MeridianLink Reports Fourth Quarter and Fiscal Year 2023 Results
- None.
- None.
Insights
The reported revenue growth of MeridianLink, particularly in its lending software solutions, is a positive indicator of the company's market position and operational efficiency. The 8% year-over-year increase in this segment suggests that MeridianLink is successfully capitalizing on the demand for financial technology solutions. However, the reported net loss of $(29.6) million, primarily due to a one-time non-cash tax expense, warrants a deeper look into the company's tax strategy and the sustainability of its financial structure. While this loss significantly impacts the reported earnings, it's important to note that the adjusted EBITDA remains strong at 42% of revenue, indicating healthy underlying operational profitability.
From a cash flow perspective, the positive cash flows from operations and free cash flow percentages reflect solid liquidity and financial flexibility. These metrics are particularly important for investors as they provide insight into the company's ability to generate cash and potentially return value to shareholders or reinvest in the business. The guidance for the upcoming fiscal year suggests a continuation of revenue growth, which may be a sign of confidence from the management in the company's strategic direction and market opportunities.
MeridianLink's performance in the financial technology sector should be evaluated against broader industry trends. The company's focus on cross-sell momentum and the expansion of its product suite, such as the integrations with Zest AI and Workato, indicates a strategic move to enhance its competitive edge and deepen its market penetration. The adoption of MeridianLink One and the successful signing of new customers for its point-of-sale solutions suggest that the company is effectively addressing market needs for integrated, efficient lending solutions.
Furthermore, the go-live of A+ Federal Credit Union and the reported doubling of instant approval rates for consumer loans highlight the tangible benefits of MeridianLink's offerings to its clients. As financial institutions continue to seek out technological advancements to improve their operations, MeridianLink's ability to deliver results can be a significant factor in its growth trajectory. The company's proactive approach to product and partner expansions is likely to resonate well with current and potential clients, potentially leading to increased market share.
The one-time non-cash tax expense that resulted in a net loss for the period is an accounting recognition that requires careful examination. It's indicative of a conservative approach to the valuation of deferred tax assets, which may reflect changes in expected future profitability or tax planning strategies. Stakeholders should consider the implications of such tax treatments and any potential impact on future financial statements. It's also crucial to assess the company's compliance with relevant tax laws and financial regulations, especially as they pertain to non-GAAP financial measures like adjusted EBITDA that are used to evaluate business performance.
While non-GAAP measures can provide additional insight into a company's operational efficiency, they should be considered alongside GAAP results for a comprehensive understanding of financial health. The discrepancy between GAAP and non-GAAP operating income highlights the importance of transparency in financial reporting and the need for stakeholders to understand the adjustments made.
Fourth quarter revenue of
“2023 was a solid year of execution, driven by robust demand and many innovative product and partner expansions,” said Nicolaas Vlok, chief executive officer of MeridianLink. “Our strong fourth quarter performance demonstrates our ability to execute in key strategic areas of the business that accelerate growth while also demonstrating cost discipline, which we see as a great achievement in the face of challenging macroeconomic conditions. I am proud of our team and am confident in our dedication to increasing the value of MeridianLink® One for our customers and stockholders.”
