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MeridianLink® Reports Third Quarter 2022 Results

Revenue of $71.8 million grows 7% year-over-year

MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies, today announced financial results for the third quarter ended September 30, 2022.

“Our solid third quarter performance spotlights the strength of our diverse portfolio, with digital lending driving our growth as more organizations take advantage of our MeridianLink One platform to better serve their consumers and communities. GAAP revenue grew 7% year-over-year to $71.8 million with 36% adjusted EBITDA margins. Lending software solutions revenue grew 17% year-over-year to $52.4 million,” said Nicolaas Vlok, chief executive officer of MeridianLink. “I am proud of our team and appreciate the effort in delivering on our multi-year cloud migration initiative a quarter early. The complete cloud migration is an important milestone, enabling greater speed and scalability while ensuring our customers benefit from enhanced security and automatic innovation updates.”

Quarterly Financial Highlights:

  • Revenue of $71.8 million, an increase of 7% year-over-year
  • Operating income of $4.5 million, or 6% of revenue and Non-GAAP operating profit of $12.1 million, or 17% of revenue
  • Adjusted EBITDA of $25.9 million, or 36% of revenue and a net loss of $(2.9) million
  • Cash flow from operations of $88.1 million and free cash flow of $79.4 million for the last twelve month period

Business and Operating Highlights:

  • MeridianLink announced the acquisition of OpenClose, a leader in mortgage lending technology, with a particular focus on supporting depository institutions. This transaction is expected to create a premier platform that will solidify our position in the market by providing more advanced, more open, and more customer-friendly capabilities.
  • A full quarter ahead of schedule, we completed the migration of the MeridianLink One functionality to the public cloud. As a result, we have already begun to see the benefits of increased security, speed, and scalability of deployment.
  • MeridianLink achieved both faster software module delivery to customers and increased uptake of the functions to more deeply automate lending processes.

Business Outlook

Based on information as of today, November 7, 2022, the Company issues fourth quarter financial guidance and updates full year 2022 financial guidance as follows:

Fourth Quarter Fiscal 2022:

  • Revenue is expected to be in the range of $65.0 million to $67.0 million
  • Adjusted EBITDA is expected to be in the range of $19.0 million to $21.0 million

Full Year 2022:

  • Revenue is expected to be in the range of $282.5 million to $284.5 million
  • Adjusted EBITDA is expected to be in the range of $107.0 million to $109.0 million

Conference Call Information

MeridianLink will hold a conference call to discuss our third quarter results today, November 7, 2022, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (888) 396-8049 from North America toll-free or the Participant Local number of (416) 764-8646 with Conference ID 03374737. A live webcast of the conference call can be accessed from the investor relations page of MeridianLink’s website at ir.meridianlink.com. An archived replay of the webcast will be available at the same website following the conclusion of the call. A telephonic replay will be available until approximately 8:59 p.m. Pacific Time (11:59 p.m. Eastern Time) on Monday, November 14, 2022, at (877) 674-7070 from North America or (416) 764-8692 as a Participant Local with Conference ID 374737.

About MeridianLink

MeridianLink® (NYSE: MLNK) is a leading provider of cloud-based software solutions for financial institutions, including banks, credit unions, mortgage lenders, specialty lending providers and consumer reporting agencies. Headquartered in Costa Mesa, California, MeridianLink provides services to more than 1,900 customers, including a majority of the financial institutions on Forbes’ 2021 lists of America’s Best Credit Unions and Banks. Further information can be found at www.meridianlink.com.

