MeridianLink Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 7, 2024

There are 9 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Miradine Link First Quarter 2024 Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Tuesday, May 7, 2024. I would now like to turn the conference over to your first speaker today, Gianna Rotellini.

Operator

Gianna, please go ahead.

Speaker 1

Good afternoon, and welcome to MeridianLink's Q1 Fiscal Year 20 24 Earnings Call. We will be discussing the results announced in our press release issued after the market closed today. With me today are MeridianLink's Chief Executive Officer, Nicholas Floch Chief Financial Officer, Larry Katz and President, Go to Market, Chris Malouf. Before we begin, I'd like to remind you that today's conference call will include forward looking statements based on the company's current expectations. These forward looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially.

Speaker 1

For a discussion of the risks, uncertainties and other factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and the periodic reports and filings we file from time to time with the Securities and Exchange Commission. All of our statements are made based on information available to us as of today, and except as required by law, we assume no obligation to update any such statements. During the call, we will also refer to both GAAP and non GAAP financial measures. You can find the reconciliation of our GAAP to non GAAP financial measures included in our press release, which is posted to the Investor Relations section of our website. With that, let me turn the call over to Nicholas.

Speaker 2

Thank you, Gianna. Good afternoon, everyone. We appreciate you all joining us today. We delivered a solid Q1 against a challenging macro backdrop, achieving GAAP revenue of $77,800,000 or 1% growth year over year and adjusted EBITDA of $31,800,000 at a 41% margin, exceeding the top end of our guidance. I want to acknowledge that we have continued to grow in the face of significant volume headwinds, including a generational low in mortgage, a multi year slowdown in auto lending and macro related churn.

Speaker 2

Specifically, our performance reflects the continued strength of MeridianLink 1's end to end lending platform and its power to enable our customers to win in the market. Once again this quarter, we signed a robust roster of new logo and cross sell wins that demonstrate the success of our go to market strategy. We also continue to expand the capabilities of our platform through innovation. With that, let's move to our Q1 updates that demonstrate how the MeridianLink 1 platform empowers our customers' growth. First, I'd like to highlight a cross sell win that shows our ability to increase module penetration within our existing customer base.

Speaker 2

Our successful land and expand strategy improves customer retention, ultimately increasing customer lifetime value. For example, we won a large financial institution who added MeridianLink Mortgage Access, mortgage lending and our debt optimization tool to their existing portfolio of MeridianLink Consumer and Opening. By connecting mortgage and consumer solutions, our customers can better meet the needs of consumers along their financial journey, capturing a greater share of their debt wallet. This is an example of how embracing the MeridianLink 1 ecosystem can deepen client relationships and ultimately revolutionize how customers do business. In Q1, we also successfully landed new customers who are strategically retooling now to prepare for a market recovery.

Speaker 2

For example, we welcomed a smaller financial institution on MeridianLink consumer, opening and mortgage. They chose MeridianLink 1 to automate decisioning capabilities and cross sell loans and deposits without adding brick and mortar branches. Through the sales cycle, the customer gained a strong appreciation for the benefits of a single comprehensive partnership rather than piecing together point solutions from disparate vendors. This illustrates how we are empowering customers to embrace a digital lending strategy and drive growth. Next, I want to spotlight the extraordinary success achieved by Space Coast Credit Union, a top 30 credit union in the U.

Speaker 2

S. After going live with our advanced decisioning capabilities in the quarter. For nearly a decade, we've been steadfast partners in supporting SECU's digital maturity initiatives as they expand it to 9 modules tailored to meet the changing lending needs of their members. Since implementation of advanced decisioning, SCCU has instantly decisioned 13% more loans overall and an astounding 53% of applicants for credit tiers over 660. With increased automation and efficiency, the customer has optimized staffing and a strategically positioned to sustain long term growth and remain agile in the competitive landscape.

