BLACK KNIGHT, INC.€¦ · DNB shares owned by Black Knight(1) 54.8 million DNB share price(2) $25.76 Market value of DNB investment $1,413 million Total amount invested in DNB $493

BLACK KNIGHT, INC.Second Quarter 2020 Financial Results

August 10, 2020

Forward-Looking Statements

This presentation contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regardingexpectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on Black Knight management's beliefs, as well asassumptions 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 statementsof 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: satisfaction of the conditions to closing theacquisition of Optimal Blue, LLC (“Optimal Blue”) and consummate the transaction, including the receipt of regulatory approvals; our ability to obtain debt financing to finance theacquisition of Optimal Blue on reasonable terms; changes in general economic, business, regulatory and political conditions, including those resulting from pandemics such as COVID-19,particularly as they affect foreclosures and the mortgage industry; the outbreak of COVID-19 and measures to reduce its spread, including the effect of governmental or voluntary actionssuch as business shutdowns and stay-at-home orders; security breaches against our information systems; our ability to maintain and grow our relationships with our clients; changes to thelaws, rules and regulations that affect our and our clients’ businesses; our ability to adapt our services to changes in technology or the marketplace or to achieve our growth strategies; ourability to protect our proprietary software and information rights; the effect of any potential defects, development delays, installation difficulties or system failures on our business andreputation; risks associated with the availability of data; the effects of our existing leverage on our ability to make acquisitions and invest in our business; our ability to successfullyintegrate strategic acquisitions; risks associated with our investment in Dun & Bradstreet Holdings, Inc. (“DNB”); and other risks and uncertainties detailed in the “Statement RegardingForward-Looking Information,” “Risk Factors” and other sections of our Annual Report on Form 10-K for the year ended December 31, 2019 and other filings with the Securities andExchange Commission (“SEC”).

Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures, including Adjusted Revenues, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Earnings and Adjusted EPS. These areimportant financial measures for us, but are not financial measures as defined by generally accepted accounting principles ("GAAP"). The presentation of this financial information is notintended 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 financialmeasures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe these measures provide useful information about operatingresults, 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 itsfinancial 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 offerinvestors 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 notmeasures 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 analternative to revenues, net earnings, net earnings per share, net earnings margin or any other measures derived in accordance with GAAP as measures of operating performance orliquidity. We have not provided a reconciliation of forward-looking Adjusted EPS and Adjusted EBITDA to the most directly comparable GAAP financial measures, due primarily to variabilityand difficulty in making accurate forecasts and projections of non-operating matters that may arise, as not all of the information necessary for a quantitative reconciliation is available to uswithout unreasonable effort. For the same reasons, we are unable to address the probable significance of the information. See the Appendix for further information.

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

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© 2020 Black Knight Technologies, LLC. All Rights Reserved.

Disclaimer



Financial Highlights (GAAP)

Metrics Second Quarter 2020 First Half 2020

Revenues $293.1 million, -1% $583.8 million, +1%

Earnings before equity in losses ofunconsolidated affiliates

$65.1 million, +44% $109.6 million, +30%

Net earnings(1) $39.1 million, +20% $89.2 million, +52%

Net earnings margin 13.3% 15.3%

Diluted EPS(1) $0.26, +18% $0.60, +54%

(1) For the three months ended June 30, 2020 and 2019, the effect of our investment in Star Parent, L.P., the parent of DNB (the “D&B Investment”), was a reduction in Net earnings of $31.0 million, or $0.21 per diluted share, and $12.7 million, or $0.09 per diluted share, respectively. For the six months ended June 30, 2020 and 2019, the effect of our D&B Investment was a reduction in Net earnings of $25.4 million, or $0.17 per diluted share, and $26.0 million, or $0.18 per diluted share, respectively.



Financial Highlights (Non-GAAP)

Metrics(1) Second Quarter 2020 First Half 2020

Adjusted Revenues $293.3 million, -0.6% $584.1 million, +1%

Adjusted EBITDA $147.3 million, -0.4% $287.4 million, +1%

Adjusted EBITDA Margin 50.2% 49.2%

Adjusted Net Earnings $78.3 million, +7% $147.7 million, +6%

Adjusted EPS $0.52, +6% $0.99, +5%

(1) See appendix for non-GAAP reconciliations.



