Q1 2021 Black Knight Inc Earnings Call
Thank you for standing by this is the conference operator.
Welcome to the Black Knight first quarter 2021 earnings call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star and zero I would now like to turn the conference over to Steve eager to Investor Relations.
With Black Knight for opening remarks. Please go ahead.
He's good morning, everyone and thank you for joining us for first quarter earnings call.
Simply put this was a great quarter per block night during which we delivered very strong financial results and continue to execute against our strategic growth initiatives.
Specifically, we delivered organic revenue growth of 9%, which was the highest rate since 2016, despite transitory headwinds related to the foreclosure moratorium.
We also delivered adjusted EBITDA margin expansion of 160 basis points and adjusted EPS growth of 19% are.
A strong start an ongoing momentum give us confidence to take a step that we usually don't take which is to raise our full year guidance after only one quarter.
This morning going to discuss our strong sales along with some of the recent innovations we've delivered and how they fit together to support lenders and servicers throughout the mortgage lifecycle.
As a shared on our last earnings call. We finished 2020 with significant sales momentum and I'm pleased to say that this momentum has continued.
Through the first quarter each of our business units was ahead of their sales plans and as an enterprise. We are well ahead of last year.
These results illustrate the strength of our solutions to meet the needs of forward thinking lenders and servicers that or laser focused on winning and the respective markets for the value of the deep and trusted relationships, we have with our clients and the talent and competitive nature of our sales organization.
Last month, we held our annual client conference.
We held they've been virtually again this year and a record 1900 clients registered for this three day event.
Whether we in person or meeting virtually this premier event allows us to showcase our solutions and interact with our clients.
The feedback from our clients has been extremely positive and is allowed us to continue with the sales momentum I mentioned earlier.
And the service in software business, we signed five new MSP clients, including harvest Bank.
Cadence Bank and Hudson Valley Credit Union. These.
These new wins demonstrate the value that servicers of all sides realized from MSP.
We now have signed twenty-three new MSP clients since the beginning of 2019, representing approximately 1.7 million loans.
We now have more than 1100 lenders using our PPE solution.
To put this in perspective in 2020, approximately two trillion dollars of application volume was lock on our PPE solutions, representing 38% of all closed loans.
Sales so far this year have been very strong and the pipeline is at a historical high.
We continue to be extremely pleased with the strategic acquisition of optimal blue.
Our data and analytics business also had strong sales across all markets, including signing multiple deals for various products on both the mortgage and real estate segments.
Additionally, we've signed for new deals for our rapid analytics platform, which is in addition to the 14 clients already using this powerful cloud based analytics tool.
So in summary, we're off to a great start for the year from a sales perspective, and our pipeline is robust we believe that sales momentum is because our clients see how our industry, leading innovative and integrated solutions can help them grow revenue expand margins and support regulatory compliance.
Each quarter I would like to provide an update on the new innovative solutions. We have delivered as a result of our focus on addressing client needs and responding with urgency to industry trends, including changing regulations.
Data in real time disaster data.
Together, the comprehensive data elements and wrap enable lenders and servicers to create more robust analytics. So they can make significantly more informed decisions.
I previously share how are solutions work together to deliver greater efficiencies for our clients.
We continued to introduce new solutions. So this morning, I would like to provide an update on how our new and existing solutions further enhance our clients ability to retain their customers here.
Here's one example of how our enhanced ecosystem delivers value.
MSP data can be pre matched with our automated valuation models and other public records datasets and wrap to identify refinance candidates.
This information can then trigger and action to present, a refund offer and servicing digital.
But it is an offer tailored to that customer not just a general offer.
Because by leveraging our PPE in fee services to lender can present, the exact rate the exact term and the exact fees at the time. The offers made so the consumer has a personalized offer to consider which helps increase retention pull through rates.
To accept the offer the customer simply pushes the let's do this button and servicing digital.
Then their information from MSP is automatically fed into borrow digital or comprehensive point of sale application.
This application allows the mortgage customer to upload all the necessary documents.
Working in concert with her point of sales system or loan officer digital solution allows the loan officer to work directly with the consumer to proactively address any potential issues and answer questions along the way.
As soon as the Lone information is updated and the point of sales system, our regulatory assist solution, which uses AI is automatically triggered and identified any issues with the documents. So the loan officer can reach out to help the customer resolve them.
The customer can check the status of the application throughout the process and our point of sale application.
