Corelogic (CLGX) 26 Jul 182018 Q2 Earnings call transcript

Good day, everyone, and welcome to the CoreLogic Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. And please note that today's event is being recorded. I would now like to turn the conference over to Dan Smith of Investor Relations. ahead. go Please

good conference and for to investor our second Thank where morning. we and call of results present presentation quarter you XXXX. Welcome our the financial

be Martell; will Speaking CEO, President Balas. Jim Frank today and CoreLogic's CFO, and

few let a points. Before we make important begin, me

our which we results details financial includes on posted First, our website. additional our on slide presentation,

our operational federal Second, within the statements performance may make securities including acquisition please laws, forward-looking and note and that during today's expected statements and outlook, concerning regarding and our and conditions. strategies, actual of from statements. plans, we are statements subject the business could presentation, in that known growth expectations results risks industry unknown described All differ materially forward-looking those these and to cause to the uncertainties meaning

please concerning our Report on For these to including most subsequent uncertainties, the and and risks XX-Qs. recent refer the details Form Annual filings, SEC further XX-K

information intend to and are us, currently Our to based statements these update undertake forward-looking and for any on statements available reason. not no do we duty

second Additionally, contains the financial these year-over-year presentation. financial of understood XXXX. basis. of specifically today's reconciliation their appendix in of presentation measures comparisons a quarter financial to the reference prior are quarter second to periods that identified, should to in A equivalents non-GAAP measures. GAAP Unless non-GAAP to results on is measures included today's be That is,

follow-up. Finally, please limit one yourself to brief a with question

end at CEO, additional now, take will Frank call and the me questions the President let permits. as our We And, of time introduce Thanks. Martell.

quarter continued notable support. first margin for want market today performance on wrap results highlights, operationally call. most and employees, Q&A guidance morning, another with We'll delivered to and revenue The the first this half their strong session. I comments quarter second I financial of off thanking operating year our CoreLogic my financial provide in lead summarize a to conditions. quarter the of second clients, and today trends, shareholders good second and half remarks Welcome off point earnings both and by Dan, profit our will and team view. for everyone. quarter Thanks, with a from start updates. Jim the expansion, up prepared recap of including will and recent CoreLogic's

Our later. cash on quarter of top headwinds. will my increased the line, balance and adjusted XXXX achieving XX%, results. Jim XX%, I and revenues, and margins financials flow towards is second our remarks focus respectively. headline profitability income, the and quarter mortgage durability business U.S. well of adjusted prepared EBITDA, making operating X%, despite detail market second the grew resiliency strong as model, will adjusted in the of progress free EBITDA expanded our today generated and XXXX We we're EPS the as the first long-term targets. and quarter half The our for undoubtedly our first second discuss half

Operationally, volumes. management For margins, and an finally, solution operating expanding compliance capital market capabilities, enhancing our XX%, our the revenues, focused property adjusted and international drop respectively, this leadership adjusted despite X%, and intelligence, and sets, our risk solutions in footprint, out to our spatial & leverage shareholders. underwriting, technology insurance building and building of EPS increased on market XX% in we U.S. year, six and EBITDA, estimated first months XX%, mortgage returning

that new provide insights will We unique clients continued real estate to with totality connect the invest leading-edge in ecosystem. solutions our also building that of

non-mortgage transform in trends scale, as top We footprint. levels, yet we successfully superior broader well relentless to of focus drive half XXXX. a partner Our expanded service first the quality and, and some to management and line as high-impact us be property as risk innovation, for growth market our We positions on our outperformed the cases, solutions. valuation, generated clients mortgage underwriting, X% again, in and enhance

performance segment PIRM businesses. insight property grew strong within our X% on Our

grew operations EBITDA by tax of of the of AMC half servicing market growth, amendment Profits from increased segments offset valuations organic XX% an first segment of revenues. discussed. contract, the year-over-year related long-term up of over the by the the XX%, Our and XXXX. UWS lower scaling modestly as previously including, Operating adjusted and benefit amendment volumes in our were operating platform both contract impact in a case favorability rose our income UWS, continuing of and to

years impact basis XX% First margin XXXX half the basis of in just XX% build-out the market XXX on a were last for of and past so result mix, were and excluding Favorable accounting solutions revenue and, platform. contract our points the focus building optimizing of productivity. amendment adjusted EBITDA I mortgage after an several over by in far normalized driving than of XXXX, set EBITDA points at automation, XXX the least adjusted organization, our or margins discussed. leverage, the and Margins we achieving a up Last are higher XXXX based operating year. our on trends U.S. efficient valuations goal year, margins

workflow One is is significant report of levels our management cost driving pleased the our quartile I'm share. achieving generated of XXXX least automating operational reduce main cross a on productivity primarily levers organization, at run that and in first program rate by to for delivering cost track to simplifying savings our $XX excellence. million These this goal processes. certain productivity, be costs will by

processes, capabilities, announced automation. to year make XXXX that and data certain expect we We significantly we in intend well XXXX that target additional technology workflow and our as accelerate and this investments enhance will as also earlier curation production

believe benefit programs rate XXXX. are substantial run plus financial and these to result in as quality lower we investments cycle time expected we benefits, not results, exit will costs XXXX these While

