This is John Bian on the Jefferies software team. I work with Brent Thill, and very happy to have a CEO of MeridianLink, Nicolaas Vlok, is it? Okay. You nailed it. Okay, awesome. Good lucky first try. Thanks. You know, so we don't wanna have formal coverage, so maybe in terms of the getting started with the first question, I mean, if you could, you know, give a quick, like a highlight of what, you know, MeridianLink is focused on and maybe your background? Sure, thank you for joining. MeridianLink is a digital lending platform. We've been around for about 25 years. We started off kind of in the early days of mortgage credit reporting, account opening, and then the early days was some really basic loan origination products. The company grew. Thoma Bravo, private equity investor, became a shareholder and acquired the business in mid of 2018. Kind of, the business was hovering around $100 million, and since then, the business continued to accelerate and grow and call us a $300 million business today under the banner of MeridianLink. My background, I'm the guy with the accent in the room. Born and raised in South Africa. Started my first business there, which led me to move to the US in 2000. Has partnered with Thoma Cressey, the predecessor to Thoma Bravo in 2006, in the second or third software deal Orlando Bravo did as a software investor, and has been around the Thoma Bravo family as a CEO or a operating partner. In the operating partner capacity, I got introduced to MeridianLink. I was on the board from June 2018 through September 2019, and then stepped into the CEO role, where the co-founder and then CEOs became our Chief Strategy Officer. Always been in software and being the kid at school that pushed his glasses up at midnight, coding software. Love software, being in software, and being around private equity a long time. Enjoyed the transition into the public company environment, learning a lot, especially in these times, but have a real strong belief in that MeridianLink is a good business and a business that Thoma Bravo saw the opportunity and I'm part of the story and the process to unlock real value of that business. You mentioned consumer lending and mortgage. I mean, what are the, I guess, the kind of the leading products today, and, you know, what's your vision where you'd like, you know, where you'd like the company to be, let's say, I don't know, in five year plus, in terms of a mission and product scope? That's a great question. That can take up the next 20 minutes, John. First of all, we think of the business into two areas. One is our data verification business. That is about $80 million in revenue. It's not a fast grower, but it's a business that have high strategic value because of the data component of it, that we resell verification services to Credit Reporting Agencies for mortgage credit reporting, employment, tenant, background verification. The strategic component of that is the data enrichment and the data into our consumer lending platform, which is the second part and the majority part of our business, and that makes up the bulk of the $300 million in revenue. That business is focused on the consumer lending cycle journey. We cover all consumer lending channels outside of student lending, so think, the journey starts with account opening. It goes to credit card, personal loans, HELOCs, auto, mortgage, pretty much any consumer loan type outside of student lending. The value of what MeridianLink offers today is a platform, and then from a platform standpoint, we have the ability to start the journey with account opening all the way through with, like, the life cycle of the consumer interacting with the financial system for first checking account, first credit card, first home, multiple vehicle loans, kind of that whole cycle along the way. The more you can enrich and know about the consumer, the better and equitable decisions you can make for the interest of all who participates. Our platform differentiates itself because of the ability for the consumer to live across the whole platform: data, analytics, automation, auto decisioning. Our competitors don't do that. They're either single-point solutions, or they're well above us from kind of a price-cost standpoint and don't come down mid-market nearly as well as we do. We also have a partner marketplace, which is about a $40 million business for us overall, and that's about 600 partner integrations that connect through APIs into our lending platform and our transaction partners, data enrichment partners, core providers, that makes MeridianLink a pretty unique offering in the market. ... in terms of the customer base, I mean, who are the core customers that you sell to? Is it, you know, kinda credit unions? Is it mid-size? Is there, like, a sweet spot that you target? Yeah. 2,000 customers, of which 1,500 are depository-taking institutions. Let's start with the 500 who's non-depository taking. They are CRAs, credit reporting agencies, and specialty lending providers. The core of the business is the depository-taking institutions, of which two-thirds of that 1,500 are credit unions. The rest are, banks, and mostly regional and, community banks. In terms of target market, part of the journey of MeridianLink was to define what we're good at and where we win, and we have a right to win. We win north of two-thirds of the deals we compete in today. They are in that $100 million-$10 billion of assets under management. You can challenge me and say: "But you've announced some larger deals." Yes, we have, but they typically come to us, and it's not inside the scope of our whole go-to-market organization. Our sweet spot, where we have a right to win more than two-thirds of the time, is right there. Banks is a fast-growing segment for us, but, like, we win a lot in the credit union, $100 million-$10 billion space. I guess, regional banks and so on have been in the news quite a bit, but wondering, you know, how that's impacted, you know, your business or either demand or interest levels, if at all? Well, 2 questions in that. First of all, our client base is more focused on consumer and retail lending. I think everybody took a bit of a pause when the news hit of Silicon Valley and a few others. If you peel the onion, you would see it's