MLNK - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thanks for standing by and welcome to MeridianLink's Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I now would like to turn the conference over to your first speaker today, Erik Schneider. ahead. go please Erik

Erik Schneider

welcome second and XXXX fiscal earnings call. to afternoon quarter MeridianLink's year Good

discussing announced me the release be President Chief will We results Blitchok; Sean the Executive Nicolaas and closed Financial Chief Officer, issued Chris in market today. MeridianLink's With Maloof. are Go-To-Market, Officer, Vlok; after press our

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

affect For refer a discussion Securities our today's other of future disclosure file the filings results factors earnings please the that from business, and Exchange and with the could reports and and Commission. in release financial to we time-to-time

statements statements. made us by law, information available our today except to of obligation such no on are update as to and based any we required of as All assume

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

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

Nicolaas Vlok

the you the of Erik. and you afternoon, We today Public Offering for Initial NYSE our bell thank Good us. joining rang to Thank mark anniversary opening at all the last July.

every exceeded guidance that expanded our our and financial strengthened platform. in transition. and last the businesses significant public, have years, X.X we going four Over cloud have progress have acquired we Since made quarter

investing for entire like us the our next quarter business. our want will Sean, growth. we're flow, the focus we on continue today achieve the generate and I'd macro environment will cash on benefits of another to us our helping more to discuss of future. MeridianLink positioning strong to I refinanced and multifaceted embark of financial We team the to But highlights and current our our in debt recognize where business the performance for The walk resilience delivering also QX phase detail. performance today. through significant

strong, the us year-over-year types. outperformance and in First, non-mortgage-related well, our led broader benefits versus businesses driving other lending particular businesses remained the in our our by growing personal mortgage-related non-vehicle as loan Diversification strength XX% within quarter, market.

are QX we the increasing adjusted our EBITDA with year-over-year mortgages originated, fewer expectations are on exceeded share and million customers in to up as revenue Although, platform. being wallet GAAP more MeridianLink MeridianLink $XX leverage X% margins. XX%

in digital We demand existing new their of see businesses and are provide is There better broader who and consumer faster transformation strong both from order and in investing customers verification to a to the continuing are experiences. data drive we our of us to significant key growth, to outlined market best-in-class $XX capture three will margins. for accelerated maintaining In opportunity a to order billion focus. have and we invest of areas disproportionate continued while TAM, continue share lending

deeply third, customers; engaging quickly our platform; second, capabilities customers better communities. expanding First, the our with more grow empowering more our and their to serve of and

a customers, real-time also inform with cross-sell is a give of opportunities. long-term product drive these near conversations and of provide with map, view their goals our points meaningfully and but road priority top and Our pain opportunities motion. do frequently our our view market us only market engaging they Not and real-time understanding us meaningfully

will program is help excitement product value launch that customers days directly continuous immediate engagement on the to are an with opportunities. and the and long-term in engagement efficiency MeridianLink event their workflow have customer will engaged led their of attended that was in at to and innovations of cross-sell XXXX. our and The forum. that win well customers so in-person thousand new to we and a increase about so nearly certification three and software QX, of administrative pipeline our example For for ensure our both organization's to both that that partners customers increased with This user larger logo our focused able believe optimize partners expand a for The provide to venue right market. customers market. the to future the in use We MeridianLink investments we

through Our digital next MeridianLink origination our spans marketing delivering capabilities continue our decisioning. consumer Particular highlights and is account focus innovative in to lending uniquely cloud platform's multi-product transition area expanding journey functionality. which the the new cloud-based is by platform, from our One opening includes following. loan

MeridianLink complete this of One we cloud full initiated the to by public ahead First, end XXXX of in migration the of are schedule year.

solution, for Second, our home money home identify across gain our power save our efficiently more with equity, purchasing customers. third, where look And and rolled serve their for can experience improve they equity the clients' helps patented lending. demand and can have out to which we customers so optimization their our continues debt portfolio surging modern customers traction

of the which and We cross-sell its platform value by logos the increasing revenues. capabilities, are driving our new turn focused expanding attract in fuels motion on

our grow area, focus and MeridianLink in any compete, final empowers customers our to succeed As market.