After underwriting is complete our expedite close solution allows the lender and consumer to electronically closed alone or conduct a hybrid closing.
In March we acquired the next spring cloud base LLS platform, which is a digital lending platform designed specifically for mortgage brokers.
This platform will be seamlessly integrated with empower so brokers using the new digital lending platform and wholesalers using and power will benefit from a streamline and connected experience.
Additionally, we will be developing integrations with our comprehensive suite of origination solutions, such as loan SR. PPE compliance validation testing actionable analytics and a single point to order services and obtain fees.
Our ability to seamlessly integrate our existing functionality made adding a digital lending platform for brokers and natural tuck in acquisition for Black Knight.
And we will provide comprehensive support for this market, which has grown nearly 50% over the last few years.
In summary, we had a great first quarter and are really seeing the sales results of our dedicated focus on delivering innovative integrated and powerful solutions and providing superior client support.
Thank you for your time today I'll now turn the call over to Kirk.
Thanks, Anthony and good morning, everyone as Anthony said, the first quarter was very strong by any measure new sales revenue growth margin expansion and EPS growth with that said I'll take you through the details for the first quarter and our raised outlook for the full year.
Turning to slide three on a GAAP basis revenues were $350 million, an increase of 20% compared to the prior year quarter net earnings attributable to Black Knight were $54 million an increase of 8%.
Diluted EPS was <unk> 35, an increase of 3%, reflecting the higher depreciation and amortization, resulting from purchase accounting, particularly related to the acquisition of optimal blue.
Net earnings margin was 13% compared to 17, 2%.
Turning to slide for I'll now discuss our adjusted results for the first quarter first quarter adjusted revenues were $350 million, an increase of 20% compared to the first quarter last year organic revenue growth was 9% adjusted EBITDA was $174 million, an increase of 24% adjusted EBITDA margin was for.
49, 8% an increase of 160 basis points.
Adjusted net earnings were $87 5 million, an increase of 26% and adjusted EPS was <unk> 56, an increase of 19%.
Turning now to slide five I'll discuss our software solutions segment results for.
Quarter revenues for the software solutions segment increased 21% to $296 million and organic revenue growth was 9%.
Our servicing software solutions revenues increased 4% the growth was driven primarily by new clients and higher usage based revenues on MSP, partially offset by the transitory headwind in specialty servicing resulting from the foreclosure moratorium.
In origination software solutions revenues increased 90% driven primarily by the acquisition of optimal blue new clients higher consulting revenues and higher origination volumes for.
First quarter, EBITDA increased 23% to $171 million on EBITDA margin was 57, 8% an increase of 80 basis points.
Turning to slide six.
First quarter revenues for the data and analytics segment increased 17% to $54 million.
Primarily driven by strong sales execution across nearly all business lines higher origination volume and revenue from an acquired business organic revenue growth was 11%.
EBITDA increased 35% to $20 million EBITDA margin was 36, 5% an increase of 480 basis points.
Adjusted EBITDA for the corporate segment in the first quarter was a loss of $17 million compared to $14 million on the prior year quarter.
Turning to slide seven I'll walk through our debt structure.
At the end of March we had cash and cash equivalents of $45 million total debt principal as of March 31 was $2 billion and $282 million we.
We had revolver capacity of $883 million and our leverage ratio was three three times on a net basis.
On March 10th we completed the refinancing of our senior secured credit facility, we replaced our term loan a and revolving credit facilities with a new one $1 $5 billion term loan a facility and an expanded $1 billion revolving credit facility both facilities have a five year tenor during.
During the first quarter, we repurchased 621000 shares of our common stock for $47 million on an average of $75 19 per share as of March 31, we had approximately $9 4 million shares remaining under our share repurchase authorization.
Before I walk through our outlook for 2021 I'll go through the details of our investment in Dun <unk> Bradstreet chairs.
Turning to slide eight we held $54 8 million Dnb shares the market value of this investment was $1 $306 million based on the $23 81 closing price of Dnb on March 31.
Our invested capital is $493 million that puts our unrealized pre tax gain at $813 million and our unrealized after tax gain at $608 million.
Turning now to slide nine I'll walk through our outlook for the full year 2021, which we have raised from the guidance. We gave you on February based on our strong first quarter and robust outlook. It also reflects the effect for the next spring acquisition, which is effectively pre revenue.
But will reduce adjusted EBITDA this year due to its early stage nature.
