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MeridianLink, Inc. (MLNK)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $79.4M (+7% YoY), adjusted EBITDA was $33.4M (42%), both above the high end of Q4 guidance, while GAAP diluted EPS was $(0.10); consumer lending grew +9% YoY, offset by mortgage software decline of 7% YoY .
  • Full-year 2024 delivered revenue of $316.3M (+4% YoY) and adjusted EBITDA of $130.7M (41%), at the high end of the FY guide; management introduced 2025 guidance of $326–$334M revenue and $131.5–$137.5M adjusted EBITDA (~41% margin) and shifted to annual-only guidance updates going forward .
  • MeridianLink authorized a new $129.5M stock repurchase program in February 2025, providing an additional capital return lever and potential support for shares; management emphasized investment in sales/marketing, product and infrastructure to capture share when volumes recover .
  • A litigation settlement/renewal with a large data verification customer implies ~$6M annual revenue reduction, a ~220 bps drag to 2025 revenue growth; the constraint on mortgage-related volumes keeps near-term growth muted, but ACV release remains the primary growth driver .

What Went Well and What Went Wrong

What Went Well

  • Record bookings for the second consecutive year with strong ACV release and ~400 bps YoY adjusted EBITDA margin expansion, highlighting execution despite macro uncertainty (“controlling what we could control”) .
  • Best new logo quarter in two years and strong cross-sell: 15 Access wins and an $8B bank adopting Mortgage + Consumer, underscoring platform breadth and time-to-value .
  • Free cash flow conversion remained solid in Q4 ($12.1M, 15% of revenue), with cash rising to $92.8M (+$10.5M QoQ), supporting investment and buybacks .

What Went Wrong

  • Mortgage software revenue declined 7% YoY in Q4 on churn and customer downsell, partially masking strength in consumer lending (+9% YoY) .
  • GAAP net loss of $(7.7)M and persistent interest expense ($8.9M) weighed on GAAP profitability; G&A rose 36% YoY in Q4 due to discretionary investments for scale .
  • Management’s cautious 2025 outlook cites volumes as a low single-digit drag (including the DBS customer renewal); shift to annual-only guidance reduces quarterly visibility for near-term forecasting .

Financial Results

Headline Metrics (GAAP and Non-GAAP)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$78.676 $80.369 $79.437
GAAP Operating Income (Loss) ($USD Millions)$(1.097) $2.559 $(0.178)
Operating Margin (%)(1)% 3% 0%
GAAP Net Loss ($USD Millions)$(9.670) $(7.051) $(7.745)
Diluted EPS ($USD)$(0.13) $(0.09) $(0.10)
Adjusted EBITDA ($USD Millions)$31.753 $33.829 $33.352
Adjusted EBITDA Margin (%)40% 42% 42%
Cost of Revenue (% of revenue, GAAP)36% 34% 34%

Revenue by Source

Source ($USD Millions)Q2 2024Q3 2024Q4 2024
Subscription fees$65.946 $67.344 $65.208
Professional services$9.559 $10.146 $10.762
Other$3.171 $2.879 $3.467
Total Revenue$78.676 $80.369 $79.437

Revenue by Solution Type

Solution ($USD Millions)Q2 2024Q3 2024Q4 2024
Lending software solutions$61.644 $63.005 $63.777
Data verification software solutions$17.032 $17.364 $15.660
Total Revenue$78.676 $80.369 $79.437

Mortgage Market Exposure

KPIQ2 2024Q3 2024Q4 2024
Lending software % related to mortgage10% 10% 11%
Data verification % related to mortgage55% 56% 57%
Total % revenue related to mortgage market20% 20% 20%

Cash Flow and Liquidity

MetricQ2 2024Q3 2024Q4 2024
Cash from Operations ($USD Millions)$14.356 $20.595 $13.813
Free Cash Flow ($USD Millions)$12.449 $18.735 $12.050
Cash & Cash Equivalents (period-end, $USD Millions)$93.009 $82.266 $92.765

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
RevenueQ4 2024$76.0M–$80.0M $79.4M actual At high end (in-line)
Adjusted EBITDAQ4 2024$29.5M–$32.5M $33.4M actual Beat
RevenueFY 2024$313M–$317M $316.3M actual At high end
Adjusted EBITDAFY 2024$127M–$130M $130.7M actual At high end
RevenueFY 2025N/A$326M–$334M Initiated
Adjusted EBITDAFY 2025N/A$131.5M–$137.5M (~41% margin midpoint) Initiated