by our platform. mortgage use turn in market. existing resilience their other mortgage have share customers of product Our of more others, their to Unlike impacted meet needs. of we our why functionality, customers however, their flexibility adversely best-in-class to automation the and a as digital we and This to from the wallet our model more space, Like environment companies exposed the more benefit are and capture winning a allowed the move business expanding clients, historic been is providing track win of customers fully mix. are we the customers and greater has record

an to know accompanying cycle. economic the diversity sustained refinancing. offsets across I but and in and activity unit increase said economics our non-mortgage I enable critical more than headwinds growth investment seeing mortgage in of before, initiatives I emphasize are The that point. We this have this strong in business the scale want

of second highlights the key quarter. our discuss me let Now

milestone our important. we mortgage This the to cloud. migration This critically the quarter completed of is module lending

our we of serving and more cloud-native a platform environment, migrate customers. better we strengthening to products MeridianLink are the One As our are

One speed has and Their of consumer delivery been take Mortgage since flexibility combining MeridianLink solution. cross-sell MeridianLink credit to synergies Our One products. modules footprint and our advantage consumer opening demand. who selected upsell increases and and capability the includes point-of-sale of multiple XXXX MeridianLink leveraging unified MeridianLink recently customer enhanced new mortgage, union now security,

XX another Additionally, our ability value category was this to to entry provide, market-leading of launch top based home of mortgage the in the customers. combination unique on new serve of lender lending. their we functionality quarter This and a a and to equity into lending were selected ability capabilities by example facilitate national of our higher provides depth breadth facilitate and MeridianLink's swift the market election

team. success is MeridianLink's a tied Finally, strong to

a expand Chris' their capabilities and operating help To conclude, business. experience next for go-to-market increase phase role he that increase President our of Go-To-Market, for ownership the MeridianLink, empower direct has to platform revenue of deep of clients growth will by engaging go-to-market expertise prepare where we investments engine. strengthened into power executive we prioritize team focused at phases our organization, better customers leveraging and opportunity MeridianLink is elevating on customer-focused capacity Chris the serve As and of customers, is the to communities. our of now created our with MeridianLink all and newly and a further strategic initiatives. Maloof This

a virtuous into call of the improve I future a turn and now ours, MeridianLink, As over generation, to and our aligned improve appreciated customers' financial about we talk little vision business. to of revenue powerful the cycle. review will bit creating have are results and background the quick they insights on then and assimilation Sean the guidance. values Sean Sean's early and his I his I and

Sean Blitchok

on value vast on market people result our today. business on clear pillars DNA, intentional and customers strategic seven XX specific let creating one, of and and performing, importantly, our for driving joining on increase weeks brief with market to largely functions impact me a in why three, and in the model; Thank Throughout full have focus drive company I roles the business. of having highly span the team than management clarity velocity guidance Those operating with and the the are joined Nicolaas, pillars two, on everyone billion our to to year introduction experience and with customers; call for my MeridianLink. alignment third and ahead including strong incredible scale values. journey I'll you leverage provide teams, you expansion Nicolaas, Being create business I've a Then the beyond. for a and in and our quarter XXXX. to relationships, most four, is leadership I of focus spent and Board perhaps mission customer a results partners. a thank career, pillars to laser positive engaged and mission, exactly diverse that and and quarter for years markets, opportunity this set growth start relied the again innovation senior the With a These key and opportunity why more a $X an four for my a the growth on and us success; review customer in I've high and are which of focus chose on we the acceleration in MeridianLink, and models. are; chair, an untapped

