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MeridianLink Reports Second Quarter 2023 Results

Revenue of $75.4 million grows 3% year-over-year driven by lending software solutions revenue of $55.8 million growing 8% 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 second quarter ended June 30, 2023.

“We experienced strong demand for our software solutions in Q2, with solid bookings momentum and successful services delivery, both in-line with our strategic investment in our Go-To-Market engine and Services capabilities,” said Nicolaas Vlok, chief executive officer of MeridianLink. “Given the power of our configurable digital lending platform, we see customers continuing to choose MeridianLink® One to accelerate growth and best position their businesses to win.”

Quarterly Financial Highlights:

  • Revenue of $75.4 million, an increase of 3% year-over-year
  • Lending software solutions revenue of $55.8 million, an increase of 8% year-over-year
  • Operating income of $1.5 million, or 2% of revenue, and Non-GAAP operating income of $11.9 million, or 16% of revenue
  • Net loss of $(5.2) million, or (7)% of revenue, and Adjusted EBITDA of $27.1 million, or 36% of revenue
  • Cash flows from operations of $61.1 million and free cash flow of $51.4 million, in each case for the last twelve month period

Business and Operating Highlights:

  • Revenue of $75.4 million for the quarter included a one-time $2.3 million reduction in revenue related to a commercial dispute of a contract acquired through a past acquisition. Without this reduction, MeridianLink’s quarterly revenue would have been $77.7 million, growing 6% year-over-year and in-line with our guidance.
  • MeridianLink propelled the cross-sell momentum of MeridianLink One, signing fourteen MeridianLink® Consumer customers on to our MeridianLink® Mortgage solution in the first half of the year.
  • The Company announced the go-live of Space Coast Credit Union, the third largest credit union in Florida, on MeridianLink® Insight, our business intelligence tool. As a result, instant approvals at Space Coast Credit Union increased by over 25% and approximately 95% of all loan applications are now processed and decided within one day.
  • MeridianLink won its largest new logo platform customer in the last twelve months with a credit union looking to supercharge growth across their portfolio with the purchase of MeridianLink® Consumer, Opening, Auto, Home Equity, and Business.
  • The Company improved the innovative functionality of MeridianLink One by enhancing its Advanced Decisioning capabilities, adding a digital banking integration with MeridianLink® Engage, and automating loan and account cross-selling.
  • MeridianLink added a partner integration with PortX to rapidly integrate with other core providers, which accelerates our customers’ end-to-end lending process, driving automation for the lender and faster decisioning for the consumer.

Business Outlook

Based on information as of today, August 1, 2023, the Company issues third quarter financial guidance and updates full year 2023 financial guidance as follows:

Third Quarter Fiscal 2023:

  • Revenue is expected to be in the range of $76.0 million to $78.0 million
  • Adjusted EBITDA is expected to be in the range of $27.0 million to $29.0 million

Full Year 2023:

  • Revenue is expected to be in the range of $302.0 million to $306.0 million
  • Adjusted EBITDA is expected to be in the range of $104.0 million to $108.0 million

Conference Call Information

MeridianLink will hold a conference call to discuss our second quarter results today, August 1, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 259-6580 from North America toll-free or the International number of (416) 764-8624 with Conference ID 93721775. 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 8:59 p.m. Pacific Time (11:59 p.m. Eastern Time) on Tuesday, August 8, 2023, by dialing (877) 674-7070 from North America or the International number of (416) 764-8692 with Playback Passcode 721775.

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:

  • Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, restructuring related costs, 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, restructuring related costs, sponsor and third-party acquisition-related costs, and the effect of income taxes on non-GAAP items. The effects of income taxes on non-GAAP items reflect a fixed long-term projected tax rate of 24%.

The Company employs a structural long-term projected non-GAAP income tax rate of 24% for greater consistency across reporting periods, eliminating effects of items not directly related to the Company's operating structure that may vary in size and frequency. This long-term projected non-GAAP income tax rate is determined by analyzing a mix of historical and projected tax filing positions, assumes no additional acquisitions during the projection period, and takes into account various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from key U.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for significant events such as significant alterations in the U.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations.

  • Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, restructuring related costs, sponsor and third-party acquisition related costs, and deferred revenue reductions from purchase accounting for acquisitions prior to the adoption of ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which we early adopted on January 1, 2022 on a prospective basis. As of June 30, 2023, the remaining deferred revenue from acquisitions prior to the adoption of ASU 2021-08 was less than $0.1 million, which will be recognized on a straight line basis through December 31, 2023.
  • 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, as applicable.
  • 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 and market conditions, our strategic initiatives, including anticipated benefits and integration of an acquisition, our restructuring plan, including expected associated timing, benefits, and costs, our ability to retain and attract customers and product partners, potential losses related to any commercial disputes, our development or delivery of new or enhanced solutions and anticipated results of those solutions for our customers, our ability to effectively implement, integrate, and service our customers, 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

(unaudited)

(in thousands, except share and per share data)

 

 

As of

 

June 30, 2023

 

December 31, 2022

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

108,872

 

 

$

55,780

 

Accounts receivable, net

 

35,104

 

 

 

32,905

 

Prepaid expenses and other current assets

 

11,313

 

 

 

9,447

 

Escrow deposit

 

 

 

 

30,000

 

Total current assets

 

155,289

 

 

 

128,132

 

Property and equipment, net

 

3,491

 

 

 

4,245

 

Right of use assets

 

1,671

 

 

 

2,185

 

Intangible assets, net

 

274,208

 

 

 

297,475

 

Deferred tax assets, net

 

17,886

 

 

 

13,939

 

Goodwill

 

608,576

 

 

 

608,657

 

Other assets

 

5,003

 

 

 

4,524

 

Total assets

$

1,066,124

 

 

$

1,059,157

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,149

 

 

$

1,249

 

Accrued liabilities

 

30,783

 

 

 

32,500

 

Deferred revenue

 

26,302

 

 

 

16,945

 

Current portion of long-term debt, net of debt issuance costs

 

3,545

 

 

 

3,505

 

Total current liabilities

 

64,779

 

 

 

54,199

 

Long-term debt, net of debt issuance costs

 

421,808

 

 

 

423,404

 

Long-term deferred revenue

 

841

 

 

 

1,141

 

Other long-term liabilities

 

845

 

 

 

1,322

 

Total liabilities

 

488,273

 

 

 

480,066

 

Commitments and contingencies

 

 

 

Stockholders’ Equity

 

 

 

Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at June 30, 2023 and December 31, 2022

 

 

 

 

 

Common stock, $0.001 par value; 600,000,000 shares authorized, 81,167,660 and 80,644,452 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

132

 

 

 

128

 

Additional paid-in capital

 

636,193

 

 

 

621,396

 

Accumulated deficit

 

(58,474

)

 

 

(42,433

)

Total stockholders’ equity

 

577,851

 

 

 

579,091

 

Total liabilities and stockholders’ equity

$

1,066,124

 

 

$

1,059,157

 

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues, net

$

75,415

 

 

$

72,987

 

 

$

152,550

 

 

$

145,741

 

Cost of revenues:

 

 

 

 

 

 

 

Subscription and services

 

23,984

 

 

 

23,376

 

 

 

47,485

 

 

 

44,480

 

Amortization of developed technology

 

4,510

 

 

 

3,850

 

 

 

8,964

 

 

 

7,284

 

Total cost of revenues

 

28,494

 

 

 

27,226

 

 

 

56,449

 

 

 

51,764

 

Gross profit

 

46,921

 

 

 

45,761

 

 

 

96,101

 

 

 

93,977

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative

 

24,409

 

 

 

20,806

 

 

 

46,964

 

 

 

38,993

 

Research and development

 

11,754

 

 

 

10,487

 

 

 

25,566

 

 

 

18,896

 

Sales and marketing

 

8,558

 

 

 

5,465

 

 

 

16,771

 

 

 

10,208

 

Acquisition related costs

 

 

 

 

103

 

 

 

 

 

 

2,386

 

Restructuring related costs

 

717

 

 

 

 

 

 

3,621

 

 

 

 

Total operating expenses

 

45,438

 

 

 

36,861

 

 

 

92,922

 

 

 

70,483

 

Operating income

 

1,483

 

 

 

8,900

 

 

 

3,179

 

 

 

23,494

 

Other (income) expense, net:

 

 

 

 

 

 

 

Other income

 

(784

)

 

 

(216

)

 

 

(1,254

)

 

 

(379

)

Interest expense, net

 

9,316

 

 

 

5,436

 

 

 

18,347

 

 

 

9,794

 

