Double-Digit Revenue Growth Fueled by Housing Market Activity, Competitive Wins and Share Gains
Significant Increases in Profits and Margin Reflect Favorable Mix and Operating Leverage
Company Expects to Achieve 2020 Results at Upper End of Guidance Range
IRVINE, Calif. — (BUSINESS WIRE) — October 22, 2020 — CoreLogic (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today reported strong operating and financial results for the third quarter ended September 30, 2020 and said it expects full year 2020 results at the upper end of its current financial guidance.
“Building off an excellent first half, CoreLogic delivered record revenue and the strongest operational and financial performance in its ten-year history in the third quarter. We generated double-digit top line growth with 8% organic revenue gains. Our organic growth rate more than doubled in the third quarter from the first half as we picked up momentum from mega wins and share gains secured over the past four quarters. During the quarter, we continued to boost our percentage of fixed recurring revenue in line with our strategic planning objectives. Strong top line growth, favorable markets and mix, operating leverage and our ongoing cost management programs also drove profitability to record levels during the quarter,” said Frank Martell, President and Chief Executive Officer.
“Looking ahead, third quarter revenue growth trends, underpinned by share gains, pricing and the launch of new innovative solutions in insurance, geospatial and core mortgage position us well to achieve our 2021 financial objectives. Our market outlook for 2021 and beyond is supported by continued increases in external forecasts. CoreLogic is firing on all cylinders and we are exiting 2020 with accelerating momentum and believe we are well positioned to capitalize on our many value-creation opportunities to drive continuing organic growth and margin gains,” Martell added.
As previously announced, the Company’s financial results reflect its reseller operations as discontinued for all periods presented. A discussion of third quarter financial results from continuing operations follows:
Third Quarter Results – Strong and Accelerating Revenue, Margin and Cash Flow Growth Trends
Growth Focus – Share Gains, Mega Wins and Pricing Drive Organic Growth Rates
- Reported revenues of $437 million were up 16% over the year-ago third quarter. Revenues were up 22% normalizing for $17 million of third quarter 2019 revenues attributable to non-core default technology units sold and the AMC transformation, which have no 2020 counterpart
- Organic revenue growth of approximately 8% in the third quarter of 2020, up from 5% in the second quarter of 2020, fueled by continued share gains, pricing and new products
- Strong performance in insurance and spatial solutions and international which collectively grew at mid-single digit rates
- Core mortgage market out-performance in Property Tax and Flood Data solutions and double-digit growth in valuation platforms
Profitability – High Operating Leverage and Productivity Fuel Expanded Margins
- Operating income from continuing operations of $73 million, up 18% over the 2019 third quarter
- Net income from continuing operations of $102 million, up $71 million
- Diluted EPS from continuing operations of $1.26, up 223%; Adjusted EPS of $1.21, up 70%
- Adjusted EBITDA of $176 million, up 46%
- Adjusted EBITDA margin of 40%, up more than 800 basis points
Liquidity and Capital Return– Record Free Cash Flow Generation
- Net operating cash provided by continuing operations for the 12 months ended September 30, 2020 was $508 million. Free cash flow ("FCF") for the 12 months ended September 30, 2020 totaled $403 million or 73% of adjusted EBITDA
- Secured gross proceeds of $46 million from the sale of an equity investment at a gain of $35 million
- Debt outstanding at September 30, 2020 of $1.59 billion compared with $1.69 billion at December 31, 2019
- $750 million available on revolving credit facility; covenant debt leverage at 2.5 times
- Dividends paid to shareholders totaled $26 million
During July 2020, the Company announced its intention to exit its reseller operations focused on mortgage credit and borrower verification and multi-family tenant screening. Although market leaders in their respective business areas, these reseller businesses are not compatible with the Company’s long-term strategic imperatives. The divestiture of these operations is expected to improve the Company’s revenue growth trends, revenue mix, and significantly enhance profit margins.
As outlined in the Company’s October 16, 2020 press release, CoreLogic’s reseller operations have been classified as discontinued operations as of September 30, 2020. Prior period results have been presented on a comparable basis. For the third quarter and nine months ended September 30, 2020, these businesses generated revenues of $103 million and $287 million, and operating income of $14 million and $38 million, respectively. The Company’s consolidated financial statements reflecting the effect of discontinued operations for prior periods have been provided separately.
Teleconference/Webcast CoreLogic management will host a live webcast and conference call on Thursday, October 22, 2020, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss these results. All interested parties are invited to listen to the event via webcast on the CoreLogic website at http://investor.corelogic.com. Alternatively, participants may use the following dial-in numbers: 1-844-861-5502 for U.S./Canada callers or 1-412-858-4604 for international callers. A replay of the webcast will be available on the CoreLogic investor website for 10 days and also through the conference call number 1-877-344-7529 for U.S. and Canada participants or 1-412-317-0088 for international participants using Conference ID 10149374.
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, buy, and protect their homes. For more information, please visit www.corelogic.com.
Safe Harbor / Forward Looking Statements
Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to (i) projections and trends regarding financial performance and operating results, including with respect to revenue growth, margin gains, contract wins, market share gains, new products, and long-term stockholder value, (ii) our financing plans and activities, including under our share repurchase program, (iii) all statements regarding our financial guidance, (iv) the impact of general economic or market conditions, such as from the COVID-19 pandemic or fluctuations in mortgage market volumes, and (v) the outcome and impact of the unsolicited acquisition offer we received from Senator Investment Group LP (“Senator”) and Cannae Holdings, Inc. (“Cannae”). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K and in Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the Securities and Exchange Commission. These risks and uncertainties include but are not limited to: any potential developments related to the unsolicited acquisition proposal from Senator and Cannae; our adoption of a shareholder rights plan; any impact resulting from COVID-19; our ability to protect our information systems against data corruption, cyber-based attacks or network security breaches; limitations on our ability to repurchase our shares; changes in prices at which we are able to repurchase our shares; limitations on access to or increase in prices for data from external sources, including government and public record sources; systems interruptions that may impair the delivery of our products and services; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data; difficult or uncertain conditions in the mortgage and consumer lending industries and the economy generally; reliance on our top ten clients for a significant portion of our revenue and profits; risks related to the outsourcing of services and international operations; our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof; impairments in our goodwill or other intangible assets; and our ability to generate sufficient cash to service our debt. The forward-looking statements speak only as of the date they are made. CoreLogic does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.