Software accounted revenue total to $XX strength in of speaks for company. me revenue, and of as Nicolaas and contracting the up of the of total ability results, Lending market what MeridianLink's mortgage is nearly in X% quarter, this to quarter, year-over-year. revenue generated rapidly million, part XX% grew business, which we Solutions a grow XX% attracted the for As In second our the balanced both year-over-year. rapidly expanding mentioned second to

in impact the Lending revenue XX% Solutions Excluding anticipated the from revenues, Software year-over-year. slowdown grew our mortgage-related

loan down and of XX% market, our year. products. generated Verification roughly revenue prior with second More X% expectations Solutions line specifically, of mortgage-focused Lending revenue tied revenues, Software our XX% but revenue the the of Solutions to For Software in in our mortgage overall XX% Data quarter were our from

this market. continues at Data new majority go-lives year-over-year our seven and existing transaction The the our growth points the revenue outperform business product Solutions to part is customers. both tied of in from meaningfully and volumes Software While the to came increased of of the primarily Verification revenue quarter mortgage

as to customers. We capabilities expect to we additional growth to our continue bring accelerated drive

was for XX%. in Accounting QX was in margin compensation, XX% gross Adjusted line profitability. stock-based margin expectations. with GAAP to gross Moving

operating to million. Adjusted Our are of EBITDA the but of reflects solutions our quarter was market, margin million, ongoing and significant response distinguish last of importantly providers, In near operating $X.X clearly level and XX% banking margins year. yet the $XX.X have second achieve and representing sales XX%. EBITDA an market income the the compared who million, we and discipline, from spent in was technology the demand, stock-based more positive $XX.X in compensation, providers, for provide us a of for more adjusted quarter marketing our in non-GAAP was most largest cost GAAP EBITDA income value more smaller the our XX% to This the to EBITDA. R&D

and to marketing line existing of of have our the solutions, for year, continue and and in invest to sight penetration potential market R&D sales will expand efforts enormous we our clear of across we Importantly, our as balance further offering. the have

million, cash $XX.X the cash Now, period balance XX% with cash driven the second or end margin. equivalents, flow three-quarters a margin. and ended activity the the We free unrestricted most sheet StreetShares the repurchase the from $XX.X low by cash but cash generation free free quarter, million, in see was flow quarter, Operating volumes raising opportunities us quarter of at million in million, statement. operating very cash $XXX.X mid-teens. was XX% flow closing of wealth at cash quarter the the for personally was and the revenue a cash of flow be than am quarter, to in acquisition highest turning the In development. this current the $XX.X I total and in level customers current shareholders. stock we at or We allocation MeridianLink's down in start did MeridianLink flow XX-month of the provides, of efficiently primarily and second cash flow ending Non-mortgage start of being unlocked our XXXX, but its environment. the $XX to as million, quarter, $XX.X the first the second of trailing and cash free quarter. was of capital and more flow potentially million cash since the position grew part strategic initiate revenues number at to and point ongoing build least opportunities in the in a by excited comprised for value second

to place focused the is investment volumes we strong an and year, I'll demand mortgage update rates initiatives, start for of and in a the robust. number and queue and team pipeline in QX full now and decrease associated With year high-return guidance since the rapid part expected XXXX. growth of market the Despite great both management time of interest to pivot restructured on continue in accelerating overall rise momentum for in see company. it a this our be to the remains

the and For to XX% same total $XX.X revenue above between This estimated estimated $XX represents and expectations. million, year-over-year, $XX be third period X% XXXX. to expected to in increase is compared the an million market of quarter, for is million

in $XXX.X irrespective compared macroeconomic XXXX, This reaffirming we and that module customers X% previously customers our to emphasize will to want uncertainties, period remain the committed guidance. for year. for year guidance between stated are are an to confident X% continue across of same represents of add of our we point, year-over-year. to increase the We estimated penetration to For this million, existing new among increase million we revenue total XXXX. the the $XXX $XXX and million I full remainder