Speaker 2

Turning to our latest product updates. We continue to innovate MeridianLink 1 to drive our customers' digital lending strategy. In the Q1, we launched MeridianLink Insight Lite, our new interactive data analytics and reporting tool designed to enhance the reporting functionality for meridiening consumer and opening customers. Insight Lite enables users to adjust strategies, mitigate risks and optimize performance with ease. As customers embrace data driven decision making through Insight Light, there is a clear upgrade path to our more comprehensive business intelligence solution, MeridianLink Insight.

Speaker 2

This showcases how we are paving the way for customers to accelerate their digital progression, which in turn drives growth for MeridianLink. Ending on a highlight of customer engagement, we enjoyed spending time together in Nashville last week with 1400 attendees, a record at MeridianLink Live, our annual conference. Our customers were excited about our digital progression model, outlining a framework to accelerate growth and deepen consumer connections. We are proud of hosting our most successful event to date, leading directly to significant pipeline creations for new logo, cross sell and partner integrations. Before I hand over to Larry, I want to emphasize that MeridianLink continues to outperform even in the face of challenging market conditions, all thanks to the exceptional ability of our team to drive results.

Speaker 2

We expect that macro headwinds will persist throughout this year and we will continue executing on what's in our control. With the solid foundation we have invested in, bolstered by healthy balance sheet and sound capital allocation strategy, we are well positioned to capitalize on the opportunities that lie ahead and deliver value back to shareholders. Finally, I'd like to close by highlighting a strategic addition to the leadership team to support our growth acceleration, namely our new CFO, Larry Katz. Larry brings a strong global track record of financial leadership with demonstrated success leading transformation at scale in Financial Services, SaaS and Private Equity. His experience spans more than 25 years at companies including Genesis and JPMorgan Chase.

Speaker 2

He served in executive leadership positions at JPMorgan Chase for approximately 15 years, including in mortgage and consumer lending businesses and as CFO of various divisions. While CFO of Genasys, a $2,000,000,000 annual revenue business, he led a highly successful transformation from on prem to the cloud and completed numerous successful acquisitions. What excites me is that Larry is also a seasoned M and A veteran and I value his experience and industry knowledge as we continue to build MRIdian Link. Larry and I share the same vision that MRIdian Link has significant untapped potential for expansion and growth, and I'm excited to partner together to propel the company forward to that next level of success. With that, I'm pleased to turn the call over to Larry to talk about his experience and then review our financial results and guidance.

Speaker 3

Thanks, Nicholas. I'm thrilled to be here and to help lead the next leg of MRIdian Link's growth and innovation. As Nicholas mentioned, I've got years of relevant experience in consumer lending, FinTech and SaaS businesses. I've been around the block and at every stop have helped companies deliver durable growth at scale while building exceptional customer experiences. Personally, I enjoy helping build companies the right way.

Speaker 3

Innovative companies like MeridianLink that deliver unique and valuable solutions for customers that are financially disciplined, that allocate capital prudently and they have high performing teams who like to win. There is a lot to like about the MeridianLink story today and I chose to join because of my knowledge and experience in this market. First, MeridianLink has a unique value proposition as the lending platform of choice for credit unions and community banks. I know the power, value and stickiness of these enterprise platforms from my experience at JP Morgan and Genesis. I've implemented point of sale, origination and servicing platforms in mortgage and consumer lending and I know that financial institutions design their businesses around these platforms.

Speaker 3

Our platforms don't just power the business, they are the business. We are the leading platform in a growing resilient market segment where MeridianLink's digital capabilities enable our customers to compete and grow. 2nd, the fundamentals of this business are strong with healthy retention rates, strong margins and robust cash generation. This is a durable business with recurring revenue insulated by contractual minimums and benefiting from macro tailwinds of digitalization. It is led by a smart and talented management team that has executed with discipline through market cycles.

