Participants

Gianna Rotellini; Investor Relations; MeridianLink Inc

Nicolaas Vlok; Chief Executive Officer, Director; MeridianLink Inc

Larry Katz; Chief Financial Officer, Director; MeridianLink Inc

Christopher Maloof; President - Go-to-Market; MeridianLink Inc

Koji Ikeda; Analyst; Bank of America

Nik Cramo; Analyst; UBS

Adib Choudhury; Analyst; William Blair

Alex Sklar; Analyst; Raymond James

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to the Meridian link First Quarter 2024 earnings conference call. (Operator Instructions) This call is being recorded on Tuesday, May 7, 2024.
I would now like to turn the conference over to your first speaker today, Gianna Rotellini. Go ahead.

Gianna Rotellini

Good afternoon, and welcome to Meridian Link's First Quarter Fiscal Year 2024 earnings call. We will be discussing the results announced in our press release issued after the market close today. With me today are Meridian Ling Chief Executive Officer, Nicolas Vlok; Chief Financial Officer, Larry Katz; 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 financial 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 Nicholas.

Nicolaas Vlok

Thank you, Gianna, and good afternoon, everyone. We appreciate you all joining us today. We delivered a solid first quarter against a challenging macro backdrop, achieving GAAP revenue of $77.8 million or 1% growth year over year and adjusted EBITDA of $31.8 million at a 41% margin exceeding the top end of our guidance.
I want to acknowledge that we have continued to grow in the face of significant volume headwinds, including a generational low and mortgage and multi-year slowdown in auto lending and macro related churn. Specifically, our performance reflects the continued strength of Meridian linked once into a leading platform and its power to enable our customers to win in the market.
Once again, this quarter, we signed a robust roster of new logo and cross-sell wins that demonstrate the success of our go-to-market strategy. We also continue to expand the capabilities of our platform through innovation.
With that, let's move to our Q1 updates that demonstrate how the Meridian link one platform empowers our customers growth.
First, I'd like to highlight a cross-sell one that shows our ability to increase module penetration within our existing customer base. Our successful land-and-expand strategy improves customer retention, ultimately increasing customer lifetime value.
For example, we won a large financial institution who added Meridian link mortgage access mortgage lending and our debt optimization tool to their existing portfolio of Meridian and consumer and opening by connecting mortgage and consumer solutions, our customers can better meet the needs of consumers along their financial journey. Capturing a greater share of their debt wallet.
This is an example of how embracing the Meridian link one ecosystem can deepen client relationships and ultimately revolutionize how customers do business in Q1. We also successfully landed new customers who are strategically retooling now to prepare for a market recovery.
For example, we welcomed a smaller financial institution on Meridian link, consumer opening and mortgage. They chose Marin iLinc one to automate decisioning capabilities and cross sell loans and deposits without adding brick and mortar branches. Because of the sales cycle, the customer gained a strong appreciation of the benefits of a single comprehensive partnership rather than piecing together point solutions from disparate vendors. This illustrates how we are empowering customers to embrace a digital lending strategy and drive growth.
Next, I want to spotlight the extraordinary success achieved by Space Coast Credit Union, a top 30 credit union of the U.S. after going live with our advanced decisioning capabilities in the quarter for nearly a decade. We've been steadfast partners and supporting SEC use digital maturity initiatives as they expand it to nine modules tailored to meet the changing lending needs of their members.
Since the implementation of advanced decisioning SCCU. has instantly decisioned 13% more loans overall and an astounding 53% of applicants for credit tiers. Over 660 with increased automation and efficiency. The customer has optimized staffing and is strategically positioned to sustain long-term growth and remain agile in the competitive landscape.
Turning to our latest product updates, we continue to innovate Meridian linked one to drive our customers' digital lending strategy. In the first quarter, we launched Meridian link inside like our new interactive data analytics and reporting tool designed to enhance the reporting functionality for retail and consumer and opening customers.
Insight live enables users to adjust strategies, mitigate risks and optimize performance with each as customers embrace data-driven decision making through Insight like there's a clear upgrade path to our more comprehensive business intelligence solution, Meridian link insights.
This showcases how we are paving the way for customers to accelerate the digital progression, which in turn drives growth for Meridian links. And even on a highlight of customer engagement, we enjoyed spending time together in Nashville last week with 1,400 attendees, a record at Meridian linked life, our annual conference, our customers were excited about our digital progression model, outlining a framework to accelerate growth and deepen consumer connections. We are proud of harvesting our most successful event to date, leading directly to significant pipeline creation for new logo, cross-sell and partner integrations.
Before I hand over to Larry, I want to emphasize that Meridian link continues to outperform even in the face of challenging market conditions. All thanks to the exceptional ability of our team to drive results. We expect that macro headwinds will persist throughout this year. So we will continue executing on what's in our control for the solid foundation we have invested in bolstered by a healthy balance sheet and sound capital allocation strategy, we are well positioned to capitalize on the opportunities that lie ahead and deliver value back to shareholders.
Finally, I'd like to close by highlighting a strategic addition to the leadership team to support our growth acceleration, namely our new CFO. Larry, gets that he brings a strong global track record of financial leadership with demonstrated success leading transformation at scale in financial services, SaaS and private equity. His experience spans more than 25 years at companies, including Genesis and JP Morgan Chase.
He served in executive leadership positions at JPMorgan Chase for approximately 15 years, including in mortgage and consumer lending businesses and as CFO of various divisions, while CFO Genesis a $2 billion annual revenue business, he led a highly successful transformation from on-prem to the cloud and completed numerous successful acquisitions
What excites me is that Larry has also a seasoned M&A veteran and I value his experience and industry knowledge as we continue to bolt Meridian links. Larry and I share the same vision that Meridian Link has significant untapped potential for expansion and growth. And I'm excited to partner together to propel the company forward to that next level of success.
With that, I'm pleased to turn the call over to Larry to talk about his experience and then review our financial results and guidance.

