Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to MeridianLink Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please be advised that this conference is being recorded.

I would now like to turn the conference over to your first speaker today, Erik Schneider. Erik, please go ahead.

Erik Schneider

Good afternoon, and welcome to MeridianLink's Fourth Quarter Fiscal Year 2022 Earnings Call.

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

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

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

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

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

Investor press in You is posted can measures non-GAAP find included our website. the to reconciliation release, which GAAP our Relations our of to

With that, call Nicolaas. let to the me turn over

Nicolaas Vlok

Thanks, for QX was joining bookings well with for everyone. software closed the MeridianLink's for in the us Thank We and company. record you Erik, successful year XXXX year another both today. strong afternoon, and history. and good executed

QX. logo during our One of Meridian consumer MeridianLink capabilities an powerful The impressive existing solution momentum, platform and drove MeridianLink as new cross-sell XX signed our we customers mortgage to

to many see of proud business. the from are achievements performance the consistent the year of thrilled are We and quarter and the

and MeridianLink revenue XX% margins. XX% exceeded up million to adjusted year-over-year in EBITDA guidance $XX.X GAAP QX, with

our year-over-year the business, notable strength in XX% fourth We consumer in the side see continue of lending to quarter. up

to and our Our business thrive. model customer base resilient continues remains

lending more offer ever clients. digitally transform are to frictionless need on lenders the to than their and focused experiences Today's

achieved across as efficiencies are We are well We've to that in an loan customers to than continue improve the environment. their we portfolio consumer fact seek growth the as of nearly XXXX client their platform uncertain customers competitors. business sales year proud that healthy activity expect experience, fast MeridianLink XX% achieving of through our of try as

remain pay to deal clear this that and external lines, conditions not outpacing deduction slowing pipeline in expectations, order want continue consumers, far We our and the our delighting to We our numbers. year, efficiently more more capabilities but laser-focused close customers customers, competition. we on to seen wallet and platforms expanding I time can and share capturing attention ensuring have be serve so market across

quarter speak performance our In year full a guidance. year few full and Sean and minutes, QX XXXX provide about will Xst financial and

several give areas updates our on growth will I of that, acceleration. three Before

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

our mission, our the and QX, the and results vision of In throughout of we key company refocused cascade to and culture catalyze MeridianLink the business. strengthen have values objectives

Our speaks our be experience financial and experiences most deep for better mission on focus to the in customers' clients. to trusted our services creating our technology space platform relentless the

borrowers. out customers important competitors best efficiently by to the power financial for moments vision life's offering stand experiences our Our ensures amongst

and in represent objectives customer now era meet we a to organization are needs values consumers. fast, Our on how our with interactions focused frictionless digital scaling

daily turn are do, the driving everything is focus delivering heart reinforce a customer our from stronger at and customers also values success, of our commitments on together, in success. Our that we being on improvement, which

further the organization. rightsized profile we that long-term This our mind, values restructuring in have focus and on and customer-centric near a areas with a customer completed our of those realigned enables success. exercise resources With cost

scaling innovation, initiatives, today. go-to-market will accelerating of savings, the review and will Cost a fund restructuring, product fueling enhancing we growth as result help of areas in all this that services, investment

cost practicing the this to realignment emphasize the environment of our will into face want Part an financial while needs. to continuing also momentarily, of implications changes invest meet Sean are but customers' to to committed to in I includes discipline go our we structure. uncertain how organizational

the our one, announced senior several transition team. of of For Operating and retirement members our responsibilities Officer we to other the leadership of Chief

I Before wish more our speak Alan his I about retirement. organizational in want changes, to well

that have the MeridianLink to of as work we stage for the transitioned of by drive build together years second first he its people to into we growth We brought was Bravo the had growth. XX leadership several upon the opportunity Alan's and as in with years over times last forward. one come going faster foundation will Toma

to and of engagement the lead Officer, new our board. across a Chief teams and also and Customer services success the We support, creation customer role, announced productivity accelerate

the We streamlined with have also business operational their reduce aim the teams complexity. and across to both leadership

recalibration XXXX. organization with to cost summary, MeridianLink and initiatives of this customers in profile In on our strategic more and laser-focused be greater positions serving efficiency

updates and operate go-to-market and last continues set go-to-market engine and the for The to innovation, and wins year build sales to to efficient an growth. Turning quarter. over the drive foundation the high-performing fourth we

We are sales that board marketing pipeline to most team seen and implemented the contributed the we structures and investing robust have across in leadership to-date.

