Ladies and gentlemen, thank you for standing by, and welcome to MeridianLink's fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Gianna Rotellini. Gianna, please go ahead. Good afternoon, and welcome to MeridianLink's fourth quarter fiscal year 2023 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, Nicolaas Vlok, Chief Financial Officer, Sean Blitchok, and President, Go-To-Market, Chris Maloof. 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. 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 a reconciliation of our GAAP to non-GAAP 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 Nicolaas. Thank you, Gianna. Good afternoon, everyone. It's great having all of you join us today. 2023 was another successful year for MeridianLink. We executed well on our strategic initiatives set in the beginning of the year that were designed to serve our customers with greater efficiency. As a result, we generated strong demand, finishing the full year with software bookings exceeding the record we set in 2022, and we made great progress releasing ACV from our new logo and cross-sell wins. We also had a fantastic year of innovation, with multiple product launches and partnerships to strengthen the capabilities of MeridianLink One. With the dedication and expertise of the entire MeridianLink team, we continue to deliver on our commitments to our customers and stockholders. Turning to our results for the fourth quarter, our GAAP revenue grew 6% year-over-year to $74.6 million, with an adjusted EBITDA margin of 42%, exceeding the top end of our EBITDA guidance. Our performance in the quarter demonstrates our ability to execute in key strategic areas of the business that accelerate growth while also demonstrating cost discipline. It remains our goal to help customers navigate an evolving operating environment and out-compete for consumers by providing a personalized, frictionless lending experience. With that, let's move to our Q4 updates on the three areas of growth acceleration that are anchored to our platform strategy. First, engaging more deeply with customers. Second, expanding the capabilities of the platform. And third, empowering customers to grow more quickly and better serve their communities. Starting with customer engagement, our go-to-market team achieved another strong booking scorer with multiple high-value platform wins. The foundation we have set over the last two years to build and operate an efficient and high-performing go-to-market engine continues to drive growth. As I mentioned, we had record software bookings for the year, which was fueled by the cross-sell momentum of MeridianLink One. In Q4, we signed nine consumer lending customers to our mortgage lending solution. This is an excellent signal that our platform strategy and go-to-market is working. Next, we wanted to highlight a couple of high-value deals that we landed in the quarter that demonstrates the ongoing demand for MeridianLink One. The majority of our high-value deals are often with new customers signing on multiple modules, understanding the value of connected solutions that cater to nearly all consumer lending needs. For example, one of our more significant wins at just under $500,000 in ARR was a $1.4 billion AUM customer who signed on four MeridianLink Consumer modules and our new point-of-sale solution that launched last quarter, MeridianLink Access. The customer chose MeridianLink One to lend through a digital channel, achieve greater automation, and improve efficiency in decisioning and cross-selling. Another high-value win at just under $300,000 in ARR was with a $300 million AUM customer who selected MeridianLink Home Equity and Indirect Lending based on the decisioning capabilities of MeridianLink One. This customer also chose our enhanced implementation services, which involves close collaboration to achieve specific results, such as loan volume growth and increased productivity. This is a great example of how the MeridianLink team is dedicated to engaging with customers from the initial sale through implementation to accelerate growth. On that point, I would like to provide an update on the strategic investments we have made in talent and process improvements in our services organization over the last year. First, we are making progress releasing ACV. In Q4, total SaaS ACV release was the highest in the year. Second, we are becoming more efficient in releasing ACV. This progress is clear in our adjusted gross margin expansion in Q4, which is more than 400 basis points higher year-over-year. Last, we look forward to one of the biggest opportunities for engagement at our MeridianLink LIVE forum at the end of April in Nashville. We can't wait to showcase our in-depth capabilities that help customers achieve their digital transformation goals. Most importantly, MeridianLink LIVE will create valuable moments of engagement and feedback that we can use to enrich our strategy and create additional value for customers and stockholders. These are just a few examples of how we engage more deeply with customers to accelerate growth for the business in the quarter. Looking to 2024, our go-to-market team is hyper-focused on engaging with more prospects, from new logo to cross-sell, and our services team remains committed to bringing customers live faster. Moving to our second area of growth acceleration, expanding the capabilities of the platform through product innovation and partner integrations. Critical to our sales motion, we are focused on fine-tuning MeridianLink One to drive our customers' digital lending strategy. Over the last few years, we have invested in R&D to achieve significant technological strides, such as migrating to the public cloud and integrating multiple acquisitions. While we have accomplished these development goals, innovation is an ongoing commitment that keeps us in our market-leading position, and we remain focused on increasing the value of the platform for customers. Now, let's review how we expanded our capabilities in Q4. We integrated MeridianLink Engage with MeridianLink Collect to automatically identify and cater to pre-delinquent accounts. Through this functionality, our customers can work with consumers to optimize their debt wallet and avoid delinquency. In today's digital environment, consumers largely prefer handling banking and collection tasks through user-friendly technology instead of in-person interactions. This new integration is a great example of how the end-to-end capabilities of MeridianLink One cater to the evolving lending needs of the consumer. We also enhanced our existing integration with Zest AI, a leader in automated underwriting, to provide multiple custom credit scores for decisioning in MeridianLink consumer loans. With more custom score options, our customers can increase their cross-sell opportunities. In addition to the automation and insights available through the MeridianLink One infrastructure, we