EX-99.1 2 elli-8kx2016x0331xex991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

FOR IMMEDIATE RELEASE

ELLIE MAE REPORTS FIRST QUARTER 2016 RESULTS
Record Revenue Up 36% to $73.6 Million
Raises 2016 Guidance


PLEASANTON, Calif. - April 28, 2016 - Ellie Mae® (NYSE:ELLI), a leading provider of innovative on-demand software solutions and services for the residential mortgage industry, today reported results for the first quarter ended March 31, 2016.

First Quarter 2016 Highlights
•
Record revenue of $73.6 million, up 36% from $54.2 million in Q1 2015
•
Adjusted EBITDA of $15.6 million, up 7% from $14.6 million in Q1 2015
•
Net income of $2.5 million, compared to $3.6 million in Q1 2015
•
15,000 Encompass seats booked
•
Revenue per average active Encompass® user of $522, up 10% from $474 in Q1 2015

“We had a great start to the year with continued momentum across our business,” said Jonathan Corr, president and CEO of Ellie Mae. “In addition to growing revenue by 36% in the face of a 10% decline in origination volume, we continued to see robust adoption throughout the lender community. Seat bookings for Encompass were an impressive 15,000 in the first quarter. In March, we welcomed more than 2,200 industry professionals to our largest ever Ellie Mae user conference, Experience, where we introduced three new solutions in the areas of compliance, CRM and mobile, continuing our focus on innovation to help customers grow their businesses. With this strong foundation, we are raising our 2016 guidance.”

Financial Results
Total revenue for the first quarter of 2016 was $73.6 million, compared to $54.2 million for the first quarter of 2015. Net income for the first quarter of 2016 was $2.5 million, or $0.08 per diluted share, compared to net income of $3.6 million, or $0.12 per diluted share, for the first quarter of 2015.

On a non-GAAP basis, adjusted net income for the first quarter of 2016 was $10.7 million, or $0.34 per diluted share, compared to $9.9 million, or $0.33 per diluted share, for the first quarter of 2015. Adjusted EBITDA for the first quarter of 2016 was $15.6 million, compared to $14.6 million for the first quarter of 2015.

Additional information about the non-GAAP financial measures presented in this release, including a reconciliation of the non-GAAP financial measures to their related GAAP financial measures, is set forth below under the section entitled “Use of Non-GAAP Financial Measures.”




Key Operating Metrics:
•
The total number of active Encompass users increased 22% year-over-year to 144,533;
•
Contracted revenue increased 44% year-over-year to $46.0 million; and
•
Revenue per average active Encompass user in the first quarter increased 10% year-over-year to $522.

Second Quarter and Full Year 2016 Financial Outlook
For the second quarter of 2016, our revenue is expected to be in the range of $84.0 million to $86.0 million. Net income is expected to be $7.5 million to $8.0 million, or $0.24 to $0.25 per diluted share. Adjusted net income is expected to be in the range of $16.6 million to $17.6 million, or $0.53 to $0.56 per diluted share. Adjusted EBITDA is expected to be in the range of $25.5 million to $27.0 million.

For the full year 2016, revenue is expected to be in the range of $325.0 million to $329.0 million, up from the previously provided range of $317.0 million to $321.0 million. Net income is expected to be $23.5 million to $25.5 million, or $0.74 to $0.80 per diluted share, up from the previously provided range of $22.2 million to $24.2 million, or $0.71 to $0.76 per diluted share. Adjusted net income is expected to be in the range of $58.4 million to $61.4 million, or $1.84 to $1.92 per diluted share, up from the previously provided range of $56.1 million to $59.1 million, or $1.79 to $1.86 per diluted share. Adjusted EBITDA is expected to be in the range of $93.0 million to $97.5 million, up from the previously provided range of $90.0 million to $94.5 million.

Quarterly Conference Call
Ellie Mae will discuss its first quarter 2016 results today, April 28, 2016, via teleconference at 4:30 p.m. Eastern Time. To access the call, please dial 877-876-9176 or 785-424-1667 at least five minutes prior to the 4:30 p.m. Eastern Time start time. A live webcast of the call will be available on the Investor Relations section of the Company’s website at http://ir.elliemae.com. An audio replay of the call will be available through May 12, 2016 by dialing 888-203-1112 or 719-457-0820 and entering access code 8415904.

