MLNK - Earnings call transcript Q4 2023

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to MeridianLink's Fourth Quarter 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Gianna Rotellini. Gianna, please go ahead.

Gianna Rotellini

Good afternoon, and welcome to MeridianLink's Fourth Quarter Fiscal Year 2023 Earnings Call.

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

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

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

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

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

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

Nicolaas Vlok

everyone. in great the that Thank executed Good with customers afternoon, were on to We for another initiatives join successful XXXX of It's you, year MeridianLink. you having all strategic well serve our our the us Gianna. beginning today. set of was designed year greater efficiency.

great and made year bookings exceeding and software we with the logo wins. releasing result, a full our set demand generated we in we the As cross-sell ACV new XXXX, finishing strong record from progress

capabilities of launches of with product the partnerships a and to had year strengthen One. We innovation fantastic also MeridianLink multiple

to the our commitments of customers and continue and dedication the entire our MeridianLink expertise to team, stockholders. on With deliver we

results the for Turning quarter. our to fourth

of adjusted to EBITDA $XX.X grew our the revenue guidance. end EBITDA top X% an GAAP Our XX%, of exceeding margin with million year-over-year

help and the customers remains our areas environment to also Our ability to outcompete the strategy. execute evolving providing for our that discipline. demonstrating navigate cost areas It a performance accelerate move of lending in our by key updates to demonstrates while personalized, quarter the that QX acceleration consumers X goal frictionless let's business to anchored in strategic growth our an operating on growth are platform experience. With that, of

customers, Go-To-Market drive First, more their capabilities bookings customers efficient operate team X third, the strong with multiple last and with platform foundation have build Go-To-Market grow deeply and serve with years quarter The we platform, and second, another an more of achieved high-value set expanding over customer growth. to engaging empowering continues the to quickly our engagement, communities. Starting to high-performing better and wins. engine the

an by our software is MeridianLink As signed X signal I This the cross-sell our which One. mentioned, mortgage consumer we Go-To-Market to working. platform of lending had was year, solution. In fueled and strategy QX, the for customers record we bookings lending that is momentum excellent

of Next, couple we new are we demonstrates quarter One. to multiple all consumer solutions wanted landed understanding nearly lending modules, The MeridianLink of deals of high-value deals value that customers that the often ongoing to on connected highlight for a the high-value signing with majority the demand our that needs. in cater

chose modules quarter, For MeridianLink AUM solution achieve a lend decisioning one billion on The through customer $X.X MeridianLink greater who and digital ones our was ARR point-of-sale to are improve MeridianLink a in X launched last example, just channel, that One under more cross-selling. and $XXX,XXX of consumer signed our automation significant Access. efficiency and customer new

increased chose capabilities implementation loan to close with This results, in lending a and $XXX,XXX Another our example AUM specific collaboration to great customer implementation involves One. of on services, ARR MeridianLink who an point, as enhanced MeridianLink was our last at with just $XXX to under selected also a would such team customer, is based and growth. On million indirect process decisioning home achieve equity win accelerate update have customers high-value and volume the which like sale growth initial is year. that of through I the to organization in provide This services investments improvements dedicated over from how talent in the on the engaging productivity. strategic made we MeridianLink the

First, we in release SaaS ACV. progress are the releasing total making In highest was year. ACV QX, the

with at more wait points Forum in our are to one than capabilities year-over-year. Last, that April to adjusted clear These the are business just growth will customers create efficient we a transformation our and our valuable MeridianLink of showcase and higher to for biggest This that end goals. look engagement digital enrich help in strategy LIVE! which the QX, XXX additional LIVE! at customers margin in Nashville. in and customers we becoming of engagement ACV. MeridianLink for of gross can we more in expansion accelerate value more the examples create stockholders. engage is basis in-depth deeply the Most progress importantly, our how Second, quarter. forward releasing moments to use can't for we is achieve opportunities of feedback their We few

bringing is XXXX, on more engaging customers to live prospects team hyper Looking with and to services remains logo from focused team Go-To-Market committed faster. our cross-sell new our to

the growth drive sales fine-tuning innovation the strategy. on to we of Moving and acceleration, lending platform One to customers' of motion, product our our capabilities focused the are our digital Critical partner second MeridianLink integrations. area through expanding to

we to significant years, migrating few technological R&D such and in acquisitions. strides, invested last integrating to as have public achieve cloud multiple the the Over

for in increasing that our value While and goals, position, of we the the an remain customers. development we keeps on ongoing platform focused these have accomplished market-leading commitment innovation us is

of This to the new of work integration QX. their delinquency. Now to handling MeridianLink MeridianLink interactions. and we capabilities automatically accounts. today's We MeridianLink is integrated and can to consumers consumers with let's customers our this and needs in-person with user-friendly Collect digital how to expanded In pre-delinquent of environment, cater lending banking wallet Engage example largely through capabilities how the review optimize technology a consumer. our One tasks great evolving debt prefer in identify the avoid end-to-end functionality, cater of collection instead Through