that software cross-sell go-to-market momentum working. As MeridianLinkOne, I platform these We solution. and XX propelled mortgage mentioned, strategy see lending our of and fantastic signing we customers to the bookings our hit consumer is signals record lending

bookings tremendous of our the for addition, in upsell fourth motion MeridianLink, and quarter. a is opportunity representing the cross-sell XX% In

new growth customers continued our also in win algorithm. the to market, another key of We component

will capture Balasubramanian MeridianLink's the ability the our with leadership in finally, new we our to market. Suresh’s Marketing Chief to share to excited team bolster we add software Officer, experience on executive focus more and benefit Suresh of generation, as added And are demand

our new quarter cross-sell deals, these eight high-value of the platform, MeridianLink and Around demonstrate One. by by landed remainder opportunities. two-thirds with the for that multiproduct deals were upsell we in ongoing deals driven to the demand driven Moving customers

market customers with optimal the business decisions functions as the beginning the platform make lines growth. customers the data and and silos just to result, of lending benefits and One. integrate in The our the key breaks is capturing separate lending MeridianLink This of necessary down accelerate a that of can

needs Our case for MeridianLink organization in the XX platform entire a One connected under offering addressing came serving years. in across members than been power looking union needs point better members of for One with consumer solutions a billion community. varied was by the support the With management, wallet. the also credit more from lending enables assets of debt that's to $X XX,XXX its and over digital its platform bundling

designed MeridianLink the customer leveraging union faster, in selected MeridianLink. great and for One, This opening of resulting is tandem in credit capture more and is both example The MeridianLink consumer. volume platform revenue MeridianLink with to more our how a business

a the and year XXXX, on necessary as bullish engagement pipeline to had the we customer solid finish next will of have conclude, recalibrated which our expect the to for improve our fuel we business To we growth. only remain in health phase

monumental platform's on of security, our example have area expand the public last to we expansion. for how expanding XXXX Moving have increased a prime as MeridianLink scalability was been year our customer of platform, and the heavily investing innovative hosted bringing our of base. for focus, of environments to cloud. completed from few we One the transition capabilities, the the speed a This is second functionality years to to our solutions

Not to early full customer, lending cloud our for QX, transition, also it build ensure cloud customer we is needs. does for to faster the allow significant only provides scaling improvements continued have in a for us but it make a quarter a internally. process on the executing technology Since to faster the process

platform. deploying our and We have build functionality faster product across times, been heavily features accelerating focused on

transition the through security capabilities inception been a cloud remains The of a cloud public of Finally, are our our standard infrastructure, add to able example success complete and driver we just pillar expanding our product commitment which to is our one customers more value of today. innovation, to platform's to efficiently. testing since has

Engage. In automation to the campaigns cases new for in save completed marketing the resulting time triple-digit marketing quarter, valuable MeridianLink launching enhancements our to many features ROI These in fourth lender. we in solution,

launched Platform enables needs. functionality and through on in our offering digital or business This lending decisioning offering, the address less. StreetShares, lending integrated mid-market lending is XX building We days business, a business advanced lightweight through that up also Atlas new to solution MeridianLink innovative capabilities acquired the running recently

expand provides began piloting the relative the Insight, a of power fourth our with scorecard to we decisions. peers, competitive intelligence new customers data with customers in quarter. MeridianLink more The drive To scorecard further business tool, unlocking performance business metrics against

revenue we for By examples, MeridianLink. expanding our which and of platform's drive new capabilities as cross-selling, seen aim together to in and volumes more drive customers each these attract

grow Finally, and participate. they customers markets compete, to MeridianLink which succeed in the empowers in

record win customers have enabling a client We debt capture of share their track greater and clients more a wallet. of to

is of lending and derived having integrations help differentiate We capabilities hundreds that powered network accelerate do Part marketplace. by this on partner proposition process. best-in-class providing of an our of built MeridianLink's digital the through customers our value solutions by from and partners extensive

of talk to this increased about new capabilities from fourth and like channel we quarter. the announced have I'd in that few a integrations the

provides First, Equifax, depository MeridianLink of work centralized integrated that is One a data. the partnership and now number a commercial with income from employment

now verifications, MeridianLink streamlined lending MeridianLink availability timely, those more number leverage to the customers lending platform. mortgage well-informed a on consumer, instantly also Lending for supporting experience customers expands MeridianLink work the can a of process. providing One integration This across

leading our expanded data In Another verification the we quarter, partner the capabilities part integration screening with screening from CRA highlight social Ferretly. media through provider, background for of an business. customers fourth comes the background our

offerings gives This continued data within capabilities verification It customers, partnership the AI powered TazWorks within demonstrates or by from TazWorks expansion social technology of to platform. screen media, partners. our our market-leading through ability

interest of the lenders. for home a consumer and as saw and in integration mortgage solutions workflow leading nation we finally, And with provider fintech home lending, an increasing FirstClose, equity equity data announced

one their in experience savings According total proof consumer partnerships empower These experiences therefore XX% equity by time improvements can XX% to and points applications over with that consumer and MeridianLink FirstClose, and customers are improve decision XX% growth. increases in solution, online our lender of stats customer leveraging pull-through. and