reflects continue and the differentiator successfully has free As and free cash underlying flow to Jim cash high rates deliver strength will of consistently levels model. proven discuss of business a CoreLogic's over later, we drive flow. to durability be ability high of to time significant our

share our strategic scale of fund allocated shareholders to repurchases. intent, capital consistently free As structure, have capital to flow return product cash a through and and optimize our innovation, our we matter

over returned fact, seven free XXXX, The XX a to unit of the for past our our has repurchased successful of $X.X the to transformation we flow shareholders shares the years portion mortgage progressively U.S. of million common we in Since market cycles volumes. of buybacks. our cash strategic have years, stock us billion. allowed our approximately impact form in seven of significant execution program reduce over the past In down

units by it CoreLogic gains, adjusted strong another well XXX has product first at margins track on the core have EPS XXXX. focus EBITDA revenues adjusted grown acquisitions. To up, as and basis from Since resulted development, of and market We long-established record have XXXX, performance of team performance building our share of outperforming through smart and a share annual has XXX%. compounded as and by Operating delivered rate strong market in X%, our our are This business the volume trends. consistently half up XX%. points an sum we price in the XX%, financial up operating quarter is second leadership

we're cost and focused the beyond business durability housing XXXX insights our into results I believe on that by unique well earlier the targets. power and the in and profit non-mortgage of making and balance opportunities said progress towards as of in expanding a remain us demonstrate connect must-have by Appreciate the solutions, the also shift and clearly model which discuss we our and focused excited joining continuing these securing delivering strategic adjacencies, achieving towards presented mortgage on, I inherent We will drive quarter of are into resiliency our purchase-driven as on now opportunities longer-term in to global ecosystem. enter that and the scale is We the plan As must-have mix our Jim second productivity. financial cycle evolving the the U.S., results realizing revenue today. our you benefits guidance.

I'm Frank, guidance. discuss our good to Thanks, results financial on morning, views Today, XXXX our capital outline recap and second quarter financial and everyone. then return our and going

of improved the which revenue technology, the reflecting contract margin by strong performance customer-driven revenue both proportion growth driven expansion outstanding second, and margin recognition; a our quarter U.S. and Frank mentioned, than business and and EBITDA a more organic amendment approximately financial our CoreLogic the a delivered represents driven total adjusted free accelerated common significant business mortgage finally, count. cost first, shares X% of acquisitions of greater benefit business quarter. segments, that XXX,XXX operating subscription, by strong outperformance Notable continued mix, of higher trends, X% flow; volumes, third, in generation non-mortgage revenue mix financial As repurchase of highlights and share second fourth, based market of very growth, of revenues; productivity; growth in included; cash of second

XXXX. $XXX impact insights, XXXX. certain totaled the income in real in The solutions growth contract. unit decline mode from resulted cost million and million million spatial operating and X%. U.S. for $XXX by UWS CoreLogic's previously, million of of scaling la revenues favorable quarter than mix, from quarter increase and increase business Second completed driven million, PIRM quarter of XXXX accelerated mortgage a revenue a Mercury valuations growth X% well platform $XXX of rose insurance the year-over-year resulting with from discussed & growth revenues wind positive million, from $XX gains segment trend UWS including the The the and organic benefit principally Operating were through acquisitions X% the revenues period, recognition as and $XXX same principally from the of attributable technologies. growth growth more programs. acquisitions $XX $XX with organic XX% lines. were second up to productivity an a management in XX% operations, down of as in benefited property contributions and year-over-year million, despite of volumes to Network second of international income long-term non-core compared primarily revenue also of in to estate-related revenue solutions compared the product the upsides was for approximately the amendment

points margin income quarter XX%. XXX Second approximately to was up operating basis

million attributable compared operations same Second operating to XXXX from upsides was quarter income in period. net outlined continuing with $XX the primarily totaled increase previously. The million $XX

increase diluted EPS offset to the compared driven compared the resulting quarter operations EPS million $XX of contract, including from of than $X.XX adjusted with to non-core Adjusted $X.XX, totaled rose with in attributable margin unit more as XX% $X.XX $XXX million, XX% up in The the valuations, which XX%. market mentioned from scaling diluted product period. adjusted lower U.S. second year X% Adjusted growth, increased long-term points quarter volumes $XX million. by cost previously amendment lines. from CoreLogic's and XXXX. in prior of of mortgage XXX second continuing totaled by the the adjusted wind EBITDA the U.S. in mix, in down quarter basis as unit totaled partially to Second $X.XX $XXX revenue offset approximately the EBITDA the million principally organic was up certain a improved XXXX. approximately volumes. benefit growth Adjusted productivity PIRM million business lower mortgage revenue $XXX of well platform, solutions and to EBITDA EBITDA UWS EBITDA recognition of was impact

Second up earlier. impact points XX the discussed the quarter excluding basis margins of were contract amendment

