Black Knight, Inc. (BKI) Q1 2021 Earnings Call Transcript

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Black Knight, Inc. (BKI)
Q1 2021 Earnings Call
May 6, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by. This is the conference operator. Welcome to the Black Knight First Quarter 2021 Earnings Call. [Operator Instructions]

I would now like to turn the conference over to Steve Egerton, Investor Relations with Black Knight, for opening remarks. Please go ahead.

Steve Eagerton -- Vice President, Investor Relations

Thanks, good morning everyone and thank you for joining us for the Black Knight first quarter 2021 earnings conference call. Joining me today are Chief Executive Officer, Anthony Jabbour; and Chief Financial Officer, Kirk Larsen.

Our results were released this morning and the press release and supplemental slide presentation have been posted to our website. This call is being recorded and will later be made available on our website. This conference call will include statements related to the expected future results of our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to, are described in our earnings release, Form 10-K and other SEC filings.

Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information is provided in the press release and supplemental slide presentation. This conference call will be available for replay via webcast through Black Knight's Investor Relations website at investor.blackknightinc.com.

I'll now turn over the call to Anthony.

Anthony Jabbour -- Chief Executive Officer

Thank you, Steve. Good morning everyone and thank you for joining us for our first quarter earnings call. Simply put, this was a great quarter for Black Knight, as we delivered very strong financial results and continued to execute against our strategic growth initiatives. Specifically, we delivered organic revenue growth of 9%, which is the highest rate since 2016 despite transitory headwinds related to the foreclosure moratorium. We also delivered adjusted EBITDA margin expansion of 160 basis points and adjusted EPS growth of 19%. Our strong start and ongoing momentum give us confidence to take a step that we usually don't take, which is to raise our full year guidance after only one quarter.

This morning, we're going to discuss the strong sales along with some of the recent innovations we've delivered and how they fit together to support lenders and servicers throughout the mortgage lifecycle. As I shared on our last earnings call, we finished 2020 with significant sales momentum and I'm pleased to say that this momentum has continued. Through the first quarter, each of our business units was ahead of their sales plans and as an enterprise, we are well ahead of last year. These results illustrate the strength of our solutions to meet the needs of forward-thinking lenders and servicers that are laser-focused on winning in their respective markets, the value of the deep and trusted relationships we have with our clients, and the talent and competitive nature of our sales organization.

Last month, we held our annual client conference. We held the event virtually again this year, and a record 1,900 clients registered for this three-day event. Whether we are in person or meeting virtually, this premiere event allows us to showcase our solutions and interact with our clients. The feedback from our clients has been extremely positive and has allowed us to continue with the sales momentum I mentioned earlier.

In the service and software business, we signed five new MSP clients, including Arvest Bank, Cadence Bank and Hudson Valley Credit Union. These new wins demonstrate the value that servicers of all sides realize from MSP. We now have signed 23 new MSP clients since the beginning of 2019, representing approximately 1.7 million loans. We also signed 10 clients to Servicing Digital and three clients to our recently launched next generation Customer Service offering. As a result, we now have signed 50 Servicing Digital clients and seven Customer Service clients since introducing these solutions.

It's important to note that consumer adoption of Servicing Digital leading the number of our clients' customers who are using this solution has more than doubled in the last six months. Equally as important, is that these consumers are using this solution to learn more about their mortgage and possible refinance options, in addition to making their payments, which results in higher customer satisfaction and retention rates.

In the origination software business, we signed seven new Empower clients in the first quarter and added the home equity channel for one existing client, further demonstrating the strong momentum that we have in our Empower sales pipeline. As a reminder, we signed 10 Empower clients in 2020. The success that we've had so far this year gives us a high degree of confidence in our ability to sign two to three times the number of new Empower clients this year than we did in 2020.

We also continue to see success in selling solutions that augment Empower and other loan origination systems with seven new AIVA deals and 11 Expedite Close deals signed in the first quarter. The organizational change that we made in late 2019 to have a dedicated sales team to sell these solutions, independent of the LOS, has paid significant dividends.

Within our secondary marketing technologies group which, as a reminder, is a combination of the Optimal Blue and Compass Analytics businesses, the team signed more than 50 new Product Pricing and Eligibility or PPE clients and 11 hedging clients. We now have more than 1,100 lenders using our PPE solution. To put this in perspective, in 2020, approximately $2 trillion of application volume was locked on our PPE solution, representing 38% of all closed loans. So far this year have been very strong and the pipeline is at a historical high. We continue to be extremely pleased with the strategic acquisition of Optimal Blue.

Our Data and Analytics business also had strong sales across all markets, including signing multiple deals for various products in both the mortgage and real estate segments. Additionally, we signed four new deals for our Rapid Analytics Platform, which is in addition to the 14 clients already using this powerful cloud-based analytics tool.

So in summary, we're off to a great start for the year from a sales perspective and our pipeline is robust. We believe the sales momentum is because our clients see how our industry-leading, innovative and integrated solutions can help them grow revenue, expand margins and support regulatory compliance.

Each quarter, I like to provide an update on our new innovative solutions we have delivered as a result of our focus on addressing client needs and responding with urgency to industry trends, including changing regulations. For our lender clients, we recently delivered our underwriter Assist solution, which leverages AI, along with advanced decisioning capabilities to quickly review loan package documents.