Transitioning catalyst integrations as now share journey, in partner to from taking customers how would to for functionality key improving MeridianLink examples growth market. of selecting customer's the and highlight add like the I our the

won customer align product we the indirect a In from closed lending deal result customer, billion as of strong well footprint. the taking process our fourth that We union competitor the customers' the opportunity a roadmaps sales with growth the strategy. capabilities, $X credit a and references with well-known lending with global quarter, a

goal players largest move volume. best capabilities the down the their This entry market, break and quarter from Another the the solution, ease consumer products. for demoing customer win After away with blown was in to the bank with of win into demographic customer a offering smaller the their the our new demonstrates interested flexibility with younger main use logo of which was the and clients, MeridianLink aligned to opening grow of empowering institutions.

is customer on above customer. funding lending. Higher end win signed innovation, over well the applications, union To ability we new this automation most advanced a decisioning through product empower level In today. for and our an more shows growth competitors enables a XX% the our auto billion that decisioned features revenue market targeting $X credit perform to the case, on touchless in faster in results what that

Before the I conclude, very welcome Sachleben of I'm MeridianLink Mark to to Board excited Directors.

guiding to impressive remarked, his a our technology As experience transformation. combined addition him team growth perfect with organizational milestones, we our as expertise Mark's Chair continue financial our through Board makes companies innovative

We deliver now initiatives. a benefit emphasize is with borrower to year lending growth healthy whose continues to the having MeridianLink aligned how high-quality, experience ours. of a again best I and through consumer resilient double-digit levels directly from create investing want our in profitability mission customer to base strategic consistent

and of We investing have track areas capital shareholders. and that in inorganically a intentional value allocation, provide customers to organically record

conditions of on focused I out continue today. XXXX, macroeconomic highly on that face three as of in areas well we can staying in we we the what In did uncertain executing XXXX, the growth control laid will

our will engaging needs digital opportunity. to exceed and customers continue capabilities meet prioritizing with in investments We that part by lending platform the expand revenue and

off kicking and of customers our and clients communities. drive am next serve momentum growth to to silo compete better with Our confident their empowering starts in the this I phase for MeridianLink. ability forward our

turn Sean With about to the guidance. over financial results will call talk now our and that, I to

Sean Blitchok

call today. Thank Nicolaas, the and on thank again you, to for you everyone joining us

and Before year. fourth in guidance, and like reviewing echo achievements quarter how financial I am the I'd to our with the results full impressed

culture Our results and I are sincere effort to and team my impressive reflection want express that, for a first an of gratitude.

we last face phase In year, of what the and macroeconomic changes in predictability up the Since control, monitoring providing we in on joining on put how are balancing we're important hyper-focused June us $X MeridianLink conditions investments for and market transparency can execute enter have TS term, to uncertainty, to accelerate of structural growth. of strategic cost and seen to beyond. drive business. the to are I affecting continue well discipline growth closely to and our Near place billion next and

we With that and going basis frequency organic that believe reporting can allow the of on annual are business. be our drivers a growth the the retention reporting XX-K. revenue, into net to will annual recurring quarterly scale of customer metrics of visibility found that more said, count going in the growth these increase We rate forward KPIs and rate,

or We and finished a rate recurring QX million ARR of of net revenue, XX%. $XXX.X with annual retention

net and rate impact finished stronger of at Specifically, however, retention revenue mortgage XXX%. excluding lending year solutions our XXX% lending consumer the volumes, software our the the from was

and increases. rate our additional due is, churn. how to as is for are net and sticky There modules, integrated the rate growth price the automated retention lending the our volume of their process drivers customer lower becomes, The primary more probability base the cross-selling in stability retention

As his an finished in total our Nicolaas with On total customers solutions. grew impressive basis, an the had organic remarks, new customers mentioned logo In we X% luster year-over-year. using wins. we quarter, X,XXX another fourth of quarter software also

and Investor a in installed over To have and is on these increased This by represents ongoing into website. base not and solution Relations please understand how financial available made the term. type, past our upsell primarily near departure the cross-sell the focused periods reference time investments go-to-market metrics of our trended supplement on

financials. total revenue driven XX% our generated in consumer quarter by year-over-year, lending $XX.X fourth product the We Close. increased acquisition of transaction of our strength to volumes, up and turning million, Now lives primarily bill Open

growth across declining business face report We lending market. of the a the continue consistent in to mortgage

Close Mortgage-related solutions, software revenue nearly year-over-year. software accounted inclusive for revenue total. within XX% lending the The and Open XX% total XX% solutions. Lending accounted of of grew for software revenue of

that of fastest total out XX% the year and any revenue, the Data closing total consumer XX% data by was quarter decrease Excluding revenue XX% XX% of the driven for impact, year-over-year, 'XX. represents FY lending year-over-year. solutions. accounted which in in for revenue rate with software XX% verification grew verification nearly revenue This mortgage-related growth declined software

see can total year our mortgage-related was from last of you revenue. generated As and MeridianLink XX% results, revenue XX% down in overall

our on our in service. wallet focus loan and taking win to be market and superior adding continues customers market mortgage a While the headwind, share enable through to to that share speed remains solutions the capabilities client