Quarterly Financial Highlights:
-
Revenue of
$74.6 million 6% year-over-year -
Lending software solutions revenue of
$59.5 million 8% year-over-year -
Operating income of
$6.8 million 9% of revenue, and non-GAAP operating income of$15.2 million 20% of revenue -
Net loss of
$(29.6) million $29.4 million $31.1 million 42% of revenue -
Cash flows from operations of
$12.5 million 17% of revenue, and free cash flow of$9.6 million 13% of revenue
2023 Fiscal Year Financial Highlights:
-
Revenue of
$303.6 million 5% year-over-year -
Lending software solutions revenue of
$232.2 million 11% year-over-year -
Operating income of
$15.5 million 5% of revenue, and non-GAAP operating income of$51.1 million 17% of revenue -
Net loss of
$(42.5) million $29.4 million $113.0 million 37% of revenue -
Cash flows from operations of
$68.0 million 22% of revenue, and free cash flow of$57.8 million 19% of revenue
Business and Operating Highlights:
- MeridianLink finished the year with strong software bookings, driven by the cross-sell momentum of MeridianLink One, which is evidence of the return on our Go-to-Market investment
- In the quarter, MeridianLink signed nine existing MeridianLink® Consumer customers on the MeridianLink® Mortgage solution and won multiple high-value platform deals, demonstrating the continued demand for MeridianLink One
- We expanded our capabilities through a new integration between MeridianLink® Engage and MeridianLink® Collect, allowing customers to automatically identify and optimize the debt wallet of pre-delinquent accounts
- MeridianLink enhanced its integration with Zest AI, a leader in automated underwriting, to provide multiple custom credit scores for decisioning MeridianLink Consumer loans, which increases cross-sell opportunities for customers
- We scaled our employment screening and background verification capabilities in our Data Verification Software Solutions by partnering with Workato, a leading Enterprise Automation platform
- In 2023, we signed more than 40 customers on MeridianLink® Access and MeridianLink® Mortgage Access, our new, highly configurable point-of-sale solutions
- MeridianLink announced the go-live of A+ Federal Credit Union, who doubled their instant approval rates on consumer loans after adding MeridianLink® Consulting, MeridianLink Engage, and MeridianLink® Insight to MeridianLink One
Business Outlook
Based on information as of today, March 5, 2024, the Company issues first quarter financial guidance and initiates full year 2024 financial guidance as follows:
First Quarter Fiscal 2024:
-
Revenue is expected to be in the range of
$75.0 million $78.0 million -
Adjusted EBITDA is expected to be in the range of
$28.0 million $31.0 million
Full Year 2024:
-
Revenue is expected to be in the range of
$313.0 million $323.0 million -
Adjusted EBITDA is expected to be in the range of
$123.0 million $130.0 million
Conference Call Information
MeridianLink will hold a conference call to discuss its fourth quarter results today, March 5, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 259-6580 from
About MeridianLink
MeridianLink® (NYSE: MLNK) empowers financial institutions and consumer reporting agencies to drive efficient growth. MeridianLink’s cloud-based digital lending, account opening, background screening, and data verification software solutions leverage shared intelligence from a unified data platform, MeridianLink® One, to enable customers of all sizes to identify growth opportunities, effectively scale up, and support compliance efforts, all while powering an enhanced experience for staff and consumers alike.
For more than 25 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities. Learn more at www.meridianlink.com.
Internal Controls
While we are still completing our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023, we expect to report a material weakness in internal control over financial reporting in our Annual Report on Form 10-K as of December 31, 2023. We have identified multiple control deficiencies that aggregate to a material weakness related to the design and operating effectiveness of controls over revenue as of December 31, 2023. This was primarily caused by insufficient controls over the set-up of customer contracts for billing and maintaining complete contract support that were not operating effectively. We can confirm that there has been no restatement of prior period financial statements and no change to our previously released financial results as a result of these control deficiencies.
Remediation efforts are currently underway, which include designing and implementing additional review processes, enhanced procedures, and controls, including with respect to customer contracts, as well as system improvements and implementations, staffing and training.
Operational Measures Definitions
We reference bookings, which is an internal operational measure of the business. Bookings is defined as the total of the minimum annual contracted value for newly sold capabilities of our software-as-a-service, or SaaS, products over a given time period, inclusive of any corresponding vendor fees owed to Third Parties.
Non-GAAP Financial Measures
To supplement the financial measures presented in accordance with generally accepted accounting principles, or GAAP, we provide certain non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin; non-GAAP operating income (loss); non-GAAP net income (loss); non-GAAP cost of revenue; non-GAAP sales and marketing expenses; non-GAAP research and development expenses; non-GAAP general and administrative expenses; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Rather, we believe that these non-GAAP financial measures, when viewed in addition to and not in lieu of our reported GAAP financial results, provide investors with additional meaningful information to assess our financial performance and trends, enable comparison of financial results between periods, and allow for greater transparency with respect to key metrics utilized internally in analyzing and operating our business. The following definitions are provided:
-
Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, restructuring related costs, and sponsor and third-party acquisition-related costs.
-
Non-GAAP net income (loss): GAAP net income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, restructuring related costs, sponsor and third-party acquisition-related costs, and the effect of income taxes, including the partial valuation allowance, on non-GAAP items. The effects of income taxes on non-GAAP items reflect a fixed long-term projected tax rate of
24% .
