BLACK KNIGHT, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

The statements contained in this Quarterly Report on Form 10-Q that are not
purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
statements regarding expectations, hopes, intentions or strategies regarding the
future. Forward-looking statements are based on Black Knight, Inc. and its
subsidiaries ("Black Knight," the "Company," "we," "us" or "our") 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. We undertake 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 Intercontinental Exchange, Inc. (“ICE”) or us to

terminate the definitive merger agreement governing the terms and conditions of

the proposed transaction;

? the outcome of any legal proceedings that may be instituted against us or ICE;

the possibility that the proposed transaction does 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

transaction);

? 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;

? security breaches against our information systems or breaches involving our

third-party vendors;

? our ability to maintain and grow our relationships with our clients;

? 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;

? our ability to protect our proprietary software and information rights;

? the effect of any potential defects, development delays, installation

difficulties or system failures on our business and reputation;

? changes in general economic, business, regulatory and political conditions;

? impacts to our business operations caused by the occurrence of a catastrophe or

global crisis;

? the effects of our existing leverage on our ability to make acquisitions and

invest in our business;

? risks associated with the recruitment and retention of our skilled workforce;

? risks associated with the availability of data;

? our ability to successfully consummate, integrate and achieve the intended

benefits of acquisitions;

? risks associated with our investment in DNB; 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, 2021 and other filings with

the Securities and Exchange Commission (“SEC”).

The following discussion should be read in conjunction with our Annual Report on
Form 10-K for the year ended December 31, 2021 filed with the SEC on February
25, 2022 and other filings with the SEC.

Overview

Black Knight is a premier provider of integrated, innovative, mission-critical,
high-performance software solutions, data and analytics to the U.S. mortgage and
real estate markets. Our mission is to transform the markets we serve by
delivering innovative solutions that are integrated across the homeownership
lifecycle and that result in realized efficiencies, reduced risk and new
opportunities for our clients to help them achieve greater levels of success.

We believe businesses leverage our robust, integrated solutions across the
entire homeownership lifecycle to help retain existing clients, gain new
clients, mitigate risk and operate more efficiently. Our clients rely on our
proven, comprehensive, scalable solutions and our unwavering commitment to
delivering exceptional client support to achieve their strategic goals and
better serve their customers.

We have a focused strategy of continuous innovation across our business
supported by strategic acquisitions – and even more importantly, the integration
of those innovations and acquisitions into our broader ecosystem. Our scale
allows us to continually invest in

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our business, both to meet ever-changing industry requirements and to maintain
our position as a leading provider of platforms for the mortgage and real estate
markets.

Deep business and regulatory expertise and a holistic view of the markets we
serve allow us the privilege of being a trusted advisor to our clients, who
range from the nation's largest lenders and mortgage servicers to institutional
portfolio managers and government entities, to individual real estate agents and
mortgage brokers. Clients leverage our software ecosystem across a range of real
estate and housing finance verticals through multiple digital channels, using
our offerings to drive more business, reduce risk and deliver a best-in-class
customer experience, all while operating more efficiently and cost-effectively.

The table below summarizes active first and second lien mortgage loans on our
mortgage loan servicing software solution and the related market data,
reflecting our leadership in the mortgage loan servicing software solutions
market (in millions):

                                First lien                     Second lien                     Total first and second lien
                           as of September 30,             as of September 30,                    as of September 30,
                           2022            2021            2022            2021              2022                          2021
Active loans              32.9             32.5            3.1              3.1              36.0                           35.6
Market size               53.4 (1)         52.9 (1)       12.7 (2)         12.3 (2)          66.1                           65.2
Market share                62 %             61 %           24 %             25 %              54 %                           55 %

Note: Percentages above may not recalculate due to rounding.

Estimates according to the Black Knight Mortgage Monitor Report as of August
(1) 31, 2022 and September 30, 2021 for U.S. first lien mortgage loans. These

estimates are subject to change.

Estimates according to the October 2022 and 2021 Equifax National Consumer
(2) Credit Trends Report as of September 30, 2022 and 2021 for U.S. second lien

mortgage loans. These estimates are subject to change.

We have long-standing relationships with our clients - a majority of whom enter
into long-term contracts that include multiple, integrated products embedded
into mission-critical, client-side workflow and decision processes. This speaks
to the confidence our clients, which include some of the largest financial
institutions in the world, have in our solutions and our commitment to serve
them. The contractual nature of our revenues and stickiness of our client
relationships make our revenues both highly visible and recurring in nature. Our
scale and integrated ecosystem of solutions drive significant operating leverage
and cross-sell opportunities, enabling our clients to continually benefit from
new and greater operational efficiencies while simultaneously allowing us to
generate strong margins and cash flows.

