Yahoo Finance

Larry Katz

Thanks, Nicolaas. We finished the year with strong sales execution, posting record bookings for the second year in a row. Both new logo and cross-sell bookings increased year-over-year as both credit unions and banks turn to MeridianLink as a trusted partner to accelerate their digital transformation. We had strong bookings performance in both cross-sell and new logo. We also had a higher mix of mortgage and larger ACV platform wins.
A key driver of our sales performance is the breadth and depth of the MeridianLink One platform, which provides us a natural expansion opportunity across more than 1,500 lending software customers. Our ability to win is a testament to the deep expertise, best-of-breed platform functionality and market-leading reputation that we've built over the past 25 years. Since stepping into the President seat 6 months ago, I've had the opportunity to meet with dozens of customers, partners, prospects and industry experts. The messages I hear are consistent. We have a distinctive and compelling platform, and our customers are committed to running their lending business on MeridianLink One.
At the same time, our customers are looking to us to continue to innovate, to deliver distinctive solutions that help them grow by acquiring and serving digitally native consumers in an AI-enabled world. They also look to us to continually make it easier to do business with us. The message is clear. We have done well over the years, and we absolutely have an opportunity to do better. With all commercial functions now under one roof, I am focused on breaking down silos, ensuring that customer feedback more actively informs our product road map and streamlines our customer journey.
As we head into 2025, we are continuing to invest in sales and marketing to further optimize our land and expand strategy. We are adding to our solutions consulting team to help customers and prospects understand the value of our platform and how it meets their needs. And we are maturing our account-based selling motions based on extensive white space analytics and enhanced demand generation strategies. Entering the year with a robust pipeline and solid foundation in place, I'm confident that our team is well positioned to generate increased demand more efficiently.
With that, I will move to our business highlights for Q4.
We had a strong quarter of cross-sell and upsell, demonstrating the resilient nature of our customers who continue to invest in innovative solutions even in a challenging market. For example, an existing consumer lending bank customer with $9 billion in assets recently added MeridianLink Access and MeridianLink Business and now deploys a total of 6 modules across the MeridianLink One platform. This customer also enabled MeridianLink's automated decisioning capability to drive touchless lending. This is a great example of the opportunity that MeridianLink One presents to deepen and expand existing relationships. Of note, this access win was 1 of 15 in the fourth quarter, more than tripling customer wins year-over-year.
Turning to new logo wins. This was our best new logo quarter in 2 years, increasing new customer bookings nearly 40% year-over-year. This suggests that financial institutions are leaning into their digital transformation to prepare for a more robust demand environment. For example, we signed a bank with $8 billion in assets onto MeridianLink Mortgage and MeridianLink Consumer, enabling them to seamlessly execute a high-value cross-sell strategy. We won this competitive deal due to our feature-rich functionality, speed of implementation and partner integrations.
This customer is also leveraging our patented debt optimization capability to increase visibility across the consumer debt wallet, which maximizes acceptance rates and deepens relationships with clients. We also delivered another solid quarter and year of subscription revenue activations or ACV release, showcasing our services team's continued focus on streamlining delivery. We activated more subscription revenue dollars than in 2024. Heading into 2025, our plan is to release more ACV dollars while maintaining healthy backlog. Moving to product.
We launched a new Share-of-Wallet add-on for MeridianLink consumer and opening customers. This unique data-rich product supports our customers' cross-selling efforts by identifying financial products that consumers have with other financial institutions. Share of wallet helps our customers extend wallet share and increase lifetime value of their consumer relationships while reducing acquisition costs. FedChoice Federal Credit Union chose to implement our Share-of-Wallet product to drive more relevant cross-sell. They ran campaigns for personal loans and HELOCs, which successfully shifted members towards money-saving fixed rate products.
With the new ability to deliver highly personalized offers to its members, FedChoice's cross-sell campaigns hit conversion rates of up to 9%. Ending now with a great new partner add, we announced a new partnership with ScoreNavigator, an advanced credit report analytic tool designed to help consumers better understand and manage their finances. ScoreNavigator integrates with our DBS solution and provides mortgage lenders with more efficient methods of assessing applicant creditworthiness.
Through the ScoreNavigator platform, the loan officer can communicate with applicants to help them improve credit scores during the application process and consolidate debt, thereby increasing lender application approvals. Leading CRAs like CIC and Advantage Credit have used the integration for their lenders for strengthening consumer relationships and boosting retention.
With that, I will now turn the call over to Elias to share our financial results in more detail and provide annual guidance for 2025.