The Company employs a structural long-term projected non-GAAP income tax rate of24% for greater consistency across reporting periods, eliminating effects of items not directly related to the Company's operating structure that may vary in size and frequency. This long-term projected non-GAAP income tax rate is determined by analyzing a mix of historical and projected tax filing positions, assumes no additional acquisitions during the projection period or include the impact from the partial deferred tax asset valuation allowance, and takes into account various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from keyU.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for significant events such as significant alterations in theU.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations.
-
Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, restructuring related costs, sponsor and third-party acquisition related costs, and deferred revenue reductions from purchase accounting for acquisitions prior to the adoption of ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which we early adopted on January 1, 2022 on a prospective basis. Deferred revenue from acquisitions prior to the adoption of ASU 2021-08 was recognized on a straight line basis through December 31, 2023.
-
Non-GAAP cost of revenue: GAAP cost of revenue, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and amortization of developed technology.
-
Non-GAAP operating expenses: GAAP operating expenses, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and depreciation and amortization, as applicable.
- Free cash flow: GAAP cash flow from operating activities less GAAP purchases of property and equipment (Capital Expenditures) and capitalized costs related to developed technology (Capitalized Software).
Reconciliations to comparable GAAP financial measures are available in the accompanying schedules, which are posted as part of this earnings release on our website. No reconciliation is provided with respect to certain forward-looking non-GAAP financial measures as the GAAP measures are not accessible on a forward-looking basis. We cannot reliably predict all necessary components or their impact to reconcile such financial measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a significant impact on our future GAAP financial results.
Forward-Looking Statements
This release contains, and our above-referenced conference call and webcast will contain, statements which are not historical facts and are considered forward-looking 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. Generally, these statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions, although not all forward-looking statements contain these identifying words. Further, statements describing our strategy, outlook, guidance, plans, intentions, or goals are also forward-looking statements. These forward-looking statements reflect our predictions, expectations, or forecasts, including, but not limited to, statements regarding, and guidance with respect to, our strategy, our future financial and operational performance, future economic and market conditions, our strategic initiatives, including anticipated benefits and integration of an acquisition, our stock repurchase program, including the execution and amount of repurchases, our restructuring and realignment plans, including expected associated timing, benefits, and costs, a potential material weakness in our internal control over financial reporting, including the sufficiency and timing of our remediation efforts relating thereto, our ability to retain and attract customers and product partners, the benefit to us and our customers of integrations with our product partners, potential losses related to any commercial disputes, our development or delivery of new or enhanced solutions and anticipated results of those solutions for our customers, our ability to effectively implement, integrate, and service our customers, our market size and growth opportunities, our competitive positioning, projected costs, technological capabilities and plans, and objectives of management. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks related to our business and industry, as well as those set forth in Item 1A. Risk Factors, or elsewhere, in our Annual Report on Form 10-K for the most recently ended fiscal year, any updates in our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K, and our other SEC filings. These forward-looking statements are based on reasonable assumptions as of the date hereof. The plans, intentions, or expectations disclosed in our forward-looking statements may not be achieved, and you should not rely upon forward-looking statements as predictions of future events. We undertake no obligation, other than as required by applicable law, to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Consolidated Balance Sheets (unaudited) (in thousands, except share and per share data) |
|||||||
|
As of December 31, |
||||||
|
2023 |
|
2022 |
||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
80,441 |
|
|
$ |
55,780 |
|
Accounts receivable, net |
|
32,412 |
|
|
|
32,905 |
|
Prepaid expenses and other current assets |
|
11,574 |
|
|
|
9,447 |
|
Escrow deposit |
|
— |
|
|
|
30,000 |
|
Total current assets |
|
124,427 |
|
|
|
128,132 |
|
Property and equipment, net |
|
3,337 |
|
|
|
4,245 |
|
Right of use assets, net |
|
1,140 |
|
|
|
2,185 |
|
Intangible assets, net |
|
251,060 |
|
|
|
297,475 |
|
Deferred tax assets, net |
|
— |
|
|
|
13,939 |
|
Goodwill |
|
610,063 |
|
|
|
608,657 |
|
Other assets |
|
6,224 |
|
|
|
4,524 |
|
Total assets |
$ |
996,251 |
|
|
$ |
1,059,157 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
4,405 |
|
|
$ |
1,249 |
|
Accrued liabilities |
|
30,673 |
|
|
|
32,500 |
|
Deferred revenue |
|
17,224 |
|
|
|
16,945 |
|
Current portion of debt, net of debt issuance costs |
|
3,542 |
|
|
|
3,505 |
|
Total current liabilities |
|
55,844 |
|
|
|
54,199 |
|
Debt, net of debt issuance costs |
|
420,004 |
|
|
|
423,404 |
|
Deferred tax liabilities, net |
|
10,823 |
|
|
|
— |
|
Long-term deferred revenue |
|
792 |
|
|
|
1,141 |
|
Other long-term liabilities |
|
541 |
|
|
|
1,322 |
|
Total liabilities |
|
488,004 |
|
|
|
480,066 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ Equity |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
129 |
|
|
|
128 |
|
Additional paid-in capital |
|
654,634 |
|
|
|
621,396 |
|
Accumulated deficit |
|
(146,516 |
) |
|
|
(42,433 |
) |
Total stockholders’ equity |
|
508,247 |
|
|
|
579,091 |
|
Total liabilities and stockholders’ equity |
$ |
996,251 |
|
|
$ |
1,059,157 |
|
Consolidated Statements of Operations (unaudited) (in thousands, except share and per share data) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenues, net |
$ |
74,579 |
|
|
$ |
70,551 |
|
|
$ |
303,617 |
|
|
$ |
288,046 |
|
Cost of revenues: |
|
|
|
|
|
|
|
||||||||
Subscription and services |
|
20,389 |
|
|
|
22,486 |
|
|
|
90,362 |
|
|
|
90,778 |
|
Amortization of developed technology |
|
4,641 |
|
|
|
4,266 |
|
|
|
18,129 |
|
|
|
15,553 |
|
Total cost of revenues |
|
25,030 |
|
|
|
26,752 |
|
|
|
108,491 |
|
|
|
106,331 |
|
Gross profit |
|
49,549 |
|
|
|
43,799 |
|
|
|
195,126 |
|
|
|
181,715 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