Larry Katz

Thanks Nicholas. I'm thrilled to be here and to help lead the next slate of Meridian Link's growth and innovation. As Nicholas mentioned, I've got years of relevant experience in consumer lending, fintech and SaaS businesses have been around the block and in every stop has helped companies deliver durable growth at scale while building exceptional customer experiences.
Personally, I enjoy helping build companies the right way, innovative companies like Meridian link that deliver a unique and valuable solutions for customers that are financially disciplined and allocate capital prudently. And they have high performing teams who like to win.
There is a lot to like about the Meridian link story today, and I chose to join because of my knowledge and experience in this market. First, Meridian Lake has a unique value proposition as some lending platform of choice for credit unions and community banks.
I know the power value and stickiness of these enterprise platforms from my experience at JPMorgan and Genesis have implemented point-of-sale origination and servicing platforms and mortgage and consumer lending. And I know the financial institutions design their businesses around these platforms. Our platforms don't just power the business. They are of the business. We are the leading platform and a growing resilient market segment where Meridian Link's digital capabilities enable our customers to compete and grow.
Second, the fundamentals of this business are strong with healthy retention rates, strong margins and robust cash generation. This is a durable business with recurring revenue insulated by contractual minimums and benefiting from macro tailwinds of digitalization. It is led by a smart and talented management team that has executed with discipline through market cycles.
They've built a great business, and I'm excited to partner with them for this next chapter three, it's clear to me that we are well positioned to accelerate growth for the power of Veridian linked one. We have a significant expansion play with our current customers and partner relationships as well as new logo acquisition opportunities.
We're just beginning to see the return on our investment in our go-to-market services and customer success teams, which will generate increased demand and accelerate time to revenue. With our healthy pipeline bookings and activations. We are becoming a coiled spring that will release as volumes recover, driving accelerated revenue growth as I enter as CFO at Meridian length, I plan to focus on three key areas.
One, I will focus on delivering against our operating priorities, bringing rigor, discipline, data and analytics to measure, progress and informed decisions, our focus on systems, processes, controls and talent to support our scale and growth. And I'll hone our short and medium term investment priorities to articulate a long-term growth plan, including milestones over a three-plus year period.
Two, I will outline a disciplined capital allocation framework. Our priorities will be first, investing inorganic growth in areas such as go to market R&D and services, especially when those investments have high ROIs, second, inorganic growth via targeted strategic accretive M&A, and third, repurchasing our own shares when trading at a discount to intrinsic value.
We expect that we will be able to do all three with our recurring revenue, free cash flow generation and balance sheet capacity. That third priority will be to help our investors better understand performance of our business and the levers of our growth, which include our revenue growth algorithm. I'm a big believer in transparency, and I'm committed to helping our investors understand what our financial expectations should be for our business.
Turning now to our results. Redeeming performed well in the face of a shifting macro economic environment. In the quarter, we delivered on our top line by executing our platform strategy and feet on our EBITDA guidance.
In Q1, we generated total revenue of $77.8 million, up 1% year over year, beating the high end of our revenue guidance. Adjusted EBITDA was $31.8 million, a 41% margin, up 27% year on year and exceeded our EBITDA guidance.
Revenue growth was driven by higher services and other revenue, offset by lower subscription revenue. Subscription revenue declined year over year due to lower volumes, offset by ACV release from both existing and new customers in the face of macro headwinds, a generational low in mortgage industry originations and softer auto lending volumes.
We beat our adjusted EBITDA guidance by managing our cost base and executing with discipline. We saw healthy demand in the quarter, resulting in pipeline growth and strong bookings in this challenging macro, we are controlling what we can control and proactively investing for wind volumes recover.
Breaking down revenue and starting with software solutions. Our total lending software revenue grew 5% year over year and accounted for nearly 78% of revenue. Non-mortgage lending revenue grew 6% year over year and accounted for 89% of lending software revenue. This growth was attributable to solid ACV release from existing and new customers offset by lower volumes.
Auto volumes, our largest consumer loan category are improving sequentially but remained down year over year. Pre-owned volumes remain challenged due to the softness in used car inventory and aggressive dealer financing alternatives. Mortgage-related revenue within lending software solutions declined 1% year over year and accounted for the remaining 11% of lending software revenue this quarter.