Elias Olmeta

Thank you, Larry, and good afternoon, everyone. We finished the year with a solid fourth quarter. Throughout 2024, MeridianLink achieved consistent revenue growth, expanded profitability and improved free cash flow conversion. Drilling into Q4, we achieved GAAP revenue of $79.4 million or 7% growth year-over-year, which is at the high end of our guidance range. Adjusted EBITDA was $33.4 million, a 42% adjusted EBITDA margin, which exceeded the high end of our guidance range.
We generated $12.1 million of free cash flow or 15% of revenue and ended the quarter with $92.8 million in cash and cash equivalents. Before I further describe our revenue growth, in prior quarters, we have made reference to a large data verification customer downsell. We are in active litigation with this customer and have reached an agreement to mutually drop our claims with the parties entering into a 3-year agreement. We anticipate that going forward, annual customer revenue will be reduced by approximately $6 million as a result of the downsell and the recent agreement. Revenue from this customer totaled $13.1 million in 2024.
This downsell has been a headwind to our data verification and total revenue growth in prior years. We anticipate that the identified adjustment in revenue from 2024 to 2025 will impact total revenue growth by approximately 220 basis points. Now turning to our Q4 total year-over-year revenue performance of 7% growth in terms of the revenue algorithm. One, ACV release contributed mid-single digits; two, price and churn were in the low single digits each and essentially offset each other. Three, volumes and onetime customer downsells combined were in the low single digits and mostly offset each other.
Moving to our total revenue performance of 7% growth in Q4 by source. Subscription revenue grew 5% year-over-year, contributing significantly at 82% of our total revenue. This growth was driven by the successful activation and recognition of subscription revenue from our implemented software solutions for both new and existing customers, what we refer to as ACV release. Services revenue grew 6% year-over-year, primarily driven by higher implementation fees associated with software from additional bookings. Other revenue grew 40% year-over-year, driven by onetime partner revenue share true-ups.
Now looking at our 7% total revenue growth in Q4 by solution type. Total lending software revenue growth was 7% year-over-year and accounted for approximately 80% of revenue. Excluding revenue from the mortgage loan market, consumer lending revenue growth was 9% year-over-year and accounted for 89% of lending software revenue. This strong growth in uncertain macro demonstrates the power of our core franchise. Mortgage lending software solutions declined 7% year-over-year and accounted for the remaining 11% of lending software revenue.
The decline was attributable to customer downsell and churn. Turning to data verification software solutions. Revenue increased 4% year-over-year and accounted for 20% of total revenue. This increase was attributable to a 5% increase in mortgage-related revenue, which represented 57% of total data verification software revenue in Q4. As we lap the onetime customer downsell from the customer I previously mentioned in Q3, revenue accelerated in the quarter.
Moving on to our profitability. Adjusted gross profit was $59 million, representing a 74% margin and a 37 basis point improvement in operating leverage year-over-year. Turning to operating expenses. R&D expense was $7 million or 9% of revenue and declined 22% year-over-year, reflecting lower staffing due to our previously announced restructuring. Sales and marketing expense was $8.6 million or 11% of revenue, up 2% year-over-year.
G&A expense increased 36% year-over-year to $11.1 million or 14% of revenue, reflecting select discretionary investments made to position the company for scale. Adjusted EBITDA was $33.4 million, a 42% adjusted EBITDA margin. This is a 28 basis point improvement in operating leverage year-over-year. Finishing with our capital position. Cash flow from operations was $13.8 million or 17% of revenue and free cash flow was $12.1 million or 15% of revenue.
We ended the fourth quarter with cash and cash equivalents of $92.8 million, an increase of $10.5 million from Q3. Now let's look at full year 2024 results. We had a challenging operating environment, especially in the first half of the year. Notwithstanding, we achieved solid in-year revenue growth, as Larry mentioned, record bookings and the highest adjusted EBITDA margin in 3 years. Revenue increased 4% to $316.3 million for the year.
Describing the 4% revenue growth in terms of the revenue algorithm, one, ACV release contributed mid-single digits; two, price and churn were in the low single digits each and essentially offset each other; and three, volumes and a onetime DBS customer downsell combined were a low single-digit drag. Now turning to our 4% year-over-year revenue growth by source. Subscription revenue grew 3% year-over-year, which contributed 84% of total revenue. Services grew 9% year-over-year, primarily driven by higher implementation fees associated with software from additional bookings. Other revenue grew 17% year-over-year, driven by increased partner revenue.
Now looking at our 4% total revenue by solution type. Total lending software revenue growth was 7% year-over-year and accounted for nearly 79% of total revenue. Excluding revenue from the mortgage market, consumer lending revenue growth was 9% year-over-year and accounted for 89% of lending software revenue. Achieving 9% year-over-year growth in our core business is a huge accomplishment, especially in the context of one of the most challenging lending environments. This highlights the value of our investments and the work and success of our go-to-market and services team over the last year.
Mortgage lending software solutions declined 7% year-over-year and accounted for the remaining 11% of lending software revenue. The decline was attributable to customer churn and downsell. Mortgage volumes were strong year-over-year and contracts below their minimum significantly improved from approximately 2/3 to approximately 1/2 by the end of Q4. Turning to data verification software solutions. Revenue declined 6% year-over-year and accounted for 21% of total revenue.
This decline was attributable to an 11% decrease in mortgage-related revenue, which represented 56% of total data verification software revenue in the year. This decline in mortgage-related data verification revenue was driven by the onetime downsell of a single large customer discussed previously. Moving on to our profitability. Adjusted gross profit was $232 million, a 73% adjusted gross margin. This is nearly 100 basis points of improvement in operating leverage year-over-year, driven by continued productivity of our services team.
