Core Insights - Alkami Technology, Inc. aims to create the premier digital sales and service platform for financial institutions, enhancing their ability to onboard, engage, and grow account holder relationships [1][2] - The Alkami Digital Sales & Service Platform consists of three key solutions designed to improve account holder relationships and facilitate anticipatory banking [2] - Alkami's Mobile App Platform has received J.D. Power certification for two consecutive years, ranking in the top 20% for mobile banking experience based on user satisfaction and operational best practices [3] Company Overview - Alkami Technology, Inc. is a leading provider of cloud-based digital banking solutions in the U.S., focusing on helping financial institutions grow and adapt through various services including retail and business banking, digital account opening, and payment security [5] - The company has made strategic acquisitions, such as MANTL, to enhance its onboarding and account opening solutions, which are proven to increase deposit growth and reduce fraud [6] - Alkami's data and marketing solution utilizes over 50,000 descriptive data tags and AI predictive models, analyzing more than 18 billion core transactions to improve targeting and cross-selling efforts [6]

Core Insights - Financial fraud losses in 2024 exceeded $12.5 billion, marking a 25% increase from 2023, with 77% of financial institutions anticipating a peak in fraud cases in 2025 [2] - A significant 93% of digital banking consumers prioritize data protection against fraudsters, while 91% emphasize the importance of safeguarding data from unauthorized third parties [4] Group 1: Fraud Prevention Strategies - Financial institutions are enhancing fraud prevention by adopting real-time fraud detection and a multi-layered approach, alongside educational initiatives for account holders [3] - 67% of surveyed banks and credit unions are willing to incentivize account holders to adopt stronger cybersecurity practices, indicating a shift towards collaborative fraud prevention [2] Group 2: Consumer Expectations - The research indicates that consumers are increasingly aware of the threats to their financial security and expect their financial institutions to take proactive measures to protect their assets [4] - The Generational Trends in Digital Banking Study highlights the critical importance consumers place on data security in their digital banking experiences [4] Group 3: Company Overview - Alkami Technology, Inc. is recognized as a leading provider of cloud-based digital banking solutions in the U.S., focusing on helping financial institutions grow and adapt in a digital landscape [5] - Alkami has received certification from J.D. Power for providing an outstanding mobile banking platform experience, underscoring its commitment to customer satisfaction [5][7]

Core Insights - Alkami Technology, Inc. partners with Greenlight Financial Technology, Inc. to enhance financial education and money management tools for kids and teens, while also aiding financial institutions in growing deposits [1][2][3] Company Overview - Alkami is a leading cloud-based digital banking solutions provider in the U.S., focused on helping financial institutions grow and adapt through various digital solutions [5] - Greenlight is a family fintech company aimed at helping parents raise financially smart kids through its banking app and debit card for children and teens [6][7] Partnership Details - The collaboration allows Alkami's clients to offer Greenlight's mobile app, which includes features for earning, saving, spending wisely, and giving, along with parental monitoring tools [2][3] - The integration of Greenlight's financial literacy tools into Alkami's platform provides banks and credit unions with resources to teach responsible money management to families [3][4] Educational Features - Greenlight's app includes interactive educational features such as the Level Up™ financial education game, which helps families build healthy financial habits in an engaging manner [3] - Parents can link existing Greenlight accounts or create new ones directly through their financial institution's mobile banking platform, enhancing accessibility to financial education [3] Industry Impact - The partnership is positioned to help financial institutions attract and retain depositors by offering a youth-friendly banking solution that prepares kids for adult accounts [3][4] - Greenlight collaborates with over 100 banks and credit unions to expand its family finance solutions, emphasizing the role of financial institutions in fostering strong financial habits among younger generations [7]

