MeridianLink Inc (MLNK) Q2 2024 Earnings Call Highlights: Strong Revenue Growth Amidst Market ...

GuruFocus News
4 min read

In This Article:

  • GAAP Revenue: $78.7 million, 4% growth year-over-year.

  • Adjusted EBITDA: $31.8 million, 40% margin, 17% growth year-over-year.

  • Free Cash Flow: $12.4 million.

  • Cash and Cash Equivalents: $93 million at the end of Q2.

  • Total Debt: $475.1 million; Net Debt: $377.8 million.

  • Subscription Revenue: 3% growth year-over-year.

  • Services Revenue: 6% growth year-over-year.

  • Other Revenue: 20% growth year-over-year.

  • Lending Solutions Revenue Growth: 11% year-over-year.

  • Non-Mortgage Lending Revenue Growth: 14% year-over-year.

  • Data Verification Software Solutions Revenue: Declined 13% year-over-year.

  • Sales and Marketing Expense: $9.6 million, 12% of revenue, up 29% year-over-year.

  • R&D Expense: $7.2 million, 9% of revenue, declined 26% year-over-year.

  • G&A Expense: $9.8 million, 12% of revenue, increased 7% year-over-year.

  • Q3 Revenue Guidance: $78 million to $81 million, 2% to 6% year-over-year growth.

  • Full Year 2024 Revenue Guidance: $312 million to $318 million, 3% to 5% year-over-year growth.

  • Q3 Adjusted EBITDA Guidance: $30 million to $33 million, approximately 40% margin.

  • Full Year 2024 Adjusted EBITDA Guidance: $123 million to $128 million, approximately 40% margin.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • MeridianLink Inc (NYSE:MLNK) reported a strong second quarter with GAAP revenue of $78.7 million, marking a 4% growth year-over-year.

  • The company achieved an adjusted EBITDA of $31.8 million, representing a 40% EBITDA margin, meeting the high end of their guidance range.

  • MeridianLink Inc (NYSE:MLNK) successfully repriced its existing $426 million term loan, reducing interest expense by approximately 51 basis points.

  • The company continues to see strong demand for its MeridianLink One platform, particularly in digital lending solutions.

  • MeridianLink Inc (NYSE:MLNK) has a robust cross-sell strategy, with significant wins in expanding share of wallet within its existing customer base.

Negative Points

  • MeridianLink Inc (NYSE:MLNK) is facing macroeconomic headwinds, including multi-year lows in auto lending and generational lows in mortgage volumes.

  • The company experienced a downtick in customer counts, with net churn being a concern, particularly among smaller clients.

  • Mortgage-related revenue within lending software solutions declined 13% year-over-year due to customer churn and strength in the year-ago quarter.

  • Data verification software solutions revenue declined 13% year-over-year, driven by a significant down-sell of a large customer.

  • Community banks and credit unions are facing lower deposit flows, impacting loan volume growth and constraining MeridianLink Inc (NYSE:MLNK)'s growth.

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