the of bit incremental mortgage third the our margins year nearly third estimated third high to Overall, to potential expect XX% contributed the expected more in in mortgage revenues, in second our market on On In is $XX down still representing teens decrease Comparatively, quarter of low XX% as million, the mortgage-related our XXXX contribute of mortgage market in context across the With from our XX% rates of the less a our million the revenue. XXXX, MeridianLink with non-GAAP quarter. between market forecast, the a of overall the reflected of expectation EBITDA adjusted our ending of revenue. a be of EBITDA or mortgage-related For XXXX our our revenue expected we've continued XX% to current we for $XX.X share rise to and revenue approximately the is we as XXXX. guidance. percentage revenue quarter XX%s, than exposure at midpoint. the decline quarter the to million to basis, $XX of anticipate

partially Our the quarter. EBITDA to catching came which initiatives reported is on great our hiring plans QX is in up our a guidance, facilitate above adjusted This investment during result. while

fully remainder Our expectation is of funded XXXX. the for those plans to through be

calls, per As the as also to approximately this One. we've on prior in includes to the MeridianLink fully and Solution part QX for quarter the discussed remainder year of $X market of dilution StreetShares million bring

macroeconomic existing our year enhancements a movement successfully For EBITDA bookings this XX% to million to holding full of our $XXX services the to and $XXX to include convert be million, development to margins environment. managing estimated summary, the and investment capacity EBITDA turbulent are priorities adjusted revenue we is year the at platform. approximately committed capacity cloud complete In between to to XXXX, representing Again midpoint. our expected guidance, our and

our investing we operator. our to we in revenues my I'll will and and the your in take business, incremental non-mortgage over revenue customers, solutions. and remarks. Nicolaas, our turn continue both prepared that continue are happy I any That and to With Chris, of questions are concludes adding new clients, in confident will to it mortgage-related driving the outperform We our market to

Operator

from Ikeda go sir. And [Operator you Koji will Instructions] of your America. question first be Bank ahead. Please Thank at

Koji Ikeda

to in questions. for you looking working new guys. the with Sean on Nicolaas again. Hey seat future. good to Thanks taking see you congrats the the forward

guide mortgage actually of year. pretty side out good headwind be non-mortgage is bigger it thinking there, really I the the a than is about previously to First think turning out guide this the But growing with question reiterated just the considering thought business mid-teens. being maybe that's the here is side, entering

Difficulty]. I it that's and [Technical like what think really in is you that's growth And even great. coming that said sounds that

when there? even consumer that driving great is consumer that not what's So, strength sentiment out

Chris Maloof

to years over is and demonstrated think have unions specific fared go and down their everyone credit the in both something But and liquidity remained the -- was we're the last strong. we're volumes which the organizations Thank One despite it how from cycles This any anything which in credit Maloof. Thank have And the see in at or that, from you upcycles call again institutions banks credit challenges. the seeing downcycles, interest looking recently, economic question. is have crisis my it's thing that's to the economic would challenges. Chris reflected chain supply more of you as across depending question. on I those mid-market now that seeing up supply for also and benefit needs XX our elements, chain view in would CUMA. In years. the change for XX to strong particular yet aspects consumers And a on whether I of vehicles on such despite forecasts

Koji Ikeda

that. Chris. your to too, our huge pretty the lenders national mention new and so seat won follow-up mortgage shows That's guys scalability congrats noticed equity product. the I And you on one view I release, the congrats product. of press on lending the me. top-XX in the for with in just it Thanks home forgot

you about that bit future? in of And about? how that this the you came leaning a guess into little mean talk that the deal more imply, does I might So, or market can part be maybe

Chris Maloof

and the platform is see its as market come my pretty a our Again, these solution needs. of at the stand and typically question through our platform, specifically, our platform. we and from upmarket? you. first speed are their needs, meet configured as folks, HELOC. customers go-to-market fast see about a integrations relates of want I configurable continue across it's Thank further We for products to answer look their when in volume highly to going and I'll scalability success us to up at out marketplace benefits to What but to be ability think of, really it and Yes. we all our partner our And perspective platform they our that the and environments rollout who drifting clip

my million management. still assets come seeing but $XXX that where when hasn't times. are to our motion, go-to-market traction us we perspective changed from folks of exciting billion on highly $XX focused So to it We're under

Koji Ikeda

for Thanks guys. Thanks, Nicolaas. the questions Thanks, taking

Nicolaas Vlok

Thanks, koji.