Speaker 3

They've built a great business and I'm excited to partner with them for this next chapter. 3rd, it's clear to me that we are well positioned to accelerate growth. With the power of MeridianLink 1, we have a significant expansion play with our current customers and partner relationships as well as new logo acquisition opportunities. We're just beginning to see the return on our investment in our go to market services and customer success teams, which will generate increased demand and accelerate time to revenue. With our healthy pipeline, bookings and activations, we are becoming a coiled spring that will release as volumes recover, driving accelerated revenue growth.

Speaker 3

As I enter as CFO at MeridianLink, I plan to focus on 3 key areas. One, I will focus on delivering against our operating priorities, bringing rigor, discipline, data and analytics to measure progress and inform decisions. I'll focus on systems, processes, controls and talent to support our scale and growth. And I'll hone our short and medium term investment priorities to articulate a long term growth plan, including milestones over a 3 plus year period. 2, I will outline a disciplined capital allocation framework.

Speaker 3

Our priorities will be: 1st, investing in organic growth in areas such as go to market, R and D and services, especially when those investments have high ROIs 2nd, inorganic growth via targeted strategic accretive M and A. And 3rd, repurchasing our own shares when trading at a discount to intrinsic value. We expect that we will be able to do all 3 with our recurring revenue, free cash flow generation and balance sheet capacity. My 3rd priority will be to help our investors better understand performance of our business and the levers of our growth, which include our revenue growth algorithm. I'm a big believer in transparency and I'm committed to helping our investors understand what their financial expectations could be for our business.

Speaker 3

Turning now to our results. MeridianLink performed well in the face of a shifting macroeconomic environment. In the quarter, we delivered on our top line by executing our platform strategy and beat on our EBITDA guidance. In Q1, we generated total revenue of $77,800,000 up 1% year over year, meeting the high end of our revenue guidance. Adjusted EBITDA was $31,800,000 a 41% margin, up 27% year on year and exceeded our EBITDA guidance.

Speaker 3

Revenue growth was driven by higher services and other revenue offset by lower subscription revenue. Subscription revenue declined year over year due to lower volumes offset by ACV release from both existing and new customers. In the face of macro headwinds, a generational low in mortgage industry originations and softer auto lending volumes, We beat our adjusted EBITDA guidance by managing our cost base and executing with discipline. We saw healthy demand in the quarter, resulting in pipeline growth and strong bookings. In this challenging macro, we are controlling what we can control and proactively investing for when volumes recover.

Speaker 3

Breaking down revenue and starting with software solutions. Our total lending software revenue grew 5% year over year and accounted for nearly 78% of revenue. Non mortgage lending revenue grew 6% year over year and accounted for 89% of lending software revenue. This growth was attributable to solid ACV release from existing and new customers, offset by lower volumes. Auto volumes, our largest consumer loan category, are improving sequentially, but remain down year over year.

Speaker 3

Pre owned volumes remain challenged due to the softness in used car inventory and aggressive dealer financing alternatives. Mortgage related revenue within Lending Software Solutions declined 1% year over year and accounted for the remaining 11% of Lending Software revenue. This quarter mortgage volumes were up year over year, but it will take time for volumes to push our customers above their committed minimums. Through a smaller part of our business, mortgage industry volumes are at generational lows with refinancing volumes at the lowest level since 2000. Turning to data verification software solutions.

Speaker 3

Revenue declined 12% year over year and accounted for 22% of total revenue. This decline was attributable to a 17% decrease in mortgage related revenue, which represented 58% of total data verification software revenue in Q1. This decline in mortgage related data verification revenue was driven by lower volumes, which were impacted by down sell of a single large customer. In total, mortgage related revenue was 21% of total MeridianLink revenue in the Q1, down 3 points from the year ago quarter. Focusing on profitability, GAAP gross margin was 66% in Q1.