leverage AI from our partner network to automate the lending process for customers. Ending on an expansion within our data verification software solutions, we scaled our employment screening and background verification capabilities by partnering with Workato, a leading enterprise automation platform. Through Workato, we can accelerate the addition of new applicant tracking systems or ATS integrations to capture new employers for our CRA customers to service. With more ATS integrations, the more volume and revenue we can process through our platform. Before moving to our next focus area, I'd like to provide an update on the traction that our MeridianLink Access launch has achieved so far. In 2023, we signed more than 40 customers in total on MeridianLink Access and MeridianLink Mortgage Access. This is an outstanding achievement by our go-to-market and product teams, and is a great example of how we are innovating to generate more demand for the company. Our product and partner updates in Q4 are just a few ways we are continuously improving the borrower experience to help customers capture and retain more demand for their lending solutions, in turn, increasing revenues for MeridianLink. Finally, our third area of focus for growth acceleration is centered around our ability to empower customers to compete, grow, and succeed in the markets in which they participate. We've been successful in empowering our customers to capture a greater share of their clients' debt wallet through MeridianLink One. This highlights a critical component of our platform strategy, the ability to increase the module penetration with our existing customer base, which ultimately increases the LTV of the customer. Starting with strong cross-sell wins in the quarter, an existing MeridianLink Consumer customer with three modules added a fourth module, MeridianLink Access, and enabled Dealertrack eContracting through our partner marketplace, both announced in Q3. With lending capabilities designed for configurability and automation, the customer improves the digital journey for the consumer. In this example, our sales team worked with a customer on a renewal that empowered long-term growth by capitalizing on our roadmap, further increasing the value of the customer for MeridianLink. We also signed an existing MeridianLink Consumer and Opening customer onto our Collect and Engage solutions to expand their use of MeridianLink One. This customer's main focus was on finding connected lending solutions fit for serving a growing demand environment. This points directly to our value proposition of providing customers with a platform designed for scaling through digitalization tailwinds... Let me end on a successful go live story. We recently announced A+ Federal Credit Union, an existing MeridianLink consumer and mortgage customer with over 190,000 members and more than $2 billion in assets under management, going live on MeridianLink Consulting, MeridianLink Engage, and MeridianLink Insight. Over time, A+ FCU has gone from using 6 disparate loan origination platforms to now only using MeridianLink One. Through our platform's advanced decision capabilities, A+ Federal Credit Union doubled their instant approval rate on consumer loans. This is a prime MeridianLink One success story, where a customer further optimizes the lending process to approve loans faster and remove workflow inefficiencies, improving the member experience as a result. Before handing the call over to Sean, I want to emphasize that MeridianLink delivered consistent top-line growth and expanding profitability levels through a year of restructuring and strategic investing to support future scaling. We have a track record of intentional capital allocation, investing organically and inorganically in areas that provide value to customers and stockholders. To set the stage for 2024, we have made strategic investments that we expect will propel the company forward. We are focusing on what's in our control, which includes accelerating ACV release and generating demand. We've also worked to tee up a strong customer success strategy to empower the customer growth journey through MeridianLink One. Thanks again to the team. Their focus on empowering our customer success is a driving reason that MeridianLink continues to deliver strong performance. I'm looking forward to seeing what we can accomplish together this year. For that, I will now turn the call over to Sean to talk about our financial results and guidance. Great, and thank you, Nicolaas. Before diving in, I'd also like to take a moment to highlight the phenomenal teamwork and execution demonstrated in the quarter. The team has remained steadfast in serving customers with best-in-class services and support to position their businesses for growth. Turning to our financial achievements in 2023, MeridianLink had an impressive year of profitable growth, supported by consistent cost discipline, a great achievement in the face of the challenging macroeconomic conditions. We have aligned our cost structure to support future scaling and to expand profitability going forward. We also strategically deployed our capital through stock repurchases to generate value for our stockholders. In terms of our key performance indicators, we continue to refine our internal processes and external disclosures to better represent the underlying drivers of our performance. On that note, I want to highlight our resilient annual recurring revenue, or ARR, and net retention metrics in the quarter. We finished Q4 with ARR of $257.5 million and a net retention rate of 98%. Specifically, however, our lending software solutions finished the year even stronger, with a net retention rate of 101%. Excluding the impact from mortgage volumes, the net retention rate of our consumer lending revenue was 103%. The primary drivers of our net retention rate are cross-selling additional modules, volume growth, and price increases. There is stability in our retention rate due to how sticky our customer base is. The more customers use our platform to automate and integrate their lending processes, the lower the probability for churn. As Nicolaas mentioned in his remarks, we also finished another quarter with an impressive roster of new logo wins. In the fourth quarter, we had 1,996 total customers using our software solutions. On an organic basis, total customers declined 2% year-over-year. While there has been increased churn from lower-value mortgage-related customers as a result of financial distress, we view this as an optimization of our customer base. As the market normalizes and we focus our go-to-market efforts on sticky depository customers, we expect to see an improvement in new logo going forward. To understand how these metrics have trended over time and by solution type, please reference the financial supplement made available on our investor relations website. Shifting focus to our fourth quarter financials, we