Mortgage volumes were up year over year, but it will take time for volumes to push our customers above their committed minimums. So a smaller part of our business mortgage industry volumes are at generational lows with refinancing volumes at the lowest levels since 2000.
Turning to data verification, software solutions revenue declined 12% year over year and accounted for 22% of total revenue. This decline was attributable to a 17% decrease in mortgage-related revenue, which represented 58% of total data verification software revenue in Q1 this decline in mortgage related data verification revenue was driven by lower volumes, which were impacted by down-sell of a single large customer. In total, mortgage-related revenue was 21% of total Meridian link revenue in the first quarter, down three points from the year-ago quarter.
Focusing on profitability, GAAP gross margin was 66% in Q1 on a non-GAAP basis, adjusted gross margin was 74%, nearly 300 basis points of improvement in operating leverage year over year, driven by increased productivity of our services team for operating expenses, sales and marketing expense was $10.5 million, a 28% increase year over year on a GAAP basis.
On a non-GAAP basis, sales and marketing was $9.2 million up 16%. This increase is due to higher variable compensation costs and our investment in our go-to-market team. R&D expense was $9.5 million and declined 31% year over year on a GAAP basis.
On a non-GAAP basis, R&D was $7.9 million and declined 34% year over year, reflecting continued cost discipline and the roll-off of spend for completed technology projects such as the migration to the public cloud. G&A expense was $25.2 million, up 12% year over year on a GAAP basis. On a non-GAAP basis, G&A declined 7% to $9.5 million, excluding nonrecurring items such as the secondary offering costs in Q1.
Moving to overall operating performance. GAAP operating income was $3.4 million and non-GAAP operating income was $16.3 million. On a GAAP basis, net loss was negative $5.3 million or negative 7% margin. And on a non-GAAP basis, adjusted EBITDA was $31.8 million or 41% margin. This represented an 850 basis point improvement in operating leverage year over year and reflects our continued cost discipline while strategically investing and growth.
Now pivoting to the balance sheet and cash flow statement, we ended the first quarter was $62.3 million in cash and cash equivalents, a decrease of $18.2 million from year end. This decline was driven by $44 million of stock repurchases in the quarter. Cash flow from operations was $29 million or 37% of revenue, and free cash flow was $27.1 million or 35% of revenue.
I'll now pivot to guidance for Q2 and update guidance for the full year 2024, while the consumer seems to be holding up we remain cautious about the uncertain macro environment with a higher for longer rate outlook.
We continue to grow our non-mortgage related lending revenue, primarily through ACV release and while volumes are improving sequentially, we expect that revenue growth attributable to volumes will be lighter than previously anticipated.
Within this macro, we are focused on the things within our control, including disciplined cost management with a focus on profitability in preparation for when volumes return. We continue to prioritize winning new logos and cross-sell mandates, accelerating ACV release and innovating Meridian link one to meet evolving consumer lending needs.
With that, I'll share our updated guidance for the second quarter. Estimated total revenue is expected to be between $76 million and $79 million compared to $75.4 million for the same period in 2023. This represents an estimated year-over-year change of 1% to 5% adjusting Q2 '23 for a onetime reduction in revenue due to the previously disclosed commercial dispute. This represents an estimated year-over-year change of negative 2% to positive 2% for the full year 2024. We expect total revenue to be between $311 million and $319 million compared to $303.6 million for the full year 2023.
This represents an estimated increase of 2% to 5% year over year. We expect the mortgage market to contribute approximately 20% of revenue for the second quarter and full year 2024 to provide more color around the drivers of our total revenue.
Our mortgage-related revenue guidance includes declining year-over-year revenue despite improving volumes as it will take time for the recovery in volumes to push our customers above their commitments. Metavante's for our non-mortgage related data verification software solutions, we expect to return to modest year-over-year growth as the employment screening market reacts to job openings and labor turnover.
Nonmortgage lending revenue is anticipated to gradually improve year over year across loan types. This is driven primarily by ACTV release and some uplift from improving volumes in line with the gradual recovery that industry sources are forecasting.
Now focusing on our adjusted EBITDA guide on a non-GAAP basis, second quarter estimated adjusted EBITDA is expected to be between $29 million and $32 million, representing adjusted EBITDA margins of approximately 39% at the midpoint.
For the full year 2024, we continue to expect our adjusted EBITDA range to be between $123 million and $130 million dollars, representing adjusted EBITDA margins of approximately 40% at the midpoint. This adjusted EBITDA guide on lower revenue, effectively raises our expected adjusted EBITDA margin and signals our confidence and focus on execution and profitability.
To wrap up, I'd like to reiterate how excited. I am to join this team and business to chart the next leg of Meridian Link's growth. With that, Nicholas, Chris and I are happy to take any of your questions.
And I'll turn it over to the operator.

