Why did MLNK's Q1 2024 earnings fall short of forecasts?

MeridianLink's (MLNK) Q1 2024 earnings fell short of forecasts due to several key factors: 1. **Economic Challenges and Uncertainties**: MeridianLink faced economic uncertainties and challenges in consumer confidence, which impacted its growth outlook. These factors can lead to decreased demand for its services or increased costs, affecting profitability. 2. **Operational Costs and Expenses**: The company reported an increase in general and administrative expenses due to increased legal and advisory fees. Such increases can squeeze profit margins if revenue growth does not keep pace. 3. **Strategic Investments and Downsell**: MeridianLink made strategic investments for future growth, which can temporarily strain financial performance. Additionally, the company experienced a downsell with a large data verification customer, reducing annual revenue by approximately $6 million. Downsell, or a decrease in average deal size, can negatively impact revenue growth. 4. **Interest Expense and Valuation Allowance**: The company faced increased interest expense and had to provide a $5.2 million valuation allowance provision, which contributed to the net loss. In summary, MeridianLink's Q1 2024 earnings were affected by economic challenges, increased operational costs, strategic investments, and downsell, leading to a shortfall compared to forecasts.