MLNK - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to MeridianLink’s Fourth Quarter and Fiscal Year 2021 Earnings Call. At this time, all participants are in listen-only mode. After the speakers’ presentations, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your first speaker today, Erik Schneider, Head of Investor Relations. ahead. go please Erik,

Erik Schneider

welcome call. fourth and year and XXXX earnings to afternoon, quarter MeridianLink’s fiscal Good

be the With will Chief after Chief We discussing Officer, Financial the release our Executive market issued Officer, press Chad close Vlok; today. Nicolaas me Martin. MeridianLink’s results are and announced in

and today’s of are on and we current the uncertainties, Before that expectations. I’d significant subject include may will These to like call begin, statements to company’s number a forward-looking risks you forward-looking results materially. actual remind conference statements our based differ

future Commission. a results the factors For release and to of that on made discussion Exchange such update today’s of file in business, statements the statements. law required could as us and to affect refer to Securities we our information to other reports time filings financial and assume All please based except today as any we the earnings and by from disclosure time and are our obligation available no with

the GAAP and refer non-GAAP to call, both measures. also financial we During will

measures find non-GAAP our website. Investor section that, over call our a of turn our to is me in to the GAAP let reconciliation Relations of release, to Nicolaas. the With can posted press You which included

Nicolaas Vlok

continue a slowing afternoon successful joining Thank quarter was growth for earning mortgage year Thank fourth you, Erik, with and related good show for very QX us outside XXXX and XXXX everyone. to momentum call. our you the all revenues. and year strong strong fiscal expected

on additional Chad during provide are guidance. I quarter. million will and In what EBITDA in strength macro revenue of again QX, GAAP $XX XX% on key MeridianLink details a will up provide year-over-year But and margins. guidance result, the the XXXX to adjusted some exceeded results provide and these in a backdrop we few minutes, on As areas seeing XX% first with details

lending data Mortgage both momentum in in XX% mortgage of business. types volumes lending reinvestment of by at into to to decline declined XXXX, with fourth to on during up our the the and the line continued this solutions. has of due notable weakening the XX% strong of expected lending and outperformance software business in impact fourth strength the lending mortgage part year-over-year. the both verification software upside our see in mortgage with to continue in of consumer our we percentage to In This quarter of revenue our came strength revenues side our our We the driven in been guidance, quarter further rest the quarter. the expect approximately and of consumer related

outperforming MeridianLink in consumer One all a platform diversified our is to one mortgage. loan strong comprehensive our platform We that in including believe you is As and MeridianLink and offered due the cloud market supports of portfolio consolidated integrated products types our digitalization account tailwinds. know, all in continuing

momentum modernization these continued three to how driving including one, Moving us times key implementation both lives invoice like and are cross-sell; driving integration, thirdly, and go and product there helping robust on go innovation strength, two, and about: logo would areas talk to new once; reduced how sooner. and driving and is and suite faster this expansion to wins engine that in how are things our market to I of increasingly is

is go-to We prospects. top customers market for have talk a record with let’s engine. three mind us quarter and QX in ever XX the quota our continued of driven detail. for the logo wins in was carrying more now by and investment these bookings So field nearly about reps new highest in digitalization

investment potential clients. from tremendous demand has Our been return high on this generating

market entry billion in new with we than spot confident, to mortgage year sweet in to lenders extends capabilities MeridianLink’s growing typical technology, win customer, institutions who collaborative These continue it, open in both sizes, a QX more with through wins implementation. drive mortgage API in designed of and market fast lands. of funded contracts opportunities. platform dollar was providing one. to the smaller committed than to multi-tenant One exclusively growing market. opportunity Conversely strengthening and templatized further of digital large our businesses working best position million to MeridianLink the our our typical will capabilities leading larger in our extending customer will $X mortgage We but more from unlocking are invest than a beyond are for smaller in our messaging They architecture enhanced all than midsized are And small clients’ $XXX invested than it approach institutions to continue XXX enabled more wholly MeridianLink lenders. a has

MeridianLink plus is added which cross-selling of Consumer, Consulting. and addition, Portal In to In MeridianLink portfolio union credit national accelerating. includes MeridianLink products, $XXX QX, MeridianLink million their MeridianLink now opening

to customers that consumer commitment meaningful to background market credit is delivering and lending. our recently to indirect opening, CRA of deposit repeatedly leadership platforms. independent leading innovation. solutions banks and lending, unions they taking, because together screening select current also the for and we products innovation Most continuously across clients. account say MeridianLink logos community trust grow sale, our independent MeridianLink, of direct clients, help all point tenant we for improve our new lending We when momentum brought leading combined business they In and Secondly, credit, for driving clients is or their

unique are seeing prospects Engage We Engage automation top the at to and is beta sales in solution. comprehensive good initial And consumer funnel. MeridianLink our expanded end-to-end card of and also launched account we in marketing in QX and general lending engagement from a availability January.