adjusted XX%. representing adjusted was Moving Accounting was to stock-based profitability, an of gross XX%. margin was margin GAAP for loss gross GAAP compensation, $XX.X XX%. operating income was a million, million million. On EBITDA net $X.X and basis, in QX income $X.X and EBITDA $X.X Non-GAAP was million margin GAAP operating was

compared and the basis, in XX% a non-GAAP in investments more our fourth down breaking XX% invested quarter, Now last R&D, in we more sales on strategically year. of to and marketing quarter the

the the third million the in cash quarter statement. sheet fourth of Operating $X.X balance from driven cash with the Open the We free $XX cash cash quarter, by cash end flow equivalents, unrestricted million down free cash Close. a and was flow of ended million X% in flow $X.X the quarter flow million to margin. Turning fourth or acquisition and was $XX.X and

XXXX year. let's acknowledge we Now headwinds important year full to results. the stronger-than-anticipated much faced look last It's at

year of representing our with the XX% entered For we revenue. total one, mortgage-related revenue

of and mortgage rate volumes volumes interest drove market. approximately drop first The refinancing of speed the and to level the XX% the down in purchase increases half XX%

new mix, insulated contract were by collapse and in we immune we activity. the not ongoing customer to additions, customer were structure While our

an while year we a mortgage million, by in headwind a business we million environment. up to $XX absorbed the the execution total grew $XXX we proper full related of revenue the of $XX generated rate For year-over-year, of million, great still X% XXXX, example unpredictable face

Open X% solutions, the solutions, Close total inclusive software accounted Software and lending For nearly within of of Mortgage-related software for for total. year-over-year. of Lending XX% revenue XX% accounted revenue revenue grew

lending XX% areas is consumer grew by the our of impact, outlined year-over-year, today. fueled the that revenue growth algorithm representing by Nicolaas Excluding that durability

nearly and represents XX% XX% mortgage-related revenue for year-over-year. XX% software which by verification of solutions. total data verification revenue, was This of driven accounted revenue total Data software declined

market However, types our CRA customers. a into to as non-credit of the our volume continue outperform result we cross-selling

Again, year in down before. results. XX%in the generating come has MeridianLink mortgage revenue this our and our revenue compared meaningfully of headwinds the were But XXXX, clear in the years, now of XX% overall XXXX portion to over XX%

mortgage market, momentum inevitable With normalization in the remains business the our of healthy strong. and the our pipeline

operating stock-based Non-GAAP million operating million. profitability, XX%. income For the $XX.X $XX.X was and was GAAP XX%. full for was compensation, adjusted year was for income margin margin gross Accounting GAAP gross

basis, EBITDA On was XX%. income an was $XXX.X of GAAP adjusted net EBITDA and $X.X representing margin a million million,

Our compensation, marketing demand full product in generating margin the Adjusted XX% our profile road reflects allows to more we R&D, discipline, compared XX% and XXXX. which more to invested and invest and year us delivering cost map. our sales in in ongoing stock-based for strategically

delivery time Both more investments a we expanding our of focused commitment year innovation. through the with and our on represent deeply was customers at go-to-market engaging our on capabilities through platform which these ago, made this

expenditure continue a long-term its on expect individual strong examine investments, each these and on we'll We merits. return to

update over the year-over-year. in software quarter again projects in an delivered XX% on our were Provide services, higher investment

designed ACV greater by operations the We released. also forward, This efficiency. to exercise realignment more serve with continue to restructuring going an and the see was only our progress of compound organization customers in improvement will accelerated that

our generation allocation provides for for cash XXXX, $XX.X was XX% shareholders. statement free of was enabling ongoing margin. protection turning cash build to customers period and cash or value and in million $XX.X the us this cash year strategic uncertainty, flow for cash capital free million flow while Now to the flow MeridianLink's full operating flow

and XXXX. guidance the guidance QX initial to pivot for full for now I'll year

We level new continue decline the expect module increasing customers in a mortgage among to remaining the of impact customers that at more penetration and the adding offsets than volumes. existing market

increase It's worth the mortgage that in XXXX. interest second sharp rates of during noting quarter the occurred

challenging. in of year first half be most the comps the the So will

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

This same For for the of $XXX revenue between to full $XXX and year-over-year. in to period XXXX, XXXX. expecting are X% $XXX the million, an total year X% compared estimated we million million increase represents

revenue, expect mortgage contribute the of to XX% mortgage-related of the the market the anticipate XXXX and we quarter continue level For approximately throughout for year. first revenue to that

To around MeridianLink lending this color of mortgage expecting $X around through capabilities provide growth XXXX momentum million to volumes Close, our more of to continues drivers the improvement the runrate the We're the we're month. into base total revenue, accelerated year-over-year the growth on with in our by depository cross-selling the from One. expecting excluding per we've contribute revenue. maintain seen, lending Open slight Pairing mortgage-related which and

the decline tough mortgage-related of On side, XXXX. in beginning continued verification impact the given a of revenue we from the comps expecting anniversary data are

verification We highs. solutions to off from hiring market flat of coming of non-mortgage-related software screening the expect be revenue headwinds data employment a in year-over-year as result post-pandemic

