JACKSONVILLE, Fla., Aug. 3, 2023 /PRNewswire/ -- Black Knight, Inc. (NYSE:BKI), a leading provider of software, data and analytics solutions to the mortgage and consumer loan, real estate and capital markets verticals, today announced unaudited financial results for the second quarter and the six months ended June 30, 2023, as compared to the prior year periods.

Commentary:

Black Knight Executive Chairman Anthony Jabbour said, "Our second quarter results were solid in the face of a very challenging operating environment. As we look ahead to the balance of the year, we remain focused on executing our strategic initiatives and improving the company's performance, yet we acknowledge that market conditions remain uncertain. As such, we remain steadfast in our focus to control what we can control and provide innovative solutions and exceptional service to our clients to drive shareholder value over the long-term."

Black Knight Chief Executive Officer Joe Nackashi added, "Our second quarter results reflect a weaker than expected mortgage market coupled with the near-term effects of the proposed merger with Intercontinental Exchange. Revenue declined 4% on an organic basis driven by lower origination volumes as well as indirect effects of the mortgage market on our Originations Software business. We remain very optimistic about our long-term growth opportunities and commitment to creating value for all stakeholders. I want to thank my Black Knight colleagues for their focus and contributions and our clients for the trust they place in us to help them achieve their strategic goals."

Second Quarter 2023 Highlights:

Revenues of $368.2 million, a decrease of 7%; Organic revenue decrease of 4%
Operating income of $60.7 million, a decrease of 21%; Operating margin of 16.5% compared to 19.5%
Net earnings attributable to Black Knight of $55.3 million compared to $40.3 million; Diluted EPS of $0.35 compared to $0.26; Net earnings margin of 15.0% compared to 10.2%
Adjusted EBITDA of $160.5 million, a decrease of 16%; Adjusted EBITDA margin was 43.6% compared to 48.3%; Adjusted EBITDA for the 2022 period includes $6.1 million related to the TitlePoint line of business sold in January 2023
Adjusted operating income of $122.8 million, a decrease of 19%; Adjusted operating margin of 33.4% compared to 38.3%; Adjusted operating income for the 2022 period includes $5.7 million related to the TitlePoint line of business sold in January 2023
Adjusted net earnings of $69.2 million, a decrease of 31%; Adjusted EPS of $0.44, a decrease of 32%

Second Quarter 2023 Segment Highlights:

Software Solutions

Revenues of $323.6 million, a decrease of 5% on a reported and organic basis
EBITDA of $168.1 million, a decrease of 12%; EBITDA margin of 51.9% compared to 56.2%
Operating income of $134.1 million, a decrease of 13%; Operating margin of 41.4% compared to 45.6%

Data and Analytics

Revenues of $44.6 million, a decrease of 19%; Organic revenue decrease of 1%
EBITDA of $10.7 million, a decrease of 40%; EBITDA margin of 24.0% compared to 32.1%
Operating income of $6.8 million, a decrease of 50%; Operating margin of 15.2% compared to 24.9%
Results for the 2022 period include the TitlePoint line of business that was sold in January 2023

Year-to-Date 2023 Highlights:

Revenues of $750.4 million, a decrease of 4%; Organic revenue decrease of 1%
Operating income of $141.7 million, a decrease of 10%; Operating margin of 18.9% compared to 20.1%
Net earnings attributable to Black Knight of $197.1 million compared to $404.9 million; Diluted EPS of $1.27 compared to $2.60; Net earnings margin of 26.3% compared to 51.5%; for the year-to-date 2023 and 2022 periods, the effect of our investment in Dun & Bradstreet Holdings, Inc. ("DNB") was a decrease in Net earnings attributable to Black Knight of $1.9 million, or $0.01 per diluted share, and an increase of $303.0 million, or $1.95 per diluted share, respectively, including a gain of $305.4 million, net of tax, or $1.96 per diluted share, recognized as a result of the exchange of shares of DNB common stock as part of the consideration for acquiring the remaining 40% interest in Optimal Blue Holdco, LLC ("Optimal Blue Holdco") in February 2022
Adjusted EBITDA of $341.2 million, a decrease of 10%; Adjusted EBITDA margin was 45.5% compared to 48.8%; Adjusted EBITDA for the 2022 period includes $13.4 million related to the TitlePoint line of business sold in January 2023
Adjusted operating income of $265.4 million, a decrease of 12%; Adjusted operating margin of 35.4% compared to 38.7%; Adjusted operating income for the 2022 period includes $12.6 million related to the TitlePoint line of business sold in January 2023
Adjusted net earnings of $157.0 million, a decrease of 21%; Adjusted EPS of $1.01, a decrease of 20%

