EX-99.1 2 exhibit991-q12024earningsr.htm EX-99.1 Document

Exhibit 99.1
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MeridianLink Reports First Quarter 2024 Results
First quarter revenue of $77.8 million grows 1% year-over-year driven by lending software solutions revenue of $60.9 million, reflecting growth of 5% year-over-year

COSTA MESA, Calif., May 7, 2024 — MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies, today announced financial results for the first quarter ended March 31, 2024.

“Our solid first quarter results highlight the team’s ability to continue executing on our strategy to empower customers to out compete with MeridianLink® One,” said Nicolaas Vlok, chief executive officer of MeridianLink®. “In the face of challenging lending conditions, we are well-positioned to capitalize on the opportunities that lie ahead with the solid foundation we have strategically invested in, bolstered by a healthy balance sheet and sound capital allocation strategy.”

Quarterly Financial Highlights:
•Revenue of $77.8 million, an increase of 1% year-over-year
•Lending software solutions revenue of $60.9 million, an increase of 5% year-over-year
•Operating income of $3.4 million, or 4% of revenue, and non-GAAP operating income of $16.3 million, or 21% of revenue    
•Net loss of $(5.3) million, or (7)% of revenue, and adjusted EBITDA of $31.8 million, or 41% of revenue
•Cash flows from operations of $29.0 million, or 37% of revenue, and free cash flow of $27.1 million, or 35% of revenue

Business and Operating Highlights:
•MeridianLink welcomed Larry Katz as its new chief financial officer, bringing extensive financial expertise and strategic leadership to help drive the Company’s financial performance and create value for customers and stockholders.
•We generated solid demand for the MeridianLink One platform, enabling new and existing customers to better meet the evolving needs of clients in both consumer and mortgage lending and capture a greater share of their debt wallet.
•MeridianLink announced Space Coast Credit Union’s successful go-live on its Advanced Decisioning capabilities, resulting in the instant decisioning of 13% more loans overall, and a 53% increase in the decisioning of applications for credit tiers over 660.
•To promote data-driven decision-making, we launched MeridianLink® Insight Lite, our new interactive data analytics and reporting tool that enhances reporting functionality for MeridianLink® Consumer and Opening customers.

Business Outlook
Based on information as of today, May 7, 2024, the Company issues second quarter financial guidance and updates full year 2024 financial guidance as follows:

Second Quarter Fiscal 2024:
•Revenue is expected to be in the range of $76.0 million to $79.0 million
•Adjusted EBITDA is expected to be in the range of $29.0 million to $32.0 million

Full Year 2024:
•Revenue is expected to be in the range of $311.0 million to $319.0 million
•Adjusted EBITDA is expected to be in the range of $123.0 million to $130.0 million

Conference Call Information
MeridianLink will hold a conference call to discuss its first quarter results today, May 7, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (800) 549-8228 from North America toll-free or the International number of (289) 819-1520 with Conference ID 16153. A live webcast of the conference call can be accessed from the investor relations page of MeridianLink’s website at ir.meridianlink.com. An archived replay of the webcast will be available at the same website following the conclusion of the call. A telephonic replay will be available until 8:59 p.m. Pacific Time (11:59 p.m. Eastern


Time) on Tuesday, May 14, 2024, by dialing (888) 660-6264 from North America or the International number of (289) 819-1325 with Playback Passcode 16153.

For More Information:
Press Contact
Becky Frost
(714) 784-5839
Media@meridianlink.com

Investor Relations Contact
Gianna Rotellini
(714) 332-6357
InvestorRelations@meridianlink.com

About MeridianLink
MeridianLink® (NYSE: MLNK) empowers financial institutions and consumer reporting agencies to drive efficient growth. MeridianLink’s cloud-based digital lending, account opening, background screening, and data verification software solutions leverage shared intelligence from a unified data platform, MeridianLink® One, to enable customers of all sizes to identify growth opportunities, effectively scale up, and support compliance efforts, all while powering an enhanced experience for staff and consumers alike.

For more than 25 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities. Learn more at www.meridianlink.com.