Operator

from Saket be will question go Next at ahead. Please Kalia Barclays.

Saket Kalia

sense? Hi, Sean echo and here. taking Coming maybe that guys. we you. Nicolaas, out for bit, Chris. for start Maybe is, word going? how what drawdown year I were bookings a you my implementation question up needed Great. this or strong little my Thanks for is, build sounded to on the services organization you congrats sort the into the that or seeing. questions that that you've are to make implement Okay. like that the seeing process built I'll with is whatever it backlog does really best the And of

Nicolaas Vlok

it do behind bit first ramping we in to hiring entered Yes, QX and end frame. you time caught QX want budgeting we I resources Thank parts now largely hiring, little in that phase. that And planning the and break We're in the for for a to yes, speak in that question. two does. QX we in the services QX by up in but of were

talent into to six you found mentoring some five next of great terms their late market we can to who on But continued would of excited backlog, to us folks engage, we place as in field the guided the out on feel of really taking in quarter, through Then projects. to we folks year takes folks year. online and a there's get this fair in implementations on own. So, months these before be second build bit training bring that will kind it of here backlog we QX. Remember, the four very

crash Our this of backlog backlog in and second kind down. increase driving to half, at QX. goal time, we've of late sequential start point the from is seen of a But the still to to QX year in

Saket Kalia

think still it's but growth for and excluding on I'm That's and business this it. Got algorithm components for is, a Lending seven of Lend kind think for volume Understanding how Software bit, whether growth Chris touched And that about my the you follow-up weeks Maybe little curious mortgage? that of you open-ended framework? you. only about that curious, customers I'm in, very rate growth total the helpful. maybe whatever how

Nicolaas Vlok

question. good Yes,

the number balance But I think diverse of one. the components. So separate of I is in portfolio, it guess, do

logo. logo in And by new that's growth. I then think a to want there want pure way is there's as There's cross-sell. that is component price much it is component, as drive can. of just a a well. I the And and as that volume-based cross-sell component that's I And I -- new increase

four lines. -- outline the And looking I we're that's if them, drive we're growth we get all want product framework so of you and of in all healthy then of the are or really at All there them. into but the of components kind details specific to that algorithm will, kind driving. of the the of

Saket Kalia

Got it. Thanks, Very helpful. guys.

Operator

question Suisse. next Credit go Cremo be from will at ahead. The Please Nik

Nik Cremo

taking loan in for slow auto higher down was minimums recessionary weakness the just that could and sort talk at questions. if rates, line in applications about with point given a scenario loans? to my Thanks protection some your what hoping were originations of interest you consumer mortgage contract provide, I

Sean Blitchok

Sean. Yes, take I'll it. this is

what system, the or resiliency contracts. Most of prices into of a part volume is contracts part increase. decreases call where our So of baked as the we tiering our insulation have

And to that so contracts that on with of we lot decreases, a is have we're customers. based our able volume the deflect -- the

So hopefully, question. that answers your

Operator

questions, further Any Nik?

Nik Cremo

time. this at Not

Operator

you. Thank

at question Cris be from ahead. Kennedy will Blair. William Please, Next go

Cris Kennedy

you Can bit about the and a the Yes. taking And congrats that years? think over of could MeridianLink more and accelerate Good business couple little of you how help for One afternoon echo growth the next the question. talk there. I thanks

Chris Maloof

this the for you take Thank is This I'll Yes. Chris. question. one.

components. a which that So the Nicolaas exciting that already is and business into very highlighted few on One, we're schedule out laying of for MeridianLink ahead

up and for next multi-year the first platform a concerted we've set investment decade. foremost to is, The our made

have So the latest infrastructure, cloud a a is we to on the platform that, me from what that's software architecture. that the leveraging latest tools means latest vendor on

that is, way focus what best. we So benefits the can we us on do

are going be center to not provider. We data a

will be tools. We data center not building

leverage development up, out all of the future class we question, as then free on the best those focus me stage marketplace can innovations. will And our resources of what's in in the this We we as position exciting you is, for most Thank finish on there. for last remaining extending the and personally project, Cris.

