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Lending

Ellie Mae 2Q14 earnings overcome outages

Encompass users increase 12% y/y

house on coins

Ellie Mae (ELLI) recorded an increase in its second-quarter earnings despite additional operating expenses from its outages experienced at the end of March.            

The company reported a second-quarter revenue of $40 million, up from $34.3 million for the same period a year ago, while net income increased from $3.7 million in 2Q14 to $4.4 million.

The total number of active Encompass users increased 12% year-over-year to 98,996.

“Our business momentum continued to be driven by onboarding more users to our SaaS Encompass platform and ramping their usage of our on-demand services. Our results also highlighted the upside leverage in our business model when mortgage origination volumes uptick as they did on a sequential basis in the second quarter,” said Sig Anderman, CEO of Ellie Mae.

Last quarter, Ellie Mae posted a first-quarter revenue of $32.2 million, saying that most of the financial consequences of its outages will hit in the second-quarter earnings.

“The outage was caused by a combination of things. Hardware, internal software, third-party software and a surge in demand. And it was kind of a perfect storm of things coming together,” Jonathan Corr, president and chief operational officer of Ellie Mae, said.

As a result the company is looking at a little over $2 million in capital spending for the year, causing a bump in its capital spending guide it put out three months ago.

In addition, back in May, Ellie Mae authorized a program to repurchase up to $75 million of the company’s common stock. Under the program, purchases may be made from “time to time” on the open market over the next 36 months, and will be funded from the company’s available working capital. 

The company also announced it is relocating its headquarters in Pleasanton, California to accommodate its increasing workforce.

The company currently occupies two smaller buildings in Pleasanton and will nearly doubles its existing office space to better fit its employees, which also has about doubled in size in the last two years to more than 500.

“Our pipeline remains strong and we are maintaining our guidance for the full year despite the forecasts of further declines in mortgage origination volume this year,” concluded Anderman.

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