MLNK - MeridianLink® Reports Fourth Quarter and Fiscal Year 2022 Results
Fourth quarter revenue of $70.6 million grows 10% year-over-year
MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies, today announced financial results for the fourth quarter and fiscal year ended December 31, 2022.
“Our solid fourth quarter performance highlights the strength of our multi-product platform, MeridianLink® One,” said Nicolaas Vlok, chief executive officer of MeridianLink. “More financial institutions are taking advantage of bundling MeridianLink offerings to create seamless digital lending experiences. With that, our revenue grew 10% year-over-year to $70.6 million with 33% adjusted EBITDA margins. Lending software solutions revenue grew 26% year-over-year to $55.0 million, now accounting for 78% of total revenue. I’d like to thank the team for their ongoing dedication and innovation.”
Quarterly Financial Highlights:
- Revenue of $70.6 million, an increase of 10% year-over-year
- Operating income of $0.6 million, or 1% of revenue and Non-GAAP operating profit of $8.5 million, or 12% of revenue
- Net loss of $(5.5) million, or (8)% of revenue, and Adjusted EBITDA of $23.2 million, or 33% of revenue
- Cash flow from operations of $7.4 million and free cash flow of $5.2 million
2022 Fiscal Year Financial Highlights:
- Revenue of $288.0 million, an increase of 8% year-over-year
- Operating income of $28.6 million, or 10% of revenue and Non-GAAP operating profit of $55.9 million, or 19% of revenue
- Net income of $1.3 million, or 0.4% of revenue, and Adjusted EBITDA of $111.2 million, or 39% of revenue
- Cash flow from operations of $74.6 million and free cash flow of $65.2 million
Business and Operating Highlights:
- MeridianLink finished the quarter with record software bookings, both for Q4 and in company history.
- In the quarter, MeridianLink signed ten existing MeridianLink® Consumer customers on the MeridianLink® Mortgage solution, demonstrating the powerful cross-sell capabilities of the MeridianLink® One platform.
- In support of our strategic investment to accelerate services, fuel Go-to-Market, and enhance product innovation, we restructured our operations team and cost profile to serve more customers with greater efficiency in 2023.
- The Company completed enhancements to our marketing automation solution, MeridianLink® Engage. These new features save time in launching targeted, personalized marketing campaigns, often resulting in triple-digit ROI for the customer.
- Building on the innovative functionality acquired through the StreetShares® Atlas Platform®, the Company completed our business lending offering, MeridianLink® Business, to optimize the business lending process in a digital environment.
- Through the Company’s extensive Partner Marketplace, we announced new integrations to partners such as Equifax®, Ferretly, and FirstClose, which help differentiate our lending and data verification customers in the market.
- MeridianLink secured another strong roster of new logo customers as a result of our lending capabilities that best serve customers in our mid-market sweet spot, enabling a more frictionless lending process and empowering customer growth.
Business Outlook
Based on information as of today, March 1, 2023, the Company issues first quarter financial guidance and initiates full year 2023 financial guidance as follows:
First Quarter Fiscal 2023:
- Revenue is expected to be in the range of $72.0 million to $75.0 million
- Adjusted EBITDA is expected to be in the range of $23.0 million to $26.0 million
Full Year 2023:
- Revenue is expected to be in the range of $304.0 million to $310.0 million
- Adjusted EBITDA is expected to be in the range of $109.0 million to $115.0 million
Conference Call Information
MeridianLink will hold a conference call to discuss our fourth quarter and fiscal year results today, March 1, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 396-8049 from North America toll-free or the Participant Local number of (416) 764-8646 with Conference ID 05813207. A live webcast of the conference call can be accessed from the investor relations page of MeridianLink’s website at ir.meridianlink.com . An archived replay of the webcast will be available at the same website following the conclusion of the call. A telephonic replay will be available until approximately 3:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Wednesday, March 8, 2023, at (877) 674-7070 from North America or (416) 764-8692 as a Participant Local with Playback Passcode 813207.
About MeridianLink
MeridianLink® (NYSE: MLNK), headquartered in Costa Mesa, California, powers digital lending and account opening for financial institutions and provides data verification solutions for consumer reporting agencies. MeridianLink’s scalable, cloud-based platforms help customers build deeper relationships with consumers through data-driven, personalized experiences across the entire lending life cycle.
MeridianLink enables customers to accelerate revenue growth, reduce risk, and exceed consumer expectations through seamless digital experiences. Its partner marketplace supports hundreds of integrations for tailored innovation. For more than 20 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities.
Learn more at www.meridianlink.com .