Year-to-Date 2023 Segment Highlights:

Software Solutions

Revenues of $660.3 million, a decrease of 1% on a reported and organic basis
EBITDA of $354.8 million, a decrease of 6%; EBITDA margin of 53.7% compared to 56.5%
Operating income of $286.7 million, a decrease of 7%; Operating margin of 43.4% compared to 45.9%

Data and Analytics

Revenues of $90.1 million, a decrease of 19%; Organic revenue decrease of 0.4%
EBITDA of $22.9 million, a decrease of 38%; EBITDA margin of 25.4% compared to 32.9%
Operating income of $15.0 million, a decrease of 48%; Operating margin of 16.6% compared to 25.9%
Results for the 2022 period include the TitlePoint line of business that was sold in January 2023

Other Highlights:

As of June 30, 2023, we owned 18.5 million shares of DNB common stock, which had a fair value of $213.7 million before tax based on DNB's closing price of $11.57 as of June 30, 2023. As of June 30, 2023, we no longer have significant influence over DNB and our investment is accounted for at fair value in accordance with ASC 321: Investments -- Equity Securities. As a result of the change in accounting method, we recorded an unrealized gain of $55.8 million before tax. The effect of the fair value adjustment was an increase in Net earnings attributable to Black Knight of $41.6 million, or $0.27 per diluted share, based on our statutory income tax rate of 25.5%.
As of June 30, 2023, we had cash and cash equivalents of $15.9 million, debt of $2,445.7 million and available capacity of $648.0 million on our revolving credit facility.

ICE Transaction

On May 4, 2022, we entered into a definitive agreement to be acquired by Intercontinental Exchange, Inc. ("ICE") (the "Original Merger Agreement") a leading global provider of data, technology, and market infrastructure. On March 7, 2023, we entered into Amendment No. 1 to the Original Merger Agreement (the "Amendment" and the Original Merger Agreement, as amended by the Amendment, the "Merger Agreement"), which provides for, among other things, a reduction in the merger consideration, valuing Black Knight at $75.00 per share, or a market value of $11.7 billion, with consideration in the form of a mix of approximately $68.00 per share in cash and stock with an exchange ratio of 0.0682 based on ICE's 10-day volume weighted average price as of March 3, 2023 of $102.62 (the "ICE Transaction"). The ICE Transaction is expected to close in the third or fourth quarter of 2023, subject to regulatory clearance and the satisfaction of customary closing conditions.

In connection with entering into the Amendment, on March 7, 2023, we entered into an Equity Purchase Agreement (the "Empower Divestiture Agreement") with Constellation Web Solutions Inc., a subsidiary of Constellation Software Inc. ("Constellation") and (solely for the purposes set forth in the Empower Divestiture Agreement) ICE, pursuant to which, after the closing of the ICE Transaction, Constellation will purchase our Empower^®LOS business, including its Exchange^SM, LendingSpace and AIVA solutions (the "Empower Divestiture Transaction").

On July 14, 2023, we entered into an Equity Purchase Agreement (the "OB Divestiture Agreement") with a subsidiary of Constellation, and (solely for the purposes set forth in the OB Divestiture Agreement) ICE, pursuant to which, after the closing of the ICE Transaction, Constellation will purchase our Optimal Blue business (the "OB Divestiture Transaction").

Each of the Empower Divestiture Agreement and the OB Divestiture Agreement was entered into in order to address certain alleged antitrust concerns raised by the United States Federal Trade Commission ("FTC") regarding the ICE Transaction and each is subject to customary closing conditions, including but not limited to the prior completion of the ICE Transaction.

Business Outlook

As a result of the proposed ICE Transaction, Black Knight has suspended the practice of providing forward-looking guidance. In addition, Black Knight will not be hosting a conference call related to its second quarter 2023 financial results.

Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.

About Black Knight

Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com.

Non-GAAP Financial Measures

This earnings release contains non-GAAP financial measures, including Organic revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted operating income, Adjusted operating margin, Adjusted net earnings and Adjusted EPS. These are important financial measures for us but are not financial measures as defined by generally accepted accounting principles ("GAAP"). The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making, including determining a portion of executive compensation. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations. By disclosing these non-GAAP financial measures, we believe we offer investors a greater understanding of, and an enhanced level of transparency into, the means by which our management operates the company.

These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, operating margin, net earnings, net earnings per share, net earnings margin or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

Revenues, EBITDA, EBITDA margin, Operating income and Operating margin for the Software Solutions and Data and Analytics segments are presented in conformity with Accounting Standards Codification Topic 280, Segment Reporting. These measures are reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For these reasons, these measures are excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's ("SEC") Regulation G and Item 10(e) of Regulation S-K.

Organic revenue - We define Organic revenue as the change in Revenues for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenues of acquired businesses for the portion of the prior year matching the portion of the current year that we owned the acquired businesses, and subtract pre-divestiture revenues for divested businesses for the portion of the prior year matching the portion of the current year for which the business was not owned.

Adjusted EBITDA - We define Adjusted EBITDA as Net earnings attributable to Black Knight, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:

Depreciation and amortization;
Impairment charges;
Interest expense, net;
Income tax expense;
Other (income) expense, net;
Equity in losses of unconsolidated affiliates, net of tax;
Gains related to investments in unconsolidated affiliates, net of tax;
Net losses attributable to redeemable noncontrolling interests;
equity-based compensation, including certain related payroll taxes;
acquisition-related costs, including costs pursuant to purchase agreements;
costs related to the ICE Transaction; and
costs associated with expense reduction initiatives.

These adjustments are reflected in Corporate and Other.

Adjusted EBITDA margin - Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.

Adjusted operating income -- We define Adjusted operating income as Operating income, with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:

equity-based compensation, including certain related payroll taxes;
acquisition-related costs, including costs pursuant to purchase agreements;
costs related to the ICE Transaction;
costs associated with expense reduction initiatives; and
the net incremental depreciation and amortization adjustments associated with the application of purchase accounting.

These adjustments are reflected in Corporate and Other.

Adjusted operating margin - Adjusted operating margin is calculated by dividing Adjusted operating income by Revenues.

Adjusted net earnings - We define Adjusted net earnings as Net earnings attributable to Black Knight with adjustments to reflect the addition or elimination of certain statement of earnings items including, but not limited to:

equity in losses of unconsolidated affiliates, net of tax;
gains related to investments in unconsolidated affiliates, net of tax;
gain related to the TitlePoint transaction;
unrealized gain related to investment in DNB;
the net incremental depreciation and amortization adjustments associated with the application of purchase accounting;
equity-based compensation, including certain related payroll taxes;
acquisition-related costs, including costs pursuant to purchase agreements;
costs related to the ICE Transaction;
costs associated with expense reduction initiatives;
costs and settlement (gains) losses associated with significant legal matters;
adjustment for income tax expense primarily related to the tax effect of the non-GAAP adjustments and a discrete income tax benefit related to the establishment of a deferred tax asset as a result of our reorganization of certain wholly-owned subsidiaries; and
adjustment for redeemable noncontrolling interests primarily related to the effect of the non-GAAP adjustments.

Adjusted EPS - Adjusted EPS is calculated by dividing Adjusted net earnings by the diluted weighted average shares of common stock outstanding.

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on Black Knight management's beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Black Knight undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

The risks and uncertainties that forward-looking statements are subject to include, but are not limited to:

the occurrence of any event, change, or other circumstance that could give rise to a right in favor of ICE or us to terminate the definitive merger agreement governing the terms and conditions of the ICE Transaction;
the possibility that the proposed ICE Transaction, the Empower Divestiture Transaction or the OB Divestiture Transaction do not close when expected or at all because required regulatory or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect ICE or us or the expected benefits of the proposed ICE Transaction);
the outcome of the FTC's lawsuits filed against us and ICE seeking to block the consummation of the ICE Transaction and of any other legal proceedings that may be instituted against us or ICE;
business uncertainties and contractual restrictions while the ICE Transaction is pending, which could adversely affect our business and operations;
the diversion of management's attention and time from ongoing business operations and opportunities on merger-related matters;
changes to our relationships with our top clients, whom we rely on for a significant portion of our revenues and profit;
our ability to comply with or changes to the laws, rules and regulations that affect our and our clients' businesses;
our ability to adapt our solutions to technological changes or evolving industry standards or to achieve our growth strategies;
increase in the availability of free or relatively inexpensive information;
our ability to protect our proprietary software and information rights;
our dependence on our ability to access data from external sources;
delays or difficulty in developing or implementing new, enhanced or existing software, data or hosting solutions;
changes in general economic, business, regulatory and political conditions, particularly as they affect the mortgage industry;
risks associated with the recruitment and retention of our skilled workforce;
impacts to our business operations caused by the occurrence of a catastrophe or global crisis;
our investment in DNB;
security breaches against our information systems or breaches involving our third-party vendors;
our ability to successfully consummate, integrate and achieve the intended benefits of acquisitions;
our existing indebtedness and any additional significant debt we incur; and
other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information", "Risk Factors" and other sections of our Annual Report on Form 10‑K for the year ended December 31, 2022 and other filings with the SEC.

Information for Investors:		Information for Media:

Steve Eagerton		Michelle Kersch
Black Knight		Black Knight
904.854.3683		904.854.5043
steven.eagerton@bkfs.com		michelle.kersch@bkfs.com

BLACK KNIGHT, INC.
Consolidated Balance Sheets
(In millions)
(Unaudited)


	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	15.9	$	12.2
Trade receivables, net		205.4		193.5
Prepaid expenses and other current assets		147.7		132.1
Receivables from related parties		—		0.1
Current assets held for sale		—		5.8
Total current assets		369.0		343.7
Property and equipment, net		129.2		143.0
Software, net		424.9		443.7
Other intangible assets, net		408.8		470.1
Goodwill		3,747.8		3,747.8
Investments		224.1		171.0
Deferred contract costs, net		189.2		192.6
Other non-current assets		275.5		246.2
Non-current assets held for sale		—		73.5
Total assets	$	5,768.5	$	5,831.6
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable and other accrued liabilities	$	68.9	$	66.5
Income taxes payable		23.4		28.4
Accrued compensation and benefits		70.9		82.8
Current portion of debt		43.8		33.6
Deferred revenues		50.3		59.9
Total current liabilities		257.3		271.2
Deferred revenues		31.1		42.4
Deferred income taxes		204.9		227.5
Long-term debt, net of current portion		2,401.9		2,621.7
Other non-current liabilities		46.4		47.9
Total liabilities		2,941.6		3,210.7

Redeemable noncontrolling interests		43.4		47.6

Equity:
Additional paid-in capital		1,363.7		1,398.2
Retained earnings		1,609.4		1,417.1
Accumulated other comprehensive loss		(2.1)		(6.3)
Treasury stock, at cost		(187.5)		(235.7)
Total shareholders' equity		2,783.5		2,573.3
Total liabilities, redeemable noncontrolling interests and shareholders' equity	$	5,768.5	$	5,831.6

BLACK KNIGHT, INC.
Consolidated Statements of Earnings
(In millions, except per share data)
(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Revenues	$	368.2	$	394.5	$	750.4	$	781.7
Expenses:
Operating expenses		214.4		216.8		427.5		424.7
Depreciation and amortization		82.1		92.5		164.7		184.0
Transition and integration costs		11.0		8.2		16.5		15.8
Total expenses		307.5		317.5		608.7		624.5
Operating income		60.7		77.0		141.7		157.2
Other income and expense:
Interest expense, net		(33.5)		(22.6)		(63.6)		(43.7)
Other income (expense), net		50.0		(2.4)		188.0		(3.6)
Total other income (expense), net		16.5		(25.0)		124.4		(47.3)
Earnings before income taxes and equity in (losses) earnings of unconsolidated affiliates		77.2		52.0		266.1		109.9
Income tax expense		21.2		11.6		67.1		10.5
Earnings before equity in (losses) earnings of unconsolidated affiliates		56.0		40.4		199.0		99.4
Equity in (losses) earnings of unconsolidated affiliates, net of tax		(0.7)		(0.1)		(1.9)		303.0
Net earnings		55.3		40.3		197.1		402.4
Net losses attributable to redeemable noncontrolling interests		—		—		—		2.5
Net earnings attributable to Black Knight	$	55.3	$	40.3	$	197.1	$	404.9