Speaker 3

On a non GAAP basis, adjusted gross margin was 74%, nearly 300 basis points of improvement in operating leverage year over year driven by increased productivity of our services team. For operating expenses, sales and marketing expense was $10,500,000 a 28% increase year over year on a GAAP basis. On a non GAAP basis, sales and marketing was $9,200,000 up 16%. This increase is due to higher variable compensation costs and our investment in our go to market team. R and D expense was $9,500,000 and declined 31% year over year on a GAAP basis.

Speaker 3

On a non GAAP basis, R and D was $7,900,000 and declined 34% year over year, reflecting continued cost discipline and the roll off of spend for completed technology projects such as the migration to the public cloud. G and A expense was $25,200,000 up 12% year over year on a GAAP basis. On a non GAAP basis, G and A declined 7% to $9,500,000 dollars excluding non recurring items such as the secondary offering costs in Q1. Moving to overall operating performance. GAAP operating income was $3,400,000 and non GAAP operating income was $16,300,000 On a GAAP basis, net loss was negative $5,300,000 or negative 7 percent margin.

Speaker 3

And on a non GAAP basis, adjusted EBITDA was $31,800,000 or 41 percent margin. This represented an 850 basis point improvement in operating leverage year over year and reflects our continued cost discipline while strategically investing in growth. Now pivoting to the balance sheet and cash flow statement. We ended the Q1 with $52,300,000 in cash and cash equivalents, a decrease of $18,200,000 from year end. This decline was driven by $44,000,000 of stock repurchases in the quarter.

Speaker 3

Cash flow from operations was $29,000,000 or 37 percent of revenue and free cash flow was $27,100,000 or 35 percent of revenue. I'll now pivot to guidance for Q2 and update guidance for the full year 2024. While the consumer seems to be holding up, we remain cautious about the uncertain macro environment with a higher for longer rate outlook. We continue to grow our non mortgage related lending revenue, primarily through ACV release. And while volumes are improving sequentially, we expect that revenue growth attributable to volumes will be lighter than previously anticipated.

Speaker 3

Within this macro, we are focused on the things within our control, including disciplined cost management with a focus on profitability in preparation for when volumes return. We continue to prioritize winning new logos and cross sell mandates, accelerating ACV release and innovating MeridianLink 1 to meet evolving consumer lending needs. With that, I'll share our updated guidance. For the Q2, estimated total revenue is expected to be between $76,000,000 $79,000,000 compared to $75,400,000 for the same period in 2023. This represents an estimated year over year change of 1% to 5%.

Speaker 3

Adjusting Q2 2023 for a one time reduction in revenue due to the previously disclosed commercial dispute, this represents an estimated year over year change of negative 2% to positive 2%. For the full year 2024, we expect total revenue to be between $311,000,000 $319,000,000 compared to $303,600,000 for the full year 2023. This represents an estimated increase of 2% to 5% year over year. We expect the mortgage market to contribute approximately 20% of revenue for the Q2 and full year 2024. To provide more color around the drivers of our total revenue, our mortgage related revenue guidance includes declining year over year revenue despite improving volumes as it will take time for the recovery in volumes to push our customers above their committed minimums.

Speaker 3

For our non mortgage related data verification software solutions, we expect to return to modest year over year growth as the employment screening market reacts to job openings and labor turnover. Non mortgage lending revenue is anticipated to gradually improve year over year across loan types. This is driven primarily by ACV release and some uplift from improving volumes in line with the gradual recovery that industry sources are forecasting. Now focusing on our adjusted EBITDA guide. On a non GAAP basis, Teckfecorder estimated adjusted EBITDA is expected to be between $29,000,000 $32,000,000 representing adjusted EBITDA margins of approximately 39% at the midpoint.

