Ellie Mae Reports Strong First Quarter 2011 Results

Revenue Increases 19% Year-Over-Year, SaaS Lender Users Increase 130% Year-Over-Year as Total Active Lender Users Increase to Over 41,000

PLEASANTON, Calif., May 11, 2011 (BUSINESS WIRE) -- Ellie Mae, Inc.(R) (NYSE Amex: ELLI), the provider of software and automation solutions for mortgage bankers, community banks, credit unions and other mortgage lenders, today reported results for the quarter ended March 31, 2011.

Total revenue for the first quarter 2011 increased 19% to $10.6 million, compared to $8.9 million in the first quarter of 2010. Software and Services revenue increased 18% to $8.4 million, compared to $7.1 million in the first quarter of 2010. Network revenue increased 24% to $2.2 million, compared to $1.8 million in the year ago period.

Net loss for the first quarter of 2011 was $0.8 million, or $0.22 per share1, compared to net loss of $1.6 million, or $0.48 per share, in the first quarter of 2010.

On a non-GAAP basis, adjusted net loss for the first quarter of 2011 was $0.3 million, or $0.09 per share, compared to adjusted net loss of $0.9 million, or $0.28 per share, in the first quarter of 2010. Adjusted EBITDA for the first quarter of 2011 was $45,000 compared to adjusted EBITDA of $(0.5) million, for the first quarter of 2010. A reconciliation of these non-GAAP financial measures to their related GAAP financial measures is set forth below.

Key Operating Metrics as of March 31, 2011

  • The number of lenders actively using the company's Encompass enterprise solution ("active lenders") increased 18% year over year to 41,351;
  • Average revenue per active lender user increased 16% to $216;
  • The number of active lenders using the company's SaaS success-based pricing (SBP) version of Encompass grew 306% year over year to 11,119, resulting in an overall increase of active lender SaaS Encompass users of 130% year over year to 15,670; and
  • Lender Encompass revenue for the first quarter of 2011 increased 37% to $8.8 million as compared to the first quarter of 2010.

 

"The key metrics driving our results remain the number of active lenders using the Encompass enterprise solution, particularly our SaaS success-based pricing version of Encompass," noted Sig Anderman, President and CEO of Ellie Mae. "Increases of 18% in the total number of active lenders, 306% in SaaS SBP users, and 130% in total SaaS users, drove our strong financial performance, despite a 10% drop in national residential mortgage volume in the first quarter of 2011 from the first quarter of 2010.

"Over the last decade, we have built a company that we believe is at the forefront in the effort to automate the mortgage origination business," continued Mr. Anderman. "Our technology-enabled solutions are attractive because they provide automated solutions to address the pain points in the mortgage industry: demands for regulatory compliance, inefficiencies in mortgage origination, and challenges in managing complex and diverse business operations.

"Our first quarter results reflect our growth strategy to extend our lender user base, increase their usage of our technology-enabled services, and expand their use of our patented Ellie Mae Network to access the business partners they work with to process and fund mortgages.

"Notwithstanding the significant drop in U.S. mortgage volume over the past two years, we continue to grow by leveraging the strength of our end-to-end solutions and capitalizing on the industry trends and investor and regulatory demands driving loan quality and automation. We believe that these trends, combined with our attractive technology solutions, position us well for continued growth," concluded Mr. Anderman.

2011 Financial Outlook

For the full year 2011, revenue is expected to be in the range of $50 million to $52 million. Net income for 2011 is expected to be in the range of $2.1 million to $3.1 million, or $0.10 to $0.15 per diluted share. Adjusted net income is expected to be in the range of $4.4 million to $5.4 million, or $0.21 to $0.26 per diluted share. Adjusted EBITDA is expected to be in the range of $6.6 million to $8.1 million.

1 All share and per share information referenced throughout this release and in the accompanying financial tables has been adjusted to reflect the 1-for-3 reverse stock split of the Company's common stock that occurred on April 14, 2011.

Use of Non-GAAP Financial Measures

Ellie Mae provides investors with adjusted net income (loss) and adjusted EBITDA in conjunction with traditional GAAP operating performance of net income (loss) as part of its overall assessment of its performance. Adjusted net income (loss) consists of net income (loss) plus amortization of acquired intangibles and non-cash, stock-based compensation expense. EBITDA consists of net income (loss) plus depreciation and amortization, interest expense and income tax expense. Adjusted EBITDA consists of EBITDA plus non-cash, stock-based compensation expense. Ellie Mae uses adjusted net income (loss) and adjusted EBITDA as measures of operating performance because they enable period to period comparisons by excluding potential differences caused by variations in the age of book depreciation of fixed assets and amortization of intangibles related to acquisitions, and changes in interest expense and interest income that are influenced by capital market conditions. The company also believes it is useful to exclude non-cash, stock-based compensation expense from adjusted net income (loss) and adjusted EBITDA because the amount of non-cash expense associated with stock-based awards made at certain prices and points in time (a) do not necessarily reflect how the company's business is performing at any particular time and (b) can vary significantly between periods due to the timing of new stock-based awards. These non-GAAP measures are not measurements of the company's financial performance under GAAP and have limitations as analytical tools. Accordingly, these non-GAAP financial measures should not be considered a substitute for, or superior to, net income (loss) or operating income (loss) or other financial measures calculated in accordance with generally accepted accounting principles in the United States, or as an alternative to cash flows from operating activities as a measure of the company's profitability or liquidity. The company cautions that other companies in Ellie Mae's industry may calculate adjusted net income (loss) and adjusted EBITDA differently than the company does, further limiting their usefulness as a comparative measure. A reconciliation of net income (loss) to adjusted net income (loss) and adjusted EBITDA is included in the tables below.

Investor Relations Contacts:

Ellie Mae, Inc.
Edgar Luce, +1-925-227-7079
Executive VP and CFO
IR@elliemae.com

or

The Blueshirt Group for Ellie Mae, Inc.
Lisa Laukkanen, +1-415-217-4967
lisa@blueshirtgroup.com

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