Q3 2024 MeridianLink Inc Earnings Call
Be advised that the conference is being recorded.
Speaker Change: I'd now like to turn the conference over to your first speaker today, Yeah, I know Youre gleaning.
Speaker Change: Yeah I know please go ahead.
Speaker Change: Good afternoon, and welcome to be ready in late third quarter fiscal year 'twenty 'twenty four earnings call.
Speaker Change: I'll be discussing the results announced in our press release issued after the market close today with me today I'm reading like Chief Executive Officer, Nicholas Block, President, Larry Cat, and Chief Financial Officer Elias Nader.
Speaker Change: Before we begin I'd like to remind you that today's conference call.
Speaker Change: Forward looking statements based on the company's current expectations.
Speaker Change: These forward looking statements are subject to a number of significant risks and uncertainties and our actual results may differ materially.
Speaker Change: For a discussion of the risks uncertainties and other factors that could affect our future financial results and business.
Speaker Change: Please refer to the disclosure in today's earnings release, and our periodic reports and filings we file from time to time with the Securities and Exchange Commission.
Speaker Change: 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.
Speaker Change: Please note that other than revenue all numbers in our remarks are on a non-GAAP basis, unless otherwise stated.
Speaker Change: Reconciliation to comparable GAAP metrics can be found in today's earnings presentation, which is available on our investor Relations website and as an exhibit to the form 8-K furnished with the FCC just before this call. Our earnings presentation is available for you to download it and reference throughout our prepared remarks.
Nicholas Block: That let me turn the call over to Nicholas.
Speaker Change: Yeah.
Nicholas Block: Thank you Joanna good afternoon, everyone.
Speaker Change: Our team executed well in the third quarter, we achieved revenue of $84 million or 5% growth year over year.
Speaker Change: In line with the high end of our guidance.
Speaker Change: Adjusted EBITDA, what studies $3 8 million.
Speaker Change: Presenting a 42% EBITDA margin exceeding the high end of our guidance.
I'm pleased that we returned $31 3 million of capital to shareholders via stock buybacks at attractive valuations.
Speaker Change: Our solid Q3 results were driven by the Companys continued disciplined execution.
Speaker Change: Revenue growth accelerated in the quarter on the backup continuous annual contract value or ACP re lease.
Speaker Change: Largest exceeded expectations as we proactively manage spend in an uncertain macro environment.
Speaker Change: Last quarter, we discussed the headwinds that our community bank and credit Union customers face in this uncertain macro environment.
Speaker Change: This quarter, we saw a modest rebound in activity due to lower rates, but our view of recovery remains unchanged as we expect that individual persists and the market will take time to normalize.
Speaker Change: First <unk>.
Speaker Change: Community banks and credit unions continue to be deposit constrained.
Speaker Change: Loan to deposit ratios will remain at elevated levels.
Speaker Change: Expect that deposit growth will return to pre pandemic levels, but it will take time for deposit rates to migrate deposits that's from higher yielding alternatives.
Speaker Change: Thank you.
Speaker Change: Affordability of use cost continued to be out of reach for many due to high prices and elevated financing rates.
Speaker Change: We expect lower used car prices as new costs work their way to used car lots.
Speaker Change: But it will likely take time to see meaningful impact on affordability.
Speaker Change: We also expect that affordability will improve with lower financing rates, but to date financing rates remains persistently high, particularly in the us auto market.
Speaker Change: Third.
Although we are seeing an increase in mortgage originations, we are not expecting a robust originations market in the short or medium term.
Speaker Change: Mortgage rates have moved higher in recent weeks, which continues to moderate demand and reflects some macro uncertainty.
Speaker Change: Most outstanding mortgages.
Speaker Change: Right well below current mortgage rates and we expect it will take multiple rate cuts to stimulate a significant increase in activity.
Speaker Change: Moving to highlights in the quarter.
Speaker Change: Wanted to start with one of our strategic focus areas.
Speaker Change: Eloping out people and leadership team to scale our business.
Speaker Change: In Q3, we strengthened our management team with the promotion of that Easter President and the Onboarding of Elias the CFO.
Speaker Change: These proven SaaS leaders have deep industry knowledge and Thats operated successfully at scale.
Speaker Change: We are already seeing the impact all day leadership in the business.
Speaker Change: We continue to have great success, with our land and expense strategy as we deepen relationships with customers and generate solid demand from those continuing their digital transformation.
Speaker Change: Financial institutions are expressing more confidence in the midterm economic outlook.
Speaker Change: And we are seeing increased buying signals from customers.
Speaker Change: In both mortgage and consumer lending solutions, just strategically at least two for a market recovery and the evolving digital lending needs of consumers.
Speaker Change: Our innovative platform continues to be a differentiator in the market.
Speaker Change: I love getting feedback from customers that use them, but I didn't make one to serve clients accelerate growth and achieve operational efficiencies.
Speaker Change: We continue to invest in innovation that delivers differentiated outcomes for our customers.
Speaker Change: With that.
Larry Cat: I will turn it over to Larry to review.
Larry Cat: Highlights in more detail.
Larry Cat: Larry.
Larry Cat: Thanks, Nicholas we had a solid third quarter with a mix of new logos cross sell and up sells.
Larry Cat: Bookings momentum continued as customers turn to meridian like as a trusted partner to accelerate their digital transformation.
Speaker Change: I've been on the road over the past 60 days with customers prospects and partners and I continue to see firsthand the unique value proposition of our platform for mid market financial institutions.
Speaker Change: No other solution offers the breadth or depth of Meridian link ones.
Speaker Change: And modern digital lending capabilities, including its ability to automate processes enable data driven decision, making improve close rates and improved risk management.
<unk> lending officers and digital transformation officers embrace our platform because it enables them to compete in an increasingly digital world with the solution set that accelerate speed experience reach and generates demand.
Speaker Change: Our existing customer base continues to be one of meridian links most strategic assets as a leading vertical SaaS company with a successful land and expand strategy. Our bookings are mostly driven by expansion opportunities within our existing customer base.
Speaker Change: I'd like to highlight that mortgage cross sell momentum remains strong as we continue to take market share with our integrated mortgage lending platform.
Speaker Change: Once again this quarter, we signed multiple high value cross sell deals across consumer and mortgage.
Speaker Change: This includes both consumer customers, adding mortgage and mortgage customers, adding consumer highlighting the bidirectional cross sell momentum enabled through our meridian like one platform.
Speaker Change: As an example, an existing meridian Lake one credit union customer with more than $750 million in assets added Meridian link mortgage mortgage access and our patented that optimization solution to their existing consumer solution.
Speaker Change: This customer consolidated five disparate mortgage systems into a single platform that they had already deployed for personal credit card vehicle and account opening capabilities.
Speaker Change: This expanded footprint further enables this customer to develop a holistic view of their members wallet and helps them best serve their members borrowing needs through personalized offers.
Speaker Change: As another example, we announced that Broadway bank, one of the largest privately owned banks in Texas with more than $5 5 billion in assets recently expanded its use of Meridian link one with its go live on meridian like mortgage.
Speaker Change: This customer's implementation enabled centralization of loan operations under one system and reduced its loan processing time by up to six days.
Speaker Change: With time saved and greater visibility across the entire consumer debt wallet Broadway. Thank staff are delivering more personalized customer experiences and building stronger customer loyalty.
Speaker Change: Turning to new logos the power of Meridian like one continues to resonate with chief lending officers and digital transformation officers due to its integrated platform offering configure ability and breath of marketplace partners.
Speaker Change: This quarter, we won a $370 million AUM new logo credit Union that is embracing this digital transformation.
Speaker Change: By selecting meridian like one for its digital lending capabilities, including account opening personal lending credit card direct auto lending and indirect lending.
Speaker Change: This customer replaced its existing providers due to our ability to drive speed of Decisioning create a cohesive digital customer experience and provide an integrated view of the consumer.
Speaker Change: I wanted to now turn to share some observations from my time in the market over the past couple of months as.
Speaker Change: As I mentioned earlier prioritize meeting with customers prospects and partners.
Speaker Change: Through these discussions I've gained a stronger appreciation for our unique value proposition and the depth of our customer relationships.
Speaker Change: <unk> integrated platform is viewed by customers as highly differentiated from point solutions and central to the design of their business processes are.
Speaker Change: Our high performing dedicated sales services and success teams our partners to our customers and relied upon to help them advance on their digital journey.
Speaker Change: We feel confident that we have a strong foundation to scale of time.
Speaker Change: I've also gained an appreciation for our opportunity to consistently deliver exceptional customer experiences.
Speaker Change: Over the past two years, we've invested in our go to market services and customer success teams, which has further positioned us to scale.
Speaker Change: Now for the first time, we've internally aligned all customer facing functions marketing demand generation sales implementation services consulting and customer success under common leadership to drive speed consistency and scalability. This focus and alignment is really important at this stage.
Speaker Change: <unk> of our journey and will set us up for the next stage of growth with both new customers and existing customers, having one team that embraces the customer journey and to and enables us to further deliver on the promise of our platform.
Speaker Change: I would like to end by reiterating my excitement to help lead the next leg of Iridium next journey.
Speaker Change: Honored to partner with Nicholas and our colleagues to lead this exceptional team.
Speaker Change: With that I'll turn the call over to Elias to take us through the financial performance and guidance.
Speaker Change: I am excited to work again with Elias after all these years I have no doubt about the value that he will bring to our team.
Speaker Change: Elias is a proven CFO, having served as CFO of Mitchell international provider of SaaS solutions to the automotive and insurance industry and most recently at this stage our subscription base professional services business.
Speaker Change: Elias currently serves on the board of Auto, Canada, Canada's largest automotive dealer groups and a public company.
Speaker Change: I'm confident that you will find continuity in our philosophy to the CFO role and approaches to value creation.
Speaker Change: Elias.
Speaker Change: Thanks, Laurie it's great to be here on my first earnings call and good afternoon, everyone.
Speaker Change: I'm excited to have joined meridian linked to partner with Nicholas Larry and the team to help lead the company through its next phase of growth and expansion.
Speaker Change: As Larry mentioned I've worked with a number of SaaS companies over the course of my career, helping them scale their operations and create long term value.
Speaker Change: Also helped organizations unlock growth potential through more effective financial operations and greater focus on metrics I'm excited to bring my experience to Meridian link and to work alongside this outstanding leadership team.
Speaker Change: With the company's solid foundation I see tremendous opportunities ahead.
Speaker Change: First Meridian link is a remarkable company with a unique value proposition as a leading lending platform of choice for credit unions and community banks and other power value and stickiness of vertical enterprise platforms for my time at Solaris and Mitchell.
Speaker Change: Platforms like Meridian link are the heart of our customers' enterprise, helping them achieve their goals empowering their businesses.
Speaker Change: We are the leading platform.
Speaker Change: Growing resilience market segment, where meridian links digital capabilities enable our customers to compete and grow.
Speaker Change: Second the fundamentals of this business are strong we have solid margins and robust cash generation capabilities.
Speaker Change: We also benefit from a secular trend towards digitalization.
Speaker Change: Particular by mid market banks, and credit unions looking to cater to their clients lending needs.
Speaker Change: This is a durable business with recurring revenue insulated by contractual minimums with upsides as those minimums are achieved.
It is led by a management team that has executed with discipline.
Speaker Change: Market cycles.
Speaker Change: I believe we are well positioned to accelerate growth.
Speaker Change: With the power of Meridian link one we have significant expansion prospects with our current customer base and partner relationships as well as new logo opportunities.
Speaker Change: Our solid pipeline bookings and Activations, we believe that overtime there is substantial upside as volumes gradually recover driving accelerated revenue growth.
Speaker Change: Our CFO Meridian link I plan to focus on three key areas and continue to work with Larry started one.
Speaker Change: I will deliver against our operating priorities, bringing continued rigor discipline data and analytics to measure progress and informed decisions.
Speaker Change: I will hold our short and medium term investment priorities to articulate our long term growth plan, including milestones over a three plus year period.
Speaker Change: Two in line with our prior framework I will take a disciplined capital allocation approach.
Speaker Change: To reiterate our order of priority is.
Speaker Change: First investing in organic growth in areas, such as product go to market and services, especially when these investments deliver repeatability and scale to the organization with a high ROI.
Speaker Change: Second.
Speaker Change: Disciplined accretive M&A that provides us with a high ROI, both strategically and financially.
Speaker Change: We have a strong track record of undertaking and integrating M&A successfully and we remain ready to execute on the right opportunities and we continue to actively explore.
Speaker Change: And third repurchasing our shares when those trade at a discount to intrinsic value and when we believe the returns on those shares are attractive.
Speaker Change: We expect that we will be able to do all three with our recurring revenue free cash flow generation and balance sheet capacity.
Speaker Change: Finally, I will seek to help our investors better understand the performance of our business and the levers of our growth, including our revenue algorithm.
Speaker Change: As I settle into the seat we will work on delivering information with greater transparency, helping investors better understand our performance and setting appropriate expectations.
Speaker Change: Now moving to our results.
Speaker Change: Meridian linked demonstrated solid performance in the face of continued to slightly diminished macro headwinds in Q3.
Speaker Change: We generated GAAP revenue of $80 4 million or 5% growth year over year in line with the high end of our guidance range led by lending solutions revenue growth of 7% adjusted.
Speaker Change: Adjusted EBITDA was $33 8 million.
Speaker Change: Presenting a 42% EBITDA margin and exceeding the high end of our guidance range.
Speaker Change: We generated $18 7 million of free cash flow and ended Q3 with $82 3 million cash and cash equivalents.
Speaker Change: Total debt was $473 9 million and excluding debt issuance costs and cash net debt was $387 6 million, representing net debt to LTM adjusted EBITDA of approximately three times.
Speaker Change: Now turning back to our revenue performance and starting with revenue by source.
Speaker Change: Total GAAP revenue grew 5% year over year.
Speaker Change: Driven by 4% growth in subscription revenue, 17% growth in services revenue and a 9% decline in other revenue subscription.
Speaker Change: Revenue, which accounts for 84% of total revenue growth in the levers at our control primarily ACD release.
Speaker Change: Further breaking down our 5% revenue growth price insurance, we're in the low single digits, each and mostly offset each other.
Speaker Change: <unk> release contributed high single digits.
Speaker Change: And volumes and onetime customer down sales combined with a low single digit drag.
Speaker Change: Now looking at total revenue by solution type.
Speaker Change: Total lending software revenue growth was 7% year over year and accounted for nearly 78% of revenue.
Speaker Change: Non mortgage lending revenue growth was 9% year over year and accounted for 90% of lending software revenue.
Speaker Change: This growth rate was largely attributable to ACD released from existing and new customers, which highlights the continued solid performance from our professional services team.
Speaker Change: Mortgage related revenue within lending software solutions declined 7% year over year and accounted for the remaining 10% of lending software revenue.
Speaker Change: The decline was attributable to customer churn.
Speaker Change: Mortgage volumes in the quarter was strong year over year with the majority of our contracts are at or below their committed minimums and it will take time for volumes to push more customers above their committed minimums to drive revenue.
Speaker Change: Turning to data verification software solutions revenue.
Speaker Change: Revenue declined 1% year over year and accounted for 22% of total revenue.
Speaker Change: This decline was attributable to a 2% decrease in mortgage related revenue, which represented 56% of total data verification software revenue in Q3.
Speaker Change: This decline in mortgage related data verification revenue was driven by the onetime down sell of a single large customer which is now operating at their minimums for the remainder of the year.
Speaker Change: Moving onto our profitability adjusted gross profit was $58 9 million, representing a 73% margin.
Speaker Change: This represents a 145 basis points of improvement in operating leverage year over year, driven by continued productivity of our services team.
Speaker Change: Turning to operating expenses.
Speaker Change: R&D expense was $7 3 million or 9% of revenue and declined 23% year over year, reflecting continued cost discipline, including lower staffing due to our previously announced restructuring.
Speaker Change: Sales and marketing expense was $8 6 million or 11% of revenue up 5% year over year.
Speaker Change: This increase is due to investment in go to market.
Speaker Change: G&A expense increased 18% year over year to $10 4 million or 13% of revenue, reflecting select discretionary investments made to position the company for scale in 2025 and beyond.
Speaker Change: Adjusted EBITDA was $33 8 million, representing a 42% margin.
Speaker Change: This represents over 300 basis points of improvement in operating leverage year over year.
Speaker Change: We made some purposeful discretionary investments in Q3, while maintaining disciplined cost management in an uncertain macro environment, we do not expect margins to remain at these elevated levels and we expect them to normalize in 2025 and beyond as we undertake further discretionary investments to accelerate future growth.
Speaker Change: Finishing with our capital position we.
Speaker Change: We ended the third quarter with cash and cash equivalents of $82 3 million a decrease of $10 7 million from Q2, driven by share buybacks totaled.
Speaker Change: Total debt was $473 9 million and excluding debt issuing costs and cash net debt was $387 6 million.
Cash flow from operations was $20 6 million or 26% of revenue and free cash flow was $18 7 million or 23% of revenue.
Speaker Change: Okay.
Speaker Change: The company executed several significant capital market activities in the quarter.
On September 30th we completed another secondary public offering of 6 million shares of common stock by funds managed by Thoma Bravo, providing greater liquidity for the stock attracting new investors.
Speaker Change: We also returned $31 $3 million of capital to stockholders via stock repurchases in Q3 and have returned a total of $105 6 million on a year to date basis.
Speaker Change: Share buybacks are consistent with our capital allocation framework I discussed previously.
Speaker Change: Now I will turn to guidance for Q4 and update guidance for the full year of 2024.
Speaker Change: We are encouraged by our year to date performance in Q3 in particular, which was driven by a C V release and disciplined execution.
Speaker Change: While Q3 was solid we are holding our guide for the full year at the midpoint of our revenue range and tempering, our Q4 expectations, primarily because of the recent increases in mortgage and treasury interest rates.
Speaker Change: In addition, liquidity or financial institution remains constrained and auto affordability remains low.
Speaker Change: As the macro environment improves we believe the headwinds impacting our customer base will moderate over the medium term.
Speaker Change: But this is likely to take quarters and will happen at different speeds.
Speaker Change: Nonetheless, we are focused on the things within our control investing for our future success, while maintaining disciplined cost management.
Speaker Change: In addition, we continued to prioritize winning new logos and cross sell mandates releasing ACD to revenue and innovating Meridian link one to meet the evolving digital lending needs of customers.
Speaker Change: With that I'll share our updated guidance for 2024.
Speaker Change: For the fourth quarter, we expect total GAAP revenue guidance to be between 76 and $80 million compared to $74 6 million for the same period of 2023.
Speaker Change: This represents an estimated year over year change of 2% to 7%.
Speaker Change: For the full year 2024, we expect total GAAP revenue to be between $313 million and $317 million compared to $303 6 million for the full year 2023. This.
Speaker Change: This represents an estimated increase of 3% to 4% year over year.
Speaker Change: We expect the mortgage market to contribute approximately 20% of GAAP revenue for the fourth quarter and for the full year of 2024.
Speaker Change: I will now provide more color on the drivers of our 2020 for total revenue.
Speaker Change: For non mortgage lending revenue, we expect mid to high single digit growth year over year, driven primarily by ACD release.
Speaker Change: Our mortgage related revenue guidance includes declining year over year revenue.
Speaker Change: It will take time for a recovery in volumes to push a significant portion of our customers above their committed minimums as the majority are currently below them.
Speaker Change: Additionally, we continue to realize the impact of down so and customer churn.
Speaker Change: For our non mortgage related data verification software solutions, we expect broadly flat growth year over year as higher and has taken more time to recover.
Speaker Change: Now focusing on our adjusted EBITDA guidance.
Speaker Change: Fourth quarter estimated adjusted EBITDA is expected to be between $29 5 million and $32 $5 million, representing adjusted EBITDA margins of approximately 40% at the midpoint.
Speaker Change: For the full year of 2024, we expect our adjusted EBITDA range to be between $127 million and $130 million, representing adjusted EBITDA margins of approximately 41% at the midpoint.
Speaker Change: To provide more color around the non-GAAP expense drivers of our adjusted EBITDA guidance for 2020 for gross margin is expected to be in the low seventies.