Non-GAAP Financial Measures

To supplement the financial measures presented in accordance with generally accepted accounting principles, or GAAP, we provide certain non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin; non-GAAP operating income (loss); non-GAAP net income (loss); non-GAAP cost of revenue; non-GAAP sales and marketing expenses; non-GAAP research and development expenses; non-GAAP general and administrative expenses; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Rather, we believe that these non-GAAP financial measures, when viewed in addition to and not in lieu of our reported GAAP financial results, provide investors with additional meaningful information to assess our financial performance and trends, enable comparison of financial results between periods, and allow for greater transparency with respect to key metrics utilized internally in analyzing and operating our business. The following definitions are provided:

  • Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, certain expenses associated with our IPO, sponsor and third-party acquisition related costs, losses resulting from early repayment of debt, lease termination charges, and deferred revenue reductions from purchase accounting for acquisitions prior to 2022
  • Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and sponsor and third-party acquisition-related costs
  • Non-GAAP net income (loss): GAAP net income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and sponsor and third-party acquisition-related costs
  • Non-GAAP cost of revenue: GAAP cost of revenue, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and amortization of developed technology
  • Non-GAAP operating expenses: GAAP operating expenses, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and depreciation and amortization
  • Free cash flow: GAAP cash flow from operating activities plus GAAP purchases of property and equipment (Capital Expenditures) and capitalized costs related to developed technology (Capitalized Software)

Reconciliations to comparable GAAP financial measures are available in the accompanying schedules, which are posted as part of this earnings release on our website. No reconciliation is provided with respect to certain forward-looking non-GAAP financial measures as the GAAP measures are not accessible on a forward-looking basis. We cannot reliably predict all necessary components or their impact to reconcile such financial measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a significant impact on our future GAAP financial results.

Forward-Looking Statements

This release contains, and our above-referenced conference call and webcast will contain, statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, these statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions, although not all forward-looking statements contain these identifying words. Further, statements describing our strategy, outlook, guidance, plans, intentions, or goals are also forward-looking statements. These forward-looking statements reflect our predictions, expectations, or forecasts, including, but not limited to, statements regarding, and guidance with respect to, our future financial and operational performance, future economic conditions, our strategic initiatives, including anticipated benefits and integration of an acquisition, the potential benefits of our migration to the public cloud, our stock repurchase program, including the execution and amount of repurchases, our development or delivery of new or enhanced solutions, our market size and growth opportunities, and our competitive positioning. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks related to our business and industry, as well as those set forth in Item 1A. Risk Factors, or elsewhere, in our Annual Report on Form 10-K for the year ended December 31, 2021, any updates in our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K, and our other SEC filings. Any forward-looking statement contained herein or provided on the related conference call is based on reasonable assumptions as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation, other than as required by applicable law, to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

As of

 

September 30,

2022

(unaudited)

 

December 31,

2021

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

115,752

 

 

$

113,645

 

Accounts receivable, net of allowance for doubtful accounts

 

32,034

 

 

 

24,913

 

Prepaid expenses and other current assets

 

12,542

 

 

 

9,398

 

Escrow deposit

 

30,000

 

 

 

 

Total current assets

 

190,328

 

 

 

147,956

 

Property and equipment, net

 

5,044

 

 

 

5,989

 

Right of use assets

 

2,638

 

 

 

 

Intangible assets, net

 

279,548

 

 

 

298,597

 

Deferred tax assets, net

 

10,717

 

 

 

4,286

 

Goodwill

 

571,554

 

 

 

564,799

 

Other assets

 

4,170

 

 

 

4,266

 

Total assets

$

1,063,999

 

 

$

1,025,893

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,173

 

 

$

2,335

 

Accrued liabilities

 

29,807

 

 

 

24,667

 

Deferred revenue

 

22,655

 

 

 

14,707

 

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

 

3,367

 

 

 

2,139

 

Total current liabilities

 

58,002

 

 

 

43,848

 

Long-term debt, net of debt issuance costs

 

423,599

 

 

 

425,371

 

Long-term deferred revenue

 

378

 

 

 

 

Deferred rent

 

 

 

 

396

 

Other long-term liabilities

 

1,527

 

 

 

 

Total liabilities

 

483,506

 

 

 

469,615

 

Commitments and contingencies

 

 

 

Stockholders’ Equity

 

 

 

Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at September 30, 2022 and December 31, 2021

 

 

 

 

 

Common stock, $0.001 par value; 600,000,000 shares authorized, 80,732,286 and 79,734,984 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