Use of Non-GAAP Financial Measures
Ellie Mae (the “Company”) provides investors with the non-GAAP financial measures of adjusted net income, adjusted EBITDA, and free cash flow in addition to the traditional GAAP operating performance measure of net income as part of its overall assessment of its performance. Adjusted net income consists of net income plus amortization of intangible assets and stock-based compensation expense. EBITDA consists of net income plus depreciation, amortization of intangible assets, and income tax provision, less other income, net. Adjusted EBITDA consists of EBITDA plus stock-based compensation expense. Free cash flow consists of net cash provided by (used in) operating activities less acquisition of property and equipment and internal-use software, net. Ellie Mae uses adjusted net income 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 and depreciable lives of fixed assets, the amortization of intangibles related to acquisitions, loss on impairment of intangible assets, and changes in interest



expense and interest income that are influenced by capital market conditions. The Company also believes it is useful to exclude stock-based compensation expense from adjusted net income 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 or operating income or other financial measures calculated in accordance with GAAP. The Company cautions that other companies in Ellie Mae’s industry may calculate adjusted net income, EBITDA, adjusted EBITDA, and free cash flow differently than the Company does, further limiting their usefulness as a comparative measure. A reconciliation of net income to adjusted net income, EBITDA, adjusted EBITDA, and operating cash flow to free cash flow are included in the tables below.

Disclosure Information
Ellie Mae uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Ellie Mae’s investor relations website in addition to following Ellie Mae’s press releases, SEC filings, and public conference calls and webcasts.

About Ellie Mae
Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call (877) 355-4362 to learn more.

Forward-Looking Statements
This press release contains forward-looking statements under the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These forward-looking statements include projected revenue, net income (loss), adjusted EBITDA, and adjusted net income for the second quarter and fiscal year 2016. These statements involve known and unknown risks, uncertainties, and other factors which may cause Ellie Mae’s results to be materially different than those expressed or implied in such statements. Such differences may be based on factors such as changes in the volume of residential mortgages in the United States; changes in other macroeconomic factors affecting the residential real estate industry; changes in strategic planning decisions by management; our ability to manage growth and expenses as we continue to scale our business; reallocation of internal resources; costs incurred and delays in developing new products; changes in anticipated rates of SaaS seat additions, and new customer acquisitions; the possibility that economic benefits of future opportunities may never materialize, including unexpected



variations in market growth and demand for the acquired products and technologies; delays and disruptions, including changing relationships with partners, customers, employees or suppliers; the satisfactory performance, reliability and availability of our products and services; the amount of costs incurred in connection with supporting and integrating new customers and partners; ongoing personnel and logistical challenges of managing a larger organization; changes in other macroeconomic factors affecting the residential real estate industry and other risk factors included in documents that Ellie Mae has filed with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2015 as updated from time to time by our quarterly reports on Form 10-Q and our other filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on Ellie Mae’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Ellie Mae cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Ellie Mae expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances, unless otherwise required by law.


IR CONTACTS:

Alex Hughes
VP of Investor Relations
Ellie Mae, Inc.
(925) 227-7079
IR@elliemae.com


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


PRESS CONTACT:

Erica Harvill
Ellie Mae, Inc.
(925) 227-5913
Erica.Harvill@elliemae.com



# # #


© 2016 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™, Mavent®, Mortgage Returns®, Prospect Manager®, Total Quality Loan®, True CRM®, TQL® and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.




