Black Knight reported that its revenues for the year ended Dec. 31, 2018, increased 6 percent to $1,114.0 million, compared to $1,051.6 million in 2017. Earnings for the same time period were $168.5 million, or $1.14 per share, compared to $182.3 million, or $1.47 per diluted share, in 2017.
In the fourth quarter, revenues from the software solutions business increased 6% to $245.8 million.
Servicing software solutions generated revenue growth of 7% due to strong loan growth in the core servicing software platform from new and existing clients, higher average revenue per loan and new client wins.
Origination software revenue increased 4 percent, driven by 35 percent growth in the results of loan origination solution, which were negated by lower volumes on the exchange and eLending platforms, reflecting a 40 percent decline in refinancing activity, according to the Mortgage Bankers Association.
Black Knight has migrated PNC, Fifth Third, Navy Federal Credit Union and Santander Bank onto the Empower loan origination system. Also, around a year ago, JPMorgan Chase and CitiMortgage licensed Empower.
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Anthony Jabbour[/caption]
“I'm thrilled to say that we completed the implementation for both JPMorgan Chase and CitiMortgage onto Empower in less than a year,” said Anthony Jabbour, chief executive officer for Black Knight, who was speaking at the firm’s quarterly earnings call with analysts. “We worked [with] our clients to achieve these expedited timelines and are continually focused on improving our implementation process.”
JPMorgan Chase, Union Bank and Santander will deploy the home equity capability that Empower offers.
Data and Analytics revenues for the fourth quarter of 2018 increased 7 percent to $39.8 million, compared to $37.2 million in the prior year quarter driven by increases in portfolio analytics and multiple listing service businesses.
On the servicing side, Black Knight added more than million loans to the Loan Sphere mortgage servicing platform through implementation, such as KeyBank, FirstBank, Old National and Lake Michigan Credit Union.
Home equity loans comprised 19 percent of loans on the mortgage servicing platform at year-end, up from 13 percent a year earlier. Commerce Bank, a client for more than 30 years, extended its use of the MSP to home equity loans and home equity lines of credit and KeyBank and Regions will implement the home equity capability that the platform offers. Black Knight inked a multi-year renewal deal with Quicken Loans and the signing of ServiceMac as an MSP client.
On the digital mortgage side, in 2018 Black Knight unveiled Servicing Digital, which gives customers the ability to perform tasks and find information related to their mortgages. “We've signed eight clients since the launch of Servicing Digital last summer, including two of our top five clients,” said Jabbour, who says more announcements are imminent.
Other new digital products include Artificial Intelligence Virtual Assistant, Actionable Intelligence Platform and Rapid Analytics Platform were designed to increase efficiency.
“We believe that our growing collection of innovative solutions will help us expand our market share because they help our clients grow revenue and reduce the overall cost to originate and service loan,” said Jabbour.
One benefit is that these complementary products have a shorter, easier sales and implementation cycle, and that was the case with Amerifirst who was signed and was live in 2018 on the Servicing Digital capability—which means revenue will be generated sooner.
So far, these products generate a small percentage of the—though they’re a long-term play for the company.
“We certainly are expecting, we've signed a few clients and we expect to see revenue from them in 2019,” said Kirk Larsen, chief financial officer. “They'll each contribute to revenue in 2019, but I would say it's still on a relatively small basis, but we'll grow overtime and then the other are also in the earlier stages.”