For the year GAAP revenues and adjusted revenues are expected to be in the range of $1.407 billion to $1 $428 million, which represents raising the bottom end of the range by $13 million and the top end of the range by $6 million. This represents reported growth of approximately 14% to <unk>.
14% and organic growth of approximately 6% to 8% adjusted.
Adjusted EBITDA is expected to be in the range of $695 million to $711 million, which represents raising the bottom end of the range by $6 million and maintaining the top of the range in light of the $3 million headwind from next spring that was not included in our original outlook.
Adjusted EPS is expected to be in the range of $2 16 to $2 24.
Which represents raising the bottom end of the range by five and the top end of the range by <unk> <unk>. This is considering a nearly <unk> <unk> headwind from next spring.
Additional modeling details underlying our outlook are as follows.
We continue to plan for incremental foreclosure revenues to be delayed until at least the first quarter of 2022, we expect no incremental headwinds outside of the $11 million headwind, we experienced in the first quarter.
With the origination volume outperformance in the first quarter, we continued to expect a full year headwind of approximately $12 million compared to 2020 with a higher than planned decline in the remaining quarters of the year.
In addition, we expect interest expense of approximately $82 million to $85 million depreciation.
Amortization expense of $143 million to $147 million, excluding the net incremental depreciation and amortization, resulting from purchase accounting.
Earnings attributable to Noncontrolling interests of approximately $20 million $22 million. This relates to the portion of optimal blue that we don't own.
And adjusted effective tax rate of approximately 23% to 24% and full year weighted average shares outstanding of approximately $156 million.
Although we do not provide quarterly guidance I want to provide you with some color as to how we expect to progress through the year, we expect to see sequential revenue growth over the course of the year from new client revenue, partially offset by origination volume headwinds that increased sequentially as the year progresses.
And we expect operating expenses in the second quarter to step up from the first quarter by a couple of percentage points as we bring on next spring and staff. Our professional services teams due to strong demand. We are seeing we then expect a small sequential increase from Q2 to Q3 and then another couple of percentage points increase from the third quarter to the fourth quarter due to typical seasonality.
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That concludes my remarks, I'll now turn the call over to the operator for Q&A.
We will now begin the question and answer session.
To join the question queue. You May Press Star then one on your telephone keypad, you will share atone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
We'll pause for a moment as callers join the queue.
The first question comes from John with Stephens, Inc. Please go ahead.
Hey, guys good morning, and congrats on a great start for the year.
Thanks, John and good morning, good morning.
So the seven new empower client wins in the quarter that was great. I mean, you guys. I think you said you picked up 10 all of last year. So that's a good start.
To what extent you guys can maybe just provide a little bit of color on just maybe the types of clients are adding and then what you think drove the more rapid kind of rate of wins.
Well, John I think.
From a.
The type of client.
The mid tier midsize client, maybe around 2500 loans on an annual basis, plus or minus kind of on that range.
And and I think the reason is really the game plan that we've been executing on here has really been focused on.
On our clients and what would resonate with them we've got great.
Great capabilities, we've been.
Innovating very aggressively we've been integrating very aggressively and very focused on them. So I think those are really the the reasons when you.
Kind of listened to walk you through the use case that long for use case.
My prepared remarks, it was really showing kind of front to back how it all works out six and hangs together and I think it drives value integration as always.
Like I said, we see it in every industry that integration wins and what's exciting here for our clients is.
Theres no sacrifice that they have to make on any of the components of their integrated bundle each of them are best of breed right on it.
We're talking about empower right now on the origination side, but also on our servicing side, it's best in class, our data and analytics with best in class for secondary marketing technologies best in class. So, we're bringing best in class capability, together and integrating it and I just think that more than anything is really what's resonating with the with our clients and with them on.
Right now.
Okay. That's helpful. And then maybe one more bigger picture question for you Anthony.
As you sit here today relative to kind of a due diligence process around optimal blue.
What are the one or two things you would point to that are may be positive surprises for you guys. Maybe you surround the integration of the pace of integration.
Work or maybe it's around the synergies, but anything you can maybe call out that would be particularly.
Well I'll tell you the thing I'm really pleased about how the teams have worked together everyone understands the mission its a common mission.
And I'll tell you during diligence.
Kirklin visited them I think Mike.
It was on the job two months.
Three years ago, we just passed mature anniversary and I think two months and went and visited with them prior to their to this being actionable.
Both Kirk and I walked away really impressed.