rollout, improve breadth full lending product consumer a with clients of and largest experience. engineering us also the cloud underlying Our MeridianLink complete QX. and date technology. iterate providing In team One scalability MeridianLink in to public the will This to our is the offer hosting we allows increased ability the speed cloud our public environment our for portal migrated migration lending solution our higher improving it user XXXX, to from and to while platform unified in the to

solutions ability capabilities our demand Thirdly, organic them. implementation best booking increased to and to implement the call, investments these need for you COVID-XX client but portions exceeded on our synchronously go-lives the last slowed demand for in both since our process site. performed increased digital And activities, and go-to-market told have comprehensive inorganic accomplish processes, outcomes. I meaningfully customer of to be integrated,

effort services that team. we and thirds quickly life clients’ our developed As and standardized bring have using previously, from product professional smaller service to more two packages less and mentioned launched up

go-lives core that invested timeline the products. close also the improvements the an of number accelerate across us This process We helped portion accelerating with implementation in we of control. year

We expect reduce are down necessary to keep to and investments up backlog investments bookings. underway work from services and total time to signing the our These and XX%. ongoing completed our go-live growth with about team by

We expect a very faster bringing strong online a return financial spin, on impact. clients as meaningful the

call ever innovation the Chad, XXXX. When some to give over than turn we go-to-market I engines. about more our you to want we confident and high-level are XXXX, in I Before think thoughts on

sales TAM as sweet outside we continue We opportunistically are our to more penetrating our spot. of run

consistent, organization. also public have The partner Our cross-sell the generating profitability I company bringing will story along is but go-to-market peers. we online We’ve increasing for XXXX our to have double mentioned adding successful our that is top is This have monetizing continue will levels candidly, XXXX. of and of quickly. this to will in well our we more muscle Meridianlink we with of customers proven to returns. growth and be is go-to-market guided what investment a very have digit, an, marketplace. been in those remain above new. to more anticipated high demand disciplined and deliver organization our you been line what we are This expect FinTech produces are building making big able we than come for, None Meridianlink. make

to We up create and between will team strong and sales and our position ramp the already distance competition. further to us leverage continue marketing our

to result, implementation we As investments are a increasing capacity. accelerate

go-lives shorter pressure, us this margin expect will more recurring allow we the but bring for customers. revenue hiring, increase improve innovation experience we online quickly and As to our

as out key this to success growth see of will on strong year confident I’m the continue. company, And we execution public initiatives. I’m last our quarter pleased As our first closed a

always, collaboration and As to momentum. I’d our with dedication like their to employees. that our It is customers our drives thank

turn the Chad the their want call also financial outcomes for now to We to communities. results. thank new existing trust and customers drive over in to about will I clients our talk to and our us for

Chad Martin

highlights of before to full of our and then highlights thanks guidance us Thanks, financial for our I’ll results and for year, year model again start is everyone giving the more year-end quarter call, detail Nicolaas. recap first XXXX. this I finally will quarter the Since first today. for in the joining by the providing earnings the provide our And

As quarter, fourth revenue Nicholas balance mentioned subscription from coming professional XX% $XX.X of we revenues in the generated with and a our services fourth million quarter fees up the XX% year-over-year. of for other. total

our was was income EBIDA And operating Our operating income but $X.X non-GAAP adjusted million. was million, million. $XX.X $XX.X

year was full million. XXXX the $XX.X operating For income

$XX.X million was was non-GAAP year. for Our and $XXX.X adjusted EBIDA income million operating the

IPO Our the was during quarter. third completed

XXXX ongoing likely of an and public what stock-based quarter of indication believe we fourth compensation the gives costs. level reporting the is So, of company

model. revenue recurring SaaS usage-based a have We

end without commitment, over In which any commitment incremental higher fees is Our Typically, transaction annual they term. applications. of are auto monthly for customers per pricing. lower minimum exchange customers to purchases an and application penalty of cancelable at sign long-term monthly contracts, that usually renew the three years, charge. the receive not in In commit monthly

verification we our total lending solutions, efficient effective more revenues Our are and software with and XX% The fourth revenues the naturally platform’s and year-over-year. lending, once nearly solutions. remainder our of software for customers and of is volume lending from solutions our data used. grow aligned which our software XX% We and increased make verification both solutions grew provide can accounted ability come data software We with it quarter year-over-year. In installed drives to customers success. XX% at their revenue more

solutions of quarter for XX% nearly mortgage revenue full year XXXX, generated from from revenues For grew revenues total verification of XX% year-over-year. solutions, data revenues. come XX% loan the software year-over-year. increased our overall The the our lending XX% remainder and market our Fourth which accounted of software revenues

data our to revenues tied Specifically of verification solutions mortgage XX% software X% and of lending our were revenues solution focused our products. software

full of the revenue revenues overall TCI year of software verification lending XX and software the X% in market growth the XX generated of from XX% points data of of and revenues, year-over-year by contributed of solutions our XXXX, composed acquisitions loan quarter, were the points XX% fourth our Of TazWorks. mortgage For solutions.

penetration addition growth the new increased increased While customers, and through customers. of primarily volume customers came the our remaining existing module from of

fourth quarter XXXX. the during reminder, acquired a of As TCI was

is as So the quarter TCI quarters was previous base. partially revenue in growth this of contribution comparable XXXX than less XXXX in the

lending year-over-year, was growth XX%. expected, data in solutions for period. from TCI trended it growing verification stock-based As robust but organic but lower software margin double-digits versus remained XX%, excluding compensation, the solutions, prior from Gross was software adjusted QX year growth

in efforts acceleration. organic We continued marketing to invest our and to drive R&D growth sales and

significantly more margin Compared XX% spent by adjusted We was fourth million. and this adjusted are $XX.X approximately to sales and XX% EBITDA the we decreased and investing capabilities. EBITDA quarter our to to $X.X our With marketing in spend, for and stock-based marketing robust in R&D adjusted compensation. sales million build more XX% last additional year,

