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Well, in a a more extensive analysis of which this is an update, we argued that you should accumulate shares in Ellie Mae (ELLI) in May, saying that we absolutely love Ellie Mae.

We’re happy to see that the love is returned. The company produced another stellar quarter. First, a little recap. Ellie Mae is one of those companies that streamline processes that span different organizations, and they do this by electronic means.

The industry is the fragmented mortgage industry. The number of steps, sign-offs, and parties involved when you apply for a mortgage is large, and the process was ripe for “re-engineering.”

The average loan is handled by 61 people, and requires 45 days to travel from application to funding. (Source: Tom Peters.)

This is what Ellie Mae does, it brings these parties together with the help of internet technology and streamlines the whole process, saving everybody involved a lot of time and money, reducing the average cost per mortgage by a whopping $3000, according to that Tom Peters case study (which we have to say is from 2004).

And of course, an increasing amount of this goes via the Internet via their software as a service (SaaS) Encompass service, the revenues of which increased 191% in the quarter. The Internet model provides further advantages:

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