General and administrative |
|
22,481 |
|
|
|
22,233 |
|
|
|
92,663 |
|
|
|
82,649 |
|
Research and development |
|
10,703 |
|
|
|
12,178 |
|
|
|
47,517 |
|
|
|
42,592 |
|
Sales and marketing |
|
9,580 |
|
|
|
7,139 |
|
|
|
35,792 |
|
|
|
23,658 |
|
Restructuring related costs |
|
— |
|
|
|
— |
|
|
|
3,621 |
|
|
|
— |
|
Acquisition related costs |
|
— |
|
|
|
1,679 |
|
|
|
— |
|
|
|
4,228 |
|
Total operating expenses |
|
42,764 |
|
|
|
43,229 |
|
|
|
179,593 |
|
|
|
153,127 |
|
Operating income |
|
6,785 |
|
|
|
570 |
|
|
|
15,533 |
|
|
|
28,588 |
|
Other (income) expense, net: |
|
|
|
|
|
|
|
||||||||
Interest and other income |
|
(1,433 |
) |
|
|
(357 |
) |
|
|
(4,029 |
) |
|
|
(1,063 |
) |
Interest expense |
|
10,031 |
|
|
|
7,578 |
|
|
|
38,158 |
|
|
|
24,227 |
|
Total other expense, net |
|
8,598 |
|
|
|
7,221 |
|
|
|
34,129 |
|
|
|
23,164 |
|
(Loss) income before income taxes |
|
(1,813 |
) |
|
|
(6,651 |
) |
|
|
(18,596 |
) |
|
|
5,424 |
|
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes |
|
27,761 |
|
|
|
(1,188 |
) |
|
|
23,943 |
|
|
|
4,130 |
|
Net (loss) income |
$ |
(29,574 |
) |
|
$ |
(5,463 |
) |
|
$ |
(42,539 |
) |
|
$ |
1,294 |
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.38 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.02 |
|
Diluted |
$ |
(0.38 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.53 |
) |
|
$ |
0.02 |
|
Weighted average common stock outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
78,767,040 |
|
|
|
80,749,744 |
|
|
|
80,349,895 |
|
|
|
80,454,356 |
|
Diluted |
|
78,767,040 |
|
|
|
80,749,744 |
|
|
|
80,349,895 |
|
|
|
82,403,679 |
|
Net Revenues by Major Source (unaudited) (in thousands) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Subscription fees |
$ |
61,999 |
|
$ |
60,004 |
|
$ |
256,787 |
|
$ |
248,864 |
||||
Professional services |
|
10,107 |
|
|
|
8,250 |
|
|
|
36,250 |
|
|
|
29,320 |
|
Other |
|
2,473 |
|
|
|
2,297 |
|
|
|
10,580 |
|
|
|
9,862 |
|
Total |
$ |
74,579 |
|
|
$ |
70,551 |
|
|
$ |
303,617 |
|
|
$ |
288,046 |
|
Net Revenues by Solution Type (unaudited) (in thousands) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Lending software solutions |
$ |
59,471 |
|
|
$ |
55,041 |
|
$ |
232,199 |
|
|
$ |
208,290 |
||
Data verification software solutions |
|
15,108 |
|
|
|
15,510 |
|
|
|
71,418 |
|
|
|
79,756 |
|
Total (1) |
$ |
74,579 |
|
|
$ |
70,551 |
|
|
$ |
303,617 |
|
|
$ |
288,046 |
|
% Growth attributable to: |
|
|
|
|
|
|
|
||||||||
Lending software solutions |
|
6 |
% |
|
|
|
|
8 |
% |
|
|
||||
Data verification software |
|
(1 |
)% |
|
|
|
|
(3 |
)% |
|
|
||||
Total % growth |
|
6 |
% |
|
|
|
|
5 |
% |
|
|
||||
___________ |
|||||||||||||||
(1) Percent revenue related to the mortgage loan market: |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Lending software solutions |
13 |
% |
|
10 |
% |
|
12 |
% |
|
8 |
% |
||||
Data verification software |
|
56 |
% |
|
|
59 |
% |
|
|
59 |
% |
|
|
64 |
% |
Total % revenue related to mortgage loan market |
|
22 |
% |
|
|
21 |
% |
|
|
23 |
% |
|
|
23 |
% |
Consolidated Statements of Cash Flows (unaudited) (in thousands) |
|||||||
|
Year Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net (loss) income |
$ |
(42,539 |
) |
|
$ |
1,294 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
57,829 |
|
|
|
53,982 |
|
Provision for expected credit losses |
|
930 |
|
|
|
— |
|
Amortization of debt issuance costs |
|
1,085 |
|
|
|
2,760 |
|
Share-based compensation expense |
|
30,550 |
|
|
|
22,761 |
|
Deferred income taxes |
|
23,630 |
|
|
|
1,905 |
|
Loss on disposal of property and equipment |
|
— |
|
|
|
678 |
|