Speaker 3

For the full year 2024, we continue to expect our adjusted EBITDA range to be between $123,000,000 130,000,000 dollars representing adjusted EBITDA margins of approximately 40% at the midpoint. This adjusted EBITDA guide on lower revenue effectively raises our expected adjusted EBITDA margin and signals our confidence and focus on execution and profitability. To wrap up, I'd like to reiterate how excited I am to join this team and business to chart the next leg of MRIdian Link's growth. With that, Nicholas, Chris and I are happy to take any of your questions and I'll turn it over to the operator.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer Your first question comes from the line of Koji Ikeda from Bank of America. Please go ahead.

Speaker 4

Hey, guys. Thanks for taking the questions. Hi, Larry. Nice to meet you on the call. Looking forward to working with you.

Speaker 4

Had a question around the minimum contract values. And just thinking about all the contracts in aggregate, is there a way to think about how far down or below the minimum contract values in aggregate the customers are? And where I'm going with this is, how much do overall volumes need to be made up before minimum contract thresholds are achieved?

Speaker 3

Hey Koji, it's Larry. Nice to meet you as well and look forward to working with you. So breaking down consumer versus mortgage. On the mortgage side, as we've talked about in the past, we are many of our contracts are well below their contractual minimums. And that's why we're seeing even though mortgage volumes are starting to recover, it's not printing to revenue in the quarter.

Speaker 3

So it's going to take some time. I don't know crystal ball when that'll happen, but it's going to take some time. From my days in mortgages, I'm sure you know that when the mortgage market comes back, it tends to move quickly. So we can move through those floors pretty quickly, but it's going to take some time until that mortgage market comes back. On the consumer lending side, substantial part of our contract base is above the minimums today and a good chunk is relatively close to those minimums.

Speaker 3

And so we see more as volumes are returning, for example, in auto, those volumes are passing through into revenue and expect that to continue as volumes recover.

Speaker 4

Got it. Thank you, Larry. And just a follow-up here. Thinking about the new logos signing up, call it, within the last 6 months, how do those contract commitments for those new logos compare to, say, contracts signed a year ago? Are they roughly the same, roughly smaller?

Speaker 4

I mean, any way to think about the commitments that are embedded with the new logo signed recently? Thanks guys.

Speaker 5

Hey, this is Chris. Over the last year, they're roughly the same. And they can really vary institution to institution based on how much how aggressive they want to be in terms of their commitment versus their app price. So we see a decent amount of variability, which has remained consistent.

Speaker 4

Thank you.

Operator

Thank you. And your next question comes from the line of Nick Krammoh from UBS. Please go ahead.

Speaker 6

Hey, guys. Congrats on the strong results and thanks for taking my question. My first one is for Nicholas. I was hoping you could provide additional color on the conversations you're having with customers at your most recent customer conference just in terms of their bank IT spending plans and more specifically on lending and also just how your sales pipeline is looking now relative to what was last year on the back of your customer conference?

Speaker 4

Thanks.

Speaker 2

Yes. Hello there and thank you for the question. First of all, from a customer conversation standpoint, I don't feel like we're having different conversations with customers at a user event or annual event and kind of separate executive briefings and meetings. And those conversations are pretty positive. Folks are leaning into retooling.

Speaker 2

Folks are very interested in MeridianLink's roadmap. We did spend some time at the user forum speaking about a digital progression model, which I'm going to ask Chris Malouf that's on the call here to take that on here in a little bit when I pass it to him. But it's something that our customers are really excited about. We feel it will help them on the curve of achieving more digital maturity on our platform, but also in the industry as a general. And a lot of conversation took place around that.

Speaker 2

Another theme that we had quite a bit of interaction with at the user forum was AI. And we've also had some keynote folks and showed product functionality that was pretty exciting to the customer base. But generally speaking, I would say folks are starting to kind of look past 24. One of the themes we heard back from some of our clients would be still a fairly constrained environment from a liquidity and deposit perspective, but hopefully folks are seeing 25 being a more positive year. Specifically on the credit union side, I would highlight.

Speaker 2

So Chris, maybe you can speak to the digital progression model, which was quite a highlight for us at the user forum.

