Fourth quarter revenue of $70.6 million grows 10% 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 fourth quarter and fiscal year ended December 31, 2022.
“Our solid fourth quarter performance highlights the strength of our multi-product platform, MeridianLink® One,” said Nicolaas Vlok, chief executive officer of MeridianLink. “More financial institutions are taking advantage of bundling MeridianLink offerings to create seamless digital lending experiences. With that, our revenue grew 10% year-over-year to $70.6 million with 33% adjusted EBITDA margins. Lending software solutions revenue grew 26% year-over-year to $55.0 million, now accounting for 78% of total revenue. I’d like to thank the team for their ongoing dedication and innovation.”
Quarterly Financial Highlights:
- Revenue of $70.6 million, an increase of 10% year-over-year
- Operating income of $0.6 million, or 1% of revenue and Non-GAAP operating profit of $8.5 million, or 12% of revenue
- Net loss of $(5.5) million, or (8)% of revenue, and Adjusted EBITDA of $23.2 million, or 33% of revenue
- Cash flow from operations of $7.4 million and free cash flow of $5.2 million
2022 Fiscal Year Financial Highlights:
- Revenue of $288.0 million, an increase of 8% year-over-year
- Operating income of $28.6 million, or 10% of revenue and Non-GAAP operating profit of $55.9 million, or 19% of revenue
- Net income of $1.3 million, or 0.4% of revenue, and Adjusted EBITDA of $111.2 million, or 39% of revenue
- Cash flow from operations of $74.6 million and free cash flow of $65.2 million
Business and Operating Highlights:
- MeridianLink finished the quarter with record software bookings, both for Q4 and in company history.
- In the quarter, MeridianLink signed ten existing MeridianLink® Consumer customers on the MeridianLink® Mortgage solution, demonstrating the powerful cross-sell capabilities of the MeridianLink® One platform.
- In support of our strategic investment to accelerate services, fuel Go-to-Market, and enhance product innovation, we restructured our operations team and cost profile to serve more customers with greater efficiency in 2023.
- The Company completed enhancements to our marketing automation solution, MeridianLink® Engage. These new features save time in launching targeted, personalized marketing campaigns, often resulting in triple-digit ROI for the customer.
- Building on the innovative functionality acquired through the StreetShares® Atlas Platform®, the Company completed our business lending offering, MeridianLink® Business, to optimize the business lending process in a digital environment.
- Through the Company’s extensive Partner Marketplace, we announced new integrations to partners such as Equifax®, Ferretly, and FirstClose, which help differentiate our lending and data verification customers in the market.
- MeridianLink secured another strong roster of new logo customers as a result of our lending capabilities that best serve customers in our mid-market sweet spot, enabling a more frictionless lending process and empowering customer growth.
Based on information as of today, March1, 2023, the Company issues first quarter financial guidance and initiates full year 2023 financial guidance as follows:
First Quarter Fiscal 2023:
- Revenue is expected to be in the range of $72.0 million to $75.0 million
- Adjusted EBITDA is expected to be in the range of $23.0 million to $26.0 million
Full Year 2023:
- Revenue is expected to be in the range of $304.0 million to $310.0 million
- Adjusted EBITDA is expected to be in the range of $109.0 million to $115.0 million
Conference Call Information
MeridianLink will hold a conference call to discuss our fourth quarter and fiscal year results today, March1, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 396-8049 from North America toll-free or the Participant Local number of (416) 764-8646 with Conference ID 05813207. 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 approximately 3:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, March 8, 2023, at (877) 674-7070 from North America or (416) 764-8692 as a Participant Local with Playback Passcode 813207.
For More Information:
Investor Relations Contact
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:
- Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, certain expenses associated with our IPO, sponsor and third-party acquisition related costs, losses resulting from early repayment of debt, lease termination charges, and deferred revenue reductions from purchase accounting for acquisitions prior to 2022
- Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, 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, and sponsor and third-party acquisition-related costs
- 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, and depreciation and amortization
- 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.
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 conditions, our strategic initiatives, including anticipated benefits and integration of an acquisition, our restructuring plan, including expected associated timing, benefits, and costs, the potential benefits of our migration to the public cloud, our stock repurchase program, including the execution and amount of repurchases, our development or delivery of new or enhanced solutions, 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.