kind of cash-hungry industries and crypto. It's not the financial institutions which our typical demographic customer interacts with. Think about who we serve. We serve teachers, firemen, kind of the individual who have a home mortgage, one or two vehicle loans, credit card, and it's kind of every month is kind of the same cycle, and the financial institution know a lot about them, serves them well, addresses their needs. It's not the failures you've seen publicly. Now, you asked me about demand. We've had a very strong first quarter in terms of bookings. We spoke about that on our earnings call. My sense is folks are looking at prioritizing spend and where they are going to invest for the foreseeable future. The good news is, for the market we serve, digitalization has been and still remains top of the list. The follow-on question is what may happen in that industry? I would say credit unions have always been kind of a, "We support each other, one for all for one," approach. They are very open working as CUSOs, Credit Union Service Organizations, where they kind of pool resources. My sense is we're gonna see some consolidation in the banking space. The consolidators will be the ones who invested in digital readiness, into technology and efficiency. The ones who's not been as kind of open to transforming and investing in their business will probably be the ones that ultimately get acquired. I think the market is going through, "Are we putting our foot ultimately down, investing more into digital readiness?" If you walk into a mid-size bank or credit union today, one of the things you will discuss if as a vendor, I walk in, and we've come off our recent user forum, it's their digital strategy, and they kind of have a two-pronged strategy. It's digital lending, which MeridianLink offers, and digital banking, and there's many digital banking providers. That's a top of mind, will continue to receive investment, and from our perspective, we've continued to see a healthy demand environment because of that. Great. Yeah, I mean, I think you mentioned cross-selling. Cross-sell bookings were a 60% increase in Q1. I mean, was there anything kinda unusual as a driver there to drive such numbers? You know, any interesting dynamics? Yeah, we've beat our own budget and our forecast, quite handedly in Q1 with bookings, the strength came first of all, new logo was consistent and strong with the expectations, so the strength for the overperformance came from cross-sell and upsell. If you look at the journey we are on, we are becoming a platform-selling business, more and more of our customers are engaging with us in multiple modules of our platform. What we've seen, and we've spoken about that in recent earning calls, in one quarter, we've won 10 mortgage cross-sell opportunities, into the existing consumer lending base. To me, that is. the strength of cross-sell and up-sell is this, MeridianLink used to be a one, two, three product company with 12 modules, and the broader our platform acceptance is within a customer, the more the benefit of analytics, automation, cross-sell within the, their member or customer base, decisioning, and that's the overperformance that we've mentioned on the recent earnings call. Interesting. Impressive, given what's going on in terms of in the industry as well as in the macro. How should we think about, you know, macro in general and the impact, you know, in the last several quarters, and then maybe, you know, how you think about it for the rest of the year? I mean, you know, and then especially obviously the mortgage side and with rates going higher. I mean, in a couple of, you know, a few interesting dynamics, and just want to see, you know, how you're thinking through that in terms of macro as well, and specifically also to the mortgage side of it? Sure. Let's start with mortgage. Mortgage in our business is the most of the mortgage revenue is associated with our data verification side in credit reporting. We've expected, and we've kind of knew that the market is very cyclical in that because of refinancing. We've built our playbook with more integrations. We've won some customers on the loan origination side. Our mortgage business is not nearly as impacted in when you compare revenue to what you would compare to industry volumes. Industry volumes are down 40%+. Our revenues are not nearly that impacted. We do expect the second half of mortgage to have easier comparisons, too, if you kind of look at when refinancings and really stopped and the rates started going up. More importantly, the way we think about the mortgage industry is there's a healthy business around first and new home purchases. Refinancing is kind of a very cyclical component of it, and yes, we were the beneficiary of it in the earlier cycle around rate, low rates, but that's not how we model and plan and invest in our mortgage business. The way we think about mortgage is our customer base, which is mostly depository-taking institutions, have a real interest in capturing more of their customer or members' debt wallet, and mortgage is one of the easier ones for them to expand in. We've invested in it over the years. Last couple of years, we've acquired a small competitor who we really like the offering they've had from a point-of-sale standpoint. I expect mortgage, from a numbers standpoint, to continue to look better competitively, second half of the year and going forward. That's MeridianLink. The industry as a whole, if you look at what MBA is forecasting, they kind of think it's mostly a sideways year in terms of volume, a little pickup towards the end. Most of the recovery, they are predicting and forecasting to be in 2024. Mortgage is just a subset of our business. It's small in LOS and kind of verification revenue. The rest of our business, we are in a headwind environment. I think we're all familiar with what happened around vehicle loans or vehicle lending. Manufacturers were behind in new cars. We've seen new vehicle sales being compressed and with pricing running up in pre-owned as well. People bought cars when they had to buy cars. We think of it as headwind-constrained over the last two or so years, will probably remain mostly constrained in 2023 in the back half. The way we are planning for our