Investors with an interest in Technology Services stocks have likely encountered both Alithya Group (ALYAF) and MeridianLink (MLNK) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends ...

Core Insights - Point Predictive announced a new integration with MeridianLink, enhancing fraud prevention solutions for the lending industry [1][2] - The integration allows financial institutions to utilize Point Predictive's risk scoring and reporting capabilities within their existing workflows, improving fraud detection and streamlining the lending process [2][3] Company Overview - Point Predictive specializes in fraud prevention solutions, leveraging artificial intelligence and a proprietary data repository of over 87 billion risk insights to enhance lending confidence and speed [7] - MeridianLink provides modern software platforms for financial institutions, focusing on digital lending and operational efficiency [9] Integration Benefits - The integration features AutoPass technology, enabling lenders to automatically approve up to 80% of credit-approved applications while reducing documentation requirements for low-risk applicants [3][4] - It helps prevent 40% to 60% of loans that would default within the first 6-12 months, addressing significant lender losses [3] - The integration includes over 150 alerts to identify various types of fraud, enhancing the fraud detection capabilities of financial institutions [5] Early Adoption Results - Early adopters of the integrated solution reported a 45% reduction in stipulation requests and a 38% increase in loan conversions, demonstrating the effectiveness of the technology [6]

Core Insights - TTEC Holdings (TTEC) is currently more attractive to value investors compared to MeridianLink (MLNK) based on various valuation metrics and earnings outlook [1][7] Valuation Metrics - TTEC has a forward P/E ratio of 4.63, significantly lower than MLNK's forward P/E of 48.45, indicating TTEC is undervalued [5] - TTEC's PEG ratio is 0.27, while MLNK's PEG ratio is 1.63, suggesting TTEC has a better expected earnings growth relative to its price [5] - TTEC's P/B ratio stands at 0.88, compared to MLNK's P/B of 3.06, further highlighting TTEC's undervaluation [6] Earnings Outlook - TTEC holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while MLNK has a Zacks Rank of 3 (Hold) [3] - The stronger estimate revision activity for TTEC suggests an improving earnings outlook, making it a more favorable option for value investors [7]

Core Insights - TTEC Holdings (TTEC) is currently more attractive to value investors compared to MeridianLink (MLNK) based on various financial metrics and rankings [1][3][7] Valuation Metrics - TTEC has a forward P/E ratio of 4.39, significantly lower than MLNK's forward P/E of 47.24, indicating TTEC is undervalued [5] - TTEC's PEG ratio stands at 0.26, while MLNK's PEG ratio is 1.59, suggesting TTEC has better growth potential relative to its price [5] - TTEC's P/B ratio is 0.83, compared to MLNK's P/B of 2.98, further highlighting TTEC's undervaluation [6] Earnings Estimates - TTEC holds a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while MLNK has a Zacks Rank of 3 (Hold) [3][7] - The stronger estimate revision activity for TTEC suggests an improving earnings outlook compared to MLNK [7] Value Grades - TTEC has been assigned a Value grade of B, while MLNK has a Value grade of D, reflecting TTEC's more favorable valuation metrics [6]

First Quarter 2025 Review May 2025 ©2025 MERIDIANLINK, INC. ALL RIGHTS RESERVED. Forward-Looking Statements and Disclaimers Information in this presentation and the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future ...