We often discuss our ability to deliver actionable analytics at any point during the mortgage lifecycle to help our clients take the right actions at the right time. Because of our comprehensive data assets and our ability to link them together, we are uniquely positioned to provide these actionable analytics. Just one example of another new actionable analytics for our lenders that we recently launched through our AIP platform is our Early Warning system. This innovative analytic tells the lenders any loan in their pipeline at the property address level are at risk because of a natural disaster. What's unique about this solution is that it proactively tells the lender if a property has experienced some type of disaster before the loan closes, so they can request a reappraisal or inspection if necessary. This early knowledge reduces the lenders risk of incurring a loss, and the customer from experiencing delays in closing. This information is fed directly into Empower so anyone working that loan can see it and take appropriate action.

Also on the analytics front, we recently enhanced our RAP solution by adding an interactive data marketplace. So users can easily view and explore the platform's available data and analytics. We expanded the data we offer through RAP to include elements like near real-time daily U.S. home prices, commercial real estate data, single-family rental data, daily mortgage rate lock data and real-time disaster data. Together, the comprehensive data elements and RAP enable lenders and servicers to create more robust analytics, so they can make significantly more informed decisions.

I previously shared how our solutions work together to deliver greater efficiencies for our clients. We continue to introduce new solutions. So this morning, I'd like to provide an update on how our new and existing solutions further enhance our client's ability to retain their customers. Here's one example of how our enhanced ecosystem delivers value. MSP data can be pre-matched with our automated valuation models and other public records data sets in RAP to identify refinance candidates. This information can then turn to an action to present a refi offer in Servicing Digital. But it's an offer tailored to that customer, not just a general offer.

Because by leveraging our PPE and fee services, the lender can present the exact rate, the exact term, and the exact fees at the time the offer is made, so the consumer has a personalized offer to consider, which helps to increase retention pull-through rates. To accept the offer, the customer simply pushes the let's-do-this button in Servicing Digital. Then their information from MSP is automatically fed into Borrower Digital, our comprehensive point-of-sale application. This application allows the mortgage customer top-load all the necessary documents. Working in concert with the point-of-sale system, our Loan Officer Digital solution allows the loan officer to work directly with the consumer to proactively address any potential issues and answer questions along the way.

As soon as the loan information is updated in the point-of-sale system, our Regulatory Assist solution, which uses AI, is automatically triggered and identifies any issues with the documents so the loan officer can reach out to help the customer resolve them. The customer can check the status of the application throughout the process in our point-of-sale application. After underwriting is complete, our Expedite Close solution allows the lender and consumer to electronically close the loan or conduct a hybrid closing.

And with our recent acquisition of DocVerify, the lender can also conduct remote online notarizations. The completed refi is then automatically loaded back into our MSP system. This seamless integration removes significant friction in the refi lending process, which results in higher customer retention, reduced costs and improved customer satisfaction. This is just one high-level example of how our innovations work together to help our clients transform and grow their businesses. It also illustrates our commitment to investing in our solutions and how our internal team of experts, working with our knowledgeable clients, develop powerful solutions to address our clients' business needs so they can achieve even greater levels of success.

Another example of our continued investment is in support of regulatory compliance across all of our offerings. One recent example is that we delivered functionality in Empower to support the new Uniform Residential Loan Application or URLA, well before the industry deadline to help our clients stay ahead of changing regulations. By successfully delivering it early, our clients had time to prepare, test and implement the new application before the regulation goes into effect. The CFPB recently said unprepared is unacceptable. And we've seen that at times of heightened regulatory oversight, lenders and servicers look to us for proven and innovative technology, data and analytic solutions to help them respond to the changing regulatory environment.

In addition to building new innovative solutions, we'll also acquire innovative technologies that augment our comprehensive offerings. In March, we acquired the NexSpring cloud-based LOS platform which is a digital lending platform designed specifically for mortgage brokers. This platform will be seamlessly integrated with Empower so brokers using the new digital lending platform and wholesalers using Empower will benefit from a streamlined and connected experience. Additionally, we will be developing integrations with our comprehensive suite of origination solutions such as Loansifter PPE, Compliance Validation Testing, Actionable Analytics and a single point to order services and obtain fees.

Our ability to seamlessly integrate our existing functionality made adding a digital lending platform for brokers a natural tuck-in acquisition for Black Knight and will provide comprehensive support for this market, which has grown nearly 50% over the last few years.

In summary, we had a great first quarter and are really seeing the sales results of our dedicated focus on delivering innovative, integrated and powerful solutions and providing superior client support.

Thank you for your time today. I will now turn the call over to Kirk.

Kirk Larsen -- Chief Financial Officer

Thanks, Anthony, and good morning, everyone. As Anthony said, the first quarter was very strong by any measure; new sales, revenue growth, margin expansion and EPS growth. With that said, I'll take you through the details for the first quarter and our raised outlook for the full year.

Turning to Slide 3, on a GAAP basis, revenues were $350 million, an increase of 20% compared to the prior year quarter. Net earnings attributable to Black Knight were $54 million, an increase of 8%. Diluted EPS was $0.35, an increase of 3% reflecting the higher depreciation and amortization resulting from purchase accounting, particularly related to the acquisition of Optimal Blue. Net earnings margin was 13% compared to 17.2%.

Turning to Slide 4. I'll now discuss our adjusted results for the first quarter. First quarter adjusted revenues were $350 million, an increase of 20% compared to the first quarter last year. Organic revenue growth was 9%. Adjusted EBITDA was $174 million, an increase of 24%. Adjusted EBITDA margin was 49.8%, an increase of 160 basis points. Adjusted net earnings were $87.5 million, an increase of 26% and adjusted EPS was $0.56, an increase of 19%.