Cris Kennedy

Yes. lot here? Got last it. And changes then, forward I from of MeridianLink of guess, made focus lot Thanks its a over your guess, years. Chris has a just a on lot. a key done go-to-market has going couple -- follow-up. of the what's I

Chris Maloof

solutions is, exciting. going focus of is able to That's grow to our customers very help maintain markets. we've last a how the new be the win My that our which -- pace, key the XX we we ultimately respective from and need educated in to person our business were of educate lot succeed people faster. well every on added To here organization, their as as foundation helping how

focus. So make my possible infrastructure that coaching to is and training, that central organizational

Cris Kennedy

Got it. Thank you.

Operator

Alex Next go question Raymond James. will from at ahead. Please, be Sklar

Unidentified Analyst

One's progress Alex. MeridianLink how One, about is Thanks. is some the early a This on manifesting for Jessica follow-up on MeridianLink on rollout? the quick want I for it. just I've adopters? got And further double to [ph] question specifically, click cross-selling Hi. a on of

Chris Maloof

again. Chris, is So this

perspective, in progress are clients of the all mortgage cloud. our a from So

of customers. we are monthly more and are -- our moving and more routinely We again,

tremendous interruption. doing here clients our are achievement. breadth with our many of out And I given want tremendous it a in team especially by That's call in marketplace. a minimal approach from we're minimize So that staged a to third-party effort really the using is so interruptions, it's the customers transitioning integrations to what the

debt Now, and such of the when is, where you areas in where think called acceleration of perspective, cross-sell about, the the optimization. By loan our the more with from Nicolaas all you're solutions out together as, in than enablement having or a cross-sell value seeing to we're by on having one place common that location. various in a cloud highly solutions the a apart, able create them create stack, responsive types, in about

Unidentified Analyst

What strategy policies? in to management, your are to your Great. with follow-up your market? question. what Thanks. And go-to expecting any changes been recent a changes And there around guidance have are any you

Sean Blitchok

Sean. you is for question. this thank the And Well,

I think, I management think at to continue don't from -- guidance build policies just affects the don't all. a think our I we're that we're go-to-market perspective, out going to team.

I -- think we guidance our guidance don't but And restructuring strong. at our affects continue I think have to go-to-market I look is will don't it, policy.

Operator

further Any questions?

Unidentified Analyst

it you. that's for Thank No, me.

Operator

Thank question will ahead. Matt be go BTIG. you. And [Operator Please, your Instructions] at VanVliet next from

Matt VanVliet

increase the the biggest And through. you're also afternoon, guys. to drivers, obviously, bit you Good Yes. there. implement the more of Chris, trying of on Maybe, sort of taking Thanks four on answers wanted congrats echo price to for in question. the I terms dig new a before. one little my gave I'll role expanded in But

add how the do base for of three sort the we So maybe feel customer areas roll an just sort or the expect Thanks. to see you But basis, the any you XXXX importantly of expansionary just is resources do towards as like year? likely components? to maybe biggest the what whether out expect you efficiency where of of other second increases continues we drivers much some more logos more and certain are to new installed other maybe beyond, through? look and sales on in across it's annual the updates Is deals greater base And of consistently do half on that of the tranches -- there, on win then, or looking now? at key price

Chris Maloof

want levers, you the Sean's don't growth? I first, mind. you consumer for question. When clarifying of if are Thank illustration answer about to you to that you referring question the lending talk

Matt VanVliet

the the think earlier, across sort outlined one questions of key business. to growth I areas you of the driving of four

Difficulty] I cross-sell think it's module new [Technical logos,

Chris Maloof

thank for you the Yes. Again, questions.

annual outlined. pricing and we'll So, were in have the And I'm that operating a just central cadence ever And the we as that this Sean willingness going inflation happening pricing to we then in that part our the to perspective, parts. we two more answer about look to environment, a in answer going model an we pursue From to marketplace. to talk and lever. levers component pay have consistently is a drive important than and high a pricing law where what's that's usual.