generated total revenue of $74.6 million, up 6% year-over-year, driven primarily by the resilience of consumer lending transaction volumes and increased product go lives from both new and existing customers. Breaking down software solutions, our total lending software revenue accounted for nearly 80% of total revenue and grew at 8% year-over-year. As a primary driver of our lending software solutions, non-mortgage lending revenue contributed 87% and grew 5% year-over-year. Mortgage-related revenue within lending software solutions accounted for the remaining 13% of the total. Turning to data verification software solutions, revenue from those solutions accounted for nearly 20% of total revenue and declined 3% year-over-year. This was driven by a 6% decrease in mortgage-related revenue, which represents 56% of total data verification software solutions for Q4. In Q4, total mortgage-related revenue was up 9% from last year and generated 22% of overall MeridianLink revenue, driven by the uplift from OpenClose, which we acquired in November of last year. Now transitioning to profitability. GAAP gross margin was 66%. Adjusted gross margin in Q4 was 74%, representing a 400 basis point improvement year over year, driven by increased productivity of our services team and technology stack. Before reviewing our operating performance in the quarter, I'd like to break down the year-over-year changes in our operating expenses. Compared to the fourth quarter of 2022, G&A increased 1% on a GAAP basis and decreased 16% on a non-GAAP basis. R&D declined 12% on both a GAAP basis and non-GAAP basis compared to the fourth quarter of 2022. On a GAAP basis, sales and marketing increased 34%, while on a non-GAAP basis, sales and marketing increased 29% compared to the fourth quarter of 2022. The changes across our non-GAAP operating expenses were primarily driven by rebalancing headcount and increased compensation costs to fuel our continued go-to-market efforts. We are selectively investing in talent to support our growth while ramping down spend in other areas like R&D now that we've completed significant technology projects, such as the migration to the public cloud. Now moving to our overall operating performance. GAAP operating income was $6.8 million, and non-GAAP operating income was $15.2 million. On a GAAP basis, net loss was $29.6 million, or negative 40% margin, which includes a one-time non-cash tax expense of $29.4 million, recorded in the quarter for the recognition of a valuation allowance on certain deferred tax assets. On a non-GAAP basis, adjusted EBITDA was $31.1 million, representing a margin of 42%. This represents an improvement of nearly 900 basis points on a year-over-year basis, driven by work to optimize our cost structure. The majority of this adjusted EBITDA was structural and demonstrates our strong cost discipline, which we can plan to continue this year. Now pivoting to the balance sheet and cash flow statement. We ended the fourth quarter with $80.4 million in cash and cash equivalents, a decrease of $17.1 million from the end of the third quarter, driven by stock repurchases. Cash flows from operations was $12.5 million, or 17% of revenue, and free cash flow was $9.6 million, or 13% of revenue for the fourth quarter. Now let's look at full year 2023 results. Overall, we anticipated the credit tightening that happened across our consumer base and executed well on our scaling initiatives to counter the deceleration in volume growth. As we've seen in past cycles, our customers stayed resilient in a challenging operating environment and made the strategic decision to purchase our solutions that are designed to help accelerate growth. This continued demand and our ability to take customers live faster drove our performance. For the full year 2023, we generated total revenue of $303.6 million, up 5% year-over-year. Breaking down our revenue growth by software solutions, our total lending software accounted for nearly 76% of total revenue and grew at 11% year over year. As the primary driver of our lending software solutions, non-mortgage lending revenue contributed 88% and grew 6% year over year. Mortgage-related revenue within lending software solutions accounted for the remaining 12% of the total. Turning to data verification software solutions, revenue from these solutions accounted for nearly 24% of total revenue and declined 10% year over year. This was driven by an 18% decrease in mortgage-related revenue, which represented 59% of total data verification software solutions in 2023. In 2023, total mortgage-related revenue was up 5% from 2022 and generated 23% of overall MeridianLink revenue, driven by our lending solutions. We are seeing volume recovery in the mortgage market. However, we still expect it to take time for customers to grow above their minimum commitments, such that volume will drive revenue growth. As that recovery continues, we're staying focused on what we can control. Our platform strategy of cross-selling mortgage lending to our consumer lending depository customers continues to be successful, as demonstrated by the go-to-market wins that Nicolaas discussed. The other 77% of our business continues to grow, which is primarily led by the demand from our existing customers for a suite of end-to-end consumer lending capabilities. That brings me back to the power of the platform. MeridianLink One caters to the evolving lending needs of the consumer. As customers add on modules, they are primed to grow, even in the most challenging lending environments, which in turn can increase the revenue opportunity for MeridianLink. Transitioning to profitability. GAAP gross margin was 64% for 2023. Adjusted gross margin was 72%, representing a 100 basis point improvement year-over-year, driven by increased productivity of our services team and technology stack. Before reviewing our operating performance in 2023, I'd like to break down the year-over-year change in our operating expenses. G&A increased 12% on a GAAP basis and increased 5% on a non-GAAP basis. R&D increased 12% on both a GAAP basis and a non-GAAP basis. And on a GAAP basis, sales and marketing increased 51%, while on a non-GAAP basis, sales and marketing increased 48%. The growth across our non-GAAP operating expenses demonstrates our commitment to our previously discussed investment in go-to-market and scale initiatives. We believe we now have the necessary infrastructure in place to support future scaling and expect to accelerate top-line growth as we generate more demand with an industry-leading suite of solutions and partner capabilities. For our overall performance, GAAP operating income was $15.5 million, and non-GAAP operating income was $51.1 million. On a GAAP basis, net loss was $42.5 million, or -14% margin, and on a non-GAAP basis, adjusted EBITDA was $113 million, representing a margin of 37%. On to the balance sheet and cash flow statement. Cash flows from operations