Turning now to Slide 5. I'll discuss our Software Solutions segment result. First quarter revenues for the Software Solutions segment increased 21% to $296 million and organic revenue growth was 9%. Our servicing software solutions revenues increased 4%. The growth was driven primarily by new clients and higher usage-based revenues on MSP, partially offset by the transitory headwinds in specialty servicing resulting from the foreclosure moratorium. In origination software solutions, revenues increased 90%, driven primarily by the acquisition of Optimal Blue, new clients, higher consulting revenues and higher origination volumes. First quarter EBITDA increased 23% to $171 million and EBITDA margin was 57.8%, an increase of 80 basis points.

Turning to Slide 6. First quarter revenues for the Data and Analytics segment increased 17% to $54 million, primarily driven by strong sales execution across nearly all business lines, higher origination volumes and revenue from an acquired business. Organic revenue growth was 11%. EBITDA increased 35% to $20 million. EBITDA margin was 36.5%, an increase of 480 basis points. Adjusted EBITDA for the corporate segment in the first quarter was a loss of $17 million compared to $14 million in the prior year quarter.

Turning to Slide 7, I'll walk through our debt structure. At the end of March, we had cash and cash equivalents of $45 million. Total debt principal, as of March 31 was $2,282 million. We had revolver capacity of $883 million and our leverage ratio was 3.3 times on a net basis. On March 10, we completed the refinancing of our senior secured credit facility. We replaced our Term Loan A and revolving credit facilities with a new $1.15 billion Term loan A facility and an expanded $1 billion revolving credit facility. Both facilities have a five-year tenure.

During the first quarter, we repurchased 621,000 shares of our common stock for $47 million for an average of $75.19 per share. As of March 31, we had approximately 9.4 million shares remaining under our share repurchase authorization.

Before I walk through our outlook for 2021, I'll go through the details of our investment in Dun & Bradstreet shares. Turning to Slide 8, we own 54.8 million D&B shares. The market value of this investment was $1,306 million based on the $23.81 closing price of DNB on March 31. Our invested capital is $493 million. That puts our unrealized pre-tax gain at $813 million and our unrealized after-tax gain at $608 million.

Turning now to Slide 9. I'll walk through our outlook for the full year 2021 which we have raised from the guidance we gave you in February based on the strong first quarter and robust outlook. It also reflects the effect of the NexSpring acquisition, which is effectively pre-revenue but will reduce adjusted EBITDA this year due to its early stage nature.

For the year, GAAP revenues and adjusted revenues are expected to be in the range of $1,407 million to 1 billion $1,428 million, which represents raising the bottom end of the range by $13 million and the top end of the range by $6 million. This represents reported growth of approximately 14% to 15% and organic growth of approximately 6% to 8%.

Adjusted EBITDA is expected to be in the range of $695 million to $711 million, which represents raising the bottom end of the range by $6 million and maintaining the top of the range in light of the $3 million headwind from NexSpring that was not included in our original outlook.

Adjusted EPS is expected to be in the range of $2.16 to $2.24, which represents raising the bottom end of the range by $0.05 and the top end of the range by $0.02. This is considering a nearly $0.02 headwind from NexSpring.

Additional modeling details underlying our outlook are as follows: we continue to plan for incremental foreclosure revenues to be delayed until at least the first quarter of 2022; we expect no incremental headwinds outside of the $11 million headwind we experienced in the first quarter; with the origination volume outperformance in the first quarter, we continue to expect a full year headwind of approximately $12 million compared to 2020 with a higher-than-planned decline in the remaining quarters of the year.

In addition, we expect interest expense of approximately $82 million to $85 million; depreciation and amortization expense of $143 million to $147 million, excluding the net incremental depreciation and amortization resulting from purchase accounting; earnings attributable to non-controlling interest of approximately $20 million to $22 million, this relates to the portion of Optimal Blue that we don't own; and adjusted effective tax rate of approximately 23% to 24%; and full year weighted average shares outstanding of approximately 156 million.

Although we do not provide quarterly guidance, I want to provide you with some color as to how we expect to progress through the year. We expect to see sequential revenue growth over the course of the year from new client revenue, partially offset by origination volume headwinds that increase sequentially as the year progresses. And we expect operating expenses in the second quarter to step up from the first quarter by a couple of percentage points as we bring on NexSpring and staff our professional services teams due to strong demand we are seeing. We then expect a small sequential increase from Q2 to Q3 and then another couple of percentage points increase from the third quarter to the fourth quarter due to typical seasonality.

That concludes my remarks. I'll now turn the call over to the operator for Q&A.

Questions and Answers:

Operator

[Operator Instructions] The first question comes from John with Stephens, Inc. Please go ahead.

John Campbell -- Stephens Inc. -- Analyst

Hey, guys, good morning and congrats on a great start to the year.

Anthony Jabbour -- Chief Executive Officer

Thanks, John.

Kirk Larsen -- Chief Financial Officer

Hey, John. Good morning.

John Campbell -- Stephens Inc. -- Analyst

Good morning. So the seven new Empower client wins in the quarter, that was great. I mean, you guys, I think you said you picked up 10 all of last year. So it's a good start. To what extent you guys can maybe just provide a little bit of color on just maybe the types of clients you're adding and then what you think drove the more rapid kind of rate of wins.