Gain on change in fair value of earnout |
|
— |
|
|
|
(162 |
) |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
Accounts receivable |
|
(443 |
) |
|
|
(7,005 |
) |
Prepaid expenses and other assets |
|
(3,665 |
) |
|
|
297 |
|
Accounts payable |
|
3,170 |
|
|
|
(1,564 |
) |
Accrued liabilities |
|
(2,514 |
) |
|
|
(2,281 |
) |
Deferred revenue |
|
(69 |
) |
|
|
1,922 |
|
Net cash provided by operating activities |
|
67,964 |
|
|
|
74,587 |
|
Cash flows from investing activities: |
|
|
|
||||
Capitalized software additions |
|
(9,250 |
) |
|
|
(8,228 |
) |
Purchases of property and equipment |
|
(943 |
) |
|
|
(1,136 |
) |
Return (payment) of escrow deposit |
|
30,000 |
|
|
|
(30,000 |
) |
Funds received in connection with former business combination |
|
1,219 |
|
|
|
— |
|
Funds paid in connection with former business combination |
|
(1,219 |
) |
|
|
— |
|
Acquisition, net of cash acquired – Beanstalk Networks LLC |
|
326 |
|
|
|
(61,830 |
) |
Acquisition, net of cash and restricted cash acquired – StreetShares, Inc. |
|
— |
|
|
|
(23,137 |
) |
Net cash provided by (used in) investing activities |
|
20,133 |
|
|
|
(124,331 |
) |
Cash flows from financing activities: |
|
|
|
||||
Repurchases of common stock |
|
(61,171 |
) |
|
|
(3,375 |
) |
Proceeds from exercise of stock options |
|
2,373 |
|
|
|
211 |
|
Proceeds from employee stock purchase plan |
|
1,679 |
|
|
|
1,777 |
|
Taxes paid related to net share settlement of restricted stock units |
|
(1,667 |
) |
|
|
(206 |
) |
Principal payments of debt |
|
(4,350 |
) |
|
|
(3,263 |
) |
Payments of deferred offering costs |
|
(300 |
) |
|
|
— |
|
Payment of Regulation A+ investor note |
|
— |
|
|
|
(3,265 |
) |
Net cash used in financing activities |
|
(63,436 |
) |
|
|
(8,121 |
) |
Net increase (decrease) in cash and cash equivalents |
|
24,661 |
|
|
|
(57,865 |
) |
Cash and cash equivalents, beginning of period |
|
55,780 |
|
|
|
113,645 |
|
Cash and cash equivalents, end of period |
$ |
80,441 |
|
|
$ |
55,780 |
|
Supplemental disclosures of cash flow information: |
|
|
|
||||
Cash paid for interest |
$ |
37,018 |
|
$ |
21,348 |
||
Cash paid for income taxes |
|
2,522 |
|
|
|
1,343 |
|
Non-cash investing and financing activities: |
|
|
|
||||
Shares withheld with respect to net settlement of restricted stock units |
|
1,667 |
|
|
|
206 |
|
Purchase price allocation adjustment for Beanstalk Networks LLC acquisition |
|
274 |
|
|
|
— |
|
Excise taxes payable included in repurchases of common stock |
|
377 |
|
|
|
— |
|
Share-based compensation expense capitalized to software additions |
|
303 |
|
|
|
311 |
|
Purchase price allocation adjustment related to income tax effects for StreetShares acquisition |
|
1,132 |
|
|
|
— |
|
Purchases of property and equipment included in accounts payable and accrued liabilities |
|
80 |
|
|
|
72 |
|
Costs related to shelf registration on Form S-3 included in accrued liabilities |
|
75 |
|
|
|
— |
|
Vesting of restricted stock awards and restricted stock units |
|
5 |
|
|
|
40 |
|
Regulation A+ investor note assumed in business combination |
|
— |
|
|
|
3,265 |
|
Initial recognition of operating lease liabilities |
|
— |
|
|
|
3,791 |
|
Initial recognition of operating lease right-of-use assets |
|
— |
|
|
|
3,047 |
|
Reconciliation from GAAP to Non-GAAP Results (unaudited) (in thousands, except share and per share data) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Operating income |
$ |
6,785 |
|
|
$ |
570 |
|
|
$ |
15,533 |
|
|
$ |
28,588 |
|
Add: Share-based compensation expense |
|
8,335 |
|
|
|
6,260 |
|
|
|
31,213 |
|
|
|
22,761 |
|
Add: Employer payroll taxes on employee stock transactions |
|
