Alkami Technology, Inc.
ALKT Technology Q4 2024
Document 1
Exhibit 99.1
Alkami Announces Fourth Quarter 2024 Financial Results
Alkami Today Also Announced Its Intent to Acquire MANTL
PLANO, Texas, February 27, 2025 (PRNewswire) -- Alkami Technology, Inc. (Nasdaq: ALKT) (“Alkami”), a leading cloud-based digital banking solutions provider for financial institutions (FIs) in the U.S., today announced results for its fourth quarter ending December 31, 2024.
Fourth Quarter 2024 Financial Highlights
•GAAP total revenue of $89.7 million, an increase of 25.6% compared to the year-ago quarter;
•GAAP gross margin of 59.3%, compared to 56.0% in the year-ago quarter;
•Non-GAAP gross margin of 63.1%, compared to 60.3% in the year-ago quarter;
•GAAP net loss of $(7.6) million, compared to $(12.7) million in the year-ago quarter; and
•Adjusted EBITDA of $10.2 million, compared to $3.1 million in the year-ago quarter.
Full Year 2024 Financial Highlights
•GAAP total revenue of $333.8 million, an increase of 26.1% compared to 2023;
•GAAP gross margin of 58.9%, compared to 54.4% in 2023;
•Non-GAAP gross margin of 62.7%, compared to 59.0% in 2023;
•GAAP net loss of $(40.8) million, compared to $(62.9) million in 2023; and
•Adjusted EBITDA of $26.9 million compared to $(1.6) million in 2023.
Alkami also announced today the signing of a definitive agreement to acquire Fin Technologies, Inc. (“MANTL”) for an enterprise value of $400 million, on a debt free, cash free basis and subject to customary purchase price adjustments, expected to be $7 million. Alkami plans to fund the acquisition with cash of approximately $380 million and restricted stock units issued to continuing MANTL employees with an estimated value of $13 million at transaction closing in replacement for unvested compensatory stock options. MANTL is the premier onboarding and account opening solution that allows financial institutions to acquire commercial, business and retail customers through any channel for virtually any deposit account type. MANTL combined with Alkami’s digital banking platform and marketing and analytic capabilities creates the industry leading digital sales and service platform for financial institutions.
Comments on the News
Alex Shootman, Chief Executive Officer, said, “In the fourth quarter, we continued to deliver strong growth and enhanced profitability, with revenue growth of over 25% and Adjusted EBITDA of $10.2 million. This capped a year that saw revenue growth of 26% and our first full year of positive Adjusted EBITDA. We also continued to expand our client portfolio, adding an additional seven banks in the fourth quarter.”
Shootman added, “We also announced today that we signed a definitive agreement to acquire MANTL, the premier onboarding and account opening solution. MANTL is unique in that it offers a multi-tenant, core-agnostic, single platform that enables FIs to support all channels in onboarding deposit accounts, including branch, call center and digital. With this acquisition, Alkami solidifies its position as the de facto digital sales and service platform in the industry, allowing FIs to onboard, engage, and grow their account base. This creates a tremendous opportunity for us to expand market share and generate cross sell within our client base, driving additional revenue growth and enhancing our competitive offering among financial institutions.”
Bryan Hill, Chief Financial Officer, said, “In 2024, we added 2.5 million registered users to our digital banking platform, ending the year with 20 million digital banking users. We exited 2024 with annual recurring revenue of $356 million, up 22% compared to December 31, 2023 and revenue per registered user of $17.81, up 7% compared to the year-ago quarter. Our remaining performance obligation reached $1.4 billion at December 31, 2024, providing substantial visibility into our future operating and financial performance. In addition, we are thrilled to welcome MANTL to the Alkami team. We believe MANTL will be accretive to Alkami’s overall revenue growth and gross margin expansion, and we expect the impact of the acquisition to be accretive to Adjusted EBITDA in 2026, allowing Alkami to meet or exceed its long-term financial targets.”
2025 Financial Outlook
The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement Regarding Forward-Looking Statements.” Alkami’s financial outlook is based on current expectations, and includes the impact of the MANTL acquisition.
Alkami is providing guidance for its first quarter ending March 31, 2025 of:
•GAAP total revenue in the range of $93.5 million to $95.0 million;
•Adjusted EBITDA in the range of $9.5 million to $10.5 million.
Alkami is providing guidance for its fiscal year ending December 31, 2025 of:
•GAAP total revenue in the range of $440.0 million to $445.0 million;
•Adjusted EBITDA in the range of $47.0 million to $51.0 million.