Sean Blitchok

But think value, and the is thinking perhaps and connecting the I the of dots this to new bit. outline how cross-sell And algorithm was the Yes. did a about logo, maybe model kind growth getting question last I little price. I

I And to of MeridianLink, go-to-market, what X corner, so, if comes right? when kind a do areas it of relates I think it just our focus are talk to of to those, the Phase are. We balance turning

We Officer, and has who Chief going -- on heavily actually, he's already be starting new more to new have focused a logo. is Sales started

And we'll -- exist we been more they opportunities past. tremendously intently have than From perspective, there in a are the within cross-sell focused be our the portfolio. existing for sell so, cross

of So XX we're modules as into on four average our example. penetrated an

to peripheral add the We new platform. for portfolio, to to a have to we're lot constantly of the looking add for opportunities, cross-sell and opportunity opportunities

about volumes our I think as And cross-sell up-sell an motion. we're example. customers what looking volumes, mortgage -- So, when at that customers, need our -- are we're you we talk constantly to then volume drive

products -- I think five that is of a by a even the the this have is consistently market normal. I other driven levels -- and talked history is we and Chris earlier. lot kind soften, we seen product have. seeing years But volume of new grows. But about if just offsetting, the at as largely it's looked and we're little that mortgage if It the a this bit piece of

up for prepared trajectory, to normal to well to mid-teens our very we're growth that is put grower. think continue which be new the and the I

Matt VanVliet

comments Very second see entered of hiring right. And up Nicolaas' exiting you up of margin a and helpful. following cross-sell run rate behind have of but sort sort or contemplated you. then you on All should of nicely next are pressure on the those and as into on a seems are that expenses, maybe Curious just Thank of sort the expansionary we of up to a it perspective, up quarter new full from plan. the you've that caught already back that bit sort quarter little like and hiring headcount? end little you compression and the headcount catched is continues pick or of through components year offsetting year and to or expect a

Sean Blitchok

the Even I the also little pressure of both. want from number because bit backlog in it of out One of move That think faster. and areas up a of we will think I becomes you implementations margin but things. hiring I backlog in create continue, focus as again, velocity saw that's a Services. key QX, and acquisition, catch point my that to it's is -- with the to StreetShares with but one

think period will we that a up time. I pressure of and relieve over will to the catch margin

Matt VanVliet

taking Okay, you Thank for great. the questions.

Operator

Thank you.

would go at Please question Stifel. ahead. Parker Next be Lane from

Max Osnowitz

Osnowitz for Max Hi, guys. It's Parker. on

when benefits we about ahead Just of are there one you to for see in me. the can of and really us being One the schedule, what the Thinking the to all MeridianLink transition those should cost cloud model? of solutions the of start and remind kind

Sean Blitchok

Yes.

I offset datacenter. So, for is of and of get profit is a X% really next the to is portion quarter. decreases as -- we starts we to the our general year-over-year large existing but And by exit in in that decreases our datacenters we about and X% years build -- gross answer which future end think it

margin sometime payoffs for a it's think 'XX, year So, next I now. a began wash a basically the been for has drag on but while FY gross