$XX the payment settlement flow. one-time million levels in of previously generate disclosed a accrued despite Finally, to continued legal free XXXX, with associated cash significant we cash

free on prepared conversion updates last and adjusted close For financial with June discussion guidance. XXXX, million, the months capital flow XX our a cash XX% will remarks months a regarding XX $XXX my today totaled I XX, return EBITDA. of rate ending

has enabled a for and share our terms of of future. managing to total future capital long-term be strong for committed XXXX, it shares our shareholders, via shares CoreLogic X% $XX CoreLogic's in creation repurchases. first and growth to so overall to half In we remain of outstanding repurchased is capital we million. for has significant our Through significant in the cash to us X.X proven free repurchasing balances expect million of while flow returning source common the value X% approach to of a XXXX. amounts of debt This return, invest

strong our year EPS and $XXX XXXX share. cost and our first productivity we of our volumes, $X.XX $X.XXX year full investments, Adjusted year guidance billion full financial have our to current adjusted per of revised half for of We're to performance, of million XXXX, $X.XXX XXXX guidance, in as the expecting likely market EBITDA financial second revenues half to of million Regarding $XXX $X.XX billion. on full for based view follows.

revised estimates ranges reflect assumptions. guidance the and Our XXXX following updated

to First, XXXX we from mortgage full loan expect XX% unit approximately to year U.S. XXXX origination levels. decline volumes XX% by

partially recognition, revenue research of as be benefit expected benefit $X enhancement of the is to addition, development net visualization year by costs a $XX accelerated increased In estimate data million $XX company's and of solutions contract earlier. capabilities. attributable from to the to to full long-term approximately resulting we of million, approximately offset a discussed delivery related and million This amendment the

As the million. third for of current U.S. trends far million business, expect that accelerated and origination based as our quarter our progression the of and of outlook the investments we view market adjusted cost plan, quarter our be in our range for strategic XXXX, unit of of within EBITDA will on $XXX timing trends $XXX third to volume the including

achieved over balance have are start strong strong financial to XXXX the deliver well-positioned to believe and year. results to we We we continue a the of

to revenue years executing growth come. strategic are margin focused a on enhancing over we our expansion view plan with the In and our long-term addition, toward

earlier, achieving of a mortgage based accounting for EBITDA U.S. market after plus As and CoreLogic to valuations XX% solutions margins in the build-out committed normalized XXXX adjusted mentioned Frank platform. remains on our

our will the expect now and of turn operator combination today. Thanks Q&A. your over cost back goals We through productivity. call to I model time for growth, for business mix, achieve the well to favorable profitable transformation as margin as a revenue

you, time, roster. go our we questioner at now Wolfe with will will session. our the assemble this Please ahead. And today and begin Peller Research. first moment will a question-and-answer for pause Thank Darrin And be to we

lot, a Thanks right. All guys.

clarify, Just puts the versus raise guidance, about think know takes. when I there's some to we and EBITDA

incorporating business. you're in the So, now investments

of I reset of and on you for where what just outlook, could lower And you're those coming benefits yet raising into partly that's more I guidance. price go from see because investments? the on a or incorporating the little still know you you're a incremental – contract If guess, overall.

just assumptions and get a you takes incremental more around can investments? here little to both originations and on the us the what's color actually happening So, give why to puts and

Yeah. end in of off to moved Jim first I of and progression, start is morning, the essentially we strong think the Sure. summarize Frank. which which fill quarter, follows. Good I'll guidance guidance the Darrin. was as the higher that But This necessary. can would range where is I At the a end if quarter, volumes. more additional we've remained on there's that look the We've or despite able pressure in in side the downside is range, – fact so that that that in been profitability you market forecast that's both hold there the to at an incremental MBA the if GSEs, – remains the mortgage and unchanged. overcome the

Right.

was the benefit discrete There Jim contract – that In full million terms item item of mentioned, the that $XX adjustment. the year. from approximately a for

plays for visualization the and us cycle production things to add $XXX sense of data as So, million. if We think invest think out. a heavily will from a continue platforms $XXX of future million enable get prospects to that lot it – number, to in other makes the that kind addition, roughly perspective, to discretionary in you to you to I systems around that I and delivery growth – also

really Jim again, a mentioned. – that it's the R&D one-time. discrete So, that It's was

of somewhat benefit of So, offsets bit the the it a revenue discrete little adjustment. one-time

but fact cost I'd So largely here has is additional the projected points and most pressure despite the mix that in percentage think, say underlying important absorbed measures. the guidance, the of I through, couple been market, –

the absorbed benefited it market we the but despite the I the we've million maintained that pressure. from revenue $XX recognition, so mortgage and think range, side, really market on revenue same the the we held

That's know the out adjusting the for Thanks that overall. normalized think see the that, kind guys. some your had analytics just side when or a a curious helpful. struggling I to been had items rest profile? originations area for including and you I'm guess business see you organic like client top from if I that also growth benefit we demand of just of had follow-up. others that Is market, could products next change contract. percent, equal, growing what of it well as headwind that, I'd the low-single guess, if or for see let's I around Frank, a business with on, calculated on be curious progresses the a that a you that's market mean, in the backing of the we few just that a VSG we something digit into hear these the That's all into Yeah. year? And a could an was tailwinds else business outlook. in, in quick you thoughts market in profile your this as dropped abating share. I like would growth growth adjust call that's X% then, about all is M&A and And lot kind then, look, year what that more

Yeah. Thanks, Darrin.

me thing will – I goes the how company the just think first of that's of think, and point to all, couple last power years. one out evolved over let which I the give of earnings you

numbers, if EBITDA. roughly (XX:XX:XX). you you billion you similar made million a out calling number, If was $X.X – – the for trillion, at about with XXXX, of $XXX.XX but year, mortgage back rough at discrete we This look at market look the items, and we're guidance adjusted if the the $X.X is

trillion, same gone essentially, mortgage But the $X.X to from latest to the market earnings again the So, $X.X MBA power. has according trillion estimates.