The consumer to growth the setting year. momentum level We improve these lending expectations break that of transparency this year. out and continue components the will guide implies for

landscape. themselves We for an better more financial are products for consumers evolving lending position as expecting demand consumer

of the One. to MeridianLink the opportunity There accelerate leveraging by company is and upsell for ample cross-sell growth power differentiating

innovative and a access hundreds platform's whole. will empower growth as partners for customers With volume our functionality MeridianLink of faster for to and the

estimated margins EBITDA midpoint. EBITDA $XX basis, be guide, $XX the approximately a EBITDA the to representing at adjusted and to XX% turning of expected between non-GAAP is million Now quarter first on million

EBITDA For the representing between margins and$XXX the to estimated million, of at expected XX% $XXX approximately be is midpoint. year full EBITDA adjusted XXXX, million

viewing of we disciplined investment from scaling, Our strong EBITDA approach the savings ongoing our the the a example capital guide allocation. to investments, back This business, is the go-to-market enhancing capabilities. leveraging reflects and into product focused fund on restructuring. these To are

investing are areas next stage examined to thoroughly of potential in forward growth. the and have MeridianLink demonstrate that into propel We great

XXXX. by end MeridianLink significant to as the reiterating opportunities for like we I'd enter

our our return consistent shareholders. optimize quality profitability base. resilience track model capital the and deliver and business our on value our invested and superior will on demonstrates to customers of We record of MeridianLink's and customer proposition of growth

growth. more At solution than to that the day, now digital the ever is end need efficient of customers an designed accelerate

we leader and that been have We decades continue that deliver to in promise. providing for solution on the will

Nicolaas, Chris over and I any With operator. happy that, and to of back your I'll the questions take are it to turn

Operator

Your Koji comes Instructions] [Operator from question Please Ikeda Bank America. of of go ahead. first

Koji Ikeda

taking questions. Hey guys. for Thanks the

from a Just me here. couple

wanted the be in for growth the for here shape the asking of for should of revenue first year? the full year question, Thanks. the First guidance in guidance the quarter about that's full growth specifically, any we about revenue ask and to XXXX, really embedded and in about the sort seasonality thinking

Sean Blitchok

we it's Koji, quarter-to-quarter. Hi, seasonality, you go as is definitely as There Sean. know,

– up. than a the the be will trend QX lot and or doesn't QX think I do how of does see yet it seen a QX. QX to softer is and typically we But market with we

the to environment. with built business lot a question. that's variables how Obviously, trends and answer there macroeconomic with is it in So of model overall the our your

Koji Ikeda

ask of uncertainty sort wanted wanted reorganization versus really wanted reorg period business? for you're of follow-up rightsizing about was given taking evolution I that the Thanks the And of Got facing. natural today. the the ask, you're questions. you it. And a any of capacity the Got news just the talking then, to to it. is guys. ask this that to I on – Thanks

Sean Blitchok

again. Sean Yes,

I When the think natural you acquisitive a past. evolution, been actually. it's highly a we've mixture in of say both,

is this some our to natural to there realignment, operational action aligned so And take get I efficiency, to needed better also customer. redundancy, on. cetera, efforts a reorganization that et is think we

velocity that to on We've about that take from that an and a time. this to necessarily long lot matter a effort for example, So our and time quite We've of products away opportunity accelerate if efforts product matter towards you diverge things aren't been market lucrative. revenue. in products to refocus that customer, as taken services, towards the as for an also talking is this development the the to

inflection it's think was but point I business. it us a necessary for as So, a a mixture both, of

Koji Ikeda

Got guys. taking questions. for it. the Thanks Thanks

Sean Blitchok

Thanks, Koji.

Operator

you. go Please Thank Parker from comes ahead. The question Stifel. Lane next of

Parker Lane

Hi count, just of and I the the appreciate the XXXX guys. mortgage wondering am us customer backlog the you disclosures. taking of for the I Thanks unit if can all context look fourth the in and and in contemplated in associated what's quarter questions the new a sense what sales In like give guide? Thanks.

Sean Blitchok

Parker, think question I Can repeat to unit apologize. Did relates I drop? he caught it I already as you the the sales on it units? mortgage.