Max Osnowitz

Thanks. it. Got

Nicolaas Vlok

don't if we that to and isn't very I'd clients data to future-proof be Sean existing this given this backlog where have fact exiting the a is clients savings, continuing add Parker And decent that, we will continuing me a while saying seeing investment. -- mind a highlighted some expand. center you a So, like something platform story to margin there,

is I'm You implement how with a -- But excited my that are speak that should the expect This a to I going will faster be is about. we're real benefits. connect it be. This that provide And center. are to folks spend margin we those and own everything. also longer-term us how cost security datacenter yes But see we is And from these a benefits would clients. on we in disappear. gross our get level kind and card from increase standpoint to spend where drive year-over-year-over-year. this higher should how and is of This cross-sell. perspective, doing I'm than I clients clients Sean our the position of personally to install excited the and -- the lot data in when a to our

Operator

Any questions? further

Max Osnowitz

thanks. No

Operator

Thank you.

from ahead. be Citi. at will Please question Next go Andrew Schmidt

Andrew Schmidt

strategy the wanted Verification just non-mortgage business. verification Thanks a pickups smaller and had you aspects part you to I And you've guys. add like Data historically. know piece side, growing in other Verification you of where taking there a talk and here. employment potentially about Data have Verification? what dig Can the few for there Hi, The to a Data else that. of growth? that support I the on questions as to my could

So, any helpful? Thanks. there comments be on would strategy

Chris Maloof

the is for Chris. This you Thank question.

in it to lenses. I'm going two So talk about different

And of scale the first benefit to benefit the the the the is, important third-party decisioning. increased are So integrations consumer that what's verifications aspects business. is and for for mortgage there

is that that and marketplace a business contributor our the to overall portion So foundation partner the Verification provides Data major the the business. of it's lending of

are have hundreds those same through and these we partners pipes scale products. across of data of at used our running types are all that So

that's one. So

strategy software providing their is is grow The of promise run other the aspect of our need with clients they part to our business. and our customer tools

even operate verticals. agencies multiple or reporting credit one Our

employment. able business than within set. And less mortgage and solution to that provide running we're to Thank tenant has a or the reduces question. now success -- And are our vertical the for volatility all mortgage three. that maximize you that for them their require run they So just on

Andrew Schmidt

into up but of step Thanks sort we resources seeing, a if more can see you're helpful. implementation perspective. But missed meaning kind into And side and color growth. probably Chris. LOS that talk would rates that, the Thanks, appreciate the current just I you of get if apologies resources Apologies, helpful. place. sort be been that consumer That's confidence, all any in of then lot. put this of a And business backlog, absorbing if backlog has about as asked. of terms the with that the just I of you into in the XXXX we as

Chris Maloof

think we with that the proves I seeing elsewhere, of declines kind out step-up. a guidance are

that guidance, I a holding look as we're positive. say at I'd because think so I'd And

It's is the don't we I services a -- clearing very of environment -- an backlog think that. we and macroeconomic want this, in the a -- in work, this. look backlog velocity I interesting more so just on want we're backlog. piece is time to know but with we're said the a uncertainty. of not another markets. people working socially I've We in which also resignation, there's great back shift

So even to an we're as customers' capacity seeing issue. implement

-- is we reasonable to it can do question, even alone. work -- services will to that that have we'll terms to backlog long that work velocity. continue the continue think And it the itself, We'll a and point But address reasonable so piece. we we'll I work out your of the in on runway rates is backlog growth or based sustain specifically better to of backlog

Andrew Schmidt

you very much. Thank Helpful.

Operator

proceed. that Thank you. questions. we And it further at have time, Please appears this no

Nicolaas Vlok

What our to you. I'd is team. together we close great remarkable. of the accomplished by Thank recognizing truly work like

of Thank be Award. us Spotlight great we I'm fact, our us a the for day. in in reaching selected That were Orange high to continued as today Growth spotlight joining Corporate and continue our inspires confident In you County Association for we'll the performance recently Have and touch. winner on success.

Operator

sir. and Thank And this conference you, Once time, for at attending. your today. for we your this please again, do conclude you disconnect thank ask call that gentlemen, you does lines. Ladies

MeridianLink (MLNK) 12 Aug 222022 Q2 Earnings call transcript