The completion of the MANTL acquisition remains subject to certain standard conditions, and is expected to close on or before March 31, 2025. As such, starting in the second quarter of 2025 and included in Alkami’s full year guidance, Alkami expects MANTL to contribute revenue of approximately $30 million and an Adjusted EBITDA loss of $5 million to its 2025 full-year financial performance. Alkami expects MANTL's annual recurring revenue under contract at December 31, 2025 to be approximately $60 million, which represents a year-over-year growth rate of over 30%.
Conference Call Information
The Company will host a conference call at 5:00 p.m. ET today to discuss its financial results with investors. A live webcast of the event will be available on the Alkami investor relations website at investors.alkami.com. In addition, a live dial-in will be available domestically at 1-800-836-8184 and internationally at 1-646-357-8785, using passcode 39894. The webcast replay will be available on the Alkami investor relations website.
About Alkami
Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in the United States that enables clients to grow confidently, adapt quickly, and build thriving digital communities. Alkami helps clients transform through retail and business banking, digital account opening, payment security, and data and marketing solutions. To learn more, visit www.alkami.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking” statements relating to Alkami Technology, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its future cash flows and its financial outlook. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: Our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients’ use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital and other factors described in the Company’s filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Explanation of Non-GAAP Financial Measures and Key Business Metrics
The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in both frequency and impact on continuing operations. The company also uses results of operations excluding such items to evaluate the operating performance of Alkami and compare it against prior periods, make operating decisions, determine executive compensation, and serve as a basis for long-term strategic planning. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that Alkami believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts
find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors.
The company defines “Non-GAAP Cost of Revenues” as cost of revenues, excluding (1) amortization and (2) stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Gross Margin” as gross profit, plus (1) amortization and (2) stock-based compensation expense, all divided by revenue. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Research and Development Expense” as research and development expense, excluding stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.
The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.
The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding (1) stock-based compensation expense and (2) secondary offering costs. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.
The company defines “Non-GAAP Income (loss) before income taxes” as loss before income taxes, plus (1) gain on financial instruments, (2) amortization, (3) stock-based compensation expense, (4) secondary offering costs, and (5) acquisition-related expenses. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Adjusted EBITDA” as net loss plus (1) provision (benefit) for income taxes, (2) gain on financial instruments, (3) interest income, net, (4) depreciation and amortization (5) stock-based compensation expense, (6) secondary offering costs, (7) acquisition-related expenses, and (8) loss on extinguishment of debt. The company believes adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.
In addition, the Company also uses the following important operating metrics to evaluate its business:
The company defines “Annual Recurring Revenue (ARR)” by aggregating annualized recurring revenue related to SaaS subscription services recognized in the last month of the reporting period as well as the next 12 months of expected implementation services revenues in the last month of the reporting period. We believe ARR provides important information about our future revenue potential, our ability to acquire new clients, and our ability to maintain and expand our relationship with existing clients.
The company defines “Registered Users” as an individual or business related to an account holder of an FI client on our digital banking platform who has registered to use one or more of our solutions and has current access to use those solutions as of the last day of the reporting period presented. We price our digital banking platform based on the number of registered users, so as the number of registered users of our digital banking platform increases, our ARR grows. We believe growth in the number of registered users provides important information about our ability to expand market adoption of our digital banking platform and its associated software products, and therefore to grow revenues over time.
The company defines “Revenue per Registered User (RPU)” by dividing ARR for the reporting period by the number of registered users as of the last day of the reporting period. We believe RPU provides important information about our ability to grow the number of software products adopted by new clients over time, as well as our ability to expand the number of software products that our existing clients add to their contracts with us over time.
The company does not provide a reconciliation of our adjusted EBITDA outlook to GAAP net loss because certain significant information required for such reconciliation is not available without unreasonable efforts, including provision for income taxes, loss on financial instruments, stock-based compensation expense, and acquisition-related expenses, net, all of which may be significant.