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:
- Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, certain expenses associated with our IPO, sponsor and third-party acquisition related costs, losses resulting from early repayment of debt, lease termination charges, and deferred revenue reductions from purchase accounting for acquisitions prior to 2022
- Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, 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, and sponsor and third-party acquisition-related costs
- 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
- 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 conditions, our strategic initiatives, including anticipated benefits and integration of an acquisition, our restructuring plan, including expected associated timing, benefits, and costs, the potential benefits of our migration to the public cloud, our stock repurchase program, including the execution and amount of repurchases, our development or delivery of new or enhanced solutions, 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.
| Condensed Consolidated Balance Sheets (in thousands, except share and per share data) |
|
|
| As of |
|
|
| December 31, |
|
|
| December 31, |
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
| $ |
| 55,780 |
|
|
|
|
| $ |
| 113,645 |
|
|
| Accounts receivable, net of allowance for doubtful accounts |
|
|
| 32,905 |
|
|
|
|
|
|
| 24,913 |
|
|
| Prepaid expenses and other current assets |
|
|
| 9,447 |
|
|
|
|
|
|
| 9,398 |
|
|
| Escrow deposit |
|
|
| 30,000 |
|
|
|
|
|
|
| — |
|
|
| Total current assets |
|
|
| 128,132 |
|
|
|
|
|
|
| 147,956 |
|
|
| Property and equipment, net |
|
|
| 4,245 |
|
|
|
|
|
|
| 5,989 |
|
|
| Right of use assets |
|
|
| 2,185 |
|
|
|
|
|
|
| — |
|
|
| Intangible assets, net |
|
|
| 297,475 |
|
|
|
|
|
|
| 298,597 |
|
|
| Deferred tax assets, net |
|
|
| 13,939 |
|
|
|
|
|
|
| 4,286 |
|
|
| Goodwill |
|
|
| 608,657 |
|
|
|
|
|
|
| 564,799 |
|
|
| Other assets |
|
|
| 4,524 |
|
|
|
|
|
|
| 4,266 |
|
|
| Total assets |
| $ |
| 1,059,157 |
|
|
|
|
| $ |
| 1,025,893 |
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| Accounts payable |
| $ |
| 1,249 |
|
|
|
|
| $ |
| 2,335 |
|
|
| Accrued liabilities |
|
|
| 32,500 |
|
|
|
|
|
|
| 24,667 |
|
|
| Deferred revenue |
|
|
| 16,945 |
|
|
|
|
|
|
| 14,707 |
|
|
| Current portion of long-term debt, net of debt issuance costs |
|
|
| 3,505 |
|
|
|
|
|
|
| 2,139 |
|
|
| Total current liabilities |
|
|
| 54,199 |
|
|
|
|
|
|
| 43,848 |
|
|
| Long-term debt, net of debt issuance costs |
|
|
| 423,404 |
|
|
|
|
|
|
| 425,371 |
|
|
| Long-term deferred revenue |
|
|
| 1,141 |
|
|
|
|
|
|
| — |
|
|
| Deferred rent |
|
|
| — |
|
|
|
|
|
|
| 396 |
|
|
| Other long-term liabilities |
|
|
| 1,322 |
|
|
|
|
|
|
| — |
|
|
| Total liabilities |
|
|
| 480,066 |
|
|
|
|
|
|
| 469,615 |
|
|
| Commitments and contingencies |
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
| Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at December 31, 2022 and 2021 |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
