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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MeridianLink Inc | NYSE:MLNK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.03 | -0.13% | 23.41 | 23.58 | 23.29 | 23.32 | 41,306 | 18:13:22 |
Revenue of $75.4 million grows 3% year-over-year driven by lending software solutions revenue of $55.8 million growing 8% year-over-year
MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies, today announced financial results for the second quarter ended June 30, 2023.
“We experienced strong demand for our software solutions in Q2, with solid bookings momentum and successful services delivery, both in-line with our strategic investment in our Go-To-Market engine and Services capabilities,” said Nicolaas Vlok, chief executive officer of MeridianLink. “Given the power of our configurable digital lending platform, we see customers continuing to choose MeridianLink® One to accelerate growth and best position their businesses to win.”
Quarterly Financial Highlights:
Business and Operating Highlights:
Business Outlook
Based on information as of today, August 1, 2023, the Company issues third quarter financial guidance and updates full year 2023 financial guidance as follows:
Third Quarter Fiscal 2023:
Full Year 2023:
Conference Call Information
MeridianLink will hold a conference call to discuss our second quarter results today, August 1, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 259-6580 from North America toll-free or the International number of (416) 764-8624 with Conference ID 93721775. 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, August 8, 2023, by dialing (877) 674-7070 from North America or the International number of (416) 764-8692 with Playback Passcode 721775.
About MeridianLink
MeridianLink® (NYSE: MLNK), headquartered in Costa Mesa, California, powers digital lending and account opening for financial institutions and provides data verification solutions for consumer reporting agencies. MeridianLink’s scalable, cloud-based platforms help customers build deeper relationships with consumers through data-driven, personalized experiences across the entire lending life cycle.
MeridianLink enables customers to accelerate revenue growth, reduce risk, and exceed consumer expectations through seamless digital experiences. Its partner marketplace supports hundreds of integrations for tailored innovation. For more than 20 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities. Learn more at www.meridianlink.com.
Operational Measures Definitions
We reference bookings, which is an internal operational measure of the business. Bookings is defined as the total of the minimum annual contracted value for newly sold capabilities of our software-as-a-service, or SaaS, products over a given time period, inclusive of any corresponding vendor fees owed to Third Parties.
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:
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, 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.
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, including anticipated benefits and integration of an acquisition, our restructuring plan, including expected associated timing, benefits, and costs, our ability to retain and attract customers and product partners, potential losses related to any commercial disputes, 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
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
108,872
$
55,780
Accounts receivable, net
35,104
32,905
Prepaid expenses and other current assets
11,313
9,447
Escrow deposit
—
30,000
Total current assets
155,289
128,132
Property and equipment, net
3,491
4,245
Right of use assets
1,671
2,185
Intangible assets, net
274,208
297,475
Deferred tax assets, net
17,886
13,939
Goodwill
608,576
608,657
Other assets
5,003
4,524
Total assets
$
1,066,124
$
1,059,157
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
4,149
$
1,249
Accrued liabilities
30,783
32,500
Deferred revenue
26,302
16,945
Current portion of long-term debt, net of debt issuance costs
3,545
3,505
Total current liabilities
64,779
54,199
Long-term debt, net of debt issuance costs
421,808
423,404
Long-term deferred revenue
841
1,141
Other long-term liabilities
845
1,322
Total liabilities
488,273
480,066
Commitments and contingencies
Stockholders’ Equity
Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at June 30, 2023 and December 31, 2022
—
—
Common stock, $0.001 par value; 600,000,000 shares authorized, 81,167,660 and 80,644,452 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
132
128
Additional paid-in capital
636,193
621,396
Accumulated deficit
(58,474
)
(42,433
)
Total stockholders’ equity