Speaker 5

Thanks, Nicholas. A core part of our cross sell success and how we position ourselves against competitors is how ML1 as a whole is differentiated than its point solutions alone. So the central approach we took our latest user form is we moved away from talking about various specific use cases around credit cards and mortgage, etcetera. It's about where are you in your specific digital transformation process and then how can our solutions help you move you along that line. An example could be, we'll talk to many different institutions that are, say they take 10% of their deposits online and they want to streamline that.

Speaker 5

But that's one engagement we can do. And then we might find another institution like the one Nicholas highlighted earlier where they're looking to enhance their auto decision rate, right? So that would be on the more advanced side of the curve. And what's great about this is I think about the business long term, is many of these customers or this industry still has 5 to 10 years left to digital and transformation left. There is a lot of processes out there that are still built for the in person and they're reflected digitally as opposed to being separate but equal.

Speaker 5

And as we move them to being separate but equal where we'll require significant investment in additional technologies, investment in their people as well as investment in their technology.

Speaker 6

Thanks for all the additional color. It's very helpful. And then my follow-up for Larry, it would be helpful if you could just provide some additional detail on the guidance assumptions for the remainder of the year for the consumer lending business excluding mortgage across the various loan types such as like auto, personal loans, credit cards? Like what are you thinking from a volume perspective relative to Q1?

Speaker 3

Thanks. Hey, Nick. Nice to meet you and thanks for the question. So in general, we are looking at we're cautiously optimistic in the second half. We are given the rate environment, we have pulled back on some of our assumptions in the second half from our prior guidance.

Speaker 3

And just to give you a little bit of color on it and we're referencing industry sources and all the rest here, but looking at our own business and where are and how our segments are performing. On the auto side, we are expecting some modest recovery in the back half, in line with industry sources as the used market, which as you know represents the majority of our consumer lending business. As that begins to recover, we'll see some pickup in the back half. And similarly in other non asset backed loan types of account opening as well. Account opening had a relatively soft Q1, just given the comps till last year and we're expecting some pickup in the back half and other personal loans and credit cards have remained pretty healthy and will be stable to positive through the back half.

Speaker 3

But just generally, I'd say it's pretty modest recovery given our outlook, our rate outlook.

Speaker 6

Got it. Thanks a lot for all the color.

Operator

Thank you. And your next question comes from the line of Adeep Choudhary from William Blair. Please go ahead.

Speaker 7

Hey guys. Thanks for taking our questions. If I could just ask on ACV release. I mean you guys have talked a lot about accelerating implementation and clearly some of the ACV releases benefiting results now. But could you kind of just talk about where we are in that journey and how that's kind of been trending?

Speaker 7

Thanks.

Speaker 3

Yes, it's Larry again. Thanks for the question. So questions on ACV release. Look, we talked a lot in prior quarters around acceleration of our ACV release and we are seeing that in the quarter. Story on the quarter is that ACV released both new and cross sell, that release is accelerating and it's offset by volumes and so you don't see it as much in the numbers, but that's kind of the underlying trend and is really the part of the Cold Spring story that we've talked about.

Speaker 3

On a period on period basis, ACV is up and that's a benefit. I mean, there are a couple of things going on there. One is, as our bookings have go to market has become has built a bigger pipeline that drives ACV release services investment that has increased our time to revenues we've talked about in prior quarters. But also there's a mix component here where new implementations can take longer to implement and cross sell is a quicker implement. And as we've talked about cross sells a big chunk of our business.

Speaker 3

And so there's a mix element here as well that drives ACV release. So we are seeing it in the numbers. It doesn't show up as much just given the macro headwinds that we're facing, but it is based into the numbers.

Speaker 7

Perfect. Thanks for that. And if I could just ask on MeridianLink Access, could you kind of just talk about how that product has kind of trended relative to your initial expectations over the last couple of months and how the offering is differentiated versus some of your offerings? Thanks.