| ALKAMI TECHNOLOGY, INC. | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (In thousands, except share and per share data) | |||||||||||
| (UNAUDITED) | |||||||||||
| December 31, | December 31, | ||||||||||
| 2024 | 2023 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 94,359 | $ | 40,927 | |||||||
| Marketable securities | 21,375 | 51,196 | |||||||||
| Accounts receivable, net | 38,739 | 35,499 | |||||||||
| Deferred costs, current | 13,207 | 10,329 | |||||||||
| Prepaid expenses and other current assets | 13,697 | 10,634 | |||||||||
| Total current assets | 181,377 | 148,585 | |||||||||
| Property and equipment, net | 22,075 | 16,946 | |||||||||
| Right-of-use assets | 14,565 | 15,754 | |||||||||
| Deferred costs, net of current portion | 37,178 | 30,734 | |||||||||
| Intangibles, net | 29,021 | 35,807 | |||||||||
| Goodwill | 148,050 | 148,050 | |||||||||
| Other assets | 5,011 | 3,949 | |||||||||
| Total assets | $ | 437,277 | $ | 399,825 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 6,129 | $ | 7,478 | |||||||
| Accrued liabilities | 24,520 | 19,763 | |||||||||
| Deferred revenues, current portion | 13,578 | 10,984 | |||||||||
| Lease liabilities, current portion | 1,343 | 1,205 | |||||||||
| Total current liabilities | 45,570 | 39,430 | |||||||||
| Deferred revenues, net of current portion | 15,526 | 15,384 | |||||||||
| Deferred income taxes | 1,822 | 1,713 | |||||||||
| Lease liabilities, net of current portion | 17,109 | 18,052 | |||||||||
| Other non-current liabilities | 220 | 305 | |||||||||
| Total liabilities | 80,247 | 74,884 | |||||||||
| Stockholders’ Equity | |||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of December 31, 2024 and 2023 | — | — | |||||||||
Common stock, $0.001 par value, 500,000,000 shares authorized; and 102,088,783 and 96,722,098 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 102 | 97 | |||||||||
| Additional paid-in capital | 833,129 | 760,210 | |||||||||
| Accumulated deficit | (476,201) | (435,366) | |||||||||
| Total stockholders’ equity | 357,030 | 324,941 | |||||||||
| Total liabilities and stockholders' equity | $ | 437,277 | $ | 399,825 | |||||||
| ALKAMI TECHNOLOGY, INC. | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||
Three months ended December 31, | Year ended December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenues | $ | 89,656 | $ | 71,369 | $ | 333,849 | $ | 264,831 | |||||||||||||||
Cost of revenues(1) | 36,446 | 31,420 | 137,219 | 120,720 | |||||||||||||||||||
| Gross profit | 53,210 | 39,949 | 196,630 | 144,111 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 25,349 | 21,491 | 96,211 | 84,661 | |||||||||||||||||||
| Sales and marketing | 14,552 | 11,863 | 59,765 | 48,557 | |||||||||||||||||||
| General and administrative | 21,576 | 19,292 | 83,650 | 72,900 | |||||||||||||||||||
| Acquisition-related expenses | — | 43 | 195 | 263 | |||||||||||||||||||
| Amortization of acquired intangibles | 359 | 359 | 1,435 | 1,435 | |||||||||||||||||||
| Total operating expenses | 61,836 | 53,048 | 241,256 | 207,816 | |||||||||||||||||||
| Loss from operations | (8,626) | (13,099) | (44,626) | (63,705) | |||||||||||||||||||
| Non-operating income (expense): | |||||||||||||||||||||||
| Interest income | 1,070 | 2,273 | 4,560 | 8,095 | |||||||||||||||||||
| Interest expense | (134) | (1,870) | (461) | (7,384) | |||||||||||||||||||
| Gain on financial instruments | — | 113 | — | 534 | |||||||||||||||||||
| Loss on extinguishment of debt | — | (409) | — | (409) | |||||||||||||||||||
| Loss before income taxes | (7,690) | (12,992) | (40,527) | (62,869) | |||||||||||||||||||
| Provision (benefit) for income taxes | (47) | (279) | 308 | 44 | |||||||||||||||||||
| Net loss | $ | (7,643) | $ | (12,713) | $ | (40,835) | $ | (62,913) | |||||||||||||||
| Net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | $ | (0.08) | $ | (0.13) | $ | (0.41) | $ | (0.67) | |||||||||||||||
| Weighted average number of shares of common stock outstanding: | |||||||||||||||||||||||
| Basic and diluted | 101,057,260 | 95,871,058 | 98,892,692 | 94,080,797 | |||||||||||||||||||
(1) Includes amortization of acquired technology of $1.3 million and $1.4 million for the three months ended December 31, 2024 and 2023, respectively, and $5.4 million for both the years ended December 31, 2024 and 2023.