Total other expense, net

 

8,532

 

 

 

5,220

 

 

 

17,093

 

 

 

9,415

 

(Loss) income before (benefit from) provision for income taxes

 

(7,049

)

 

 

3,680

 

 

 

(13,914

)

 

 

14,079

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

 

(1,819

)

 

 

1,508

 

 

 

(3,018

)

 

 

4,428

 

Net (loss) income

$

(5,230

)

 

$

2,172

 

 

$

(10,896

)

 

$

9,651

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

Basic

$

(0.06

)

 

$

0.03

 

 

$

(0.13

)

 

$

0.12

 

Diluted

$

(0.06

)

 

$

0.03

 

 

$

(0.13

)

 

$

0.12

 

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic

 

80,911,113

 

 

 

80,418,520

 

 

 

80,786,427

 

 

 

80,197,832

 

Diluted

 

80,911,113

 

 

 

82,223,181

 

 

 

80,786,427

 

 

 

82,251,322

 

Net Revenues by Major Source

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Subscription fees

$

63,770

 

$

63,529

 

$

130,175

 

$

126,998

Professional services

 

9,002

 

 

6,665

 

 

17,437

 

 

13,777

Other

 

2,643

 

 

2,793

 

 

4,938

 

 

4,966

Total

$

75,415

 

$

72,987

 

$

152,550

 

$

145,741

Net Revenues by Solution Type

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Lending software solutions

$

55,778

 

 

$

51,668

 

 

$

113,779

 

 

$

100,835

 

Data verification software solutions

 

19,637

 

 

 

21,319

 

 

 

38,771

 

 

 

44,906

 

Total (1)

$

75,415

 

 

$

72,987

 

 

$

152,550

 

 

$

145,741

 

% Growth attributable to:

 

 

 

 

 

 

 

Lending software solutions

 

6

%

 

 

 

 

9

%

 

 

Data verification software

 

(3

)%

 

 

 

 

(4

)%

 

 

Total % growth

 

3

%

 

 

 

 

5

%

 

 

 

 

 

 

 

 

 

 

(1) % Revenue related to mortgage loan market:

 

 

 

 

 

 

 

Lending software solutions

 

13

%

 

 

7

%

 

 

12

%

 

 

7

%

Data verification software

 

61

%

 

 

64

%

 

 

61

%

 

 

67

%

Total % revenue related to mortgage loan market

 

26

%

 

 

24

%

 

 

25

%

 

 

26

%

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net (loss) income

$

(10,896

)

 

$

9,651

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

28,955

 

 

 

26,376

 

Provision for expected credit losses

 

441

 

 

 

 

Amortization of debt issuance costs

 

669

 

 

 

1,429

 

Share-based compensation expense

 

13,893

 

 

 

9,247

 

Loss on disposal of fixed assets

 

 

 

 

135

 

Deferred income taxes

 

(4,192

)

 

 

4,025

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(2,640

)

 

 

(8,806

)

Prepaid expenses and other assets

 

(2,395

)

 

 

661

 

Accounts payable

 

2,955

 

 

 

(1,059

)

Accrued liabilities

 

(1,663

)

 

 

(2,065

)

Deferred revenue

 

9,058

 

 

 

8,076

 

Net cash provided by operating activities

 

34,185

 

 

 

47,670

 

Cash flows from investing activities:

 

 

 

Acquisition, net of cash acquired – Beanstalk Networks L.L.C.

 

326

 

 

 

 

Acquisition, net of cash and restricted cash acquired – StreetShares, Inc.

 

 

 

 

(23,059

)

Return (payment) of escrow deposit

 

30,000

 

 

 

(30,000

)

Capitalized software additions

 

(4,562

)

 

 

(4,079

)

Purchases of property and equipment

 

(305

)

 

 

(480

)

Net cash provided by (used in) investing activities

 

25,459

 

 

 

(57,618

)

Cash flows from financing activities:

 

 

 

Repurchases of common stock

 

(5,145

)

 

 

(193

)

Proceeds from exercise of stock options

 

1,025

 

 

 

186

 

Proceeds from employee stock purchase plan

 

793

 

 

 

922

 

Taxes paid related to net share settlement of RSUs

 

(1,050

)

 

 

 

Principal payments of long-term debt

 

(2,175

)

 

 

(1,088

)

Payment of Regulation A+ investor note

 