Core Insights - MeridianLink reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.11 per share, but showing an improvement from $0.06 per share a year ago [1] - The company posted revenues of $81.49 million for the quarter, exceeding the Zacks Consensus Estimate by 0.67% and up from $77.82 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was -18.18%, with the company having surpassed consensus EPS estimates only once in the last four quarters [2] - In the previous quarter, MeridianLink had an earnings surprise of 14.29% by reporting $0.08 per share against an expectation of $0.07 [2] Revenue Insights - MeridianLink has consistently topped consensus revenue estimates, achieving this four times over the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.10, with expected revenues of $81.91 million, and for the current fiscal year, the estimate is $0.36 on revenues of $329.81 million [8] Market Performance - Since the beginning of the year, MeridianLink shares have declined by approximately 15.7%, contrasting with the S&P 500's decline of 3.8% [4] - The stock currently holds a Zacks Rank of 3 (Hold), indicating it is expected to perform in line with the market in the near future [7] Industry Context - The Technology Services industry, to which MeridianLink belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

MeridianLink (MLNK) Q1 2025 Earnings Call May 12, 2025 05:00 PM ET Company Participants Gianna Rotellini - Senior Director of Investor Relations & Strategic InitiativesNicolaas Vlok - Chief Executive OfficerLarry Katz - PresidentElias Olmeta - Chief Financial OfficerAlexander Sklar - Vice PresidentSaket Kalia - Managing DirectorScott Wurtzel - SVP - Equity ResearchMatthew Kikkert - Equity Research AssociateMarc Feldman - Equity Research Associate Conference Call Participants Nik Cremo - Executive Director, ...

Financial Data and Key Metrics Changes - MeridianLink achieved total revenue of $81.5 million, representing a 5% year-over-year growth, and adjusted EBITDA of $34.8 million, with a 43% adjusted EBITDA margin [5][28][42] - Free cash flow was $40.6 million, equating to 50% of revenue, and cash and cash equivalents at the end of the quarter were $128.9 million, an increase of $36.1 million from the previous quarter [36][43] Business Line Data and Key Metrics Changes - Total lending software revenue grew by 10% year-over-year, accounting for approximately 82% of total revenue, with consumer lending revenue growth at 11% and mortgage lending revenue growth at 7% [39][40] - Data Verification Software Solutions revenue declined by 15% year-over-year, primarily due to a 28% decrease in mortgage-related revenue [41] Market Data and Key Metrics Changes - In 2024, MeridianLink processed 28 million consumer loan applications with nearly $700 billion in application volume, and served 50 million background checks and over 40 million credit reports [19] - The company completed 15 mortgage lending deals in Q1, up nearly 90% year-over-year, indicating strong demand in the mortgage lending segment [30] Company Strategy and Development Direction - The company plans to focus on three strategic pillars: increasing product portfolio breadth and depth, simplifying customer interactions, and strengthening talent [22][24] - MeridianLink aims to enhance its product offerings through innovation, partnerships, and acquisitions, with a particular emphasis on digital interfaces and AI integration [78][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate an uncertain macroeconomic environment, with a focus on maintaining strong demand and managing customer relationships [29][60] - The outlook for 2025 remains unchanged, with total GAAP revenue expected to be between $326 million and $334 million, representing a 3% to 6% year-over-year increase [46][49] Other Important Information - A leadership transition is underway, with Larry Katz set to assume the role of CEO effective October 1, following Nicholas Block's six-year tenure [6][12] - The company has made significant investments in its go-to-market organization to enhance value delivery and operational efficiency [7][10] Q&A Session Summary Question: Can you elaborate on the changes being implemented as part of the new chapter? - Management views the changes as a continuation of existing strategies, focusing on operational discipline and growth acceleration [56] Question: How is the demand backdrop and ability to replace ACV release being assessed? - The pipeline remains strong, with robust demand across platforms, although some softness is noted at the top end of the funnel [60][61] Question: What is the outlook for the consumer lending business? - Growth is driven by ACV release, with solid demand for the