XX% a XXXX, compensation. XX%. million EBITDA by EBITDA year and for million full An sales total $XX.X R&D the grew by to marketing of again, stock-based XX% XX%. or XXXX For and spend grew was $XXX.X respectively, and margin adjusted

growth We underlying our invest accelerate XXXX. continue to in will to

cash We the equivalents, the the Turning of to were our the fourth sheet ended our cash XX $XXX.X was statement. loan credit cash We term million $XX.X Operating and cash or cash end flow margin. we million quarter quarter free our of third quarter with facility. $XX.X quarter. completed size in extend XX% the quarter, and million the initial and floating million balance basis fourth in by from the increase able cash was a the to in the rate $XX.X fourth unrestricted credit facility duration flow the and the In of revolving of free fourth refinancing flow points. up interest while reducing

$XX.X year flow flow flow full free margin. and was XX% the cash a million operating or For cash XXXX, was $XX.X free million cash

I our will momentum to continue be and strong acquisitions business, the the used robust. call for can funds Overall, QX of to to We in pursue and full the remains pipeline deleverage. conclude invest for year providing business guidance we generate or that continue now XXXX. see by

revenue total period represents quarter just expected the X% estimated same XXXX. to million of quarter. mortgage of the in In and estimated the $XX.X an year-over-year. is first $XX.X in the million compared million be $XX.X first increase This of For to market quarter, X% between million for over year or to $XX.X ago XXXX, one-third revenue of the MeridianLink revenue contributed to our

mortgage for revenue $XX.X range. the EBITDA representing XXXX. our $XX.X market expect the to between of million We only first and estimated the On a basis, adjusted to be million, of quarter midpoint expected first of quarter approximately of XX% at contribute XX% EBITDA margins non-GAAP the is

basis, was increase For $XXX our in million the million million of to expected for full an to between year-over-year. the This full be revenue and margins lower same compared and period X% by X% year to between non-GAAP at XXXX XXXX, the estimated be midpoint range. million. On anticipated reflects total represents XX% estimated approximately year margin Nicolaas, XXXX. year-over-year a million $XXX expected approximately totaling spending the earlier estimated as annual they $XXX representing adjusted to of million, is $XX increases in This EBITDA described $XXX of EBITDA $XXX.X

been convert As sales our both drive drive to TCI enhance company growth we revenue TazWorks marketing require and to investment to previously, the product investment in XXXX bookings, a returns. future expand to are future Entering our the at and areas year. and of the expect that development in for will we’ve to all we items least and in current to cloud invest the that expense in services suite continue and to will communicated will investment lead part and have capacity bookings

lending be them well appears normalization no So calling be mortgage we market base. of longer underway. our from will out separately in to The activity the

percentage from to expect the XXXX. in meaningful minor performance is and more drag software our software this This reduction is We on expected Overall, be XXXX ahead. to related mid-XXs, in anticipated. less revenue headwind quarters the data down a decrease in of verification a previously in the lending than mortgage to XX%

clients, have volume continued have to are And and mortgage any to are Operator? LOS we currently shown our share As existing the partners augment more more solutions our with items your finding therefore With tougher we to questions. and to I market for ways happy in win overall ability additional environment are to experiencing. revenue to Nicolaas provide and new customers data add ourselves. an we take ongoing of our value that, clients

Operator

sir. Ikeda first of Sure, Instructions] from [Operator ahead. Please comes America. question Your go line the Koji with Bank of

Koji Ikeda

Hey guys, thanks for question. taking my

here. Just a me couple from

on generally earlier one congrats that First on Engage, year. available this getting

be of is Engage And product could existing for digest opportunity maybe the Just fully new this end sales sort wondering color what trying pause, what cycle to with, release that from product of any cause of this replacing, the is. any would Greenfield of or sort be what any product market customers? maybe could digest it engage and kind on this a new uplift

Nicolaas Vlok

your Koji, and question. afternoon, Good thank you for

be good program all, in we’ve communicating market seen the beta QX. to success and in of would QX been that the we a launching we’ve First in

received real been the decided available and partner nearly market we’ve Greenfield not seen sales exceeded our we some at time then will and about our expectations a and From it cycle who’s launched We’ve group a great large it. we as in as activity a January. time date Engage will to but to clients our to testing feedback marketplace, had integrated bring it in which out, move of So activity great been turn and roll from but continue top turn automation and and solutions to base, launch to into as over customer Since through extent, is offering opportunity it’s January. they very are the of booking, opportunity excited will to sales and lot that have operations It in our and in a available be revenue. analytics. since implemented the into are it’s then standpoint, funnel we’ve that launch

Koji Ikeda

then here. Thanks, from it. And just one Got Nick. me follow-up

Okay.

there. you it for like are XX So then growth. bearing investing with for quota you visibility ended sounds year that And thanks reps, the guys

we just of pace for how QBR how about should has been So and about from you? thinking here the be thinking specifically, capacity the hiring the new environment