the goes forward. think, we that we've positive earnings how in power as significantly way, way So, go evolved a to I positive

some mortgage think numbers. mortgage at beyond market will, headline subplots, I this just also look volume the there's year, the if you you if

more strains on creating cost what other want market I look activities. you and and the mortgage they the players pay to if issues, originate, you players, what there's at discretionary our clients and of kinds look they the at that's to – the stress around and if – some in think stresses the supply

pattern So, should you'd a bit effect to had see. moderate. certainly, of I little over that's on effect, on That basic the that Again, had normal at would as little expect a trimming I'd this dampening I it's growth abate a But rate. year, say, organic to expect think, organic bit of a we that look time. the growth

solutions. a paying other reduction side, to around are – to activity on innovation. think, lot is think And plus willing the people there innovative time I cycle how look for at I up of and

invest that's players So, that's to scaled in forward. it's we why where long-term. future win the Because important I go think as the those behind for

think point these from both things, obviously, go the perspective your market a abate to think, forward. unique of and going I'd abate. those they're also, moment – and – for AMC I I client-related are we as pressures some that should around the they're unique some significant to other at going more to – issues say, a

Right.

lot think get higher. you I underlying be in to I like So, market. fighting look the higher. issues rate, at in the think difficult hard We're if I'd growth because these But of a some X% run, short of the organic it to it it's

Yes. makes All you. guys. Thank right, sense,

next Baird. with Jeff Please Meuler go ahead. And questioner our will be today

Thank you.

we're given benefit that good go against it's going restructuring, cash. servicing, know contract it and sizable way comping I reduced not the any XXXX any scope that this – it's basis think have it grow change terms the over reduced? I if from ongoing a contract the CoreLogic? was and a that or scope has origination XXXX. of an to contract know upfront the for on post contract, will But the a and the On a with that's given But Just economics a you, $XX the in to that we're is million that contract net client in at paid forward restructuring, long-term tax I quarter's

Hey, Jeff. Jim. This is

contract, structure came the for particular to So, on tax a pain of change make a that client point to contract. wanted the our that they us in

also the change recognize sheet a significant to performance with with had cure, profile of their the a they're of had able outcomes future it. we was raised $XX little pleased The the don't of So, went to overall to bit the the commercial different contract pleased needs. and contract When I away the to were any the balance reason just the economics, foresee meeting obligation why structure they there. We contract. We're that old million P&L pull and think structure essentially. It's changed, attached through obligation it. the what off the

they're pleased and of So, what outcome arrangement, with to them outcome terms with the we're in of they address. commercial the for the wanted pleased

thank Okay, you.

think, I Jeff...

just... And then,

Sorry, Jeff.

to there's think, I Just, profile I question, think, material our going a I not think in forward. this change answer item – your also

No.

this. Related to

expect or large I So, any upsides. wouldn't downsides

you the any and guess, to then, helpful remind CoreLogic just interest you would give meaningful sensitivity on impacting to potentially escrow That's you? how can they us And any the, if rising tax you you so, us us to Okay. business. clarification. can Is rates I and income be can give –

interest, on So, income those on interest earn don't we contracts.

Okay. (XX:XX:XX)

to that say we're not – earn to That's that allowed those monies.

Okay.

Specifically.

And about currencies. and FX thinking clients. about percentage finally, I then, but business, moving currencies? not is base for give of arrangements some sense you I'm thinking other for and us outsourcing percentage Australia U.S. what outsourcing your is a denominated of expense those have via base What – in servicing I'm you of around know some expense arrangements. just – your Can also the

them – or there lot a not of us outsourcing Jeff, risk U.S. a a The I'd really from that say so are to currency translational Yeah. perspective. there's benefit dollar-related,

it. Got Okay. you. Thank

go questioner Bill next today Warmington be our will Fargo. And Wells ahead. Please with

Good morning, everyone.

morning, Good Bill.

on is for first pricing. So, you question

that had kind is pricing price could years? revenue You become the in these you've increases. success over contribution putting days, next through to of some few mentioned it and what some What growth

It's of had certain for new also programmatic. as businesses. of growth Yeah. the It's We've Pricing contracts they becoming as part our renew. some remediation healthy be organic continues to in a driver part rate. the more past

remains still healthy. pretty it all, in all So,

My VSG. Okay. question on is follow-up

new needle do move is XX going how talked for you or in to services. clients are the to How sign able you've VSG to of that onboarding the on that revenue? past the more when clients start and been going think this You've process for

a Look, headwind. AMCs couple of just Bill, One the on all, first I VSG. things Yeah. is, faced think, the

it's situational and I think kind of some is of market. it of unique, some

we're very up pleased I of clients. with the new think that sign

We bit a our onboarding. to augmented various of to degrees of them takes clients up. time of the new accept of signed It get through business have systems orders lot lot are that's unit, progressing well. think the those impact up, that but I is, all but more. the say everybody lenders progressively pretty in obviously, market I'd same also they're A conditions in a that is their else signing Also, are

going next I the larger meaningful I see to these to folks. going think diversification we're continued a we're existing impact think lenders year have And other we from see today. from that