Question and Answer Session

Operator

(Operator Instructions) Koji Ikeda, Bank of America.

Koji Ikeda

Hey, guys, thanks for taking the questions. Hi, Larry. Nice to meet you on the call and looking forward to working with you. I've had a question around the minimum contract values and just thinking about all the contracts and in aggregate, is there a way to think about how far down or below the minimum contract values in aggregate, the customers are and we're ongoing with this is how much do overall volumes need to be made up. The four minimum contract thresholds are achieved

Larry Katz

Hey Koji. It's Larry Nice to meet you as well and look forward to working with you and to break down consumer versus mortgage. On the mortgage side, as we've talked about in the past, we are many of our contracts are well below there, their contractual minimums.
And and that's why we're seeing even though mortgage volumes are starting to recover worse, it's not printing to revenue in the quarter. So it's going to take some time or no crystal ball when that'll happen, but it's going to take some time.
Well, from my days in mortgage and I'm sure you know that you have when the mortgage market comes back, it tends to it tends to move quickly. So we can move through those floors pretty quickly, but it's going to take some time until that mortgage market comes back.
On the consumer lending side, substantial part of our of our contract base is on is above the minimums today and a good chunk is relatively close to those minimums. And so we see we see more from them as volumes are returning. For example, in auto, those volumes are passing through and turn into revenue, and I'd expect that to continue as volumes recover.

Koji Ikeda

Got it. And thank you, Larry. And just a follow-up here on thinking about the new logos signing up, call. It within the last six months, how do those contract commitments for those new logos compare to, let's say, contracts signed a year ago? Or are they roughly the same rough roughly smaller I mean, any way to think about the commitments that are embedded with the new logos signed recently?

Christopher Maloof

Thanks, guys, and this is Chris. Over the last year, they're roughly the same and they can really vary institution to institution based on how much how aggressive they want to be in terms of their commitment versus their off-price. So we see these amount of variability. Our wishes remained consistent.

Koji Ikeda

Thank you.

Operator

Nik Cramo, UBS.

Nik Cramo

Hey, guys. Congrats on the strong results and thanks for taking my question. My first one is for Nicolas. I was hoping you could provide additional color on the conversations you're having with customers at your most recent customer conference just in terms of their bank IT spending plans and more specifically on lending and also just how your sales pipeline is looking now relative to it was last year in the back of your customer conference.