comprehensive platform, and an increase in average ARR indicates success with larger clients [68][69] Question: What are the expectations for the auto lending vertical in 2025? - The company anticipates growth in line with the rest of consumer lending, acknowledging uncertainty due to potential tariffs [84] Question: What factors are driving increased mortgage demand? - The strong mortgage offering, effective sales execution, and favorable macro conditions are contributing to the increased demand [92][94] Question: What is the appetite for M&A in the current environment? - The company remains open to M&A opportunities, focusing on finding the right deals at the right price while maintaining a strong balance sheet [99][100]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents MeridianLink, Inc.'s unaudited condensed consolidated financial statements for Q1 2025 and 2024, including balance sheets, statements of operations, cash flows, and notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $987.0 million from $961.3 million, driven by cash growth; liabilities rose to $555.0 million, mainly from deferred revenue Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $128,895 | $92,765 | | Total current assets | $175,607 | $138,160 | | Goodwill | $610,063 | $610,063 | | Total assets | $986,958 | $961,333 | | **Liabilities & Stockholders' Equity** | | | | Deferred revenue (current) | $39,727 | $17,170 | | Total current liabilities | $79,022 | $57,029 | | Long-term debt, net | $463,989 | $464,922 | | Total liabilities | $555,021 | $533,840 | | Total stockholders' equity | $431,937 | $427,493 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenues increased to $81.5 million, with operating income at $3.6 million and a net loss of $4.7 million, an improvement from Q1 2024 Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $81,488 | $77,816 | | Gross profit | $53,765 | $51,743 | | Operating income | $3,565 | $3,352 | | Net loss | $(4,685) | $(5,306) | | Net loss per share (Basic & Diluted) | $(0.06) | $(0.07) | - Operating expenses increased to **$50.2 million** in Q1 2025 from **$48.4 million** in Q1 2024. The prior year period included **$3.2 million** in restructuring related costs which did not recur in 2025[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly increased to $42.4 million in Q1 2025, while cash used in financing decreased due to fewer stock repurchases Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,350 | $29,038 | | Net cash used in investing activities | $(1,716) | $(1,929) | | Net cash used in financing activities | $(4,504) | $(45,265) | | **Net increase (decrease) in cash** | **$36,130** | **$(18,156)** | - Financing activities in Q1 2024 included **$44.0 million** for repurchases of common stock, which did not occur in Q1 2025[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes detail revenue by solution type, intangible assets, debt structure including a $471.5 million Term Loan, increased share-based compensation, and the 2024 Realignment Plan Revenue by Solution Type (in thousands) | Solution Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Lending Software Solutions | $67,069 | $60,903 | | Data Verification Software Solutions | $14,419 | $16,913 | | **Total** | **$81,488** | **$77,816** | - As of March 31, 2025, the company had a Term Loan with an outstanding principal of **$471.5 million**, maturing in November 2028[48](index=48&type=chunk)[148](index=148&type=chunk) - Total share-based compensation expense increased to **$12.4 million** in Q1 2025 from **$7.8 million** in Q1 2024[68](index=68&type=chunk) - In January 2024, the company initiated a '2024 Realignment Plan' involving a **12%** workforce reduction, resulting in **$3.2 million** of restructuring costs recognized in Q1 2024[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, including revenue growth, increased operating expenses, strong operating cash flow, and liquidity, along with non-GAAP reconciliations [Overview](index=26&type=section&id=Overview) MeridianLink provides cloud-based SaaS for financial institutions, with a subscription-based revenue model, while monitoring economic uncertainties like inflation and interest rates - The company provides secure, cloud-based software solutions (SaaS) for financial institutions, including banks, credit unions, and mortgage lenders[92](index=92&type=chunk) - The company's contracts are typically three years, with subscription fees including annual base fees and volume-based fees (per application or loan)[95](index=95&type=chunk) - In February 2025, the board authorized a new stock repurchase program of up to **$129.5 million**[108](index=108&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased **5%** to **$81.5 million**, driven by Lending Software Solutions, while operating expenses rose due to advisory fees and employee costs Comparison of Results for the three months ended March 31, (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $81,488 | $77,816 | $3,672 | 5% | | Gross profit | $53,765 | $51,743 | $2,022 | 4% | | Operating income | $3,565 | $3,352 | $213 | 6% | | Net loss | $(4,685) | $(5,306) | $621 | (12)% | - Revenue growth was primarily due to a **$6.2 million** increase from Lending Software Solutions, partly offset by a **$2.5 million** decrease from Data Verification Software Solutions[130](index=130&type=chunk) - General and administrative expenses increased by **$2.5 million** (**10%**), mainly due to a **$2.1 million** increase in advisory fees for material weakness remediation and a **$1.5 million** rise in employee-related costs[133](index=133&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity includes **$128.9 million** in cash and a **$50.0 million** revolving credit facility, with operating cash flow increasing to **$42.4 million** in Q1 2025 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,350 | $29,038 | | Net cash used in investing activities | $(1,716) | $(1,929) | | Net cash used in financing activities | $(4,504) | $(45,265) | - Principal sources of liquidity as of March 31, 2025, were **$128.9 million** in cash and an unused **$50.0 million** revolving credit facility[139](index=139&type=chunk) - As of March 31, 2025, **$129.5 million** remained available for repurchase under the company's stock repurchase program authorized in February 2025[150](index=150&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA, a non-GAAP measure, which increased to **$34.8 million** in Q1 2025 from **$31.8 million** in Q1 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(4,685) | $(5,306) | | Interest expense | 8,712 | 9,582 | | Provision for income taxes | 617 | 32 | | Depreciation and amortization | 14,686 | 14,524 | | Share-based compensation expense | 12,381 | 7,936 | | Other adjustments | 3,134 | 4,992 | | **Adjusted EBITDA** | **$34,845** | **$31,770** | - Adjustments to calculate Adjusted EBITDA include non-cash charges like depreciation and share-based compensation, as well as specific cash expenses such as restructuring costs and **$2.1 million** in expenses for material weakness remediation in Q1 2025[158](index=158&type=chunk)[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no significant changes in the company's exposure to market risk since December 31, 2024 - There have been no significant changes in the company's exposures to market risk since December 31, 2024[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to an ongoing material weakness in internal control over financial reporting - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective due to a previously identified material weakness[163](index=163&type=chunk) - The material weakness relates to insufficient controls over the set-up of customer contracts for billing and maintaining complete contract support[166](index=166&type=chunk)[287](index=287&type=chunk) - The company is actively working on remediating the material weakness by implementing process improvements and new key controls, but the process was not yet complete as of the end of the quarter[167](index=167&type=chunk)[288](index=288&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any litigation or claims that would materially adversely affect its business or financial condition - The company is not currently a party to any litigation or claims that, if determined adversely, would have a material adverse effect on its business, operating results, financial condition, or cash flows[172](index=172&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section details substantial risks, including economic downturns, competition, cybersecurity threats, regulatory changes, and the material weakness in internal controls, categorized by strategy, operations, legal, finance, and governance [Risks Related to Our Strategy and Industry](index=41&type=section&id=Risks%20Related%20to%20Our%20Strategy%20and%20Industry) Risks include economic factors affecting the lending market, customer retention, intense competition, and industry concentration in financial services - The lending market is subject to economic and political factors, such as rising interest or inflation rates, which could directly affect performance[177](index=177&type=chunk) - Failure to retain customers, innovate the platform, or increase brand recognition may limit growth and profitability[177](index=177&type=chunk) - The business is highly concentrated in the financial services industry, and any downturn or decrease in