So, to a going a bit of it's balance. be

a more the is important decent business. think it though thing sized I is,

I of the the think profitability with of growth improve important But automation mortgage is changes should falling. and thing really in, poised now of volumes cycle out characteristics is to we're as market this basic workflow come we're progress making currently revenue. the think that in I we it terms good

longer-term a So, growth a we're kind well. going of side after of as profitability and both that

the we really really addition the platform business. to the about past it. we evolution think a would of a by did as thing la I talked mention is, April, on We company. I you mode business. the tremendous VSG platform on In add calls, to pleased the excited other It's acquired and

end-to-end there good producing organic We have solid growth a and rates. high-margin it's business

targets the talked long-term to So, evolution we're trying about about. mix get of we really to that pleased that and

story. kind that's of VSG So, the

you All very thank much. right. Well,

Thanks.

Piper Please Deleeuw be next go Jaffray. with our questioner will And Jason ahead.

that? just given this Thanks But understand adjusted number morning. sure the and organic kind that's Historically, and want Good of quarter. revenue And clarify the this to FX just I miss understand always I a for did taking want for number to quarter. for quarter? growth question. the for there you've revenue I volumes. growth organic make I Was given your

Sure.

is So, Jason, Jim. this

you the X%. it was then, all-in So, item, the about X%, about That's gross The had impacted market about rec us rev X%. the The if was you X.X% number. X.X%. to company M&A. strip X%. number on And organic the for about And lands out of we overall growth

the that's X% XX% market X.X% So, you minus lands impact the the at if you X.X%, take the that and and of X%. versus

And include does deferred that revenue, $XX the organic that – Okay. benefit? million does the

Of course.

Yeah. $XX X.X% the The includes million.

out, was been apples-and-apples back if X%. that organic about So, number you citing growth that the we've

Okay. Thanks for that.

Sure.

to outlook? originally color XX%, it XX% is the growth And of that – just XX% or them changed Because, to Just or coming it's then, And believe, down in I'm just down in the what now in there. understand any trying refi, I – guide. the purchase volume both was which weaker?

Yeah. of both, bit It's a little Jason.

the are that been down if bit. the forecasts coming you they've at think I coming look – out, a

I think there's reasons a variety of different for that.

supply think is one issue that's come. I

think pricing – has escalated. prices I

impacted. been activity cash-out I a lot think a that refi There been demand of of that's has also kind tapered has bit.

the that and but XX% right certainly is – So, GSEs – in people are to it's other the factors. XX% there's think I definitely what the the a with I decline, the back gigantic And a turning all estimates. number – of I don't MBA. think think line it's Jim the

one. bit, revenue the last year-over-year, quarter. was one in little up a down just The then the and XX margins And still it. stepped Property like bps Got Intelligence

little the the I'm of we kind what expect So, for on can a rest looking that color just year. and segment for margins of for the

Yeah.

there You business bit little have some investments timing of of and in a mix.

out that that balanced year Yeah. this the of kind of is rest quarter just too? all or for in the Was

through probably continue of balance That the should year. the

you Thank very much. Great.

Sure.

go Chris And question be our with ahead. will Please Compass Point. Gamaitoni next

you define call. mean normalized taking margin market mortgage for when what by your XX% Thanks Can afternoon. you Good you target? EBITDA referenced my

market. Yeah. Hi, Chris. We've normalized talked about $X.X trillion a to kind $X.X trillion of mortgage is

so... Okay,

there to market. – $X.X to trillion goes but we don't Obviously, want market a think talking the And at to think look dropping primarily I I it of kind we're trillion achieve dramatically. we a $X.X mortgage that numbers about can't stable just was put out

I roughly, So, the in the think right we're consensus today? something now, $X.X trillion environment

think Yeah. a is Yeah, it's I – $X.X yeah. trillion dollars number,

Any Okay, businesses mean? give level helpful. high Just, speaking investments? does solutions more And the be delivery details you about? and can visualization that's What are what any around would that us thoughts helpful. we

want general, around imagery, lot to competitive on But, in them Yeah. secrets be I as bringing sets going away a housing anything. aware, or view visualization, to I in give data around mean, capturing visual imagery. to There's our of you in on going lot may life any able being don't visually. people a of there's terms

hard data a do produce consumable our clients we're take how representation we the So, way. that visual in on for of it working and

So, it requires platform.

potentially further very, very going really is file little file It's where – interesting. a market to a at of instead more to really a think going of down I from bit it's looking visual the the in really kind And flat track. But is So, change the of a data something to there. we're come. our years

and So, we're in as as some our on to data do that, we as software working investment in well investing to enable repository that well. require hardware

– And certain a for Okay. there revenue you at Is just level XX% back getting to need the your make hit of to to guidance. be target XXXX?

going that's about and factor. all organically No. to and that the we're mix We things target I a remarks. I'd his grow and talked I this – that in that Jim say think involves question. hard to wouldn't say answer prepared it's think costs not

market as get we project not look reset. combination we're certainly kind look going our a to we stable of revenue growth And So, growth things, I shrink this it's into think think past we accelerated out we I way it of and to current at as but out.

So, the basic assumption that's really there.

Yeah.

I think...