Non-GAAP Financial Measures
To supplement the financial measures presented in accordance with generally accepted accounting principles, or GAAP, we provide certain non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin; non-GAAP operating income (loss); non-GAAP net income (loss); non-GAAP cost of revenue; non-GAAP sales and marketing expenses; non-GAAP research and development expenses; non-GAAP general and administrative expenses; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Rather, we believe that these non-GAAP financial measures, when viewed in addition to and not in lieu of our reported GAAP financial results, provide investors with additional meaningful information to assess our financial performance and trends, enable comparison of financial results between periods, and allow for greater transparency with respect to key metrics utilized internally in analyzing and operating our business. The following definitions are provided:
•Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our initial public offering and secondary offering, restructuring related costs, and sponsor and third-party acquisition-related costs.

•Non-GAAP net income (loss): GAAP net income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our initial public offering and secondary offering, restructuring related costs, sponsor and third-party acquisition-related costs, and the effect of income taxes, including the partial valuation allowance, on non-GAAP items. The effects of income taxes on non-GAAP items reflect a fixed long-term projected tax rate of 24%.

The Company employs a structural long-term projected non-GAAP income tax rate of 24% for greater consistency across reporting periods, eliminating effects of items not directly related to the Company's operating structure that may vary in size and frequency. This long-term projected non-GAAP income tax rate is determined by analyzing a mix of historical and projected tax filing positions, assumes no additional acquisitions during the projection period or include the impact from the partial deferred tax asset valuation allowance, and takes into account various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from key U.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for significant events such as significant alterations in the U.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations.



•Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, expenses associated with our initial public offering and secondary offering, restructuring related costs, sponsor and third-party acquisition related costs, and deferred revenue reductions from purchase accounting for acquisitions prior to the adoption of ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which we early adopted on January 1, 2022 on a prospective basis. Deferred revenue from acquisitions prior to the adoption of ASU 2021-08 was recognized on a straight line basis through December 31, 2023.

•Non-GAAP cost of revenue: GAAP cost of revenue, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and amortization of developed technology.

•Non-GAAP operating expenses: GAAP operating expenses, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our initial public offering and secondary offering, and depreciation and amortization, as applicable.

•Free cash flow: GAAP cash flow from operating activities less GAAP purchases of property and equipment (Capital Expenditures) and capitalized costs related to developed technology (Capitalized Software).
Reconciliations to comparable GAAP financial measures are available in the accompanying schedules, which are posted as part of this earnings release on our website. No reconciliation is provided with respect to certain forward-looking non-GAAP financial measures as the GAAP measures are not accessible on a forward-looking basis. We cannot reliably predict all necessary components or their impact to reconcile such financial measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a significant impact on our future GAAP financial results.

Forward-Looking Statements
This release contains, and our above-referenced conference call and webcast will contain, statements which are not historical facts and are considered forward-looking 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. Generally, these statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions, although not all forward-looking statements contain these identifying words. Further, statements describing our strategy, outlook, guidance, plans, intentions, or goals are also forward-looking statements. These forward-looking statements reflect our predictions, expectations, or forecasts, including, but not limited to, statements regarding, and guidance with respect to, our strategy, our future financial and operational performance, future economic and market conditions, our strategic initiatives, our leadership transition and plans, , our ability to retain and attract customers and product partners, the benefit to us and our customers of integrations with our product partners, our development or delivery of new or enhanced solutions and anticipated results of those solutions for our customers, our ability to effectively implement, integrate, and service our customers, our market size and growth opportunities, our competitive positioning, projected costs, technological capabilities and plans, and objectives of management. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks related to our business and industry, as well as those set forth in Item 1A. Risk Factors, or elsewhere, in our Annual Report on Form 10-K for the most recently ended fiscal year, any updates in our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K, and our other SEC filings. These forward-looking statements are based on reasonable assumptions as of the date hereof. The plans, intentions, or expectations disclosed in our forward-looking statements may not be achieved, and you should not rely upon forward-looking statements as predictions of future events. We undertake no obligation, other than as required by applicable law, to update any forward-looking statements, whether as a result of new information, future events, or otherwise.


Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)

As of
March 31, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$62,285$80,441
Accounts receivable, net36,62332,412
Prepaid expenses and other current assets12,23811,574
Total current assets111,146124,427
Property and equipment, net3,0113,337
Right of use assets, net9671,140
Intangible assets, net238,818251,060
Goodwill610,063610,063
Other assets6,4956,224
Total assets$970,500 $996,251
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $4,135$4,405
Accrued liabilities28,36930,673
Deferred revenue37,68317,224
Current portion of debt, net of debt issuance costs3,5433,542
Total current liabilities73,73055,844
Debt, net of debt issuance costs419,102420,004
Deferred tax liabilities, net10,63910,823
Long-term deferred revenue257792
Other long-term liabilities439541
Total liabilities$504,167$488,004
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at March 31, 2024 and December 31, 2023
——
Common stock, $0.001 par value; 600,000,000 shares authorized, 76,338,829 and 78,447,701 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
127129
Additional paid-in capital662,403654,634
Accumulated deficit(196,197)(146,516)
Total stockholders’ equity466,333508,247
Total liabilities and stockholders’ equity$970,500$996,251



Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)

Three Months Ended March 31,
20242023
Revenues, net$77,816 $77,135 
Cost of revenues:
Subscription and services21,344 23,501 
Amortization of developed technology4,729 4,454 
Total cost of revenues26,073 27,955 
Gross profit51,743 49,180 
Operating expenses:
General and administrative25,179 22,555 
Research and development9,485 13,812 
Sales and marketing10,536 8,213 
Restructuring related costs3,191 2,904 
Total operating expenses48,391 47,484 
Operating income3,352 1,696 
Other (income) expense, net:
Interest and other income(956)(470)
Interest expense9,582 9,031 
Total other expense, net8,626 8,561 
Loss before income taxes(5,274)(6,865)
Provision for (benefit from) income taxes32 (1,199)
Net loss$(5,306)$(5,666)
Net loss per share:
Basic$(0.07)$(0.07)
Diluted$(0.07)$(0.07)
Weighted average common stock outstanding:
Basic77,335,072 80,659,978 
Diluted77,335,072 80,659,978 



Net Revenues by Major Source
(unaudited)
(in thousands)

Three Months Ended March 31,
20242023
Subscription fees$65,912$66,405
Professional services9,0108,435
Other2,8942,295
Total$77,816$77,135

Net Revenues by Solution Type
(unaudited)
(in thousands)

Three Months Ended March 31,
20242023
Lending software solutions$60,903$58,001
Data verification software solutions16,91319,134
Total
$77,816$77,135
% Growth attributable to:
Lending software solutions
4%
Data verification software
(3)%
Total % growth
1%
___________

Percent Revenue Related to the Mortgage Loan Market
(unaudited)
Three Months Ended March 31,
20242023
Lending software solutions11%11%
Data verification software58%61%
Total % revenue related to mortgage loan market21%24%


Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

Three Months Ended March 31,
20242023
Cash flows from operating activities:
Net loss$(5,306)$(5,666)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization14,52414,531
Provision for expected credit losses234532
Amortization of debt issuance costs212235
Share-based compensation expense7,8034,891
Deferred income taxes(184)(1,198)
Loss on disposal of property and equipment6—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable(4,444)(5,028)
Prepaid expenses and other assets(960)(1,636)
Accounts payable(270)2,717
Accrued liabilities(2,501)1,706
Deferred revenue19,92416,997
Net cash provided by operating activities29,03828,081
Cash flows from investing activities:
Capitalized software additions(1,837)(1,924)
Purchases of property and equipment(92)(134)
Net cash used in investing activities(1,929)(2,058)
Cash flows from financing activities:
Repurchases of common stock(44,000)(3,490)
Proceeds from exercise of stock options191594
Taxes paid related to net share settlement of restricted stock units(294)(24)
Principal payments of debt(1,088)(1,087)
Payments of deferred offering costs(74)—
Net cash used in financing activities(45,265)(4,007)
Net (decrease) increase in cash and cash equivalents(18,156)22,016
Cash and cash equivalents, beginning of period80,44155,780
Cash and cash equivalents, end of period$62,285$77,796
Supplemental disclosures of cash flow information:
Cash paid for interest$9,365$9,019
Cash paid for income taxes3250
Non-cash investing and financing activities:
Shares withheld with respect to net settlement of restricted stock units29424
Excise taxes payable included in repurchases of common stock3779
Share-based compensation expense capitalized to software additions6948
Purchase price allocation adjustment related to income tax effects for StreetShares acquisition—245
Purchases of property and equipment included in accounts payable and accrued liabilities4479
Vesting of restricted stock awards and restricted stock units—4