89 |
|
|
|
20 |
|
|
|
687 |
|
|
|
350 |
|
Add: Restructuring related costs(2) |
|
— |
|
|
|
— |
|
|
|
3,621 |
|
|
|
— |
|
Add: Sponsor and third-party acquisition related costs |
|
— |
|
|
|
1,679 |
|
|
|
— |
|
|
|
4,228 |
|
Non-GAAP operating income |
$ |
15,209 |
|
|
$ |
8,529 |
|
|
$ |
51,054 |
|
|
$ |
55,927 |
|
Operating margin |
|
9 |
% |
|
|
1 |
% |
|
|
5 |
% |
|
|
10 |
% |
Non-GAAP operating margin |
|
20 |
% |
|
|
12 |
% |
|
|
17 |
% |
|
|
19 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net (loss) income |
$ |
(29,574 |
) |
|
$ |
(5,463 |
) |
|
$ |
(42,539 |
) |
|
$ |
1,294 |
|
Add: Share-based compensation expense |
|
8,335 |
|
|
|
6,260 |
|
|
|
31,213 |
|
|
|
22,761 |
|
Add: Employer payroll taxes on employee stock transactions |
|
89 |
|
|
|
20 |
|
|
|
687 |
|
|
|
350 |
|
Add: Restructuring related costs(2) |
|
— |
|
|
|
— |
|
|
|
3,621 |
|
|
|
— |
|
Add: Sponsor and third-party acquisition related costs |
|
— |
|
|
|
1,679 |
|
|
|
— |
|
|
|
4,228 |
|
Subtract: Income tax effect on non-GAAP items |
|
(2,022 |
) |
|
|
(1,910 |
) |
|
|
(8,525 |
) |
|
|
(6,561 |
) |
Non-GAAP net (loss) income |
$ |
(23,172 |
) |
|
$ |
586 |
|
|
$ |
(15,543 |
) |
|
$ |
22,072 |
|
Non-GAAP basic net (loss) income per share |
$ |
(0.29 |
) |
|
$ |
0.01 |
|
|
$ |
(0.19 |
) |
|
$ |
0.27 |
|
Non-GAAP diluted net (loss) income per share |
$ |
(0.29 |
) |
|
$ |
0.01 |
|
|
$ |
(0.19 |
) |
|
$ |
0.27 |
|
Weighted average shares used to compute Non-GAAP basic net (loss) income per share |
|
78,767,040 |
|
|
|
80,749,744 |
|
|
|
80,349,895 |
|
|
|
80,454,356 |
|
Weighted average shares used to compute Non-GAAP diluted net (loss) income per share |
|
78,767,040 |
|
|
|
82,413,712 |
|
|
|
80,349,895 |
|
|
|
82,403,679 |
|
Net (loss) income margin |
|
(40 |
)% |
|
|
(8 |
)% |
|
|
(14 |
)% |
|
|
— |
% |
Non-GAAP net (loss) income margin |
|
(31 |
)% |
|
|
1 |
% |
|
|
(5 |
)% |
|
|
8 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net (loss) income |
$ |
(29,574 |
) |
|
$ |
(5,463 |
) |
|
$ |
(42,539 |
) |
|
$ |
1,294 |
|
Interest expense |
|
10,031 |
|
|
|
7,578 |
|
|
|
38,158 |
|
|
|
24,227 |
|
Taxes(1) |
|
27,761 |
|
|
|
(1,188 |
) |
|
|
23,943 |
|
|
|
4,130 |
|
Depreciation and amortization |
|
14,441 |
|
|
|
14,234 |
|
|
|
57,829 |
|
|
|
53,982 |
|
Share-based compensation expense |
|
8,335 |
|
|
|
6,260 |
|
|
|
31,213 |
|
|
|
22,761 |
|
Employer payroll taxes on employee stock transactions |
|
89 |
|
|
|
20 |
|
|
|
687 |
|
|
|
350 |
|
Restructuring related costs(2) |
|
— |
|
|
|
— |
|
|
|
3,621 |
|
|
|
— |
|
Acquisition related costs |
|
— |
|
|
|
1,679 |
|
|
|
— |
|
|
|
4,228 |
|
Deferred revenue reduction from purchase accounting for acquisitions prior to 2022 |
|
19 |
|
|
|
51 |
|
|
|
78 |
|
|
|
227 |
|
Adjusted EBITDA |
$ |
31,102 |
|
|
$ |
23,171 |
|
|
$ |
112,990 |
|
|
$ |
111,199 |
|
Net (loss) income margin |
|
(40 |
)% |
|
|
(8 |
)% |
|
|
(14 |
)% |
|
|
— |
% |
Adjusted EBITDA margin |
|
42 |
% |
|
|
33 |
% |
|
|
37 |
% |
|
|
39 |
% |
(1) Taxes reflects a one-time non-cash tax expense of |
|||||||||||||||
(2) Restructuring related costs are inclusive of |
|||||||||||||||
Reconciliation from GAAP to Non-GAAP Results (unaudited) (in thousands) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Cost of revenue |
$ |
25,030 |
|
|
$ |
26,752 |
|
|
$ |
108,491 |
|
|
$ |
106,331 |
|
Less: Share-based compensation expense |
|
930 |
|
|
|
1,063 |
|
|
|
3,848 |
|
|
|
4,630 |
|
Less: Employer payroll taxes on employee stock transactions |
|
21 |
|
|
|
6 |
|
|
|
157 |
|
|
|
127 |
|
Less: Amortization of developed technology |
|
4,641 |
|
|
|
4,266 |
|
|
|
18,129 |
|
|
|
15,553 |
|