Turning to operating expenses. R&D expense was $29.4 million or 9% of revenue and declined 27% year-over-year, reflecting lower staffing due to the previously mentioned restructuring. Sales and marketing expense was $35.9 million or 11% of revenue, up 13% year-over-year. This increase is primarily due to investment in our go-to-market team and strategy. G&A expense increased 12% year-over-year to $40.8 million or 13% of revenue, reflecting the previously mentioned select discretionary investments made to position the company for scale.
Adjusted EBITDA was $130.7 million, a 41% adjusted EBITDA margin. This is a 400 basis point improvement in operating leverage year-over-year. We made some purposeful discretionary investments in the year while maintaining disciplined cost management. Finishing with our capital position. Cash flow from operations was $77.8 million or 25% of revenue and free cash flow was $70.3 million or 22% of revenue.
Total debt was $472.7 million and excluding debt issuance costs and cash, net debt was $375.8 million, representing net debt to LTM adjusted EBITDA of approximately 3 times. Once again, we were disciplined allocating capital. We invested in the business and repurchased shares at a discount to intrinsic value, returning $105.4 million of capital to stockholders through repurchases. We also engaged in several capital market activities such as the debt repricing and top-up and two secondary offerings that broadened our shareholder base. Now I'll provide guidance for 2025.
As Nicolaas mentioned, going forward, we will only provide annual guidance updates on our quarterly calls. While we will no longer provide prospective quarterly guidance, where relevant, we will comment on and provide insights into anticipated trends. We have made this change because we want to improve the alignment between our guidance and how we run the business.
Our approach is to deploy capital and to create long-term value for our shareholders. We believe that shifting to annual guidance will help to focus our operating teams and the equity market on the long-term progress that we are making rather than on quarterly variances.
Keep in mind that our variances are typically driven by volumes, which are less predictable and tend to obscure the more stable and important drivers of our business, which include ACV release. Moving on to 2025 guidance. Ongoing conversations with customers and recent economic data point to an uncertain environment for the consumer in 2025. As a result, we are cautious in our outlook for customer volumes and associated revenue. We expect total GAAP revenue to be between $326 million and $334 million compared to $316.3 million for the full year of 2024.
This represents an estimated increase of 3% to 6% year-over-year. To provide more color on how revenue will trend by solution type at the midpoint of our guidance, we expect the mortgage market to contribute approximately 18.5% of revenue for the full year 2025. To help investors understand our sensitivity to current volume levels in our mortgage lending business, we estimate that a 5% increase in our expected annual mortgage loan volumes will yield approximately a 1% increase in our annualized mortgage lending subscription revenue.
There is not a one-for-one correlation between volumes and revenue growth because only the incremental volumes for customers above their minimums convert into overage revenue and overage revenue is a fraction of the total revenue for the year. On the non-mortgage side, we expect modest growth year-over-year in data verification revenue.
Understanding these dynamics, we expect consumer lending will grow approximately 7% in 2025, driven by releasing ACV at a steady pace. In a higher for longer interest rate environment, consumer volumes are expected to be flat year-over-year. I will now describe our 4% total revenue growth at the midpoint of our guidance in terms of the revenue algorithm. One, we expect ACV release to continue contributing mid-single digits and be the single largest driver of our revenue growth in 2025. Two, we expect price and churn to continue to offset each other.
Three, we expect that volumes and the DBS customer renewal combined will be a low single-digit drag. Excluding the customer downsell, total volumes across all our products will be slightly positive year-over-year and be a neutral contribution to revenue growth. Now focusing on the adjusted EBITDA guide. For the full year 2025, we expect our adjusted EBITDA range to be between $131.5 million and $137.5 million, representing an adjusted EBITDA margin of approximately 41% at the midpoint. As revenue increases, we are investing in our product road map and go-to-market team to drive growth.
We continue to manage the business to eventually become a Rule of 50 company and are investing appropriately. Given our visibility into Q1 trends, insight from customers and recent economic data, we anticipate normal seasonality in our revenue through 2025. MeridianLink's high percentage of subscription revenue and strong quarterly ACV release give us confidence in our annual growth expectations with relatively stronger sequential revenue growth in the second half of the year. We expect our expenses to be impacted by the timing of investments that will start in Q2. These will ramp up in the second half, and there will be a modest contraction in margins.
Both R&D and sales and marketing as a percentage of revenue will increase approximately 100 bps for 2025 compared to 2024 as we invest in our product road map and go-to-market capabilities. As a result, we expect adjusted EBITDA margins to be the highest in the first quarter before slightly declining in the second half of the year. I'd like to end with how we are thinking about capital allocation going forward. To reiterate, our order of priorities is: first, investing in organic growth in areas that deliver repeatability and scale to the organization. Second, disciplined M&A.
We remain ready to execute on the right deal at the right price and have recently invested in our corporate development team. And third, repurchasing our shares when trading at a discount to intrinsic value. I'm excited to announce that in February, our Board authorized a new stock repurchase program to acquire up to $129.5 million. On this last point, I would like to comment on our stock-based compensation philosophy. In 2024, we made larger-than-usual grants as we recruited new leadership to help us scale the organization.
Our expectation is that share grants will come down in 2025. Finally, I'd like to reiterate how resilient the company has been, all thanks to the outstanding effort of our team. We ended the year strongly despite the challenges we faced because of the dedication and skill of our employees who work closely every day for the benefit of our customers.
Looking forward, we believe this is a year during which execution remains paramount, while the macro takes time to recover. As that manifests itself, we will continue investing in technology, infrastructure and sales and marketing to support future growth and scale.
With that, Nicolaas, Larry and I are happy to take any of your questions, and I'll turn it over to the operator.