Nicolaas Vlok

Okay. Yes, hello there, and thank you for the question. First of all, from a customer conversation standpoint, I don't feel like we're having different conversations with customers at our user event or nearly been then separate executive briefings and meetings. And those conversations are pretty positive. Folks are leaning into retooling.
Folks are very interested in running on Lincoln Road Map. We did spend some time at the User Forum speaking about a digital progression model, which I'm going to ask Chris Malouf that's on the call here to take that on here in a little bit when I pass it to him.
But it's something that our customers are really excited about. We feel it will help them on the curve of achieving more digital maturity on our platform, but also in the industry as a general. And a lot of conversation took place around that from another theme that we have I've had quite a bit of interaction with the user forum was some I know we've also had some Keynote folks and showed a product functionality that was pretty exciting to them. To the customer database.
But generally speaking, I would say folks are starting to kind of look past '24 on one of the themes we heard back from some of our clients would be still a fairly constrained environment from a liquidity and deposit perspective. But hopefully folks are seeing' 25 being a more positive year on specifically on the credit union side, I would highlight. So Chris, maybe you can speak to the digital progression model, which was quite a highlight for us at the User Forum.

Christopher Maloof

Thanks, Nicolas. A core part of our cross-sell success and how we position ourselves against competitors is how and no one has a whole is differentiated, then it's point solutions alone. So certain central approach we took to our latest user form as we moved away from talking about various specific use cases around credit cards and work, et cetera.
It's about where are you in your specific digital transformation process and then how can our SPAR solutions help him do along that line. So an example could be we'll talk to many different institutions that are and a significant percent of their deposits outlined.
They want to streamline that, like that's data. That's one engagement we can do. And then we will find another institution like the one that was higher than earlier where they're looking to enhance their auto decision, right price. So that would be on the board side of that curve.
And what's great about this as I think about the business long term is many of these customers with this industry still has 5 to 10 years left of digital and transformation like there's a lot of processes out there that are still built for the in person and they're reflected digitally as opposed to being separate but equal and as we move them to being separate but equal, where we're will require significant investment additional technologies investment in their people as well as investment in their technology.

Nik Cramo

Thanks for all the additional color. It's very helpful. And then my follow-up for Larry, it would be helpful if you could just provide some additional detail on the guidance assumptions for the remainder of the year for the consumer lending business, excluding mortgage, just across the various loan types such as like auto personal loans, credit cards, like what are you thinking from a volume perspective relative to Q1? Thanks.

Larry Katz

Hey Nic, nice to meet you, and thanks for the question. So in general, we are looking at we're cautiously optimistic in the second half than we are given the rate environment. We have pulled back on some of our assumptions in the second half from our prior guidance, and I'll just give you a little bit of color on it. And we're referencing industry sources and all the rest here.
But looking at our own business and where our and how and how our segments are performing on the auto side. And we are expecting some modest recovery in the in the back half in line with in line with industry sources as the used market, which, as you know, represents the majority of our consumer lending business.
And as that begins to recover, we'll see some pickup in the back half and similarly in other in other in other non asset-backed loan types account or band as well account opening had a relatively soft first quarter. But just given the comps to last year and we're expecting some pickup in that in the back half and other personal loans, credit cards have been remained pretty healthy and will and will be in a stable to positive through the back half, which is generally, I'd say it's pretty modest, modest recovery given our outlook, our rate outlook.

Nik Cramo

Thanks a lot for all the color.

Operator

(Operator Instructions) Adib Choudhury, William Blair.

Adib Choudhury

Thanks for taking our questions. If I could just ask on ACV release, I mean, you guys have talked a lot about accelerating implementation and clearly UniFi AC viewers is benefiting results now.
But could you kind of just talk about where we are in that journey and how that's kind of interesting.
Thanks.

Larry Katz

Yes, Sam, it's Larry again. Thanks for the question. So my question is on ACV release from like we talked a lot in prior quarters around around acceleration of our of our ACV release, and we are seeing that in the quarter I'm sorry, in the quarter is that ACV?
Our ACV release both new and cross-sell. That release is accelerating and it's offset by volumes. And so you don't see it as much in the numbers. But that's that's kind of the underlying trend and is really part of the coiled spring story that we've talked about the on a period-on-period basis ACV is up and that's a benefit. I mean, there are a couple things going on there.
One is our as our as our bookings have a go to market has become it's got a bigger pipeline that drives ACV release services investment that has increased our time to revenue, as we've talked about in prior quarters. But also there's a mix component here where new implementations it can take longer to implement. And the cross-sell is a quicker implemented, as we've talked about in across those big chunk of our business. And so there's a mix element here as well that drives ACV release. So we are seeing it in the numbers. It doesn't show up as much just given the macro headwinds that we're facing. But it is baked into the numbers.