| ALKAMI TECHNOLOGY, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (In thousands) | |||||||||||
| (UNAUDITED) | |||||||||||
Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
Net loss | $ | (40,835) | $ | (62,913) | |||||||
Adjustments to reconcile net loss to net cash provide by (used in) operating activities: | |||||||||||
| Depreciation and amortization expense | 10,508 | 10,631 | |||||||||
| Accrued interest on marketable securities, net | (1,075) | (3,231) | |||||||||
| Stock-based compensation expense | 59,437 | 51,231 | |||||||||
| Amortization of debt issuance costs | 210 | 138 | |||||||||
| Gain on financial instruments | — | (532) | |||||||||
| Loss on extinguishment of debt | — | 409 | |||||||||
| Gain on lease modification | — | (375) | |||||||||
| Deferred taxes | 109 | (32) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (3,240) | (9,253) | |||||||||
| Prepaid expenses and other assets | (3,972) | 425 | |||||||||
| Accounts payable and accrued liabilities | 3,322 | 91 | |||||||||
| Deferred costs | (8,603) | (7,720) | |||||||||
| Deferred revenues | 2,736 | 3,629 | |||||||||
| Net cash provided by (used in) operating activities | 18,597 | (17,502) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of marketable securities | (40,416) | (140,816) | |||||||||
| Proceeds from sales, maturities, and redemptions of marketable securities | 71,312 | 181,019 | |||||||||
| Purchases of property and equipment | (1,195) | (1,058) | |||||||||
| Capitalized software development costs | (6,660) | (5,234) | |||||||||
| Net cash provided by investing activities | 23,041 | 33,911 | |||||||||
| Cash flows from financing activities: | |||||||||||
| Principal payments on debt | — | (85,000) | |||||||||
| Payment of holdback funds from acquisition | — | (3,600) | |||||||||
| Payments for taxes related to net settlement of equity awards | (12,820) | (15,985) | |||||||||
| Proceeds from stock option exercises | 20,241 | 12,983 | |||||||||
| Proceeds from Employee Stock Purchase Plan issuances | 4,736 | 4,124 | |||||||||
| Debt issuance costs paid | (363) | (341) | |||||||||
| Net cash provided by (used in) financing activities | 11,794 | (87,819) | |||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 53,432 | (71,410) | |||||||||
| Cash and cash equivalents and restricted cash, beginning of period | 40,927 | 112,337 | |||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 94,359 | $ | 40,927 | |||||||
| ALKAMI TECHNOLOGY, INC. | |||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP total revenues | $ | 89,656 | $ | 71,369 | $ | 333,849 | $ | 264,831 | |||||||||||||||
| December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Annual Recurring Revenue (ARR) | $ | 355,874 | $ | 291,049 | |||||||||||||||||||
| Registered Users | 19,984 | 17,502 | |||||||||||||||||||||
| Revenue per Registered User (RPU) | $ | 17.81 | $ | 16.63 | |||||||||||||||||||
| Non-GAAP Cost of Revenues | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP Cost of Revenues.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP cost of revenues | $ | 36,446 | $ | 31,420 | $ | 137,219 | $ | 120,720 | |||||||||||||||
| Amortization | (1,926) | (1,656) | (7,389) | (6,579) | |||||||||||||||||||
| Stock-based compensation expense | (1,434) | (1,444) | (5,366) | (5,584) | |||||||||||||||||||
| Non-GAAP cost of revenues | $ | 33,086 | $ | 28,320 | $ | 124,464 | $ | 108,557 | |||||||||||||||
| Non-GAAP Gross Margin | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP Gross Margin.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP gross margin | 59.3 | % | 56.0 | % | 58.9 | % | 54.4 | % | |||||||||||||||
| Amortization | 2.2 | % | 2.3 | % | 2.2 | % | 2.5 | % | |||||||||||||||
| Stock-based compensation expense | 1.6 | % | 2.0 | % | 1.6 | % | 2.1 | % | |||||||||||||||
| Non-GAAP gross margin | 63.1 | % | 60.3 | % | 62.7 | % | 59.0 | % | |||||||||||||||
| Non-GAAP Research and Development Expense | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP Research and Development Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP research and development expense | $ | 25,349 | $ | 21,491 | $ | 96,211 | $ | 84,661 | |||||||||||||||
| Stock-based compensation expense | (4,533) | (4,141) | (17,279) | (15,995) | |||||||||||||||||||
| Non-GAAP research and development expense | $ | 20,816 | $ | 17,350 | $ | 78,932 | $ | 68,666 | |||||||||||||||
| Non-GAAP Sales and Marketing Expense | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP Sales and Marketing Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP sales and marketing expense | $ | 14,552 | $ | 11,863 | $ | 59,765 | $ | 48,557 | |||||||||||||||
| Stock-based compensation expense | (2,400) | (1,911) | (9,049) | (7,220) | |||||||||||||||||||
| Non-GAAP sales and marketing expense | $ | 12,152 | $ | 9,952 | $ | 50,716 | $ | 41,337 | |||||||||||||||