128

 

 

 

88

 

Additional paid-in capital

 

614,222

 

 

 

596,542

 

Accumulated deficit

 

(33,857

)

 

 

(40,352

)

Total stockholders’ equity

 

580,493

 

 

 

556,278

 

Total liabilities and stockholders’ equity

$

1,063,999

 

 

$

1,025,893

 

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share/unit and per share/unit data)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues, net

$

71,754

 

 

$

67,367

 

 

$

217,495

 

 

$

203,652

 

Cost of revenues:

 

 

 

 

 

 

 

Subscription and services

 

23,812

 

 

 

23,467

 

 

 

68,292

 

 

 

58,078

 

Amortization of developed technology

 

4,003

 

 

 

3,219

 

 

 

11,287

 

 

 

9,190

 

Total cost of revenues

 

27,815

 

 

 

26,686

 

 

 

79,579

 

 

 

67,268

 

Gross profit

 

43,939

 

 

 

40,681

 

 

 

137,916

 

 

 

136,384

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative

 

21,423

 

 

 

29,917

 

 

 

60,416

 

 

 

64,103

 

Research and development

 

11,518

 

 

 

13,533

 

 

 

30,414

 

 

 

27,807

 

Sales and marketing

 

6,311

 

 

 

5,994

 

 

 

16,519

 

 

 

13,817

 

Acquisition related costs

 

163

 

 

 

 

 

 

2,549

 

 

 

781

 

Total operating expenses

 

39,415

 

 

 

49,444

 

 

 

109,898

 

 

 

106,508

 

Operating income (loss)

 

4,524

 

 

 

(8,763

)

 

 

28,018

 

 

 

29,876

 

Other (income) expense, net:

 

 

 

 

 

 

 

Other income

 

(327

)

 

 

(9

)

 

 

(706

)

 

 

(39

)

Interest expense, net

 

6,855

 

 

 

7,165

 

 

 

16,649

 

 

 

27,073

 

Loss on debt repayment and extinguishment

 

 

 

 

4,351

 

 

 

 

 

 

4,351

 

Total other expense, net

 

6,528

 

 

 

11,507

 

 

 

15,943

 

 

 

31,385

 

Income (loss) before provision for income taxes

 

(2,004

)

 

 

(20,270

)

 

 

12,075

 

 

 

(1,509

)

 

 

 

 

 

 

 

 

Provision for income taxes

 

890

 

 

 

1,176

 

 

 

5,318

 

 

 

5,274

 

Net income (loss)

 

(2,894

)

 

 

(21,446

)

 

 

6,757

 

 

 

(6,783

)

 

 

 

 

 

 

 

 

Class A preferred return

 

 

 

 

(2,780

)

 

 

 

 

 

(20,944

)

Net income (loss) attributable to common stockholders

$

(2,894

)

 

$

(24,226

)

 

$

6,757

 

 

$

(27,727

)

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

$

(0.04

)

 

$

(0.34

)

 

$

0.08

 

 

$

(0.47

)

Diluted

 

(0.04

)

 

 

(0.34

)

 

 

0.08

 

 

 

(0.47

)

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic

 

80,659,320

 

 

 

71,697,083

 

 

 

80,353,399

 

 

 

58,495,073

 

Diluted

 

80,659,320

 

 

 

71,697,083

 

 

 

82,364,835

 

 

 

58,495,073

 

Net Revenues by Major Source

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Subscription fees

$

61,861

 

$

58,988

 

$

188,860

 

$

179,732

Professional services

 

7,293

 

 

5,706

 

 

21,070

 

 

16,812

Other

 

2,600

 

 

2,673

 

 

7,565

 

 

7,108

Total

$

71,754

 

$

67,367

 

$

217,495

 

$

203,652

Net Revenues by Solution Type

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Lending software solutions

$

52,414

 

 

$

44,657

 

 

$

153,249

 

 

$

133,034

 

Data verification software solutions

 

19,340

 