Net earnings per share attributable to Black Knight shareholders:
Basic	$	0.36	$	0.26	$	1.27	$	2.62
Diluted	$	0.35	$	0.26	$	1.27	$	2.60
Weighted average shares of common stock outstanding:
Basic		155.0		154.5		154.8		154.4
Diluted		155.9		155.6		155.7		155.5

BLACK KNIGHT, INC.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)


	Six months ended June 30,
	2023		2022
Cash flows from operating activities:
Net earnings	$	197.1	$	402.4
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		164.7		184.0
Amortization of debt issuance costs and original issue discount		2.0		1.9
Gain related to the TitlePoint transaction		(145.4)		—
Unrealized gain related to investment in DNB		(55.8)		—
Deferred income taxes, net		(21.8)		(144.9)
Equity in losses (earnings) of unconsolidated affiliates, net of tax		1.9		(303.0)
Equity-based compensation		17.9		23.6
Changes in assets and liabilities:
Trade receivables, including receivables from related parties		(11.7)		(17.4)
Prepaid expenses and other assets		(42.3)		(28.1)
Deferred contract costs		(18.3)		(21.7)
Deferred revenues		(20.9)		(15.3)
Trade accounts payable and other liabilities		(22.9)		8.3
Net cash provided by operating activities		44.5		89.8
Cash flows from investing activities:
Additions to property and equipment		(4.1)		(11.8)
Additions to software		(44.9)		(43.7)
Proceeds from the TitlePoint transaction		224.2		—
Other investing activities		—		(4.0)
Net cash provided by (used in) investing activities		175.2		(59.5)
Cash flows from financing activities:
Revolver borrowings		250.3		585.8
Revolver payments		(443.3)		(195.1)
Term loan payments		(14.4)		(14.4)
Payments made for redeemable noncontrolling interests		—		(433.5)
Tax withholding payments for restricted share vesting		(8.4)		(11.0)
Finance lease payments		—		(0.8)
Other financing activities		(0.2)		(0.4)
Net cash used in financing activities		(216.0)		(69.4)
Net increase (decrease) in cash and cash equivalents		3.7		(39.1)
Cash and cash equivalents, beginning of period		12.2		77.1
Cash and cash equivalents, end of period	$	15.9	$	38.0
Supplemental cash flow information:
Interest paid, net	$	(59.1)	$	(41.9)
Income taxes paid, net	$	(94.9)	$	(124.3)

BLACK KNIGHT, INC.
Segment Information
(In millions)
(Unaudited)


	Three months ended June 30, 2023
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	323.6	$	44.6	$	—		$	368.2
Expenses:
Operating expenses		155.5		33.9		25.0	(1)		214.4
Transition and integration costs		—		—		11.0	(2)		11.0
EBITDA		168.1		10.7		(36.0)			142.8
Depreciation and amortization		34.0		3.9		44.2	(3)		82.1
Operating income (loss)		134.1		6.8		(80.2)			60.7
Interest expense, net									(33.5)
Other income, net									50.0
Earnings before income taxes and equity in losses of unconsolidated affiliates									77.2
Income tax expense									21.2
Earnings before equity in losses of unconsolidated affiliates									56.0
Equity in losses of unconsolidated affiliates, net of tax									(0.7)
Net earnings								$	55.3

	Three months ended June 30, 2022
	Software		Data and		Corporate and
	Solutions		Analytics		Other			Total
Revenues	$	339.4	$	55.1	$	—		$	394.5
Expenses:
Operating expenses		148.7		37.4		30.7	(1)		216.8
Transition and integration costs		—		—		8.2	(2)		8.2
EBITDA		190.7		17.7		(38.9)			169.5
Depreciation and amortization		35.9		4.0		52.6	(3)		92.5
Operating income (loss)		154.8		13.7		(91.5)			77.0
Interest expense, net									(22.6)
Other expense, net									(2.4)
Earnings before income taxes and equity in losses of unconsolidated affiliates									52.0
Income tax expense									11.6
Earnings before equity in losses of unconsolidated affiliates									40.4
Equity in losses of unconsolidated affiliates, net of tax									(0.1)
Net earnings attributable to Black Knight								$	40.3

