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MeridianLink, Inc. (MLNK)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue of $81.5M grew 5% YoY and modestly beat S&P Global consensus ($80.5M), while non-GAAP diluted EPS of $0.09 missed consensus ($0.11); adjusted EBITDA margin was 43% with strong free cash flow conversion at 50% of revenue . Consensus values marked with an asterisk; Values retrieved from S&P Global.*
  • Lending Software Solutions rose 10% YoY to $67.1M on ACV release, larger deal mix, cross-sell momentum, and accelerated mortgage demand (15 mortgage deals, up ~90% YoY) .
  • FY2025 guidance was maintained: revenue $326–334M and adjusted EBITDA $131.5–137.5M; management flagged tariff-related uncertainty and expects volumes to decelerate in H2 .
  • Strategic catalysts: CEO transition to Larry Katz effective Oct 1, 2025; investments in product and go-to-market, with focus on partner ecosystem, account opening, and AI-enabled automation .
  • Cash from operations of $42.4M and free cash flow of $40.6M provided balance sheet flexibility to pursue disciplined M&A and organic investments .

What Went Well and What Went Wrong

What Went Well

  • Strong core momentum: Lending Software Solutions revenue +10% YoY to $67.1M; consumer lending +11% YoY, aided by ACV release and auto volumes .
  • Bookings and mortgage acceleration: 15 mortgage lending deals, up nearly 90% YoY; improving churn and refi volume uplift supported mortgage revenue growth of 7% YoY .
  • Operational efficiency and cash generation: adjusted EBITDA $34.8M (43% margin) and free cash flow $40.6M (50% of revenue) .
  • Management quote: “We benefited from a favorable demand environment… increased mix of larger deals, continued cross-sell momentum, and accelerated demand for mortgage lending solutions.” — Larry Katz .

What Went Wrong

  • Data Verification Solutions declined 15% YoY; mortgage-related DBS (half of DBS) fell 28% YoY due to a large customer downsell rolling through the year ($6M annual impact) .
  • Services revenue -4% YoY on a one-time core upgrade program; management expects flat services growth excluding this program .
  • EPS miss versus S&P Global consensus ($0.09 reported vs $0.11 estimate) despite strong EBITDA; management highlighted cost discipline but flagged macro uncertainty and tariff impacts on volumes into H2 * [functions.GetEstimates]* .

Financial Results

Headline metrics vs prior periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$80.4 $79.4 $81.5
Non-GAAP Diluted EPS ($)$0.06 $0.08 $0.09
Adjusted EBITDA Margin (%)42% 42% 43%
Adjusted Gross Margin (%)73% (derived from non-GAAP CoR% 27%) 74% 74%
Cash from Operations ($USD Millions)$20.6 $13.8 $42.4
Free Cash Flow ($USD Millions)$18.7 $12.1 $40.6

Revenue breakdown

MetricQ3 2024Q4 2024Q1 2025
Lending Software Solutions ($USD Millions)$63.0 $63.8 $67.1
Data Verification Software ($USD Millions)$17.4 $15.7 $14.4
% Revenue Related to Mortgage – Lending10% 11% 10%
% Revenue Related to Mortgage – DBS56% 57% 49%
Total % Revenue Related to Mortgage20% 20% 17%

Revenue by source

SourceQ3 2024Q4 2024Q1 2025
Subscription Fees ($USD Millions)$67.3 $65.2 $68.7
Professional Services ($USD Millions)$10.1 $10.8 $8.7
Other ($USD Millions)$2.9 $3.5 $4.1

KPIs

KPIQ3 2024Q4 2024Q1 2025
Lending ARR ($USD Millions)$195.5 $199.8 $204.7
Lending NRR (%)101.9% 104.5% 106.3%
Total NRR (%)99.2% 101.6% 103.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$326–$334 $326–$334 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$131.5–$137.5 $131.5–$137.5 Maintained

Management noted potential tariff-related volume headwinds and unchanged annual outlook pending greater clarity post-Q2 .

Earnings Call Themes & Trends

TopicQ-2 (Q3 2024)Q-1 (Q4 2024)Current (Q1 2025)Trend
AI/automation & partner ecosystemEmphasis on partner integrations; vertical SaaS land-and-expand motion New Share-of-Wallet product; partner adds like ScoreNavigator Continued enhancements to Access; 6 new integrations across fraud/ID/credit Expanding capabilities and integrations
Mortgage demand & churnMortgage deal wins; processing time improvements (Broadway Bank) Mortgage business flipping to positive growth in 2025; churn diminishing 15 mortgage deals, +~90% YoY; refi uplift; improving churn Improving from trough levels
Macro/tariffsMacro headwinds temper volumes Expect flat consumer volumes in higher-for-longer rates Tariff-related auto pull-forward; expect H2 deceleration, uncertainty Near-term volatility; cautious H2 outlook
Product & UX (account opening)—Launches and UX focus; pipeline strength Secondary account opening time reduced ~70%; workflow auto-fill UX simplification driving activation
M&A appetite—Capital allocation: organic first, disciplined M&A second, buybacks third Capacity up to ~$200M without external capital; disciplined valuation Active, disciplined approach
Customer mix/NRR—NRR up on ACV release and churn limited to small customers Lending NRR 106%; average ARR/customer at all-time high [$135k] Larger customer mix; resilient cohorts

