MeridianLink Reports Third Quarter 2023 Results

Revenue of $76.5 million grows 7% year-over-year driven by lending software solutions revenue of $58.9 million, reflecting growth of 12% 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 third quarter ended September 30, 2023.

“Q3 was another solid quarter of execution, and the strategic key drivers of our business continue to yield consistent performance,” said Nicolaas Vlok, chief executive officer of MeridianLink. “We are continuously improving MeridianLink® One through product innovation and value-added partner integrations. In addition, we have a talented Go-to-Market team capturing strong demand as financial institutions invest in enhancing the consumer experience through improving their digital capabilities.”

Quarterly Financial Highlights:

  • Revenue of $76.5 million, an increase of 7% year-over-year
  • Lending software solutions revenue of $58.9 million, an increase of 12% year-over-year
  • Operating income of $5.6 million, or 7% of revenue, and non-GAAP operating income of $14.0 million, or 18% of revenue
  • Net loss of $(2.1) million, or (3)% of revenue, and adjusted EBITDA of $29.8 million, or 39% of revenue
  • Cash flows from operations of $21.3 million, or 28% of revenue, and free cash flow of $18.8 million, or 25% of revenue

Business and Operating Highlights:

  • MeridianLink® captured strong demand for MeridianLink One, as demonstrated by an impressive roster of new logo and cross-sell wins, including a solid bookings quarter in mortgage lending.
  • The Company launched its new point-of-sale solution, MeridianLink® Access, for MeridianLink® Consumer and MeridianLink® Mortgage, to provide enhanced configurability and a more personalized consumer experience.
  • MeridianLink continued to innovate in the data and analytics space by launching MeridianLink® Data Connect, a solution that brings transactional data in-house for the customer to gain more insightful reporting, and expanding MeridianLink® Insight, our business intelligence tool, to integrate with MeridianLink® Engage and MeridianLink® Collect.
  • The Company integrated with a variety of leading partner solutions such as Experian’s Verify™ and PowerCurve®, designed to automate loan approvals and decisioning, as well as Cox Automotive’s Dealertrack®, a comprehensive suite of indirect lending solutions for the auto industry’s largest dealer-lender network.

Business Outlook

Based on information as of today, November 1, 2023, the Company issues fourth quarter financial guidance and reaffirms full year 2023 financial guidance as follows:

Fourth Quarter Fiscal 2023:

  • Revenue is expected to be in the range of $73.0 million to $77.0 million
  • Adjusted EBITDA is expected to be in the range of $22.0 million to $26.0 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 third quarter results today, November 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 96695077. 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 Wednesday, November 8, 2023, by dialing (877) 674-7070 from North America or the International number of (416) 764-8692 with Playback Passcode 695077.

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 September 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 stock repurchase program, including the execution and amount of repurchases, 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

 

September 30, 2023

 

December 31, 2022

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

97,560

 

 

$

55,780

 

Accounts receivable, net

 

33,996

 

 

 

32,905

 

Prepaid expenses and other current assets

 

12,640

 

 

 

9,447

 

Escrow deposit

 

 

 

 

30,000

 

Total current assets

 

144,196

 

 

 

128,132

 

Property and equipment, net

 

3,651

 

 

 

4,245

 

Right of use assets

 

1,407

 

 

 

2,185

 

Intangible assets, net

 

262,791

 

 

 

297,475

 

Deferred tax assets, net

 

18,201

 

 

 

13,939

 

Goodwill

 

609,333

 

 

 

608,657

 

Other assets

 

5,738

 

 

 

4,524

 

Total assets

$

1,045,317

 

 

$

1,059,157

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,847

 

 

$

1,249

 

Accrued liabilities

 

34,159

 

 

 

32,500

 

Deferred revenue

 

26,694

 

 

 

16,945

 

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

 

3,548

 

 

 

3,505

 

Total current liabilities

 

69,248

 

 

 

54,199

 

Long-term debt, net of debt issuance costs

 