Question and Answer Session

Operator

Thank you, ladies and gentlemen. We will now begin the question and answer session. (Operator Instructions)
Chris Kennedy, William Blair.

Cristopher Kennedy

Good afternoon and thanks for all the new disclosures and the new detail. When you think about the volume component, you gave good color on the mortgage, the sensitivity of the mortgage side of the business. Is there any way to think about the sensitivity on the non-mortgage component?

Elias Olmeta

It's Elias. Thanks for the question. Thank you and thank you for acknowledging that we've, improved our disclosures and we are going to continue to work on that. But at this point I am not going to be providing further disclosures around consumer, but that is something that we will keep in mind for future calls.

Cristopher Kennedy

Okay, understood. And then just talk briefly about the sustainability of your 41% even down margin target going forward, as the environment changes and as you continue to invest in sales and marketing. Thanks for taking the questions.

Elias Olmeta

Yeah, of course, we feel, look. We feel good about the 41%. As we talked about last quarter, the number to really anchor around is the 40% guidance. What's really occurring, though, is as we ramp up some of the investments that I was referencing in my color commentary, those are going to come in, in the second half of the year. So you're going to see a slightly higher and more elevated set of margins in Q1, possibly even in the first half.
And as those investments roll on to the P&L, obviously, that will put a little bit of pressure on those margins. So what you're seeing in the 41% guidance is not us signaling that it's going from 40% to 41%, rather just simply acknowledging the timing around some of the investments that we're undertaking. But we feel very good about it. We have good cost control in place and continue to be disciplined about how we deploy capital.

Cristopher Kennedy

Great, thanks for taking the questions.

Operator

Andrew Smith, Citi.