| Common stock, $0.001 par value; 600,000,000 shares authorized, 80,644,452 and 79,734,984 shares issued and outstanding at December 31, 2022 and 2021, respectively |
|
|
| 128 |
|
|
|
|
|
|
| 88 |
|
|
| Additional paid-in capital |
|
|
| 621,396 |
|
|
|
|
|
|
| 596,542 |
|
|
| Accumulated deficit |
|
|
| (42,433 |
| ) |
|
|
|
|
| (40,352 |
| ) |
| Total stockholders’ equity |
|
|
| 579,091 |
|
|
|
|
|
|
| 556,278 |
|
|
| Total liabilities and stockholders’ equity |
| $ |
| 1,059,157 |
|
|
|
|
| $ |
| 1,025,893 |
|
|
| Condensed Consolidated Statements of Operations (in thousands, except share/unit and per share/unit data) |
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
| Revenues, net |
| $ |
| 70,551 |
|
|
|
|
| $ |
| 64,024 |
|
|
|
|
| $ |
| 288,046 |
|
|
|
|
| $ |
| 267,676 |
|
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subscription and services |
|
|
| 22,486 |
|
|
|
|
|
|
| 19,025 |
|
|
|
|
|
|
| 90,778 |
|
|
|
|
|
|
| 77,103 |
|
|
| Amortization of developed technology |
|
|
| 4,266 |
|
|
|
|
|
|
| 3,329 |
|
|
|
|
|
|
| 15,553 |
|
|
|
|
|
|
| 12,519 |
|
|
| Total cost of revenues |
|
|
| 26,752 |
|
|
|
|
|
|
| 22,354 |
|
|
|
|
|
|
| 106,331 |
|
|
|
|
|
|
| 89,622 |
|
|
| Gross profit |
|
|
| 43,799 |
|
|
|
|
|
|
| 41,670 |
|
|
|
|
|
|
| 181,715 |
|
|
|
|
|
|
| 178,054 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
|
|
| 22,233 |
|
|
|
|
|
|
| 21,057 |
|
|
|
|
|
|
| 82,649 |
|
|
|
|
|
|
| 85,160 |
|
|
| Research and development |
|
|
| 12,178 |
|
|
|
|
|
|
| 8,529 |
|
|
|
|
|
|
| 42,592 |
|
|
|
|
|
|
| 36,336 |
|
|
| Sales and marketing |
|
|
| 7,139 |
|
|
|
|
|
|
| 4,305 |
|
|
|
|
|
|
| 23,658 |
|
|
|
|
|
|
| 18,122 |
|
|
| Acquisition related costs |
|
|
| 1,679 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 4,228 |
|
|
|
|
|
|
| 781 |
|
|
| Total operating expenses |
|
|
| 43,229 |
|
|
|
|
|
|
| 33,891 |
|
|
|
|
|
|
| 153,127 |
|
|
|
|
|
|
| 140,399 |
|
|
| Operating income |
|
|
| 570 |
|
|
|
|
|
|
| 7,779 |
|
|
|
|
|
|
| 28,588 |
|
|
|
|
|
|
| 37,655 |
|
|
| Other (income) expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income |
|
|
| (357 |
| ) |
|
|
|
|
| (10 |
| ) |
|
|
|
|
| (1,063 |
| ) |
|
|
|
|
| (49 |
| ) |
| Interest expense, net |
|
|
| 7,578 |
|
|
|
|
|
|
| 5,542 |
|
|
|
|
|
|
| 24,227 |
|
|
|
|
|
|
| 32,615 |
|
|
| Loss on debt repayment and extinguishment |
|
|
| — |
|
|
|
|
|
|
| 5,593 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 9,944 |
|
|
| Total other expense, net |
|
|
| 7,221 |
|
|
|
|
|
|
| 11,125 |
|
|
|
|
|
|
| 23,164 |
|
|
|
|
|
|
| 42,510 |
|
|
| Income (loss) before provision for income taxes |
|
|
| (6,651 |
| ) |
|
|
|
|
| (3,346 |
| ) |
|
|
|
|
| 5,424 |
|
|
|
|
|
|
| (4,855 |
| ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for (benefit from) income taxes |
|
|
| (1,188 |
| ) |
|
|
|
|
| (133 |
| ) |
|
|
|
|
| 4,130 |
|
|
|
|
|
|
| 5,141 |
|
|
| Net income (loss) |
|
|
| (5,463 |
| ) |
|
|
|
|
| (3,213 |
| ) |
|
|
|
|
| 1,294 |
|
|
|
|
|
|
| (9,996 |
| ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Class A preferred return |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| (20,944 |
| ) |
| Net income (loss) attributable to common stockholders |
| $ |
| (5,463 |
| ) |
|
|
| $ |