 

 

22,710

 

 

 

64,246

 

 

 

70,618

 

Total (1)

$

71,754

 

 

$

67,367

 

 

$

217,495

 

 

$

203,652

 

% Growth attributable to:

 

 

 

 

 

 

 

Lending software solutions

 

12

%

 

 

 

 

10

%

 

 

Data verification software

 

(5

)%

 

 

 

 

(3

)%

 

 

Total % growth

 

7

%

 

 

 

 

7

%

 

 

 

 

 

 

 

 

 

 

(1) % Revenue related to mortgage loan market:

 

 

 

 

 

 

 

Lending software solutions

 

6

%

 

 

9

%

 

 

7

%

 

 

9

%

Data verification software

 

62

%

 

 

70

%

 

 

66

%

 

 

71

%

Total % revenue related to mortgage loan market

 

21

%

 

 

29

%

 

 

24

%

 

 

31

%

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

6,757

 

 

$

(6,783

)

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

 

 

 

Depreciation and amortization

 

39,746

 

 

 

37,654

 

Amortization of debt issuance costs

 

1,705

 

 

 

2,551

 

Share-based compensation expense

 

16,501

 

 

 

26,835

 

Loss on disposal of fixed assets

 

164

 

 

 

524

 

Loss on sublease liability

 

 

 

 

405

 

Loss on debt repayment and extinguishment

 

 

 

 

4,351

 

Gain on change in fair value of earnout

 

(162

)

 

 

 

Other adjustments

 

 

 

 

(18

)

Deferred income taxes

 

5,193

 

 

 

4,992

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(6,964

)

 

 

(2,033

)

Prepaid expenses and other assets

 

(2,480

)

 

 

(6,179

)

Accounts payable

 

(450

)

 

 

(961

)

Accrued liabilities

 

(247

)

 

 

(2,271

)

Deferred revenue

 

7,472

 

 

 

10,016

 

Deferred rent

 

 

 

 

(71

)

Net cash provided by operating activities

 

67,235

 

 

 

69,012

 

Cash flows from investing activities:

 

 

 

Acquisition, net of cash acquired – TazWorks, LLC

 

 

 

 

(85,420

)

Acquisition, net of cash and restricted cash acquired – Saylent Technologies, Inc.

 

 

 

 

(35,945

)

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

 

(23,138

)

 

 

 

Escrow deposit

 

(30,000

)

 

 

 

Capitalized software additions

 

(6,323

)

 

 

(3,590

)

Purchases of property and equipment

 

(889

)

 

 

(692

)

Net cash used in investing activities

 

(60,350

)

 

 

(125,647

)

Cash flows from financing activities:

 

 

 

Repurchases of common stock

 

(262

)

 

 

 

Repurchases of Class A Units

 

 

 

 

(54

)

Repurchases of Class B Units

 

 

 

 

(1,887

)

Proceeds from initial public offering, net of underwriters’ discounts and commissions

 

 

 

 

247,227

 

Proceeds from exercise of stock options

 

186

 

 

 

1,317

 

Payment due to effect of corporate conversion

 

 

 

 

(6

)

Proceeds from employee stock purchase plan

 

922

 

 

 

 

Taxes paid related to net share settlement of RSUs

 

(184

)

 

 

 

Proceeds from long-term debt

 

 

 

 

100,000

 

Principal payments of long-term debt

 

(2,175

)

 

 

(202,590

)

Payment of Regulation A+ investor note

 

(3,265

)

 

 

 

Payments of debt issuance costs

 

 

 

 

(1,970

)

Payments of Class A cumulative preferred return

 

 

 

 

(12

)

Payments of deferred offering costs

 

 

 

 

(4,435

)

Payment to sellers of Teledata Communications, Inc

 

 

 

 

(2,142

)

Holdback payment to sellers of MeridianLink

 

 

 

 

(25,665

)

Net cash (used in) provided by financing activities

 

(4,778

)

 

 

109,783

 

Net increase in cash, cash equivalents and restricted cash

 