 

 

 

(3,265

)

Net cash used in financing activities

 

(6,552

)

 

 

(3,438

)

Net increase (decrease) in cash and cash equivalents

 

53,092

 

 

 

(13,386

)

Cash and cash equivalents, beginning of period

 

55,780

 

 

 

113,645

 

Cash and cash equivalents, end of period

$

108,872

 

 

$

100,259

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

17,955

 

$

8,337

Cash paid for income taxes

 

2,577

 

 

762

Non-cash investing and financing activities:

 

 

 

Share-based compensation expense capitalized to software additions

$

136

 

$

188

Purchase price allocation adjustment related to income tax effects for StreetShares acquisition

 

245

 

 

Vesting of RSAs and RSUs

 

5

 

 

38

Purchases of property and equipment included in accounts payable and accrued expenses

 

3

 

 

93

Regulation A+ investor note assumed in business combination

 

 

 

3,265

Initial recognition of operating lease liability

 

 

 

3,372

Initial recognition of operating lease right-of-use asset

 

 

 

2,627

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Operating income

$

1,483

 

 

$

8,900

 

 

$

3,179

 

 

$

23,494

 

Add: Share-based compensation expense

 

9,367

 

 

 

5,439

 

 

 

14,556

 

 

 

9,247

 

Add: Employer payroll taxes on employee stock transactions

 

322

 

 

 

3

 

 

 

448

 

 

 

148

 

Add: Restructuring related costs

 

717

 

 

 

 

 

 

3,621

 

 

 

 

Add: Sponsor and third-party acquisition related costs

 

 

 

 

99

 

 

 

 

 

 

2,386

 

Non-GAAP operating income

$

11,889

 

 

$

14,441

 

 

$

21,804

 

 

$

35,275

 

Operating margin

 

2

%

 

 

12

%

 

 

2

%

 

 

16

%

Non-GAAP operating margin

 

16

%

 

 

20

%

 

 

14

%

 

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(5,230

)

 

$

2,172

 

 

$

(10,896

)

 

$

9,651

 

Add: Share-based compensation expense

 

9,367

 

 

 

5,439

 

 

 

14,556

 

 

 

9,247

 

Add: Employer payroll taxes on employee stock transactions

 

322

 

 

 

3

 

 

 

448

 

 

 

148

 

Add: Restructuring related costs

 

717

 

 

 

 

 

 

3,621

 

 

 

 

Add: Sponsor and third-party acquisition related costs

 

 

 

 

99

 

 

 

 

 

 

2,386

 

Add: Income tax effect on non-GAAP items

 

(2,497

)

 

 

(1,330

)

 

 

(4,470

)

 

 

(2,827

)

Non-GAAP net income

$

2,679

 

 

$

6,383

 

 

$

3,259

 

 

$

18,605

 

Non-GAAP basic net income per share

$

0.03

 

 

$

0.08

 

 

$

0.04

 

 

$

0.23

 

Non-GAAP diluted net income per share

 

0.03

 

 

 

0.08

 

 

 

0.04

 

 

 

0.23

 

Weighted average shares used to compute Non-GAAP basic net income per share

 

80,911,113

 

 

 

80,418,520

 

 

 

80,786,427

 

 

 

80,197,832

 

Weighted average shares used to compute Non-GAAP diluted net income per share

 

83,487,132

 

 

 

82,223,181

 

 

 

82,994,599

 

 

 

82,251,322

 

Net (loss) income margin

 

(7

)%

 

 

3

%

 

 

(7

)%

 

 

7

%

Non-GAAP net income margin

 

4

%

 

 

9

%

 

 

2

%

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(5,230

)

 

$

2,172

 

 

$

(10,896

)

 

$

9,651

 

Interest expense

 

9,316

 

 

 

5,436

 

 

 

18,347

 

 

 

9,794

 

Taxes

 

(1,819

)

 

 

1,508

 

 

 

(3,018

)

 

 

4,428

 

Depreciation and amortization

 

14,424

 

 

 

13,472

 

 

 

28,955

 

 

 

26,376

 

Share-based compensation expense

 

9,367

 

 

 

5,439

 

 

 

14,556

 

 

 

9,247

 

Employer payroll taxes on employee stock transactions

 

322

 

 

 

3

 

 

 

448

 

 

 

148

 

Restructuring related costs

 

717

 

 

 

