Ellie Mae’s 3Q Net Income Down 50%

Ellie Mae is reporting net income of $3.4 million, which is approximately half of its 3Q12 net income of $6.8 million.

The drop in mortgage applications in August and September affected its business, CEO Sig Anderman says.

Separately, Ellie Mae is buying MortgageCEO, a customer relationship management platform and marketing automation solutions provider.

Other issues affecting Ellie Mae’s results involve getting new large customers on board in a timely fashion and two of users of its Doc Prep product exiting the business during the quarter.

Revenue is up 20% on year-over-year basis to $33 million, but revenue per average active Encompass user was down 14%. The company added 39% more users on a year-over-year basis.

It is buying MortgageCEO because customers are looking for CRM functionality as they seek to keep their individual loan volumes up as the overall market declines, Anderman says.

The transaction is expected to close at yearend. No other terms of the transaction have been released.