Our Markets

The Black Knight ecosystem stretches across four core "pillar" verticals:
mortgage loan servicing, mortgage origination, real estate and capital markets;
with our data and analytics flowing throughout and between the interconnected
ecosystem of solutions. As we integrate our innovations and acquired
technologies, we are committed to continually improving the end consumer
experience, driving further efficiencies for our clients and helping them to win
new customers and retain existing customers.

Recent Developments

Optimal Blue Transaction

On February 15, 2022, we entered into a purchase agreement with Cannae and THL
and acquired all of their Class A units of Optimal Blue Holdco, LLC ("Optimal
Blue Holdco") through Optimal Blue I, LLC ("Optimal Blue I"), a Delaware limited
liability company and our wholly-owned subsidiary, in exchange for aggregate
consideration of 36.4 million shares of DNB common stock valued at $722.5
million and $433.5 million in cash. The cash portion of the consideration was
funded with borrowings under our revolving credit facility. The aggregate
consideration of $1.156 billion and number of shares of DNB common stock paid to
Cannae and THL was based on the 20-day volume-weighted average trading price of
DNB for the period ended on February 14, 2022. As of February 15, 2022, we own
100% of the Class A units of Optimal Blue Holdco. Refer to Note 1 - Basis of
Presentation and Overview in Item 1 of Part I of this Quarterly Report on
Form 10-Q for additional information.

Merger Agreement

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On May 4, 2022, we entered into a definitive agreement to be acquired by ICE, a
leading global provider of data, technology, and market infrastructure, in a
transaction valued at approximately $13.1 billion, or $85 per share, with
consideration in the form of a mix of cash (80%) and stock (20%) (the "ICE
Transaction"). The aggregate cash consideration in the ICE Transaction consists
of approximately $10.5 billion and the aggregate stock consideration was valued
at approximately $2.6 billion based on ICE's 10-day volume weighted average
price as of May 2, 2022 of $118.09. The ICE Transaction is expected to close in
the first half of 2023, subject to the receipt of regulatory approvals and the
satisfaction of customary closing conditions. The ICE Transaction has been
approved by the Boards of Directors of Black Knight and ICE and Black Knight
shareholders. Refer to Note 1 - Basis of Presentation and Overview in Item 1 of
Part I of this Quarterly Report on Form 10-Q for additional information.

Business Trends and Conditions

Market Trends

Market trends that have spurred lenders and servicers to seek software, data and
analytics solutions are as follows:

Lenders increasingly focused on core operations. As a result of regulatory
scrutiny, a decline in refinance origination volumes due to a rising interest
rate environment and the higher cost of doing business, we believe lenders have
become more focused on their core operations, including ways to reduce costs. We
believe lenders are increasingly shifting from in-house solutions to third-party
solutions that provide a more comprehensive and efficient solution. Lenders
require these providers to deliver best-in-class solutions and deep domain
expertise and to assist them in maintaining regulatory compliance and reducing
costs.

Integral role of technology in the U.S. mortgage loan industry. Over the past
few years, the homebuyer's processes have become more digital, and banks and
other lenders and servicers have become increasingly focused on automation and
workflow management to operate more efficiently and meet their regulatory
requirements as well as using technology to enhance the consumer experience
during the mortgage loan origination, closing and servicing processes. We
believe technology providers must be able to support the complexity and dynamic
nature of the market, display extensive industry knowledge and possess the
financial resources to make the necessary investments in technology and software
to support lenders and servicers. This includes an enhanced digital experience
along with the application of artificial intelligence, robotic process
automation and adaptive learning.

Heightened demand for enhanced transparency and analytic insight. As U.S.
mortgage loan market participants work to minimize the risk in lending,
servicing and capital markets, they rely on the integration of data and
analytics with solutions that enhance the decision-making process. These
industry participants rely on large comprehensive third-party databases coupled
with enhanced analytics to achieve these goals. Mortgage loan market
participants are eager for timely data and insights to help them plan and react
to the changing environment.

Regulatory changes and oversight. Most U.S. mortgage loan market participants
are subject to a high level of regulatory oversight and regulatory requirements
as federal and state governments have enacted various new laws, rules and
regulations. It is our experience that mortgage lenders and servicers have
become more focused on minimizing the risk of non-compliance with regulatory
requirements and are looking toward solutions that assist them in complying with
their regulatory requirements. We expect this trend to continue as additional
governmental programs and regulations have been enacted to address the economic
concerns resulting from the pandemic, and our clients have had to adapt their
systems and processes in record time to the shifting landscape. In addition, our
clients and our clients' regulators have elevated their focus on privacy and
data security in light of an increased level of cybersecurity incidents. We
expect the industry focus on privacy and data security to continue to increase.