Reconciliation from GAAP to Non-GAAP Results
(unaudited)
(in thousands, except share and per share data)

Three Months Ended March 31,
20242023
Operating income$3,352$1,696
Add: Share-based compensation expense7,9365,190
Add: Employer payroll taxes on employee stock transactions422126
Add: Expenses associated with public offering
1,389—
Add: Restructuring related costs(1)
3,1912,904
Non-GAAP operating income$16,290$9,916
Operating margin4%2%
Non-GAAP operating margin
21%13%
Three Months Ended March 31,
20242023
Net loss$(5,306)$(5,666)
Add: Share-based compensation expense7,9365,190
Add: Employer payroll taxes on employee stock transactions422126
Add: Expenses associated with public offering
1,389—
Add: Restructuring related costs(1)
3,1912,904
Subtract: Income tax effect on non-GAAP items
(3,105)(1,973)
Non-GAAP net income $4,527$581
Non-GAAP basic net income per share$0.06$0.01
Non-GAAP diluted net income per share$0.06$0.01
Weighted average shares used to compute Non-GAAP basic net income per share
77,335,07280,659,978
Weighted average shares used to compute Non-GAAP diluted net income per share80,479,008 82,538,596
Net loss margin(7)%(7)%
Non-GAAP net income margin6%1%
Three Months Ended March 31,
20242023
Net loss$(5,306)$(5,666)
Interest expense
9,5829,031
Taxes32(1,199)
Depreciation and amortization
14,52414,531
Share-based compensation expense7,9365,190
Employer payroll taxes on employee stock transactions422126
Expenses associated with public offering1,389—
Restructuring related costs(1)
3,1912,904
Deferred revenue reduction from purchase accounting for acquisitions prior to 2022—20
Adjusted EBITDA$31,770$24,937
Net loss margin(7)%(7)%
Adjusted EBITDA margin41%32%
(1) Restructuring related costs for the three months ended March 31, 2024 and 2023 are inclusive of $133 thousand and $299 thousand, respectively, of stock-based compensation forfeitures recorded associated with restructuring.


Reconciliation from GAAP to Non-GAAP Results
(unaudited)
(in thousands)

Three Months Ended March 31,
20242023
Cost of revenue$26,073$27,955
Less: Share-based compensation expense782853
Less: Employer payroll taxes on employee stock transactions4822
Less: Amortization of developed technology4,7294,454
Non-GAAP cost of revenue$20,514$22,626
Cost of revenue as a % of revenue34%36%
Non-GAAP cost of revenue as a % of revenue26%29%
Three Months Ended March 31,
20242023
General and administrative$25,179$22,555
Less: Share-based compensation expense4,3932,264
Less: Employer payroll taxes on employee stock transactions13651
Less: Expenses associated with public offering
1,389—
Less: Depreciation expense376495
Less: Amortization of intangibles9,4199,582
Non-GAAP general & administrative$9,466$10,163
General and administrative as a % of revenue32%29%
Non-GAAP general and administrative as a % of revenue12%13%
Three Months Ended March 31,
20242023
Research and development$9,485$13,812
Less: Share-based compensation expense1,5021,783
Less: Employer payroll taxes on employee stock transactions12127
Non-GAAP research and development$7,862$12,002
Research and development as a % of revenue12%18%
Non-GAAP research and development as a % of revenue10%16%
Three Months Ended March 31,
20242023
Sales and marketing$10,536$8,213
Less: Share-based compensation expense1,259290
Less: Employer payroll taxes on employee stock transactions11726
Non-GAAP sales and marketing$9,160$7,897
Sales and marketing as a % of revenue14%11%
Non-GAAP sales and marketing as a % of revenue12%10%
Three Months Ended March 31,
20242023
Net cash provided by operating activities$29,038$28,081
Less: Capitalized software1,8371,924
Less: Capital expenditures 92134
Free cash flow$27,109$26,023