| (3,213 |
| ) |
|
|
| $ |
| 1,294 |
|
|
|
|
| $ |
| (30,940 |
| ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
| $ |
| (0.07 |
| ) |
|
|
| $ |
| (0.04 |
| ) |
|
|
| $ |
| 0.02 |
|
|
|
|
| $ |
| (0.48 |
| ) |
| Diluted |
|
|
| (0.07 |
| ) |
|
|
|
|
| (0.04 |
| ) |
|
|
|
|
| 0.02 |
|
|
|
|
|
|
| (0.48 |
| ) |
| Weighted average common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
| 80,749,744 |
|
|
|
|
|
|
| 79,596,418 |
|
|
|
|
|
|
| 80,454,356 |
|
|
|
|
|
|
| 63,813,770 |
|
|
| Diluted |
|
|
| 80,749,744 |
|
|
|
|
|
|
| 79,596,418 |
|
|
|
|
|
|
| 82,403,679 |
|
|
|
|
|
|
| 63,813,770 |
|
|
| Net Revenues by Major Source (unaudited) (in thousands) |
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
| Subscription fees |
| $ |
| 60,004 |
|
|
| $ |
| 55,757 |
|
|
| $ |
| 248,864 |
|
|
| $ |
| 235,489 |
| Professional services |
|
|
| 8,250 |
|
|
|
|
| 5,895 |
|
|
|
|
| 29,320 |
|
|
|
|
| 22,707 |
| Other |
|
|
| 2,297 |
|
|
|
|
| 2,372 |
|
|
|
|
| 9,862 |
|
|
|
|
| 9,480 |
| Total |
| $ |
| 70,551 |
|
|
| $ |
| 64,024 |
|
|
| $ |
| 288,046 |
|
|
| $ |
| 267,676 |
| Net Revenues by Solution Type (unaudited) (in thousands) |
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
|
|
| 2022 |
|
|
|
|
| 2021 |
|
|
| Lending software solutions |
| $ |
| 55,041 |
|
|
|
|
| $ |
| 43,759 |
|
|
|
|
| $ |
| 208,290 |
|
|
|
|
| $ |
| 176,793 |
|
|
| Data verification software solutions |
|
|
| 15,510 |
|
|
|
|
|
|
| 20,265 |
|
|
|
|
|
|
| 79,756 |
|
|
|
|
|
|
| 90,883 |
|
|
| Total (1) |
| $ |
| 70,551 |
|
|
|
|
| $ |
| 64,024 |
|
|
|
|
| $ |
| 288,046 |
|
|
|
|
| $ |
| 267,676 |
|
|
| % Growth attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lending software solutions |
|
|
| 18 |
| % |
|
|
|
|
|
|
|
|
| 12 |
| % |
|
|
|
|
| Data verification software |
|
|
| (7 |
| )% |
|
|
|
|
|
|
|
|
| (4 |
| )% |
|
|
|
|
| Total % growth |
|
|
| 10 |
| % |
|
|
|
|
|
|
|
|
| 8 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) % Revenue related to mortgage loan market: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lending software solutions |
|
|
| 10 |
| % |
|
|
|
|
| 9 |
| % |
|
|
|
|
| 8 |
| % |
|
|
|
|
| 9 |
| % |
| Data verification software |
|
|
| 59 |
| % |
|
|
|
|
| 68 |
| % |
|
|
|
|
| 64 |
| % |
|
|
|
|
| 70 |
| % |
| Total % revenue related to mortgage loan market |
|
|
| 21 |
| % |
|
|
|
|
| 27 |
| % |
|
|
|
|
| 23 |
| % |
|
|
|
|
| 30 |
| % |
| Condensed Consolidated Statements of Cash Flows (in thousands) |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
| Cash flows from operating activities: |
|
|
|
|
|
|
| Net income (loss) |
| $ |
| 1,294 |
|
|
|
|
| $ |
| (9,996 |
| ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
| Depreciation and amortization |
|
|
| 53,982 |
|
|
|
|
|
|
| 50,453 |
|
|
| Amortization of debt issuance costs |
|
|
| 2,760 |
|
|
|
|
|
|
| 3,413 |
|
|
| Share-based compensation expense |
|
|
| 22,761 |
|
|
|
|
|
|
| 30,736 |
|
|
| Loss on disposal of fixed assets |
|
|
| 678 |
|
|
|
|
|
|
| 524 |
|
|
| Loss on sublease liability |
|
|
| — |
|
|
|
|
|
|
| 405 |
|
|
| Loss on debt repayment and extinguishment |
|
|
| — |
|
|
|
|
|
|
| 9,944 |
|
|