were $68 million, or 22% of revenue, and free cash flow was $57.8 million, or 19% of revenue for the year. We continue to generate funds that can be used to invest in the business, pursue acquisitions, deleverage, or repurchase stock under the repurchase program that our board authorized earlier this year. Before moving to our guidance for the year, I want to provide an update around our internal controls, as previewed in our 8-K filing on February sixth this year, and noted in the earnings re-release issued today. Although the assessment is still ongoing, after working diligently with our auditors, we expect to report in our upcoming 10-K a material weakness related to controls over revenue, specifically regarding customer contracts and billing. There has been no restatement of prior period financial statements, no change to previously reported financial results, and we do not expect any change to the expected timing of our 10-K. As we continue to mature as a public company, we've been highly focused on improving our control environment. Through our increased resourcing and audit processes and scrutiny, the company has uncovered additional areas for improvement. We believe we have the right remediation in place to address these deficiencies, and those remediation efforts have been and remain underway. I'll now pivot to guidance for Q1 and initial guidance for the full year of 2024. As we saw last year, interest rate levels, related credit tightening, and consumer sentiment are just some of the main drivers of the loan volumes that our customers capture through our software solutions. Until we see the market respond to a substantial change in these drivers, we expect our customers to continue operating in a challenging credit environment. As part of our comprehensive forecasting process, we incorporate external industry data points, and we will update our expectations accordingly as there's increased uncertainty around the lending environment going forward. Aside from volumes, there are additional performance drivers in our control that we have strategically invested in to accelerate growth. We will continue to prioritize capturing new logos and cross-sell opportunities, accelerating our ACV release, and innovating MeridianLink One to meet the evolving consumer lending needs that exist today. For the first quarter, estimated total revenue is expected to be between $75 million and $78 million, compared to $77.2 million for the same period in 2023. This represents an estimated year-over-year change of -3% to 1%. For the full year 2024, we expect total revenue to be between $313 million and $323 million, compared to $303.6 million for the same period in 2023. This represents an estimated increase of 3%-6% year-over-year. For mortgage-related revenue, we expect the mortgage market to contribute approximately 20% of revenue for the first quarter of 2024 and expect to end the full year 2024 around the same percentage. To provide more color around the drivers of our total revenue, the mortgage-related revenue guide represents a decline year-over-year because we expect that it will take time for the recovery in volumes to push our customers above their committed minimums and therefore impact revenue growth. On the non-mortgage side, we expect modest growth year-over-year in data verification revenue as the employment screening market reacts to the economy normalizing. Understanding both of these dynamics, we expect consumer lending will drive momentum in 2024. While industry sources are signaling continued headwinds impacting the used auto market, we plan to continue winning new customers and cross-selling other consumer loan types through MeridianLink One. Now focusing on the adjusted EBITDA guide. On a non-GAAP basis, first quarter estimated adjusted EBITDA is expected to be between $28 million and $31 million, representing adjusted EBITDA margins of approximately 39% at the midpoint. For the full year 2024, we expect our adjusted EBITDA range to be between $123 million and $130 million, representing adjusted EBITDA margins of approximately 40% at the midpoint. Our adjusted EBITDA guide reflects our continued commitment to operating discipline in areas that we do not believe contribute meaningfully to growth acceleration. We believe 2024 represents an inflection point as our past strategic investments have built the foundation for growth and for future scaling. We have aimed to optimize our cost structure to support incremental growth, which we expect will in turn drive margin expansion as volumes impact the bottom line. With that, I'd like to touch on how we are thinking about capital allocation going forward. While we continue to strategically repurchase shares, we are planning to reprioritize M&A as the market presents opportunities. We want to be active in the M&A market environment, with a focus on continuing to add value to our customers and stakeholders. To wrap up, I'd like to reiterate how resilient the company has been throughout a difficult operating environment. All thanks to a team that knows how to execute and put the customer first, something we've done for over 25 years. We will continue to prioritize our customer-centric scaling initiatives in 2024, resulting in expansion of organic growth and profitability. With that, Nicolaas, Chris, and I are happy to take any of your questions, and I'll turn it over to the operator. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please leave the handset before pressing any keys. Your first question comes from the line of Alex Sklar from Raymond James. Please go ahead. Great. Thank you. Sean or Nicolaas, your commentary around prioritizing the ACV release, it'd be helpful if you could help frame kind of how much backlog you have from bookings that aren't yet implemented today, and how that kind of compares to the size of that bucket last year. Thanks. Hey, Alex. Thanks for the question. This is Sean. So, as you well know, we don't disclose backlog. But I will say that backlog has been optimized as we've gone. So, with our new CCO, Dean, we look at backlog a little bit different. It's a good problem to have, not a bad problem to have. I think we saw Q4 as the fastest ACV release that in my tenure at least, and the highest ACV release number that we've put up to date. So it's going very, very well. We continue to refine in the services space to go faster and to optimize the structure to eliminate inefficiencies. So we have the backlog that we need to execute through FY 2024. Our selling motion continues to add to that backlog, and we—I think you and I have talked about this before, but it's really about creating an equilibrium between sales in the door and getting them our customers up and running and ACV release going out the door. So, we believe we have the right balance in 2024. There's not too much capacity on the services side. We're not building backlog over a period of time that's unmanageable. So