Yeah, just...

my a to then question be next these units to year-over-year, year year, the following, down revenue and of, and that's look obviously headwind. gets That

ex-market, be So, kind trying it's but you're going to I to just understanding. of so challenge, square get to combination I'm of understand, just to is circle – that growing X% How market to of factors that... of organically continue a the the

– kind why the shrunk about Yeah. that's basically think that in talked I wise serve That's call, we've market to able earlier earnings hold $XXX billion. earnings mean, why in power just, a been I I just has of power. the

are do we're able we some to to So, the automation that in to through why we continue and that the expect investing be things of doing. That's automation.

be there's more in think I a lot area. to that done

it, at efficient, think, that do the things to of the like margin transforming business. I And as that. and materially look And change AMC so, we'll space you getting should continue characteristic more

the convinced think we've achieve we'll look I play very, a volumes to to we target, down and when I in out. – that expect very I that done we well So, despite market continue mortgage continue and that. the think how market, still and do I'm see actual to But still

Okay. Thank very much. you

Stephen And be ahead. William with Sheldon go our next Blair. today questioner will Please

then, I on If Yeah. within pro more Good here in see color trends could hoping morning. the first VSG. next broadly AMC VSG. some diversification platform you platform volumes I issues and AMC growth was the for growth businesses. on stabilize do that side? think businesses Hi. underlying year year, guess, you forma through the within I And the grow mortgage combined provide next guess, some could potentially the

Yeah. said, I'll let about. Jim I talk as I very But piece about the of piece, excited AMC it. we're the think platform

year. coming last I'd business, activity I has think those But organically we it's growth stages together a And that as think strong organic to well. in mentioned, as we're as obviously I acquired say addition the by some of aided the in acquisition that synergy businesses that very somewhat early had the a very, of profile I rate, well. that growth high

exciting we they're growth the the already most connection to some think I And in improve margins I well. there's businesses. opportunities additional also high-margin, as and the is of inherent we continue can the of So, and the synergy businesses think think

We at growth And is – it revenue is granular high I moment. it growth go a high the profile is the I rate. but specific in it that's margin don't the the high streams, of businesses, So, a are, but I they – perspective, from it's currently relatively minimis to not de margins the the want think those important, situation. a growth a don't think say is AMCs, numbers,

I large AMCs XXXX. think, contributors be in be growth don't to I going to from Certainly, a the growth negative. look a perspective, to it's

contributor think not hopefully I going projections they market do. going if XXXX to way certainly a I projected the the to large as current out into mortgage not think, probably But play negative. be, are it's

Yeah.

platforms. the the that yet Expect on because year, that progress the Mercury plans good comments on Frank's not it a platform the together against growth we there. the in owned supplement put mode but buy la we've same to add And organic ago. we particular months AMC Just or couple diversification is seen a rate when on and as we in that the issues to one a in that'll future. where crossover the here past, clients client, with acquired then, continue sometime side, the we the stated haven't it occurs, we've offsets share be

big of seems a adjusted some expected year-over-year you'd investments year the fourth two, the to investments for million IT that And then, wanted of visualization, to last in in you a planned? investments pretty follow-up, guess, Couple million One, a on second you're real as quarter of EBITDA? maybe originally half And questions. then, pullback than basis along be bigger investments, are like about the to to in margin the seems sure and especially, Helpful. that's $X I $XX estate these Okay. quarter. now make data with assuming the expensed even going talked those be that like

exclusive. Those are mutually

just to take the of we year. $XX put in over release. course million Those Let's million the that the the go will $X

Third quarter will they be in and the fourth quarter, number.

a those be our number year, planned. they the is making the our Those cost the of it's guidance of issued. but beginning reduce in as just And so structures, in nature are EBITDA at we indicated transformational we guidance the the program the number investments. as other and as continue of we'll out in part original to So, be then, adjusted that more call-up will

Okay. Thanks.

– the know, quarters. just much And other just you traditionally seasonal, the lower quarter as are also – Stephen, I margins housing than market, I would fourth being

Right.

fourth at the some a look you out outlooks of year fourth quarter. with forecasts pretty the there, quarter last was strong If

bit a a it's of tougher comp. So,

now. bit from to we a more going right that's So, know be little what challenging

Got it. you. Thank

be Kevin Kaczmarek And the will Associates. today questioner next with & ahead. go Please Zelman

this bit, I've demand? haven't lenders businesses terms the they the talking garnered Hey, operations specific lot my earnings are mortgage quarter, in calls technology, a about seeing you're now in but on lot yours revenue yet well interest, the mentioned specifically. Thanks investing of attracting the as a guys. this on last noticed a you be the in but attention most been even if have more can for of of as driving know taking quarter, questions. what most And right more you what's of I

Yeah.