Core Insights - The partnership between Alkami Technology and BioCatch has successfully prevented over $54 million in fraudulent transactions in 2024, showcasing the effectiveness of their fraud prevention solutions [1][5]. Company Overview - Alkami Technology, Inc. is a leading provider of cloud-based digital banking solutions for financial institutions in the U.S., focusing on enabling clients to grow confidently and adapt quickly [6]. - BioCatch specializes in preventing financial crime by analyzing user behavior patterns, utilizing over 3,000 anonymized data points to distinguish between legitimate users and fraudsters [7]. Fraud Prevention Strategy - Alkami employs a strategic, multi-layered approach to fraud prevention, with BioCatch playing a crucial role in detecting and stopping emerging threats without disrupting user experience [2]. - BioCatch's Account Takeover Protection analyzes unique user interactions, such as mouse movements and typing patterns, to identify suspicious activities in real time [4]. Impact and Results - The collaboration has led to immediate enhancements in fraud defenses, with BioCatch's technology continuously learning and adapting to customer behavior to safeguard identities [3]. - The proactive, behavior-based approach allows financial institutions to identify and prevent account takeover fraud before financial losses occur [2][5]. Industry Context - Fraud remains a significant challenge in the financial services sector, with cybercriminals constantly evolving their tactics to exploit vulnerabilities [2]. - BioCatch's solutions are currently deployed by 34 of the world's largest 100 banks, analyzing 14 billion user sessions monthly and protecting 447 million individuals from fraud [7].

Core Viewpoint - Alkami Technology, Inc. has announced the pricing of a $300 million offering of 1.50% convertible senior notes due 2030, aimed at qualified institutional buyers, with settlement scheduled for March 13, 2025 [1][2]. Group 1: Offering Details - The offering consists of $300 million in aggregate principal amount of convertible senior notes, with an option for initial purchasers to buy an additional $45 million [1]. - The notes will accrue interest at a rate of 1.50% per annum, payable semi-annually starting September 15, 2025, and will mature on March 15, 2030 [2]. - The initial conversion rate is set at 30.4681 shares of common stock per $1,000 principal amount of notes, translating to an initial conversion price of approximately $32.82 per share, which is a 37.5% premium over the last reported sale price of $23.87 on March 10, 2025 [2]. Group 2: Redemption and Repurchase Rights - The notes are redeemable at Alkami's option starting March 20, 2028, under certain conditions, including if the stock price exceeds 130% of the conversion price [3]. - In the event of a "fundamental change," noteholders may require Alkami to repurchase their notes for cash at the principal amount plus accrued interest [4]. Group 3: Use of Proceeds - Alkami estimates net proceeds from the offering to be approximately $290.3 million, which will be used to fund the acquisition of MANTL and for general corporate purposes [5]. - Approximately $29.5 million of the net proceeds will fund capped call transactions, with additional proceeds allocated for further capped call transactions if the option to purchase additional notes is exercised [5]. Group 4: Capped Call Transactions - Alkami has entered into capped call transactions to reduce potential dilution from the conversion of the notes, with an initial cap price of $47.74 per share, representing a 100% premium over the last reported sale price [6][7]. - These capped call transactions are designed to offset potential cash payments required upon conversion of the notes [8]. Group 5: Market Impact - The initial hedging activities related to the capped call transactions may influence the market price of Alkami's common stock and the market value of the notes [9]. - Ongoing modifications to hedge positions by option counterparties could further affect the market price of Alkami's common stock and the notes [10].

PLANO, Texas, March 10, 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 its intention to offer, subject to market and other conditions, $300,000,000 aggregate principal amount of convertible senior notes due 2030 (the "notes") in a private offering (the "Offering") to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securitie ...

Core Insights - Alkami Technology, Inc. has partnered with American Eagle Financial Credit Union (AEFCU) to enhance AEFCU's digital banking experience, focusing on innovation and member financial wellness [1][2][3] - The collaboration aims to provide AEFCU with advanced tools for personalized member interactions and improved financial management [2][3] - AEFCU's commitment to member service and financial freedom is reinforced through this partnership, which will enable targeted marketing campaigns and seamless integration with fintech partners [3][4] Company Overview - Alkami Technology, Inc. is a leading provider of cloud-based digital banking solutions for financial institutions in the U.S., helping clients grow and adapt in the digital landscape [5] - American Eagle Financial Credit Union, established in 1935, serves over 180,000 members with more than $2.5 billion in assets, offering a range of financial services [6]