| Non-GAAP General and Administrative Expense | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP General and Administrative Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP general and administrative expense | $ | 21,576 | $ | 19,292 | $ | 83,650 | $ | 72,900 | |||||||||||||||
| Stock-based compensation expense | (7,248) | (5,821) | (27,743) | (22,432) | |||||||||||||||||||
| Secondary offering costs | (527) | — | (1,337) | — | |||||||||||||||||||
| Non-GAAP general and administrative expense | $ | 13,801 | $ | 13,471 | $ | 54,570 | $ | 50,468 | |||||||||||||||
| Non-GAAP Income (Loss) Before Income Taxes | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Non-GAAP Income (Loss) Before Income Taxes.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP loss before income taxes | $ | (7,690) | $ | (12,992) | $ | (40,527) | $ | (62,869) | |||||||||||||||
| Gain on financial instruments | — | (113) | — | (534) | |||||||||||||||||||
| Amortization | 2,285 | 2,015 | 8,824 | 8,014 | |||||||||||||||||||
| Stock-based compensation expense | 15,615 | 13,317 | 59,437 | 51,231 | |||||||||||||||||||
| Secondary offering costs | 527 | — | 1,337 | — | |||||||||||||||||||
| Acquisition-related expenses | — | 43 | 195 | 263 | |||||||||||||||||||
| Non-GAAP Income (loss) before income taxes | $ | 10,737 | $ | 2,270 | $ | 29,266 | $ | (3,895) | |||||||||||||||
| Adjusted EBITDA | |||||||||||||||||||||||
| Set forth below is a presentation of the company’s “Adjusted EBITDA.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| GAAP net loss | $ | (7,643) | $ | (12,713) | $ | (40,835) | $ | (62,913) | |||||||||||||||
| Provision (benefit) for income taxes | (47) | (279) | 308 | 44 | |||||||||||||||||||
| Gain on financial instruments | — | (113) | — | (534) | |||||||||||||||||||
| Interest income, net | (936) | (403) | (4,099) | (711) | |||||||||||||||||||
| Depreciation and amortization | 2,654 | 2,790 | 10,508 | 10,631 | |||||||||||||||||||
| Stock-based compensation expense | 15,615 | 13,317 | 59,437 | 51,231 | |||||||||||||||||||
| Secondary offering costs | 527 | — | 1,337 | — | |||||||||||||||||||
| Acquisition-related expenses | — | 43 | 195 | 263 | |||||||||||||||||||
| Loss on extinguishment of debt | — | 409 | — | 409 | |||||||||||||||||||
| Adjusted EBITDA | $ | 10,170 | $ | 3,051 | $ | 26,851 | $ | (1,580) | |||||||||||||||
Investor Relations Contact
Steve Calk
Media Relations Contacts
Marla Pieton
Valerie Kerner
Document 420
Alkami Technology, Inc. Proprietary Information. Alkami Technology Fourth Quarter 2024
2 © A lk am i T ec h n o lo gy , I n c. This presentation contains “forward-looking” statements relating to Alkami Technology, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its future cash flows and its financial outlook. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: Our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients’ use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital and other factors described in the Company’s filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in both frequency and impact on continuing operations. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that Alkami believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors. Cautionary Statement Regarding Forward-Looking Statements
3 © A lk am i T ec h n o lo gy , I n c. Combination Expected to Position Alkami as Premier Digital Banking Provider Expands Market Position Expected to position Alkami as a leader in digital sales and service platform Unlocks and expands TAM Onboard + Engage + Grow strategy drives competitive advantage Proven ability to leverage acquisitions (ACH Alert, Segmint) Stimulates GTM Strategy Minimal overlap with existing Alkami clients Significant Cross-Sell Opportunity Expected to be accretive to Alkami growth Attractive Financial Profile Commitment to empowering regional & community financial institutions Client as North Star Shared Culture of Innovation
4 © A lk am i T ec h n o lo gy , I n c. C o n fi d en ti al Alkami Digital Sales & Service Platform Digital Banking Engage users with an intuitive experience that simplifies self service Data & Marketing Leverage data from digital banking and core to target relevant products and services Onboarding & Account Opening Onboard new account holders and/or additional accounts for existing customers or members 50K demographic & psychographic tags and 12 AI predictive models to acquire customers and cross-sell products Awarded “Best Banking App” by Tearsheet in 2024 and the fastest-growing among all banks and credit unions combined Core-agnostic, omnichannel onboarding and account opening that supports virtually all deposit types, segments, and roles