With Scott and the team and what they had going on the culture that they had it felt very similar to what we have at Black Knight and we commented on that and so I am not surprised but im pleased that it's exactly what we thought it would be and.
The team is obviously off to a great start.
As part of Black Knight day.
They're equal members of the Black Knight family like those who have been here like Joe our presence has been here for 33 years, where all equals here, where our family here and.
We're just excited with the amount of cross sales that we've got going on between.
The Ob teams and the legacy Black Knight team and.
So again, not a surprise, but just more.
How pleased I am on how it's all coming together and working.
Okay. That's very helpful. Thank you guys. Thank.
Thank you Jonathan.
The next question comes from Ryan with K B W. Please go ahead.
Good morning, Thanks for taking the questions.
Just following up on optimal optimal blue I was wondering if you can give us a bit more detail.
More kpis for a progress report on around that integration and cross selling momentum to date is the cross selling progressing as you hoped and maybe you could speak to that both on cross selling between Ob to empower and vice versa.
And boiling that all down what confidence do you have in optimal blue is growth outlook say over the next three to five years relative to.
What I think was 25% guidance in terms of revenue growth for that business. This year. Thanks.
Thanks, Brian Yeah, I'll start per can.
Chime in on the longer term views.
I think the for.
From an integration perspective.
It's coming well, we're currently have the retail channel integrated and currently working on integrations for wholesale correspondent.
Panels and the teams are working well and.
Again, just very very pleased with how thats working from an integration of our cross selling perspective.
I'd say were equally satisfied on the bi directional nature of the cross selling.
Certainly.
The.
The actual.
And power solution, it's a longer sales cycle and implementation cycle than our PPE products are so what we're seeing so the pipelines look good obviously for both but what we're seeing really take traction is.
The cross sell of PPE to empower clients because again, it's just.
On a per.
Product that we put in our integration bundle and we sell an integrated bundle and so we're doing that just a matter of course, and it's working well.
And obviously, we've got great momentum that way Kirk on what's going on.
You mentioned anything on future outlooks for sure from a growth perspective, Ryan we continue to be confident in the 25% that we spoke of this year for for the secondary marketing technologies business, which is the combination of optimal blue encompass they will be indistinguishable one organization and so we will be combining products and go into.
Market as one and so I won't speak to it in the aggregate so feel very good about <unk> 25 per cent for this year to 26% in the first quarter. So off to a very good start sales are off to a very good start as Anthony discussed in his prepared remarks, as we think about the next several years.
Entering the year, we talked about growing over the over the near term in that 20% area and with a little higher this year and we expect it to be in that in that range for the next several years. So we feel very good about the momentum feel very good about the cross selling as Anthony just described and the performance of the business, but we still feel confident for the next several years.
With growth at debt levels and beyond that I think it's we continue to see a lot of opportunity for those solutions, but we'd rather limit the call on the growth at those levels for the next several years.
Okay.
Great.
And nice to see the buyback this quarter, which I think might be signaling your view of.
The current levels of the stock and I think investors certainly ones that we speak with are trying to pinpoint the drivers of the underperformance in Black Knight shares and one of the questions. We get the most around is around confidence in lock makes longer term revenue growth outlook say over the next three to five 5% to seven years just consider.
During MSP inevitable maturation, so I guess high level question.
Considering the proliferation of innovation that we're seeing across the private markets and the mortgage related technology space and also the residential housing space.
What gives you confidence that black Knight.
Is keeping pace with that level of innovation to remain competitive over.
Over the long term and then to that end do you think that there is an opportunity to use M&A in a meaningful way to bring some of this faster growing innovation in house similar to what you did with optimal blue.
Yes.
Well I'll tell you Brian.
Like I said I just passed my three year anniversary at Black Knight and I'll tell you when I joined three years ago ahead of vision for the company.
We come together, we would act as one black Knight that we'd be relentlessly focused on our clients.
Which is hard to do.
When you have lots of market share versus just a small startup we've done great at that will be relentlessly focused on innovation Assembly hard thing to do as a very large.
<unk> and.
So pleased with how we have accomplished both of those.
I also had a vision that each business will be performing at an exceptionally high level.
Drive in their business and the revenues and the.
<unk> and they're compliant.
And I, just don't think anyone's close to us in terms of.
How we can offer that.
To our clients and so we're very excited about our future and we've got tremendous momentum and.
And we're having fun.
Right, well I would add to that is.
