A string of acquisitions coupled with strong organic growth helped software, data and analytics provider Black Knight post double-digit revenue growth during the second quarter.
Black Knight reported Thursday that second quarter revenue grew by 23 percent from a year ago, to $361.3 million, with net earnings up a more modest 2 percent, to $39.7 million.
After factoring out growth that was due to acquisitions, Black Knight said organic revenue growth was up 11 percent from a year ago. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 21 percent, to $177.5 million.
Anthony Jabbour | Black Knight, Inc.
Black Knight CEO Anthony Jabbour said he was pleased with those numbers, which “reflect the consistent execution of our strategy to drive organic growth through the addition of new clients, the expansion of relationships with existing clients and the delivery of new innovative solutions.”
Black Knight revenue growth, by segment. Source: Black Knight quarterly report to investors
Revenue from software solutions was up 25 percent from a year ago, to $305.4 million, while revenue from Black Knight’s data and analytics businesses was up 16 percent, to $55.9 million.
Within the software solutions segment, the biggest growth was in mortgage origination software, up 60.5 percent to $97.6 million. But servicing software continues to be Black Knight’s biggest business, with revenue up 12.8 percent to $207.8 million.
Acquisitions fueling growth
Last fall, Black Knight partnered with two investment firms in a $1.8 billion deal to acquire Optimal Blue, a marketplace platform that provides product and pricing data for mortgage lenders and investors. Black Knight contributed $762 million in cash, and its Compass Analytics business, for a 60 percent stake in Optimal Blue Holdco, LLC.
This year Black Knight has acquired:
- A cloud-based loan origination system from NexSpring Financial LLC, to better serve mortgage brokers.
- eMBS Inc., which tracks the performance of nearly $7.5 trillion in mortgage-backed securities (MBS).
- Top of Mind Networks, the developer of Surefire, a customer relationship management and marketing automation system for the mortgage industry.
In its latest quarterly report to investors, Black Knight revealed that it paid a total consideration of $254.1 million for Top of Mind, and $52.7 million for other acquisitions including NexSpring and eMBS.
“With our strong second quarter performance, our confidence in the outlook for the remainder of the year and the effect of the Top of Mind and eMBS acquisitions, we are raising our full year guidance again,” Jabour said in a statement.
Black Knight said it now expects 2021 revenue will grow by 17 to 18 percent, to somewhere between $1.447 billion and $1.463 billion.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are now forecast at between $704 million and $716 million, which would represent 15 percent to 17 percent growth.