Software SolutionsRevenues ($ in millions)

$255.4 $245.1

Q2 2019 Q2 2020

$498.9 $489.8

YTD 2019 YTD 2020

-4% Y/Y -2% Y/Y

EBITDA MARGIN (%)

60.3% 59.6%

Q2 2019 Q2 2020

59.0% 58.3%

YTD 2019 YTD 2020

-70 bps Y/Y -70 bps Y/Y

SECOND QUARTER HIGHLIGHTS

• Servicing software solutions decline of 12.5% as increased revenues from new and existing clients on MSP® were more than offset by the effect of client deconversions and the effect of lower foreclosure related volumes due to the foreclosure moratorium as part of the CARES Act

• Origination software solutions growth of 36% primarily driven by increased revenues from new clients, higher refinance origination volumes and revenue from an acquired business

• EBITDA margin of 59.6%

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an affiliate.




Data & Analytics

SECOND QUARTER HIGHLIGHTS

• Revenues increased 21% primarily driven by strong sales execution, higher origination volumes and revenues from an acquired business

• EBITDA margin expansion of 970 basis points to 33.4%

$39.7

$48.2

Q2 2019 Q2 2020

$79.4$94.3

YTD 2019 YTD 2020

Revenues ($ in millions)

+21% Y/Y +19% Y/Y

EBITDA MARGIN (%)

23.7%

33.4%

Q2 2019 Q2 2020

24.3%

32.6%

YTD 2019 YTD 2020

+970 bps Y/Y +830 bps Y/Y

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an affiliate.




Debt Summary

($ in millions) June 30, 2020 Maturity Interest Rate

Cash and cash equivalents $ 228.2

Term A Loan 1,179.7 2023 LIBOR + 150 bps

Other 24.7 2023 0.00%

Total long-term debt(1) $ 1,204.4

Net debt $ 976.2

LTM Adjusted EBITDA(2) $ 585.8

Total debt / LTM Adjusted EBITDA 2.1x

Net debt / LTM Adjusted EBITDA 1.7x

(1) Excludes debt issuance costs and discount.

(2) See appendix for non-GAAP reconciliations.

Dun & Bradstreet Investment

8

DNB shares owned by Black Knight(1) 54.8 million

DNB share price(2) $25.76

Market value of DNB investment $1,413 million

Total amount invested in DNB $493 million

Pre-tax unrealized gain based on amount invested $920 million

After-tax unrealized gain based on amount invested $688 million

After-tax value of our DNB investment $1,180 million

Confidential, Proprietary and/or Trade Secret | TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, or an affiliate.© 2020 Black Knight Technologies, LLC. All Rights Reserved.

(1) DNB shares owned by Black Knight after the DNB initial public offering and concurrent private placement on July 6, 2020.(2) Based on the average closing price of DNB common stock during July 2020.



Full Year 2020 Financial Guidance

Financial Metric Guidance

Revenues and Adjusted Revenues $1,170 million to $1,184 million

Adjusted EBITDA $572 million to $583 million

Adjusted EPS $1.94 to $1.99

Full year 2020 guidance is based upon the following estimates and assumptions:

Interest expense of ~$50 million to $52 million

Depreciation and amortization expense of ~$137 million to $140 million (excluding incremental depreciation and amortization expense

resulting from purchase accounting)

Effective tax rate of ~23% in the third and fourth quarters (excluding potential discrete tax benefits)

Diluted weighted average shares outstanding of ~156 million for the third and fourth quarters and ~153 million for full year 2020

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APPENDIX



Non-GAAP Financial Measures

Adjusted Revenues – We define Adjusted Revenues as Revenues adjusted to include the revenues that were not recorded by Black Knight during the periodspresented due to the deferred revenue purchase accounting adjustment recorded in accordance with GAAP. These adjustments are reflected in Corporate andOther.

Adjusted EBITDA – We define Adjusted EBITDA as Net earnings, with adjustments to reflect the addition or elimination of certain statement of earnings itemsincluding, but not limited to: (i) Depreciation and amortization; (ii) Impairment charges; (iii) Interest expense, net; (iv) Income tax expense; (v) Other (income)expense, net; (vi) Equity in (earnings) losses of unconsolidated affiliates, net of tax; (vii) (Gains) losses on sale of investments in unconsolidated affiliate, net oftax; (viii) deferred revenue purchase accounting adjustment; (ix) equity-based compensation, including certain related payroll taxes; (x) costs associated withdebt and/or equity offerings; (xi) acquisition-related costs, including costs pursuant to purchase agreements; and (xii) costs associated with expense reductioninitiatives. These adjustments are reflected in Corporate and Other.