PART I [Business](index=4&type=section&id=Item%201.%20Business) Alkami provides a cloud-based digital banking platform for financial institutions, serving 272 clients and 20.0 million users, generating $333.8 million in 2024 revenue Key Business Metrics (as of December 31) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Alkami Digital Banking Platform Clients** | 272 | 236 | 199 | | **Live Registered Users (Millions)** | 20.0 | 17.5 | 14.5 | | **Total Revenues ($M)** | $333.8 | $264.8 | $204.3 | | **Net Loss ($M)** | $(40.8) | $(62.9) | $(58.6) | - The company's growth strategy focuses on deepening existing client relationships through cross-selling and increasing user adoption, winning new FI clients, enhancing its product suite, and pursuing selective acquisitions[34](index=34&type=chunk) - The Alkami Digital Banking Platform is built on a true cloud, multi-tenant architecture hosted on AWS, featuring a single code base and continuous delivery model, which enables rapid innovation and scalability[27](index=27&type=chunk)[40](index=40&type=chunk)[48](index=48&type=chunk) - The platform offers 34 products across 10 categories, including digital account opening, marketing, data insights, and business banking, with new clients in 2024 contracting for an average of **20 products** compared to the overall client average of **14**[14](index=14&type=chunk)[37](index=37&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including managing rapid growth, client retention, third-party dependence, cybersecurity threats, intense competition, and historical operating losses - Business risks include challenges in managing rapid growth, attracting and retaining clients, dependence on third-party software and data centers (principally AWS), and retaining key personnel[82](index=82&type=chunk)[85](index=85&type=chunk)[98](index=98&type=chunk) - Cybersecurity is a major risk, with threats of breaches, reliance on third-party security, and the need to comply with numerous data privacy laws like GLBA and CCPA, which could lead to significant costs and liabilities[119](index=119&type=chunk)[129](index=129&type=chunk) - The company faces intense competition from established core processing and point solution vendors who have greater financial resources, brand recognition, and larger client bases[137](index=137&type=chunk)[138](index=138&type=chunk) - Financial risks include a history of operating losses, uncertainty in achieving future profitability, and potential limitations on using its substantial net operating loss (NOL) carryforwards due to ownership change rules under IRC Section 382[174](index=174&type=chunk)[178](index=178&type=chunk) [Unresolved Staff Comments](index=51&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - Not applicable[201](index=201&type=chunk) [Cybersecurity](index=51&type=section&id=Item%201C.%20Cybersecurity) Alkami implements a cybersecurity risk management program based on SCF, overseen by the Board's Information Systems Audit Committee, with no material incidents identified - The cybersecurity risk management program is based on the Secure Controls Framework (SCF) and includes a security team, risk assessments, training, an incident response plan, and third-party risk management[202](index=202&type=chunk)[208](index=208&type=chunk) - The Information Systems Audit Committee of the Board of Directors oversees the cybersecurity program, receiving quarterly reports from management[205](index=205&type=chunk)[206](index=206&type=chunk) - The company has not identified any past cybersecurity threats or incidents that have materially affected its business, operations, or financial condition[204](index=204&type=chunk) [Properties](index=53&type=section&id=Item%202.%20Properties) The company's principal executive offices are located in a leased **83,939 sq. ft.** space in Plano, Texas, until August 2033 - The main office is a leased space of **83,939 sq. ft.** in Plano, Texas, with the lease running until August 31, 2033[212](index=212&type=chunk) [Legal Proceedings](index=53&type=section&id=Item%203.%20Legal%20Proceedings) The company states that it is not involved in any pending legal proceedings that would have a material impact on its business, financial condition, or results of operations - Management believes there are no pending claims or actions that would have a material impact on the company[213](index=213&type=chunk) [Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[214](index=214&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Alkami's common stock trades on Nasdaq under 'ALKT' since April 2021; the company has not paid and does not anticipate paying cash dividends - Common stock is listed on Nasdaq under the symbol **"ALKT"** since April 15, 2021[217](index=217&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[219](index=219&type=chunk) - Net proceeds of **$192.8 million** from the IPO have been fully utilized for general corporate purposes[220](index=220&type=chunk) - No equity securities were repurchased during the three months ended December 31, 2024[224](index=224&type=chunk) [Reserved](index=55&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Alkami's 2024 revenue grew **26.1%** to **$333.8 million**, with improved gross margin and positive Adjusted EBITDA, and plans to acquire MANTL for **$380 million** Financial Performance Comparison (2024 vs. 2023) | Metric | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues ($M)** | $333.8 | $264.8 | +$69.0 | +26.1% | | **Gross Profit ($M)** | $196.6 | $144.1 | +$52.5 | +36.4% | | **Gross Margin (%)** | 58.9% | 54.4% | +4.5 p.p. | +8.3% | | **Net Loss ($M)** | $(40.8) | $(62.9) | +$22.1 | -35.1% | | **Adjusted EBITDA ($M)** | $26.9 | $(1.6) | +$28.5 | N/A | Key Business Metrics Comparison (as of Dec 31) | Metric | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Annual Recurring Revenue ($M)** | $355.9 | $291.0 | +$64.9 | +22.3% | | **Registered Users (Thousands)** | 19,984 | 17,502 | +2,482 | +14.2% | | **Revenue per Registered User ($)** | $17.81 | $16.63 | +$1.18 | +7.1% | - On February 27, 2025, the company entered into an agreement to acquire MANTL for approximately **$380 million** to enhance its onboarding and account opening solutions[240](index=240&type=chunk)[473](index=473&type=chunk) - Cash flow from operations turned positive to **$18.6 million** in 2024, a significant improvement from a **$17.5 million** use of cash in 2023, driven by a lower net loss and higher non-cash charges[286](index=286&type=chunk)[287](index=287&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its credit agreement, with a **10%** change not expected to be material - The primary market risk is interest rate changes on the Amended Credit Agreement, but a hypothetical **10%** change in rates is not expected to have a material impact[315](index=315&type=chunk) [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements, with an unqualified opinion from Ernst & Young LLP, detailing financial position and results - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and on the effectiveness of internal control over financial reporting[321](index=321&type=chunk)[330](index=330&type=chunk) Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | **Total Current Assets ($K)** | $181,377 | $148,585 | | **Total Assets ($K)** | $437,277 | $399,825 | | **Total Current Liabilities ($K)** | $45,570 | $39,430 | | **Total Liabilities ($K)** | $80,247 | $74,884 | | **Total Stockholders' Equity ($K)** | $357,030 | $324,941 | Consolidated Statement of Operations Data (Year Ended Dec 31) | (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Revenues ($K)** | $333,849 | $264,831 | $204,270 | | **Gross Profit ($K)** | $196,630 | $144,111 | $108,324 | | **Loss from Operations ($K)** | $(44,626) | $(63,705) | $(57,689) | | **Net Loss ($K)** | $(40,835) | $(62,913) | $(58,600) | | **Net Loss per Share ($)** | $(0.41) | $(0.67) | $(0.64) | - Subsequent to year-end, on February 27, 2025, the company agreed to acquire MANTL for **~$380 million** and entered into a Third Amendment to its Credit Agreement, increasing its revolving commitment to **$225 million**[473](index=473&type=chunk)[475](index=475&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=107&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[476](index=476&type=chunk) [Controls and Procedures](index=107&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that disclosure controls and procedures were effective as of December 31, 2024[478](index=478&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2024, based on the COSO 2013 framework[481](index=481&type=chunk) [Other Information](index=107&type=section&id=Item%209B.%20Other%20Information) The Chairperson and an affiliated entity adopted a Rule 10b5-1 trading plan for up to **3,276,000** shares - The Chairperson of the board, Brian Smith, and an affiliated entity adopted a Rule 10b5-1 trading plan for the sale of up to **3,276,000** shares[485](index=485&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=107&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not Applicable[488](index=488&type=chunk) PART III Part III incorporates information by reference from the 2025 Proxy Statement, covering directors, executive compensation, security ownership, and related transactions - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting of Stockholders[490](index=490&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk) [Directors, Executive Officers and Corporate Governance](index=109&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the 2025 Proxy Statement [Executive Compensation](index=109&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the 2025 Proxy Statement [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the 2025 Proxy Statement [Certain Relationships and Related Transactions, and Director Independence](index=109&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the 2025 Proxy Statement [Principal Accountant Fees and Services](index=109&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information is incorporated by reference from the 2025 Proxy Statement PART IV Part IV lists exhibits filed with the Form 10-K, including financial statements, schedules, and a comprehensive index of all exhibits [Exhibit and Financial Statement Schedules](index=109&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This item lists the financial statements, notes that no financial statement schedules are required, and provides an index of all exhibits filed with or incorporated by reference into the annual report - This section provides the index to the Consolidated Financial Statements (under Item 8) and the Exhibit Index[497](index=497&type=chunk)[501](index=501&type=chunk) [Form 10-K Summary](index=112&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates there is no Form 10-K summary - None[508](index=508&type=chunk) [Signatures](index=113&type=section&id=Signatures) The report is duly signed by the company's executive officers and Board of Directors, including a Power of Attorney for amendments

