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 third quarter and nine months ended September 30, 2022, as compared to the prior year periods.Commentary:
Black Knight Executive Chairman Anthony Jabbour said, “I am pleased with our performance in light of what is a very challenging time for the markets we serve and our pending transaction with Intercontinental Exchange. While the operating environment has created some near-term headwinds to our financial performance, we believe our third quarter results demonstrate the resilience of our business model. We remain optimistic about our long-term growth opportunities and are committed to creating value for all our stakeholders.”
Black Knight Chief Executive Officer Joe Nackashi added, “We delivered solid results with Organic revenue growth of 2% while advancing our strategic initiatives during the third quarter. Our team demonstrated resiliency and agility while maintaining disciplined execution and a sharp focus on serving our clients.”Third Quarter 2022 Highlights:
- Revenues of $386.7 million, an increase of 2%; Organic revenue growth of 2%
- Operating income of $68.2 million, a decrease of 18%; Operating margin of 17.6% compared to 21.9%
- Net earnings attributable to Black Knight of $30.0 million compared to $53.4 million; Diluted EPS of $0.19 compared to $0.34; Net earnings margin of 7.8% compared to 12.2%
- Adjusted EBITDA of $179.4 million, a decrease of 3%; Adjusted EBITDA margin was 46.4% compared to 48.9%
- Adjusted operating income of $138.1 million, a decrease of 7%; Adjusted operating margin of 35.7% compared to 39.2%
- Adjusted net earnings of $86.6 million, a decrease of 7%; Adjusted EPS of $0.56, a decrease of 7%
Third Quarter 2022 Segment Highlights:
Software Solutions
- Revenues of $332.7 million, an increase of 4%; Organic revenue growth of 4%
- EBITDA of $179.7 million, a decrease of 2%; EBITDA margin of 54.0% compared to 57.1%
- Operating income of $142.3 million, a decrease of 5%; Operating margin of 42.8% compared to 46.9%
Data and Analytics
- Revenues of $54.0 million, a decrease of 8%; Organic revenue decrease of 8%
- EBITDA of $16.9 million, a decrease of 19%; EBITDA margin of 31.3% compared to 35.8%
- Operating income of $13.0 million, a decrease of 24%; Operating margin of 24.1% compared to 29.1%
Year-to-Date 2022 Highlights:
- Revenues of $1,168.4 million, an increase of 7%; Organic revenue growth of 6%
- Operating income of $225.4 million, an increase of 2%; Operating margin of 19.3% compared to 20.2%
- Net earnings attributable to Black Knight of $434.9 million compared to $147.2 million; Diluted EPS of $2.80 compared to $0.94; Net earnings margin of 37.0% compared to 11.4%; the effect of our investment in Dun & Bradstreet Holdings, Inc. (“DNB”) was an increase in Net earnings attributable to Black Knight of $303.3 million, or $1.95 per diluted share, including a gain of $305.4 million, net of tax, or $1.96 per diluted share, recognized as a result of the exchange of shares of DNB common stock as part of the consideration for acquiring the remaining 40% interest in Optimal Blue Holdco, LLC (“Optimal Blue”) in February 2022
- Adjusted EBITDA of $560.6 million, an increase of 5%; Adjusted EBITDA margin was 48.0% compared to 49.2%
- Adjusted operating income of $440.7 million, an increase of 3%; Adjusted operating margin of 37.7% compared to 39.3%
- Adjusted net earnings of $284.4 million, an increase of 6%; Adjusted EPS of $1.83, an increase of 6%
Year-to-Date 2022 Segment Highlights:
Software Solutions
- Revenues of $1,002.8 million, an increase of 9%; Organic revenue growth of 7%
- EBITDA of $558.6 million, an increase of 6%; EBITDA margin of 55.7% compared to 57.4%
- Operating income of $450.2 million, an increase of 4%; Operating margin of 44.9% compared to 46.8%
Data and Analytics
- Revenues of $165.6 million, a decrease of 2%; Organic revenue decrease of 3%
- EBITDA of $53.6 million, a decrease of 13%; EBITDA margin of 32.4% compared to 36.5%
- Operating income of $41.9 million, a decrease of 16%; Operating margin of 25.3% compared to 29.7%
Other Highlights:
- As of September 30, 2022, we owned 18.5 million shares of DNB common stock.
- As of September 30, 2022, we had cash and cash equivalents of $16.1 million, debt of $2,682.2 million and available capacity of $434.4 million on our revolving credit facility.
- For the nine months ended September 30, 2022, net cash provided by operations includes the effect of higher income tax payments primarily related to the DNB gain recognized as part of the February 2022 Optimal Blue transaction and the effect of the change in timing of deducting certain software development costs under Internal Revenue Code Section 174.
Business Outlook
As a result of the proposed transaction with Intercontinental Exchange, Inc. (“ICE”) that was announced on May 4, 2022 (the “ICE Transaction”), Black Knight has suspended the practice of providing forward-looking guidance. In addition, Black Knight will not be hosting a conference call related to its third quarter 2022 earnings release.
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.
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