2,107

 

 

 

53,148

 

Cash, cash equivalents and restricted cash, beginning of period

 

113,645

 

 

 

39,881

 

Cash, cash equivalents and restricted cash, end of period

$

115,752

 

 

$

93,029

 

Reconciliation of cash, cash equivalents, and restricted cash

 

 

 

Cash and cash equivalents

$

115,752

 

 

$

93,029

 

Restricted cash

 

 

 

 

 

Cash, cash equivalents, and restricted cash

$

115,752

 

 

$

93,029

 

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

14,852

 

$

24,549

Cash paid for income taxes

 

1,179

 

 

239

Non-cash investing and financing activities:

 

 

 

Regulation A+ investor note assumed in business combination

$

3,265

 

$

Initial recognition of operating lease liability

 

3,786

 

 

Initial recognition of operating lease right-of-use asset

 

3,096

 

 

Share-based compensation expense capitalized to software additions

 

255

 

 

45

Shares withheld with respect to net settlement of RSUs

 

184

 

 

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

 

2

 

 

Vesting of restricted stock awards and RSUs

 

40

 

 

85

Deferred offering costs included in accounts payable and accrued expenses

 

 

 

423

Effect of corporate conversion

 

 

 

320

Related party receivable net against holdback payment to prior shareholders

 

 

 

4,335

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands, except share/unit and per share/unit data)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

4,524

 

 

$

(8,763

)

 

$

28,018

 

 

$

29,876

 

Add: Share-based compensation expense

 

7,253

 

 

 

25,527

 

 

 

16,501

 

 

 

26,835

 

Add: Employer payroll taxes on employee stock transactions

 

182

 

 

 

79

 

 

 

329

 

 

 

79

 

Add: Sponsor and third-party acquisition related costs

 

163

 

 

 

209

 

 

 

2,549

 

 

 

2,323

 

Non-GAAP operating income

$

12,122

 

 

$

17,052

 

 

$

47,397

 

 

$

59,113

 

Non-GAAP operating margin

 

17

%

 

 

25

%

 

 

22

%

 

 

29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(2,894

)

 

$

(21,446

)

 

$

6,757

 

 

$

(6,783

)

Add: Share-based compensation expense

 

7,253

 

 

 

25,527

 

 

 

16,501

 

 

 

26,835

 

Add: Employer payroll taxes on employee stock transactions

 

182

 

 

 

79

 

 

 

329

 

 

 

79

 

Add: Sponsor and third-party acquisition related costs

 

163

 

 

 

209

 

 

 

2,549

 

 

 

2,323

 

Non-GAAP net income

$

4,704

 

 

$

4,369

 

 

$

26,136

 

 

$

22,454

 

Non-GAAP basic net income per share

$

0.06

 

 

$

0.06

 

 

$

0.33

 

 

$

0.38

 

Non-GAAP diluted net income per share

 

0.06

 

 

 

0.06

 

 

 

0.32

 

 

 

0.36

 

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

 

80,659,320

 

 

 

71,697,083

 

 

 

80,353,399

 

 

 

58,495,073

 

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

 

82,543,631

 

 

 

74,764,302

 

 

 

82,364,835

 

 

 

61,552,071

 

Non-GAAP net income margin

 

7

%

 

 

6

%

 

 

12

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(2,894

)

 

$

(21,446

)

 

$

6,757

 

 

$

(6,783

)

Interest expense

 

6,855

 

 

 

7,165

 

 

 

16,649

 

 

 

27,073

 

Taxes

 

890

 

 

 

1,176

 

 

 

5,318

 

 

 

5,274

 

Depreciation and amortization

 

13,370

 

 

 

12,697

 

 

 

39,746

 

 

 

37,654

 

Share-based compensation expense

 

7,253

 

 

 

25,527

 

 

 

16,501

 

 

 

26,835

 

Employer payroll taxes on employee stock transactions

 

182

 

 

 

79

 

 

 

329

 

 

 

79

 