Management also shifted to annual-only guidance updates (no quarterly guidance), emphasizing long-term value creation and reducing noise from quarterly volume variability .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
AI/technology initiativesConductiv partnership to improve underwriting approvals (up to 47%) ; platform innovation and integrations continuing Deep Zest AI decisioning integration; expanding fraud partnerships; investment in digital interfaces, partner infrastructure, data engineering Increasing
Product performance (consumer vs mortgage)Lending +11% YoY in Q2; +7% YoY in Q3 Consumer lending +9% YoY; mortgage software −7% YoY; expect mortgage contribution ~18.5% in 2025 Consumer strong; mortgage stabilizing
Macro/volumesMacro headwinds cited; resilience of platform Cautious 2025 outlook; volumes a low single-digit drag including DBS renewal; stronger 2H seasonality expected Cautious
Regulatory/legalLitigation-related charges disclosed (settlements/legal fees) Settlement/renewal with large DBS customer; ~$6M annual revenue reduction; ~220 bps 2025 growth drag Resolution reduces uncertainty, creates headwind
R&D execution/efficiencyR&D down YoY due to restructuring R&D 9% of revenue in Q4; continued productivity with ~100 bps YoY adjusted gross margin improvement in FY Efficient
Go-to-market investmentsLeadership changes; demand generation and cross-sell motion Ramp S&M and product/infrastructure in 2H25; margins highest in Q1 then modest contraction later Ramping

Management Commentary

  • CEO: “We recorded revenue in excess of $79 million… and adjusted EBITDA above $33 million… We executed well… delivering over 400 basis points of adjusted EBITDA margin expansion… We believe we are well-positioned to scale the business in 2025 and beyond.” .
  • President: “Record bookings for the second year in a row… best new logo quarter in 2 years… 15 Access wins… focused on breaking down silos… maturing account-based selling motions with white space analytics.” .
  • CFO: “Adjusted EBITDA was $33.4 million (42% margin)… cash rose to $92.8M… DBS customer agreement reduces annual revenue by ~$6M and ~220 bps drag to 2025 growth… 2025 revenue guide $326–$334M; adjusted EBITDA $131.5–$137.5M (~41%).” .

Q&A Highlights

  • Margins: Management targets ~40% adjusted EBITDA structurally; 2025 guide implies ~41% due to timing of investments (margins highest in Q1, modestly lower in 2H) .
  • Investment priorities: Focus on digital interfaces, partner infrastructure, mortgage capabilities, and data engineering/infrastructure scale .
  • Pipeline/new logos: Robust pipeline and momentum into 1H25; cross-sell momentum building, especially mortgage and broader modules .
  • Consumer LOS composition: Auto ~50% of consumer LOS (≈⅔ used, ⅓ new); credit cards + personal loans ~25%; mix stable .
  • AI/fraud: Zest AI “deep and wide” integration for enhanced automated decisioning; expanding fraud partnerships (e.g., Experian), with front-of-house onboarding fraud controls .
  • M&A: Priority on tuck-ins and near adjacencies to expand platform breadth/depth, plus evaluating partner marketplace; transformational only if strategically compelling .
  • NRR/churn: NRR improving on strong bookings/ACV release; churn stabilizing in consumer, slightly elevated in mortgage but expected to diminish in 2025 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable due to data access limits; comparison versus Wall Street consensus cannot be provided. As a proxy, results versus company guidance indicate revenue at the high end and adjusted EBITDA a clear beat for Q4 2024 .
  • Where relevant, estimates should adjust for: the ~$6M annual reduction from the DBS customer renewal in 2025 (~220 bps growth drag), the shift to annual guidance, and the anticipated ramp in OpEx (R&D and S&M +~100 bps of revenue in 2025) .

Key Takeaways for Investors

  • Q4 execution strong: revenue at high end of guide; adjusted EBITDA beat; consumer lending remains resilient while mortgage softness persists .
  • 2025 setup: annual revenue guide $326–$334M with ~41% margin; expect stronger sequential growth in 2H as investments ramp and ACV release remains the largest growth driver .
  • Capital allocation supportive: new $129.5M buyback program and disciplined M&A focus on tuck-ins/adjacencies to deepen platform capability .
  • Headwind calibrated: DBS customer settlement reduces annual revenue by ~$6M; incorporate ~220 bps drag to 2025 growth in models and watch mortgage volume dynamics .
  • Operating leverage: sustained 40%+ adjusted EBITDA margins even as the company invests in product and GTM suggests durable unit economics; near-term margins peak in Q1 .
  • Platform breadth/cross-sell: record bookings, best new logo quarter in two years, and Access wins validate land-and-expand, improving NRR and backlog monetization via ACV release .
  • Narrative catalysts: AI decisioning integrations (Zest AI), fraud partnerships, and Share-of-Wallet add-ons can enhance conversion and customer economics; watch product uptake and partner-driven revenue .

Notes:

  • Primary source documents reviewed: Q4/FY 2024 results press release (3/6/2025) , Q4 2024 earnings call transcript (3/6/2025) , and relevant Q4 period press releases including ScoreNavigator (11/21/2024) and Automatic partnership (12/13/2024) .
  • Prior quarters’ earnings press releases used for trend analysis: Q3 2024 (11/7/2024) and Q2 2024 (8/8/2024) .
  • The 8‑K furnishing for Q4 included the presentation; a standalone 8‑K 2.02 was not separately available in our document catalog. We relied on the company’s press release and earnings call materials for financials and commentary .