Adib Choudhury

Perfect. Thanks for that, Tom. And if I could just ask on Meridian link access, could you kind of just talk about how that product has kind of trended relative to your initial expectations over the last couple of months and how the offering is differentiated versus some of your offerings? Thanks.

Christopher Maloof

Thanks for the question. So we release this product in H2 of last year and the number we talked about last quarter was [50]. Other week we sold for [40] to [50] of them. So that's in line with expectations as we continue to mature the product.
Now as far as differentiation is concerned is when we think about ML. one from a data perspective, the more aspects of the platform, you have the better the data you're going to have on how effective each party your organization is in driving originations, and that's the central parts of the insights and data product that we've had continued success selling as well.
So if you were to leverage one of our partners, which is great, and we enable our customers to extend our solution with third parties. As we highlight, you wouldn't have some of those extra features that allow you to optimize your business for the different channels you're operating at.

Adib Choudhury

Great. Thanks very much.

Operator

(Operator Instructions) Alex Sklar, Raymond James.

Alex Sklar

Great. Thank you, Tom. And let me there as well. Sorry, jumping between calls here. Larry, just the first one for you. I'm just kind of wondering the notes fairly new still, but the next couple of months, where are you most focused on internally specifically as it relates to kind of the accelerating growth comments you made aside from some of the macro headwinds easing.

Larry Katz

It's nice to meet you on look, I think, focused on it in others, and we're focused on controlling what we can control. Right and add it given the macro and those are around ACV release around time to revenue around of bookings and actually pipeline release around them. I'm focused on understanding churn and managing churn.
And then on pricing as well on kind of all the key elements of value creation. And then as I mentioned in the script also on turning up the inorganic, the inorganic efforts as well, we think there's a real opportunity in the market right now given them valuations and liquidity that is really well positioned there as well.
So given our given our recurring revenue and free cash flow. I think we've got a meaningful opportunity there to to add on when we see product market fit and when we see and when it's accretive and when it makes sense for us. So that's an area as well that that is spending a lot of time and over the next and will be over the next quarter.

Alex Sklar

Okay. Great color on that on. Maybe one follow-up for you, Nicolas, just in terms of the customer Space Coast that took their automated decisioning and implemented is now live. Can you just talk about if something unique from that customer's perspective in terms of being ready to adopt First, your average customer base?
I'm just kind of curious if there's been any change in terms of the overall appetite for your customers and prospects? Are they similarly adopt that automated decisioning that you've been talking about for a while now? Thanks.

Christopher Maloof

This is Chris. I'll take that one. When you think of it goes all goes back to the digital progression where they are within that journey. I would say that more and more organizations are are investing to move up that course.
And what I mean by that is it's all about how are you out competing for consumers in a core measure about competing for consumers? Is your instant decisioning rate and that's what our advanced decisioning tool allows our financial institutions to do so, more specifically providing more data points and more data trees for them to profitably decision the highest percentage of their incoming consumers as possible. So we are seeing a higher take rate as people are seeing digital transformation being more critical to their long-term success factor for us.

Alex Sklar

And great color there. Thank you all.

Operator

(Operator Instructions)
And there are no further questions at this time. I would now like to hand it back over to management for closing remarks.

Nicolaas Vlok

Thank you, operator. And as we wrap up, I know you'll join me in welcoming Larry as our CFO, his experiences, an asset to our business, and I'm glad you made the decision to join the team speaking of the team, I want to thank everyone at Meridian link for a solid Q1 performance I am consistently impressed by our employees' dedication, innovation and drive to succeed and ending on a real high note, we are pleased to share that we have won a product innovation Stevie Award.
We share this award with a customer choice for the innovative use of Meridian link insight to make measurable improvements across the lending life cycle. We are honored to be as a trust, we are honored to be their trusted partner and also that so many other leading FIs. We look forward to speaking with you again soon and enjoy the rest of your day.

Operator

Thank you. And ladies and gentlemen, this concludes today's conference call. You may now disconnect.