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Real estate software, data and analytics company Black Knight Inc. signed new clients and made the most out of existing relationships to stay profitable in 2022 as rising interest rates created “operational challenges” for lenders, including consolidation, bankruptcies and layoffs.
Black Knight’s $17.6 million in fourth-quarter net earnings represented a 71 percent decline from a year ago. While revenue slipped by just 1 percent over the same period to $383.5 million, expenses climbed by 9 percent to $330.7 million.
Black Knight books $452M in profits in 2022
Source: Inman analysis of Black Knight regulatory filings
For the full year, Black Knight booked a $452.5 million profit, up 118 percent from 2021 with revenue up 5 percent to $1.55 billion.
Black Knight executives did not provide forward guidance or hold an earnings call, citing the company’s pending acquisition by Intercontinental Exchange Inc. (ICE), which remains under scrutiny by antitrust regulators.
Anthony Jabbour
“I am pleased with our performance during the fourth quarter and for the full year, Black Knight Executive Chairman Anthony Jabbour said in a statement Tuesday. “Despite a very challenging time for the markets we serve, coupled with our proposed transaction with Intercontinental Exchange, our team remained focused and continued to execute against our strategic initiatives to deliver profitable growth over the long term.”
In an investor presentation, Black Knight said it signed 29 new clients in 2022 to use its Empower loan origination system, which the company has reportedly explored spinning off to satisfy concerns of antitrust regulations.
Black Knight also signed 129 new users of its Optimal Blue product and pricing engine (PPE), 13 new clients to use its MSP Mortgage Servicing System and nine new customers for its Rapid Analytics Platform (RAP), a cloud-based enterprise data and analytics solution.
Black Knight revenue by segment
Source: Inman analysis of Black Knight regulatory filings
Black Knight’s software solutions segment boosted 2022 revenue by 7 percent to $1.334 billion, while the company’s data and analytics divisions saw revenue decline by 3 percent to $218 million.
A subsidiary of title insurer Fidelity National Financial announced in November that it would pay $225 million to buy back TitlePoint from Black Knight, a title search and order management business it spun off nearly a decade ago.
In its 2022 annual report to investors, Black Knight disclosed that the TitlePoint deal closed on Jan. 1 and the company generated $39 million in revenue and $22 million in operating income for Black Knight’s data and analytics segment last year.
Last year, Black Knight also became the 100 percent owner of Optimal Blue, after acquiring a majority stake in the company in 2020 and then buying out its coinvestors last year for $1.156 billion.
Optimal Blue, a marketplace platform that provides product and pricing data for mortgage lenders and investors, contributes its revenue and profits to Black Knight’s software segment.
Black Knight uses organic revenue growth as a metric to account for the contribution of new businesses like Optimal Blue. Organic revenue growth compares current revenues with an adjusted revenue base for prior periods, taking into account pre-acquisition revenues of acquired businesses.
Joe Nackashi
“We delivered Organic revenue growth of 4 percent for the year, which demonstrates the durability of our business model,” Black Knight CEO Joe Nackashi said in a statement. “We remain focused on winning new clients, expanding and extending our relationships with existing clients through cross sales and contract renewals and delivering innovative new solutions.”
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