Core Insights - MeridianLink, Inc. announced a series of enhancements for its MeridianLink One platform, focusing on consumer and mortgage solutions to help financial institutions leverage data, enhance personalization, and acquire more consumers digitally [1][2]. Group 1: Product Enhancements - The enhancements include the introduction of MeridianLink® Insight for Mortgage, which provides analytics and benchmarking tools to improve decision-making and growth for lenders by utilizing over 2000 data points [3]. - MeridianLink® Insight for Collect offers advanced tools for managing collections, including the Propensity to Pay Index and performance dashboards, enabling institutions to prioritize accounts and improve ROI [4]. - New features in MeridianLink® Access and MeridianLink® Opening allow financial institutions to present personalized product offers to consumers in real-time, enhancing cross-sell opportunities [5]. Group 2: Digital Consumer Acquisition - The platform supports Second Chance Checking, allowing consumers access to inclusive financial options, and custom branded business account opening experiences for business owners [8]. - The enhancements aim to streamline the account opening process across various product offerings, including minor, trusts, memorial, and estate accounts, broadening the capabilities of financial institutions [8]. Group 3: Strategic Goals - MeridianLink's commitment to innovation is aimed at helping customers compete and grow in a rapidly evolving banking landscape, supporting every stage of a consumer's financial journey [2][6]. - The platform's seamless integration reduces operational silos and increases efficiencies, ultimately enhancing the experience for both staff and consumers [2][6].

Group 1: Apple Inc. (AAPL) - Apple is approaching a $4 trillion market cap, with shares rising nearly 4% recently [2] - Strong demand for the iPhone 17 has been noted, with Loop Capital upgrading Apple to Buy and raising the price target to $315 from $226, while Evercore ISI added Apple to its Tactical Outperform List with a $290 price target [3] - The iPhone 17 series has outsold the iPhone 16 series by 14% in its first 10 days, with the base model driving a 33% increase in sell-out data compared to the iPhone 16 [4] Group 2: Unilever (UL) - Unilever is postponing the planned demerger of its ice cream business due to the U.S. government shutdown, which affects the SEC's ability to declare the registration statement effective for the listing [5] - Despite the delay, Unilever will still hold the general meeting of shareholders to vote on the proposed consolidation of its share capital as scheduled [6] Group 3: e.l.f. Beauty (ELF) - e.l.f. Beauty shares fell nearly 7% after reporting disappointing sales of rhode beauty, totaling $40.2 million for the quarter ending June 30, which was below investor expectations [7] - Analysts had projected that the $1 billion acquisition of rhode would add approximately $0.38 to FY25 earnings, but this may be reduced due to uncertain tariff conditions and recent disclosures [8]

Core Insights - The U.S. homeowners currently hold a record $17.8 trillion in equity, with $11.6 trillion being tappable, indicating a strong potential for continued HELOC and second mortgage offerings [1] - The Mortgage Bankers Association (MBA) anticipates a rise in overall origination points from $1.7 trillion last year to $2 trillion this year, with unit origination expected to increase from 4.572 million to 5.598 million [1] - Non-QM loans have seen a significant growth of 53% over the past year, increasing their market share from 5.21% to 8%, with projections suggesting a potential rise to 15% in less than two years if the current growth rate continues [8][9] Industry Trends - The mortgage market is experiencing a shift towards non-agency loans, with innovative lending solutions becoming increasingly necessary as traditional banks withdraw from conventional lending [8][9] - The introduction of AI-powered tools, such as ACES Intelligence, is redefining quality control in mortgage services, enhancing efficiency and productivity for loan reviews and compliance [4] - The updated MeridianLink® Mortgage product suite aims to streamline the mortgage lending process, providing lenders with greater control and efficiency [2] Economic Indicators - New home sales unexpectedly surged by 20.5% in August, attributed to lower mortgage rates and builder incentives, although caution is advised due to the volatility of the data [17][18] - The overall trend in new home sales has been relatively flat, with expectations of a slowdown in single-family construction impacting GDP growth in the coming quarters [18] - Seasonal hiring in 2025 is projected to decline, reflecting ongoing economic uncertainty and a shift towards leaner staffing strategies among companies [13]

Core Insights - MeridianLink has been recognized once again on the IDC FinTech Rankings for 2025, highlighting its continued prominence in the digital lending sector [1] Company Summary - The recognition by IDC signifies MeridianLink's strong position and reputation within the financial technology industry, particularly in digital lending solutions [1]

A group of private credit firms are providing nearly $1.4 billion of loans to support Centerbridge’s acquisition of financial software platform MeridianLink, according to sources https://t.co/j5Y9mb4cP0 ...