BLACK KNIGHT, INC.
Segment Information (Continued)
(In millions)
(Unaudited)


	Six months ended June 30, 2023
	Software		Data and		Corporate
	Solutions		Analytics		and Other			Total
Revenues	$	660.3	$	90.1	$	—		$	750.4
Expenses:
Operating expenses		305.5		67.2		54.8	(1)		427.5
Transition and integration costs		—		—		16.5	(2)		16.5
EBITDA		354.8		22.9		(71.3)			306.4
Depreciation and amortization		68.1		7.9		88.7	(3)		164.7
Operating income (loss)		286.7		15.0		(160.0)			141.7
Interest expense, net									(63.6)
Other income, net									188.0
Earnings before income taxes and equity in losses of unconsolidated affiliates									266.1
Income tax expense									67.1
Earnings before equity in losses of unconsolidated affiliates									199.0
Equity in losses of unconsolidated affiliates, net of tax									(1.9)
Net earnings								$	197.1

	Six months ended June 30, 2022
	Software		Data and		Corporate
	Solutions		Analytics		and Other			Total
Revenues	$	670.1	$	111.6	$	—		$	781.7
Expenses:
Operating expenses		291.2		74.9		58.6	(1)		424.7
Transition and integration costs		—		—		15.8	(2)		15.8
EBITDA		378.9		36.7		(74.4)			341.2
Depreciation and amortization		71.0		7.8		105.2	(3)		184.0
Operating income (loss)		307.9		28.9		(179.6)			157.2
Interest expense, net									(43.7)
Other expense, net									(3.6)
Earnings before income taxes and equity in earnings of unconsolidated affiliates									109.9
Income tax expense									10.5
Earnings before equity in earnings of unconsolidated affiliates									99.4
Equity in earnings of unconsolidated affiliates, net of tax									303.0
Net earnings									402.4
Net losses attributable to redeemable noncontrolling interests									2.5
Net earnings attributable to Black Knight								$	404.9

_______________________________
(1)	Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $6.7 million and $13.0 million for the three months ended June 30, 2023 and 2022, respectively, and $18.3 million and $24.2 million for the six months ended June 30, 2023 and 2022, respectively.
(2)	Transition and integration costs primarily consists of costs related to the ICE Transaction and costs associated with acquisitions.
(3)	Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP.

BLACK KNIGHT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In millions)
(Unaudited)

Reconciliation of Revenues to Organic Revenue


	Three months ended June 30,
	2023		2022
	As		As		Pre-divestiture		Adjusted		Organic
	reported		reported		revenues⁽¹⁾		base		revenue
Servicing Software	$	221.5	$	221.7	$	—	$	221.7	— %
Origination Software		102.1		117.7		—		117.7	(13) %
Software Solutions		323.6		339.4		—		339.4	(5) %
Data and Analytics		44.6		55.1		(10.0)		45.1	(1) %
Revenues	$	368.2	$	394.5	$	(10.0)	$	384.5	(4) %

_______________________________
Note: Amounts may not recalculate due to rounding.
(1)	Includes revenues related to the TitlePoint line of business for the three months ended June 30, 2022.


	Six months ended June 30,
	2023		2022
	As		As		Pre-divestiture		Adjusted		Organic
	reported		reported		revenues⁽¹⁾		base		revenue
Servicing Software	$	442.6	$	444.3	$	—	$	444.3	— %
Origination Software		217.7		225.8		—		225.8	(4) %
Software Solutions		660.3		670.1		—		670.1	(1) %
Data and Analytics		90.1		111.6		(21.1)		90.5	— %
Revenues	$	750.4	$	781.7	$	(21.1)	$	760.6	(1) %

_______________________________
Note: Amounts may not recalculate due to rounding.
(1)	Includes revenues related to the TitlePoint line of business for the six months ended June 30, 2022.