Look at the momentum look at the momentum and sales whether you look at it from on MSP perspective, a number of new clients that we add the last two years.
And going into the first quarter you look at the number of empower signings accelerating over the course of the last couple of years you look at the performance in the quarter, 9% organic growth and an outlook that that we raised both the bottom and the top and for growth for the year and that's all based upon the sales success that we're having so I think that's all demonstrable evidence.
Of what Anthony just talked about and those are things that are not they are not transitory. It's not you have one good quarter and then and then it's over it's been it's been a series of successful quarters from a sales perspective that Arwood drive the growth into next year as we sell going forward and reselling into deliveries in 2023.
So you are talking about the next several years of very strong performance that you can see the the seeds planted for so so I think that that's important to look at what's driving the growth is it sustainable and we firmly believe with all of our being that it is and so that would be my response to those questions that you're getting.
Thanks, guys I appreciate the commentary and congrats on a strong start to the year.
Thank you. Thank you Ryan.
The next question comes from Ken Ken J P. Morgan. Please go ahead.
Okay. Thanks, good morning, everyone.
Course, good results here, so the 9% organic growth that's a high.
Watermark that we've seen in quite some time.
Sales they use the system more.
And there are some some additional revenues that we see when activity is up we think that's terrific because that means they are using.
<unk> platform that is core to their operations. They are using it more that's great and they're finding the value of an MSP. So we think thats terrific.
Then I'd say the last piece is a little bit better than we expected was professional services, particularly in origination related to empower. So we see clients that are looking for a domain expertise to help them improve processes and increase automation.
As they look to as they look forward.
How they want to optimize operations and so we see more demand for for those professional services. So those are the three areas that I would say, we're a little better than we expected coming in but fundamentally at the core of it is very very active sales oriented growth was what drove the overall.
9%.
Very clear and complete thanks for that Kurt So just my quick follow up then.
Yeah.
Yes, so 10 points of organic growth you guys are real buildup on on selling on sales.
Confidence and I think I almost always asses forgive me just confidence in replenishing the pipeline and more importantly, the back log and timeliness of closing deals. It sounds like the pipeline is strong but do you feel like those.
Those will come to close here in the next couple of quarters.
At a good pace.
Yes, I think we feel very confident on.
The sales pipeline and like I said.
How what we're doing the game plan, we're executing against is resonating with our clients.
Terrific on those very broad based on well done and I know you guys don't ticket lately, taking up guidance for early new year. So thanks for that.
Thank you. Thank you Tien tsin.
The next question comes from Steven with William Blair. Please go ahead.
Hey, good morning, Thank you taking my questions.
Good morning, really really appreciate the detailed example, asking for how the combined platform can help clients better recapture opportunities I know.
Recapture rates have been low across the industry I think below 20%. So have you seen your client base.
Adopted these broad based.
Next spring acquisition has to be strategically how that'll fit in with the existing origination assets and on the guidance the expected adjusted EBITDA drag from it.
For the year.
Yes.
Yes, I agree.
We shared you know.
A $3 million drag as we invest in this and we're excited about.
This opportunity so it's really focusing on the broker market and.
When you look at everything that we have yes correct.
For a brand new companies startup and go after it there's so many components that they want to bring together because again, even for the smaller broker market integration matters right youre changing value propositions through the power of integration and so for US we have many of these capabilities. So when we looked at next spring.
We're excited about was we said well we can integrate this into our loan sector PPE, we can integrate it to regulatory assist to our expedite E close to our exchange to tax data AIP. We have a lot of these capabilities. So this is really just adding again.
So more connectivity tissue between all the capabilities, where we can have a much bigger impact.
The next spring could have ever had on its own and so we're excited for what that opportunity looks like and like I said in my prepared remarks, I mean the.
The opportunity and the volumes have grown significantly in that space, but.
We look at as again another one of these relatively low risk.
Acquisitions that we make where we can get into it.
<unk> dataset.
Going forward that you'd like to add to that day the platform. Thank.
Thank you.
Sure. So a couple of things in terms of you know the the Tam expansion.
There's a number of oxy possibilities and we're going to we see a lot of room for us to continue to grow as is.
Ways for us to go into.
Smaller clients, we talked about the.
<unk> six for PPE capabilities, and obviously now tied to next spring as an example.
There is further expansion mortgage insurance.
But and more expansion into just capital markets in general with the capability you'd asked about the datasets and there are some really exciting data sets that have come out of that and again.
