Ellie Mae ELLI reported a healthy second-quarter fiscal 2018, wherein both top line and bottom line surpassed the Zacks Consensus Estimate.
The company’s non-GAAP earnings per share of 54 cents beat the Zacks Consensus Estimate of 41 cents. Also, the bottom line climbed 6% year over year.
Fiscal second-quarter revenues came in at $125 million, up 20% year over year. The revenue figure was above the company’s guidance of $122-$124 million and beat the Zacks Consensus Estimate of $123 million. This increase was primarily driven by the company’s subscription revenues, including that from the recently acquired Velocify.
Ellie Mae, Inc. Price, Consensus and EPS Surprise
Ellie Mae, Inc. Price, Consensus and EPS Surprise | Ellie Mae, Inc. Quote
Notably, the company has outperformed the industry’s rally of 0.5% with an average return of 16.3%.
Revenue Details
The company’s contracted revenues increased 34% on a year-over-year basis to $89.8 million, contributing 72% of the total revenues. The contracted revenues include professional services revenues, which constituted about 7% of total revenues in the quarter.
Notably, average monthly closed loans per active user were 1.23 compared with 1.3 in the prior-year period. Nevertheless, Encompass NG Lending Platform closed loan volumes of 721,000, which were up about 6% from the year-ago quarter.
On a per loan basis, revenues grew 13% year over year on the back of increased adoption of products and network strength.
The company had 193,000 active users during the fiscal second quarter, up 9% from the year-ago quarter.
Margin Details
Non-GAAP gross profit came in at $81.01 million. Per ASC 605, the figure was $81.48 million compared to $68.3 million in the year-ago quarter.
Non-GAAP gross margin of 64.8% expanded 30 basis points (bps) sequentially.
Adjusted EBITDA for the fiscal second quarter was $34.03 million. Per ASC 605, adjusted EBITDA was $33.89 million compared with $35.76 million for the year-ago quarter.
Balance Sheet and Other Financial Details
Ellie Mae ended the quarter with cash and investments of $324 million compared with $315 million in the previous quarter.
Cash flow from operating activities was $35.7 million in the quarter. Free cash flow came in at $13.9,
Guidance
The company reaffirmed fiscal 2018 revenue guidance at $495-$505 million.
However, guidance for Contracted revenues has been raised. The figure is now expected to be within $353–$358 million, up from the previously expected range of $350–$355 million.
On a non-GAAP basis, earnings per share are expected to be in the range of $1.79–$1.92, which is higher than the previous guidance of $1.68 to $1.78.
Adjusted EBITDA is now projected in the range of $129.5 million to $134.5 million, higher than the previous view of $126.7–$132 million.
For the third quarter of fiscal 2018, revenues are expected to be in the range of $127 million to $129.0 million. Non-GAAP EPS is anticipated to be within 52 cents to 57 cents. Adjusted EBITDA is expected between $35 million and $38 million.
Zacks Rank and Stocks to Consider
Ellie Mae currently carries a Zacks Rank #3 (Hold).
A few stocks worth considering in the broader Computer and Technology sector are Adobe ADBE, and Momo Inc. MOMO, each sporting a Zacks Rank #1 (Strong Buy), and Okta, Inc. OKTA, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Adobe, Momo and Okta is projected to be 16.20%, 22% and 20%, respectively.
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