technology spending in this sector could be adverse[205](index=205&type=chunk) [Risks Related to Our Business and Operations](index=48&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) Operational risks include economic conditions, cybersecurity threats, software defects, reliance on third-party systems, and challenges in retaining key personnel and managing growth - Cybersecurity incidents, data breaches, or other compromises could lead to unauthorized data access, reputational damage, and substantial liability[177](index=177&type=chunk)[211](index=211&type=chunk) - The business depends on retaining key personnel and product partners to drive volume through the platform[182](index=182&type=chunk) - Disruptions in the performance or delivery of software solutions, whether due to security issues or third-party providers, could decrease demand and harm the brand[177](index=177&type=chunk) [Risks Related to Legal and Regulatory Matters](index=58&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Matters) Legal and regulatory risks include compliance with evolving data privacy laws, financial industry regulations, potential litigation, and challenges in protecting intellectual property - The company must comply with complex laws and regulations as a technology provider to the highly regulated financial industry, and failure to do so could disrupt operations[182](index=182&type=chunk)[252](index=252&type=chunk) - Evolving data privacy regulations, such as the CCPA and CPRA, impose significant compliance obligations and potential liabilities[248](index=248&type=chunk) - Failures in protecting intellectual property rights could critically impair offerings and the ability to conduct business[182](index=182&type=chunk)[257](index=257&type=chunk) [Risks Related to Finance and Accounting](index=64&type=section&id=Risks%20Related%20to%20Finance%20and%20Accounting) Financial risks include fluctuating quarterly results, forecasting challenges, goodwill impairment, limited deferred tax asset utilization, the identified material weakness in internal controls, and high leverage - A material weakness in internal control over financial reporting has been identified. If not remediated, it may lead to an inability to timely and accurately report financial results[182](index=182&type=chunk)[286](index=286&type=chunk) - The company's ability to recognize the benefits of its deferred tax assets is dependent on future taxable income and may be limited[182](index=182&type=chunk)[277](index=277&type=chunk) - The company is highly leveraged, and its substantial indebtedness could restrict its ability to compete, react to business changes, and fund future needs[182](index=182&type=chunk)[282](index=282&type=chunk) [Risks Related to Potential Conflicts of Interests and Related Parties](index=70&type=section&id=Risks%20Related%20to%20Potential%20Conflicts%20of%20Interests%20and%20Related%20Parties) Risks include potential conflicts of interest due to Thoma Bravo's significant ownership and influence, as their interests may diverge from other stockholders - Thoma Bravo holds a significant stake (approx. **37.5%**) and influence over the company, and their interests may conflict with those of other stockholders[180](index=180&type=chunk)[294](index=294&type=chunk) [Risks Related to Our Common Stock and Governance Structure](index=71&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Governance%20Structure) Risks related to common stock and governance include price volatility, no dividend intent, emerging growth company exemptions, and charter provisions that could deter change of control - Market conditions, including increased market volatility, could affect the stock price and stockholders' return on investment[182](index=182&type=chunk)[300](index=300&type=chunk) - The company is an emerging growth company and is not required to comply with certain requirements that apply to other public companies, such as an auditor's attestation on internal controls[303](index=303&type=chunk) - Delaware law and provisions in the company's charter and bylaws could restrict certain strategic activities or limit stockholder actions[182](index=182&type=chunk)[311](index=311&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=75&type=section&id=Other%20Items%20(Items%202%2C%203%2C%204%2C%205%2C%206)) This section covers standard disclosures, including no unregistered equity sales, no defaults on senior securities, and no Rule 10b5-1 trading plan adoptions by directors or officers - The company did not repurchase any of its equity securities during the three months ended March 31, 2025[315](index=315&type=chunk) - There were no defaults upon senior securities[316](index=316&type=chunk) - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[318](index=318&type=chunk)

