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MeridianLink, Inc. (MLNK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $84.6M, up 8% year-over-year; non-GAAP diluted EPS was $0.13. Adjusted EBITDA reached $38.4M (45% margin). The quarter’s strength was driven by lending software solutions revenue of $68.7M (+12% YoY) while data verification was lower YoY .
  • Results were modestly above Wall Street consensus: revenue $81.8M* and EPS $0.096*, versus actuals $84.6M and $0.13. The company reported positive operating income (6% margin) and strong free cash flow (20% of revenue) .
  • MeridianLink announced an all-cash acquisition by Centerbridge at $20.00 per share, a ~26% premium to the Aug 8 close; the company cancelled its earnings call and suspended FY25 guidance during the transaction process .
  • Near-term stock reaction catalyst is the takeout price and deal certainty; operationally, cross-sell and platform wins in lending continue to support fundamentals amid an uncertain macro backdrop .

What Went Well and What Went Wrong

What Went Well

  • Lending software solutions revenue grew 12% YoY to $68.7M, underpinning total revenue growth of 8% YoY to $84.6M .
  • Profitability metrics improved: operating income $5.2M (6% margin) and adjusted EBITDA $38.4M (45% margin); free cash flow was $17.1M (20% of revenue) indicating strong cash conversion .
  • Management emphasized acceleration in product innovation and AI/data to enhance customer experiences, aligning with a platform narrative and community FI focus. “Advances our strategy to unlock the potential of this company by accelerating product innovation, harnessing the power of AI and data…” — Larry Katz .

What Went Wrong

  • Data verification software revenue declined YoY in Q2 (to $15.9M from $17.0M); segment attribution shows a negative contribution to total growth .
  • GAAP profitability remained negative: net loss of $(3.0)M (net loss margin 4%) despite healthier non-GAAP metrics .
  • Guidance suspension and earnings call cancellation due to pending acquisition reduced forward visibility and removed typical qualitative context and Q&A for the quarter .

Financial Results

Headline Financials (GAAP and Non-GAAP)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$79.4 $81.5 $84.6
GAAP Diluted EPS ($)$(0.10) $(0.06) $(0.04)
Non-GAAP Diluted EPS ($)$0.08 $0.09 $0.13
Operating Margin (%)— 4% 6%
Adjusted EBITDA ($USD Millions)$33.4 $34.8 $38.4
Adjusted EBITDA Margin (%)42% 43% 45%
Free Cash Flow ($USD Millions)$12.1 $40.6 $17.1

Quarterly and YoY Comparison for Q2

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$78.7 $84.6
GAAP Diluted EPS ($)$(0.13) $(0.04)
Non-GAAP Diluted EPS ($)$0.04 $0.13
Adjusted EBITDA ($USD Millions)$31.8 $38.4
Adjusted EBITDA Margin (%)40% 45%

Segment Breakdown (Q2 2025 vs Q2 2024)

SegmentQ2 2024 ($MM)Q2 2025 ($MM)
Lending Software Solutions$61.6 $68.7
Data Verification Software$17.0 $15.9
Total$78.7 $84.6

Revenue by Source (Q2 2025 vs Q2 2024)

SourceQ2 2024 ($MM)Q2 2025 ($MM)
Subscription Fees$65.9 $71.1
Professional Services$9.6 $9.5
Other$3.2 $4.0
Total$78.7 $84.6

Mortgage Market Exposure

MetricQ2 2024Q2 2025
% Revenue Related to Mortgage (Total)18% 18%
Lending Software Solutions11% 11%
Data Verification Software51% 50% (Six months)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$326–$334 Guidance suspended Lowered/Suspended
Adjusted EBITDA ($USD Millions)FY 2025$131.5–$137.5 Guidance suspended Lowered/Suspended
Earnings CallQ2 2025Call scheduled for Aug 11 Call cancelled Cancelled