420,921

 

 

 

423,404

 

Long-term deferred revenue

 

692

 

 

 

1,141

 

Other long-term liabilities

 

690

 

 

 

1,322

 

Total liabilities

 

491,551

 

 

 

480,066

 

Commitments and contingencies

 

 

 

Stockholders’ Equity

 

 

 

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

 

 

 

 

 

Common stock, $0.001 par value; 600,000,000 shares authorized, 79,627,213 and 80,644,452 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

130

 

 

 

128

 

Additional paid-in capital

 

644,854

 

 

 

621,396

 

Accumulated deficit

 

(91,218

)

 

 

(42,433

)

Total stockholders’ equity

 

553,766

 

 

 

579,091

 

Total liabilities and stockholders’ equity

$

1,045,317

 

 

$

1,059,157

 

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Revenues, net

$

76,488

 

 

$

71,754

 

 

$

229,038

 

 

$

217,495

 

Cost of revenues:

 

 

 

 

 

 

 

Subscription and services

 

22,488

 

 

 

23,812

 

 

 

69,973

 

 

 

68,292

 

Amortization of developed technology

 

4,524

 

 

 

4,003

 

 

 

13,488

 

 

 

11,287

 

Total cost of revenues

 

27,012

 

 

 

27,815

 

 

 

83,461

 

 

 

79,579

 

Gross profit

 

49,476

 

 

 

43,939

 

 

 

145,577

 

 

 

137,916

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative

 

23,218

 

 

 

21,423

 

 

 

70,182

 

 

 

60,416

 

Research and development

 

11,248

 

 

 

11,518

 

 

 

36,814

 

 

 

30,414

 

Sales and marketing

 

9,441

 

 

 

6,311

 

 

 

26,212

 

 

 

16,519

 

Acquisition related costs

 

 

 

 

163

 

 

 

 

 

 

2,549

 

Restructuring related costs

 

 

 

 

 

 

 

3,621

 

 

 

 

Total operating expenses

 

43,907

 

 

 

39,415

 

 

 

136,829

 

 

 

109,898

 

Operating income

 

5,569

 

 

 

4,524

 

 

 

8,748

 

 

 

28,018

 

Other (income) expense, net:

 

 

 

 

 

 

 

Interest and other income

 

(1,342

)

 

 

(327

)

 

 

(2,596

)

 

 

(706

)

Interest expense

 

9,780

 

 

 

6,855

 

 

 

28,127

 

 

 

16,649

 

Total other expense, net

 

8,438

 

 

 

6,528

 

 

 

25,531

 

 

 

15,943

 

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

 

(2,869

)

 

 

(2,004

)

 

 

(16,783

)

 

 

12,075

 

 

 

 

 

 

 

 

 

(Benefit from) provision for income taxes

 

(800

)

 

 

890

 

 

 

(3,818

)

 

 

5,318

 

Net (loss) income

$

(2,069

)

 

$

(2,894

)

 

$

(12,965

)

 

$

6,757

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

Basic

$

(0.03

)

 

$

(0.04

)

 

$

(0.16

)

 

$

0.08

 

Diluted

$

(0.03

)

 

$

(0.04

)

 

$

(0.16

)

 

$

0.08

 

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic

 

81,073,915

 

 

 

80,659,320

 

 

 

80,883,310

 

 

 

80,353,399

 

Diluted

 

81,073,915

 

 

 

80,659,320

 

 

 

80,883,310

 

 

 

82,364,835

 

Net Revenues by Major Source

(unaudited)

(in thousands)

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Subscription fees

$

64,613

 

$

61,861

 

$

194,788

 

$

188,860

Professional services

 

8,706

 

 

7,293

 

 

26,143

 

 

21,070

Other

 

3,169

 

 

2,600

 

 

8,107

 

 

7,565

Total

$

76,488

 

$

71,754

 

$

229,038

 

$

217,495

Net Revenues by Solution Type

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Lending software solutions

$

58,949

 