5 © A lk am i T ec h n o lo gy , I n c. Partner Ecosystem Data & Marketing Security & Fraud Billing & Receivables Financial Wellness Card Management Commercial Services Extends Alkami’s Compelling Product and Customer Footprint Sales Channel Retail Account Opening Business Account Opening Customer LOS Business LOS Card Experience Money Movement ● The #1 retail banking platform ● Consumer and business ● Omnichannel account opening ● Accelerated entrance into LOS market Marketing Data Insights SHARED Strength ALKAMI Strength MANTL Strength Service Channel ● The best data and market platform ● Land and expand to grow relationships ● Driving higher attach rates, wallet share ● Enhancing customer stickiness Clients Client Type Banks Credit Unions Consumer / Retail Business / Corporate ● Proven playbook in CU market ● Accelerated push into bank market ● Consumer and business banking needs FinTech Partners Branch Manager
6 © A lk am i T ec h n o lo gy , I n c. Who We Are • Cloud-based digital banking platform serving U.S. financial institutions What We Do • Empower FIs to grow, drive user engagement and improve operational efficiency • Leverage broad product set enabling retail and commercial banking How We Do It • Powerful, scalable technology stack • Modern architecture, multi-tenant • Continuous integration, delivery and deployment Who We Serve • Community, regional and super-regional FIs Alkami Technology, Inc. We enable FIs to effectively compete with larger, more technologically advanced and well-resourced competitors Financial Institutions Digital Banking Consumer and Commercial Users FinTech Partners
7 © A lk am i T ec h n o lo gy , I n c. U.S. Digital Banking User Distribution Users in millions by asset range, including megabanks Source: FI Navigator, December 2023
8 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market: User Characteristics 250M+ digital users, excluding megabanks Total market digital users growing 5-8% historically, driven by: ● Increasing number of accounts per customer ● Ease of new account opening via digital tools ● Demographics, including post-COVID shift to ex-urban areas, decline in unbanked and underbanked customers Digital user growth historically uncorrelated with contraction in branches or number of FIs Addressable Market = FIs with assets from $100M to $450B, representing 250M+ digital users Legacy Providers include Fiserv, FIS, JKHY, DI and other small or point solutions Sources: SEC filings, NCUA, FDIC, FI Navigator, Cornerstone Advisors and Alkami internal research Legacy Providers: 210M+ Historical User Growth: 5-8% Competitor: 24.7M User Growth: 12% Alkami: 20.0M User Growth: 14%
9 © A lk am i T ec h n o lo gy , I n c. Go-To-Market Cadence We focus on the top 2,500 FIs excluding the megabanks Industry average contract length is 5 years, translating to approximately 500 contracts up for renewal annually 500 Annual Renewals 2,500 Target Clients v 9,000+ FIs Over 9,000 FIs in the United States• Sales team drives outbound lead generation, cross selling and account management • Client success team supports retention and deepens the relationships with our clients Highly targeted annual renewal class allows us to focus sales resources Note: Excludes financial institutions with assets greater than $450B
10 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market Growing healthy $14 billion TAM Total Addressable Market • 250M digital users x $58 ARPU • Digital users growing 5% to 8% annually • 30+ products today vs. 9 in 2015 Core Platform • 250M digital users x $35 ARPU • Existing client digital penetration of <80% expected to converge to near 100% DOA/LOS • Acquired Q3 2021 - Digital Account Opening and Unsecured Loan Origination ACH Alert • Acquired Q4 2020 - Fraud Prevention Segmint • Acquired Q2 2022 - Managed Marketing & AI 250M users represents FIs with assets between $100M and $450B Sources: NCUA, FDIC, FI Navigator, Cornerstone Advisors and Alkami internal research
11 © A lk am i T ec h n o lo gy , I n c. Multiple Levers Driving Growth ● Clients driven by new logo wins, historically among credit unions, with a growing presence among banks ● Registered users grow as we add new logos and as clients add users ● RPU driven by product penetration at initial sale and by add on sales, and is offset by volume discounts as existing clients add users Note: RPU and ARR include subscription and recurring implementation services revenue
12 © A lk am i T ec h n o lo gy , I n c. Alkami’s Digital Sales & Service Platform Onboard Engage Grow Guard Sales Service Digital Account Opening Marketing Data Insights Card Experience Customer Service Business Banking Financial Wellness Security & Fraud Protection Money Movement Extensibility Comprehensive digital banking to help FIs manage costs and remain competitive
13 © A lk am i T ec h n o lo gy , I n c. Product Strategy ● Lead with UX ● Deepen integrations with cores & third party systems ● Hyperfocus on Commercial Banking & DAO ● Data Integrity ● Integrating Flux, Segmint and Digital Banking further ● Monetizing data ● Streamlined, trackable and performant APIs ● Enhanced SDK to enable easier customization ● Developer Portal MVP Data Services Platform ServicesDigital Banking The Three Product Pillars