577,851
579,091
Total liabilities and stockholders’ equity
$
1,066,124
$
1,059,157
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Revenues, net
$
75,415
$
72,987
$
152,550
$
145,741
Cost of revenues:
Subscription and services
23,984
23,376
47,485
44,480
Amortization of developed technology
4,510
3,850
8,964
7,284
Total cost of revenues
28,494
27,226
56,449
51,764
Gross profit
46,921
45,761
96,101
93,977
Operating expenses:
General and administrative
24,409
20,806
46,964
38,993
Research and development
11,754
10,487
25,566
18,896
Sales and marketing
8,558
5,465
16,771
10,208
Acquisition related costs
—
103
—
2,386
Restructuring related costs
717
—
3,621
—
Total operating expenses
45,438
36,861
92,922
70,483
Operating income
1,483
8,900
3,179
23,494
Other (income) expense, net:
Other income
(784
)
(216
)
(1,254
)
(379
)
Interest expense, net
9,316
5,436
18,347
9,794
Total other expense, net
8,532
5,220
17,093
9,415
(Loss) income before (benefit from) provision for income taxes
(7,049
)
3,680
(13,914
)
14,079
(Benefit from) provision for income taxes
(1,819
)
1,508
(3,018
)
4,428
Net (loss) income
$
(5,230
)
$
2,172
$
(10,896
)
$
9,651
Net (loss) income per share:
Basic
$
(0.06
)
$
0.03
$
(0.13
)
$
0.12
Diluted
$
(0.06
)
$
0.03
$
(0.13
)
$
0.12
Weighted average common stock outstanding:
Basic
80,911,113
80,418,520
80,786,427
80,197,832
Diluted
80,911,113
82,223,181
80,786,427
82,251,322
Net Revenues by Major Source
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Subscription fees
$
63,770
$
63,529
$
130,175
$
126,998
Professional services
9,002
6,665
17,437
13,777
Other
2,643
2,793
4,938
4,966
Total
$
75,415
$
72,987
$
152,550
$
145,741
Net Revenues by Solution Type
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Lending software solutions
$
55,778
$
51,668
$
113,779
$
100,835
Data verification software solutions
19,637
21,319
38,771
44,906
Total (1)
$
75,415
$
72,987
$
152,550
$
145,741
% Growth attributable to:
Lending software solutions
6
%
9
%
Data verification software
(3
)%
(4
)%
Total % growth
3
%
5
%
(1) % Revenue related to mortgage loan market:
Lending software solutions
13
%
7
%
12
%
7
%
Data verification software
61
%
64
%
61
%
67
%
Total % revenue related to mortgage loan market
26
%
24
%
25
%
26
%
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Six Months Ended June 30,
2023
2022
Cash flows from operating activities:
Net (loss) income
$
(10,896
)
$
9,651
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
28,955
26,376
Provision for expected credit losses
441
—
Amortization of debt issuance costs
669
1,429
Share-based compensation expense
13,893
9,247
Loss on disposal of fixed assets
—
135
Deferred income taxes
(4,192
)
4,025
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(2,640
)
(8,806
)
Prepaid expenses and other assets
(2,395
)
661
Accounts payable
2,955
(1,059
)
Accrued liabilities
(1,663
)
(2,065
)
Deferred revenue
9,058
8,076
Net cash provided by operating activities
34,185
47,670
Cash flows from investing activities:
Acquisition, net of cash acquired – Beanstalk Networks L.L.C.
326
—
Acquisition, net of cash and restricted cash acquired – StreetShares, Inc.
—
(23,059
)
Return (payment) of escrow deposit
30,000
(30,000
)
Capitalized software additions
(4,562
)
(4,079
)
Purchases of property and equipment
(305
)
(480
)
Net cash provided by (used in) investing activities
25,459
(57,618
)
Cash flows from financing activities:
Repurchases of common stock
(5,145
)
(193
)
Proceeds from exercise of stock options
1,025
186
Proceeds from employee stock purchase plan
793
922
Taxes paid related to net share settlement of RSUs
(1,050
)
—
Principal payments of long-term debt
(2,175
)
(1,088
)
Payment of Regulation A+ investor note
—
(3,265
)
Net cash used in financing activities
(6,552
)
(3,438
)
Net increase (decrease) in cash and cash equivalents
53,092
(13,386
)
Cash and cash equivalents, beginning of period
55,780
113,645
Cash and cash equivalents, end of period
$
108,872
$
100,259
Supplemental disclosures of cash flow information:
Cash paid for interest
$
17,955
$
8,337
Cash paid for income taxes
2,577
762
Non-cash investing and financing activities:
Share-based compensation expense capitalized to software additions
$
136
$
188
Purchase price allocation adjustment related to income tax effects for StreetShares acquisition
245
—
Vesting of RSAs and RSUs
5
38
Purchases of property and equipment included in accounts payable and accrued expenses
3
93
Regulation A+ investor note assumed in business combination
—
3,265
Initial recognition of operating lease liability
—
3,372
Initial recognition of operating lease right-of-use asset
—
2,627
Reconciliation from GAAP to Non-GAAP Results