we believe we have the right balance for 2024 as a year. It's really about fine-tuning it. Yeah. Okay, got it. Great, great color there. And then maybe one just for Chris. Just with given the go-to-market growth we saw over the last 12 months, can you just talk about how the sales force looks now from a tenure and productivity standpoint relative to the last few quarters? And then anything that's kind of embedded in the 2024 outlook from a productivity standpoint. Yeah, happy to. So going back about a year, we talked, we started to have the conversation about moving from an order-taking organization to a hunting organization, and we're well underway in that path. So what you saw last year is us working with the respective teams, up-leveling where possible, and bringing in new talent that can go out and create that pipeline and take down new logos, as well as cross onto our customer base. So we saw a lot of desired turnover last year. Now, many of those, many of those sales representatives are still on their ramp, but they're moving up into a higher level of productivity, and we expect that to flow through in 2024. ... Great. Thank you all. Thanks, Alex. Thank you. And your next question comes from the line of Matt VanVliet from BTIG. Please go ahead. Yeah, thanks for taking the question. You know, you gave us some details on some of the consumer lending areas, but as you look back on the year and maybe as you're projecting out the year ahead, you know, where have you seen the most interest rate sensitivity? And then I guess baked in within that, what are your assumptions today for kind of where we end up from a Fed funds rate or something on that level that sort of gives you indication that, you know, certain areas of the consumer lending might be stronger or weaker throughout the year? Yeah. Hi, Matt. Sean, thank you for the question. I mean, to answer your first question, it's undoubtedly mortgage that's been exposed the most. Now, our business model, as you well know, does have minimum contractual commitments, and so our downside it was protected. But it has been the most sensitive in terms of volumes. It has been the most sensitive in terms of our MCL business and DVS. So that's something that we're having to contend with for FY 2024 as well. Now, it's a story that's already turning around, so we are seeing mortgage volumes increase already, and we continue to, you know, think that that will continue to improve through the year. It's just a matter of when do those volumes become accretive to revenue. The consumer was impacted and continues to be impacted, but volumes have been healthy. If you look across the consumer portfolio, whether you're talking about account opening or credit card, personal loans, et cetera, that has really picked up the slack for auto. But as you know, as you know this business very well, we, you know, we don't see a ton of growth or upside without auto, you know, in our total volume package. So, you know, and I think that's making good progress as well. The new car inventories have recovered. The new cars making them into the used car inventories is the part that hasn't or is happening, hasn't happened yet. But we are seeing downward pressure on the used auto market as well. So it is, as we've been talking about for the last couple of quarters, it's just a matter of timing before the used auto market comes back. But the consumer really does, or auto really does have to come back for us to see that growth in consumer that we would hope for. Okay. Very helpful. And then, obviously, we got a bit of an update in January, but curious, as you think about on the go-forward basis, talking about R&D probably coming down as a percentage of revenue, where do you stand at in terms of headcount capacity there? And I guess more importantly, what are some of the people that were focused on the migration process, what are they being sort of repurposed to, and how should we think about that in terms of the product roadmap ahead? First, I'd like to talk about what are one of the resources that were included in the at least capacity perspective, what resources were included in the RIF. If you look at the R&D plan over the last four years, five years, it's been largely focused on rebuilding the tech stack to be cloud native one, so it can be future-proof for the next decade plus. And then the second element was rewriting the code base on the user interface level, which is another significant investment. With those two completing, that's the capacity we were talking about when we made the actions earlier this year. From a go-forward perspective, our goals remain largely the same. It's about which aspects of our solution allow our customers to outcompete for consumers, and that happens from a number of capacities. One is, how are we enabling the maximum automated decisioning? So we had our advanced decisioning functionality that we continue to augment. We delivered ML Access, which is, you know, per Nicholas' notes, we sold approximately 40 over the last period. And then we continue to build on the interconnectivity between our platform and how it adds more value together than apart. And there's a number of examples in that, that we highlighted. So one would be how we're connecting Engage, our marketing automation solution, to our collections solution, so we can enable our clients to create those bespoke experiences and ultimately win in the marketplace. Great. Thank you. Thanks, Matt. Appreciate it. Thank you, and your next question comes from the line of Scott Wurtzel from Wolfe Research. Please go ahead. Good afternoon, guys, and thank you for taking my questions here. Just wanted to touch on some of the customer account dynamics. And I know you mentioned that you had some increased churn from lower-value mortgage customers, and just wondering if you're expecting any of that trend to sort of continue through this year, and if so, how long, you know, we might expect it to continue? And just sort of on top of that, I know it's probably affecting the retention rates and just wondering sort of when that dynamic settles out, what kind of, you know, retention rate you're sort of expecting as we move throughout the year? ... Yeah, thanks, Scott. So this quarter was another quarter of a consolidation in the total customer count. I you know it's a number that we need to see reverse, and I think we're almost at the tail end of what I've been talking about for the last quarter or two, which is financial distress INBs kind of in total a shift from in our go-to-market strategy away from that and more into the depository base. Customers that are going to be with us for a long period of time. Now, even given that our churn levels are not that high. We're still a very sticky business. And so we've allowed customers to walk away as opposed to redesigning contracts as an example, that would be not in our financial best interest. Now to your question about