[MeridianLink First Quarter 2025 Results](index=1&type=section&id=MeridianLink%20Reports%20First%20Quarter%202025%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) Executives expressed satisfaction with Q1 results, highlighting strong bookings, accelerated demand for mortgage solutions, and the upcoming CEO transition to Larry Katz effective October 1, 2025 - Larry Katz, MeridianLink's President, will succeed Nicolaas Vlok as Chief Executive Officer effective **October 1, 2025**, with Mr. Vlok continuing to serve on the Board of Directors[2](index=2&type=chunk) - The company experienced solid bookings driven by an increased mix of larger deals, continued cross-sell momentum, and accelerated demand for mortgage lending solutions[3](index=3&type=chunk) - Outgoing CEO Nicolaas Vlok highlighted significant business growth, with revenue expanding from approximately **$150 million in 2019** to a guided midpoint of **$330 million for 2025**[3](index=3&type=chunk) [Quarterly Financial Highlights](index=1&type=section&id=Quarterly%20Financial%20Highlights) MeridianLink reported Q1 2025 total revenue of **$81.5 million** (5% YoY growth), driven by lending software, with strong cash flow from operations at **$42.4 million** and a GAAP net loss of **$(4.7) million** Q1 2025 Financial Highlights | Metric | Value | Growth/Margin | | :--- | :--- | :--- | | Total Revenue | $81.5 million | 5% YoY | | Lending Software Solutions Revenue | $67.1 million | 10% YoY | | Operating Income | $3.6 million | 4% of revenue | | Non-GAAP Operating Income | $19.1 million | 23% of revenue | | Net Loss | $(4.7) million | (6)% of revenue | | Adjusted EBITDA | $34.8 million | 43% of revenue | | Cash Flow from Operations | $42.4 million | 52% of revenue | | Free Cash Flow | $40.6 million | 50% of revenue | [Business and Operating Highlights](index=1&type=section&id=Business%20and%20Operating%20Highlights) The company appointed Troy Coggiola as its new Chief Strategy Officer to drive product innovation and partnerships, achieved strong bookings through its land-and-expand strategy, and enhanced MeridianLink One to streamline deposit account applications - Troy Coggiola was appointed as the new Chief Strategy Officer on **April 21, 2025**, to help meet customer needs through product innovation, partnerships, and acquisitions[7](index=7&type=chunk) - Achieved solid bookings momentum, highlighted by continued strength in cross-sells and **fifteen mortgage lending deals** with new and existing customers[7](index=7&type=chunk) - Enhanced MeridianLink One to reduce secondary deposit account opening time by approximately **70%** for returning consumers[7](index=7&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) MeridianLink reaffirmed its full-year 2025 financial guidance as of May 12, 2025, expecting total revenue between **$326.0 million and $334.0 million** and Adjusted EBITDA between **$131.5 million and $137.5 million** Full Year 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $326.0 million to $334.0 million | | Adjusted EBITDA | $131.5 million to $137.5 million | [Definitions and Disclosures](index=3&type=section&id=Definitions%20and%20Disclosures) This section defines key operational metrics like 'Bookings' and 'ACV', details the composition of non-GAAP financial measures, and provides a standard forward-looking statements disclaimer outlining potential risks and uncertainties - Defines 'Bookings' as the minimum annual contracted value (ACV) of newly sold SaaS products and professional services orders[14](index=14&type=chunk) - Non-GAAP measures like Adjusted EBITDA, Non-GAAP operating income, and Free Cash Flow are used to supplement GAAP results by excluding items such as share-based compensation and acquisition-related costs[16](index=16&type=chunk)[19](index=19&type=chunk) - The report contains forward-looking statements regarding strategy, financial guidance, and operational performance, which are subject to risks and uncertainties[22](index=22&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, MeridianLink's total assets stood at **$987.0 million**, an increase from **$961.3 million** at the end of 2024, primarily due to a rise in cash to **$128.9 million**, with total liabilities increasing to **$555.0 million** Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$986,958** | **$961,333** | | Cash | $128,895 | $92,765 | | Goodwill | $610,063 | $610,063 | | **Total Liabilities** | **$555,021** | **$533,840** | | Long-term debt, net | $463,989 | $464,922 | | **Total Stockholders' Equity** | **$431,937** | **$427,493** | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, revenues grew **5%** year-over-year