Parker Lane

on yes, us sense XXXX. how mortgage curious of itself, additions the new you're business trended customer have there unit the in you what associated and was backlog Yes, sales, contemplating give I and if can a

Sean Blitchok

Yes.

you and that lending grow in can It example, as perspective in was, will I give well. to data that 'XX mean that is of from for script of was component a seasonally huge I at some Close. is QX in QX, throughout So my There related mortgages XX%. but a Open

as complete And well. your kind 'XX in be that as will of answers second fully come we hopefully, easier and guidance. to half a saw lot incorporated there will a prior, in and FY the fall kind As million as QX, be mortgage an about disclosed we've from think see comps contemplated QX so, will that a XXXX I of $X so become growth end, that of and question. middle is of associated month you And into that's with free mortgage our the

Chris Maloof

to that I on have the a front. little sales add

also investment deals that referenced into to accelerate year. that put an we increased the the increased is And the sales on Open platform, referenced So going depository selling we sales of note in where going to consumer saw front biggest which close. see to we expanded the team our that as on now is ten on the that And are cross-sell dynamic acquired and sales investment through we have Nicolaas' acceleration in more shift focus the the base. discussion you're going for mortgage

Nicolaas Vlok

by I But has I to fair say think, that bookings Chris, mortgage most new also think it's been successful or our customers. QX

Parker Lane

it. Got

existing follow-up Okay. with us launch then to just near-term more the the curious of a the sense opportunity maybe business base you that. there? is some inside give of color the was Appreciate the of customer unlock features I Thanks. bringing that can here. value MeridianLink on a additive of And table the you're and quick what if to

Chris Maloof

that customer and talk base. to of really about their small small the opportunity showcased to bit service the demand the a to the institutions business. that in businesses serve little to Happy answer the and interest of demand TPP and middle-market demand these ability

investment part of StreetShares. StreetShares So and this is our thesis in

package lending in. hadn't market Now as what cards account to we business business heavily acquisition built opening already a they to for a serve further and we're up a StreetShares our prior institutions in cross-sell we previously invested from that broader to had these motion, as invested combining what with with have business credit to provide

them to a grow do for help it's them it. and their opportunity So to us business great for

Parker Lane

Thanks questions. the Great. taking again for

Sean Blitchok

Parker. Thanks,

Operator

Please go Scott question comes from you. ahead. Research. next Wartell Thank The [Ph]of Wolfe

Unidentified Analyst

Hey, thanks my for taking good questions. afternoon and guys

understand terms reallocating in Thanks. reduction? of of some of back – that to the wanted dollars to restructuring those where sort you're you're Just and from just going workforce the saving

Sean Blitchok

Yes, Scott, Sean. happy to that. Be answer

in script scaling technology I automation around think we're it's but pretty clear on, think very initiatives. I the what focused specifically

focused We getting right. services are on heavily

investment will So there. there dollars be

the and broad streamlining innovation. the well go-to-market meaning revenue as in go-to-market not invest to just product operations go-to-market, continue and but We processes as sales,

those focused will There though there we're so dollars more investment even that R&D have be allocated well. on as tightly And being we dollars. there's

use restructuring just restructuring notice this planned you'll And isn't take this – the to continue dollars. investing. only dollars We a isn't the had and just – a already

This this reshapes the clarity that an forward. as business isn't more get in and think go initiative is we cost business I really So just focus a and that the more play.

Unidentified Analyst

quick at margin, quarter on want it, looking of sort down year. and the flow. just conversion then however for the at free Got in mean, and a or I the it. follow-up year-over-year And cash you to look

about think little you can color wondering give cash on should just I'm we into free XXXX. a So of bit if flow going how

Sean Blitchok

Yes, generous of bit – customers a flow out or they light. deferred typically had this Free is we how payment some reasons terms, not There well We is other say, more I things. income had a again. was cash operating various do free cash flow. in that of is so cash little That QX as for had some deductions put mix that, as in Sean what taxes. terms some

focused better, expect similar, and 'XX. cash if not we're FY for on very So flow would results

Unidentified Analyst

Thank you it. guys. Got

Sean Blitchok

Yes, thank you.

Operator

comes question from you. ahead. next Thank go The Sklar James. Alex Please of Raymond

Alex Sklar

the strength wanted I in about to non-mortgage ask your lending thanks. solutions. underlying Yeah, consumer

think accelerated the Can as all And what's just clarification up just higher organic? close growth I that talk about did contribution? was a progressed. year the you that Or Thanks. non-mortgage any on quick volumes? driving open

Sean Blitchok

can this is non-mortgage start. the of Close. hi, from no Alex, There acquisition And Open I is Sean. Well,

strength So at throughout The relied data the if year. on the etcetera. it's analysts as We the lot a – of for consumer, sources, a that's whether we're starting sources it's do same point. think, as looking I has auto, whether continued Kona,

growth to expect XXXX. slow in actually we So the

same not on I levels the now. still growth what But expect the we don't see we it's of growth. market Hopefully, our basis to that's in am incorrect forward. of right It's the that, think but going we Now in grow. XXXX story going

Alex Sklar

as exactly the I of curious one regard? in date And then, around But prepared terms of one remarks any service revenue, to to parts to a the up your time in in there. talking – some accelerating result specifically, reorganization And questions. to initiatives of the and terms what And answer moving Great. came of the this Okay. to follow improvement team? your that stats changing just kind is in of want of up earlier the to your on of

