MeridianLink Reports Second Quarter 2021 Results

Revenue of $68.5 million grows 38% year-over-year

MeridianLink, Inc. (NYSE: MLNK), a cloud-based technology company that enables banks, credit unions, mortgage lenders, specialty lending providers, and consumer reporting agencies (CRAs) to streamline loan decision making and origination, and credit reporting and background screening workflows, today announced financial results for the second quarter ended June 30, 2021.

“MeridianLink delivered strong performance throughout our business in Q2,” said Nicolaas Vlok, chief executive officer of MeridianLink. “We have great momentum in the business as MeridianLink continues to help financial institutions and CRAs bring equity to lending, placing power in consumers’ hands through our lending and data verification platforms. I couldn’t be prouder of these results which showcase both our robust organic growth and best-in-class margins.”

“Given our leadership position in the market, our operational execution and the positive market dynamics, we are confident in our growth trajectory. As financial institutions respond to customer demands for more integrated digital banking, lending, and data verification experiences, we are ideally positioned to help new and existing customers meet evolving consumer needs through our dynamic platform. As a result of this, I am even more optimistic about the opportunity ahead of us.”

Financial Highlights:

• Revenue of $68.5 million, an increase of 38% year-over-year
• Operating profit of $19.2 million, or 28% of revenue
• Adjusted EBITDA of $33.4 million, or 49% of revenue
• Cash flow from operations of $21.2 million, and Free Cash Flow of $19.5 million

Initial Public Offering:

• MeridianLink completed its initial public offering on July 28, 2021, for net proceeds of $241.5 million, after deducting underwriters’ discounts
• A portion of the net proceeds were used to repay $75.0 million of borrowings outstanding under our first lien credit agreement and all borrowings outstanding under our second lien credit agreement of $125.0 million

Business and Operating Highlights:

• The 2021 Virtual User Forum took place in May and had a total of 80 sessions over three days. There were more than 2,100 unique attendees and over 13,000 cumulative attendees for all sessions to engage with and learn more about MeridianLink’s Lending offerings
• The organization completed the acquisition of Saylent on April 1st. Saylent contributes key data and marketing capabilities to the MeridianLink One platform, which will continue to be enhanced and integrated
• The company had another strong quarter of new logo wins, including key signings in specialty lending, continued bank and credit union expansion, and also several new customers for MerdianLink’s Data Verification Solutions

Business Outlook

Based on information as of today, September 7, 2021, the Company issues the following financial guidance.

Third Quarter Fiscal 2021:

• Revenue is expected to be in the range of $62.9 million to $63.5 million
• Adjusted EBITDA is expected to be in the range of $25.0 million to $25.6 million

Full Year 2021:

• Revenue is expected to be in the range of $256.7 million to $257.9 million
• Adjusted EBITDA is expected to be in the range of $112.3 million to $113.5 million

Conference Call Information

MeridianLink will hold a conference call to discuss our second quarter 2021 results today, September 7, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (877) 284-4396 from the United States and Canada or (873) 415-0298 internationally with conference ID 4917618. 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 8:59 p.m. Pacific Time (11:59 p.m. Eastern Time) on Tuesday, September 14, 2021, at (800) 585-8367 from the United States and Canada or (416) 621-4642 internationally with conference ID 4917618.

About MeridianLink

MeridianLink® (NYSE: MLNK) is a leading provider of cloud-based software solutions for financial institutions, including banks, credit unions, mortgage lenders, specialty lending providers and consumer reporting agencies. Headquartered in Costa Mesa, California, MeridianLink provides services to more than 1,900 customers, including a majority of the financial institutions on Forbes’ 2020 lists of America’s Best Credit Unions and Banks. Further information can be found at www.meridianlink.com.

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; non-GAAP net income; 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 before interest expense, taxes, depreciation, amortization, unit-based compensation expense, certain expenses associated with our IPO, and sponsor and third-party acquisition-related costs, and deferred revenue reduction from purchase accounting
• Non-GAAP operating income: GAAP income from operations, excluding the impact of stock-based compensation, employer taxes specific to equity compensation awards, and sponsor and third-party acquisition-related costs
• Non-GAAP net income: GAAP net income, excluding the impact of stock-based compensation, employer taxes specific to equity compensation awards, and sponsor and third-party acquisition-related costs
• Non-GAAP cost of revenue: GAAP cost of revenue, excluding the impact of stock-based compensation, employer taxes specific to equity compensation awards, and amortization of developed technology
• Non-GAAP operating expenses: GAAP operating expenses, excluding the impact of stock-based compensation and employer taxes specific to equity compensation awards
• Free cash flow: GAAP cash flow from operating activities plus 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 and Section 21E of the Securities Exchange Act. 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 future financial and operational performance, our strategic initiatives, our development or delivery of new or enhanced solutions, our market size and growth opportunities, and our competitive positioning. 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 under the caption “Risk Factors” in our final prospectus filed on July 28, 2021, and our other SEC filings. Additional information will also be set forth in Item 1A. Risk Factors, or elsewhere, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. Any forward-looking statement contained herein or provided on the related conference call is based on reasonable assumptions as of the date hereof. 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.

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