3.9 | 0.9 | 5.3 | 5.2 | |||||||||
Depreciation and amortization purchase accounting | 55.3 | 57.1 | 219.0 | 135.4 | |||||||||
Adjusted operating income | $ | 150.0 | $ | 134.5 | $ | 578.2 | $ | 474.6 | |||||
Operating margin | 21.5 % | 18.3 % | 20.5 % | 21.5 % | |||||||||
Adjusted operating margin | 38.8 % | 39.3 % | 39.2 % | 38.3 % | |||||||||
BLACK KNIGHT, INC. | ||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) | ||||||||||||
(In millions, except per share data) | ||||||||||||
(Unaudited) | ||||||||||||
Reconciliation of Net Earnings to Adjusted Net Earnings | ||||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Net earnings attributable to Black Knight | $ | 60.7 | $ | 47.1 | $ | 207.9 | $ | 264.1 | ||||
Equity in losses (earnings) of unconsolidated affiliates, net of | 0.4 | (0.9) | (2.6) | (62.1) | ||||||||
Gain on sale of investment in unconsolidated affiliate, net of | — | — | — | (5.0) | ||||||||
Depreciation and amortization purchase accounting | 55.3 | 57.1 | 219.0 | 135.4 | ||||||||
Deferred revenue purchase accounting adjustment | — | 0.1 | — | 0.4 | ||||||||
Equity-based compensation (2) | 9.4 | 10.1 | 42.9 | 40.6 | ||||||||
Debt and/or equity offering expenses | — | — | 2.3 | 0.1 | ||||||||
Acquisition-related costs | (1.5) | 3.7 | 8.0 | 26.1 | ||||||||
Expense reduction initiatives | 3.9 | 0.9 | 5.3 | 5.2 | ||||||||
Legal matters | 1.2 | 0.8 | 4.2 | (16.2) | ||||||||
Income tax expense adjustment | (16.5) | (16.7) | (67.4) | (43.9) | ||||||||
Redeemable noncontrolling interests adjustment (3) | (10.6) | (8.7) | (48.1) | (22.4) | ||||||||
Adjusted net earnings | $ | 102.3 | $ | 93.5 | $ | 371.5 | $ | 322.3 | ||||
Adjusted EPS | $ | 0.66 | $ | 0.60 | $ | 2.38 | $ | 2.11 | ||||
Weighted average shares outstanding, diluted | 155.6 | 156.5 | 155.8 | 152.9 | ||||||||
_______________________________ | ||||||||||||
(1) Components of the depreciation and amortization purchase accounting adjustment are as follows: | ||||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Other intangible assets | $ | 39.5 | $ | 42.3 | $ | 159.1 | $ | 86.6 | ||||
Computer software | 15.6 | 14.7 | 59.2 | 48.8 | ||||||||
Property and equipment | 0.2 | 0.2 | 0.8 | 0.8 | ||||||||
Deferred contract costs | — | (0.1) | (0.1) | (0.8) | ||||||||
Depreciation and amortization purchase accounting | $ | 55.3 | $ | 57.1 | $ | 219.0 | $ | 135.4 |
(2) | Includes accelerated recognition of equity-based compensation expense of |
(3) | The redeemable noncontrolling interests adjustment primarily includes the effect of the net incremental depreciation and amortization adjustments |
BLACK KNIGHT, INC. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued) | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Reconciliation of Revenue Growth to Adjusted Revenue Growth and Organic Revenue Growth | |||||||||||||||
Full Year 2022 Guidance | Full Year 2021 | ||||||||||||||
Pre-acquisition | Adjusted | ||||||||||||||
Low | High | As reported | revenues(1) | base | |||||||||||
Revenues | $ | 1,593 | $ | 1,612 | $ | 1,475 | $ | 14 | $ | 1,489 | |||||
Revenue growth | 8 % | 9 % | |||||||||||||
Organic revenue growth | 7 % | 8 % |
_______________________________ | |
(1) | Includes pre-acquisition revenues of Top of Mind, eMBS and NexSpring for the year ended December 31, 2021. |
Information for Investors: | Information for Media: | |
Steve Eagerton | Michelle Kersch | |
Black Knight | Black Knight | |
904.854.3683 | 904.854.5043 | |
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SOURCE Black Knight, Inc.