interesting. it's think I

a side, has time the – reduction, say cycle there of a So, been, number there experience. years, over origination going is things into around a I'd lot customer on of investment like

knowing lot a mining, requires customer, that a data know CYA, type hear customer more your in stuff. know customer. and That lot property, about You your enhancing of market the your

we obviously, what in the knowing So, we're about. have all U.S. data the and repository biggest that's the property,

engagement though, versus the you that obviously So, visually like different What to plays customer a show is, talked which whole we'd great. do, in about It's as can the file. a visualization can sell into property wheelhouse, dimension I our is the just and data the a visually, current. it of amount easily in level and the you can just they increases, think I my if you more it's more real can more and is look data, at because sell, house opinion,

example. one that's So,

example. a cycle the Everybody be wants faster. I think big time that is to

perception even cycle the to to XX frankly, the that needs XX XX- and, to days faster. be is I think mortgage XX-day traditional

investments look potentially around valuation. a why if XX% think faster our on longer-cycle the can items the time That's you for to we on that's AMC, XX% we example, the of one typical go cycle origination. So, time at in

been talking investments and making making about we're those are well. we've So, what as

invest, in a and R&D at and going type going cyclical That's will that try systems. scale usually look that improves. investing so, Data you we put could that has the I that as with the of POS-type cycle that their feel market the been thing, opportunities again, think operational investments lenders, dividends. into pays But I applications you down foregone you that, I if metrics industries, on that in, market But lot A metrics think higher these and to Big the evaluating such leadership, is investing much this have lot market in systems. if pay honestly. into think why been especially – also, having investment I we a have been benefits massive has

question. of little a So, long-winded of answer that's your a kind way bit to

seems keep the revolver. balance on guess, to the on sheet? much we And a Okay. out Should do took the lot. you capital it like that priority, in I And, coming like $XXX hand quarters? you million on to cash paid down guess, I expect Thanks how on be about the

$XXX around on at been generally million balance the We've sheet.

all-time not where acquisition mode, acquire had on It's the la around there. then, the recent anything. for leverage to of revolver over or couple each a right and to to X.Xx. And we've an We covenant Our pulled high now is very That's manageable. have so about the months quarter. the trigger opportunity drew an the amortization scheduled nine we six But we of every we prepayments a $XX million. done tune also last

which is get to Be to And you'd a Okay. timeline there down comfortable... back like over the revolver zero?

XX Probably within next to X months. the

that don't big focus. a think revolver Yeah. the I is

think Jim overall decent. and bit, the will a down we drifted at which As X.Xx at down. look I leverage said, is continue It's to drift

less be As little that. X-ish maybe to a bit we the kind range like and in we've of it than mentioned previously,

have don't many we years are many, I And also super – overall repurchaser I any aggressive many, target. mention, so, shares that's to the done there. million be continuing would been kind this urgency we our shares. think continuing over X.X are of there's and level of year. an We've we

We a target of have X% X%. to

if million shares. go So, it's X X%, to over you

because So to XX as shareholders, that we long-term been shares. have creator that's certainly as well, our more shareholders, on back lot massive a do for bought we million think a front value we our

had. Okay That's I a all lot. Thanks

go ahead. today our be next with will Stephens, questioner John Please And Campbell Inc.

morning. Hey, Good guys.

morning. Good

of you could roughly segment? Is of the coming build guys XX% UWS? kind margin maybe that by goal, from the up margin On just most

No. XXXX. They're going time get by be to the to you fairly balanced

that to to $X segment? PIRM in million on year? this year to the as that spin is Okay. also, hitting all then, then, isolated some And million investment roll the well? going that into $XX And Is next spend, is

that's and more year This enterprise-wide.

will a portion in So, wind each up segment.

say, I'd modestly weighted Yeah. towards... more it's

PIRM?

it probably practical segment, quarter, more ...that a accelerating more may offset We're why margin pressure you'll the fourth think the I And the than item, more discrete see then, weighted a revenue to is recognition quarter slightly spending the item. again, impute related which But also, so quarter that that. fourth towards it's I think. in probably John, into you by it's – matter. it's

guys. Great. Thanks, Okay.

And the Please ahead. Jeffrey next with questioner today will go be Andrew SunTrust.

with maybe one hand, question. VSG for customer outlook outlook morning. balanced got you've be? perhaps how much I but diversification, Thanks around on getting mix better a comments time? taking Good Hey. more little would to that the with guess, I to margin is regard continued a revenue guess, contributor the the a of

No. Yeah.

think to the a is need volume. and largely there is you drive diversification – I platform,

there productive, can this. automation transformation operating around other we some of exciting higher the to more are a of basic the going still of already if appointment work. think scheduling, us And think, and automate thing, and I leverage transformation the scheduling, is the within to – I to And forms, economics. around field trying part what think we and testing you're But get so throughput, Andrew, do, we're platform going of probably it's also, manual, in the we've lot change appraiser some papers that's more aspects that. been our so, themselves, the this. the can capacity. of gives because a optimistic think we largely component then, big an route there's the to you very is of So, the and I And scaling get workflow appraiser It's that, the of their

not the a are think going what's I think, to going while. More in positive. think it's But board. the I to drawing That's So, initial margin. drive, I It's out testing. come. the It's indications the on to field, take

AMC, negative. revenue from is, now, guess the think my right it's itself I the

not a into got That's we to and the revenue that's the of we that's derived about characteristic. get the data neutral positive neutral, have margins why say hopefully from margin turn a the trend, don't talk up to this. don't lot insight want I that at the low want thing a within derived, then, element appraisal. lot other But will would it think we because is we I positive. to

data to calibrate used Some is our of repository. that

And numbers. some of so, that's AMC a valuable addition that's not in necessarily up the showing

little a Okay. at when the be the And look is market, parse a you guys look of When scrutinize then, on important purchase sort market. will between whether that's about macro about and the continue. you down top not and Because more sort maybe – When assumptions to are the the MBA's I think out just you supply whether balance pretty couple your next mean, what about we can demand, market, a the reasonable? of tenure underlying think way about what I given from bit of the refis the or general perspective, underlying mortgage you aspect not, trends projections the the if environment, think when doing, purchase but – the you views understand, expectations or their of performance. years obviously are – the think line we and