Nicolaas Vlok

been three of with the imagine, Hiring challenging however on too. can do quickly can it Let’s you good as MeridianLink second new as challenging is members than than train with onboarding to environment talent and pretty for as family part and productive start team. as in to We bring making time sure and our new we question. of companies as you’re keep board today hearing more them be the other and part much I’m more it’s It’s skill from finding years. employees the investment the we my when finding talent

clip the we but invest, XX but opportunity. be investment, sales probably would accelerate in And part the side investments can great the market our be we It’s services, the are But it sitting side, we terms the highest yield services on quarters the XX, in And we six the the we Also we scaling. and given bank, and on the to – at a that’s climate of to making outperformance make to – today’s the checks In months. cash. of going the five, ramping, continue and group is basically investment you’ve need great logic it’s and over being would investments, same go our significant thinking you to last investments in success. that find the way it’s the bookings low one the risk me, on And in I ROI. it’s investments services of backlog priority of business. not sales we contracted it a business seen about confident

air the getting of and product known like products Engage also products And focus. put into lots then analytics are collect We activities. product for standpoint, our more more We continue – field. of more our to example and some getting lesser an from time

a pretty to – services, So definitely And selling sync two XXXX, the together. growing to have in by my that of the the kind is end the bring on and yielding where on sales a but side the focus bring perspective, there’s from you the isn’t anymore. ramp it implementation of much backlog –

Koji Ikeda

Appreciate it. Got Nick. Thanks, you. Thank the Got it. commentary.

Nicolaas Vlok

asking, for Koji. Thanks welcome. You’re

Operator

of Your next line Timothy go with Suisse. from ahead. the Please question comes Credit Chiodo

Timothy Chiodo

a I then just the a trends, general around just industry of Thanks question. have on business lot follow-up taking the Great. guidance and quick one incorporation StreetShares. for and another and the

The join is and actually during I incumbent FIS first core RFP the the the of one world. talked know Jack sometimes forces of past platforms, an we’ve in with the some Henry’s you’ll Fiserv, process, about large banking

Just win follow-up a change topic that on seen if go And that if trend, seeing kind still any to you business and RFPs, of The touch wondering generally. guide. is in the just around could you if just together joint together. you’ve where you’re quick

you StreetShares give that of contributions be any acquisition. from the just might embedded could If the

Nicolaas Vlok

respond good. I’ll in work where market. are course. the course our we the And – course. We let course Switzerland We we best happy to I’ll Chad with that’s audit here. believe the into question and and to guidance be go-to-market go-to-market additional Sounds I’ll still question positioning integrate and to speak to the

could in course work alongside listed. you the We all names continue to deals

integrated moving keep larger end together. opportunities deals tightly our keep of where pushing some the very and and initiatives, forward an quarter fact, outcome partnered are sales In we

that So through date. no to want in you to change from Chad, speak StreetShares? my perspective, environment

Chad Martin

the Sure. Tim, for thanks question.

timing is next added provide then overall when be to put the on by it that material How just And doesn’t view deal and be include the today impact picture. the presuming of close was of that to StreetShares That time. it say the itself financial acquisition and not we’ll the for call our we’ll StreetShares. I does we any known, to into is So would guidance guidance has close our able close not the it will the year. closed. yet announced,

incorporate guidance update. we I change material but it in see when So next financial give wouldn’t it, into we the to the certainly expect will a

Timothy Chiodo

both a it. you answers. Thank excellent. That’s for appreciate Really of those Thanks lot.

Nicolaas Vlok

you Timothy. Thank the questions, for

Operator

you. Thank

next ahead. Your question with Kalia from Please go Saket comes the of Barclays. line

Saket Kalia

Thanks Okay, talk are was out your for here. wondering rates. guys. businesses my with bit to little saying lending questions a amidst start great. right the customers interest taking a kind if maybe Hey consumer now, zooming I sort what you little of just Nicholas, about about of you bit, just their rising could

less your I kind example. think sense? that loans than broadly be curious, just sensitive customers are to make sound currently. of consumer about just for Does But businesses that mortgages, how those I’m going rate that

Nicolaas Vlok

in I mortgage rate and your be normalization It And you as over are makes and our time, agree cost for be interest the depository customers upside sense and thank facing capital lending They be you of rate more rates in taking sensitive. be my terms would think question. institutions. with of of for sensitive. welcome clients our of environment. that and a most given rising will actually could will non-depository good consumer they And competition perspective believe I a less afternoon perspective rising rate more will

very our benefit customer the So you’ve with largest of for part laid base. be will and a I believe out over net agree that time analysis the it much

Saket Kalia

Nicholas’s whether those year two? makes mix there’s just and see touch how a going if bit, in of fourth on maybe started sold just for you’re wondering verification. could a would whether on out presumably gross quarter you. the and services on lending I bit is thinking difference that as little I a That’s That to between about Chad, you line. on here which Got zooming be just you those margins just and sense. going into Can and But helpful. start it. of just on the back we cost it. kind this Got next going forward was if data maybe point of goods that you maybe that bit to gross investment, follow-up little material relating forward. part margins between incremental And margin for a touch was touched we shift wondering gross the