timing, I would say we're largely through that. If you think about this last quarter, Q4, we had a little over 2% in terms of customer churn. You know, over about 1.5% of that was in the mortgage space. So, you know, you can think of it as we're getting to the point where those are cleaned up and we're in a good spot. We did see a little bit of consumer churn, but not significantly so. I think it's a combination of. We're always going to see a little bit of churn. I mean, you know, even the best companies in the world operate with a little bit of churn. It's within striking distance. I think the total customer count needs to be coupled with new logo. The new logo piece, we feel really good about actually, even though it doesn't show up in Q4's numbers. The pipeline is stronger than it's ever been. We're seeing very minor delays in the sales cycle, but we really believe that 2024 is going to be a good year in terms of new logos. So that total customer count comes up off of that. If not next quarter, then I think next quarter will kind of bottom out, and we'll start to see the second half come back up again. Got it. That's super helpful. Thank you. And then just as a quick follow-up and, you know, talking about capital allocation, you mentioned that, you know, you're gonna start kind of looking back at the M&A environment. And just kind of wondering if you can give us a little bit, you know, more detail on, you know, what you could be looking for in the environment. You know, if you've kind of gone out and started looking what you're kind of seeing from a bid-ask spread perspective relative to maybe the last two years. Any color on that would be helpful. Yeah. So, maybe I'll just preview just really fast. You know, we purchased a significant amount of stock—repurchased a significant amount of stock in 2023. We have board authorization to continue to do that, and we will do that, as the stock price presents that opportunity. So, that's number one. I don't want to imply that that's... We believe that the share prices continues to be at a very good value, and so we will continue to do that. The M&A market, I think, you know, you mentioned the bid-ask spread. I think for the overall market, they're starting to close. They're still not exactly where we would want them in terms of absolute value for us as MeridianLink. But it's very situational, right? Whether you're talking about a peripheral asset, or you're talking about something upstream or downstream or a new technology. I mean, I think it varies widely. But those conversations that have been, you know, way, way off the mark, because of cash burn or, you know, the investment that was made in X, Y, or Z company, you're starting to see kind of a realization that, "Okay, we're going to have to do something." And so there's a lot of really terrific assets out there in a very fragmented market. We're looking at a lot of those right now, and I wouldn't be surprised if it was sooner rather than later for us. Got it. Super helpful. Thank you, guys. Yep, absolutely. Thank you. Thank you. Your next question comes from the line of Chris Kennedy from William Blair. Please go ahead. Good afternoon. Thanks for taking the question. Nicolaas, I think you talked about fine-tuning MeridianLink One. Can you give a little bit more details on what you were referring to there? Yes, good afternoon. I think on the call, my fine-tuning was in relationship to the services organization, unless I'm mistaken where the comment comes from. It was when Sean spoke about our services business making great strides, working backlog down, we found a good balance and kind of 2024 is the year where we're gonna improve our processes, document it better to also in the future provide consulting companies the ability to implement MeridianLink One. And that's what I mean in the context of this call by fine-tuning. If, if I'm missing it, feel free to expand on it. No, and I may have misheard it, so thank you for that. And then just, is there a way to think about what the revenue growth for this business can be? You guys have done a lot, changing the go-to-market, doing MeridianLink One, operating in a difficult environment. But as that environment normalizes, is there a way to think about what the revenue growth opportunity is for MeridianLink? Thank you. Yeah, thanks, Chris. For right now, I mean, we have not—we've not veered from our growth algorithm of 5% new logo, 5% cross-sell, and 5% price and upsell. I think that if you put that in the context of FY 2023, you know, we performed well against the upsell component and the price component. We saw maybe a little bit more churn than we would have hoped, and new logo was low. So I... There are components that are tied to the macro that are driven out of our control, you know, not completely out of our control, but things that we took the kind of countercyclical approach and invested at a time where we knew we had the opportunity to do so. So I do believe that this can, at minimum, be a 15% grower in the market on an annual basis. And I think that, again, we're gonna start to see new logo come back. We've already got a cross-sell and upsell motion that we believe in, and it's happening. The delivery mechanism by which we take those bookings and turn them into revenue is getting faster, and it's getting tighter. So that long lead time to revenue is getting tighter. And so I think those are the things that we're focused on right now. The volume will come back. We're a world-class platform. I don't... You know, our customers don't leave us very often. It's just they don't also control the decisions, the buying patterns of the consumer. And so I think selling into the installed base, continuing to sell, creating extremely happy customer success-oriented, you know, motions from us, building out the customer journey to expand and use more and more of our products is what we can control and what we're focused on now. The volume component will come as we go. Now, you know, if anything, I would say, you know, as you look at the business in a more normalized environment, this has the ability to probably grow more than 15%. But at this moment in time, you know, in this operating environment, I think it's still safe to use our compares against the 15% that we've stated ever since the IPO. Great. Thanks for taking the question. Yeah, absolutely. Thank you. Thank you. And your next question comes from the line of Saket Kalia from Barclays. Please go ahead. Hey, team, this is Ryan MacWilliams on for Saket here at Barclays. Thanks for taking the questions. Nicolaas, maybe first for you, could you talk about the competitive environment in the consumer LOS business and whether that's changing at all with some vendors like nCino talking about it a little bit more? Yeah, happy to, Ryan. We don't see much of a change in the competitive landscape, nCino or others. We tend to find folks have more of a single point message