Nicolaas Vlok

cradle handoff practice double-click is services Nicolaas, more part on be from is the that all project grave little We me structured let practice. to had restructuring with doing services delivering And handoffs This bit. we're and that just of the where on will of practices practice a the doing be live a project. functional our will to basically Sure. organization part the of services areas, a to in moving – and training

teams. between of of knowledge the within and between be of specific efficient to building foundation handoffs level. solution our for or practice more integrations we the the areas feel next backs minimizes to implementation see scalability hand and services scaling It's types and handouts future It the and

relationships in to to specifically located that – complement elsewhere. with can the on build implementation you the positions practice also areas, out future partners It better or resources

where more head say So became future from that got let's a a to we perspective, wanted the of we it's size count point of kind for number factor – efficient become and gating growth. in in, to

Chris Maloof

just of this right? reiterate better I heard a in year-over-year Yes. And example terms good we is This were QX, ACV continuous to want both a earlier. improvement, of point. release. little Alex, you QX So very XX% me say for and

doing just in this to But faster so, we in are We're time reorganization the better And the well to services. revenue. more is service. next to in get us step doing evolution drive efficient

X reduced months time. We've to quoted I that continues the X I and over you that hopefully a X to on dramatically and to have think project down I go live past to average. really on that and hope personally, average to months in talked X We've get

Alex Sklar

for the Great great Okay. color.

Chris Maloof

Yes.

Nicolaas Vlok

implementation today. then that's managed and services. And consulting implementations Nicolaas maybe on last in XX% of on, comment set one the in of from before business also that our take lines is we run and typically the being kind second from professional services our leaders of would organization up cycle two the two we One move services is a, is here by a practice standard business

ready for next the We are operator. question,

Operator

Thank from you. question Matt VanVliet Please next ahead. comes go BTIG. The of

Matt VanVliet

taking demand for that when not Thanks as MeridianLink of years target was the institutions nature consumer in then, it, whether couple leaning some guess lending I it's the of go-to-market borrowers in are some projections and the Sean, that can of growth look it's question. Insights laps mentioned drive 'XX better things evening. I financial One, of maybe just a from of automation you perspective to maybe for towards from good it into kind of functionality help maybe marketing a like ago? the side you some or the maybe you additive falling potential around their products in maybe slower and guess, the more Hey, on

Chris Maloof

healthy that is thing like lending question, happy I'd answer. you well, slowing and thank the real to consumer for looking I'd to when quick remains know is, it historic argue forecasts. Yes, One to at the compared growth economist's levels,

Now can One to the is MeridianLink about economic platform customers flexible of it. that about enough do about situations. your love question variety a and our help what we I thing broad enough it's we where in can

world and continue we'll connective look deep tissue helping fall profitably deposits our Engage up – to that them grow leveraging base lending that bringing expand clients and right cross-sell the efficiently solution to we're to in consumers to we're both motion. as or in so with credit our forward unions going to an their example automation solution effectively together our we're like that they we now our and how more build market place continue out can lend help So in and opening as invest marketing is base, and our of

Sean Blitchok

Hey Matt, it's Sean.

either, about see I talking demand from right? Just still really revenue, to to add, demand transaction doesn't a So, that we a that's the going where equal It's back, tie very when right? perspective, from macroeconomic environment. revenue was be really healthy

to if at start et couple some downswing that upswing, so, an we exposed quarters. last we're the cetera, transaction And healthy been demand see level has level, for to

mentioned, We Chris the increase looking continue. that we're for new always and will, and to pipeline increase opportunities as backlog that will

Matt VanVliet

you've wanted How maybe functionality deeper successes some added product par realizing I And attribute helpful. customers little from Very talked the and dig the of competitors. functionality some not you into on of – I those in cross-selling maybe the of customers many versus that there. that to existing grown how a guess some Open on about deals with mortgage is of much or only some to expanded has Close your the and do Okay.

can time it is But efficient by maybe cost-effective has system than little ripping expensive a and lower together, more out have older, been. and more when demand a bundling systems a it bigger, they

Chris Maloof

Thank for question. you Chris. the is This

at are Close Open at year. we XX, look from QX of the On in acquisition those said, element, completed see, I least think benefits a the perspective, that a we to when we're That with yet was within perspective required that resonating the story functional on create when heard power the was for consistently that how silos customers, I bridge those experiences what bespoke I consumers. solution regulatory from cross-sell, speaking a from late to the helps FI

and their debt bought their a Nicolaas in vision wallet that has to the mortgage types And clients of relative talked qualify our between we to for their the aspects increase spending have that loan to connective capabilities of help are for into and/or the we other optimization that where in about our customers. end loan invest debt consumers refinance continue value feature will financial we tissue expand to past

Matt VanVliet

my for questions. Thanks taking Great.

Chris Maloof

Thanks, Matt.