 

$

52,414

 

 

$

172,728

 

 

$

153,249

 

Data verification software solutions

 

17,539

 

 

 

19,340

 

 

 

56,310

 

 

 

64,246

 

Total (1)

$

76,488

 

 

$

71,754

 

 

$

229,038

 

 

$

217,495

 

% Growth attributable to:

 

 

 

 

 

 

 

Lending software solutions

 

9

%

 

 

 

 

9

%

 

 

Data verification software

 

(3

)%

 

 

 

 

(4

)%

 

 

Total % growth

 

7

%

 

 

 

 

6

%

 

 

 

 

 

 

 

 

 

 

(1) % Revenue related to mortgage loan market:

 

 

 

 

 

 

 

Lending software solutions

 

12

%

 

 

6

%

 

 

12

%

 

 

7

%

Data verification software

 

57

%

 

 

62

%

 

 

60

%

 

 

66

%

Total % revenue related to mortgage loan market

 

22

%

 

 

21

%

 

 

24

%

 

 

24

%

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

Net (loss) income

$

(12,965

)

$

 

6,757

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

 

 

 

Depreciation and amortization

 

43,388

 

 

 

39,746

 

Provision for expected credit losses

 

627

 

 

 

 

Amortization of debt issuance costs

 

897

 

 

 

1,705

 

Share-based compensation expense

 

22,216

 

 

 

16,501

 

Loss on disposal of property and equipment

 

 

 

 

164

 

Deferred income taxes

 

(4,507

)

 

 

5,193

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(1,726

)

 

 

(6,964

)

Prepaid expenses and other assets

 

(4,595

)

 

 

(2,480

)

Accounts payable

 

3,632

 

 

 

(450

)

Accrued liabilities

 

(782

)

 

 

(247

)

Deferred revenue

 

9,301

 

 

 

7,472

 

Net cash provided by operating activities

 

55,486

 

 

 

67,235

 

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.

 

 

 

 

(23,138

)

Return (payment) of escrow deposit

 

30,000

 

 

 

(30,000

)

Funds payable in connection with former business combination

 

1,219

 

 

 

 

Capitalized software additions

 

(7,004

)

 

 

(6,323

)

Purchases of property and equipment

 

(347

)

 

 

(889

)

Net cash provided by (used in) investing activities

 

24,194

 

 

 

(60,350

)

Cash flows from financing activities:

 

 

 

Repurchases of common stock

 

(35,660

)

 

 

(262

)

Proceeds from exercise of stock options

 

1,633

 

 

 

186

 

Proceeds from employee stock purchase plan

 

793

 

 

 

922

 

Taxes paid related to net share settlement of restricted stock units

 

(1,403

)

 

 

(184

)

Principal payments of debt

 

(3,263

)

 

 

(2,175

)

Payment of Regulation A+ investor note

 

 

 

 

(3,265

)

Net cash used in financing activities

 

(37,900

)

 

 

(4,778

)

Net increase in cash and cash equivalents

 

41,780

 

 

 

2,107

 

Cash and cash equivalents, beginning of period

 

55,780

 

 

 

113,645

 

Cash and cash equivalents, end of period

$

97,560

 

 

$

115,752

 

 

Supplemental disclosures of cash flow information:

 

Cash paid for interest

$

27,498

 

 

$

14,852

 

Cash paid for income taxes

 

2,610

 

 

 

1,179

 

Non-cash investing and financing activities:

 

 

 

Shares withheld with respect to net settlement of restricted stock units

$

1,403

 

 

$

184

 

Purchase price allocation adjustment for BeanStalk Networks acquisition

 

757

 

 

 

 

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

 

611

 

 

 

2

 

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

 

245

 

 

 

 

Share-based compensation expense capitalized to software additions

 

219

 

 

 

255

 

Excise taxes payable included in repurchases of common stock

 

162

 

 

 

 

Vesting of restricted stock awards and restricted stock units

 

4

 

 

 