14 © A lk am i T ec h n o lo gy , I n c. How We Achieve Our Long-term Objectives Market Leadership Maintain Strong Credit Union Position Grow Bank Mindshare and Capabilities Drive Add-On Sales Scale and Continued Cost Discipline Continuous Product and Platform Improvement
Alkami Technology, Inc. Proprietary Information. Financial Overview
16 © A lk am i T ec h n o lo gy , I n c. Q4 2024 Financial Performance $M ● Q4’24 revenue growth of 26% driven by new clients, existing client user growth and ARPU growth ● GM expansion consistent with our plan to increase GM 200-300 bps per year through 2026 ● Adjusted EBITDA expansion driven by continued scale and efficiencies in Research & Development, Sales & Marketing and General & Administrative Note: Gross margin % on a non-GAAP basis
17 © A lk am i T ec h n o lo gy , I n c. Operating and Financial Highlights Q4 2024 $356M ARR Subscription Revenue Mix as of 12/31/24 96% Subscription Revenue 12/31/24 113% Net Dollar Retention Remaining Performance Obligation as of 12/31/24 $1.4B RPO Digital Banking Clients 272 Q4 2024 236 Q4 2023 Registered Users 20.0M17.5M Q4 2024Q4 2023 ● Signed 12 new digital banking platform clients in Q4 ● Implemented 8 clients in Q4, bringing digital platform client count to 272 ● 39 new clients in implementation backlog, representing 1.3M digital users ● Exited Q4 with 20.0M registered users, up 2.5M or 14%. Drivers: (i) FIs implemented in last twelve months represent 1.2M registered users and (ii) existing clients increased their registered users by 1.3M ● Increased ARR 22% to $356M ● Remaining performance obligation reached $1.4B representing 3.8 times live ARR and was 20% higher than a year ago ● LTM churn less than 1% vs long-term expected annual churn modeled at 2-3%
18 © A lk am i T ec h n o lo gy , I n c. Client Base Expansion 2020 151 177 199 236 37 57 67 89 2021 2022 2023 ARR growth driven by larger new logos and increased product penetration 272 104 2024 Total Digital Banking Platform Clients Clients with ARR > $1M
19 © A lk am i T ec h n o lo gy , I n c. Technology Demand and Product Expansion Drive ARR Cohort ARR Expansion Via User Growth and Cross-Sell Success ARR Expansion Drivers ● Long-term contracts ● Escalating contract minimums ● Gross client retention ● Growth in digital user adoption ● Product cross-sell As of 12/31/24
20 © A lk am i T ec h n o lo gy , I n c. Strong Historical Revenue Growth $M
21 © A lk am i T ec h n o lo gy , I n c. Gross Margin Expansion Driven by Scale and Efficiency $M
22 © A lk am i T ec h n o lo gy , I n c. Best-in-Class GTM Efficiency ● Long-term contract structure reduces annual GTM motion ● Alkami models annual client retention of 97% - 98% ● 2026E reflects continued growth in S&M spend related to bank market expansion and increased product depth ● Historical high sales team productivity and GTM efficiency; LTM increase in ARR to S&M expense of ~1.3x, among the best in SaaS ● Continued GTM efficiency driven by cross-sale success and upsell opportunities from user growth among our existing client base
23 © A lk am i T ec h n o lo gy , I n c. Clear Path to Manage Equity Dilution
24 © A lk am i T ec h n o lo gy , I n c. 2025 Financial Guidance
25 © A lk am i T ec h n o lo gy , I n c. Attractive Long-Term Profile Expect margin improvement through scale, product mix and operational efficiency
26 © A lk am i T ec h n o lo gy , I n c. Selected Historical Data 2021 2022 2023 2024 Digital banking platform clients 177 199 236 272 Growth % 12% 19% 15% Digital banking platform users (M) 12.4 14.5 17.5 20.0 Growth % 18% 20% 10% Live ARR ($M) $ 169.0 $ 226.1 $ 291.0 $ 355.9 Growth % 34% 29% 22% RPU $ 13.68 $ 15.55 $ 16.63 $ 17.81 Growth % 14% 7% 7% RPO ($M) $ 652 $ 893 $ 1,140 $ 1,366 Growth % 37% 28% 20% Notes: Segmint acquisition completed in Q2’22, driving one-time increase in RPU Q3’24 growth compares to Q3’23
27 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)
28 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)
29 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)
Document 1
Exhibit 99.3
Alkami to Acquire MANTL to Expand Account Opening Capabilities
Combination Creates Powerhouse Digital Sales and Service Platform
PLANO, Texas, February 27, 2025 (PRNewswire) -- Alkami Technology, Inc. (Nasdaq: ALKT) (“Alkami”), a leading cloud-based digital banking solutions provider for financial institutions in the U.S., today announced that it signed a definitive agreement to acquire Fin Technologies, Inc. (“MANTL”) for an enterprise value of $400 million, on a debt free, cash free basis and subject to customary purchase price adjustments, expected to be $7 million. Alkami plans to fund the acquisition with cash of approximately $380 million and restricted stock units issued to continuing MANTL employees with an estimated value of $13 million at transaction closing in replacement for unvested compensatory stock options.