Group 1 - Class Action Attorney Juan Monteverde's firm, Monteverde & Associates PC, has recovered millions for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1] - The firm is investigating MeridianLink, Inc. regarding its sale to affiliates of Centerbridge Partners, L.P. for $20.00 per share in cash, raising questions about the fairness of the deal [1] - Monteverde & Associates PC is headquartered in the Empire State Building, New York City, and has a successful track record in trial and appellate courts, including the U.S. Supreme Court [2][3] Group 2 - The firm emphasizes that not all law firms are equal and encourages potential clients to inquire about their track record before hiring [2] - The firm offers free consultations for shareholders with concerns about their investments in MeridianLink, Inc. [3] - Contact information for Juan Monteverde, Esq. is provided for shareholders seeking additional information [3]

Core Viewpoint - The law firm Wohl & Fruchter LLP is investigating the fairness of the proposed sale of MeridianLink, Inc. to Centerbridge Partners for $20.00 per share, which is significantly lower than its 52-week high and analyst price targets, indicating a potentially opportunistic acquisition by Centerbridge [1][3]. Group 1: Sale Details - MeridianLink has agreed to be sold to Centerbridge for $20.00 per share in cash [3]. - The sale price is below the 52-week high of $25.33 per share and below the price target of $24.00 set by at least one Wall Street analyst [1][3]. Group 2: Investigation Purpose - The investigation aims to determine if the MeridianLink Board of Directors acted in the best interests of shareholders when approving the sale [4]. - It will assess whether the agreed price is fair and if all material information regarding the transaction has been disclosed [4]. Group 3: Legal Representation - Wohl & Fruchter LLP has a history of representing investors in litigation related to corporate misconduct and has recovered significant damages for investors [4].

Core Insights - MeridianLink (MLNK) reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, and up from $0.04 per share a year ago [1][2] - The company achieved revenues of $84.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.62% and increasing from $78.68 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +44.44%, following a previous quarter where the company reported earnings of $0.09 against an expectation of $0.11, resulting in a surprise of -18.18% [2] - Over the last four quarters, MeridianLink has surpassed consensus EPS estimates two times [2] Revenue Insights - MeridianLink has topped consensus revenue estimates four times over the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $83.25 million, and for the current fiscal year, it is $0.35 on revenues of $329.49 million [8] Market Performance - MeridianLink shares have declined approximately 23.1% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [4] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Technology Services industry, to which MeridianLink belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents MeridianLink's unaudited financial statements, including balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total assets | $936,933 | $961,333 | | Total liabilities | $544,292 | $533,840 | | Total stockholders' equity | $392,641 | $427,493 | | Cash | $91,088 | $92,765 | | Accounts receivable, net | $34,585 | $34,422 | | Deferred revenue (current) | $30,110 | $17,170 | - **Total assets** decreased by **$24.4 million** from December 31, 2024, to June 30, 2025, while **total liabilities** increased by **$10.4 million**, leading to a **$34.8 million** decrease in **total stockholders' equity**[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues, net | $84,597 | $78,676 | $166,085 | $156,492 | | Gross profit | $57,072 | $50,500 | $110,837 | $102,243 | | Operating income (loss) | $5,206 | $(1,097) | $8,771 | $2,255 | | Net loss | $(3,013) | $(9,670) | $(7,698) | $(14,976) | | Basic EPS | $(0.04) | $(0.13) | $(0.10) | $(0.19) | | Diluted EPS | $(0.04) | $(0.13) | $(0.10) | $(0.19) | - **Net revenues** increased by **7.5%** for the three months ended June 30, 2025, and by **6.1%** for the six months ended June 30, 2025, compared to the same periods in 2024. The company reported an **operating income** of **$5.2 million** for **Q2 2025**, a significant improvement from an **operating loss** of **$1.1 million** in **Q2 2024**. **Net loss** decreased significantly from **$(9.67) million** in **Q2 2024** to **$(3.01) million** in **Q2 2025**[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric (in thousands) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :-------------------- | :--------------------------- | :----------------------- | | Common Stock (Amount) | $127 | $125 | | Additional Paid-in Capital | $709,057 | $734,970 | | Accumulated Deficit | $(281,691) | $(342,454) | | Total Stockholders' Equity | $427,493 | $392,641 | - **Total stockholders' equity** decreased by **$34.85 million** from December 31, 2024, to June 30, 2025, primarily due to **net losses** and **common stock repurchases** totaling **$53.07 million**, partially offset by **share-based compensation expense** of **$29.63 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $61,547 | $43,394 | | Net cash used in investing activities | $(3,818) | $(3,836) | | Net cash used in financing activities | $(59,406) | $(26,990) | | Net (decrease) increase in cash and cash equivalents | $(1,677) | $12,568 | | Cash and cash equivalents, end of period | $91,088 | $93,009 | - **Net cash provided by operating activities** increased by **42%** to **$61.5 million** for the six months ended June 30, 2025, compared to **$43.4 million** in the same period of 2024[20](index=20&type=chunk) - **Net cash used in financing activities** significantly increased to **$59.4 million** in **H1 2025** from **$27.0 million** in **H1 2024**, primarily due to higher **common stock repurchases** and **taxes paid related to RSU settlements**[20](index=20&type=chunk)[169](index=169&type=chunk)[175](index=175&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [Note 1 – Organization and Description of Business](index=10&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Description%20of%20Business) MeridianLink provides secure, cloud-based SaaS solutions to financial institutions and reporting agencies - **MeridianLink, Inc.