We also a and provide score can decisioning AI, enhanced underwriting, multiple customers their Consumer in opportunities. for more leader our options, custom integration our to cross-sell loans, automated custom increase with MeridianLink credit with Zest scores existing

our Software integrations systems, addition expansion Automation verification In our the insights to an can our to with the AI can we MeridianLink One we capture Through the and Workato, employment our platform. automation and new to or our leverage network addition customers. Ending screening Data employers process available we and for the the infrastructure, capabilities partnering scaled partner platform. lending through customers on from by for Verification to With new background Solutions, more volume within more Workato, ATS accelerate process ATS leading service. of CRA Enterprise we applicant a tracking revenue through integrations, automate

the next area, and innovating for a on total achievement our MeridianLink outstanding so product update MeridianLink MeridianLink provide XX to signed are customers great more teams more that the XXXX, on and an generate how This Mortgage is we traction demand our focus company. launch to like Access is has achieved in of than Access. an I'd moving Before to Access by our example far. and Go-To-Market In we

lending customers partner a increasing are demand and the capture for ways improving retain in their in MeridianLink. are revenues more solutions, updates we to just and few for borrower continuously QX turn, Our help product experience

X to of area of customer. Starting LTV customers platform MeridianLink centered for our in with to ability quarter, their compete, strong renewal and worked successful third designed MeridianLink by customer and empowered for cross-sell consumer road on configurability customer customers our that our debt the increasing markets partner existing component enable this e-contracting penetration wins increase that which the journey Marketplace, team strategy, growth base, capture long-term MeridianLink. our capabilities been with One. automation, succeed the around growth in increases to We've Finally, customer ultimately dealer focus the through critical consumer. In lending to improves announced with our map, sales our a in the added of capitalizing value digital QX. empowering on with fourth the the and greater of the which a ability modules the acceleration for further participate. in share grow MeridianLink clients' With highlights example, module, empower our a for in our an is the Access they existing through module of a customer wallet track This a both customer

existing One. This our serving an platform MeridianLink use Engage focus a and signed for providing directly was main also solutions connected Collect tailwinds. points This on designed customer's We a growing for digitalization lending solutions MeridianLink our value scaling customers finding demand customer of expand onto environment. to to through and proposition fit of with consumer the opening

approval over mortgage under going $X using recently We story. MeridianLink optimizes go-live successful more platforms Credit members gone XXX,XXX a an than and and disparate has and A+FCU now experience This our capabilities, customer A+ prime a consumer Federal process inefficiencies, Through member improving approve decision a the platform's Credit remove MeridianLink to advanced their story lending on doubled workflow success to management on A+ on X end Engage faster with using existing where assets in loan result. rates only a as One. consumer from Union, MeridianLink me Union further Consulting, Insight. Over instant Let time, loans. loans announced MeridianLink and Federal One origination customer live billion the

consistent over a top Sean, to through to growth future want to call Before scaling. of delivered line handing support and expanding and I year levels MeridianLink emphasize restructuring that strategic investing profitability the

allocation, in for investments provide company track stage customers expect of will record the have We propel we a forward. intentional to we inorganically have value and areas set organically made that and strategic the stockholders. To that XXXX, investing capital

the worked on the a demand. which Their growth success to MeridianLink through strategy up ACV empower the continues Sean now success customer what's what driving to team. talk in reason looking focus control, will year. With We've on seeing One. also accelerating to a is Thanks and that, release again deliver to customer empowering and that I'm we are about performance. focusing includes generating journey strong customer tee MeridianLink our strong We accomplish call I to to our guidance. over to this together turn results can forward financial our

Sean Blitchok

you, And Great. Nicolaas. thank

for the Before growth. team the their support remained execution demonstrated steadfast serving businesses also to with a and like best-in-class highlight take diving has position I'd in, quarter. to moment teamwork phenomenal in The to customers services in and

impressive financial MeridianLink an the great Turning the in had of achievement growth, discipline, cost to by our supported macroeconomic of profitable challenging consistent conditions. face achievements a in year XXXX.

future We aligned support to and cost our going to have expand profitability structure scaling forward.

our We also value for stockholders. through capital our generate stock repurchases strategically to deployed

metrics retention of and I finished note, that recurring better want of the XX%. terms performance processes underlying indicators, key annual rate ARR to our in external the highlight performance. net refine $XXX.X to of revenue our and internal represent disclosures million resilient and On our to drivers or ARR we with In net quarter. We QX continue retention a of our

a year however, Specifically, our with of solutions software the even lending rate XXX%. net retention finished stronger

from rate volumes, rate lending growth volume impact XXX%. The processes, primary the for revenue the lower stability sticky and customer is. cross-selling are is Excluding net increases. the to net to mortgage our use base modules, integrate consumer customers of retention platform retention our price the rate how retention probability There was in our lending drivers automate additional more of our churn. and due our The their