Adjusted EBITDA Margin – Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by Adjusted Revenues.

Adjusted Net Earnings – We define Adjusted Net Earnings as Net earnings with adjustments to reflect the addition or elimination of certain statement ofearnings items including, but not limited to: (i) equity in (earnings) losses of unconsolidated affiliates, net of tax; (ii) (gains) losses on sale of investments inunconsolidated affiliate, net of tax; (iii) the net incremental depreciation and amortization adjustments associated with the application of purchase accounting;(iv) deferred revenue purchase accounting adjustment; (v) equity-based compensation, including certain related payroll taxes; (vi) costs associated with debtand/or equity offerings; (vii) acquisition-related costs, including costs pursuant to purchase agreements; (viii) costs associated with expense reductioninitiatives; (ix) costs and settlement (gains) losses associated with significant legal matters; and (x) adjustment for income tax expense primarily related to thetax 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.



Non-GAAP Reconciliation: Adjusted Revenues

Three months ended June 30,

Six months endedJune 30,

($ in millions) 2020 2019 2020 2019

Revenues $ 293.1 $ 294.9 $ 583.8 $ 578.0

Deferred revenue purchase accounting adjustment 0.2 0.2 0.3 0.3

Adjusted Revenues $ 293.3 $ 295.1 $ 584.1 $ 578.3



Non-GAAP Reconciliation: Adjusted EBITDAThree months ended

June 30,Six months ended

June 30,LTM ended

June 30,

($ in millions) 2020 2019 2020 2019 2020

Net earnings $ 39.1 $ 32.6 $ 89.2 $ 58.6 $ 139.4

Depreciation and amortization 58.6 57.5 116.3 114.4 238.1

Interest expense, net 13.0 16.7 27.7 31.7 59.5

Income tax expense 17.2 14.5 25.4 25.2 42.1

Other (income) expense, net (18.8) 0.5 (18.0) 0.8 (17.4)

Equity in losses of unconsolidated affiliates, net of tax 31.0 12.7 25.4 26.0 73.4

Gain on sale of investment in unconsolidated affiliate, net of tax (5.0) — (5.0) — (5.0)

EBITDA 135.1 134.5 261.0 256.7 530.1

Deferred revenue purchase accounting adjustment 0.2 0.2 0.3 0.3 0.5

Equity-based compensation 9.5 12.2 21.2 26.1 46.8

Debt and/or equity offering expenses — — 0.2 — 0.2

Acquisition-related costs 2.5 1.0 3.9 1.9 5.8

Expense reduction initiatives — — 0.8 — 2.4

Adjusted EBITDA $ 147.3 $ 147.9 $ 287.4 $ 285.0 $ 585.8

Net earnings margin (%) 13.3% 11.1% 15.3% 10.1%

Adjusted EBITDA Margin (%) 50.2% 50.1% 49.2% 49.3%



Non-GAAP Reconciliation: Adjusted Net Earnings

Three months endedJune 30,

Six months endedJune 30,

($ in millions, except per share data) 2020 2019 2020 2019

Net earnings $ 39.1 $ 32.6 $ 89.2 $ 58.6

Equity in losses of unconsolidated affiliates, net of tax 31.0 12.7 25.4 26.0

Gain on sale of investment in unconsolidated affiliate, net of tax (5.0) — (5.0) —

Depreciation and amortization purchase accounting adjustment 24.7 23.9 48.3 47.2

Deferred revenue purchase accounting adjustment 0.2 0.2 0.3 0.3

Equity-based compensation 9.5 12.2 21.2 26.1

Debt and/or equity offering expenses — — 0.2 —

Acquisition-related costs 2.5 1.0 3.9 1.9

Expense reduction initiatives — — 0.8 —

Legal matters (18.7) 0.5 (17.9) 0.7

Income tax expense adjustment (5.0) (10.0) (18.7) (21.8)

Adjusted Net Earnings $ 78.3 $ 73.1 $ 147.7 $ 139.0

Adjusted EPS $ 0.52 $ 0.49 $ 0.99 $ 0.94

Weighted average shares outstanding, diluted 150.0 148.5 149.3 148.4

Documents

BLACK KNIGHT, INC.€¦ · DNB shares owned by Black Knight(1) 54.8 million DNB share price(2) $25.76 Market value of DNB investment $1,413 million Total amount invested in DNB $493