| Gain on change in fair value of earnout |
|
|
| (162 |
| ) |
|
|
|
|
| — |
|
|
| Other adjustments |
|
|
| — |
|
|
|
|
|
|
| (18 |
| ) |
| Deferred income taxes |
|
|
| 1,905 |
|
|
|
|
|
|
| 4,926 |
|
|
| Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
| Accounts receivable |
|
|
| (7,005 |
| ) |
|
|
|
|
| 1,619 |
|
|
| Prepaid expenses and other assets |
|
|
| 297 |
|
|
|
|
|
|
| (5,726 |
| ) |
| Accounts payable |
|
|
| (1,564 |
| ) |
|
|
|
|
| 117 |
|
|
| Accrued liabilities |
|
|
| (2,281 |
| ) |
|
|
|
|
| (302 |
| ) |
| Deferred revenue |
|
|
| 1,922 |
|
|
|
|
|
|
| 3,834 |
|
|
| Deferred rent |
|
|
| — |
|
|
|
|
|
|
| (94 |
| ) |
| Net cash provided by operating activities |
|
|
| 74,587 |
|
|
|
|
|
|
| 89,835 |
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
| Acquisition, net of cash acquired – Beanstalk Networks L.L.C. |
|
|
| (61,830 |
| ) |
|
|
|
|
| — |
|
|
| Acquisition, net of cash and restricted cash acquired – StreetShares, Inc. |
|
|
| (23,137 |
| ) |
|
|
|
|
| — |
|
|
| Acquisition, net of cash and restricted cash acquired – Saylent Technologies, Inc. |
|
|
| — |
|
|
|
|
|
|
| (35,945 |
| ) |
| Acquisition, net of cash acquired – TazWorks, LLC |
|
|
| — |
|
|
|
|
|
|
| (84,605 |
| ) |
| Escrow deposit |
|
|
| (30,000 |
| ) |
|
|
|
|
| — |
|
|
| Capitalized software additions |
|
|
| (8,228 |
| ) |
|
|
|
|
| (4,906 |
| ) |
| Purchases of property and equipment |
|
|
| (1,136 |
| ) |
|
|
|
|
| (843 |
| ) |
| Net cash used in investing activities |
|
|
| (124,331 |
| ) |
|
|
|
|
| (126,299 |
| ) |
| Cash flows from financing activities: |
|
|
|
|
|
|
| Repurchases of common stock |
|
|
| (3,375 |
| ) |
|
|
|
|
| — |
|
|
| Repurchases of Class A Units |
|
|
| — |
|
|
|
|
|
|
| (54 |
| ) |
| Repurchases of Class B Units |
|
|
| — |
|
|
|
|
|
|
| (1,887 |
| ) |
| Proceeds from initial public offering, net of underwriters’ discounts and commissions |
|
|
| — |
|
|
|
|
|
|
| 247,307 |
|
|
| Proceeds from exercise of stock options |
|
|
| 211 |
|
|
|
|
|
|
| 1,714 |
|
|
| Payment due to effect of corporate conversion |
|
|
| — |
|
|
|
|
|
|
| (6 |
| ) |
| Proceeds from employee stock purchase plan |
|
|
| 1,777 |
|
|
|
|
|
|
| — |
|
|
| Taxes paid related to net share settlement of RSUs |
|
|
| (206 |
| ) |
|
|
|
|
| — |
|
|
| Proceeds from long-term debt |
|
|
| — |
|
|
|
|
|
|
| 535,000 |
|
|
| Principal payments of long-term debt |
|
|
| (3,263 |
| ) |
|
|
|
|
| (631,255 |
| ) |
| Payment of Regulation A+ investor note |
|
|
| (3,265 |
| ) |
|
|
|
|
| — |
|
|
| Payments of debt issuance costs |
|
|
| — |
|
|
|
|
|
|
| (7,207 |
| ) |
| Payments of Class A cumulative preferred return |
|
|
| — |
|
|
|
|
|
|
| (12 |
| ) |
| Payments of deferred offering costs |
|
|
| — |
|
|
|
|
|
|
| (4,790 |
| ) |
| Payment to sellers of Saylent Technologies, Inc. |
|
|
| — |
|
|
|
|
|
|
| (775 |
| ) |
| Payment to sellers of Teledata Communications, Inc |
|
|
| — |
|
|
|
|
|
|
| (2,142 |
| ) |
| Holdback payment to sellers of MeridianLink |
|
|
| — |
|
|
|
|
|
|
| (25,665 |
| ) |
| Net cash (used in) provided by financing activities |
|
|
| (8,121 |
| ) |
|
|
|
|
| 110,228 |
|
|