Operator

Thank ahead. you. Suisse. Credit Please from comes The question [Indiscernible] of Pat next go

Unidentified Analyst

This Thanks environment question taking MeridianLink lending mentioned despite I lending is Pat believe to unpredictability ask volumes for macro healthy general is wanted last for the pipeline. quarter, in I is volumes in XXXX, in from my Tim what team. Chiodo's assuming some you in a

Sean Blitchok

that mortgage. didn't cetera, what and QX. assumption that to credit from in – We consumer don't the I down a we material split there see a QX mean in is into auto, the then, same as cards, in terms for And We lot to of about fairly Sean. personal in has QX. QX of it's from I lot change consumer no we been talked et for – QX. change XXXX, break of the split Pat, as Hey XXXX saw

well. So as going I change into 'XX, material expect don't to see

Unidentified Analyst

Thanks.

Operator

Thank you. go Bob Napoli next question Blair. William comes of ahead. The Please from

Bob Napoli

disclosures. to for you really record bookings you on quarter. where mentioned more then disclosures. those color or ago year around maybe the the just the and the That's would – question. why stands the out you it. really, color the Thank in little Appreciate Thank some maybe color versus, any that pipeline Maybe a helpful, the say break software final you be fourth The helpful. for a bookings pipeline on had a record

Chris Maloof

is ways. increase capacity it One is, Thank for of This the we year-over-year, am continue the Chris. organization you sales I to at responsibly. looking our question. two in

feed at ways continue to new capacity. We us for that look to attack to ultimate markets

I'd plan. So year-to-year is line with our say this in

aspect. one that's So

It's – this is second about with investment in about the we talked really building for foundation then the in And our sales and that general. scale.

we're of thus, the them and So increased to the to our training the solutions. sales onboarding starting working clients benefits some to of introduce already with and success reap

supporting out. – to we It's more on forward, improvement line pipeline as in guidance far provided. has then So that a growth quarter-over-quarter And Sean just work the that's as QX. continue why continued and about pipeline we're seeing the laid our continuous Sean execution that with our in looking

Bob Napoli

your maybe Great. cross-sell? more – important cross-sells? – And cross-sells contributing bookings One are mean, And XX to I becoming percentage and from are then, is – what to how the how the outlook of important One, what cross-sells, for your ability is MeridianLink or MeridianLink

Chris Maloof

our logo, in base, modules in So in those for our to us various accelerate a we're I like investing this which of believe were maintain XX% areas ML to average of invest to into is X.X see in Nicolaas' script, is that it the opportunity right? up that XX selling that continue then I'd new expand. out heavily ability customer execute the a to and taking our laid customer and across functional step We'll By out invest so bookings sales. back, for tremendous opportunity customer leverage continues One, areas. business

from I well customers, MeridianLink platform forward. improving So to an value connective sales about our perspective, that from our between the types loan with and selling increase the what just includes focus talked going R&D tissue on to as One training as

of then bring together our financials achieve valuable in summary, and result all which in tremendously is One MeridianLink will the to customer and promise the that business. So

Bob Napoli

Appreciated. Thank you.

Chris Maloof

Bob. Thanks,

Operator

[Operator Global you. of Please go Schmidt Andrew Instructions] question The comes ahead. Citi Thank from next Markets.

Unidentified Analyst

for white LS This and consumer the to mortgage? is [Ph] David more how know Schmidt. space on competitive Wilczynski Andrew evolving on I'd and for like that's environment,

Sean Blitchok

money conserve I'd and established players roads. their or startups, business fairly those in say has three over right cheaper, on down consistent changed less it even investments saw size seeing we flow and lot quarter-over-quarter been from competition and heavy of the that starting the years about and was as it's look organizations to to cash I'm we're where last a and perspective, see when year-over-year solution of avoid point less perspective, is

Unidentified Analyst

follow-up gross between Thank see and savings a the XXXX? then, you. margin improvement. Where should in we regarding continuous I have OpEx cost efficiencies And expect to and

Sean Blitchok

Yeah, thank you, it's Sean.

or mixed. I to entire across be be whether thinking cost of I because some have about we be thinking are or right? think mixed OpEx will So will it's about going functions, our of support other it think or you of company, you're functions the efficiencies G&A services it inside – goods,

story, to cloud My that is migration guess it story, go of just cetera of faster. because goods, et from primarily are fixing will cost opposed to we and public data OpEx services be the as the categories

short So it will term reinvest an the to in but we efficiency is faster. story we go – those

towards So OpEx I be think that the goods. and weighted ultimately, heavily it cost of more will

Unidentified Analyst

Understood. Thank you.

Sean Blitchok

Dave. Thanks,

Operator

this Thank are for time. no to back turn closing any conference There questions at Nicolaas further I'll the remarks. you.

Nicolaas Vlok

to heartening. our Thank forward you, you with customers, and I other the what together entire partners operator. here thanking Their by And close quarter. I'd like accomplishing to is to again team. commitment next MeridianLink we're speaking look each about

your week. and you, Thank attending a support great Thank appreciate have you operator. We rest today. your for of

Operator

this the for participation Ladies today. and and for that your your you. does please conclude We ask thank disconnect lines. gentlemen, conference you you Thank call

MeridianLink (MLNK) 1 Mar 232022 Q4 Earnings call transcript