Chad Martin

Appreciate augmenting Saket. margins generally, mentioned, continue big to did Thanks XXXX. see services question. And long-term into a that that quarter in model we that and that gross services the Touching that of the relates Sure. flow those slightly our than as capacity as being fourth component lower on our margins, expecting kind be in costs capacity is will and the of you through we revenue. to COGS do gross it

some see reduction bump will margin we cost, in in therefore So driven by the services.

is side. of data SaaS data Conversely, less elements lending services Now within investments services the the on cost revenue verification Zooming our the than have contained to margin verification data revenue revenue on there margin lower we on But gross mix shift, our the lower be side. business the there’s will than attached lending, a because we’re of SaaS at those has out, as said, SaaS services on the does. the margin you well. than gross margin verification looking the data SaaS the like

ultimately material when real a gross margin at of overall you the on not business. the there’s So mix two, difference look those between

Saket Kalia

of provide it I in give understanding whether of anything us closed you whether anything one question that if StreetShares housekeeping And sneak that scale number closed understanding that’s in yet? revenue, Is yet. you can hasn’t just can maybe hasn’t that’s still there could that that employees, terms

Nicolaas Vlok

is want add to that? to you Chad, anything there

Chad Martin

No, once we’ll closed, that be Saket. giving guidance it’s

not there until we’re talks to, to information to close. StreetShares but the looking can has you get we provide point clean you really about that a about, obviously, that any business I details webpage So would

Saket Kalia

Thanks enough. Fair it. Got guys.

Nicolaas Vlok

Thank you question, for Saket. the

Chad Martin

Appreciate it.

Operator

from next Matt the with of line Your BTIG. comes go question VanVliet ahead. Please

Matt VanVliet

activity Maybe for higher question question. – bit a guys. a Thanks question maybe to afternoon. Saket’s follow-up around level sales the taking good of Yes, a as

As ago of think your maybe even few points institutions the majority overall rates term like trend rising. rates a to quite depository the certainly as I if quickly are longer to it customers months looked aren’t as rising

idea in So backdrop, seeing embracing system recently? in especially potential technology, for some whether side with spending macro with bigger you project a lending investing customers even overall of from geopolitical like that net What’s the customers the here. ongoing a more a as or of undertaking new are on it’s their or uncertainty, balanced your appetite

Nicolaas Vlok

base for clients are the from of with from shifted a dealt them that those realizing transactional Good reach gaze expectations date, you digitalization cycle becoming a an branch still afternoon, too. knowledge Matt question. a pandemic with for the in But the be. environment. ball consumer’s into and we’ve in to and that Hard a clients, standpoint, ourselves We technology of kind base have driven see will perspective to – and to advisory an what But visit much very more opportunity to perspective of communication your our digital a interface conflict refresh not find are ultimate thank crystal and from they in cycle where need there’s real and it a for and coming branches more from our purely transactional where visit. the midsize away it’s impact being was kind

are systems time So decisioning is, number to in competitive business and real in larger our platform. model analytics to is mid-market We loan platform automation time, stay And where non-Meridianlink help of to the evolving Meridianlink it’s standpoint, point outperform the and a how into are we a where And non-Meridianlink consolidate positioning compared a is from is is larger in growth. customers FIs. single doing banks real customers our real a data customers we X of fast typically benefit. customers, analysis Tier

delivering, sitting worsen, weaken And as and we’re we’ll towards long we’ve a contracts to that our best is And terms a have five done booking. productive or continue the in the scaling significantly on the as environment off quarter perspective of my backlog company. last are quarters. we we’ve selling motion So are new seen come signed in over that

same are pipeline our has may the that So a little It strength we’ve nothing feels the tailwinds up standpoint, bit, be picking of percolate funnel. from given of the my through deals and changed. like seen kind significantly even and larger

Matt VanVliet

especially on can performance those talking Chad, mortgage stripped All off we about in LOS risk the then new potential market, it ultimately cooling further. how at – where the conservatism by guidance. refinance And mortgage then guess, the – little of I shakes I that have out we And of a guidance some look think impacting if as you’re be helpful. out about help us kind think the the probably expected net right. of as better expectation year. how don’t the might or you of versus Thanks. much you know, about embedded end of of Very side, downside customers bit

Chad Martin

Matt. Thanks, Yes.

we – mortgage the we impact discussed, is those environment refinancings side, the as are overall on rate do So and volumes. an on having seeing

see on we’ll parts tied those the mortgage. business roll through are to that our that So of volumes

of pass either raising own So It’s And side, through. to on – able mortgage added and value in Nicholas reporting of our to success the part doing. verification of ways that in we into as potentially more our about into decline then in customers we’re side, solutions adding actually customers new prices the more more is share data lending terms therefore pushing that form to in and what our we’re add data to referenced our as seeing partners our the on along us more and having solutions the relationship, LOS we’re or success. to us have volumes. but a just what offsetting to that our in customers our that well you finding talked leveraging the and new go-to-market LOS what provide revenue volumes whether as and credit both CRAs, Obviously, the of of mortgage good and credit having kind defray information offset we’re gaining

seeing the So we’d a into teens. revenue past go of XX’s in the initially as low talked mortgage or – percentage of we think that about that’s

in to now the think of kind be to we expecting XX’s we the market year. conservative today. We’re where that for given see low the And mid view that’s

Matt VanVliet

right, you. Thank wonderful. All

Operator

Thank you.

