Alkami(ALKT) - 2025 Q1 - Quarterly Results

Company Announcements & Highlights Alkami reported strong Q1 2025 financial results, including significant revenue growth and user expansion, announced its CFO's planned retirement, and provided a positive financial outlook for 2025 First Quarter 2025 Financial Highlights Alkami achieved strong revenue growth and profitability in Q1 2025, significantly increasing user numbers and expanding market share through the acquisition of MANTL Key Financial and Operational Metrics for Q1 2025 | Metric | Amount/Value | YoY Change | | :----------------------- | :-------------- | :------------- | | Revenue Growth | 28.5% | Growth | | Adjusted EBITDA | $12.1 million | - | | Alkami Platform Users | 20.5 million | Increased by 2.3 million | | Annual Recurring Revenue (ARR) | $404 million | 33% Growth | | Revenue Per User (RPU) | $19.74 | 18% Growth | - The company continued to expand its banking market share, enhance upsells, and invest in its platform in Q1, recently extending capabilities through the acquisition of MANTL[4] - The MANTL acquisition, completed on March 17, 2025, is expected to increase Alkami's overall revenue growth and gross margin expansion, and is projected to be accretive to Adjusted EBITDA in 2026[4] CFO Planned Retirement Alkami announced CFO Bryan Hill's planned retirement, initiating a search for his successor, with Mr. Hill continuing as CFO until February 27, 2026, or 15 days post-successor appointment, then transitioning to an advisory role - Chief Financial Officer Bryan Hill plans to retire, and the company has initiated a search for his successor[5] - Mr. Hill will serve as CFO until February 27, 2026, or 15 days after a successor is appointed, and then as an advisor until December 15, 2026, to assist with the transition[5] - Bryan Hill has played a pivotal role since joining Alkami in 2019, driving company value, leading the IPO, expanding financing access, and overseeing four acquisitions[6] 2025 Financial Outlook Alkami provided financial guidance for Q2 and the full fiscal year 2025, projecting continued revenue growth and improved Adjusted EBITDA, detailing MANTL acquisition's expected full-year contribution 2025 Financial Guidance | Metric | Q2 2025 Guidance | FY 2025 Guidance | | :------------------- | :------------------- | :------------------- | | GAAP Total Revenue | $109.0 million - $110.5 million | $443.0 million - $447.0 million | | Adjusted EBITDA | $9.0 million - $10.0 million | $49.5 million - $52.5 million | Expected MANTL Contribution to 2025 Financial Performance | Metric | Expected Contribution | | :--------------------------------- | :------------------- | | Q1 Total Revenue Contribution | $1.4 million | | Q1 Adjusted EBITDA Loss Contribution | ($0.1 million) | | Full-Year Revenue Contribution | Approximately $31.4 million | | Full-Year Adjusted EBITDA Loss Contribution | $5 million | | Contracted Annual Recurring Revenue as of December 31, 2025 | Approximately $60 million (over 30% YoY growth) | About Alkami Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for U.S. financial institutions, empowering clients to grow, adapt quickly, and build thriving digital communities - Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for U.S. financial institutions[11] - The company helps clients transform through retail and business banking, account opening, payment security, and data and marketing solutions[11] Financial Statements (Unaudited) This section presents Alkami's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, reflecting the company's financial position and performance Condensed Consolidated Balance Sheets As of March 31, 2025, Alkami's balance sheet shows significant growth in total assets and liabilities, primarily driven by the MANTL acquisition and related financing activities, leading to substantial increases in intangible assets and goodwill Key Balance Sheet Data (as of March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :-------------------------- | :-------------- | :-------------- | :----------- | | Assets | | | | | Total Assets | 837,161 | 437,277 | 91.4% | | Intangible Assets, net | 178,801 | 29,021 | 516.1% | | Goodwill | 400,158 | 148,050 | 170.3% | | Liabilities | | | | | Total Liabilities | 503,117 | 80,247 | 526.9% | | Convertible Senior Notes, net | 334,720 | — | N/A | | Revolving Loan | 60,000 | — | N/A | | Stockholders' Equity | | | | | Total Stockholders' Equity | 334,044 | 357,030 | -6.5% | Condensed Consolidated Statements of Operations Alkami in Q1 2025 achieved significant revenue growth and improved gross profit, while net loss narrowed year-over-year, despite increased operating expenses due to acquisition-related costs and intangible asset impairment Key Statements of Operations Data (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :-------------------------- | :-------------- | :-------------- | :----------- | | Revenue | 97,835 | 76,127 | 28.5% | | Cost of Revenue | 40,075 | 32,095 | 24.9% | | Gross Profit | 57,760 | 44,032 | 31.2% | | Total Operating Expenses | 73,156 | 56,397 | 29.7% | | Operating Loss | (15,396) | (12,365) | -24.5% | | Net Loss | (7,816) | (11,433) | 31.6% (Improvement) | | Net Loss Per Share, Basic and Diluted | (0.08) | (0.12) | 33.3% (Improvement) | - Acquisition-related expenses increased from $60 thousand in Q1 2024 to $2,378 thousand in Q1 2025[29] - An intangible asset impairment loss of $1,655 thousand was recognized in Q1 2025, with no such loss in Q1 2024[29] Condensed Consolidated Statements of Cash Flows In Q1 2025, Alkami's cash outflow from operating activities increased, investment activities saw a significant outflow primarily due to the MANTL acquisition, while financing activities generated substantial cash inflow from convertible senior notes and revolving loans Key Statements of Cash Flows Data (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--------------------------------- | :-------------- | :-------------- | | Net Cash (Used in) Provided by Operating Activities | (5,664) | 951 | | Net Cash (Used in) Provided by Investing Activities | (389,413) | 6,808 | | Acquisition of Businesses, net of cash acquired | (375,499) | — | | Net Cash Provided by (Used in) Financing Activities | 362,378 | (4,507) | | Proceeds from Issuance of Convertible Senior Notes | 335,513 | — | | Proceeds from Revolving Loan Borrowings | 60,000 | — | | Net (Decrease) Increase in Cash and Cash Equivalents | (32,699) | 3,252 | | Cash and Cash Equivalents at End of Period | 61,660 | 44,179 | Non-GAAP Financial Measures and Key Business Metrics This section explains Alkami's non-GAAP financial measures and key business metrics, providing reconciliations to GAAP and insights into operational performance and strategic trends Explanation of Non-GAAP Financial Measures and Key Business Metrics Alkami provides non-GAAP financial measures and key business metrics like ARR, registered users, and RPU to offer investors a clearer view of operational performance, strategic trends, and profitability by excluding certain non-cash or non-recurring items - Non-GAAP financial measures aim to help investors better understand the company's short-term and long-term financial, operational, and strategic trends by excluding certain non-cash or non-recurring items[13] - Annual Recurring Revenue (ARR) is defined as the annualized recurring revenue from SaaS subscription services recognized in the last month of the reporting period, plus expected implementation service revenue for the next 12 months[22] - Registered Users are defined as individual or business account holders of financial institution clients using the company's digital banking platform as of the last day of the reporting period[23] - Revenue Per User (RPU) is defined as ARR for the reporting period divided by the number of registered users on the last day of the reporting period, reflecting the ability to adopt new products and expand existing customer products[24] Reconciliation of GAAP to Non-GAAP Measures This section provides detailed reconciliations of GAAP to various non-GAAP financial metrics, adjusting for items like amortization, stock-based compensation, and acquisition-related expenses to present a clearer view of underlying operational performance, alongside key business metrics Key Business Metrics (as of March 31) | Metric | 2025 | 2024 | | :---------------------- | :------- | :------- | | GAAP Total Revenue (in thousands) | 97,835 | 76,127 | | Annual Recurring Revenue (ARR) (in thousands) | 403,885 | 302,659 | | Registered Users (in thousands) | 20,461 | 18,113 | | Revenue Per User (RPU) | $19.74 | $16.71 | Non-GAAP Cost of Revenues Non-GAAP cost of revenues for Q1 2025 was $34,941 thousand, adjusted by deducting amortization and stock-based compensation expenses from GAAP cost of revenues Non-GAAP Cost of Revenues Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :---------------------- | :-------------- | :-------------- | | GAAP Cost of Revenues | 40,075 | 32,095 | | Amortization | (2,498) | (1,775) | | Stock-based Compensation Expense | (2,636) | (1,178) | | Non-GAAP Cost of Revenues | 34,941 | 29,142 | Non-GAAP Gross Margin Non-GAAP gross margin for Q1 2025 improved to 64.3% from 61.7% in the prior year, reflecting enhanced profitability after adjusting for amortization and stock-based compensation expenses Non-GAAP Gross Margin Reconciliation (for the three months ended March 31) | Metric | 2025 | 2024 | | :---------------------- | :----- | :----- | | GAAP Gross Margin | 59.0 % | 57.8 % | | Amortization | 2.6 % | 2.3 % | | Stock-based Compensation Expense | 2.7 % | 1.6 % | | Non-GAAP Gross Margin | 64.3 % | 61.7 % | Non-GAAP Research and Development Expense Non-GAAP research and development expense for Q1 2025 was $21,451 thousand, adjusted by deducting stock-based compensation expense from GAAP research and development expense Non-GAAP Research and Development Expense Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :-------------- | :-------------- | | GAAP Research and Development Expense | 26,885 | 22,820 | | Stock-based Compensation Expense | (5,434) | (3,998) | | Non-GAAP Research and Development Expense | 21,451 | 18,822 | Non-GAAP Sales and Marketing Expense Non-GAAP sales and marketing expense for Q1 2025 was $15,052 thousand, adjusted by deducting stock-based compensation expense from GAAP sales and marketing expense Non-GAAP Sales and Marketing Expense Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :-------------- | :-------------- | | GAAP Sales and Marketing Expense | 17,899 | 13,843 | | Stock-based Compensation Expense | (2,847) | (2,031) | | Non-GAAP Sales and Marketing Expense | 15,052 | 11,812 | Non-GAAP General and Administrative Expense Non-GAAP general and administrative expense for Q1 2025 was $14,686 thousand, adjusted by deducting stock-based compensation expense from GAAP general and administrative expense Non-GAAP General and Administrative Expense Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :-------------- | :-------------- | | GAAP General and Administrative Expense | 23,771 | 19,315 | | Stock-based Compensation Expense | (9,085) | (6,345) | | Non-GAAP General and Administrative Expense | 14,686 | 12,970 | Non-GAAP Income Before Income Taxes Non-GAAP income before income taxes for Q1 2025 was $12,000 thousand, a significant improvement from the prior year, reflecting profitability after adjusting for specific non-operating and non-cash items Non-GAAP Income Before Income Taxes Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :-------------- | :-------------- | | GAAP Loss Before Income Taxes | (15,101) | (11,244) | | Gain on Financial Instruments | — | (112) | | Amortization | 3,066 | 2,134 | | Stock-based Compensation Expense | 20,002 | 13,552 | | Acquisition-related Expenses | 2,378 | 60 | | Intangible Asset Impairment Loss | 1,655 | — | | Non-GAAP Income Before Income Taxes | 12,000 | 4,390 | Adjusted EBITDA Adjusted EBITDA for Q1 2025 was $12,069 thousand, a substantial increase from the prior year, indicating strong core operational performance after excluding non-cash and non-recurring expenses Adjusted EBITDA Reconciliation (for the three months ended March 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :-------------- | :-------------- | | GAAP Net Loss | (7,816) | (11,433) | | Income Tax (Benefit) Expense | (7,285) | 189 | | Gain on Financial Instruments | — | (112) | | Interest Income, net | (295) | (1,009) | | Depreciation and Amortization | 3,430 | 2,562 | | Stock-based Compensation Expense | 20,002 | 13,552 | | Acquisition-related Expenses | 2,378 | 60 | | Intangible Asset Impairment Loss | 1,655 | — | | Adjusted EBITDA | 12,069 | 3,809 | Additional Information This section provides details on Alkami's conference call, cautionary statements regarding forward-looking information, and investor relations contact information Conference Call Information Alkami held a conference call on April 30, 2025, to discuss its financial results, providing webcast and dial-in access, with a replay available on the investor relations website - The company held a conference call on April 30, 2025, at 5:00 PM ET to discuss financial results[10] - A live webcast is available on Alkami's investor relations website at investors.alkami.com[10] - Domestic dial-in: 1-800-836-8184, International dial-in: 1-646-357-8785, Passcode: 04175[10] Cautionary Statement Regarding Forward-Looking Statements Forward-looking statements in this press release are based on management's beliefs and assumptions, involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, with no obligation to update these statements - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results, performance, or achievements to differ materially from those expressed or implied[12] - Factors affecting forward-looking statements include limited operating history, ability to manage future growth, ability to attract and retain customers, unpredictability of sales cycles, industry competition, security breaches, acquisition integration, regulatory compliance, and ability to attract and retain key employees[12] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law[12] Investor Relations Contact This section provides contact information for Alkami's investor relations and media relations - Investor Relations Contact: Steve Calk, Email: ir@alkami.com[48] - Media Relations Contacts: Marla Pieton, Email: marla.pieton@alkami.com; Valerie Kerner, Email: alkami@fullyvested.com[48]