Ellie Mae, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
 
 
March 31,
2016
 
December 31,
2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
28,540

 
$
34,396

Short-term investments
43,122

 
48,975

Accounts receivable, net of allowances for doubtful accounts of $141 and $124 as of March 31, 2016 and December 31, 2015, respectively
39,474

 
28,568

Prepaid expenses and other current assets
11,472

 
9,874

Total current assets
122,608

 
121,813

Property and equipment, net
96,673

 
81,360

Long-term investments
42,292

 
55,473

Intangible assets, net
21,353

 
22,810

Deposits and other assets
9,281

 
8,888

Goodwill
74,547

 
74,547

Total assets
$
366,754

 
$
364,891

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
8,910

 
$
9,911

Accrued and other current liabilities
22,107

 
37,307

Deferred revenue
17,009

 
15,864

Total current liabilities
48,026

 
63,082

Leases payable, net of current portion
571

 
685

Other long-term liabilities
11,206

 
10,273

Total liabilities
59,803

 
74,040

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock, $0.0001 par value per share; 140,000,000 authorized shares, 29,971,612 and 29,566,511 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively
3

 
3

Additional paid-in capital
298,607

 
285,342

Accumulated other comprehensive income (loss)
71

 
(257
)
Retained earnings
8,270

 
5,763

Total stockholders’ equity
306,951

 
290,851

Total liabilities and stockholders’ equity
$
366,754

 
$
364,891




Ellie Mae, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share and per share amounts)
 
 
 
 
 
Three Months ended March 31,
 
2016
 
2015
Revenues
$
73,625

 
$
54,189

Cost of revenues(1)
26,631

 
17,350

Gross profit
46,994

 
36,839

Operating expenses:
 
 
 
Sales and marketing(1)
15,287

 
9,760

Research and development(1)
12,453

 
8,297

General and administrative(1)
15,731

 
12,302

Total operating expenses
43,471

 
30,359

Income from operations
3,523

 
6,480

Other income, net
199

 
132

Income before income taxes
3,722

 
6,612

Income tax provision
1,216

 
3,028

Net income
$
2,506

 
$
3,584

Net income per share of common stock:
 
 
 
Basic
$
0.09

 
$
0.12

Diluted
$
0.08

 
$
0.12

Weighted average common shares used in computing net income per share of common stock:
 
 
 
Basic
29,471,214

 
28,768,144

Diluted
31,080,314

 
30,442,163

 
 
 
 
Net income
$
2,506

 
$
3,584

Other comprehensive income, net of taxes:
 
 
 
Unrealized gain on investments
328

 
171

Comprehensive income
$
2,834

 
$
3,755

 
 
 
 
(1)Includes stock-based compensation expense of the following for the periods presented:
 
 
 
 
Cost of revenues
$
970

 
$
615

Sales and marketing
878

 
517

Research and development
1,504

 
1,147

General and administrative
3,338

 
2,728

 
$
6,690

 
$
5,007






Ellie Mae, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
 
 
 
 
Three Months ended March 31,
 
2016

2015
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
2,506

 
$
3,584

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation
3,954

 
1,767

Provision for uncollectible accounts receivable
33

 
38

Amortization of intangible assets
1,457

 
1,332

Stock-based compensation expense
6,690

 
5,007

Excess tax benefit from stock-based compensation
—

 
(2,906
)
Deferred income taxes
1,172

 
—

Loss on disposal of property and equipment
5

 
—

Amortization of investment premium
239

 
275

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(10,939
)
 
(5,188
)
Prepaid expenses and other current assets
(1,598
)
 
3,007

Deposits and other assets
(1,565
)
 
—

Accounts payable
625

 
379

Accrued, other current and other liabilities
(13,817
)
 
846

Deferred revenue
1,178

 
2,805

Net cash provided by (used in) operating activities
(10,060
)
 
10,946

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Acquisition of property and equipment
(13,298
)
 
(10,253
)
Acquisition of internal-use software
(7,112
)
 
(5,762
)
Purchases of investments
(18,971
)
 
(15,816
)
Maturities of investments
18,094

 
15,665

Sale of investments
20,000

 
—

Net cash used in investing activities
(1,287
)
 
(16,166
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Payment of capital lease obligations
(868
)
 
(1,320
)
Proceeds from issuance of common stock under employee stock plans
6,719

 
5,071

Payments for repurchase of common stock
—

 
(2,520
)
Tax payments related to shares withheld for vested restricted stock units
(360
)
 
(320
)
Excess tax benefit from stock-based compensation
—

 
2,906

Net cash provided by financing activities
5,491

 
3,817

NET DECREASE IN CASH AND CASH EQUIVALENTS
(5,856
)
 