Your ahead. line Citi. Schmidt the next from Andrew question Please comes go with of

Andrew Schmidt

to Hey into here Thanks seeing my embedded side. you’re kind XXXX? just thanks for LOS you so much car, dig color I whether LOS consumer set, you lot. most be Can for of then, questions cetera, the And discuss, lending expectations there it’s the guys any demand, the growth where here. great. would the in taking across consumer auto, about modules wanted the talk personal, a could et perhaps non-mortgage non-mortgage

Nicolaas Vlok

supply opinion, constraints I very and really like here high do channel feel way material. in comment out a not more But stand we’re new And not environment you that Chad performing and say, there’s low we’re living in some free or I chips in that it’s would a to of if headwinds make chain would to would want homebuilding I well, the even shape. in as any Andrew, and say level, where with auto that. step my in where

really If another. impacted consumer you worse tend lending, or one clients a saying we but kind may would are. XXXX ball, expectation of see being our going there’s we’re is, some to It’s I feel shifts a looking of most maybe and I follow have My constraints, on we that constrained I kind and initiate that side what of up. assets the more are on in typically say thinking and still – to Folks starting of, example, an to these hear area things market what as I kind investing mortgage take or would crystal see is to by we’re the that haven’t nonmortgage happen, we’re seen ease not in is about say loans and world. would that HELOCs think, an off. don’t highlight

trend clients a decisioning flywheel us one other channel in lines the moving better for perspective in us, automation add? is that’s You that we whether whatever or the significantly helps with past. worth do outperforming we’re and are And company, marketing, you that doing opportunities our everything or of we to would of kind as a better doing out and I or have assisting more percentage integrations and clients, that’s there’s to on have we, over within say don’t maximize have it’s another But may better want control It’s everything I Chad, points from pulling the us if down. our and consumers. investing kind anything one the clients it. than control, for keep the But it. our

Chad Martin

is only expectation I’d to is thing to Yes, Andrew, is, that I’d add the the yes, add is see that mentioned, – our more Andrew, as thing same. Nicolaas the only we of

volumes are we’ve nonmortgage on consumer forward. So XXXX seen on through rolling the impacts that

market upper that no the big down, anything expected the should as to there’s So be to improves ultimately the but beneficial, change mentioned. Nicolaas

Andrew Schmidt

potential Okay. work fashion. you about the just of could net done, mean level, together a Very platform about Just talk a having what as us out XXXX, or cross-sells? that then hear very at it’s follow-up helpful. into coming of very, for XXXX Maybe high substantially the you And that consolidated a remind the to can of on benefits MeridianLink might in One, progress. and bringing curious, either Thanks. good new

Nicolaas Vlok

we are products which have environments a One MeridianLink into and and done our Andrew, that integrating on to platform committed to our great way. track – ties over with public in migrated private We’ve From cloud our cloud, platform acquired also more question. Saylent. meaningful in with

be of only And can the that’s scalable. done, in between customers to continue acquire a environment. new for ability really the doing available will into sign-on, cloud the the We and various a our us mortgage. the single user take, bring made is as clients our be product, XXXX, certain the for the components But from that moving And the aspects be XXXX data standing the analytics it’s more to benefits public platform. would will interface, single example, where it platform we benefit have platform to of market

with as scale about additional time, growth have environment cloud, in light we up ability an take go to we the can into we faster, where but faster know instances We We trajectory just think implement and business markets live for our also in the and term, the that you markets in when benefit to and of going a you you centers of speed but choose kind to, platform that gives of launch. environment kind a in don’t put cloud go through ability data long to the platform, being the where you down need over clients today.

a for the the the decade scale or architecture cloud-ready completing baseline technology the will standpoint, for news are clearly as longer out our positioning initiative MeridianLink is carry standpoint, move going roll to that, faster. good faster, as One well our there. the putting strategic be that’s company our go-to-market So that in benefits next in it is from easier. to a it’s investment that’s And and to for – clients clients, It’s from ensuring us acquisitions this there and platform us, us the a selling

more also take when in will forward. really it force a scaled you help an environment sales where think us I we’re platform create the can

our excited for And up XXXX light time, would environment it. set confident component there QX our will achieved I great motion faster. the a be seen milestone large of very that we very go-to up to in with be we’ve So, will throughout just year. our say, about very very complete part in continue One cloud quite customers and be the environment move eventually and will It it the market over and of an Meridianlink a to that We’ve to ability ability and public excited, and some wanted the and as momentum transition. will

Andrew Schmidt

be right but side, characterize on in-house move lot like clearly Is kind centers. on well demand Got of that. side, as the from that benefits also to some it. savings, you of Thank the way data CapEx away cost could a it? sounds And there it you for as the

Nicolaas Vlok

– at of a context and of And It’s nearly of are XX%. customer of was growth between CapEx and customer it XXXX of than the new our moving little was slightly pace think bit less XXXX growing XXXX and growth can between growth customer color, in just You XX%. the XXXX our away, we new in but kind excess doubled.

the the we is us data as to investment. where So for our expand want make to centers cost I not would tell you