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

from has this of as as customers distress, there of an churn customer view mortgage-related our financial we increased optimization result a base. While been lower-value

financials. from As To we forward. focus customers. Breaking logo revenue efforts lending focus existing website. Shifting Software new the on we quarter our million, have depository solution expect generated customers, both driven total transaction Relations our Solutions. of and volumes in $XX.X the trended of sticky increased understand year-over-year, time normalizes, reference fourth We resilience product new see up Investor Go-To-Market to to the available and supplement X% primarily improvement made how go-lives consumer by type, down by metrics and please our these going financial an on market over

accounted software revenue year-over-year. XX% nearly lending revenue for total total grew at Our and X% of

grew driver solutions X% a and our of the revenue XX% total. lending Mortgage-related software software As primary solutions, remaining within lending XX% lending of nonmortgage for year-over-year. the accounted revenue contributed

mortgage-related Revenue Solutions. Software solutions and of by for This represents year-over-year. Verification XX% driven XX% X% revenue, total revenue data total Data those a X% to was in declined decrease which from Turning nearly November accounted from of last driven OpenClose, software total we in generated which of X% was uplift for verification QX. In solutions acquired last mortgage-related QX, revenue up overall year from the and by MeridianLink year. XX% of revenue,

basis gross gross XX%, transitioning productivity profitability. a in representing increased XXX was was technology our and of driven Adjusted stack. QX team Now by improvement margin services year-over-year to GAAP point XX%. margin

like basis, across our basis Go-To-Market reviewing and quarter the marketing GAAP XX%, non-GAAP break decreased headcount non-GAAP declined and our in performance our quarter expenses G&A GAAP a basis to fourth costs GAAP sales of increased driven compared sales were both to the and XX% on a the Before and of 'XX. On XXXX. X% efforts. compared R&D marketing on Compared and in quarter, compensation the while non-GAAP I'd fourth our by increased to increased operating XX% non-GAAP expenses. down primarily changes of The continued rebalancing on XX% operating basis, to basis to basis. the fuel quarter increased year-over-year a a on fourth XXXX, a operating changes

in down such R&D public now completed significant areas investing support cloud. we've to are ramping while the in the migration our like technology projects, We selectively growth other that talent to spend as

moving GAAP operating expense tax a million. non-GAAP certain operating Now this assets. On operating optimize allowance negative million overall XX% beat The a On $XX.X nearly year. which $XX.X and million our includes income represents $XX.X quarter the or tax this a strong adjusted which we representing EBITDA million, margin non-GAAP valuation of XXX an structural plan the recorded loss structure. to improvement majority discipline, basis, GAAP driven work was of on deferred by EBITDA $X.X a basis for on noncash net was a to recognition was basis, of margin, basis, performance. our onetime in was income and $XX.X cost of points continue demonstrates to was a This year-over-year our cost XX%. adjusted of million

of of $XX.X cash and operations flow million with third end ended free and quarter, $XX.X or was from driven Now equivalents, quarter. statement. XX% $XX.X $X.X revenue revenue, in cash quarter or balance the the cash by stock decrease flow million for repurchases. Cash million of flows cash the the was of from XX% pivoting fourth to fourth We and sheet the million a

consumer our look anticipated our Now to that happened XXXX full credit across Overall, base year tightening on deceleration the volume executed initiatives growth. let's results. counter we scaling in and at the well

the our help a that are decision ability customers challenging seen have operating to resilient past stayed our and cycles, demand we environment As and in made to continued purchase our growth. With customers solutions drove live in take to our accelerate strategic designed faster performance.

of For solutions. revenue up the Breaking our full year XXXX, we generated million, total $XXX.X by software revenue X% growth down year-over-year.

software Our and XX% year-over-year. at of total lending grew for nearly XX% accounted total revenue

driver accounted XX% Mortgage-related lending As for within grew year-over-year. remaining lending our revenue the of total. the contributed software solutions the revenue solutions, X% of primary XX% and lending software nonmortgage

data by up and software XX% represented verification these and Data nearly Revenue solutions. from was from to total by mortgage-related XX% This was decrease accounted Software year-over-year. Turning our Verification of X% XXXX. In driven XXXX, revenue, of revenue lending MeridianLink total overall XXXX Solutions. solutions driven total revenue revenue of for generated in which an XX% mortgage-related XX% declined in XX% solutions

We market. the are seeing in mortgage volume recovery

it However, to we still minimum that will to take drive above for revenue such grow time expect their volume growth. commitments customers

As that control. can staying what focused recovery we're on we continues,

wins Go-To-Market lending by Our depository successful platform be consumer strategy cross-selling lending to that customers the to continues as discussed. mortgage demonstrated our of Nicolaas

challenging XXX turn for the in gross even Adjusted team was increased our is for evolving consumer the the One stack. productivity increase The to from most primarily a GAAP customers as they opportunity power our needs year-over-year of by our point modules, led to to caters capabilities. That me are a revenue by primed grow improvement suite of other margin XX%, environment, was the in of lending business on which technology to brings MeridianLink. Transitioning consumer gross lending services margin profitability. to XX% basis platform. lending the for add grow, customers existing driven and of demand XX% MeridianLink XXXX. continues end-to-end of the which the back representing

sales increased I'd reviewing increased a expenses. on have GAAP suite basis, our a industry-leading as on infrastructure in non-GAAP and the basis scale marketing scaling support on a and operating solutions generate increased increased XX% basis down we line a like future believe expenses year-over-year X% commitment in basis, on R&D in Before non-GAAP and now XX%. The previously partner to growth more basis. place And our and our increased marketing in to discussed GAAP across XX%, a non-GAAP capabilities. We accelerate and demand investments non-GAAP demonstrates operating and G&A performance with operating change top both XXXX, our basis. sales growth the XX% an of our and on break we initiatives. a expect to necessary Go-To-Market while to GAAP