(1,403
)
CASH AND CASH EQUIVALENTS, Beginning of period
34,396

 
26,756

CASH AND CASH EQUIVALENTS, End of period
$
28,540

 
$
25,353




Ellie Mae, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (continued)
(UNAUDITED)
(in thousands)
 
 
 
 
 
Three Months ended March 31,
 
2016
 
2015
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
79

 
$
33

Cash paid for income taxes
$
97

 
$
50

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
Fixed asset purchases accrued but not paid
$
2,036

 
$
2,628

Stock-based compensation capitalized to property and equipment
$
488

 
$
207

Acquisition of property and equipment under capital leases
$
—

 
$
5,996





Ellie Mae, Inc.
NON-GAAP RECONCILIATION
(UNAUDITED)
(in thousands, except share and per share amounts)
 
 
 
 
 
Three Months ended March 31,
 
2016
 
2015
Net income
$
2,506

 
$
3,584

Depreciation
3,954

 
1,767

Amortization of intangible assets
1,457

 
1,332

Other income, net
(199
)
 
(132
)
Income tax provision
1,216

 
3,028

EBITDA
8,934

 
9,579

 
 
 
 
Stock-based compensation expense
6,690

 
5,007

Adjusted EBITDA
$
15,624

 
$
14,586

 
 
 
 
Net income
$
2,506

 
$
3,584

Stock-based compensation expense
6,690

 
5,007

Amortization of intangible assets
1,457

 
1,332

Adjusted net income
$
10,653

 
$
9,923

 
 
 
 
Shares used to compute non-GAAP net income per share
 
 
 
Basic
29,471,214

 
28,768,144

Diluted
31,080,314

 
30,442,163

 
 
 
 
Adjusted net income per share
 
 
 
Basic
$
0.36

 
$
0.34

Diluted
$
0.34

 
$
0.33

 
 
 
 
Net cash provided by (used in) operating activities
$
(10,060
)
 
$
10,946

Acquisition of property and equipment and internal-use software, net
(20,410
)
 
(16,015
)
Free cash flow
$
(30,470
)
 
$
(5,069
)



Ellie Mae, Inc.
NON-GAAP RECONCILIATION
(UNAUDITED)
(in thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
Second Quarter 2016 Projected Range
 
Fiscal 2016 Projected Range
Net income
$
7,500

 
$
8,000

 
$
23,500

 
$
25,500

 
 
 
 
 
 
 
 
Depreciation
4,400

 
4,600

 
19,000

 
19,800

Amortization of intangible assets
1,500

 
1,500

 
5,900

 
5,900

Income tax provision/other
4,500

 
4,800

 
15,600

 
16,300

EBITDA
17,900

 
18,900

 
64,000

 
67,500

 
 
 
 
 
 
 
 
Stock-based compensation expense
7,600

 
8,100

 
29,000

 
30,000

Adjusted EBITDA
$
25,500

 
$
27,000

 
$
93,000

 
$
97,500

 
 
 
 
 
 
 
 
Net income
$
7,500

 
$
8,000

 
$
23,500

 
$
25,500

Stock-based compensation expense
7,600

 
8,100

 
29,000

 
30,000

Amortization of intangible assets
1,500

 
1,500

 
5,900

 
5,900

Adjusted net income
$
16,600

 
$
17,600

 
$
58,400

 
$
61,400

 
 
 
 
 
 
 
 
Shares used to compute non-GAAP net income per share
 
 
 
 
 
 
 
Basic
29,700,000

 
29,800,000

 
30,300,000

 
30,500,000

Diluted
31,400,000

 
31,500,000

 
31,800,000

 
32,000,000

 
 
 
 
 
 
 
 
Projected net income per share
 
 
 
 
 
 
 
Basic
$
0.25

 
$
0.27

 
$
0.78

 
$
0.84

Diluted
$
0.24

 
$
0.25

 
$
0.74

 
$
0.80

 
 
 
 
 
 
 
 
Adjusted net income per share
 
 
 
 
 
 
 
Basic
$
0.56

 
$
0.59

 
$
1.93

 
$
2.01

Diluted
$
0.53

 
$
0.56

 
$
1.84

 
$
1.92