Andrew Smith

Hi guys, thank you for taking the question this evening and Good to see the stability here. Maybe just on the investments for 2025. I heard the detail around sales and marketing, but you also mentioned product infrastructure. So if you could put a finer point on where the investments are being made across the other categories outside of sales and marketing, that would be great.

Nicolaas Vlok

It's Nicolaas. Let's tackle the question in 2 sections. On the product side, our focus is on digital, digital interfaces. It's in partner infrastructure. It's also around our mortgage business where we continue to see expanded opportunity.
And then what I would call infrastructure, which kind of spans out of our product and our internal business systems, but it's around data engineering and scaling our systems to continue to scale the business in the future.

Andrew Smith

Okay. And then maybe just the next question on just the pipeline that you're seeing. Obviously, fourth quarter tends to be a higher watermark for bookings, but it was a very good quarter from a new logo perspective, you called out with some larger bank wins. So maybe just talk a little bit about what you're seeing in terms of the pipeline, the size and composition and whether you see that new logo momentum continuing?

Larry Katz

Yeah. Andrew, it's Larry. I apologize for my voice here. Look, we ended the year with a strong pipeline and feel good about the momentum coming into the first half of the year across the products.

Nicolaas Vlok

Do you want me to...

Larry Katz

Yeah, that would be great.

Nicolaas Vlok

We continue to...

Operator

This is the operator. I apologize for this inconvenience.

Nicolaas Vlok

I'm sorry, we were muted here. I answered the question to myself.

Andrew Smith

I can hear you now. No worries.

Nicolaas Vlok

Okay. Did you hear anything I said? Or do you want me to start at the beginning, Andrew?

Andrew Smith

No, it cut out when you started talking. So if you could repeat what you said, that would be great.

Nicolaas Vlok

Okay. We had a great back half of the year in terms of pipeline build, but also in sales momentum, and we continue to see that momentum continue into the '25 year, and our expectation is it will continue to be very similar in the first half. We are seeing great success with our cross-sell initiatives, specifically the momentum is building around mortgage for us and then some of our other modules on our platform. Specifically, as we think about kind of what's next and what's happening in our business from an opportunity standpoint, what we're hearing from customers and new prospects is folks are looking at making investments, especially where it helps them grow and helps them find new customers. So from our perspective, growing pipeline means we are in lockstep with our customers that's leaning in to grow members, to grow clients, grow deposits.
And we're pretty excited where the pipeline is at and where it's going.

Operator

Saket Kalia, Barclays.

Saket Kalia

Saket from Barclays. Nicolaas and Larry, maybe for you. Can we just maybe go one level deeper just into that core consumer LOS business? I think the growth there was about 9%, which is good to see. It's healthy.
Maybe the question is, how do you feel about the growth drivers in that business if you peel back the onion and the potential to sustain that growth in the future?

Nicolaas Vlok

Great question. Larry has lost his voice, so he's waving at me with answers and numbers. But we're pretty proud of the 9% consumer lending growth. And just to use your term, peel back the onion, it was driven by solid ACV release in the setting we're in. We are in a challenging macro environment.
And today, we control what we can control. We keep selling more. There's customer demand for our product, our platform. And as we kind of land that and cross-sell and accelerate new logo motion, and we believe that we can sustain the growth in that segment of the business. The demand is there as well as the team is set up to continue to release ACV at the pace that we're doing it today.

Saket Kalia

Got it. That's very helpful. Maybe for my follow-up for you, Elias. I know you said we're not going to talk about sort of new metrics here, but I was wondering, just as an update, how do you kind of think about the different consumer loan types as a percentage of that LOS business. I think in the past, maybe we've heard about sort of rough percentages coming from the overall auto loan market or used auto market.
Is there any detail you can give us just as we look back at '24 in terms of the different loan types and how they contributed?

Elias Olmeta

Happy to, I guess, give an update as it relates to a couple of the loans in the consumer. Auto is, of course, roughly half, so the single largest category within our consumer LOS. And within that, you break that down and roughly 2/3 of that is used and 1/3 of that is new, so more exposure, obviously, to the used car market. Then our non-asset-backed product categories, credit cards and personal loans are about 1/4. And then the remainder obviously makes up the balance of what's in consumer.
And just by way of update, that has not been shifting in any appreciable way.

Operator

Parker Lane, Stifel.

Matthew Kikkert

This is Matthew Kikkert on for Parker. To start, could you talk about your recent partnership with Zest AI? Curious what they're bringing incrementally to the table for you? And then also maybe some broader thoughts on your fraud product lineup and opportunity in 2025.