40

 

Regulation A+ investor note assumed in business combination

 

 

 

 

3,265

 

Initial recognition of operating lease liabilities

 

 

 

 

3,786

 

Initial recognition of operating lease right-of-use assets

 

 

 

 

3,096

 

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Operating income

$

5,569

 

 

$

4,524

 

 

$

8,748

 

 

$

28,018

 

Add: Share-based compensation expense

 

8,322

 

 

 

7,253

 

 

 

22,879

 

 

 

16,501

 

Add: Employer payroll taxes on employee stock transactions

 

150

 

 

 

182

 

 

 

598

 

 

 

329

 

Add: Restructuring related costs

 

 

 

 

 

 

 

3,621

 

 

 

 

Add: Sponsor and third-party acquisition related costs

 

 

 

 

163

 

 

 

 

 

 

2,549

 

Non-GAAP operating income

$

14,041

 

 

$

12,122

 

 

$

35,846

 

 

$

47,397

 

Operating margin

 

7

%

 

 

6

%

 

 

4

%

 

 

13

%

Non-GAAP operating margin

 

18

%

 

 

17

%

 

 

16

%

 

 

22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Net (loss) income

$

(2,069

)

 

$

(2,894

)

 

$

(12,965

)

 

$

6,757

 

Add: Share-based compensation expense

 

8,322

 

 

 

7,253

 

 

 

22,879

 

 

 

16,501

 

Add: Employer payroll taxes on employee stock transactions

 

150

 

 

 

182

 

 

 

598

 

 

 

329

 

Add: Restructuring related costs

 

 

 

 

 

 

 

3,621

 

 

 

 

Add: Sponsor and third-party acquisition related costs

 

 

 

 

163

 

 

 

 

 

 

2,549

 

Add: Income tax effect on non-GAAP items

 

2,033

 

 

 

1,824

 

 

 

6,503

 

 

 

4,651

 

Non-GAAP net income

$

8,436

 

 

$

6,528

 

 

$

20,636

 

 

$

30,787

 

Non-GAAP basic net income per share

$

0.10

 

 

$

0.08

 

 

$

0.26

 

 

$

0.38

 

Non-GAAP diluted net income per share

$

0.10

 

 

$

0.08

 

 

$

0.25

 

 

$

0.37

 

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

 

81,073,915

 

 

 

80,659,320

 

 

 

80,883,310

 

 

 

80,353,399

 

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

 

83,716,804

 

 

 

82,543,631

 

 

 

83,331,901

 

 

 

82,364,835

 

Net (loss) income margin

 

(3

)%

 

 

(4

)%

 

 

(6

)%

 

 

3

%

Non-GAAP net income margin

 

11

%

 

 

9

%

 

 

9

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Net (loss) income

$

(2,069

)

 

$

(2,894

)

 

$

(12,965

)

 

$

6,757

 

Interest expense

 

9,780

 

 

 

6,855

 

 

 

28,127

 

 

 

16,649

 

Taxes

 

(800

)

 

 

890

 

 

 

(3,818

)

 

 

5,318

 

Depreciation and amortization

 

14,433

 

 

 

13,370

 

 

 

43,388

 

 

 

39,746

 

Share-based compensation expense

 

8,322

��

 

 

7,253

 

 

 

22,879

 

 

 

16,501

 

Employer payroll taxes on employee stock transactions

 

150

 

 

 

182

 

 

 

598

 

 

 

329

 

Restructuring related costs

 

 

 

 

 

 

 

3,621

 

 

 

 

Sponsor and third-party acquisition related costs

 

 

 

 

163

 

 

 

 

 

 

2,549

 

Deferred revenue reduction from purchase accounting for acquisitions prior to 2022

 

19

 

 

 

60

 

 

 

58

 

 

 

179

 

Adjusted EBITDA

$

29,835

 

 

$

25,879

 

 

$

81,888

 

 

$

88,028

 

Net (loss) income margin

 

(3

)%

 