Speaker 5

Thanks for the question. So we released this product in H2 of last year. And the number we talked about last quarter was 50. I think we sold 40 to 50 of them. So that's in line with expectations as we continue to mature the product.

Speaker 5

Now as far as differentiation is concerned is when we think about ML1 from a data perspective, the more aspects of the platform you have, the better the data you're going to have on how effective each part of your organization is in driving originations. And that's the central part of the insights and data product that we've had continued success selling as well. So if you were to leverage 1 of our partners, which is great and we enable our customers to extend our solution with 3rd parties as we highlight, you wouldn't have some of those extra features that allow you to optimize your business for the different channels you're operating in.

Speaker 7

Great. Thanks very much.

Operator

Thank you. Your next question comes from the line of Alex Sklar from Raymond James. Please go ahead.

Speaker 8

Great. Thank you. And nice to meet you, Larry as well. Sorry, jumping between calls here. Larry, just the first one for you.

Speaker 8

I'm just kind of want to see, I know it's fairly new still, but the next couple of months, where are you most focused on, specifically as it relates to kind of the accelerating growth comments you made, aside from some of the macro headwinds easing?

Speaker 3

Hey, Alex, nice to meet you. Look, I think focus on there's we're focused on what controlling what we can control, right. And given the macro and those are around ACV release, around time to revenue, around bookings and obviously pipeline release around focused on understanding churn and managing churn and then on pricing as well, kind of all the key elements of value creation. And then as I mentioned in the script also on turning up the inorganic efforts as well, we think there's a real opportunity in the market right now given valuations and liquidity that is really we're well positioned there as well. So and given our recurring revenue and free cash flow, I think we've got a meaningful opportunity there to add on when we see product market fit and when we see and when it's accretive and when it makes sense for us.

Speaker 3

So that's an area as well that is spending a lot of time and over the next and will be over the next quarter.

Speaker 8

Okay. Great color on that. Maybe one follow-up for you, Nicholas. Just in terms of the customers, Space Coast that took the automated decisioning and implemented is now live. Can you just talk about just something unique from that customer's perspective in terms of being ready to adopt versus your average customer base?

Speaker 8

I'm just kind of curious if there's been any change in terms of the overall appetite for your customers and prospects to similarly adopt that automated decisioning that you've been talking about for a while now? Thanks.

Speaker 5

Yes. This is Chris. I'll take that one. When you think of it goes all goes back to the digital progression where they are within that journey. I would say that more and more organizations are investing to move up that course.

Speaker 5

And what I mean by that is it's all about how are you out competing for consumers. And a core measure of out competing for consumers is your instant decisioning rate. And that's what our advanced decisioning tool allows our financial institutions to do. So more specifically, providing more data points and more data trees for them to profitably decision the highest percentage of their incoming consumers possible. So we are seeing a higher take rate as people are seeing digital transformation being more critical to their long term success.

Speaker 8

Thanks, Chris. Great color there. All right. Thank you all.

Operator

There are no further questions at this time. I would now like to hand it back over to management for closing remarks.

Speaker 2

Thank you, operator. And as we wrap up, I know you'll join me in welcoming Larry as our CFO. His experience is an asset to our business, and I'm glad he made the decision to join the team. Speaking of the team, I want to thank everyone at MeridianLink for a solid Q1 performance. I'm consistently impressed by our employee dedication, innovation and drive to succeed.

Speaker 2

And ending on a real high note, we are pleased to share that we have won a Product Innovations TV Award. We shared this award with a customer, FedChoice, for the innovative use of MeridianLink Insight to make measurable improvements across the lending lifecycle. We're honored to be at the trust we're honored to be their trusted partner and also so many other leading FIs. We look forward to speaking with you again soon And ladies and gentlemen, this concludes today's conference call.

Speaker 4

You may now disconnect.

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Earnings Conference Call
MeridianLink Q1 2024
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