Management Commentary

  • “We achieved $81.5 million in total revenue… and adjusted EBITDA of $34.8 million, a 43% adjusted EBITDA margin.” — Nicolaas Vlok .
  • “We are the leading digital lending platform for community financial institutions… three strategic pillars: increase product portfolio, make it easier to do business with us, strengthen our talent.” — Larry Katz .
  • “Total bookings increased this quarter… majority from cross-sell/upsell, with accelerated mortgage demand; 15 mortgage lending deals, up nearly 90% YoY.” — Elias Olmeta .
  • “Secondary account applications… reduced total time by approximately 70% via workflow streamlining and auto-fill from core.” — Elias Olmeta .
  • “We may provide an update [to guidance] once we are through the second quarter and assuming greater clarity on the impacts of tariffs and the macroeconomic environment.” — Elias Olmeta .

Q&A Highlights

  • Pipeline and demand: Healthy pipeline; cross-sell and new logos solid; watching for potential softness at the top of funnel; sales cycles steady so far .
  • Consumer LOS growth drivers: 11% YoY growth mainly from ACV release (new logos + expansion) with some volume uplift; average ARR per customer rising .
  • Auto lending/tariffs: Q1 saw likely pull-forward before tariffs; FY2025 consumer growth assumption at ~7% with cautious view on auto volumes .
  • Mortgage momentum and retention: Strength in mid-market wins; improving churn; refi volumes contributed in Q1 .
  • Go-to-market investments: Sales engineering/consulting and demand generation to improve articulation of platform value; momentum building .
  • Account opening strategy: Omnichannel capabilities tightly integrated to LOS for workflow, data, and security advantages; differentiation emphasized .
  • M&A capacity: Cash ~$129M; revolver availability; room to do deals up to ~$200M without external capital; disciplined valuation focus .

Estimates Context

MetricS&P Global Consensus*Reported
Revenue ($USD)$80,470,150* [functions.GetEstimates]$81,488,000
Primary EPS ($)$0.111* [functions.GetEstimates]$0.09 (non-GAAP diluted)
Primary EPS – # of Estimates4* [functions.GetEstimates]—
Revenue – # of Estimates6* [functions.GetEstimates]—
  • Result: Revenue beat; EPS missed. Management highlighted strong adjusted EBITDA margin (43%) and cash generation despite macro/tariff uncertainty . Values retrieved from S&P Global.*

Note: EBITDA consensus and reported definitions may differ (GAAP vs non-GAAP); company reports adjusted EBITDA of $34.8M (43% margin) .

Key Takeaways for Investors

  • Core franchise strength: Lending Software Solutions +10% YoY on ACV release and cross-sell, with improving mortgage dynamics; NRR 106% underscores cohort resilience .
  • Quality of earnings: 43% adjusted EBITDA margin and 50% FCF margin indicate durable unit economics; cash generation supports organic investment and disciplined M&A .
  • Guidance intact but cautious: FY2025 kept at $326–$334M revenue and $131.5–$137.5M adj. EBITDA; management expects H2 volume deceleration tied to tariffs and macro .
  • Strategic execution: CEO transition to Katz aligns with focus on product velocity, customer experience simplification, and talent; partner ecosystem and AI use cases expanding .
  • DBS headwinds largely known: Annual ~$6M downsell impact continues to weigh on DBS; magnitude is quantified and baked into outlook .
  • Near-term trade setup: Narrative likely positive around bookings momentum, mortgage green shoots, and FCF strength; watch tariff headlines and any Q2 update on volumes/guidance .
  • Medium-term thesis: As macro normalizes, platform breadth and activation (ACV release), improving churn, and scaled GTM should support acceleration; M&A optionality provides upside with disciplined capital allocation .

Appendix: Source Documents Reviewed

  • Q1 2025 8-K and exhibits (press releases, financial schedules, investor deck) .
  • Q1 2025 press release .
  • Q1 2025 earnings call transcript (prepared remarks + Q&A) .
  • Prior two quarters:
    • Q4 2024 press release & call .
    • Q3 2024 press release .
  • Q1 2025 CEO transition press release .
  • S&P Global consensus estimates via tool (revenue and EPS) [functions.GetEstimates]. Values retrieved from S&P Global.*