than us with a platform approach and a platform message. And, what we have to offer is differentiated enough that we do not run into scenarios where I would say things have changed, win rates have changed at all. And specifically, your question to nCino, we don't see them much in our prospect or customer base. I don't know if you have anything to add there, Chris, but... No, that's right on. Yeah. Yeah, it's super helpful. Sean, maybe my follow-up for you. Some great detail on the product line expectations in your guidance. I'm just curious, can you help us understand the amount of contribution you're expecting from volume growth this year? And specifically, you know, in the context of what the MBA is forecasting for volumes, how much that factors into your expectations going into this full year? Thanks. Yeah, I can. Thank you, Ryan. I think, well, if you just take an external viewpoint, we look at MBA, we look at CUNA, we look at all the external data points. Those have continued to shift and change. And to be honest, it's been an interesting six months or so. And what I've learned is, you know, the closer you get to the actual period, the better they are at the forecasting. And so we have our own internal forecasting methodology that I think we would work, that incorporates those that we rely on more heavily. I do think that, all things considered, with everybody banking on recovery or normalization in the last year, it was the second half, and then it was half one of this year, and now it's half two of this year. I don't know. I can't answer that question, but I can say that where MBA is, where CUNA is, is around 4% for consumer. You know, MBA has a slightly higher, you know, 17% for mortgage. But I will tell you that that's come down over the last six months. So, you know, the answer to your question is we've baked in what we're comfortable with in terms of consumer. We believe that mortgage is gonna come back at a higher rate. The timing, again, of when that becomes accretive to revenue for us is the key story. And then the other part of the story is when does the MCL component really get above minimums and start to reflect the overall market? So those are the three data points. Super clear. Thanks, guys. Yeah. Thank you. If you get a chance, just make sure that you remind Saket that he owes... We had a bet, and so just make sure to remind Saket that he owes me something. I'll add that to his ledger. Thanks. Okay, thank you. Thank you. And your next question comes from the line of Koji Ikeda from Bank of America. Please go ahead. Yeah. Hey, guys. Thanks for taking the questions. I wanted to ask a follow-up on, you know, kind of understanding the, the contracts and the minimum commitments, and how to think about, mortgage loan volumes that we might need to see in the market to, you know, kind of break out to, to maybe the overage level or, you know, when are we gonna see the volumes out there? What sort of volumes would we have to meet need to see for minimum contract commitments to be met? Yeah. Hi, Koji. It's so for mortgage in particular, you know, if you think about our total population of customers, or let's take the population of revenue, and not take it on a customer by customer basis. But all from a revenue perspective, we had approaching 90% of our revenue that was coming from contractual minimums. Now, that's not to say that 90% of our customers were, but it varies customer by customer. So, you know, the analysis that we've done is we will see probably a quarter, two quarters of pickup in the minimums for most of our customers. And then we'll start to see upside in the mortgage space. So, if you kind of go through the model for us, there's not a lot of upside in mortgage, even though the volumes are recovering in the front half. And we see some recovery in the back half of the year. So hopefully that's helpful. Super helpful. No, thank you for that, Sean. And just a follow-up question here on the guidance and thinking about EBITDA margin. The guide there is just about 40%, you know, for a growth rate of 5% on the revenue side. So how should we be thinking about EBITDA margins, you know, in a better macro or lower interest rate environment that might drive higher loan volumes? You know, would that incremental revenue growth flow down to the bottom line, or is the business looking to reinvest that EBITDA upside? Thanks, guys. Yeah. Thanks, Koji. I think it's probably a mix of both. But I would say, for the most part, you know, if you look at our gross margins, they continue to improve. And it, you know, we've embedded that. I think if you just at a high level, if we saw an incremental improvement from this guide, we would pass through a good portion of that through to the bottom line. Not saying dollar for dollar, but I think you would start to. I mean, the number, the EBITDA guide is already very good in my mind. And so. And what I've said for a while now is our next target, if you will, is to be Rule of 50 company. And so as we start to accelerate, that's the next threshold, and we're gonna work to get to that threshold. At some level, you have to sustain the business. Some of our products are pay per transaction, and so you'll see cost of goods in them. There are different instances where it won't be as easy as just flowing dollar for dollar through to the bottom line, but it will be enough so that we can make a meaningful improvement in EBITDA as we see the revenue comes in. So hopefully that's helpful. Yep. No, super helpful. Thanks, Sean. Appreciate the time. Thank you. Yep. Thank you. And your next question comes from the line of Andrew Schmidt from Citi. Please go ahead. Hey, Nicolaas, Sean, Chris. Thanks for taking my questions here. I appreciate all the detail. I wanted to put a finer point on just the net new side, specifically within, you know, lending software for depository institutions, which is obviously, you know, as you mentioned, kind of the higher ARPU opportunity. Trying to disaggregate what's maybe cyclical from a buying pattern perspective versus what might be controllable. Maybe to talk about just what you've seen from a, you know, pipeline, RFP activity, and win rate perspective. Maybe that could help us get a better sense on just the, you know, what's building for net new adds and the situation there. Thanks a lot. Yeah. So this is Chris. So if we look at the last 2-3 quarters, let's say win rates and sales velocity have been largely consistent. And as we've built in our new capabilities, investing in marketing and our sales enablement, we're seeing ourselves in a superior pipeline position than we had done in the prior quarters. So we're making movement here and remain in flight in our transformation from order-taking to market-taking, from a go-to-market motion perspective. Yeah, and Andrew, I don't know that I... I think you used the word cyclicality from a buying pattern. And I don't know that I necessarily see