 

(4

)%

 

 

(6

)%

 

 

3

%

Adjusted EBITDA margin

 

39

%

 

 

36

%

 

 

36

%

 

 

40

%

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands)

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Cost of revenue

$

27,012

 

 

$

27,815

 

 

$

83,461

 

 

$

79,579

 

Less: Share-based compensation expense

 

910

 

 

 

1,352

 

 

 

2,919

 

 

 

3,567

 

Less: Employer payroll taxes on employee stock transactions

 

26

 

 

 

67

 

 

 

135

 

 

 

121

 

Less: Amortization of developed technology

 

4,524

 

 

 

4,003

 

 

 

13,488

 

 

 

11,287

 

Non-GAAP cost of revenue

$

21,552

 

 

$

22,393

 

 

$

66,919

 

 

$

64,604

 

Cost of revenue as a % of revenue

 

35

%

 

 

39

%

 

 

36

%

 

 

37

%

Non-GAAP cost of revenue as a % of revenue

 

28

%

 

 

31

%

 

 

29

%

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

General and administrative

$

23,218

 

 

$

21,423

 

 

$

70,182

 

 

$

60,416

 

Less: Share-based compensation expense

 

4,443

 

 

 

3,170

 

 

 

11,938

 

 

 

6,947

 

Less: Employer payroll taxes on employee stock transactions

 

59

 

 

 

42

 

 

 

217

 

 

 

74

 

Less: Depreciation expense

 

490

 

 

 

577

 

 

 

1,480

 

 

 

1,718

 

Less: Amortization of intangibles

 

9,419

 

 

 

8,790

 

 

 

28,420

 

 

 

26,741

 

Non-GAAP general & administrative

$

8,807

 

 

$

8,844

 

 

$

28,127

 

 

$

24,936

 

General and administrative as a % of revenue

 

30

%

 

 

30

%

 

 

31

%

 

 

28

%

Non-GAAP general and administrative as a % of revenue

 

12

%

 

 

12

%

 

 

12

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Research and development

$

11,248

 

 

$

11,518

 

 

$

36,814

 

 

$

30,414

 

Less: Share-based compensation expense

 

1,709

 

 

 

2,092

 

 

 

5,368

 

 

 

4,457

 

Less: Employer payroll taxes on employee stock transactions

 

38

 

 

 

56

 

 

 

163

 

 

 

97

 

Non-GAAP research and development

$

9,501

 

 

$

9,370

 

 

$

31,283

 

 

$

25,860

 

Research and development as a % of revenue

 

15

%

 

 

16

%

 

 

16

%

 

 

14

%

Non-GAAP research and development as a % of revenue

 

12

%

 

 

13

%

 

 

14

%

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Sales and marketing

$

9,441

 

 

$

6,311

 

 

$

26,212

 

 

$

16,519

 

Less: Share-based compensation expense

 

1,260

 

 

 

639

 

 

 

2,654

 

 

 

1,530

 

Less: Employer payroll taxes on employee stock transactions

 

27

 

 

 

17

 

 

 

83

 

 

 

37

 

Non-GAAP sales and marketing

$

8,154

 

 

$

5,655

 

 

$

23,475

 

 

$

14,952

 

Sales and marketing as a % of revenue

 

12

%

 

 

9

%

 

 

11

%

 

 

8

%

Non-GAAP sales and marketing as a % of revenue

 

11

%

 

 

8

%

 

 

10

%

 

 

7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

Net cash provided by operating activities

$

21,301

 

 

$

19,565

 

 

$

55,486

 

 

$

67,235

 

Less: Capitalized software

 

2,442

 

 

 

2,244

 

 

 

7,004

 

 

 

6,323

 

Less: Capital expenditures

 

42

 

 

 

409

 

 

 

347

 

 

 

889

 

Free cash flow

$

18,817

 

 

$

16,912

 

 

$

48,135

 

 

$

60,023

 

 

 

 

 

 

 

 

 

 

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