** offers secure, cloud-based digital solutions to financial services providers, primarily through a **Software-as-a-Service (SaaS) model**[23](index=23&type=chunk) - The company's customer base includes **banks**, **credit unions**, **mortgage lenders**, **specialty lending providers**, and **consumer reporting agencies**[23](index=23&type=chunk) [Note 2 – Significant Accounting Policies](index=10&type=section&id=Note%202%20%E2%80%93%20Significant%20Accounting%20Policies) Unaudited financial statements follow GAAP, reflecting management estimates; company uses extended transition period - The **financial statements** are unaudited and prepared on the **accrual basis** in accordance with **GAAP**, with **management making estimates and assumptions**[24](index=24&type=chunk)[25](index=25&type=chunk)[28](index=28&type=chunk) - **MeridianLink** is an **emerging growth company** and uses the **extended transition period** for new or revised accounting standards[30](index=30&type=chunk) - The company is evaluating the impact of **ASU 2023-09 (Income Taxes)** and **ASU 2024-03 (Expense Disaggregation Disclosures)**, effective for annual periods beginning after December 15, 2025, and December 15, 2026, respectively[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 3 – Revenue Recognition](index=11&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) MeridianLink disaggregates net revenues by solution type and source, detailing contract balances and credit losses Net Revenues by Solution Type (in thousands) | Solution Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Lending Software Solutions | $68,737 | $61,644 | $135,806 | $122,547 | | Data Verification Software Solutions | $15,860 | $17,032 | $30,279 | $33,945 | | Total | $84,597 | $78,676 | $166,085 | $156,492 | Net Revenues by Major Source (in thousands) | Major Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Subscription fees | $71,147 | $65,946 | $139,892 | $131,858 | | Professional services | $9,499 | $9,559 | $18,165 | $18,569 | | Other | $3,951 | $3,171 | $8,028 | $6,065 | | Total | $84,597 | $78,676 | $166,085 | $156,492 | Deferred Revenue (in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------- | :------------------ | :---------------------- | | Deferred revenue, current | $30,110 | $17,170 | | Long-term deferred revenue | $0 | $75 | | Total deferred revenue | $30,110 | $17,245 | - **Lending Software Solutions revenue** increased by **$7.1 million** (**11.5%**) for **Q2 2025** and **$13.3 million** (**10.9%**) for **H1 2025 YoY**, while **Data Verification Software Solutions revenue** decreased by **$1.2 million** (**7.0%**) for **Q2 2025** and **$3.7 million** (**10.9%**) for **H1 2025 YoY**[33](index=33&type=chunk) [Note 4 – Balance Sheet Components](index=13&type=section&id=Note%204%20%E2%80%93%20Balance%20Sheet%20Components) Details changes in prepaid expenses, property, intangible assets, and accrued liabilities, highlighting amortization Intangible Assets, Net (in thousands) | Asset Type | June 30, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :-------------------- | :---------------------------------- | :------------------------------------ | | Customer relationships | $125,535 | $142,628 | | Developed technology | $28,058 | $33,137 | | Trademarks | $8,470 | $9,700 | | Non-competition agreements | $2,287 | $2,777 | | Capitalized software | $12,717 | $13,280 | | Total | $177,067 | $201,522 | - **Total intangible assets, net**, decreased by **$24.45 million** from December 31, 2024, to June 30, 2025, primarily due to **amortization**, partially offset by **capitalized software additions**[41](index=41&type=chunk) Accrued Liabilities (in thousands) | Accrued Liability Type | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Accrued payroll and payroll-related expenses | $11,144 | $8,188 | | Accrued bonuses and commissions | $4,747 | $6,313 | | Accrued operating costs | $4,191 | $4,127 | | Sales tax liabilities from acquisitions | $3,383 | $3,383 | | Accrued costs of revenues | $2,537 | $2,305 | | Customer deposits | $1,551 | $795 | | Total accrued liabilities | $30,700 | $29,383 | [Note 5 – Commitments and Contingencies](index=16&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) Company faces no material adverse legal claims; contractual commitments total $31.7 million for cloud infrastructure - The company is not aware of any **legal proceedings or claims** that could have a **material adverse effect** on its **financial position**, **results of operations**, or **cash flows**[46](index=46&type=chunk) Future Minimum Contractual Commitments (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | 2025 (remaining six months) | $6,324 | | 2026 | $12,855 | | 2027 | $11,808 | | 2028 | $722 | | Total | $31,709 | [Note 6 – Debt](index=16&type=section&id=Note%206%20%E2%80%93%20Debt) MeridianLink's debt is primarily a Term Loan, amended in June 2025; company is covenant compliant Debt, Net of Debt Issuance Costs (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Term Loan | $470,358 | $472,728 | | Debt issuance costs | $(3,601) | $(4,128) | | Total debt, net of debt issuance costs | $466,757 | $468,600 | | Current portion of debt, net | $3,632 | $3,678 | | Long-term debt, net | $463,125 | $464,922 | - On June 17, 2025, the company entered into the **2025 Amendment**, which reduced the **Applicable Rate** on the **Term Loan** from **2.75%** to **2.50%**. The **effective interest rate** on the **Term Loan** was **7.12%** as of June 30, 2025[54](index=54&type=chunk)[58](index=58&type=chunk) - The company was in compliance with all **financial covenants** of the **Credit Agreement** at June 30, 2025, and had no outstanding balance on the **Revolving Credit Facility**[57](index=57&type=chunk)[59](index=59&type=chunk) [Note 7 – Stockholders' Equity](index=18&type=section&id=Note%207%20%E2%80%93%20Stockholders'%20Equity) Board authorized a $129.5 million stock repurchase program in Feb 2025; $76.4 million remains - In February 2025, the board authorized a new **stock repurchase program** for up to **$129.5 million** of **common stock**[61](index=61&type=chunk) Stock Repurchase Activity (in thousands, except share data) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------------- | :------------------------------- | :----------------------------- | | Total number of shares repurchased | 3,135,583 | 3,135,583 | | Total cost of shares repurchased, including commissions, fees, and excise taxes | $53,068 | $53,068 | | Remaining for repurchase under program (as of June 30, 2025) | N/A | $76,400 | [Note 8 – Share-based Compensation](index=19&type=section&id=Note%208%20%E2%80%93%20Share-based%20Compensation) Significant share-based compensation expense from options, RSUs, and ESPP increased in Q2/H1 2025 Share-based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock Options | $2,600 | $1,100 | $3,400 | $2,500 | | Restricted Stock Units (RSUs) | $14,500 | $11,400 | $26,000 | $17,800 | | Employee Stock Purchase Program (ESPP) | $200 | $200 | $300 | $300 | | Total Share-based Compensation Expense | $17,122 | $12,626 | $29,503 | $20,429 | - As of June 30, 2025, there was **$127.2 million** of **unrecognized share-based compensation expense** related to **RSUs**, expected to be recognized over a weighted-average period of **2.74 years**[71](index=71&type=chunk) [Note 9 – Income Taxes](index=21&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) Income tax provision reflects Q2/H1 2025 effective tax rates, with a partial valuation allowance on deferred tax assets Effective Tax Rate | Period | Effective Tax Rate | | :----- | :----------------- | | Three Months Ended June 30, 2025 | (55.1)% | | Three Months Ended June 30, 2024 | (4.5)% | | Six Months Ended June 30, 2025 | (28.1)% | | Six Months Ended June 30, 2024 | (3.1)% | - The company maintains a **partial valuation allowance** of **$35.6 million** against its **deferred tax assets** as of June 30, 2025, due to uncertainty in utilizing all **deferred tax assets**[81](index=81&type=chunk) - **Gross unrecognized tax benefits** related to **research and development credits** were **$4.1 million** as of June 30, 2025[82](index=82&type=chunk) [Note 10 – Related Party Transactions](index=22&type=section&id=Note%2010%20%E2%80%93%20Related%20Party%20Transactions) MeridianLink engages in related party transactions; total expenses decreased to $0.68M for Q2 2025 Related Party Expenses (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenues | $580 | $501 | $1,019 | $865 | | General and administrative | $67 | $520 | $184 | $686 | | Research and development | $29 | $27 | $56 | $52 | | Total related party expenses | $676 | $1,048 | $1,259 | $1,603 | [Note 11 – Net Loss Per Share](index=23&type=section&id=Note%2011%20%E2%80%93%20Net%20Loss%20Per%20Share) Basic and diluted net loss per share improved in Q2/H1 2025; anti-dilutive securities were excluded Net Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Net Loss Per Share | $(0.04) | $(0.13) | $(0.10) | $(0.19) | | Diluted Net Loss Per Share | $(0.04) | $(0.13) | $(0.10) | $(0.19) | - Approximately **10.5 million potentially dilutive securities** (options, **RSUs**, **ESPP** purchase rights) were excluded from diluted **EPS** calculations for the three and six months ended June 30, 2025, due to their **anti-dilutive effect**[85](index=85&type=chunk) [Note 12 – Restructuring Activities](index=23&type=section&id=Note%2012%20%E2%80%93%20Restructuring%20Activities) The 2024 Realignment Plan, completed in 2024, included a 12% workforce reduction and restructuring charges - The **2024 Realignment Plan**, completed in 2024, included a **workforce reduction** of approximately **12%**[86](index=86&type=chunk) Restructuring Charges (in thousands) | Period | Restructuring Related Costs | | :------------------------------- | :-------------------------- | | Three Months Ended June 30, 2024 | $988 | | Six Months Ended June 30, 2024 | $4,179 | [Note 13 – Segment Information](index=24&type=section&id=Note%2013%20%E2%80%93%20Segment%20Information) MeridianLink operates as a single segment, providing cloud-based digital solutions in the US - The company operates in one **operating and reportable segment**, providing **cloud-based digital solutions** in the **United States**[87](index=87&type=chunk) [Note 14 – Subsequent Events](index=24&type=section&id=Note%2014%20%E2%80%93%20Subsequent%20Events) Post-June 30, 2025, new tax legislation passed, and company entered a Merger Agreement for $20.00/share - On July 4, 2025, the U.S. Congress passed the **One Big Beautiful Bill Act of 2025 (OBBBA)**, which includes immediate expensing of domestic R&D and a favorable modification to **interest expense limitation**, expected to impact **income taxes** starting **Q3 2025**[89](index=89&type=chunk) - On August 11, 2025, the company entered into a **Merger Agreement** to be **acquired** by **ML Holdco, LLC**, with each outstanding share of **common stock** to be converted into the right to receive **$20.00** in **cash**[91](index=91&type=chunk)[92](index=92&type=chunk) - The proposed **Merger** is subject to **stockholder and regulatory approvals**, and if terminated under certain circumstances, the company may be required to pay a **termination fee** of **$47 