So going on the at savings are to sale. drop scaling your and we ideas have, also business, with increase off, wins logos there’s then the as be backlog we cross-sales yes, faster our accelerated an will ability pace, ability is we be bringing And OpEx scaling. cross keep with faster to keep fold bring While of that footprint the tied an the especially may are new and believe acquisitions front, grow new momentum into and starting to it the the CapEx but and the make I there the into that part customer pace in in the platform. The will benefits see on to

there? other Chad, So one I add you it’s really think want drops you increasing. is one don’t to not just the the and anything want off

Chad Martin

the moving in said and CapEx be in OpEx. the Nicolaas, pickup the No, OpEx we’ll so will you see we decline to the CapEx,

spin now moving have we’re cloud infrastructure data double the we to. both having of that the the kind We’re and as centers

the So cloud infrastructure. our carrying to and the hope maintaining through spend be able forward we’ve center see only and we reduction have time, had costs the own us the data in to CapEx on

Operator

Thank you.

question with Your from Alex go ahead. Raymond comes next the Sklar James, line of please

Alex Sklar

you’ve to seen sense the customers the trade commitments back about any compared in up favor and kind off ramping monthly your remarks, just if Can of of kind in of Chad, years? of in to are lower revenue their of of talk monthly noticeable the you mentioned visibility in going idea what prior you higher pricing. your prepared changes commitments

Chad Martin

Yeah, thanks Alex.

in been commitments we working incrementally already higher on – of have they’re to a process customers but have contract these a higher number customers we at moving So their volume.

existing revenue just And their lower of choose their have big basically in receive looking take when for lower we’re reality bringing it’s that customers, contracts. on then contract. may they seen up that a to we light if is, renegotiating locking in raise candidly, but commitment level they’re revenue in customers to grows we commitment these from we’re commitments them So to not revenue new already at is the And the onto been time, in pricing. phenomenon of increase and category step of locked that But through our advantage that receiving And the new level. pricing. these move customers their commitment customers committed to

each commitment have more per at hasn’t having really committed, of revenue that we So take but lower app much entity. the to come a fee expense from

Alex Sklar

Got it.

a talked but I end you logo growth or and to then the lot subscription take curious, if of XXXX revenue how one, the I’m this want can you given model, revenue services what your about and is who, – leading indicator recognition of and the Chad or accelerating And, just much terms of XXXX? know kind Okay. backlog, see into for a growth Nicolaas that of don’t in

Chad Martin

Yeah.

they So not are the recognition until revenue is, until go these recognizing well. customers contract start they revenue from And as period, go their doesn’t we live live.

can customer contracted get losing receive to revenue technology the the faster phase, they talked during customer any recognize candidly get the to access the be And not Nicolaas just So because revenue. sooner. happier we’ll live, is the and the we we’re about sooner able implementation as the

market, in the to win-win-win both for as investment time streams. implementation speed, services the for for the to time services and the to customer, is capacity SaaS So really us and the revenue

that is an So indicator.

what’s new are doing coming talking successful around we as right? more about online, success backlog. going That building in signing we logos, success so, that is see customers Nicolaas is And should forward. in that, the What

the Nicolaas revenue that quickly. indicator into leading having is to more we’re convert into the So sales entities success of backlog the going now pushing

Alex Sklar

very That’s you. Thank color. it. helpful Got

Chad Martin

Thank you.

Operator

Thank you.

the William from ahead. Bob Please Napoli of line Blair. Your go with next question comes

Bob Napoli

Thank quarter. afternoon. Nice you, and good

lot just the the have towards of the picture the focused a to any and goals growth. or But EBITDA timing guess, trend long-term or thoughts just XX%. that XX% margins, that guide, in on I have target business understand I lot you’re question, on target? and you’re long-term on you a And big any moving So investing momentum you and

Chad Martin

question. Yes. the for Bob, thanks

EBITDA. So, the sense for makes the on XX investment said long-term or the think ROI gross around absolutely is on about on target yes, so the cashing the from We’ve again Nicolaas shy is as we’re making, about the services the talked that We but of margin the investments talked making. checks. we’re XX% guide still right on the We’ve us. obviously year for just impact

and when to and we drag I and that along move And we a marketing. as as certainly see also will sales the the we positive. revenue the on spending And basis. gross we’re year-over-year through entities converting we’re then margins. that more that higher talked SaaS the pull think moves margins margin that’s improve, the comes just all services Again, R&D mix EBITDA margins both the our So SaaS should revenue, which a those to to targeting. on that mix spend about is kind related the at amount SaaS accelerate us push the on of and revenue of time into

Bob Napoli

and in posture But a investment per to there driving But so the demand. XXXX, are guess I you and that, you’ve in have nice – you And your broadly specific Banktech that’s aggressive mindset you. customer? this your mean, post-COVID of the are customers the as you there in Is change then impressive ARR you’ve you it’s XX% ramped customers? new more need Thank a And larger space in they change As a growth I a the maybe a know like a it it’s seems and marketing I FinTech, demand acceleration. lot seeing seen up – bit the – from that, for seen is and are you. is been posture adding base some seen digital. realizing just customer we’ve the

