MeridianLink (MLNK 24.56%), a provider of cloud-based software for banks, credit unions, and mortgage lenders, released its second quarter 2025 financial results on August 11, 2025. The company reported GAAP revenue of $84.6 million, surpassing the analyst consensus of $81.8 million (GAAP), and non-GAAP earnings per share (EPS) of $0.13. GAAP revenue exceeded the consensus estimate by $2.83 million. Non-GAAP operating income rose to $23.0 million and Adjusted EBITDA grew approximately 21% year-over-year. Operationally, the period reflected strong execution in the core lending software segment, offset somewhat by continued softness in data verification software revenue. It also announced it will be acquired by Centerbridge Partners for approximately $2.0 billion, suspending guidance for the rest of the year.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.13 | $0.10 | $0.04 | 225.0 % |
| Revenue (GAAP) | $84.6 million | $81.8 million | $78.7 million | 7.5 % |
| Non-GAAP Operating Income | $23.0 million | $15.5 million | 48.1 % | |
| Adjusted EBITDA | $38.4 million | $31.8 million | 20.8 % | |
| Free Cash Flow | $17.1 million | $12.4 million | 37.9 % |
Source: Analyst estimates for the quarter provided by FactSet.
About MeridianLink's Business
MeridianLink delivers software-as-a-service (SaaS) platforms tailored for the needs of community banks, credit unions, and other financial service providers. It is best known for its lending software solutions, which automate loan origination, facilitate account opening, and streamline data verification processes for these organizations.
Its flagship platforms, including the cloud-based MeridianLink One suite and MeridianLink Portal, served approximately 2,000 financial institutions as of December 31, 2024. MeridianLink’s business focuses on providing subscription-based services, which ensure predictable, recurring revenue and high customer retention. Key success factors for MeridianLink include the breadth of its software suite, the stability of its customer base, the scale and stickiness of its SaaS offerings, continued investment in innovation, and adaptive strategies that help institutions navigate digital transformation and regulatory changes.
Quarterly Highlights and Segment Trends
MeridianLink’s Q2 2025 was marked by strong top-line growth. Lending software revenue climbed 12% to $68.7 million. This segment benefited from the activation of annual contract value (ACV), an internal operational measure, with growth driven by both new customer signings and cross-sell activity among existing clients. where it had posted 10% year-over-year growth in lending software revenue in Q1 2025.
Subscription revenue, which forms the base of MeridianLink’s predictable income stream, accounted for 84% of total GAAP revenue at $71.1 million, compared to Q2 2024. This recurring model is based on annual and volume-based minimums that limit downside from weaker demand, as customers typically cannot cancel contracts without penalty. The company’s ability to drive average recurring revenue per customer higher underscores the strength of its land-and-expand strategy with community lending institutions.
Data verification software, by contrast, remained a headwind, with revenue slipping 1% to $15.9 million. Half of the revenue in this segment is directly related to mortgage lending (51% in Q2 2025), which exposes it more to market swings compared to the lending software business, where only 11% of revenue was mortgage-linked in Q2 2025. Management noted that the impact of a major customer downsizing, flagged in previous quarters, continues to weigh on results, though churn overall is limited to smaller customers.
Adjusted EBITDA rose to $38.4 million, increasing adjusted EBITDA margin to 45%, up from 40% in Q2 2024. Non-GAAP operating income also saw a notable jump, up 48% compared to Q2 2024, to $23.0 million. Cash generation was strong, with free cash flow up nearly 38% compared to Q2 2024, to $17.1 million, and Cash and equivalents (GAAP) at quarter-end stood at $91.1 million. The company reported an improvement in GAAP operating income, turning last year’s loss into a profit.
Professional services and other categories provided stable or growing contributions, but the business remains highly concentrated in its recurring subscription and lending solutions.
Product Overview and Strategic Developments
The core of the company’s product suite includes lending origination solutions like MeridianLink One, a fully integrated cloud software platform for consumer and mortgage loan processing, and MeridianLink Portal, a digital application system that simplifies the experience for borrowers. These software products help customers automate loan decisioning, streamline compliance checks, and manage all steps from application to funding.
This period, the company continued to enhance its software suite with additional artificial intelligence (AI)-driven features, workflow automation, and deeper partner integrations. The investment in digital interfaces aims to help banks and credit unions deliver more seamless online application and account-opening experiences, reducing processing times and improving efficiency. For example, the rollout of new deposit account opening tools in Q1 2025 reportedly reduced customer application times for secondary account applications by about 70%.
Management also emphasized investments in its go-to-market strategy. While top-of-funnel activity has been described as moderately softer due to broader uncertainty in financial services, sales cycles and deal execution remain solid, helping sustain bookings and revenue growth. The firm’s sales motion is supported by channel partnerships and frequent customer engagement events, including user conferences and advisory boards.
Customers benefit from multi-year contracts and a high degree of support. Churn is limited and continues to be concentrated among the smallest institutions with lower annual recurring revenue, mitigating the dollar impact on results. Importantly, the company continues to win a growing share of larger institutions, as reflected in increasing average recurring revenue per client.
Outlook and Pending Acquisition
On the same day it reported Q2 2025 results, the company announced it will be acquired by Centerbridge Partners for $2.0 billion, or $20 per share in cash. it has suspended its financial guidance for the full year 2025. Management also did not conduct an earnings call for the quarter. As a result, there is no operational outlook or refreshed guidance for the remainder of fiscal 2025 or beyond.
Prior to the acquisition announcement, MeridianLink had forecasted FY2025 GAAP revenue of $326 million to $334 million, and an adjusted EBITDA margin of about 41% at the midpoint for the full year. Most of the projected top-line growth was expected to come from new contract activation, with pricing gains offsetting customer churn and weaker volumes in several data and verification lines. The company’s strategy emphasized continued investments in research and development as well as go-to-market capabilities to support longer-term growth. With the pending transaction, these targets are now on hold, and all attention turns to the completion of the acquisition.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