million**[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, global factors, 2025 developments, and non-GAAP measures [Overview](index=29&type=section&id=Overview) MeridianLink is a leading SaaS provider of secure, cloud-based solutions for financial institutions - **MeridianLink** is a leading **SaaS provider** of secure, cloud-based software solutions for **financial institutions**, including **banks**, **credit unions**, **mortgage lenders**, **specialty lending providers**, and **credit reporting agencies**[105](index=105&type=chunk) - The company's solutions, delivered via a **SaaS model**, generate revenue through **subscription fees** (annual base fees, platform partner fees, volume-based fees) and grow as customers add transaction types, modules, or partner integrations[108](index=108&type=chunk)[109](index=109&type=chunk) - **MeridianLink** focuses on the middle market (institutions with **$100 million** to **$10 billion** in assets) but sees opportunity in expanding to larger customers and leveraging its **Partner Marketplace** for additional revenue and market presence[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) [Global Considerations](index=30&type=section&id=Global%20Considerations) Company monitors economic uncertainty, inflation, and high interest rates impacting spending and loan volumes - The company is monitoring **economic uncertainty**, **elevated inflation rates**, and **high interest rates**, which may lead to reduced spending on products, pricing pressure, and lower loan volumes from **financial institutions**[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Increased inflation could result in decreased demand for mortgages and consumer lending, increased operating costs (including labor), reduced liquidity, and limitations on accessing credit or raising capital[119](index=119&type=chunk) [Developments in 2025](index=32&type=section&id=Developments%20in%202025) Key 2025 developments include a Merger Agreement, CEO change, Term Loan amendment, and stock repurchase - On August 11, 2025, **MeridianLink** entered into a **Merger Agreement** to be acquired by **ML Holdco, LLC**, with stockholders receiving **$20.00** per share in **cash**[121](index=121&type=chunk)[122](index=122&type=chunk) - **Nicolaas Vlok** resigned as **CEO** effective October 1, 2025, with **Laurence E. Katz** appointed as the new **CEO** and **President**[123](index=123&type=chunk) - On June 17, 2025, the company amended its **Credit Agreement**, reducing the **Term Loan's Applicable Rate** from **2.75%** to **2.50%**, incurring **$0.7 million** in fees[124](index=124&type=chunk)[125](index=125&type=chunk) - In February 2025, a new **stock repurchase program** of up to **$129.5 million** was authorized; **3.1 million shares** were repurchased for **$53.1 million** in **Q2 2025**, with **$76.4 million** remaining[126](index=126&type=chunk) [Components of Operating Results](index=33&type=section&id=Components%20of%20Operating%20Results) Details revenue components (subscription, services, other) and operating expenses (G&A, R&D, S&M) - **Revenues** consist of **subscription fees** (recognized ratably over contract term, including usage-based fees), **professional services** (recognized as control is transferred), and **other revenues** (from referral/marketing agreements)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - **Cost of revenues** includes personnel costs, third-party vendor fees, cloud-based hosting, allocated overhead, and amortization of developed technology. **Operating expenses** comprise **General and Administrative**, **Research and Development**, and **Sales and Marketing**[132](index=132&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk)[141](index=141&type=chunk) - The company expects **general and administrative expenses** to increase in absolute dollars but decrease as a percentage of revenues over the long term, while **research and development** and **sales and marketing expenses** are expected to increase in absolute dollars[136](index=136&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Revenue Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues, net | $84,597 | $78,676 | $166,085 | $156,492 | | YoY Change ($) | $5,921 | N/A | $9,593 | N/A | | YoY Change (%) | 8% | N/A | 6% | N/A | - **Revenue growth** was driven by higher **Lending Software Solutions revenue** (**$7.1M** for **Q2**, **$13.3M** for **H1**) from existing and new customers, primarily cross-selling, partially offset by lower **Data Verification Software Solutions revenue** (**$1.2M** for **Q2**, **$3.7M** for **H1**) due to a large customer downsell and lower mortgage-related volumes[149](index=149&type=chunk)[150](index=150&type=chunk) Operating Expense Performance (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $28,553 | $29,237 | $56,238 | $54,416 | | Research and development | $11,380 | $9,905 | $22,292 | $19,390 | | Sales and marketing | $11,933 | $11,467 | $23,536 | $22,003 | | Restructuring related costs | $0 | $988 | $0 | $4,179 | - **General and administrative expenses** decreased by **$0.7 million** (**2%**) in **Q2 2025 YoY**, mainly due to lower **legal fees** (**$3.1M** decline, including **$1.9M** class action settlement in 2024), partially offset by higher **employee-related costs** (**$3.1M** increase, including **$2.7M share-based compensation**)[157](index=157&type=chunk) - **Research and development expenses** increased by **$1.5 million** (**15%**) in **Q2 2025** and **$2.9 million** (**15%**) in **H1 2025 YoY**, primarily due to higher **share-based compensation expense**[159](index=159&type=chunk) - **Total other expenses, net**, decreased by **$1.0 million** (**12%**) in **Q2 2025** and **$2.0 million** (**12%**) in **H1 2025 YoY**, driven by lower **interest expense** and higher **interest income**, partially offset by **debt modification expenses**[163](index=163&type=chunk)[164](index=164&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses liquidity sources, cash flow activities, and contractual commitments as of June 30, 2025 - As of June 30, 2025, **principal liquidity sources** were **$91.1 million** in **cash** and **$34.6 million** in **accounts receivable**, along with an unused **$50.0 million revolving credit facility**[166](index=166&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Operating activities | $61,547 | $43,394 | $18,153 | 42% | | Investing activities | $(3,818) | $(3,836) | $18 | —% | | Financing activities | $(59,406) | $(26,990) | $(32,416) | (120)% | | Net (decrease) increase in cash | $(1,677) | $12,568 | $(14,245) | (113)% | - **Net cash used in financing activities** increased significantly due to **$53.3 million** in **common stock repurchases** (including excise taxes) and **$4.7 million** in **taxes paid for RSU settlements** in **H1 2025**[175](index=175&type=chunk) - The company has **contractual commitments** of **$31.7 million** as of June 30, 2025, primarily for third-party cloud infrastructure, with **$22.1 million** remaining under a renewed agreement through January 2028[179](index=179&type=chunk)[180](index=180&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 2 for recent accounting pronouncements, adoption dates, and estimated effects - Refer to **Note 2, 'Significant Accounting Policies,'** for a description of recent accounting pronouncements, including expected adoption dates and estimated effects[181](index=181&type=chunk) [Emerging Growth Company Status](index=42&type=section&id=Emerging%20Growth%20Company%20Status) MeridianLink is an EGC, electing extended transition for new accounting standards under the JOBS Act - **MeridianLink** is an **emerging growth company (EGC)** under the **JOBS Act** and has elected to use the **extended transition period** for complying with new or revised accounting standards[182](index=182&type=chunk) - The company will remain an **EGC** until December 31, 2026, or earlier if it meets certain revenue or market value thresholds[345](index=345&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) Defines and reconciles Adjusted EBITDA, a key non-GAAP financial measure, from net loss - **Adjusted EBITDA** is defined as **net loss** before **interest expense**, **provision for income taxes**, **depreciation and amortization of intangible assets**, **share-based compensation expense**, **employer payroll taxes on employee stock transactions**, **material weakness remediation expenses**, **debt modification expenses**, **acquisition-related costs**, **indemnity claim income**, **restructuring costs**, **litigation charges**, and **public offering expenses**[185](index=185&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(3,013) | $(9,670) | $(7,698) | $(14,976) | | Interest expense | $8,715 | $9,797 | $17,427 | $19,379 | | Provision for income taxes | $1,070 | $412 | $1,687 | $444 | | Depreciation and amortization of intangible assets | $14,151 | $14,573 | $28,837 | $29,096 | | Share-based compensation expense | $17,122 | $12,500 | $29,503 | $20,436 | | Adjusted EBITDA | $38,435 | $31,753 | $73,280 | $63,523 | - **Adjusted EBITDA** increased by **21.0%** to **$38.4 million** for **Q2 2025** and by **15.4%** to **$73.3 million** for **H1 2025**, compared to the same periods in 2024[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No significant changes in market risk exposure since December 31, 2024, per 2024 Annual Report - No significant changes in **market risk exposure** have occurred since December 31, 2024[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness in internal controls over financial reporting - **Disclosure controls and procedures** were not effective as of June 30, 2025, due to a **material weakness** in **internal controls over financial reporting**[192](index=192&type=chunk) - The **material weakness** is primarily related to insufficient controls over the set-up of customer contracts for billing and maintaining complete contract support[193](index=193&type=chunk) - **Remediation efforts**, including process improvements and new key controls, are ongoing, but the **material weakness** has not yet been fully remediated[194](index=194&type=chunk)[195](index=195&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) Company is not involved in material litigation or claims, only ordinary course legal proceedings - The company is not currently a party to any **litigation or claims** that would have a **material adverse effect** on its **business, operating results, financial condition, or cash flows**[200](index=200&type=chunk) [Item 1A. Risk Factors](index=47&type=page&id=Item%201A.%20Risk%20Factors) Outlines substantial risks of investing in MeridianLink, covering merger, strategy, operations, and finance [Summary of Risk Factors](index=47&type=section&id=Summary%20of%20Risk%20Factors) Summarizes key risks: merger, strategy, operations, legal, finance, conflicts of interest, and governance - Key risk categories include uncertainties related to the proposed **Merger**, challenges in strategy and industry, operational risks, legal and regulatory compliance, financial and accounting issues, potential conflicts of interest with significant stockholders, and risks concerning common stock and governance structure[203](index=203&type=chunk)[204](index=204&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) [Risks Related to the Proposed Merger](index=49&type=section&id=Risks%20Related%20to%20the%20Proposed%20Merger) - **Uncertainties and potential disruptions** associated with the pending **Merger**, including delays, failure to complete, and diversion of management attention, could adversely impact the company's **business, financial results, and stock price**[211](index=211&type=chunk)[213](index=213&type=chunk) - Failure to complete the **Merger** could lead to adverse reactions from financial markets, loss of investor