Nicolaas Vlok

like what time folks I believe the look and investing for in but what post do we with at really We I for of the right place, to time what the in have in increased market right interest target level I decade definitely we resonate. next Let you Meridianlink believe me doing, or see midmarket know speak the to and should mindset. platform the invest because pandemic point is do not their future to and in business our the technology an at of and longer. the segment at rethink And the a

platform to that invest technology a in a solution their they We’re are a integrate not that We across the dollars the market, landscape. standalone run cheaper not we can and solution need companies into bring customer us. with of base, engaging large be and of engage that broader want discussions on. their various are And tend more to institutions levels to interactions forward the in financial thinking with portion business

whole working and and they into demos. nurturing that point faster mindset business to what most with efficient, Meridianlink faster as as work webinars, a And access business cycle. they Some they more Eventually in also to it’s whole and folks their more up end competitive doing bunch decisions starting better that can to grow they turns actually clients. can and I clients. make of offer where realize it where we’re their rates get with we may data can risk better their with they the And analyze starting are for a have discussions in see learning start offer. to We the think they

again we a to have perspective, these clients my the that market our mid-markets wants competitors, we the outperform with opinion, platform my to integrations is, how date the with outperform offering been want offering the from financial market and greater who’s to have, and So And non-Meridianlink. investing segment the leading institutions better, yet. we not resonate of serve accelerate kind

branch prominent of it they one competitive new with in So two about from be now about the is incremental that function is, buying be members, certainly that before clients, even historically the solutions, isn’t it the most MeridianLink they that discussion business term. way starting same What world the I can Where yes themes speak a we where will year the clients thinking And is longer how when or what attract or when people did I new and connect prospects, like has COVID. are a to to – is performing look in post-COVID? and customers, new be would the of think should doing of and think to the shifted changed? business going are to

Bob Napoli

Appreciate Thank the Great. answers. you.

Chad Martin

just add I would Bob, one comment…

Nicolaas Vlok

you to... want Chad,

Chad Martin

and is and think year time. will I new right? the Nicolaas that you’ll and how we’re we’re would the typically And – talked additional a say, then don’t We of really, with noticeably through add have done consumer seeing we’ve ARR lead But comment, which I LOS that. see logo focused that’s about having sales, an of base, on growing ARR leading result kind I customers really functionality one came some of just higher increased ARR Yes. the adding in as a we’re customer small the of pruning past on per end acquisitions customer half. our that and smaller through we

Operator

Please you. And your the ahead. Stifel. next go Lane of Thank comes with line from question Parker

Parker Lane

the for question. thanks Yes, taking

taking and last to highlighted the I over to these that uncertain of years. at project spend get the more is of MeridianLink the where an the and in business you we for potential macro are that secondarily, last tailwind of company’s perhaps competing the of your them they’re few And transform Sort of Do what to the back the some other SaaS there’s digital about have customers pare think priority be a digitally looking in a real interest for one. a choice the seen to follow-up they trying as any their there services look macro? here, those what just the uncertain overall back you’ve next as face then think thinking transformation to they’re the In sector, If institutions think financial spending? context history, places of you from on. in

Nicolaas Vlok

mind you taking do Chad, a for that second? one

Chad Martin

trend technology. propagate are in I say banks, fintechs, institutions looking pressure start-ups to Yes. new macro their Parker, problem. from would depository there’s we still right, still the these are at from the No the level, who investing all solutions. seeing of a from institutions, neo The the

community that so our are marketplace. right, focused customers, up in banks, unions the very keeping the And credit on

make the And turn get times loans, often solutions better help around loans any their that’s deposits – looking attract income then And more technology attract that our difficult on slowdown. to to looking of entities when to interest ways customers even periods time and lending, in in folks farther even basically haven’t seen find So we line. back attract right, lending that’s make are time, historically, to those and economic are top decisions. these again, uncertainty, to basically XX%

that’s something is the and difficult. and So performance a market out relish having continue overall ready solution having their line driving gets little top ensure to – in we to even environment if that go we conversation a that difficult they’re a find more bit a

Parker Lane

Appreciate congrats the feedback. the on it. quarter. Got Chad,

Chad Martin

Thanks.

Operator

session CEO, today. now call our concludes Vlok, over that our Nicolaas the And for question-and-answer for remarks. you. I’ll Thank closing back turn to

Nicolaas Vlok

ahead a outperformance And performance who public you full today thank for and first excited operator, year us all joined perspective, being consumer public. given is mortgage I lending even I’m supply pressure again, of year first And chain my you, which, Thank really said and strength the the from for more it’s a and as remarkable business in company. highlights review from earlier those our of normalizing our opportunities about have environment, us. our our tremendous also this the of constraints what

say would closing an We’ve better grow As investments extremely afternoon, to acquisition you I’m strong amazing year us wherever and on the another us our Operator? for StreetShares we team, commitment trust the loyal in today, to and and here. meantime, your really headwinds ahead, week, as their you of want StreetShares we again. growth I every day. can had in the clients I our to forward lastly, employees to at. us continue to confident exciting and, I and confident of when XXXX And can will officially to forward looking thank love partners be MeridianLink look are family. best-in-class being market-leading welcome a What fact, to who thanks the and to us position. we inspires may that and In ideally we and our with looking these am revenue position are appreciate the – situated business. joining, welcome profitability. evening, for And our be to accelerate great scale out call customers deliver I our well tailwinds have And our become subside I’m

Operator

Thank conference call. today’s for concludes you participating. this And

now disconnect. may You

MeridianLink (MLNK) 11 Mar 222021 Q4 Earnings call transcript