balance margin operating GAAP to XX% free was was million. For flows were negative statement. sheet and a income $XX.X was million operating was million, $XX.X of representing for from $XX.X basis, margin. the our cash $XXX operations basis, million, performance, flow and XX% flow a $XX.X income loss or year. adjusted on cash and XX%. On GAAP overall non-GAAP million XX% of revenue, a was of EBITDA or On non-GAAP the revenue And million or $XX Cash net

the business, be deleverage year. funds that that earlier to generate repurchase Board or the authorized program in can used invest to stock pursue continue We our acquisitions, this under repurchase

as year, X issued provide moving and our release February our controls today. previewed I our in around to on the to filing an guidance Before update year the this in want for earnings X-K internal noted

no to related specifically any we still auditors, to not financial customer over change our working our of expected ongoing, report timing controls in with been weakness expect prior to material we XX-K contracts assessment change our of is results, the billing. There to regarding a diligently period do previously restatement Although upcoming no after expect reported the financial statements, and has XX-K. and revenue,

we been control on company, improving environment. our continue as As focused highly public to a mature we've

So address company We these for QX to for XXXX. the deficiencies. increased scrutiny, has we right our processes to resourcing of pivot and And and place remediation initial for the efforts now guidance full have the and year and improvement. believe those been remain uncovered underway. I'll additional audit areas remediation have in guidance

customers loan consumer saw of Until last interest tightening the in levels, As related solutions. we that respond market challenging the credit credit substantial volumes and our see just a a customers we to some in the change our operating main through are year, software of our we these rate drivers settlement expect capture to continue environment. drivers,

As part update will of is around external lending incorporate our there forward. points, as forecasting comprehensive environment our data we industry going expectations we and uncertainty increased accordingly process, the

there drivers that volumes, in to accelerate from Aside are in have additional we control invested growth. strategically our performance

One We logos our will evolving to and ACV lending meet to continue prioritize capturing opportunities, cross-sell and exist the release MeridianLink today. accelerating consumer innovating needs that new

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

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

and represents recovery revenue because our mortgage-related year revenue, around to their end a above decline The market color year-over-year quarter expect push therefore, percentage. same growth. mortgage impact the we around revenue. take and full To expect of committed the for XXXX guide provide we time, the volumes total will to to first XXXX that approximately customers our revenue contribute XX% of the it minimums in For revenue the the expect mortgage-related of more drivers

revenue the both we to year-over-year in non-mortgage side, the as consumer we expect market .Understanding XXXX. expect growth momentum normalizing drive verification modest employment the dynamics, of these will in screening economy data reacts On lending

other While MeridianLink loan auto winning are customers the to types through consumer industry sources continue One. used and signaling plan headwinds continued new we cross-selling impacting market,

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

full the margins $XXX to of midpoint. representing range the year EBITDA our be expect adjusted and XXXX, For at $XXX million we adjusted EBITDA million, approximately between XX%

strategic our growth areas have future inflection reflects do operating We as point believe commitment Our that scaling. to adjusted the believe to acceleration. in for XXXX EBITDA investments for not meaningfully foundation an discipline our guide contribute built represents and growth continued we past

expansion that, forward. our We line. With going have the in to growth, support like as about expect are margin we which structure to optimize cost impact aimed to capital touch thinking will, incremental we turn, allocation how on I'd volumes drive bottom

execute focus and continue to company wrap to up, to difficult reiterate the years. want planning repurchase to stakeholders. To we strategically over with a the be All we to thanks we've We resilient add in reprioritize to that a how M&A something presents customer value While I'd like the environment put operating done team a M&A to knows for been environment. market and how XX are our shares, as has throughout continuing active to opportunities. the customers first, on

We questions, XXXX, continue in of in of scaling profitability. With I Nicolaas, to over and and it prioritize our any organic operator. to take that, to initiatives expansion I'll happy and Chris your will are turn the growth resulting customer-centric

Operator

Sklar Raymond from question comes the of Alex [Operator line Your James. from Instructions] first

Alexander Sklar

compares around ACV the how of or the you be would prioritizing help from I to your kind backlog of frame helpful that size last how much yet commentary that year. release. aren't bucket Sean if kind that could bookings you -- of today have Nicolaas, just and it implemented

Sean Blitchok

is thanks question. This Alex, the for Sean.

we optimized So I that don't we've as as know, been gone. backlog, disclose will has but you backlog say well

not bad to have, little It's with new good problem CCO, a problem we at different. So have. backlog look our Dean, a a bit to

number we ACV at fastest tenure, ACV up highest to we've in the as least, release QX I that my that the think date. put saw release and

very, going it's So very well.

inefficiencies. to refine services space to eliminate go to structure to the continue We faster in and the optimize

we to through that the execute have 'XX. backlog FY need So we

we -- I in but and I and backlog. up sales before, an to about really equilibrium talked continues ACV between motion about getting going selling customers have think the door. add And release out and to the -- it's and creating them door that this our you Our running

So a we not much side. time period We're services we in There's on of not the believe backlog building that's capacity balance 'XX. have right too the over unmanageable.

the a So balance for year. right as 'XX we have we believe

Nicolaas Vlok

fine about it. tuning really It's

Sean Blitchok

Yes.

Alexander Sklar

Great Okay. color one then Got there. And it. for maybe just Chris.

given the sales then saw months, last Just XXXX from kind outlook can Go-To-Market over growth just relative you productivity from last that's about the looks the we a standpoint the and to the talk how XX-year productivity force XX now in And embedded anything few a standpoint? of quarters?