| Net (decrease) increase in cash, cash equivalents and restricted cash |
|
|
| (57,865 |
| ) |
|
|
|
|
| 73,764 |
|
|
| Cash, cash equivalents and restricted cash, beginning of period |
|
|
| 113,645 |
|
|
|
|
|
|
| 39,881 |
|
|
| Cash, cash equivalents and restricted cash, end of period |
| $ |
| 55,780 |
|
|
|
|
| $ |
| 113,645 |
|
|
| Condensed Consolidated Statements of Cash Flows (in thousands) |
|
|
| Year Ended December 31, |
|
|
| 2022 |
|
|
| 2021 |
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
| Cash paid for interest |
| $ |
| 21,348 |
|
|
| $ |
| 29,242 |
| Cash paid for income taxes |
|
|
| 1,343 |
|
|
|
|
| 306 |
| Non-cash investing and financing activities: |
|
|
|
|
|
|
| Regulation A+ investor note assumed in business combination |
| $ |
| 3,265 |
|
|
| $ |
| — |
| Initial recognition of operating lease liability |
|
|
| 3,791 |
|
|
|
|
| — |
| Initial recognition of operating lease right-of-use asset |
|
|
| 3,047 |
|
|
|
|
| — |
| Share-based compensation expense capitalized to software additions |
|
|
| 311 |
|
|
|
|
| 111 |
| Shares withheld with respect to net settlement of RSUs |
|
|
| 206 |
|
|
|
|
| — |
| Effect of corporate conversion |
|
|
| — |
|
|
|
|
| 319,868 |
| Related party receivable net against holdback payment to prior shareholders |
|
|
| — |
|
|
|
|
| 4,335 |
| Deferred offering costs in prepaid expenses and other current assets as of December 31, 2020 offsetting payments of deferred offering costs |
|
|
| — |
|
|
|
|
| 423 |
| Vesting of RSAs and RSUs |
|
|
| 40 |
|
|
|
|
| 94 |
| Debt issuance costs included in accrued expenses |
|
|
| — |
|
|
|
|
| 90 |
| Purchases of property and equipment included in accounts payable and accrued expenses |
|
|
| 72 |
|
|
|
|
| 81 |
| Reconciliation from GAAP to Non-GAAP Results (unaudited) (in thousands, except share/unit and per share/unit data) |
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
| $ |
| 570 |
|
|
|
|
| $ |
| 7,779 |
|
|
|
|
| $ |
| 28,588 |
|
|
|
|
| $ |
| 37,655 |
|
|
| Add: Share-based compensation expense |
|
|
| 6,260 |
|
|
|
|
|
|
| 3,901 |
|
|
|
|
|
|
| 22,761 |
|
|
|
|
|
|
| 30,736 |
|
|
| Add: Employer payroll taxes on employee stock transactions |
|
|
| 20 |
|
|
|
|
|
|
| 16 |
|
|
|
|
|
|
| 350 |
|
|
|
|
|
|
| 95 |
|
|
| Add: Sponsor and third-party acquisition related costs |
|
|
| 1,679 |
|
|
|
|
|
|
| 25 |
|
|
|
|
|
|
| 4,228 |
|
|
|
|
|
|
| 2,348 |
|
|
| Non-GAAP operating income |
| $ |
| 8,529 |
|
|
|
|
| $ |
| 11,721 |
|
|
|
|
| $ |
| 55,927 |
|
|
|
|
| $ |
| 70,834 |
|
|
| Non-GAAP operating margin |
|
|
| 12 |
| % |
|
|
|
|
| 18 |
| % |
|
|
|
|
| 19 |
| % |
|
|
|
|
| 26 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
| $ |
| (5,463 |
| ) |
|
|
| $ |
| (3,213 |
| ) |
|
|
| $ |
| 1,294 |
|
|
|
|
| $ |
| (9,996 |
| ) |
| Add: Share-based compensation expense |
|
|
| 6,260 |
|
|
|
|
|
|
| 3,901 |
|
|
|
|
|
|
| 22,761 |
|
|
|
|
|
|
| 30,736 |
|
|
| Add: Employer payroll taxes on employee stock transactions |
|
|
| 20 |
|
|
|
|
|
|
| 16 |
|
|
|
|
|
|
| 350 |
|
|
|
|
|
|
| 95 |
|
|
| Add: Sponsor and third-party acquisition related costs |
|
|
| 1,679 |
|
|
|
|
|
|
| 25 |
|
|
|
|
|
|
| 4,228 |
|
|
|
|
|
|
| 2,348 |
|
|