Anthony Jabbour -- Chief Executive Officer

Well, John, I think from a -- the type of client, it's the mid-tier mid-sized client, maybe around 2,500 loans on an annual basis, plus or minus, kind of in that range. And I think the reason is really the game plan that we've been executing on here has really been focused on our clients and what would resonate with them. We've got great capabilities. We've been innovating very aggressively. We've been integrating very aggressively and very focused on them. So I think those are really the reasons. When you kind of listen to it as I walked you through the use case -- that longer use case in my prepared remarks, it was really showing kind of front to back, how it all works help us fix and hangs together and I think it drives value. Integration is always, like I said, we see it in every industry that integration wins. And what's exciting here for our clients is there is no sacrifice that they have to make on any of the components of their integrated bundle. Each of them are best of breed. Right?

I know we're talking Empower right now on the origination side, but also on our servicing side, its best-in-class. Our Data and Analytics is best-in-class. Our Secondary Marketing Technologies is best-in-class. So bringing best-in-class capability together and integrating it and I just think, that, more than anything, is really what's resonating with our clients and with the market right now.

John Campbell -- Stephens Inc. -- Analyst

Okay, that's helpful. And then maybe one more bigger picture question for you, Anthony. I mean, as you sit here today, relative to kind of the due diligence process around Optimal Blue, what are the one or two things you'd point to that are maybe positive surprises for you guys? Maybe it's around the integration, the pace of integration work or maybe it's around the synergies. But anything you can maybe call out that would be particular?

Anthony Jabbour -- Chief Executive Officer

Well, I'll tell you, the thing I'm really pleased about is how the teams have worked together. Everyone understands the mission. It's a common mission, and I'll tell you, during diligence and Kirk went and visited them, I think my -- I was on the job two months and three years ago -- I just passed my three -year anniversary. And I think two months in, I went and visited with him prior to their -- to this being actionable and both Kirk and I walked away really impressed with Scott and the team and what they had going on, the culture that they had, it felt very similar to what we have at Black Knight and we commented on that.

And so I'm not surprised, but I'm pleased that it's exactly what we thought it would be, and the team is obviously off to a great start as part of Black Knight. They know they're equal members of the Black Knight family, like those who have been here like Joe, our President, who has been here over 33 years. We're all equals here, we're a family here and we're just excited with the amount of cross-sells that we've got going on between the OB teams and the legacy Black Knight team. And so, again, not a surprise, but just more about how pleased I am with how it's all coming together and working.

John Campbell -- Stephens Inc. -- Analyst

Okay, it's very helpful. Thank you, guys.

Anthony Jabbour -- Chief Executive Officer

Thank you, John.

Operator

The next question comes from Ryan with KBW. Please go ahead.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Good morning, thanks for taking the questions. Just following up on Optimal Blue, I was wondering if you can give us a bit more detail, more KPIs for a progress report around that integration and cross-selling momentum to date. Is the cross-selling progressing as you hoped? And maybe you could speak to that both on cross-selling between OB to Empower and vice versa. And boiling that all down, what confidence do you have in Optimal Blue's growth outlook, say, over the next three to five years relative to what I think was 25% guidance in terms of revenue growth for that business this year? Thanks.

Anthony Jabbour -- Chief Executive Officer

Thanks, Ryan. Yeah, I'll start and Kirk can chime in on the longer term views. I think the -- from an integration perspective, it's coming well. We currently have the retail channel integrated and are currently working on integrations for wholesale correspondent channels and the teams are working well, and again just very, very pleased with how that's working. From an integration -- cross-selling perspective, I'd say, we're equally satisfied on the bi-directional nature of the cross-selling. Certainly, the actual Empower solution, it's a longer sales cycle and implementation cycle than our PPE products are. So what we're seeing -- so the pipelines look good obviously for both, but what we're seeing really take traction is the cross-sell of PPE to Empower client, because again it's just a product that we put in our integration bundle and we sell an integrated bundle. And so we're doing that. Just a matter of course and it's working well and obviously, we've got great momentum in that way. Kirk, I don't if you want to mention anything on future outlooks.

Kirk Larsen -- Chief Financial Officer

Sure. From a growth perspective Ryan, we continue to be confident in the 25% that we spoke of this year for the secondary marketing technologies business, which is the combination of Optimal Blue and Compass. They will be indistinguishable, one organization and so we'll be combining products and going to market as one. And so once we get to it in the aggregate. So, very good about the 25% for this year to 26% in the first quarter, so off to a very good start. Sales are off to a very good start, as Anthony discussed in his prepared remarks. As we think about the next several years, entering the year, we talked about growing over the near term in that 20% area and with a little higher this year and we expect it to be in that range for the next several years. So we feel very good about the momentum, feel very good about the cross-selling as Anthony just described and the performance of the business, but we still feel confident for the next several years with growth at that level. And beyond that, I think as we continue to see a lot of opportunity for those solutions but we'd rather limit the call on the growth at those levels for the next several years.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Great. And nice to see the buyback this quarter, which I think might be signaling your view of the current levels of the stock. And I think investors certainly ones that we speak with are trying to pinpoint the drivers of the underperformance in Black Knight shares. And one of the questions we get the most around -- is around confidence in Black Knight's longer term revenue growth outlook, say over the next three to five years, five to seven years, just considering MSPs inevitable maturation. So I guess, high level question, considering the proliferation of innovation that we are seeing across the private markets and the mortgage-related technology space and also the residential housing space, what gives you confidence that Black Knight is keeping pace with that level of innovation to remain competitive over the long-term? And then to that end, do you think that there is an opportunity to use M&A in a meaningful way to bring some of this faster growing innovation in-house similar to what you did with Optimal Blue? Thanks.