Nicolaas Vlok

happy Yes, to.

and So organization well year, going have talked from about in started to conversation order-taking a we about organization, we an that path. back underway -- a hunting to moving the we're

So to where teams customer respective in possible ] create as last that cross selling is well leveling talent working that logos pipeline the up base. can bringing go we year as our us out take with and down [ and new saw new and

productivity, of sales lot to year. are turnover moving a on into last XX. many we up higher but their saw those they're expect of we level still now So representatives through of that desire flow and And in a ramp,

Operator

And VanVliet BTIG. from the your comes Matt of question line from next

Matthew VanVliet

baked in within Fed your that or that something consumer from level you throughout what year on projecting as of assumptions year rate sort you the we of today lending back the areas. gave of kind on you're consumer I guess, seen that on for where rate some And a then and the end or out us are interest be the indication most you You lending year? have maybe funds the But up areas look details some of that, as ahead, sensitivity? the weaker certain stronger might where gives

Sean Blitchok

to thank Matt, been the the mean, question, that's exposed it's first answer question. your mortgage, I you undoubtedly for most.

Now contractual our have well as minimum business commitments. you model, does know,

so is been sensitive DBS. in downside, terms has been business that our the it in MCL of sensitive most the terms was it it -- in most of volumes protected. But our And has

contend well. 'XX having that as something with we're FY to for that's So

Now a that's around. it's turning already story

continue become through So of we continue volumes matter have the was that revenue. The It's to and are be been to think healthy. a consumer do and volumes increase mortgage impacted, will but those impacted improve when just seeing already, that, year. volumes we to continues to accretive

as look talking across But loans, the business you're picked our volume you about know don't growth of personal package. up slack opening credit has whether auto for If a account very cetera, et portfolio, upside we the well, card, you consumer see this that ton really or in without or total auto.

part hasn't -- making auto So that's inventories think well. new new is recovered. inventories market But is used well. The the car I and into car are downward hasn't yet. them seeing cars, have progress pressure as the The making good the we as that or happening, on happened used

consumer really used really -- talking of been hope comes but auto for. we've us a does back, as consumer for last the before is, or we to to see back that auto that it the the about So couple come quarters. in does just for It's timing have market would matter growth of

Matthew VanVliet

update Where should of terms there? on some R&D you capacity they in probably And more got think are headcount talking obviously, we in people product think guess, about percentage of down you how the then importantly, were of migration a in I what that And to? of we as And go-forward the about about roadmap as are January, being process, terms sort what do the at repurposed focused ahead? that on revenue. of an helpful. a but Very curious Okay. basis, a bit coming stand of

Sean Blitchok

If X resources riff look in last on over the ] cloud-native rebuilding talk of I'd least you the at First, capacity were were X be years, the one focused in the the about the included to to stack at largely been like [ that it's perspective, R&D tech plan one. included what resources years,

which about second how goals was of another maximum were go-forward same. be made actions the allow on that aspects earlier and completing, from the can next capacities. consumers, future-proof solution enabling we number talking when that's which is element rewriting it our about the the then perspective, decisioning. plus. So With of capacity the interface level, outcompete base a X One happens we code automated user And our is the this we for to remain investment. decade significant a customers the year. From It's largely the for our are those

than had we more that which approximately of delivered to we we platform that then per how examples between interconnectivity decisioning the the in apart. And ML Access, build value continue notice that So adds And our over XX our advanced last and together to number continue sold We it we we highlighted. augment. Nicolaas' there's on period. functionality a

Engage, So how to create our ultimately marketplace. can our win marketing the we're we solution, clients and experiences so connecting one enable those bespoke our solution in to would be collections automation

Operator

question And your Research. Scott comes Wurtzel Wolfe next of from line from the

Scott Wurtzel

that that, as rates. some this of customers. touch to mentioned customer long affecting the wanted retention sort sort you expect on of to settles expecting probably wondering some churn I'm you that the retention trend move And of of to the top expecting dynamics. rate continue of from know out, of any of we year? so, just had it's you're dynamic know lower-value we you're continue? And might sort year? when increased that I wondering And mortgage account Just And through on sort of just if if it throughout kind just I what how

Nicolaas Vlok

Yes. Thanks, Scott.

And this last time. customers in kind our to of which away what period we're was quarter long of, see tail in X, the for almost going of number be a quarter the and that into us about that shift reverse. we financial for a end consolidation depository strategy of So a It's been -- IMBs a from total the total, Go-To-Market that I've need more think in count. talking at distress, is to with or customer base are from I another quarter the

given are that, even Now levels that We're sticky our very high. still churn not a business.