| Non-GAAP net income |
| $ |
| 2,496 |
|
|
|
|
| $ |
| 729 |
|
|
|
|
| $ |
| 28,633 |
|
|
|
|
| $ |
| 23,183 |
|
|
| Non-GAAP basic net income per share |
| $ |
| 0.03 |
|
|
|
|
| $ |
| 0.01 |
|
|
|
|
| $ |
| 0.36 |
|
|
|
|
| $ |
| 0.36 |
|
|
| Non-GAAP diluted net income per share |
|
|
| 0.03 |
|
|
|
|
|
|
| 0.01 |
|
|
|
|
|
|
| 0.35 |
|
|
|
|
|
|
| 0.35 |
|
|
| Weighted average shares used to compute Non-GAAP basic net income per share |
|
|
| 80,749,744 |
|
|
|
|
|
|
| 79,596,418 |
|
|
|
|
|
|
| 80,454,356 |
|
|
|
|
|
|
| 63,813,770 |
|
|
| Weighted average shares used to compute Non-GAAP diluted net income per share |
|
|
| 82,413,712 |
|
|
|
|
|
|
| 82,358,079 |
|
|
|
|
|
|
| 82,403,679 |
|
|
|
|
|
|
| 67,130,479 |
|
|
| Non-GAAP net income margin |
|
|
| 4 |
| % |
|
|
|
|
| 1 |
| % |
|
|
|
|
| 10 |
| % |
|
|
|
|
| 9 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
| $ |
| (5,463 |
| ) |
|
|
| $ |
| (3,213 |
| ) |
|
|
| $ |
| 1,294 |
|
|
|
|
| $ |
| (9,996 |
| ) |
| Interest expense |
|
|
| 7,578 |
|
|
|
|
|
|
| 5,542 |
|
|
|
|
|
|
| 24,227 |
|
|
|
|
|
|
| 32,615 |
|
|
| Taxes |
|
|
| (1,188 |
| ) |
|
|
|
|
| (133 |
| ) |
|
|
|
|
| 4,130 |
|
|
|
|
|
|
| 5,141 |
|
|
| Depreciation and amortization |
|
|
| 14,234 |
|
|
|
|
|
|
| 12,799 |
|
|
|
|
|
|
| 53,982 |
|
|
|
|
|
|
| 50,453 |
|
|
| Share-based compensation expense |
|
|
| 6,260 |
|
|
|
|
|
|
| 3,901 |
|
|
|
|
|
|
| 22,761 |
|
|
|
|
|
|
| 30,736 |
|
|
| Employer payroll taxes on employee stock transactions |
|
|
| 20 |
|
|
|
|
|
|
| 16 |
|
|
|
|
|
|
| 350 |
|
|
|
|
|
|
| 95 |
|
|
| Expenses associated with IPO |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 424 |
|
|
| Sponsor and third-party acquisition related costs |
|
|
| 1,679 |
|
|
|
|
|
|
| 25 |
|
|
|
|
|
|
| 4,228 |
|
|
|
|
|
|
| 2,348 |
|
|
| Loss on debt prepayment |
|
|
| — |
|
|
|
|
|
|
| 5,593 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 9,944 |
|
|
| Deferred revenue reduction from purchase accounting for acquisitions prior to 2022 |
|
|
| 51 |
|
|
|
|
|
|
| 109 |
|
|
|
|
|
|
| 227 |
|
|
|
|
|
|
| 733 |
|
|
| Lease termination charges |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 879 |
|
|
| Adjusted EBITDA |
| $ |
| 23,171 |
|
|
|
|
| $ |
| 24,639 |
|
|
|
|
| $ |
| 111,199 |
|
|
|
|
| $ |
| 123,372 |
|
|
| Adjusted EBITDA margin |
|
|
| 33 |
| % |
|
|
|
|
| 38 |
| % |
|
|
|
|
| 39 |
| % |
|
|
|
|
| 46 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue |
| $ |
| 26,752 |
|
|
|
|
| $ |
| 22,354 |
|
|
|
|
| $ |
| 106,331 |
|
|
|
|
| $ |
| 89,622 |
|
|
| Less: Share-based compensation expense |
|
|
| 1,063 |
|
|
|
|
|
|
| 1,017 |
|
|
|
|
|
|
| 4,630 |
|
|
|
|
|
|
| 6,478 |
|
|
| Less: Employer payroll taxes on employee stock transactions |
|
|
| 6 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 127 |
|
|
|
|
|
|
| 3 |
|
|
| Less: Amortization of developed technology |
|
|
| 4,266 |
|
|
|
|
|
|
| 3,329 |
|
|
|
|
|
|
| 15,553 |
|
|
|
|
|
|
| 12,519 |
|
|
| Non-GAAP cost of revenue |
| $ |
| 21,417 |
|
|
|
|
| $ |
| 18,008 |
|
|
|
|
| $ |
| 86,021 |
|
|
|
|
| $ |
| 70,622 |
|
|
| As a % of revenue |
|
|
| 30 |
| % |
|
|
|
|
| 28 |
| % |
|
|
|
|
| 30 |