Non-GAAP cost of revenue |
$ |
19,438 |
|
|
$ |
21,417 |
|
|
$ |
86,357 |
|
|
$ |
86,021 |
|
Cost of revenue as a % of revenue |
|
34 |
% |
|
|
38 |
% |
|
|
36 |
% |
|
|
37 |
% |
Non-GAAP cost of revenue as a % of revenue |
|
26 |
% |
|
|
30 |
% |
|
|
28 |
% |
|
|
30 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
General and administrative |
$ |
22,481 |
|
|
$ |
22,233 |
|
|
$ |
92,663 |
|
|
$ |
82,649 |
|
Less: Share-based compensation expense |
|
4,519 |
|
|
|
2,552 |
|
|
|
16,456 |
|
|
|
9,499 |
|
Less: Employer payroll taxes on employee stock transactions |
|
30 |
|
|
|
6 |
|
|
|
246 |
|
|
|
81 |
|
Less: Depreciation expense |
|
381 |
|
|
|
599 |
|
|
|
1,860 |
|
|
|
2,319 |
|
Less: Amortization of intangibles |
|
9,419 |
|
|
|
9,369 |
|
|
|
37,840 |
|
|
|
36,110 |
|
Non-GAAP general & administrative |
$ |
8,132 |
|
|
$ |
9,707 |
|
|
$ |
36,261 |
|
|
$ |
34,640 |
|
General and administrative as a % of revenue |
|
30 |
% |
|
|
32 |
% |
|
|
31 |
% |
|
|
29 |
% |
Non-GAAP general and administrative as a % of revenue |
|
11 |
% |
|
|
14 |
% |
|
|
12 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Research and development |
$ |
10,703 |
|
|
$ |
12,178 |
|
|
$ |
47,517 |
|
|
$ |
42,592 |
|
Less: Share-based compensation expense |
|
1,692 |
|
|
|
2,014 |
|
|
|
7,060 |
|
|
|
6,472 |
|
Less: Employer payroll taxes on employee stock transactions |
|
26 |
|
|
|
6 |
|
|
|
189 |
|
|
|
102 |
|
Non-GAAP research and development |
$ |
8,985 |
|
|
$ |
10,158 |
|
|
$ |
40,268 |
|
|
$ |
36,018 |
|
Research and development as a % of revenue |
|
14 |
% |
|
|
17 |
% |
|
|
16 |
% |
|
|
15 |
% |
Non-GAAP research and development as a % of revenue |
|
12 |
% |
|
|
14 |
% |
|
|
13 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Sales and marketing |
$ |
9,580 |
|
|
$ |
7,139 |
|
|
$ |
35,792 |
|
|
$ |
23,658 |
|
Less: Share-based compensation expense |
|
1,194 |
|
|
|
631 |
|
|
|
3,849 |
|
|
|
2,160 |
|
Less: Employer payroll taxes on employee stock transactions |
|
12 |
|
|
|
2 |
|
|
|
95 |
|
|
|
40 |
|
Non-GAAP sales and marketing |
$ |
8,374 |
|
|
$ |
6,506 |
|
|
$ |
31,848 |
|
|
$ |
21,458 |
|
Sales and marketing as a % of revenue |
|
13 |
% |
|
|
10 |
% |
|
|
12 |
% |
|
|
8 |
% |
Non-GAAP sales and marketing as a % of revenue |
|
11 |
% |
|
|
9 |
% |
|
|
10 |
% |
|
|
7 |
% |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net cash provided by operating activities |
$ |
12,478 |
|
|
$ |
7,352 |
|
|
$ |
67,964 |
|
|
$ |
74,587 |
|
Less: Capitalized software |
|
2,246 |
|
|
|
1,905 |
|
|
|
9,250 |
|
|
|
8,228 |
|
Less: Capital expenditures |
|
596 |
|
|
|
247 |
|
|
|
943 |
|
|
|
1,136 |
|
Free cash flow |
$ |
9,636 |
|
|
$ |
5,200 |
|
|
$ |
57,771 |
|
|
$ |
65,223 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240305574206/en/
Press Contact
Becky Frost
(714) 784-5839
Media@meridianlink.com
Investor Relations Contact
Gianna Rotellini
(714) 332-6357
InvestorRelations@meridianlink.com
Source: MeridianLink, Inc.
FAQ
What was MeridianLink's (MLNK) revenue in the fourth quarter of 2023?
What drove the revenue growth for MeridianLink in the fourth quarter?
What was the net loss reported by MeridianLink in the fourth quarter of 2023?
What was the operating income for MeridianLink in the fourth quarter of 2023?
What financial guidance did MeridianLink provide for the first quarter of fiscal year 2024?
What was MeridianLink's revenue for the fiscal year 2023?
What partnership did MeridianLink announce in 2023 to enhance its capabilities?
How did MeridianLink's operating income compare to revenue for the fiscal year 2023?
What is MeridianLink's adjusted EBITDA for the full year 2024 expected to be?