Our Business Segments

Our business is organized into two segments: Software Solutions and Data and
Analytics.

Software Solutions

Our Software Solutions segment offers software solutions that support loan
servicing, loan origination and settlement services. Our software solutions
revenues were 86% of our consolidated revenues for both the three and nine
months ended September 30, 2022, and 85% for both the three and nine months
ended September 30, 2021.

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The following table summarizes our software solutions revenues (in millions):

                                    Three months ended       % of segment       Nine months ended       % of segment
                                      September 30,            revenues          September 30,            revenues
                                     2022         2021      2022      2021       2022        2021      2022      2021

Servicing software solutions      $    217.7     $ 210.9       65 %     66 %  $    662.0    $ 621.4       66 %     67 %
Origination software solutions         115.0       108.7       35 %     34

%       340.8      299.4       34 %     33 %
Software Solutions                $    332.7     $ 319.6      100 %    100 %  $  1,002.8    $ 920.8      100 %    100 %


Our servicing software solutions primarily include our core servicing software
solution that automates loan servicing, including loan setup and ongoing
processing, customer service, accounting, reporting to the secondary mortgage
market and investors and web-based workflow information systems. Our servicing
software solutions primarily generate revenues based on the number of active
loans outstanding on our system, which has been very stable; however, we have
some exposure to foreclosure and bankruptcy loan volumes, which can fluctuate
based on economic cycles and other factors.

As a result of the effects of the broad-based response to the COVID-19 pandemic,
we have seen lower foreclosure-related transactional revenues due to the
mortgage loan foreclosure moratorium and other measures that were in effect from
2020 through 2021. We have seen higher foreclosure-related transactional
revenues in 2022 compared to 2021 as a result of the expiration of the federal
foreclosure moratorium. According to corresponding Black Knight Mortgage Monitor
reports, foreclosure starts were 56,400 for the three months ended September 30,
2022 compared to 15,200 for the 2021 period. Although foreclosure starts are
higher than the prior year period, they are still below levels prior to the
pandemic.

Our origination software solutions primarily include our solutions that automate
and facilitate the origination of mortgage loans and provide an interconnected
network allowing the various parties and systems associated with lending
transactions to exchange data quickly and efficiently. Our exposure to
origination volumes is limited as our loan origination system revenues are based
on closed loan volumes subject to minimum base software fees that are
contractually obligated, and our secondary marketing technologies' revenues are
primarily subscription-based. Some of our origination software solutions are
exposed to variances in origination volumes, primarily related to refinance
volumes, due to the nature of the services provided. While we saw elevated
refinance origination volumes for a prolonged period of time, we have seen lower
origination volumes in 2022 due to record volumes in prior years and a rising
interest rate environment. According to the October 2022 Mortgage Bankers
Association Mortgage Finance Forecast, mortgage loan originations have declined
63% for the three months ended September 30, 2022 compared to the 2021 period.
The portion of our origination software solutions revenues that are more
sensitive to origination volumes were approximately 3% of our consolidated
revenues for the three months ended September 30, 2022, and revenues related to
these origination software solutions declined approximately 37% for the three
months ended September 30, 2022 compared to the 2021 period, representing a
headwind of approximately $6.2 million.

Data and Analytics

Our Data and Analytics segment offers data and analytics solutions to the
mortgage, real estate and capital markets verticals. These solutions include
property ownership data, lien data, servicing data, automated valuation models,
collateral risk scores, behavioral models, a multiple listing service software
solution and other data solutions. Our data and analytics business is primarily
based on longer-term strategic data licenses, other data licenses and
subscription-based revenues. For both the three and nine months ended September
30, 2022, our data and analytics revenues were 14% of our consolidated revenues.
For both the three and nine months ended September 30, 2021, our data and
analytics revenues were 15% of our consolidated revenues. The portion of our
data and analytics solutions revenues that are more sensitive to fluctuations in
home buying activity and origination volumes primarily relate to services where
we provide software and data necessary for title insurance and other settlement
service activities. Revenues from these solutions were approximately 2% of our
consolidated revenues for the three months ended September 30, 2022 and declined
approximately 33% for the three months ended September 30, 2022 compared to the
2021 period, representing a headwind of approximately $4.7 million.

Results of Operations

Key Performance Metrics

Revenues, EBITDA and EBITDA 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

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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 SEC's Regulation G and
Item 10(e) of Regulation S-K.

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