And financial so customers away would we've redesigning in that contracts, as allowed example, opposed not as be best walk an interest. to to our

question that. about would Now say timing, we're to largely your through I

over was in that last quarter, we about QX, customer X.X -- Over about If terms of the this you churn. think in space. mortgage little a had X% of

and but up those good consumer in did we're to So not so. where see the churn you little of as bit can of getting think significantly a cleaned point it we're spot. We are a

going of combination within striking mean, little we're world even the churn. bit of bit a to it's churn. the think best operate and distance. a of in companies see with a -- I It's always I little

pipeline We're ever needs I QX's feel really total the new to year logo. XXXX The that think in a new delays actually, is And we numbers. believe about, of very good logo show be we minor stronger though is logos. cycle. But it the sales count terms in to in coupled than new up piece, seeing it's doesn't going been. customer with be the good really even

up that comes of that back come total then customer kind quarter, out So count up start bottom If and next half second quarter will of next the we'll floor. again. I think to off not see

Scott Wurtzel

kind M&A for of Thank mentioned could Got you. environment. I'm it. to can That's give a super helpful. going kind just if on more looking you allocation, little in you're back and looking as a be the follow-up And capital just detail us wondering the talking bit what that environment. quick you at then you about of start

years. gone of color last a out bid-ask kind relative seeing and to X started of looking, you've be on the Any that helpful. would what If kind you're maybe spread perspective from

Nicolaas Vlok

Yes.

amount significant preview amount a XXXX. fast. stock, So stock in maybe I'll of just We really repurchased just purchased significant of a

continue authorization do we that, do as board to to have presents will and We price stock that opportunity. the that

continues very don't at we So imply want prices good that that's believe to that's share a number one. I -- the to be that value.

the so do continue will that. The bid-ask M&A think And mentioned to spread. you I we market,

I situational, MeridianLink. it's absolute of a for us market, starting in would made right? But Y Whether still that or something. to not talking talking to or that, mean, value the I we're the close. upstream varies peripheral way about because or But Z widely. terms where company, or to technology. as about way it [ was for going overall do they're cash okay, we downstream in I see burn to something the X realization think the investment you're been want conversations and of new They're have very exactly have ] kind that or mark off a them asset think you're those starting you're of

a really rather terrific was now. at surprised out right a assets sooner fragmented market. lot of lot so looking And us. We're there's if wouldn't than a there it later be in I those of for very And

Operator

And Kennedy the line Cris of question your Blair. next comes from William from

Cristopher Kennedy

fine-tuning Can there? you think to One. more details about on little I MeridianLink Nicolaas, talked bit you give a you referring what were

Nicolaas Vlok

ability mean unless it, it where was kind my we're great to good context year our Sean comes is by improve that's MeridianLink the on the processes, in mistaken working on provide where the what our relationship to from. about the in spoke document down, it. tuning I of services expand If a balance I'm It fine-tuning. XXXX was services comment backlog consulting strides, feel companies also One. the think goal I found to missing when future to this implement to business, in and going And making we Yes, of call, fine organization, the I'm free better, the

Cristopher Kennedy

may it. No. misheard And I have

to for a So for guys is revenue there that. difficult Go-To-Market environment. business done think a is One lot You the opportunity environment about about be? what thank MeridianLink? just revenue a normalizes, think as in that way for doing But this operating then MeridianLink have you a there what way is changing can growth to the growth And the

Nicolaas Vlok

Yes. Thanks, Cris.

upsell. not For price and cross-sell X% right [ X% mean, algorithm our I new growth now, and ] we've from of X% veered logo,

hoped. well was we you logo new We would the if have price more maybe against I low. 'XX, component. the FY a in of the and And think churn performed upsell that we put little context that component than saw bit

not of our tied the knew so. is driven we completely kind to countercyclical out are that -- that things the components took do had our of time are are of we there a the opportunity where to and So but that we control, at out control, are we invested macro approach

the into in we're a this And and got can, an I already long think I that, and lead tighter, faster that upsell by annual getting we at do revenue basis. that back. a to logo cross-sell again, see tighter. delivery be and revenue is on new turn take those so time grower happening. minimum, them getting market a is XX% in that So mechanism come it's believe The going to We've and to bookings we getting which motion believe is start

I buying come volume also the the just think leave those consumer. And of right decisions, control us now. things they a -- customers are very platform. will world-class don't It's so We're that the don't back. I patterns we're the focused don't often. our The on

use more I the continuing from we customer focused happy come to so as we're can and The will selling products volume component our think to we what into the on of And creating out motions installed what control base, journey is us, expand extremely more and building sell, success-oriented go. and customer now.

against ever as XX% in stated But has Now business if to more environment, grow moment anything, I still think IPO. since to this the than compares XX%. look that use I you the would environment, in at a it's safe at we've more say, in this the this our ability normalized the probably time, operating

Operator

comes Barclays. the Saket question And of your from next from Kalia line

Ryan Powderly-Gross

you. LOS business? all in whether some the taking talk this for Nicolaas, first about the And consumer with for questions. talking more? changing for competitive Encino on about Powderly a Saket like Team, Thanks maybe environment Ryan you bit Barclays. it at here the Could is vendors that's at little

Nicolaas Vlok

competitive not see where don't have message changed, in approach know than I We a much our have a do things and single change base. or offer to there, a us your folks platform to Ryan. if message. prospect rates find what to enough And the that say Chris. changed We Encino Yes, a see of landscape, question don't into specifically, tend more anything don't all. And platform them or with scenarios to point we would to, have others. customer much happy of differentiated in is win I have you add run have at Encino. we We

Chris Maloof

right. That's

Nicolaas Vlok

Yes.