 

 

 

3,621

 

 

 

 

Sponsor and third-party acquisition related costs

 

 

 

 

99

 

 

 

 

 

 

2,386

 

Deferred revenue reduction from purchase accounting for acquisitions prior to 2022

 

19

 

 

 

55

 

 

 

39

 

 

 

119

 

Adjusted EBITDA

$

27,116

 

 

$

28,184

 

 

$

52,052

 

 

$

62,149

 

Net (loss) income margin

 

(7

)%

 

 

3

%

 

 

(7

)%

 

 

7

%

Adjusted EBITDA margin

 

36

%

 

 

39

%

 

 

34

%

 

 

43

%

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Cost of revenue

$

28,494

 

 

$

27,226

 

 

$

56,449

 

 

$

51,764

 

Less: Share-based compensation expense

 

1,157

 

 

 

1,251

 

 

 

2,009

 

 

 

2,215

 

Less: Employer payroll taxes on employee stock transactions

 

88

 

 

 

 

 

 

109

 

 

 

54

 

Less: Amortization of developed technology

 

4,510

 

 

 

3,850

 

 

 

8,964

 

 

 

7,284

 

Non-GAAP cost of revenue

$

22,739

 

 

$

22,125

 

 

$

45,367

 

 

$

42,211

 

Cost of revenue as a % of revenue

 

38

%

 

 

37

%

 

 

37

%

 

 

36

%

Non-GAAP cost of revenue as a % of revenue

 

30

%

 

 

30

%

 

 

30

%

 

 

29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

General and administrative

$

24,409

 

 

$

20,806

 

 

$

46,964

 

 

$

38,993

 

Less: Share-based compensation expense

 

5,231

 

 

 

2,396

 

 

 

7,494

 

 

 

3,777

 

Less: Employer payroll taxes on employee stock transactions

 

107

 

 

 

 

 

 

158

 

 

 

33

 

Less: Depreciation expense

 

495

 

 

 

580

 

 

 

990

 

 

 

1,141

 

Less: Amortization of intangibles

 

9,419

 

 

 

9,042

 

 

 

19,001

 

 

 

17,951

 

Non-GAAP general & administrative

$

9,157

 

 

$

8,788

 

 

$

19,321

 

 

$

16,091

 

General and administrative as a % of revenue

 

32

%

 

 

29

%

 

 

31

%

 

 

27

%

Non-GAAP general and administrative as a % of revenue

 

12

%

 

 

12

%

 

 

13

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Research and development

$

11,754

 

 

$

10,487

 

 

$

25,566

 

 

$

18,896

 

Less: Share-based compensation expense

 

1,875

 

 

 

1,288

 

 

 

3,658

 

 

 

2,365

 

Less: Employer payroll taxes on employee stock transactions

 

97

 

 

 

1

 

 

 

125

 

 

 

40

 

Non-GAAP research and development

$

9,782

 

 

$

9,198

 

 

$

21,783

 

 

$

16,491

 

Research and development as a % of revenue

 

16

%

 

 

14

%

 

 

17

%

 

 

13

%

Non-GAAP research and development as a % of revenue

 

13

%

 

 

13

%

 

 

14

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Sales and marketing

$

8,558

 

 

$

5,465

 

 

$

16,771

 

 

$

10,208

 

Less: Share-based compensation expense

 

1,104

 

 

 

504

 

 

 

1,395

 

 

 

890

 

Less: Employer payroll taxes on employee stock transactions

 

30

 

 

 

2

 

 

 

56

 

 

 

21

 

Non-GAAP sales and marketing

$

7,424

 

 

$

4,959

 

 

$

15,320

 

 

$

9,297

 

Sales and marketing as a % of revenue

 

11

%

 

 

7

%

 

 

11

%

 

 

7

%

Non-GAAP sales and marketing as a % of revenue

 

10

%

 

 

7

%

 

 

10

%

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net cash provided by operating activities

$

6,104

 

 

$

12,807

 

 

$

34,185

 

 

$

47,670

 

Less: Capitalized software

 

2,638

 

 

 

2,557

 

 

 

4,562

 

 

 

4,079

 

Less: Capital expenditures

 

171

 

 

 

61

 

 

 

305

 

 

 

480

 

Free cash flow

$

3,295

 

 

$

10,189

 

 

$

29,318

 

 

$

43,111

 

 

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