(unaudited)
(in thousands, except share and per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Operating income
$
1,483
$
8,900
$
3,179
$
23,494
Add: Share-based compensation expense
9,367
5,439
14,556
9,247
Add: Employer payroll taxes on employee stock transactions
322
3
448
148
Add: Restructuring related costs
717
—
3,621
—
Add: Sponsor and third-party acquisition related costs
—
99
—
2,386
Non-GAAP operating income
$
11,889
$
14,441
$
21,804
$
35,275
Operating margin
2
%
12
%
2
%
16
%
Non-GAAP operating margin
16
%
20
%
14
%
24
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Net (loss) income
$
(5,230
)
$
2,172
$
(10,896
)
$
9,651
Add: Share-based compensation expense
9,367
5,439
14,556
9,247
Add: Employer payroll taxes on employee stock transactions
322
3
448
148
Add: Restructuring related costs
717
—
3,621
—
Add: Sponsor and third-party acquisition related costs
—
99
—
2,386
Add: Income tax effect on non-GAAP items
(2,497
)
(1,330
)
(4,470
)
(2,827
)
Non-GAAP net income
$
2,679
$
6,383
$
3,259
$
18,605
Non-GAAP basic net income per share
$
0.03
$
0.08
$
0.04
$
0.23
Non-GAAP diluted net income per share
0.03
0.08
0.04
0.23
Weighted average shares used to compute Non-GAAP basic net income per share
80,911,113
80,418,520
80,786,427
80,197,832
Weighted average shares used to compute Non-GAAP diluted net income per share
83,487,132
82,223,181
82,994,599
82,251,322
Net (loss) income margin
(7
)%
3
%
(7
)%
7
%
Non-GAAP net income margin
4
%
9
%
2
%
13
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Net (loss) income
$
(5,230
)
$
2,172
$
(10,896
)
$
9,651
Interest expense
9,316
5,436
18,347
9,794
Taxes
(1,819
)
1,508
(3,018
)
4,428
Depreciation and amortization
14,424
13,472
28,955
26,376
Share-based compensation expense
9,367
5,439
14,556
9,247
Employer payroll taxes on employee stock transactions
322
3
448
148
Restructuring related costs
717
—
3,621
—
Sponsor and third-party acquisition related costs
—
99
—
2,386
Deferred revenue reduction from purchase accounting for acquisitions prior to 2022
19
55
39
119
Adjusted EBITDA
$
27,116
$
28,184
$
52,052
$
62,149
Net (loss) income margin
(7
)%
3
%
(7
)%
7
%
Adjusted EBITDA margin
36
%
39
%
34
%
43
%
Reconciliation from GAAP to Non-GAAP Results
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Cost of revenue
$
28,494
$
27,226
$
56,449
$
51,764
Less: Share-based compensation expense
1,157
1,251
2,009
2,215
Less: Employer payroll taxes on employee stock transactions
88
—
109
54
Less: Amortization of developed technology
4,510
3,850
8,964
7,284
Non-GAAP cost of revenue
$
22,739
$
22,125
$
45,367
$
42,211
Cost of revenue as a % of revenue
38
%
37
%
37
%
36
%
Non-GAAP cost of revenue as a % of revenue
30
%
30
%
30
%
29
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
General and administrative
$
24,409
$
20,806
$
46,964
$
38,993
Less: Share-based compensation expense
5,231
2,396
7,494
3,777
Less: Employer payroll taxes on employee stock transactions
107
—
158
33
Less: Depreciation expense
495
580
990
1,141
Less: Amortization of intangibles
9,419
9,042
19,001
17,951
Non-GAAP general & administrative
$
9,157
$
8,788
$
19,321
$
16,091
General and administrative as a % of revenue
32
%
29
%
31
%
27
%
Non-GAAP general and administrative as a % of revenue
12
%
12
%
13
%
11
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Research and development
$
11,754
$
10,487
$
25,566
$
18,896
Less: Share-based compensation expense
1,875
1,288
3,658
2,365
Less: Employer payroll taxes on employee stock transactions
97
1
125
40
Non-GAAP research and development
$
9,782
$
9,198
$
21,783
$
16,491
Research and development as a % of revenue
16
%
14
%
17
%
13
%
Non-GAAP research and development as a % of revenue
13
%
13
%
14
%
11
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Sales and marketing
$
8,558
$
5,465
$
16,771
$
10,208
Less: Share-based compensation expense
1,104
504
1,395
890
Less: Employer payroll taxes on employee stock transactions
30
2
56
21
Non-GAAP sales and marketing
$
7,424
$
4,959
$
15,320
$
9,297
Sales and marketing as a % of revenue
11
%
7
%
11
%
7
%
Non-GAAP sales and marketing as a % of revenue
10
%
7
%
10
%
6
%
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Net cash provided by operating activities
$
6,104
$
12,807
$
34,185
$
47,670
Less: Capitalized software
2,638
2,557
4,562
4,079
Less: Capital expenditures
171
61
305
480
Free cash flow
$
3,295
$
10,189
$
29,318
$
43,111
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801230395/en/
Press Contact Becky Frost (714) 784-5839 becky.frost@meridianlink.com
Investor Relations Contact Gianna Rotellini (714) 332-6357 InvestorRelations@meridianlink.com
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