Nicolaas Vlok

Sounds good. This is Nicolaas again. Two questions, Zest and call it fraud. Zest has been a great partner in the marketplace for our customers and partnering with us. They're one of our, what I would call, AI decisioning partnerships that bring value to our decisioning engine.
We've integrated them pretty deeply into our platform. It's a pretty deep and wide integration with our customers. And the benefit is the customers have the ability to move to the next level of enhanced and automated decisioning if they choose to do so. And Zest has been one of our foundation partners in bringing kind of an AI approach to the platform and decisioning. In terms of fraud, we continue to find high interest in the fraud landscape.
We have a number of partnerships there, for example, SoCare and also on the Experian side. And our customers continue to lean in and they would like to move it more front of house. It's not just fraud on the lending application, but it's also fraud on when you onboard a new deposit and a new account. So we continue to invest. We continue to expand also great partnerships with some real industry leaders on the fraud side.

Matthew Kikkert

Okay. And then in your capital allocation strategy comments, you mentioned M&A second before share repurchases. Do you have any comment on maybe like particular areas of the business or the market that you would be looking to strengthen through M&A?

Nicolaas Vlok

Matthew, can you just repeat the question for a second?

Matthew Kikkert

Sure. So in the capital allocation comments that you made in the prepared remarks, you mentioned M&A is the second priority before share repurchases. So I was curious, maybe like is there a particular area that you'd be looking to make any M&A, whether in the near to midterm that would strengthen your business?

Nicolaas Vlok

Yeah. Great question. You may get a winded answer from me. We think of M&A in kind of a few different vectors. One is continue to expand the platform and continue to look at what I would call tuck-in acquisitions that build out the platform breadth and depth and give our customers that ability to work with a single vendor.
And that's a strong message we're getting from our customer base is they want to work with less vendors, and they would like to have a single hand to shake and a single neck to break. And consolidating what is a great fit into our platform is something that we're spending quite a bit of time looking at. And we've invested in capacity and also building out our M&A muscle in the company under Elias' leadership, call it, over the last 3, 4, 5 months. And we've seen quite a bit of activity evaluating opportunities in that area. And it's from kind of inbounds from bankers, from us going out into the market as well as getting deeper into, call it, what I would call our partner marketplace, where we have some tight integrations with partners.
There's also great opportunity for us to build adjacent to our platform into areas that I would say is a natural short-arm extension, and we're also evaluating that. And then lastly, I would kind of say there's transformational that you always need to take a look at, but it's something that we would do if it truly makes sense from a strategy and growth perspective. Otherwise, you should expect us to be more focused on building platform capacity through tuck-ins and very near adjacencies.

Operator

Alex Sklar, Raymond James.

Jessica Wang

This is Jessica on for Alex. I just want to congratulate you on a great quarter. And I also just want to double-click on NRR. It's impressive to see the improvement in NRR you have also, of course, part of being strong fourth quarter bookings. I was kind of curious about what are some of the drivers and factors you're seeing for this improvement?
And how sustainable do you see these factors being going forward?

Elias Olmeta

A couple of things happening as it relates to NRR and Larry and Nicolaas made reference to these. One is, obviously, we are growing our bookings, and we had a very strong ACV release year. And then on top of that, if you look at our customer counts, our customer counts while coming down, it is coming down across a segment of very small customers. And so that is pushing our NRR upwards. And as we head into 2025, I certainly think that is sustainable and they're going to be growing as we continue to work on releasing ACV.
And to the extent that there's volume, there could be upside to that. But those are really the drivers of our NRR.

Jessica Wang

Got it. And just like a really quick follow-up. Do you kind of see churn as maybe having peaked already? Or do you still having more of a holding position on the situation as to whatever develops in the macro environment?

Elias Olmeta

Obviously, the macro impacts it. And so we're watching that very carefully. What I would point you to is, I guess I'd make a few comments. One is that churn as it relates to consumer, we think, is roughly where we would expect it to be. Mortgage remains slightly elevated.
But as we head into 2025, you see the flip in our mortgage lending business changing, flipping from negative 7% to about 8% and that is really just a function of the fact that amongst other things, churn is going to be diminishing as well as there was some onetime items that we lapped in Q4 of 2023.

Operator

All right. So there are no further questions at this time. Ladies and gentlemen, today's conference call has concluded. Thank you for your participation. You may now disconnect.