a logical pattern in cyclicality in buying behavior. We do see, you know, depending on the economic cycle, depending on where our financial institutions are financially, that could perhaps delay or accelerate some of the pipeline build or some of the actual buying decisions. But I don't think there's inherently cyclicality. That makes sense. Yeah, we just heard more focus on deposit gathering versus, you know, loan origination. But, yeah, understood. This stuff needs to get modernized, and there's a lot of demand for it. It makes sense. Yeah. Um, Yeah, I understand your question now. Yeah. Right. I don't think there's a shift away from buying and into depositories, or I think it's just a matter of both now. You know, so I don't think that people have shifted away from buying softwares, retooling, etc., even with the kind of shift of focus into taking more deposits. Very clear, more balanced. That, that makes a lot of sense. I appreciate that. And then, it looks like the, you know, at the midpoint, the expense growth, this overall expense growth is, like, flat to slightly up, which is, you know, pretty impressive. And, you know, obviously, you have the, cost actions you announced and, you know, some the roll-off of some investments. But I, I guess the, the question is, you know, are there areas you could actually double down on in terms of investing, maybe accelerate investment, investment? You've done this, you know, over the past couple of years, you know, pretty good job in terms of, investing in Link One, etc. Are there other areas we could, you know, see incremental investment, versus just dropping to the bottom line? Thanks a lot, guys. Yeah, thanks, Andrew. I think the... You know, I quoted numbers in the talk track. I think sales and marketing is where we are doubling down. Last year, it was 80-90% growth year-over-year. This year, we're 30-ish%-40% growth in terms of sales and marketing expense. And we're self-funding that through trade-offs in other places within the business. And, you know, we've got a handle on G&A, we've got a handle on, you know, discretionary spend. We've tightened the belt and we are funding the things that we know we need to fund. So from an income statement perspective, I feel pretty good about... Again, foundationally, we're at the point of scaling. As that top line starts to come back into shape, into where we think the growth algorithm should be, the market starts to shake out, I think we'll be in a very good position. Perfect. Thank you very much, Sean. Appreciate all the comments. Yep. Take care. Thank you. Your last question comes from the line of Parker Lane from Stifel. Please go ahead. ... Hi, this is Matthew Kikkert for Parker. Thanks for taking my questions. You mentioned you are shifting the go-to-market team into more of a hunting mentality this year. How does the MeridianLink One platform fit into the strategy, and does it help accelerate the strategy at all? MeridianLink One is all centered around how we drive solutions for our customer base, and I think an effective hunting team is going out and understanding our customer's goals, our challenges, and then positioning the company's solution to ultimately drive that outcome. So MeridianLink One and the maturity models for the FIs that can derive from it on key aspects like digital maturity, decisioning, insights and other is central to having an effective go-to-market motion. I really view it as all part of same story, right? That the sales team is a, an arm of that story, and all needs to come together with one message to the customer base. And if you look at some of the detail that we've announced in our script as well, the customer wins with four modules, plus access, the cross-sell success of ML Mortgage into the customer base, the depository taking customer base. I think it's really coming together well there. That makes sense. And then secondly, are there any ways that you're looking to incorporate AI into your tools more in 2024? What are you hearing from your customers in terms of AI demand from you and their budgets for it? Yeah. So I'll start with the demand question. It's... AI within the financial services industry is, is really interesting in terms of there's a regulatory aspect to it, but there's also a consumer sentiment aspect to it. There's a perception in some consumer bases, at least in the researches we've done, on how comfortable or not comfortable they are with using AI to make decisions on their behalf. So those are some things we, we watch closely. Now, what we've done to date is a lot of work with partners. You know, we're leveraging ChatGPT-typ e tools from a customer service perspective or consumer service perspective. We have a number of partners that are using machine learning models for decisioning. Then what we've been doing internally from an R&D perspective is over the last few years, we've spent $ millions as part of our cloud design to bring all of our data into a single location. As we're evaluating our FI's needs and the consumers, what the consumers willing to bear, two areas that we're looking closely at are, are we leveraging an OpenAI-type format to take our insights program to the next level? Meaning we have a very unique offering, and we can enable our customers to see how they're performing versus their peers on a large array of different key performance metrics. And we can use a language model to present a narrative back on where they should focus their efforts to have the optimal outcome. Then the other element, I think is a core use of any AI tool, is how are we automating key aspects of the lending officer's role for them to be more efficient? And candidly, over the last year, I've seen more and more rhetoric around IT investment, around efficiency, which perhaps wasn't as true the years before that. But the key takeaway, I'd say, is the hardest part for an organization like us to perform in that market is to bring all the data and clean it and put in a single place to then build models on top of. Terrific. Thank you very much. Thank you. There are no further questions at this time. Mr. Nicolaas Vlok, please proceed. Thank you for attending today's call. As we close, I'd like to express my gratitude to the team for their ongoing commitment to our customers, partners, and each other. Great teams in a way do well. They serve customers in a way that stands apart, and they deliver better experiences day in and day out. That's what we mean. That's what we— That's why we remain focused on, and the industry continues to take note. In fact, I was pleased and humbled to see our team receive the HousingWire Tech100 Mortgage Award at the start of this year. We will continue to deliver award-winning products and services to our customers, and we are grateful for their trust and partnership. Thank you for being part of our success. Until next time, have a great day. Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect.