Black Knight, Inc.

Greetings and welcome to Black Knight fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to hand the conference over to your host, Steve Egerton, Investor Relations. Thank you, and over to you, sir.

Thanks. Good morning, everyone, and thank you for joining us for the Black Knight Fourth Quarter 2021 Earnings Conference Call. Joining me today is Chairman and Chief Executive Officer Anthony DeBoer, President Joe Nekashi, Chief Financial Officer Kirk Larson. Our results were released this morning, and the press release and supplemental slide presentation have been posted to our website. This conference call is being recorded and will later be made available on our website. This call will include statements related to the expected future results for our company and our therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release, Form 10-K, and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release supplemental slide presentation. This call will be available for replay via webcast through Black Knight Investor Relations website at investor.blackknightneeds.com. I'll now turn over the call to Anthony. Thank you, Steve.

Good morning, everyone, and thank you for joining us for our fourth quarter earnings call. Today, I'm going to discuss highlights from 2021 and our plans for 2022, as well as our announcement this morning. I'm very proud of how our company performed in 2021 and how we remain focused on the health and safety of our employees supported our clients, and executed exceptionally well against our strategic initiatives to drive long-term value for all of our stakeholders. From a financial perspective, fourth quarter was another outstanding quarter that closed out an outstanding year. Organic growth was nearly 11%, adjusted EBITDA grew 12%, and adjusted EPS grew 10%. From a sales perspective, 2021 was a record year, and the fourth quarter was the highest of the year. I'll now provide an update on the performance of each of our businesses, beginning with our industry-leading servicing software business. We are laser-focused on our client relationships and enjoy exceptionally high client retention, with only two competitive losses since 2014. In the fourth quarter, we signed one of those clients back to a multi-year MSP relationship and look forward to a long future together. We also signed three additional new clients to MSP in the fourth quarter. For the full year, we signed a total of 16 new MSP clients, which is the highest number of clients signed on record and almost double the number of new clients signed in 2020. These clients, along with other implementations and process, will add more than a million loans to MSP by the end of 2023. Our ability to sign new MSP clients at such a pace clearly demonstrates the value in this comprehensive platform and our ability to capitalize on the opportunities available to us. I'm proud of how hard we've worked to deepen the relationships with our existing clients, as well as attract new clients. The value our clients place on innovation can be seen in the adoption rate of the next-gen product Black Knight has delivered over the past few years. Servicing digital and customer service digital were developed with a cloud-first approach, and loss mitigation and claims leverage our advanced API strategy, allowing us to deliver innovative solutions to market quickly in response to our clients' biggest pain points. When we sell MSP to new clients or renew existing client contracts, we bundle our new innovative technologies that help services grow revenue, improve margins, and support regulatory compliance. In fact, we have more than doubled the number of solutions bundled into MSP new client sales compared to six years ago. We also cross-sell our new innovative technologies to existing MSP clients. Specifically in 2021, we signed 37 new service and digital deals, 20 new loss mitigation deals, 15 deals for our next generation customer service solution, and seven deals for our claims solution. Our trusted position in the mortgage industry, the deep customer relationships we have earned, our extensive industry knowledge, and our agile product delivery practices allows us to respond with urgency to industry changes. like the pandemic, and deliver meaningful solutions at the right time. We delivered and continued to improve forbearance tools for borrowers through Servicing Digital, while enhancing an already robust loss mitigation solution for our clients. To add even more value, we also integrated Servicing Digital with our collateral analytics, AVM, and our optimal blue, PPE. Last quarter, I mentioned that we were integrating with an insurance marketplace to give our clients' customers the ability to select insurance policies through servicing digital. We've completed this integration ahead of schedule, and we've also enabled connections to payment providers so customers can use alternative payment methods like Apple Pay, Google Pay, and debit cards to make real-time mortgage payments. These integrations are part of our strategy to allow our clients to provide their customers the ability to manage anything related to their home through servicing digital and improve the customer experience. As you can see from the example they just provided, we deliver the innovative servicing digital platform and continue to identify ways to expand the solutions available to our clients that will help them better serve their customers. We're also developing new capabilities for the recently acquired SureFire marketing automation platform that was originally built to serve the origination market to help servicers provide better customer service and reduce call volume. As an example, escrow statements are mailed once an escrow analysis is performed on the loan. Servicers receive more inbound inquiries from these statements than they do from any other single event throughout the year. We are leveraging Surefire to create and share personalized explanatory videos through Servicing Digital to help reduce this call volume. We will be offering similar capabilities to address other high-call volume topics, such as explaining private mortgage insurance and when it can be removed, and the potential benefits of a refi, which will also include a link to Servicing Digital to apply for a refi. These valuable additions, which are designed to give our clients the tools they need to better serve their customers, will be available in the second quarter and are just a few examples of the endless ways we can integrate our significant capabilities to solve more client problems.