business is, 2023 is a constrained year. 2023 is a year where it's not, and the market is not in a natural state, and that is also reflective in the guidance we've given, and kind of how we've spoken about this on earnings calls and other conference conversations. I guess with some of the headwind and especially this year, I mean, how are you thinking about balancing, you know, that versus, kind of profitability, you know, and putting maybe greater focus on the margin? I mean, how are you working through that and doing the trade-offs? Sure. First of all, big picture, we think of ourselves as a Rule of 50 or better business. We are forecasting margins in kind of the mid, high 30s for the year, and we continue to see growth in the business. I'm not expecting us to be a Rule of 50 business this year in a constrained environment, but I'm expecting us to continue to grow and continue to expand margin as we hopefully get out of the current cycle we're in. We've been pretty upfront that we've taken a view on where to best invest and scale. We are seeing healthy demand for product. We're sitting on opportunity and backlog to release ACV. Part of what we've done in kind of late Q1 was to restructure our business in areas where we've made decisions to rebalance, where headcount gets placed in the organization. Instead of just taking some cost out, yes, we've taken cost out of the business, but we've taken a component of that, and we're reinvesting it back into the business in areas where it can have near or medium-term impact, like expanding our services business, where we need more hands on deck implementing, investing, and go-to-market, where we see opportunity to continue to cross-sell. From a platform standpoint, a platform selling standpoint, it requires a skill set that's a little different from some of the skills we have. We keep investing. I think one of the questions folks had for us after our earnings call was specifically, is it a restructuring? It's purely a restructuring, or what are you meaning by investing? We see opportunity even in the current market, but we made the trade-off to make decisions in the business where we can best invest some of the dollars that we've captured through a restructuring process. I'm buoyant about where we are heading. I think 2023 is not a very natural year for any of us in the industry, investors, operating executives. We kind of have to get through the turbulence that we are seeing, and there are areas in our business where we firmly believe we need to make investments in, and we keep doing that. Some of the investments were in talents. You've had a number of leadership changes, including a new chief sales officer. If you could talk about some of the changes, you know, obviously, CSO, CMO, chief customer officer, and maybe especially focusing on the go-to-market side, on the sales side? Sure. We are bringing a platform to market, and we've been in market with it for over a year now. We have multiple components to the platform, and we are seeing opportunity to scale the business, and we were looking for talent that has seen scale, has done scale before. Go-to-market, in my definition, really starts with good capital allocation in your product organization that translates over into marketing and sales. We've hired folks who've seen and been operating executives in larger businesses that can help us set up the business to kind of small steps, quick steps, and get big fast. By that, I don't mean overinvest. I mean, people who have seen that, done that, and can guide us to scale faster. Richard, our Chief Sales Officer, brings a ton of experience in kind of multi-product selling and in environments where you would like to move a customer from two, three modules and grow that out of the gate. Our Chief Marketing Officer came on board, ton of experience in larger organizations, and I would be remiss not to speak about Devesh, our Chief Customer Officer, who came from SAP and is focused on specifically the post-sale customer journey, where we're sitting on tons of opportunity to release ACV faster. How do you create an efficient, scalable delivery organization? That's part of what I view as the journey we're on in becoming more efficient and accelerate our go-to-market playbook. Great. Just one other area we haven't touched on is AI. Wondering, you know, what sort of interest there is from your customer base in having more AI-based features to help with their end customers in the lending side. I mean, you know, how are you thinking through the opportunity around AI, whether, you know, maybe it could be disruptive or a big opportunity? Us and our customers think of it as opportunity. I think the near-term playbook is we've partnered with a number of AI and machine learning vendors to produce a score that is part of a larger decision cycle. We continue to use the score and enrich it with other data points, driving better outcomes, more equitable outcomes for the consumer, which ultimately, if you start kind of looking at it from a risk, related risk perspective through AI and machine learning, you can do a lot around making the right decision for the right risk profile at the right time, faster. We are working with partners. We are excited about where AI may lead, all of us. I think it's gonna bring efficiency to bear in the market and in financial institutions. Think of us as the back end to loan processing, and if it can be done more efficiently at the front end, and if decisioning can be done more efficiently, there's more volume for MeridianLink to capture. We're excited. We think it's gonna be an opportunity down the line. The way most people think of AI today is kind of ChatGPT, and if you think of AI in that context, as kind of predicting the next word or the next sentence, that is not how we think of AI and kind of auto decisioning. We are firmly of the opinion it's going to be a fast evolving landscape and something we want to and should participate in, that will benefit those who are investing in it. Yeah, I mean, clearly a lot of value if you can improve the risk scoring. Oh, yeah. ... for your clients. I think that brings it to the end of session. Thanks very much for coming and great story on MeridianLink, and thanks again, Nicolaas. Thank you, John. Thanks.