What I'm really proud of the team. This isn't me sitting in every meeting directing everyone want to do this is everyone doing it on their own right.
Our two teams coming together, our data and analytics team coming together with our Optima Blue team looking at their data set for some great information that we have there on rate lock data et cetera, and combining it in with what we've got.
And creating new insights for our clients and driving more value and I think there'll be more and more data that we'll find there and either exhaust data that's coming off of something were currently doing new data that we can.
You're right and integrate but it certainly is an area, where we see there being possibilities for us in ways that we can help our clients.
Great opportunity. Thank you so much on.
Thank you Tom.
Okay.
The next question comes from me here with Bank of America. Please go ahead.
Hi, Thank you for taking my question.
Question on wanted to ask just going back for next spring again close I guess just wanted to make sure I understand.
Doing that it's pre revenue when do we when will you start.
Selling it and monetizing that is it is 'twenty 'twenty. One should we think of 2021 is just building the capability of getting the integration done and then when you as you monetize it would be a different product or will it be kind of roller to empower.
No.
So on here, we're starting to sell it right now and as we integrate it obviously you get some momentum behind it yes, it will kick in more into 2022% in 'twenty, one, but it will be a separate products. So it will be branded differently from empower for the broker model, but it will be integrated into <unk> power. So for wholesale lenders who are.
Using empower there'll be again real nice integration between the two and again with the.
Integration, creating efficiencies streamlining et cetera. So that's what our plan is for next spring.
So does that make book I guess, just just staying on that for us they can for existing embolic clients I imagine there's already a good thing clients, who use and Paolo paddle broker channel would that'd be a cross sell opportunity is there, but you shouldn't they are already using this just enhances it.
Okay.
And more I would say enhances it for clients that are using it today.
Okay.
And then switching gears for one second just I wanted to ask about the caliber.
Caliber M&A.
So that's true.
Being part of our Z, obviously was a big client that I think it was.
Scheduled to come on this year is that still going ahead and is this like an opportunity for you to get into expand your relationship with N O Z or I guess, how are you all thinking about what's going on with <unk>.
With that and what's the implications for <unk>.
Sure sure Yeah, we are.
We're very close to both management teams at NRG and caliber for both clients of ours in other areas.
Outside of MSP, but as far as calibers conversion to MSP, yes, it's happening with urgency so.
Absolutely you know moving forward with it we're excited about it working really closely with them and more so.
Excited about what's happening in.
In M&A and how it's benefiting us as a net positive.
P&C is acquiring BBVA, which is good for our Huntington acquiring Tcf financial.
Who is the other on empty bank acquiring People's United Bank. So just some great.
Trends in consolidation that are benefiting us as well in addition.
Due to energy and capital caliber.
Acquisition.
Got it thank you.
Then just one last question from me just I just wanted to go back flow.
Most of the analysts on the call and we understand that your business is not very some debt.
Origination volume, but since you did mention that as a headwind for the rest of the.
Book for the remaining part of the potential headwind maybe.
Maybe you can just size that just because its something that needs to be a question, we get quite often.
Yeah, just since you mentioned it thank you that'll be all from me.
Yeah, let me take that.
So revenues sensitive to origination volumes are 10% of our revenue that's at 10% and so which is why before as we were talking about how we grow it is not about predicting what volume we're going to do it's about innovating integrating selling and delivering.
But there is that minor stub that is related to it.
Not something that that we employ people to sit and forecast every day, because its not action oriented and so yes, there's a little bit that it could be up a little bit down a little bit.
But it's only 10% on revenues.
Yes. Thank you for the overwriting feedback here I hope here for Mrs.
Our incentives are lined up for us to focus on what we can control. So on everyone waking up not hoping whatever volumes do or don't do waking up every day innovating integrating selling delivering servicing our clients then rinse wash repeat and go back and innovate again integrate cell delivering service that's what.
We'll drive our company's what helps our clients move the needle for us that's what we're focused on and that's what's really driving this company.
Right no I appreciate that thank you.
You had very good execution on the first quarter, clearly and you know it sounds like the outlook for the year was very strong book.
I'll stop there. Thank you for taking my questions.
Thanks, So much for me here.
The next question comes from Manav with Barclays. Please go ahead.
Thank you.
I apologize if I missed it but can you just tell us what the optimal do contribution was this quarter I guess I'm trying to get to what the organic growth from the origination South Atlanta would be.