Ryan Powderly-Gross

super for needing Got it. you. helpful. a follow-up That's Sean,

expectations on how for the of Some I'm factors the this context understand volumes, is year? help guidance. specifically, amount you're the us your MBA great growth this just full forecasting of line product contribution detail much And what expectations into the in volume that expecting year? curious, can from going into in you Thanks. your

Sean Blitchok

Yes, can. Ryan. you, Thank I

I think at -- data to at shift you take the MBA. look the what are Those CUNA. forecasting. external we the have -- We well, at closer it's look all honest, if an points. be actual viewpoint, an or to so. And you to external at our look We continued been change. X get interesting they better and months period, And learned the is I've the just

has over I tell will I last it's where say down a I own where do is for that X with for on heavily. I think we And this was all then year the consumer. and that have we I of question, that we recovery those considered But And you CUNA that answer half everybody our know. rely -- but things incorporates can't MBA it the it that's that the so X% can don't MBA that mortgage. now methodology X on come year. one was forecasting is last around I year. half of slightly more would or normalization is, internal banking that higher second XX% in think half, this months.

the is we've becomes and in key the story. MCL higher of question at to that is the to then start us a The to reflect baked consumer. overall really the believe what for revenue is of part get component market. when of story mortgage going accretive does above the with And other minimums terms we're So that again, your back to is the answer comfortable rate. We timing, in when come

So those the are data X points.

Ryan Powderly-Gross

guys. Thanks, clear. Super

Sean Blitchok

that he you get a bet. Yes. Thank make you. just sure chance, you owes a remind that Look, had -- we Saket, if

remind just make so he me owes Saket And that to sure something.

Ryan Powderly-Gross

] I'll to add that [ Thanks. his ledger.

Sean Blitchok

thank you. Okay,

Operator

Koji comes question Ikeda of from of America. from your line the And next Bank

Koji Ikeda

need I see to a to need the ask taking and to commitments minimum out kind the of to we see guys, minimum see follow-up would loan volumes volumes market in volumes to the Or thanks for contract think questions. on the that maybe contracts overage of are be the going met? wanted to to we to have for understanding how mortgage break when about and the Hey, level? might there? to sort What kind out commitments of we

Sean Blitchok

let's for and revenue -- you on customer-by-customer a it's total But that take our our the so population we think XX% revenue from it population customers, from approaching particular, was basis. minimums. not in contractual revenue Koji, had of perspective, of mortgage, about of Yes. or if take a coming

Now that's our that say but customer-by-customer. varies it XX% customers of to not were,

we for is quarter see to done will see we've the of a in that probably most we'll space. minimums analysis quarters mortgage then in our the upside the a X pickup and start So or customers,

half are through lot in the if there's year. a even mortgage, volumes us, though the recovery upside the you go of of and the in front model in back some recovering not we for kind the half of So see

helpful. that's So hopefully,

Koji Ikeda

side. thinking Sean. Super for rate EBITDA here just just and of follow-up The there revenue guidance for X% the that, growth is helpful. a on guide about the about on Thanks margin. a And question XX%

to macro environment the that upside? revenue is drive Or business the better should EBITDA loan reinvest might or Would down to line? interest thinking rate margins, how bottom about be we higher So that flows EBITDA any incremental growth lower that looking volumes?

Sean Blitchok

Koji. Thanks, Yes.

probably it's think I say, gross if look for of margins, embedded our to continue mix both. we've the improve. most would they at you part, a But I And that.

dollar good pass portion high would a mean through an I guide, just already think incremental you a of Not -- this number think -- level, bottom that start at through to the improvement very mind. EBITDA line. my saying the would we I if from to -- is we for I but guide if you in saw good dollar, the

now for be of so company. if while said to target, will, you and is rule next I've XX a what a our And -- is

and start business. the to get threshold, we're we have that to going to next threshold. I some to sustain level, work as the that's accelerate And we at -- to so -- you

transaction. paid per Some products are our of

see are as improvement of you'll bottom it cost to so revenue it But dollar make as we as can the And see dollar in be them. enough won't be so that a instances line. meaningful in we goods flowing EBITDA the There for through easy where will in. different just comes

So helpful. hopefully, that's

Operator

question comes Andrew line from next of your Schmidt Citi. the from And

Andrew Schmidt

wanted I of the point just Nicolaas, to a ARPU just maybe software depository higher put a opportunity. a a Sean, versus get win what as situation institutions, Trying the buying pipeline disaggregate which lot. us Maybe what's a the what help seen in you specifically ] there. within controllable. you've -- net on Maybe new all perspective pattern is could might mentioned, kind Chris, cyclical be obviously, better finer activity appreciate on the from I the new lending from for and side, net you to just sense RFP [ could talk what's perspective. detail. Thanks about that building ads rate for

Chris Maloof

Yes.

sales position If So our as had sales this at and capabilities, marketing look our done we're consistent. in have quarters. than pipeline we a been in enablement, superior built the X say, in we and Chris. new ourselves investing is last prior largely seeing And velocity win the X in to we've rates quarters, let's

motion we're in our remain from Go-To-Market a taking movement order here from making So to flight in taking transformation market perspective. and

Nicolaas Vlok

I in pattern. or I build actual institutions And depending don't Andrew, some accelerate some logical on on are think decisions, see -- financial inherently that necessarily depending pattern or the We buying there's of in could And cycle, used know cyclicality our cyclicality. Yes. financially, -- that think but I I word the behavior. pipeline where the see economic perhaps don't delay a don't know I from a do buying you the cyclicality of that buying

Andrew Schmidt

more get heard origination, of this lot loan gathering stuff We versus demand makes to needs Understood sense. but yes. sense. a It there's and deposit it. focus modernized makes just on That for

Nicolaas Vlok

your I understand yes. question Yes, now,

Andrew Schmidt

Right.

Nicolaas Vlok

shift there's think both of now. and I don't depositories I a matter from just it's a buying think or away into

to shifted even have away So deposits. into from shift cetera, retooling, I don't think et that with kind more people the taking software, of focus buying

Andrew Schmidt

the you which impressive. up, more expense like balanced. it to like overall sense. midpoint, investments. But And actions investing slightly That clear, some growth have cost I a I actually you growth, down looks this And maybe investment. of the guess announced is, is then on the flat roll-off there areas of terms in are appreciate question the expense -- and some lot of that. at makes Very the is could accelerates pretty double obviously, you

the guys. versus job incremental line? Are this good lot, of over in a terms other Thanks years, like we pretty to done investing, really of You've the just past a see there et dropping bottom areas cetera. one, couple could investment

Sean Blitchok

Andrew. Thanks, Yes.

and talk a year, marketing XX% growth numbers This to track, and in marketing the XX%, is we've through got handle in And I that We've think XX-ish Last G&A. sales we're handle our things doubling XX% a We've think the terms in was that down. sales funding self-funding to growth belt, got business. And are know in need I the expense. we spend. we're tightened discretionary trade-offs of places year-on-year. we where on -- percent I the we we're other year, quoted the it on and fund.

should So back foundationally, to from into shape And good come we're growth starts an shake point I income pretty statement as perspective, out. of into again, be, market at feel where starts to the the top scaling. algorithm that about, we the line think

in I position. a we'll very be think good

Operator

question the Lane Stifel. last comes line of your from And from Parker

Matthew Kikkert

questions. taking Parker. my This for Kikkert Matthew for Thanks is

all? help at the into And fit You it MeridianLink How you Go-To-Market strategy? the shifting strategy the more mentioned team are into year. of hunting does One a the mentality this platform does accelerate

Nicolaas Vlok

our and outcome. hunting customers' all the base. how going positioning understanding goals, is And is drive company's an challenges for team around that and ultimately solution solutions One to centered I then drive out MeridianLink our we our think customer effective

an really the all The message the on having One to story, drive an it insights effective team arm from of is So I the other together to base. come and with sales same to the MeridianLink view in it maturity digital can right? like decisioning, of maturity, all story that that FIs for needs central aspects as models motion. and Go-To-Market customer part is key one

Sean Blitchok

the the And the customer depository you of ML X base, Mortgage customer with detail into announced script that well, at in taking plus base. modules if customer look access, some the wins we've success of as cross-sell our the

there. it's I really coming think together well

Matthew Kikkert

to of in That are incorporate demand you're terms any customers looking more there from secondly, you your budgets What that your makes AI tools from it? their for ways you And in AI into are and XXXX. sense. hearing

Nicolaas Vlok

Yes.

There's is It's question. there's demand really they but consumer the at aspect to a interesting with also sentiment of not the done it. services aspect with to the some financial using in comfortable within AI we least start I'll So in perception basis, have or it, researches a are in a on regulatory AI their how comfortable decisions industry make terms consumer to behalf. on there's

those closely. are So things we some watch

done to all decisioning. date We're learning into what bring to cloud X consumer partners. partners have years, as of last internally needs format type lot is is few to or our our with we're service a are what of we R&D we've a location. And are design willing Now, closely doing bear, we consumers leveraging And over using spent to data as ChatGPT type of perspective, the single part a perspective what from insights service for customer we've FIs millions that our and OpenAI at, work to an of from of program we're a dollars the that consumers, tools leveraging machine take been our a next perspective the models areas evaluating then we've looking number level. the an

they where back the tool year, on And to us organization to their before key in offering them AI focus outcome. And we rhetoric clean bring and the narrative think efforts and to a for to peers data key we a array we that models have are of of wasn't then which versus the place it very any hardest last our meaning a role IT the performance use element core and of around is enable takeaway more the put years that perhaps metrics, a perform more of. investment officer's I've efficient. is language present customers aspects a can to to unique The true their and different build all I'd lending they're on use in the say to market we other So optimal is, around single performing should more and large be that. top efficiency, the how automating then a key over see how can is seen I for an candidly, like part have model as

Operator

are Mr. no further at There please questions proceed. time. this Nicolaas Vlok,

Nicolaas Vlok

today's Thank call. for attending you

day partners industry They As Great their serve continues my experiences we and in team we that's that's to commitment express in better I'd to out. deliver That's way close, and like the what they innovate our customers and each teams well. customers, that why to for ongoing apart a gratitude what we the mean focused and take on - day stands note. we to -- remain other.

was year. pleased the the and HousingWire to In Tech this at XXX Award say start fact, Mortgage received our I humbled team of

Until and day. We to trust their partnership. award will our a success. deliver we're for and Thank and next great winning continue part our grateful of you have customers for services to products time, being

Operator

you for conference and conclude all Thank Ladies Thank for does gentlemen, participating. that our today. you.

You may all disconnect.

MeridianLink (MLNK) 5 Mar 242023 Q4 Earnings call transcript