MANTL is the premier account opening solution that allows financial institutions to acquire commercial, business and retail customers through any channel for virtually any deposit account type. MANTL, combined with Alkami’s Digital Banking and Data & Marketing Solutions, creates the industry-leading digital sales and services platform for financial institutions.
MANTL is unique in that it offers a multi-tenant, core-agnostic, single platform that enables financial institutions to support all channels in opening deposit accounts, including in-branch, call center and digital. MANTL automates the account opening process for virtually all deposit account types and roles, and transforms the process across a financial institution’s entire operation, including front-, middle-, and back-office. MANTL has 112 financial institution clients live on its platform ranging in size from $80 million to over $20 billion in assets.
Founded in 2016 by Nathaniel Harley and Benjamin Conant, MANTL has helped its clients raise over $31 billion in deposits while saving employees over 350,000 hours through automation and process transformation. Financial institutions that use MANTL experience a median retail account opening time of under five minutes, three times faster than the national benchmark. For business accounts, the median account opening experience is less than 10 minutes compared to an industry average of 3.5 hours. On average, 85% of applications receive an automated decision, vastly improving the efficiency of the financial institution.
With the acquisition of MANTL, Alkami solidifies its position as the de facto digital sales and service platform in the industry, allowing financial institutions to onboard, engage and grow their account base. Alkami is already a leader in engagement. Its digital banking solution was awarded “Best Banking App” by Tearsheet in 2024, and is the fastest-growing digital banking platform among all U.S. financial institutions. Alkami also has the premier solution for growth. Its data and marketing capabilities are purpose-built for financial institutions and provide 50,000 descriptive data tags and a dozen AI predictive models trained on analyzing more than 18 billion core transactions to improve cross-selling efforts, increase revenue and reduce churn. MANTL addresses one of the paramount concerns of financial institutions - onboarding new customers with speed, security and ease and deepening share-of-wallet with existing clients.
Alex Shootman, Alkami Chief Executive Officer said, “MANTL is a leader in account opening, allowing financial institutions to boost deposit growth with a higher application conversion, higher initial funding, and less fraud than competitive alternatives. And, when combined with Alkami’s strengths in digital banking and data and marketing, it completes the Alkami Digital Sales & Service Platform, our solution to help financial institutions land and expand the account holder relationship and create competitive advantage.”
Shootman continued, “This business combination creates a tremendous opportunity for Alkami to expand market share and generate cross sell within its client base, driving additional revenue growth and enhancing our competitive offering among financial institutions. We are thrilled to welcome the MANTL team to Alkami and look forward to leveraging our collective capabilities to serve financial institutions.”
“Since we founded MANTL nine years ago, our mission has remained constant: build technology that creates an equitable banking landscape where community financial institutions can not only survive but thrive," said Nathaniel Harley, MANTL co-founder and Chief Executive Officer. "We are excited to join the Alkami family, a move which sets MANTL on a path to deliver even greater value to our clients and the banking industry at large.”
Alkami plans to provide commentary on the acquisition during its fourth quarter 2024 earnings call on February 27, 2025. The completion of the MANTL acquisition remains subject to certain standard conditions, and is expected to close on or before March 31, 2025.
Conference Call
Alkami will host a conference call at 5:00 p.m. ET on February 27, 2025 to discuss its fourth quarter 2024 financial results and the MANTL acquisition with investors. A live webcast of the event will be available on the Alkami investor relations website at investors.alkami.com. In addition, a live dial-in will be available domestically at 1-800-836-8184 and internationally at 1-646-357-8785, using conference code 39894. The webcast replay will be available on the Alkami investor relations website.
About Alkami
Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in the United States that enables clients to grow confidently, adapt quickly, and build thriving digital communities. Alkami helps clients transform through retail and business banking, digital account opening, payment security, and data and marketing solutions. To learn more, visit www.alkami.com.
About MANTL
MANTL is a financial technology firm offering unified account origination technology that empowers banks and credit unions to seamlessly open deposit accounts on any banking channel in real time. MANTL Deposit Origination is among the fastest and most performant solutions on the market; consumers can open a new deposit account in under three minutes, businesses can open a new deposit account in under 10 minutes, and MANTL customers raise billions in core deposits each month. Founded
in 2016, MANTL is a privately held company headquartered in New Jersey with the backing of prominent venture capital investors. For more information, visit mantl.com or follow MANTL on LinkedIn.
Investor Relations Contact
Steve Calk
Media Relations Contacts
Marla Pieton
Valerie Kerner