Anthony Jabbour -- Chief Executive Officer

Well, I'll tell you Ryan, like I said I just passed my three-year anniversary at Black Knight and I'll tell you when I joined three years ago I had a vision for the company that we come together, we'd act as one Black Knight, and we'd be relentlessly focused on our clients which is hard to do when we have lots of market share versus just a small start up. We've done great at that. We'd be relentlessly focused on innovation, similarly hard thing to do as a very large organization. And I'm so pleased about how we have accomplished both of those.

I also had a vision that each business will be performing an exceptionally high level and when I look back now after these three years, I couldn't be more pleased with how we're operating and the great momentum that we have here. I'm covering growth opportunities in servicing, so we're selling more servicing clients now than we've had in many years, but we're also innovating with new solutions, helping us grow the business, such as servicing digital, loss mitigation, AIP next-generation customer service, you name it. So, we've got great momentum there. We spoke earlier about our loan origination systems and just the great capabilities that we have there, how strongly its winning in the market, how well it's performing and growing. Our data and analytics business, same thing. We pointed to getting this business to being over 30% margin and growing mid single-digits. It's there and it's executing very well.

And lastly we're excited with the acquisition we did with Optimal Blue. An acquisition of scale and size and how well it's working together and it's just a perfect fit for us. But when I look at down the road in this company, I'm thrilled because we've got a family here. We care about one another. We work well together. We're having fun together and that will lead to continued growth. And so, anyone else coming, we're ready for it. We're innovating, like I said, with urgency here and we're doing the thing that is one-off type of companies out there cannot do which is integrate, and again that's where you really drive the value for your clients. And at the end of the day, what's going to matter to clients is, what kind of value can we help them drive in their business, in their revenues, in their efficiencies, in their compliance, and I just don't think anyone's close to us in terms of how we can offer that to our clients. And so we're very excited about our future and we've got tremendous momentum and we're having fun.

Kirk Larsen -- Chief Financial Officer

Ryan, what I would add to that is, look at the momentum. Look at the momentum in sales, whether you look at it from an MSP perspective, a number of new clients that we had in the last two years and in going into the first quarter. You look at the number of Empower signings accelerating over the course of the last couple of years. You look at the performance in the quarter, 9% organic growth and an outlook that we raised both the bottom end and the top end for growth for the year and that's all based upon the sales success that we're having. So I think that's all demonstrable evidence of what Anthony just talked about. And those are things that are not transitory. It's not you have one good quarter, and then it's over. It's been a series of successful quarters from a sales perspective that would drive the growth into next year. As we sell going forward, we will be selling into deliveries in 2023. So you're talking about the next several years of very strong performance that you can see the seeds planted for. So I think that that's important to look at what's driving the growth? Is it sustainable? And we firmly believe with all of our being that it is. And so that would be my response to those questions that you're getting.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Thanks guys, I appreciate the commentary. And congrats on the strong start to the year.

Anthony Jabbour -- Chief Executive Officer

Thank you, Ryan.

Kirk Larsen -- Chief Financial Officer

Thank you, Ryan.

Operator

The next question comes from Tien-Tsin with JPMorgan. Please go ahead.

Tien-Tsin -- JPMorgan -- Analyst

Hey, thanks, good morning everyone. Of course, good results here. So the 9% organic growth at the high watermark that we've seen in quite some time, what would you -- I don't know how to come in versus your plan, and what would you attribute some of the upside to? I know there's lots of puts and takes here. Just trying to better understand where the upside came from? And I have a set of...

Kirk Larsen -- Chief Financial Officer

Yes. I...

Tien-Tsin -- JPMorgan -- Analyst

Outlook as well.

Kirk Larsen -- Chief Financial Officer

Yes. Tien-Tsin let's start with what drove the 9% growth. So, as you picked up on, and as Anthony said it's the highest rate of growth since 2016. So let's start with that and say what drove that and then I'll get into the quarter itself, kind of the various variances. So I would simply summarize it as its revenues from new clients on our platforms and revenues from cross-sales that drove 10 percentage points of organic growth. So that really was -- it was a very active driven growth as opposed to things that just happened to us. So that's 10 percentage points from that. So all the other things that you could talk about, whether it be annual price or origination volumes or closure volume transitory headwind and the other thing, really all netted out to a 1% headwind, so it gets you from the 10% down to the 9%. So super high quality, new client, new solution driven quarter overall.

As far as how it varied from our expectations coming in, there's really three things. And I would say, one was, origination volumes were a little bit better than we thought coming in. And you can see how from week-to-week those can move around. It's frankly not something that we spend a whole lot of intellectual cycles focusing on because it is outside of our control, the rates can go up, rates went up, rates came back down. So volumes will move, but it came in a bit better than our expectations. That said, for the full year, I think with that -- with the rising rates that we saw during the first quarter, it did temper our expectations a bit for the final three quarters versus our plan. So for the full year, we continue to expect the same $12 million headwind that we came into. So a little better than the first quarter, but there is a little bit of a reversal of that in the rest of the year.