| % |
|
|
|
|
| 26 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation from GAAP to Non-GAAP Results (unaudited) (in thousands) |
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General & administrative |
| $ |
| 22,233 |
|
|
|
|
| $ |
| 21,057 |
|
|
|
|
| $ |
| 82,649 |
|
|
|
|
| $ |
| 85,160 |
|
|
| Less: Share-based compensation expense |
|
|
| 2,552 |
|
|
|
|
|
|
| 1,694 |
|
|
|
|
|
|
| 9,499 |
|
|
|
|
|
|
| 14,558 |
|
|
| Less: Employer payroll taxes on employee stock transactions |
|
|
| 6 |
|
|
|
|
|
|
| 14 |
|
|
|
|
|
|
| 81 |
|
|
|
|
|
|
| 73 |
|
|
| Less: Depreciation expense |
|
|
| 599 |
|
|
|
|
|
|
| 560 |
|
|
|
|
|
|
| 2,319 |
|
|
|
|
|
|
| 2,303 |
|
|
| Less: Amortization of intangibles |
|
|
| 9,369 |
|
|
|
|
|
|
| 8,910 |
|
|
|
|
|
|
| 36,110 |
|
|
|
|
|
|
| 35,631 |
|
|
| Non-GAAP general & administrative |
| $ |
| 9,707 |
|
|
|
|
| $ |
| 9,879 |
|
|
|
|
| $ |
| 34,640 |
|
|
|
|
| $ |
| 32,595 |
|
|
| As a % of revenue |
|
|
| 14 |
| % |
|
|
|
|
| 15 |
| % |
|
|
|
|
| 12 |
| % |
|
|
|
|
| 12 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
| $ |
| 12,178 |
|
|
|
|
| $ |
| 8,529 |
|
|
|
|
| $ |
| 42,592 |
|
|
|
|
| $ |
| 36,336 |
|
|
| Less: Share-based compensation expense |
|
|
| 2,014 |
|
|
|
|
|
|
| 1,095 |
|
|
|
|
|
|
| 6,472 |
|
|
|
|
|
|
| 7,453 |
|
|
| Less: Employer payroll taxes on employee stock transactions |
|
|
| 6 |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 102 |
|
|
|
|
|
|
| 8 |
|
|
| Non-GAAP research and development |
| $ |
| 10,158 |
|
|
|
|
| $ |
| 7,434 |
|
|
|
|
| $ |
| 36,018 |
|
|
|
|
| $ |
| 28,875 |
|
|
| As a % of revenue |
|
|
| 14 |
| % |
|
|
|
|
| 12 |
| % |
|
|
|
|
| 13 |
| % |
|
|
|
|
| 11 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales and marketing |
| $ |
| 7,139 |
|
|
|
|
| $ |
| 4,305 |
|
|
|
|
| $ |
| 23,658 |
|
|
|
|
| $ |
| 18,122 |
|
|
| Less: Share-based compensation expense |
|
|
| 631 |
|
|
|
|
|
|
| 95 |
|
|
|
|
|
|
| 2,160 |
|
|
|
|
|
|
| 2,247 |
|
|
| Less: Employer payroll taxes on employee stock transactions |
|
|
| 2 |
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
| 40 |
|
|
|
|
|
|
| 11 |
|
|
| Non-GAAP sales and marketing |
| $ |
| 6,506 |
|
|
|
|
| $ |
| 4,208 |
|
|
|
|
| $ |
| 21,458 |
|
|
|
|
| $ |
| 15,864 |
|
|
| As a % of revenue |
|
|
| 9 |
| % |
|
|
|
|
| 7 |
| % |
|
|
|
|
| 7 |
| % |
|
|
|
|
| 6 |
| % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended December 31, |
|
|
| Year Ended December 31, |
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
| 2022 |
|
|
|
|
|
|
| 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by operating activities |
| $ |
| 7,352 |
|
|
|
|
| $ |
| 20,823 |
|
|
|
|
| $ |
| 74,587 |
|
|
|
|
| $ |
| 89,835 |
|
|
| Less: Capitalized software |
|
|
| 1,905 |
|
|
|
|
|
|
| 1,316 |
|
|
|
|
|
|
| 8,228 |
|
|
|
|
|
|
| 4,906 |
|
|
| Less: Capital expenditures |
|
|
| 247 |
|
|
|
|
|
|
| 151 |
|
|
|
|
|
|
| 1,136 |
|
|
|
|
|
|
| 843 |
|
|
| Free cash flow |
| $ |
| 5,200 |
|
|
|
|
| $ |
| 19,356 |
|
|
|
|
| $ |
| 65,223 |
|
|
|
|
| $ |
| 84,086 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005781/en/
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