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call or transcript due to acquisition; comparisons below rely on prepared remarks and prior quarter disclosures.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/Data & Product InnovationFocus on platform, incremental investments to drive demand and accelerate revenue; record bookings and pipeline strength Emphasis on accelerating product innovation and harnessing AI/data under Centerbridge ownership Strengthening under new ownership vision
Mortgage Lending DemandQ1: 15 mortgage lending wins; increased mix of larger deals; demand momentum Mortgage exposure steady at 18% of revenue; lending solutions growth +12% YoY Stable exposure, improving lending growth
Leadership TransitionCEO transition to Larry Katz effective Oct 1, 2025 announced in Q1 Reinforced by management remarks; continuity into next chapter Ongoing transition
Bookings/Cross-sellQ1: Solid bookings; land-and-expand strategy No call commentary; prepared remarks highlight platform strength with community institutions Positive but less detail due to call cancellation
Capital Allocation/RepurchasesQ4: $129.5M repurchase authorization; active buybacks Transaction to go private; capital deployment narrative shifts to post-close Shifts to M&A and private-company strategy

Management Commentary

  • “Our second quarter results demonstrate strong execution in an environment that remains uncertain… We’ve created a strong foundation for our next chapter, and Larry and the management team are ready and capable to lead.” — Nicolaas Vlok, CEO .
  • “We… advance our strategy to unlock the potential of this company by accelerating product innovation, harnessing the power of AI and data, and enhancing the delivery of exceptional customer experiences.” — Larry Katz, President & CEO-designate .
  • Centerbridge perspective: MeridianLink is positioned to enhance digital lending and credit reporting capabilities, expanding wallet share with new and existing customers .

Q&A Highlights

  • No Q&A; earnings conference call cancelled on August 11, 2025 in light of the pending acquisition; FY25 guidance suspended during the transaction .

Estimates Context

MetricConsensus (S&P Global)*Actual
Revenue ($USD)$81,776,390*$84,597,000
Primary EPS ($)$0.096*$0.13 (Non-GAAP diluted)
Primary EPS – # of Estimates5*—
Revenue – # of Estimates7*—

Values retrieved from S&P Global.

  • Results represented a beat versus consensus on both revenue and EPS. Adjusted EBITDA margin (45%) also improved versus Q2 2024 (40%), reflecting operating leverage and subscription mix despite data verification softness .
  • Note: S&P Global “EBITDA Consensus Mean” may be based on a different definition than company “Adjusted EBITDA”; company-reported Adjusted EBITDA was $38.4M (45% margin) .

Key Takeaways for Investors

  • Q2 delivered an operational beat: revenue and non-GAAP EPS above consensus, with improved adjusted EBITDA margin and positive operating income — supportive for deal-case valuation and downside protection .
  • Lending software momentum (+12% YoY) continues to offset data verification headwinds; subscription mix and platform strength with community FIs remain core pillars .
  • Guidance suspension and call cancellation reduce near-term visibility; however, the pending $20.00 per share takeout (26% premium) sets a near-term price anchor and likely caps upside/downside pending deal close .
  • Leadership transition to Larry Katz (Oct 1) and Centerbridge ownership are expected to accelerate product innovation and AI/data initiatives, potentially enhancing long-term competitiveness post-close .
  • Cash generation remains robust; Q2 free cash flow of $17.1M suggests durable cash conversion even with macro uncertainty .
  • For trading: deal spread and regulatory/approval milestones become primary catalysts; fundamental upside from lending growth is secondary near term given M&A overhang .
  • Medium-term thesis (post-close): focus on platform cross-sell, mortgage cycle normalization, and AI-enabled workflows to drive ACV growth and margin expansion (non-GAAP) .

Additional Q2-Relevant Press Releases

  • Acquisition announcement detailing the $20.00 cash per share offer and ~26% premium vs Aug 8 close .
  • Conference call announcement made July 28, later cancelled due to transaction .
  • Product/partner update: expanded Point Predictive integration for fraud detection within MeridianLink Consumer workflows .

Prior Quarters for Trend Analysis

  • Q1 2025: Revenue $81.5M (+5% YoY), non-GAAP diluted EPS $0.09, adjusted EBITDA $34.8M (43%), strong bookings and mortgage demand; FY25 guidance initially maintained .
  • Q4 2024: Revenue $79.4M (+7% YoY), non-GAAP diluted EPS $0.08, adjusted EBITDA $33.4M (42%); repurchase program authorized; FY25 guidance introduced .