We saw elevated usage of MSP in the quarter. And I would say it relates to a few things. We have clients that are growing. Clients that are taking on new portfolios. They use the system more and there are some additional revenues that we see when activity is up. We think that's terrific, because that means they are using the platform that is core to their operations. They're using it more. That's great. And they're finding the value in MSP. So we think that's terrific. And then actually the last piece that's a little bit better than we expected was professional services, particularly in origination related to Empower. So we see clients that are looking for domain expertise to help them improve processes and increase automation as they look to -- as they look forward to how they want to optimize operations. And so, we see more demand for those professional services. So those are the three areas that I would say, we're a little better than we expected, coming in, but fundamentally at the core of it is, very, very active sales oriented growth was what drove the overall 9%.

Tien-Tsin -- JPMorgan -- Analyst

Very clear and complete. Thanks for that Kirk. So just my quick follow-up then, yes, so 10 points of organic growth you guys a real build up on selling on sales confidence and I think [Indecipherable] forgive me, just confidence and replenishing the pipeline, more importantly, the backlog and timeliness of closing deals. It sounds like the pipeline is strong. But do you feel like those will come to close here in the next couple of quarters at a good pace?

Anthony Jabbour -- Chief Executive Officer

Yes, Tien-Tsin we feel very confident on the sales pipeline and like I said how well we're doing, the game plan, we're executing against is resonating with our clients.

Tien-Tsin -- JPMorgan -- Analyst

Terrific. I know it is very broad based. So well done and I know you guys don't take it lightly taken up guidance so early in the year. So, thanks for that.

Anthony Jabbour -- Chief Executive Officer

Thanks.

Kirk Larsen -- Chief Financial Officer

Thank you, Tien-Tsin.

Operator

The next question comes from Stephen with William Blair. Please go ahead.

Stephen Sheldon -- William Blair -- Analyst

Hey, good morning. Thank you for taking my questions.

Anthony Jabbour -- Chief Executive Officer

Good morning.

Stephen Sheldon -- William Blair -- Analyst

Really appreciate the detailed example Anthony for how the combined platform can help clients better recapture by opportunities. I know recapture rates have been low across the industry, I think below 20%. So have you seen your client base that have adopted be broad-based integrated capabilities actually leverage them to be able to recapture at an above average rate? Have you seen there within your client base?

Anthony Jabbour -- Chief Executive Officer

Yes, Stephen, you broke up a bit, but I think your question was have we seen our clients leveraging some of our technologies to improve the recapture rates? And we have. Obviously, I won't speak to any of that -- to them or to their resulted, ask you to seek them directly, but we have. And on a more broad-based basis, our servicing digital, I can say that, early indications are it's providing a double-digit improvement in retention rates than itself. So having this digital application, it's sticky. Customers are using it in an ongoing basis. You're in touch with more, there's more of a connection versus just a plain mortgage when it comes up for refi, you go anywhere you want. There is more of a connection like most other financial services products. So we're certainly seeing the improvements happening and we're -- so we think we're at the beginning of the journey candidate. We think there's a lot that we can do and a lot more integrating and ways that we can help our clients improve their retention rates.

Stephen Sheldon -- William Blair -- Analyst

Got it, that's really helpful. And hopefully, you can hear me OK. Talk about some -- it's more about what the NexSpring acquisition has been strategically, how that will fit in with the existing origination assets? And on the guidance, the expected adjusted EBITDA drag from it, you've included for the year? Thanks.

Anthony Jabbour -- Chief Executive Officer

Yes, I think we shared a $3 million drag as we invest in this and we're excited about this opportunity. So it's really focusing on the broker market. And when you look at everything that we have, for when companies start up and go after it, there's so many components that they want to bring together, because even for the smaller broker market integration matters. You're changing value propositions through the power of integration and so for us, we have many of these capabilities. So we look at NexSpring, really we're excited about we said, well we can integrate this into our loan sector PPE, we can integrate it to regulatory assist to our expedite e-close to our exchange to tap data, AIP, we have a lot of these capabilities. So this is really just adding again some more connectivity tissue between all the capabilities, where we can have a much bigger impact than next [Indecipherable] could have ever had on its own. And so we're excited about what that opportunity looks like. And like I said in my prepared remarks, I mean the opportunity that the volumes have grown significantly in that space, but we look at as again another one of these relatively low risk acquisitions that we make, we can get into it in pretty easily and think the opportunity of it could be pretty, pretty exciting.

Operator

The next question comes from Tom with Truist Securities. Please go ahead.

Tom -- Truist Securities -- Analyst

Hey guys. Thanks for taking our call and good to speak with you again Anthony.

Anthony Jabbour -- Chief Executive Officer

You too Tom.

Tom -- Truist Securities -- Analyst

Our question is around Optimal Blue and great color given on that. I was wondering from -- with regard to cross-sell but I'm wondering HAMP expansion opportunities and maybe new verticals and client groups that you're selling this into that would be helpful. And then the second question on Optimal Blue will be around the datasets. Just wondering thoughts and updates, I know it's early days here, but where your long -- intermediate term thoughts would be around the datasets that you have? Is this more about cross-selling and expanding the TAM there with the existing datasets or is there some holes or in the early findings some need for additional datasets going forward, that you'd like to add to that data platform? Thank you.

Anthony Jabbour -- Chief Executive Officer

Sure, Tom. So a couple of things. In terms of the TAM expansion, there is a number of possibilities and we're going to -- we see a lot of room for us to continue to grow as is ways for us to go into smaller clients. We talked about the long shifter PPE capabilities and obviously now tied to NexSpring as an example. There is further expansion mortgage insurance, but -- and more expansion into just capital markets in general with the capability. You'd asked about the datasets and there are some really exciting datasets that have come out of that. And again what I'm really proud of the team, this isn't me sitting in every meeting, directing everyone what to do, this is everyone doing it on their own, right. Our two teams coming together, our data and analytics team coming together with our Optimal Blue team looking at their dataset, there is some great information that we have there on rate lock data etc and combining it in with what we've got in creating new insights for our clients and driving more value. And I think there'll be more and more data that we'll find there and either exhaust data that's coming off of something we're currently doing. New data that we can curate and integrate, but it certainly is an area where we see there being possibilities for us in ways that we can help our clients.