Financial Data and Key Metrics Changes - In Q4 2024, Alkami reported a revenue growth of 26% and generated over $10 million in adjusted EBITDA [8][30] - For the full year 2024, total revenue reached $333.8 million, also reflecting a 26% year-over-year growth, with adjusted EBITDA improving to $26.9 million from a loss of $1.6 million in 2023 [30][44] - The adjusted EBITDA margin for Q4 was 11.3%, achieving the Rule of 37 [42] Business Line Data and Key Metrics Changes - Subscription revenue grew by 26.5% in 2024, accounting for nearly 96% of total revenue [30] - The annual recurring revenue (ARR) increased by 22%, ending the quarter at $356 million [32] - Add-on sales represented 45% of new bookings in 2024, up from 24% in 2021 [12] Market Data and Key Metrics Changes - Alkami ended 2024 with 272 clients and 20 million registered users, marking a user growth of approximately 2.5 million or 14% compared to the previous year [33] - The company churned less than 1% of its digital banking ARR in 2024, with expectations of maintaining a churn rate of 2% to 3% per year in the long term [34] Company Strategy and Development Direction - Alkami aims to solidify its position as a premier digital banking platform through the acquisition of MANTL, which enhances its onboarding and account opening capabilities [22][45] - The company is focused on expanding its market share in both the bank and credit union sectors, with a long-term goal of generating half of its new logo wins from each market [11][19] - Alkami's strategy includes leveraging add-on sales and improving operational efficiency through platform investments [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum heading into 2025, with expectations of continued growth and improved profitability [29][51] - The acquisition of MANTL is anticipated to be accretive to adjusted EBITDA starting in 2026, with an expected internal rate of return (IRR) of about 30% [48][50] - Management highlighted the competitive pressure from megabanks and fintechs, emphasizing the need for improved digital offerings among community banks and credit unions [19][20] Other Important Information - Alkami's gross margin for Q4 2024 was reported at 63.1%, with a target of reaching 65% by 2026 [39][114] - The company ended the quarter with nearly $116 million in cash and marketable securities, and produced operating cash flow of $18.6 million, an improvement of $36.1 million compared to 2023 [43][44] - Alkami announced an amendment to its credit facility, expanding its revolver from $125 million to $225 million [45] Q&A Session Summary Question: How does MANTL compare with existing account opening solutions? - Management noted that MANTL offers a comprehensive solution that supports various account types and channels, addressing gaps in Alkami's current offerings [56][58] Question: What is embedded in the 2025 outlook regarding user growth and ARPU expansion? - Management expects organic user growth in the 14% to 15% range and ARPU expansion of 6% to 8% for 2025, with MANTL's client base contributing additional users at a lower ARPU [60][63] Question: What is the competitive environment for MANTL? - Management indicated that MANTL faces competition from outdated core providers and smaller players, but its superior user experience and integration capabilities set it apart [70][72] Question: Will MANTL's EBITDA loss include any expense synergies? - Management clarified that while MANTL is expected to be EBITDA accretive in 2026, the focus will be on revenue synergies rather than immediate cost-cutting [73][100] Question: How will cross-selling opportunities be impacted? - Management expressed confidence in cross-selling opportunities between Alkami and MANTL's client bases, given their complementary nature [108][110] Question: What is the long-term margin trajectory for gross profit margin? - Management reiterated a target of 65% gross margin by 2026, with MANTL expected to contribute positively to this margin [114]

Alkami Technology Fourth Quarter 2024 Alkami Technology, Inc. Proprietary Information. Cautionary Statement Regarding Forward-Looking Statements 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 ma ...