So there is for optimal blue contributed $35 million of revenue this quarter.
Okay, Alright and.
The one area I think I wanted to touch on was data and analytics I mean the.
Organic growth and 11% I think you said that was pretty good I was just wondering is there any.
One time items I, just just for what's going on there and what the outlook for the rest of the year would be.
So manav.
There were no one timers frankly across the business across the enterprise there were no one timers in the first quarter. If you take the growth in data and analytics and look at what the drivers were the majority of that growth was driven by selling and delivering and selling and delivering innovative solutions and so it really was across each of the businesses.
Within data and analytics.
What I'll I'll highlight there was an element of the.
Volume benefit bad debt that is in that business, but still was growing six 7% on a kind of on underlying basis and as we look forward for the full year on that similar underlying basis.
It's right in that area for the full year the back half is.
Is that is that volume headwind that we talked about but the underlying performance of that business is it still in that mid single digits inching up towards high single digits at for at mid <unk> margins, which is which is terrific.
Got it thank you guys.
Thanks, Tom.
Once again, if you have a question. Please press Star then one.
The next question comes from Kevin with Zelman Associates. Please go ahead.
Hey, guys you mentioned your average repurchase price for somewhere in the range of the mid <unk> per share last quarter. How do you think about ramping up repurchases if the stock stays at this level.
It is more steady and systematic or opportunistic and if the stock stock dips more from here Directionally at least how much more aggressive could you get in terms of repurchases given there aren't any required payments on the term loan for now and in the capacity on the revolver.
But Kevin look our balance sheet is in great shape, we increased our available capital through the expansion of the revolver and.
We're always going to focus first on internal investment I've told the leadership team here will fund every project that has attractive returns.
Innovation is central to our long term growth strategy very focused on it and we're going to get the highest return on invested capital that way.
Go to our M&A strategy.
It has not changed we're going to continue to look for acquisitions out there that are good fits for us that helped drive.
Our game plan here with our clients and we're obviously very focused on that we always see opportunity there, but if we have excess catalog for investing in growth, we do stand ready to buy back shares and you saw us do it in the first quarter.
Okay.
And then one on more of an accounting items and non controlling interest your guidance is for about twentyish million of earnings versus $8 6 million loss from the first quarter.
Can you give us a sense of the trajectory for the remainder of the year I mean could it be should it be steady.
You know at some point or it could be it could be it would be a bit bumpy and I realize there are a lot of accounting pieces in there. In addition operational factors, but it does really swing EPS a decent amount. So just wanted to get your sense of for an outlook there.
Kevin that debt that minus eight six in the first quarter is the GAAP number the $20 million to $22 million as a as an adjusted numbers sort of looking at the underlying business. The same way we measure performance for Black Knight. So it would take out the effect of purchase accounting and and the like.
So I think there is we can walk through it separately, but I believe there is a line item in our GAAP to non-GAAP reconciliation.
That shows what that adjustment did but conceptually the number should be relatively consistent increasing sequentially from Q1 to Q4 as the profit growth in that business and so it should be but relatively linear.
It's not going to bounce around from a from a loss to.
Two.
To income over the over the course of the year. So if you look at page 11 of our press release, sorry to be very specific here. There's a line item called redeemable non controlling interest adjustment that that is an adjustment of $12 $5 million, that's what that relates to.
Okay, Yes.
Did I understand those are different numbers, maybe I misspoke a bit but that is debt is helpful. Thank you very much and I guess one last one on on the next spring acquisition is this is this more of a product where the.
The mortgage broker is the customer paying you or is this more of a product where it provides kind of a network like the big wholesale lenders have where they have a tech platform that they rollout to their broker networks to attract more volume I guess it was the end client here.
No. It's the former example that you gave.
Okay cool. Thank you that's all I have Kevin just to just to clarify something I said I pointed in the wrong direction in our GAAP to non-GAAP, we actually start with net earnings attributable to Black Knight. That's the net that's the net number already.
But the 2022 would conceivably be relatively linear across the past so apologize.
We're looking on the fly there.
Okay cool thank you.
This concludes the question and answer session I would like to turn the conference back over to Anthony Jabbour for any closing remarks.
Thank you in closing we're pleased with our strong start to the year and are confident in our outlook for the remainder of the year I would like to thank our clients for their strong partnership and my Black Knight colleagues for their exceptional efforts and dedication. Thank you for joining us on the call today for your interest in our Great company enjoy the rest of your day.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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