BLACK KNIGHT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued)
(In millions)
(Unaudited)

Reconciliation of Net Earnings to Adjusted EBITDA


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net earnings attributable to Black Knight	$	55.3	$	40.3	$	197.1	$	404.9
Depreciation and amortization		82.1		92.5		164.7		184.0
Interest expense, net		33.5		22.6		63.6		43.7
Income tax expense		21.2		11.6		67.1		10.5
Other (income) expense, net		(50.0)		2.4		(188.0)		3.6
Equity in losses of unconsolidated affiliates, net of tax		0.7		0.1		1.9		2.4
Gain related to investment in unconsolidated affiliates, net of tax		—		—		—		(305.4)
Net losses attributable to redeemable noncontrolling interests		—		—		—		(2.5)
EBITDA		142.8		169.5		306.4		341.2
Equity-based compensation		6.7		13.0		18.3		24.2
Acquisition-related costs		0.7		1.1		0.7		8.7
ICE Transaction-related costs		10.3		6.4		15.8		6.4
Expense reduction initiatives		—		0.7		—		0.7
Adjusted EBITDA	$	160.5	$	190.7	$	341.2	$	381.2
Net earnings margin		15.0 %		10.2 %		26.3 %		51.5 %
Adjusted EBITDA margin		43.6 %		48.3 %		45.5 %		48.8 %

Reconciliation of Operating Income to Adjusted Operating Income


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Operating income	$	60.7	$	77.0	$	141.7	$	157.2
Equity-based compensation		6.7		13.0		18.3		24.2
Acquisition-related costs		0.7		1.1		0.7		8.7
ICE Transaction-related costs		10.3		6.4		15.8		6.4
Expense reduction initiatives		—		0.7		—		0.7
Depreciation and amortization purchase accounting adjustment		44.4		52.8		88.9		105.4
Adjusted operating income	$	122.8	$	151.0	$	265.4	$	302.6
Operating margin		16.5 %		19.5 %		18.9 %		20.1 %
Adjusted operating margin		33.4 %		38.3 %		35.4 %		38.7 %

BLACK KNIGHT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued)
(In millions)
(Unaudited)

Reconciliation of Net Earnings to Adjusted Net Earnings


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net earnings attributable to Black Knight	$	55.3	$	40.3	$	197.1	$	404.9
Equity in losses of unconsolidated affiliates, net of tax		0.7		0.1		1.9		2.4
Gain related to investment in unconsolidated affiliates, net of tax		—		—		—		(305.4)
Gain related to the TitlePoint transaction		—		—		(145.4)		—
Unrealized gain related to investment in DNB		(55.8)		—		(55.8)		—
Depreciation and amortization purchase accounting adjustment ⁽¹⁾		44.4		52.8		88.9		105.4
Equity-based compensation		6.7		13.0		18.3		24.2
Acquisition-related costs		0.7		1.1		0.7		8.7
ICE Transaction-related costs		10.3		6.4		15.8		6.4
Expense reduction initiatives		—		0.7		—		0.7
Legal matters		5.7		2.4		13.2		3.7
Income tax expense adjustment ⁽²⁾		1.2		(16.3)		22.3		(47.4)
Redeemable noncontrolling interests adjustment ⁽³⁾		—		—		—		(5.8)
Adjusted net earnings	$	69.2	$	100.5	$	157.0	$	197.8

Adjusted EPS	$	0.44	$	0.65	$	1.01	$	1.27
Weighted average shares outstanding, diluted		155.9		155.6		155.7		155.5

_________________________________
(1)	Components of the depreciation and amortization purchase accounting adjustment are as follows:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Other intangible assets	$	30.6	$	36.8	$	61.3	$	73.6
Software		13.6		15.8		27.2		31.4
Property and equipment		0.2		0.2		0.4		0.4
Depreciation and amortization purchase accounting adjustment	$	44.4	$	52.8	$	88.9	$	105.4


(2)	For the six months ended June 30, 2022, the income tax expense adjustment includes a discrete income tax benefit of $14.1 million related to the establishment of a deferred tax asset as a result of our reorganization of certain wholly-owned subsidiaries within the Optimal Blue partnership investment structure.
(3)	The redeemable noncontrolling interests adjustment primarily includes the effect of the net incremental depreciation and amortization adjustments associated with the application of purchase accounting.

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SOURCE Black Knight, Inc.