confidence, litigation, and the requirement to pay a **$47 million termination fee** under certain circumstances[214](index=214&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - Regulatory approvals for the **Merger** may be delayed or impose unforeseen conditions, and the company is subject to contractual restrictions on business conduct during the pendency of the **Merger**[219](index=219&type=chunk)[220](index=220&type=chunk) [Risks Related to Our Strategy and Industry](index=52&type=section&id=Risks%20Related%20to%20Our%20Strategy%20and%20Industry) - **Lending volumes** are highly sensitive to **economic factors**, including **elevated interest rates**, which may remain low in 2025, adversely affecting the business if the company cannot increase its **market share** or cross-sell solutions[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - Failure to retain existing customers or attract new ones, innovate the **platform**, or address evolving **technological requirements** could lead to obsolescence, reduced revenue growth, and increased competition from both external providers and internal customer solutions[227](index=227&type=chunk)[228](index=228&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - The market for **cloud-based solutions** may develop slower than expected, or changes in customer preferences and pricing pressure from competitors could adversely affect sales and operating results[244](index=244&type=chunk) - The **financial services industry**, a significant source of revenue, is subject to **economic downturns**, consolidation, and increased regulation, which could reduce technology spending or lead to loss of business[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) [Risks Related to Our Business and Operations](index=57&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) - **Uncertain economic conditions**, including **elevated interest rates** and inflation, and changes in governmental policies, can adversely affect customer spending on technology and overall transaction volumes[249](index=249&type=chunk) - **Cybersecurity incidents**, **data breaches**, or other compromises, including those involving **AI technologies**, could result in unauthorized access to customer data, reputational damage, operational disruptions, and significant legal and financial liabilities[251](index=251&type=chunk)[252](index=252&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - **Defects, errors, or performance problems in software solutions**, or inability to effectively integrate with third-party systems, could harm reputation, increase costs, and impair sales[260](index=260&type=chunk)[262](index=262&type=chunk)[264](index=264&type=chunk) - Challenges in **customer support**, inherent inaccuracies in **key operating metrics**, volatility from **usage and volume-based pricing**, unpredictable sales cycles, and difficulties in retaining **key personnel** or managing growth can adversely affect business performance[267](index=267&type=chunk)[269](index=269&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk)[279](index=279&type=chunk)[282](index=282&type=chunk) - Dependence on third-party data centers and cloud hosting providers, as well as contracting product development operations to third parties in India, introduces risks of service disruption, security vulnerabilities, and operational inefficiencies[284](index=284&type=chunk)[286](index=286&type=chunk) [Risks Related to Legal and Regulatory Matters](index=67&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Matters) - Rapidly evolving privacy, information security, and data protection laws (e.g., **CCPA**, **CPRA**) and potential new federal laws could limit software solution adoption, increase compliance costs, and lead to enforcement actions[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - As a technology provider to highly regulated **financial institutions**, the company must comply with laws like **GLBA** and **FCRA**, and any failure to do so or to update solutions for regulatory changes could result in adverse business impacts, fines, or liabilities[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - Inability to protect **intellectual property** (**copyrights**, **trademarks**, **patents**, **trade secrets**) against unauthorized use or infringement claims could lead to significant expenses, litigation, and harm to reputation and business[299](index=299&type=chunk)[300](index=300&type=chunk) - Use of open-source software in solutions could subject the company to litigation or require costly re-engineering, while lawsuits by third parties for **intellectual property infringement** could result in significant expenses and harm operating results[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - Changes in financial services legislation, failure to comply with anti-bribery/anti-corruption laws, or successful assertions of sales/use tax obligations could adversely affect the business, increase costs, and impose operational constraints[306](index=306&type=chunk)[308](index=308&type=chunk)[311](index=311&type=chunk) [Risks Related to Finance and Accounting](index=73&type=section&id=Risks%20Related%20to%20Finance%20and%20Accounting) - **Quarterly results** may fluctuate significantly due to **economic conditions**, **customer retention**, transaction volumes, operating expenses, and other factors, potentially not fully reflecting underlying business performance[313](index=313&type=chunk) - **Forecasts** are subject to significant risks and uncertainties, and inaccuracies could materially affect revenues, expenses, and profitability, potentially leading to **impairment charges** for acquired entities[314](index=314&type=chunk)[316](index=316&type=chunk) - Due to **ratable revenue recognition**, downturns or upturns in business may not be fully reflected in results until future periods, creating a lag in financial