Ellie Mae Reports First Quarter 2013 Results

Revenue up 48% from prior year

Revenue guidance raised for 2013

PLEASANTON, CA – April 30, 2013 – Ellie Mae® (NYSE: ELLI), a leading provider of on-demand, enterprise level automation solutions for the residential mortgage industry, today reported results for the first quarter ended March 31, 2013.

First Quarter Highlights

  • Revenue up 48% year over year to $30.9 million
  • Adjusted EBITDA up 87% year over year to $10.0 million
  • $7.9 million of free cash flow generated
  • Record 80,710 active Encompass360®users as of March 31, 2013

“We had a great start to the year with strong financial and operating performance in the first quarter,” said Sig Anderman, CEO of Ellie Mae. “Through solid execution we delivered robust growth in both revenue and profits while generating significant free cash flow. We sold a record number of SaaS Encompass360 seats, with continued strong progress in adding new customers, increasing users from existing customers, and upgrading existing customers to our SaaS platform. We also had a record increase in the number of new active SaaS users during the quarter, which we believe will provide a solid foundation for continued growth in 2013 and beyond.”

“Setting a new user growth record this quarter on the heels of record growth last year speaks to the tremendous appeal of our on-demand platform,” continued Mr. Anderman. “Encompass360 is a compelling, end-to-end value proposition for lenders that automates and streamlines the mortgage origination process, assures regulatory compliance and helps reduce IT and other operational costs. With the heightened concerns lenders have about quality, regulatory compliance and efficiency; our innovative on-demand technology solutions provide us the opportunity for continued growth well into the future.”

“With the business momentum we experienced in the first quarter, we are pleased to raise our full year revenue guidance, even in the face of current expectations for a decline in 2013 mortgage origination volumes. We are maintaining our bottom line guidance for the full year, enabling us to incrementally increase our investment in growth initiatives and further enhance our compliance capabilities with a goal of extending our leadership position,” Mr. Anderman concluded.

First Quarter 2013

Total revenue for the first quarter of 2013 increased 48% to $30.9 million, compared to $20.9 million in the first quarter of 2012. Net income for the first quarter of 2013 was $3.9 million, or $0.14 per diluted share, compared to net income of $3.6 million, or $0.16 per diluted share, in the first quarter of 2012.

On a non-GAAP basis, adjusted net income for the first quarter of 2013 was $7.6 million, or $0.27 per diluted share, compared to $4.6 million, or $0.20 per diluted share, in the first quarter of 2012. Adjusted EBITDA for the first quarter of 2013 was $10.0 million, compared to $5.4 million for the first quarter of 2012.

A reconciliation of the non-GAAP financial measures to their related GAAP financial measures is set forth below.

Key Operating Metrics as of and for the Quarter Ended March 31, 2013:

Second Quarter and Fiscal Year 2013 Financial Outlook

The April 2013 composite forecast of Fannie Mae, Freddie Mac and the Mortgage Bankers Association for 2013 mortgage origination volume is approximately $1.6 trillion, which represents a 14% decrease from estimated mortgage volume in 2012. These organizations publish monthly updates of their annual and quarterly forecasts. The April 2013 composite quarterly forecast for origination volume is as follows:

Approximately 50% of our revenue is sensitive to fluctuations in mortgage volumes and we are therefore providing financial guidance for the second quarter and full fiscal year 2013 based in part on these composite quarterly forecasts.

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