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Ellie Mae (ELLI) Q3 Earnings Top, Revenues Miss, View Cut
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Ellie Mae reported third-quarter 2018 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line missed the same.
The company’s non-GAAP earnings per share of 67 cents beat the Zacks Consensus Estimate of 54 cents. Also, the bottom line climbed 19.6% year over year.
Third-quarter revenues came in at $123 million, up 15% year over year. However, the revenue figure was below the company’s guidance of $127-$129 million and missed the Zacks Consensus Estimate of $128 million.
Lower-than-expected revenues were a result of falling housing inventory and rising rate of interest on loans, which made home purchase less affordable, in turn, resulting in lower closed loan volumes.
The company’s contracted revenues increased 25% on a year-over-year basis to $88.6 million, contributing 72% of the total revenues. Professional services revenues, which are included in contracted revenues, constituted about 7% of total revenues in the quarter.
Notably, average monthly closed loans per active user were 1.21 compared with 1.27 in the prior-year period.
The company added new components to the Encompass Lending Platform, enhancing its strong wholesale and correspondent channel capabilities.
Ellie Mae also made its Consumer Connect platform generally available early in the third quarter, which received positive feedback. This apart, the company continued to focus on integrating Velocify’s lead management and engagement capabilities into its consumer engagement platforms.
The company’s Data Connect and Investor Connect offerings also continued to gain momentum throughout the third quarter.
Per loan revenues grew 14% year over year to $176 on the back of increased adoption of new products and network strength.
The company had 192,000 active users during the third quarter, up 5% from the year-ago quarter.
Margin Details
Per ASC 606, Non-GAAP gross profit came in at $79.6 million. Per ASC 605, the figure was $78.2 million compared to $70 million in the year-ago quarter.
Non-GAAP gross margin of 64.8% remained flat sequentially, per ASC 606.
Adjusted EBITDA for the third quarter was $40.9 million. Per ASC 605, adjusted EBITDA was $39.1 million compared with $38.7 million for the year-ago quarter.
Balance Sheet and Other Financial Details
Ellie Mae ended the quarter with cash and investments of $342 million compared with $324 million in the previous quarter.
Cash flow from operating activities was $37.1 million in the quarter. Free cash flow came in at $12.2.
Guidance
The company cut view for 2018 revenues. It now expects revenues in the range $477-$480 million, lower than the previous guided range of $495-$505 million.
Guidance for Contracted revenues has also been decreased. The figure is now expected to be within $347-$349 million, down from previous projection of $353-$358 million.
On a non-GAAP basis, earnings per share are expected to be in the range of $1.84-$1.88 compared with $1.79-$1.92 estimated previously.
Adjusted EBITDA is now projected in the range of $125.3-$127.8 million, lower than the earlier view of $129.5 million to $134.5 million.
For the fourth quarter of 2018, revenues are expected to be in the range of $113 million to $116 million. Non-GAAP EPS is anticipated to be within 34 cents to 39 cents. Adjusted EBITDA is expected between $28.8 million and $31.3 million.
Zacks Rank and Stocks to Consider
Ellie Mae currently carries a Zacks Rank #3 (Hold).
Long-term earnings growth for CyberArk, Twilio and Vishay is projected to be 19.83%, 9% and 9.16%, respectively.
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Ellie Mae (ELLI) Q3 Earnings Top, Revenues Miss, View Cut
Ellie Mae reported third-quarter 2018 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line missed the same.
The company’s non-GAAP earnings per share of 67 cents beat the Zacks Consensus Estimate of 54 cents. Also, the bottom line climbed 19.6% year over year.
Third-quarter revenues came in at $123 million, up 15% year over year. However, the revenue figure was below the company’s guidance of $127-$129 million and missed the Zacks Consensus Estimate of $128 million.
Lower-than-expected revenues were a result of falling housing inventory and rising rate of interest on loans, which made home purchase less affordable, in turn, resulting in lower closed loan volumes.
Ellie Mae, Inc. Price, Consensus and EPS Surprise
Ellie Mae, Inc. Price, Consensus and EPS Surprise | Ellie Mae, Inc. Quote
Revenue Details
The company’s contracted revenues increased 25% on a year-over-year basis to $88.6 million, contributing 72% of the total revenues. Professional services revenues, which are included in contracted revenues, constituted about 7% of total revenues in the quarter.
Notably, average monthly closed loans per active user were 1.21 compared with 1.27 in the prior-year period.
The company added new components to the Encompass Lending Platform, enhancing its strong wholesale and correspondent channel capabilities.
Ellie Mae also made its Consumer Connect platform generally available early in the third quarter, which received positive feedback. This apart, the company continued to focus on integrating Velocify’s lead management and engagement capabilities into its consumer engagement platforms.
The company’s Data Connect and Investor Connect offerings also continued to gain momentum throughout the third quarter.
Per loan revenues grew 14% year over year to $176 on the back of increased adoption of new products and network strength.
The company had 192,000 active users during the third quarter, up 5% from the year-ago quarter.
Margin Details
Per ASC 606, Non-GAAP gross profit came in at $79.6 million. Per ASC 605, the figure was $78.2 million compared to $70 million in the year-ago quarter.
Non-GAAP gross margin of 64.8% remained flat sequentially, per ASC 606.
Adjusted EBITDA for the third quarter was $40.9 million. Per ASC 605, adjusted EBITDA was $39.1 million compared with $38.7 million for the year-ago quarter.
Balance Sheet and Other Financial Details
Ellie Mae ended the quarter with cash and investments of $342 million compared with $324 million in the previous quarter.
Cash flow from operating activities was $37.1 million in the quarter. Free cash flow came in at $12.2.
Guidance
The company cut view for 2018 revenues. It now expects revenues in the range $477-$480 million, lower than the previous guided range of $495-$505 million.
Guidance for Contracted revenues has also been decreased. The figure is now expected to be within $347-$349 million, down from previous projection of $353-$358 million.
On a non-GAAP basis, earnings per share are expected to be in the range of $1.84-$1.88 compared with $1.79-$1.92 estimated previously.
Adjusted EBITDA is now projected in the range of $125.3-$127.8 million, lower than the earlier view of $129.5 million to $134.5 million.
For the fourth quarter of 2018, revenues are expected to be in the range of $113 million to $116 million. Non-GAAP EPS is anticipated to be within 34 cents to 39 cents. Adjusted EBITDA is expected between $28.8 million and $31.3 million.
Zacks Rank and Stocks to Consider
Ellie Mae currently carries a Zacks Rank #3 (Hold).
A few stocks worth considering in the broader Computer and Technology sector are CyberArk Software Ltd. (CYBR - Free Report) , Twilio Inc. (TWLO - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for CyberArk, Twilio and Vishay is projected to be 19.83%, 9% and 9.16%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>