Yeah.

have a So, do first we know, our you bench may of significant company. economists as thing, within

– tie obviously perspectives. those. we to from probably most in we it's And we own in So, an at the – MBA external of the available projections, fact, projections. like range we scrutinizing But into look available have our perspective, broadest because publicly of the terms

tend we when the refer talk why we and about market. to use mortgage MBA to that's so, And forecasts the

So, on evolving. think market, the purchase I think going from that standpoint, – it's I in what's the

it. at looking is everybody think I

housing and supply I range. think, what supply. lot you around the purchase is a obviously, in hear in of Especially discussion affordable

The a the probably of a I property if think an ones. develop lot fixed available is one regulation, end supply seeing a you lot lot a lack biggest developing is to were of compared you're A of affordable cost areas prohibited there's behind to build to lot around houses. the drivers – why that's house, related of cost land. that to what now in going higher of skew in a of

little a that broader there's higher So, availability I whole bit think homes. within end of affordable – of

a of impact home run prices. the of seeing also you're think long I

people at think that. are looking I

stretched, a a especially think mortgage going I bit. rates up little it's bit with

country Francisco the these different buy It's are in versus coastlines are you little Heartland then, that will less I the the it's big That out, people desperate of than think different There there. about have issues the on of the definitely other San play say I'd time. whole there. look is been levels more houses. than a the where metros at are as middle Mississippi a say, to thing not significant general the I'd in – bit pricing acute I country. or so in others. more if cycle of market And So, also maybe think, purchase over

time. you I variability think that's over more in home where see prices

So, complex a issue. it's

much would however, is still market. versus refi – purchase more think heavy cycle, maintain, I I market more predictable, a a purchase sustainable much the

purchase-driven for that a very over market, medium- perspective, the from still think, for So, positive to is the to sure. company I longer-term evolution the one

you. Thank

questioner next with the And today be Greene Glenn go Oppenheimer. ahead. will Please

questions. of couple A morning. Good Thanks.

first side contrast the profitability. maybe of topic couple just pieces, the a one, could trending? and of follow-ups. sort profitability Maybe the or platform margins on you just of to what have then, where us are and that see at kind if relative SG&A of The you And update you meaning, I the versus AMC

– Yeah. Look, the the Glenn, are modestly margins year-over-year. up overall

reflects lower shrunk heavier obviously, that of and business a these evolution the and, bit. margin I platform think pieces the the mix

kind lower. to margins of perspective, were. They're they're So, say up. break of I'd kind that have have that – to you say where you I margins that two, from are actually the AMC the they I'd are think

think revenue you perversity significantly – the on talk the not as going is is type large, low by the the you to volumes of business, the line profile. you're kind when it that at and impact the higher and as then, As a AMC. we single-digit bit. of margin pronounced I if But talked profit fluctuate impact about their guess, a of see margins AMC, about look the And the platform very I

an the clients. margin us story is AMC I with supports offering platform traction I because, higher of it much is for which been it's think businesses the a automation very and that's important business, strong also, a got but A, think – why the getting market we've the

platform mix versus terms What's of of the revenue in AMC? relative contribution

now. XX% I now. about we're – We're think, third above a We're

different to if X%, spatial, digit then, X%, that been of and, a the know as low-double sort a high-single, it's of at least sort trend yet, couple for like think don't a & Insurance a And growth directions. of we slowed. Great. last I it's quarters, couple of but of business kind used

explanation do you there or any to or So, expect re-accelerate? that's anything that happening

Yeah.

it's year, business. say the other ago, think the I some five last or drag – say, of that benefit traded It's I kind hurricanes decline. spatial And There was to the years been that only there of do a ago. of I to we and that has benefit some hate the a business but margin Modeling we think timing situations That changed the changed. down. a business And a the that going much bigger the it of public been some We always the bit. is you that's that the change. of bit there's I weather thing has – also six growth presence other a of I'd cetera and the side on margin that can a has years small in had in so business, have revenue characteristic of some the data et around not think we on buy there. that bit with the some a bought gradual whole sector number buys is market a bulk market. whole always very or CAT That in of – clients, timing But get of still

the there little by the us. has a highly on a impact some has and an bit has is But it's growth So, it really new helped added think high value rate. the business team think large, of in which and profitable, capabilities I I

So, good I business. that feel about

more. could I in if squeak one Just

la contribution call a as guide So, year that the that was full you the think acquired, business revenue it for What revenue well? the mode. impact the in you bridge also does I and quarter, the

small. pretty It's

Or it impact does how that? much

It's in minimis, de Glenn. I'd – in fact, the pretty small actually. pretty quarter, say It's it's

haircut a subscription-based articulated it. pretty last has – had it acquired deferred we heavy small it's we a call, model the and It's because, a when on revenue rent as Yeah.

So see more into that you'll XXXX. really

Yeah.

impact it the doesn't outlook? meaningfully the bridge So, for XXXX revenue

No.

All Okay. guys. Thanks, right.

today's you will session conference And attending for and call. this question-and-answer today's the conclude presentation. Thank all

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