Tom -- Truist Securities -- Analyst

I'll take the great opportunity. Thank you so much Anthony.

Anthony Jabbour -- Chief Executive Officer

Thank you, Tom.

Operator

The next question comes from Mihir with Bank of America. Please go ahead.

Mihir Bhatia -- Bank of America -- Analyst

Hi, thank you for taking my question. The first question I wanted to ask is going back to NexSpring again for a second, I just want to make sure I understand, do you let it's pre-revenue, when do we -- when will you start selling it and monetizing that? Is it -- is 2021 -- should we think of 2021 as just building the capability, is getting the integrations done? And then when you -- as you monetize that will it be a different product or will it be kind of rolled into Empower?

Anthony Jabbour -- Chief Executive Officer

No. So Mihir, we're starting to sell it right now. And as we integrate it obviously you get some momentum behind it. Yes, it will kick in more into 2022 than '21, but it will be a separate product. So it will be branded differently from Empower for the broker model, but it will be integrated into Empower. So for wholesale lenders who are using Empower, there'll be again real nice integration between the two and again with the integration creating efficiencies, streamlining etc. so that's what our plan is NexSpring.

Mihir Bhatia -- Bank of America -- Analyst

So does that make, I guess, just staying on that first again, for existing Empower clients, I imagine there's already existing clients who use Empower who have a broker channel. Would that be a cross-sell opportunity or is there a solution they are already using and this just enhances it?

Anthony Jabbour -- Chief Executive Officer

Yes, Mihir, I think enhances it for clients that are using it today.

Mihir Bhatia -- Bank of America -- Analyst

Okay. And then switching gears for a second, I wanted to ask about The Caliber M&A. They are having part of NRZ obviously with a big client, and I think it was scheduled to come on this year. Is that still going ahead and is this like an opportunity for you to get into expand your relationship with NRZ or I guess how are you all thinking about what's going on with that and what the implications for BKI are?

Anthony Jabbour -- Chief Executive Officer

Sure. Yes, we're very close to both management teams at NRZ and Caliber. They are both clients of ours and other areas outside of MSP. But as far as Caliber's conversion to MSP, yes it's happening with urgency. So absolutely moving forward with it. We're excited about it. Working real closely with them and more so I feel excited about what's happening in M&A and how it's benefiting us as a net positive. P&C is acquiring BBVA, which is good for us. Huntington acquiring TCF Financial. M&T Bank acquiring People's United Bank. So, just some great trends in consolidation that are benefiting us as well in addition to the NRZ and capital or Caliber acquisition.

Mihir Bhatia -- Bank of America -- Analyst

Got it. Thank you. And then just one last question from me. I just wanted to go back. Look, I think most of the analysts on the call and we understand that your business is not very sensitive to origination volumes, but since you did mention it as a headwind for the rest of the -- for the remaining part of the potential headwind. Maybe you can just size that just because it continues to be a question we get quite often, so just since you mentioned it. Thank you. That will be all from me.

Kirk Larsen -- Chief Financial Officer

Yes, let me take that. So revenues sensitive to origination volumes are 10% of our revenues. That's it 10%. And so, which is why before as we were talking about how we grow, it's not about predicting what volumes are going to do, it's about innovating, integrating, selling and delivering. And so, but there is that minor stub that is related to it. It's not something that that we employ people to sit and forecast every day, because it's not action oriented. And so, yes, there is a little bit that it could be up a little bit down a little bit, but it's only 10% of revenues.

Mihir Bhatia -- Bank of America -- Analyst

Thank you.

Anthony Jabbour -- Chief Executive Officer

I think the overriding feedback here I hope you hear from us is, our incentives are lined up for us to focus on what we can control. So whenever in waking up not hoping whatever volumes do or don't do, waking up every day innovating, integrating, selling, delivering servicing our clients then rinse, wash, repeat and go back and innovate again, integrate, sell, deliver and service. That's what will drive our company -- what helps our clients, moves the needle for us. That's what we're focused on and that's what's really driving this company.

Mihir Bhatia -- Bank of America -- Analyst

Right. No, I appreciate that. Thank you. Look, I mean you had very good execution in the first quarter clearly and it sounds like the outlook for the year is very strong, but anyway I'll stop there. Thank you for taking my questions.

Anthony Jabbour -- Chief Executive Officer

Thanks Mihir.

Operator

The next question comes from Manav with Barclays. Please go ahead.

Manav Patnaik -- Barclays -- Analyst

Thank you. I apologize if I missed it. Can you just tell us what the Optimal Blue contribution was this quarter? I guess I'm trying to get toward the organic growth in the origination software line would be?

Kirk Larsen -- Chief Financial Officer

So Optimal Blue contributed $35 million of revenue this quarter.

Manav Patnaik -- Barclays -- Analyst

Okay, all right. And just the one area, I think I wanted to touch on was data and analytics. I mean the organic growth there 11%. I think you said that was pretty good. I was just wondering, is there any one-time items, just what's going on there and what the outlook for the rest of the year would be?