Expenses associated with IPO

 

 

 

 

230

 

 

 

 

 

 

424

 

Sponsor and third-party acquisition related costs

 

163

 

 

 

209

 

 

 

2,549

 

 

 

2,323

 

Loss on debt prepayment

 

 

 

 

4,351

 

 

 

 

 

 

4,351

 

Deferred revenue reduction from purchase accounting for acquisitions prior to 2022

 

60

 

 

 

122

 

 

 

179

 

 

 

624

 

Lease termination charges

 

 

 

 

879

 

 

 

 

 

 

879

 

Adjusted EBITDA

$

25,879

 

 

$

30,989

 

 

$

88,028

 

 

$

98,733

 

Adjusted EBITDA margin

 

36

%

 

 

46

%

 

 

40

%

 

 

48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Cost of revenue

$

27,815

 

 

$

26,686

 

 

$

79,579

 

 

$

67,268

 

Less: Share-based compensation expense

 

1,352

 

 

 

5,296

 

 

 

3,567

 

 

 

5,461

 

Less: Employer payroll taxes on employee stock transactions

 

67

 

 

 

3

 

 

 

121

 

 

 

3

 

Less: Amortization of developed technology

 

4,003

 

 

 

3,219

 

 

 

11,287

 

 

 

9,190

 

Non-GAAP cost of revenue

$

22,393

 

 

$

18,168

 

 

$

64,604

 

 

$

52,614

 

As a % of revenue

 

31

%

 

 

27

%

 

 

30

%

 

 

26

%

 

 

 

 

 

 

 

 

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

General & administrative

$

21,423

 

 

$

29,917

 

 

$

60,416

 

 

$

64,103

 

Less: Share-based compensation expense

 

3,170

 

 

 

12,158

 

 

 

6,947

 

 

 

12,864

 

Less: Employer payroll taxes on employee stock transactions

 

42

 

 

 

59

 

 

 

74

 

 

 

59

 

Less: Depreciation expense

 

577

 

 

 

572

 

 

 

1,718

 

 

 

1,743

 

Less: Amortization of intangibles

 

8,790

 

 

 

8,906

 

 

 

26,741

 

 

 

26,721

 

Non-GAAP general & administrative

$

8,844

 

 

$

8,222

 

 

$

24,936

 

 

$

22,716

 

As a % of revenue

 

12

%

 

 

12

%

 

 

11

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Research and development

$

11,518

 

 

$

13,533

 

 

$

30,414

 

 

$

27,807

 

Less: Share-based compensation expense

 

2,092

 

 

 

6,194

 

 

 

4,457

 

 

 

6,358

 

Less: Employer payroll taxes on employee stock transactions

 

56

 

 

 

8

 

 

 

97

 

 

 

8

 

Non-GAAP research and development

$

9,370

 

 

$

7,331

 

 

$

25,860

 

 

$

21,441

 

As a % of revenue

 

13

%

 

 

11

%

 

 

12

%

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Sales and marketing

$

6,311

 

 

$

5,994

 

 

$

16,519

 

 

$

13,817

 

Less: Share-based compensation expense

 

639

 

 

 

1,879

 

 

 

1,530

 

 

 

2,152

 

Less: Employer payroll taxes on employee stock transactions

 

17

 

 

 

9

 

 

 

37

 

 

 

9

 

Non-GAAP sales and marketing

$

5,655

 

 

$

4,106

 

 

$

14,952

 

 

$

11,656

 

As a % of revenue

 

8

%

 

 

6

%

 

 

7

%

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

19,565

 

 

$

19,103

 

 

$

67,235

 

 

$

69,012

 

Less: Capital expenditures

 

409

 

 

 

139

 

 

 

889

 

 

 

692

 

Less: Capitalized software

 

2,244

 

 

 

1,374

 

 

 

6,323

 

 

 

3,590

 

Free cash flow

$

16,912

 

 

$

17,590

 

 

$

60,023

 

 

$

64,730

 

 

 

 

 

 

 

 

 

 

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