to **$81.5 million**, with gross profit increasing to **$53.8 million**, resulting in a net loss of **$(4.7) million** or **$(0.06)** per share Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $81,488 | $77,816 | | Gross profit | $53,765 | $51,743 | | Operating income | $3,565 | $3,352 | | Net loss | $(4,685) | $(5,306) | | Net loss per share, basic & diluted | $(0.06) | $(0.07) | [Revenue Breakdown](index=10&type=section&id=Revenue%20Breakdown) In Q1 2025, lending software solutions revenue grew **10%** to **$67.1 million**, while data verification software solutions revenue declined **15%** to **$14.4 million**, with subscription fees as the primary driver at **$68.7 million** Net Revenues by Major Source (in thousands) | Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Subscription fees | $68,745 | $65,912 | | Professional services | $8,666 | $9,010 | | Other | $4,077 | $2,894 | | **Total** | **$81,488** | **$77,816** | Net Revenues by Solution Type (in thousands) | Solution Type | Q1 2025 | Q1 2024 | % Growth | | :--- | :--- | :--- | :--- | | Lending software solutions | $67,069 | $60,903 | 10% | | Data verification software solutions | $14,419 | $16,913 | (15)% | | **Total** | **$81,488** | **$77,816** | **5%** | Percent Revenue Related to the Mortgage Loan Market | Solution Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Lending software solutions | 10% | 11% | | Data verification software | 49% | 57% | | **Total % revenue** | **17%** | **21%** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated **$42.4 million** in net cash from operating activities in Q1 2025, a significant increase from **$29.0 million** in Q1 2024, resulting in free cash flow of **$40.6 million** and an increased cash balance of **$128.9 million** Statement of Cash Flows Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,350 | $29,038 | | Net cash used in investing activities | $(1,716) | $(1,929) | | Net cash used in financing activities | $(4,504) | $(45,265) | | **Net increase (decrease) in cash** | **$36,130** | **$(18,156)** | | **Cash and cash equivalents, end of period** | **$128,895** | **$62,285** | [Reconciliation of GAAP to Non-GAAP Results](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) [Reconciliation of Key Profitability Metrics](index=12&type=section&id=Reconciliation%20of%20Key%20Profitability%20Metrics) This section reconciles GAAP figures to non-GAAP metrics by adjusting for items like share-based compensation and amortization, showing Non-GAAP operating income of **$19.1 million** (23% margin), Non-GAAP net income of **$7.1 million**, and Adjusted EBITDA of **$34.8 million** (43% margin) Reconciliation of Operating Income (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Operating income | $3,565 | $3,352 | | Non-GAAP operating income | $19,080 | $16,290 | | Non-GAAP operating margin | 23% | 21% | Reconciliation of Net Income (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Net loss | $(4,685) | $(5,306) | | Non-GAAP net income | $7,106 | $4,527 | | Non-GAAP diluted net income per share | $0.09 | $0.06 | Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Net loss | $(4,685) | $(5,306) | | Adjusted EBITDA | $34,845 | $31,770 | | Adjusted EBITDA margin | 43% | 41% | [Reconciliation of Costs and Expenses](index=13&type=section&id=Reconciliation%20of%20Costs%20and%20Expenses) After adjusting for items like share-based compensation and amortization, Non-GAAP cost of revenue was **$21.0 million** or **26%** of revenue, with Non-GAAP operating expenses detailed across G&A, R&D, and Sales & Marketing, demonstrating consistent cost management Reconciliation of Cost of Revenue (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Cost of revenue | $27,723 | $26,073 | | Non-GAAP cost of revenue | $21,045 | $20,514 | | Non-GAAP cost of revenue as a % of revenue | 26% | 26% | Reconciliation of Operating Expenses (as a % of revenue) | Expense Category | Non-GAAP % of Revenue (Q1 2025) | Non-GAAP % of Revenue (Q1 2024) | | :--- | :--- | :--- | | General & administrative | 12% | 12% | | Research and development | 10% | 10% | | Sales and marketing | 11% | 12% | [Reconciliation of Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Free cash flow for Q1 2025 was **$40.6 million**, calculated by subtracting capitalized software and capital expenditures from net cash provided by operating activities, representing a strong **50%** free cash flow margin Reconciliation of Free Cash Flow (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,350 | $29,038 | | Less: Capitalized software | $1,620 | $1,837 | | Less: Capital expenditures | $96 | $92 | | **Free cash flow** | **$40,634** | **$27,109** | | Free cash flow as a % of revenue | 50% | 35% |