Speaker Change: R&D is expected to be significantly lower year over year due to our restructuring earlier in the year.
Speaker Change: Sales and marketing as a percentage of total revenue is expected to be higher year over year as we have invested in our go to market team.
Speaker Change: G&A is expected to be higher as a percentage of revenue year over year, reflecting select discretionary investments made to position the company for scale in 2025 and beyond.
Speaker Change: Our adjusted EBITDA guidance reflects the same cost discipline that we demonstrated in Q3.
Speaker Change: Until we have greater conviction around the recovery in volumes from the macro and political environment, becoming more certain we will.
Speaker Change: We'll remain focused on managing our costs and releasing ACD to drive performance.
Speaker Change: I will end, where I began today I believe we have the foundation for scale and a strong leadership team in place to take the company to the next level I look forward to finishing the year strongly and capitalizing on the growth opportunities that lie ahead.
Nicholas Block: With that Nick.
Speaker Change: Nicholas Larry and I are happy to take any of your questions and I'll turn it over to the operator.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: <unk> do you have a question. Please press the star button, followed by the number one on your touch going forward, you're going to hear a prompt that your hand has been raised.
Speaker Change: Should you wish to decline from the polling process. Please press the star button, followed by the number Q.
Speaker Change: If you are using a speaker phone please.
Speaker Change: If the handset before pressing any.
Speaker Change: One moment for your first question.
Speaker Change: Your first question comes from Parker Lane.
From Stifel. Your line is now open. Please go ahead.
Speaker Change: For Parker, Thank you for taking my questions.
Speaker Change: To start you mentioned, a severely contributing high single digits revenue growth can.
Speaker Change: Can you just provide a little bit.
Speaker Change: And what youre doing to accelerate that or at least to that.
Speaker Change: Going forward.
Speaker Change: Thank you.
Speaker Change: Hey, Ed it's Larry.
Speaker Change: Thanks for joining.
Speaker Change: We had a strong quarter on ACB release.
Speaker Change: That's I wouldn't say that it's accelerating.
Speaker Change: It used to be relationship driven by bookings and then services delivery and.
Speaker Change: The growth in ACB release is really driven by bookings growth over prior periods.
Speaker Change: In the past, we had accelerated delivery due to some changes in our services delivery came in that had accelerated but the growth in this period was not driven by that.
Process change so to speak where kind of where we're at stable delivery times, it's really driven by by bookings and bookings realize.
Speaker Change: Okay got it and then secondly, you mentioned mortgage headwinds still continuing.
Speaker Change: Do you have any update on when you would think that that would kind of flip around in and would the election results from this week have any impact on that.
Nicholas Block: Hi, there this is nicholas.
Speaker Change: We still are in the phase of generational lows in mortgage volume.
Speaker Change: We don't anticipate.
Speaker Change: A fast return to normal if you take a look at where rates are and where we just have been.
Speaker Change: You should over the all of the Covid and.
Speaker Change: More recent times mortgage rates will need to drop below five Florida it to have a meaningful impact on the business and volumes for us. So we anticipate this to.
Speaker Change: To be quarters.
Speaker Change: Yes.
Okay. That's all thank you for the question.
Speaker Change: The next question comes from Chris Kennedy from William Blair. Your line is now open. Please go ahead.
Good afternoon, and thanks for all.
Speaker Change: The information when you think about your business in a normalized environment can you just talk about what you think the revenue can grow at.
Speaker Change: Going forward.
Elias Nader: Hi, This is elias.
Elias Nader: In a normalized environment, which we clearly arent in and as Nicolas and Larry alluded to it's going to take us a while because we are facing some headwinds.
Elias Nader: Across different parts of our portfolio both on the mortgage side the auto side all of that being said as we do enter into a normalized environment and volumes pick up what youll see flowing through as a revenue algorithm volumes will flip from a small drag across the company too.
Elias Nader: And it's.
Elias Nader: Somewhere in the mid single digits, and if you think about that in the context of where consumer performed for.
Elias Nader: For the quarter.
Elias Nader: It's not hard to see us ultimately performing near where we have set long term guidance, which is in the mid single digits.
Elias Nader: Okay.
Elias Nader: So mid single digits for revenue growth I am sorry, excuse me mid teens excuse me double digits I misspoke mid teens, yes.
Speaker Change: Okay. So it's consistent with what you've said historically okay.
Speaker Change: Got it okay. Thank you for taking the question.
Speaker Change: The next question comes from Alex Sklar from Raymond James Your line is now open.
Go ahead.
Speaker Change: Hi, This is Jessica on for Alex today. Thanks for taking my question I just wanted to start off with double clicking on cross sell what are some key factors that have been driving your success in cross sell has there been any shifts in customer priorities are elevated demand for sorting capability over others. Thanks.
Speaker Change: Hey, Larry Thanks for the question.
Speaker Change: The cross sell is a big part of our business.
Speaker Change: As a vertical SaaS company with land and expand motion Cross sell is a big part of it is.
Speaker Change: A big part of our bookings in our pipeline.
Speaker Change: I wouldn't say the priorities have shifted but I'll just highlight the number one is we're a platform play with.
Speaker Change: The variety of solutions and so on.
Speaker Change: On the consumer side, there's always the natural expand the cross sell from their initial buy to the extended modules. So for example, if they start with account opening and direct lending direct auto lending for example, adding indirect lending, adding personal loans credit cards and whatnot.
Speaker Change: That is the primary.
Speaker Change: Primary motion for cross sell the second which I highlighted in my prepared remarks is.
Speaker Change: As mortgage and that is a real opportunity that we do see accelerating.
Speaker Change: Both consumer cross selling.
Speaker Change: Customers with consumer solutions clarify sign into mortgage and mortgage cross selling into consumer that bi directional cross sell is a is a very strong motion and we think theres opportunity there.
Speaker Change: And theres quite a bit of interest in the market there and then.
Speaker Change: And then three is the <unk>.
Speaker Change: Data and analytics right as a as a platform play.
Speaker Change: One of the Differentiators is that we have data across the across the consumer that wallet and really that enables our customers to deliver personalized offers.
Speaker Change: Things like that that optimization for example.
Speaker Change: Two eight to a consumer and so that data and analytics modules is an area of interest as well.
Speaker Change: Got it its really great a follow up question do you see a potential for the macro environment being more friendly to M&A activity among financial institutions.
Speaker Change: This does play out do you see this having an impact on your customer base performance due to M&A activity.
Nicholas Block: Hi, This is nicholas from a from a macro and M&A perspective.
Speaker Change: We expect.
Speaker Change: With rates coming down to drive increased activity in M&A.
Speaker Change: We are also over time seeing that.
<unk> expectations adjusting more so my perspective is that they would generally be speaking more M&A activity and one of the catalyst would be macro and interest rates coming down.
Larry Cat: Anything you want to add Larry maybe I'll just add specifically I think your question was around the around our end market consolidation in our end market.
Larry Cat: If I heard that right and clearly there's been a lot of discussion.
Speaker Change: Around consolidation in banking over the past 24 hours I do think that there will be look we've been in a consolidation trend in banks and.
Speaker Change: Community banks and credit unions over a period of time I think that will continue I think we should expect it to continue.
Speaker Change: Our experience is that we tend to be a beneficiary there because we.
Speaker Change: We tend to serve our clients tend to customers tend to be those larger institutions that are using technology and have invested in technology and they are the winners in the market and so they tend to be the consolidators and so that gives us.
Speaker Change: As consolidation happens that's that's a win for us because our end customers are the are the buyers.
Digital as a whole with banks.
Speaker Change: Got it.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: There are no further question at this time I will not give up the call over to Nicholas volt.
Speaker Change: Go ahead.
Nicholas volt: As we close out the call I want to express my sincere gratitude to our outstanding team.
Nicholas volt: Our dedication and commitment have been instrumental in achieving a solid Q3 and other reason meridian link is differentiated in the market in.
Nicholas volt: In fact, I'm proud to share that in Q3 ITC included marine linked in the top 50 of which 20 to 24 global sudden take one on that list.
Nicholas volt: This achievement would not be possible without the strength and innovation of our team.
Thanks to everyone for listening in and we look forward to speaking with you again soon.
Nicholas volt: Yes.
Nicholas volt: Yeah.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.