reporting[317](index=317&type=chunk) - The company has significant **goodwill** and other **intangibles** (**$610.1M** and **$177.1M** as of June 30, 2025), and any impairment could result in a significant charge to earnings[318](index=318&type=chunk) - Realization of **deferred tax assets** is dependent on future taxable income, and the company maintains a partial **valuation allowance** (**$35.6M** as of June 30, 2025) due to uncertainty[319](index=319&type=chunk) - **High leverage** and **debt agreements** impose significant operating and financial restrictions, limiting flexibility and increasing vulnerability to adverse conditions[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - The company identified a **material weakness in internal controls over financial reporting related to revenue controls**, which is still undergoing remediation. Failure to remediate could lead to inaccurate financial reporting, regulatory investigations, and loss of investor confidence[328](index=328&type=chunk)[329](index=329&type=chunk)[333](index=333&type=chunk) - Changes in **tax laws**, such as the **TCJA** and **IRA**, or new unfavorable tax legislation like the **'One Big Beautiful Act of 2025,'** could adversely affect the company's **financial position** and increase **tax liabilities**[334](index=334&type=chunk) [Risks Related to Potential Conflicts of Interests and Related Parties](index=79&type=section&id=Risks%20Related%20to%20Potential%20Conflicts%20of%20Interests%20and%20Related%20Parties) - **Thoma Bravo** and its related entities beneficially own approximately **39.0%** of the **common stock**, allowing them significant influence over matters requiring stockholder approval and potentially delaying or preventing changes of control[335](index=335&type=chunk)[337](index=337&type=chunk) - **Thoma Bravo** may pursue corporate opportunities independent of the company, which could present conflicts of interest with the company and its other stockholders[338](index=338&type=chunk) [Risks Related to Our Common Stock and Governance Structure](index=80&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Governance%20Structure) - The **trading price of common stock** could be volatile due to numerous factors beyond the company's control, including **economic conditions**, **market sentiment**, operational results, and sales of large blocks of stock[341](index=341&type=chunk)[343](index=343&type=chunk) - As an **emerging growth company**, the company is exempt from certain public company requirements, which may make its **common stock** less attractive to some investors and increase **price volatility**[344](index=344&type=chunk)[346](index=346&type=chunk) - Future issuance or sale of capital stock, including preferred stock, could dilute existing stockholders' ownership interests and adversely affect the **market price of common stock**[347](index=347&type=chunk)[348](index=348&type=chunk) - The company does not intend to pay **dividends** on its **common stock**, meaning stockholder returns will depend solely on **stock price appreciation**[349](index=349&type=chunk) - The **stock repurchase program** may not be fully consummated or enhance long-term stockholder value, and repurchases could increase **stock price volatility** and diminish **cash reserves**[350](index=350&type=chunk)[351](index=351&type=chunk) - **Delaware law** and certain provisions in the company's charter and bylaws could delay, discourage, or prevent a change in control, limiting stockholders' ability to approve favorable transactions[352](index=352&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Summarizes the company's stock repurchase activity for the three months ended June 30, 2025 Stock Repurchase Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------ | :------------------------------- | :--------------------------- | | April 1 to April 30, 2025 | — | $— | | May 1 to May 31, 2025 | 312,123 | $16.52 | | June 1 to June 30, 2025 | 2,823,460 | $16.87 | | Total | 3,135,583 | N/A | - As of June 30, 2025, approximately **$76.7 million** remained authorized for repurchase under the **stock repurchase program**[356](index=356&type=chunk) [Item 3. Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[357](index=357&type=chunk) [Item 4. Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Mine Safety Disclosures** are not applicable to the company[358](index=358&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated a **Rule 10b5-1** or non-**Rule 10b5-1 trading arrangement** during the quarter ended June 30, 2025[359](index=359&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents [Signatures](index=87&type=section&id=Signatures) Report signed by MeridianLink's CEO, Nicolaas Vlok, and CFO, Elias Olmeta, as of August 11, 2025

Core Viewpoint - Johnson Fistel, PLLP has initiated an investigation into MeridianLink, Inc. regarding potential breaches of fiduciary duties by its board members in relation to the proposed sale to Centerbridge Partners, which may undervalue the company’s shares [1][6]. Company Overview - MeridianLink has entered into a definitive merger agreement with Centerbridge Partners, where shareholders will receive $20.00 in cash per share [6]. - The proposed merger price is significantly lower than MeridianLink's 52-week high of $25.33 per share, despite positive projections for the company's sales and revenue growth from Wall Street analysts [6]. Legal Context - The investigation by Johnson Fistel is aimed at assessing whether the board's actions in the sale process are in the best interest of shareholders [1]. - Shareholders who believe the deal undervalues their investment are encouraged to participate in the investigation [3]. Firm Background - Johnson Fistel, PLLP is recognized as a leading shareholder rights law firm with a strong track record in securities class action lawsuits, having recovered approximately $90.725 million for clients [4].