Ellie Mae ekes out profit gains, despite drop in 3Q originations
Ellie Mae's third-quarter net income increased to $14.5 million from $13.8 million a year ago but fell from $18.8 million in the second quarter, when its tax accounting changed.
"We delivered strong third-quarter results with better-than-expected revenue and adjusted EBITDA," said Jonathan Corr, president and CEO of Ellie Mae, in a press release. "Seat bookings of 8,100 were also solid despite a tough quarter in which some of our customers were affected by devastating hurricanes in two of our major markets."
Ellie Mae's adjusted EBITDA of $37.6 million was up from $37.1 million in the third quarter of 2016 and $35.8 million in the second quarter.
The company's earnings are generally "supportive of the stock grinding higher but not of a quick recovery back to a premium valuation," analysts Brandon Dobell and Josh Lamers at William Blair Equity Research said in a report.
"Investors are likely to question medium-term growth rates until the mortgage market normalizes," they said.
Ellie Mae's fourth-quarter results will include the company's acquisition of sales technology platform Velocify.
"With this acquisition, we see a tremendous opportunity for our customers to drive better lead optimization and for us to further our goal of fully automating the mortgage process," Corr said.
"We believe the acquisition helps us accelerate our delivery of the front end digital experience combined with Encompass CRM and Consumer Connect. This also introduces a key opportunity for us to drive more long-term value and increased revenue per loan with both new and existing customers."