Kirk Larsen -- Chief Financial Officer

So Manav the -- there were no one-timers frankly across the business, across the enterprise there were no one-timers in the first quarter. If you take the growth in data and analytics and look at what the drivers were, the majority of that growth was driven by selling and delivering, and selling and delivering innovative solutions. And so it really was across each of the businesses within data and analytics. What I'll highlight there was an element of the -- of volume benefit that is in that business but still was growing 6%, 7% on kind of underlying basis. And as we look forward for the full year on that similar underlying basis, it's right in that area for the full year. The back half is that volume headwind that we talked about, but the underlying performance of the business is still in that mid single-digits inching up toward high single-digits at mid 30s margins, which is terrific.

Manav Patnaik -- Barclays -- Analyst

Got it. Thank you, guys.

Kirk Larsen -- Chief Financial Officer

Thanks Manav.

Anthony Jabbour -- Chief Executive Officer

Thank you.

Operator

[Operator Instructions] The next question comes from Kevin with Zelman Associates. Please go ahead.

Kevin Kaczmarek -- Zelman Associates -- Analyst

Hey guys. You mentioned your average repurchase price is somewhere in the range of the mid 70s per share last quarter. How do you think about ramping up repurchases if the stock stays at this level? Do you see it as more steady and systematic or opportunistic and if the stock dips more from here, directionally, at least, how much more aggressive could you get in terms of repurchases given there aren't any required payments on the term loan for now in the capacity and the revolver?

Anthony Jabbour -- Chief Executive Officer

Kevin, look our balance sheet's in great shape. We increased our available capital through the expansion of the revolver and we're always going to focus first on internal investment. I've told the leadership team here will fund every project that has attractive returns, innovation is central to our long-term growth strategy, very focused on it and we're going to get the highest return on invested capital that way. Go to our M&A strategy. It's not changed. We're going to continue to look for acquisitions out there that are good fits for us that helps drive our game plan here with our clients and we're obviously very focused on that. We always see opportunity there, but if we have excess capital, after investing in growth, we do stand ready to buy back shares and you saw us do it in the first quarter.

Kevin Kaczmarek -- Zelman Associates -- Analyst

Okay. And then one on more of an accounting item, non-controlling interest, your guidance is for about $20-ish million of earnings versus $8.6 million loss in the first quarter. Can you give us a sense of the trajectory for the remainder of the year. I mean, could it be --should it be steady at some point or it could be a bit bumpy and I realize there are a lot of accounting pieces in there in addition to operational factors. But it does really swing EPS a decent amount. So just wanted to get your sense of forward outlook there?

Kirk Larsen -- Chief Financial Officer

Kevin that minus $8.6 million in the first quarter is the GAAP number. The $20 million to $22 million is an adjusted number. So looking at the underlying business the same way we measure performance for Black Knight. So we take out the effect of purchase accounting and the like. And so I think there is -- we can walk through it separately, but I believe there is a line item in our GAAP to non-GAAP reconciliation that shows what that adjustment is, but conceptually the number should be relatively consistent, increasing sequentially from Q1 to Q4 as the profit growth in that business. And so it should be, but relatively linear. It's not going to bounce around from a loss to income over the course of the year. So if you look at Page 11 of our press release, sorry to be very specific here, there's a line item called redeemable non-controlling interest adjustment, that is an adjustment of $12.5 million, that's what that relates to.

Kevin Kaczmarek -- Zelman Associates -- Analyst

Okay. Yes, I did understand those were different numbers maybe I misspoke a bit, but that is helpful. Thank you very much. And I guess one last one on the NexSpring acquisition. Is this more of a product where the mortgage broker is the customer paying you or is this more of a product where it provides kind of a network like the big wholesale lenders have where they have a tech platform that they rollout to their broker networks to attract more volume. I guess who is the end client here?

Anthony Jabbour -- Chief Executive Officer

No it's the former example you gave.

Kevin Kaczmarek -- Zelman Associates -- Analyst

Okay, thank you. That's all I had.

Kirk Larsen -- Chief Financial Officer

Hey Kevin, just to clarify something I said. I pointed you in the wrong direction. In our GAAP to non-GAAP we actually start with net earnings attributable to Black Knight, that's the net number already. So, but I -- the $20 million, $22 million would conceivably be relatively linear across the past. So that's we're looking on the fly there.

Kevin Kaczmarek -- Zelman Associates -- Analyst

Okay, Kirk. Thank you.

Operator

This concludes the question-and-answer session. I would like to turn the conference back over to Anthony Jabbour for any closing remarks.

Anthony Jabbour -- Chief Executive Officer

Thank you. In closing, we're pleased with our strong start to the year and are confident in our higher outlook for the remainder of the year. I'd like to thank our clients for their strong partnership and my Black Knight colleagues for their exceptional efforts and dedication. Thank you for joining us on the call today, for your interest in our great company. Enjoy the rest of your day.

Operator

[Operator Closing Remarks]

Duration: 67 minutes

Call participants:

Steve Eagerton -- Vice President, Investor Relations

Anthony Jabbour -- Chief Executive Officer

Kirk Larsen -- Chief Financial Officer

John Campbell -- Stephens Inc. -- Analyst

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Tien-Tsin -- JPMorgan -- Analyst

Stephen Sheldon -- William Blair -- Analyst

Tom -- Truist Securities -- Analyst

Mihir Bhatia -- Bank of America -- Analyst

Manav Patnaik -- Barclays -- Analyst

Kevin Kaczmarek -- Zelman Associates -- Analyst

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