Financial Data and Key Metrics Changes - The company generated revenue of $195 million, representing a 13% year-over-year growth and exceeding guidance [9][20] - Adjusted EBITDA reached $46 million, with a margin of 23.5%, reflecting a 53% increase from the prior year [9][26] - Free cash flow was strong at $42 million, with cash and investments totaling $532 million, up from $486 million in the previous quarter [9][27] Business Line Data and Key Metrics Changes - Subscription-based revenues grew 16% year-over-year, accounting for 81% of total revenue [21] - Services and other revenues increased by 1% year-over-year, driven by higher professional services tied to core conversions and M&A activity [21] - Total annualized recurring revenue (ARR) grew to $861 million, up 10% year-over-year, with subscription ARR at $716 million, a 13% increase [22] Market Data and Key Metrics Changes - The company saw significant bookings from Tier one, Tier two, and Tier three segments, with notable M&A activity among customers leading to incremental bookings [10][24] - The backlog increased to approximately $2.4 billion, up 3% sequentially and 21% year-over-year, driven by expansion with existing customers [24] Company Strategy and Development Direction - The company is focused on digital transformation, AI innovation, and enhancing fraud prevention capabilities through its Innovation Studio [12][32] - The strategy includes expanding into larger enterprise deals and maintaining a strong pipeline for the second half of the year [18][39] - The company aims to leverage M&A activity among its customers to drive growth and efficiency [11][97] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline and anticipated a strong second half of the year, particularly in enterprise activity [35][39] - The company expects to see lower churn rates in the second half of the year, despite a higher concentration of churn in Q2 [23][46] - The outlook for revenue and adjusted EBITDA for the full year has been raised, reflecting strong performance and market demand [29] Other Important Information - The company is transitioning to a cloud-based infrastructure, which is expected to enhance operational efficiency and reduce costs [111][114] - The Innovation Studio is becoming increasingly central to the company's offerings, with over 85% of digital banking customers utilizing it [18][62] Q&A Session Summary Question: Is the demand environment improving? - Management noted a strong pipeline but did not see a significant lift in new opportunities yet [35][36] Question: What is the outlook for enterprise activity? - Management indicated a more normal mix of Tier one deals expected in the second half of the year [39][40] Question: Can you quantify the penetration of risk and fraud solutions? - Management highlighted strong penetration but noted that quantifying it is challenging due to the nature of the offerings [44] Question: What drove the higher churn in Q2? - Management attributed it to localized churn and M&A transactions impacting the second quarter [46] Question: How is the gross margin outlook evolving? - Management indicated that both cost management and revenue mix shifts are contributing to improved gross margin expectations [54] Question: What are the cross-selling initiatives looking like? - Management reported strong cross-selling opportunities following the recent client conference [108]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported total revenue of $97.8 million, representing a year-over-year growth of 28.5% [24] - Adjusted EBITDA improved to $12.1 million compared to $3.8 million in the same quarter last year, marking a significant increase [24] - The company exited the quarter with an Annual Recurring Revenue (ARR) of approximately $400 million, reflecting a 33% increase year-over-year [24][25] - The average revenue per user (RPU) was $19.74, up 18% compared to the previous year [26] Business Line Data and Key Metrics Changes - Subscription revenue grew by 27% in Q1 2025, accounting for 95% of total revenue [24] - The company added 36 new digital banking clients, representing 1.1 million digital users, and exited the quarter with 278 live clients [25] - The Mantle acquisition contributed significantly to the growth in RPU, with an estimated contribution of 1.8 to RPU this quarter [41] Market Data and Key Metrics Changes - The company reported a registered user growth of approximately 2.3 million or 13% compared to the previous year [25] - The demand for digital banking services remains strong, with no observed decline despite macroeconomic uncertainties [7][9] - The company noted a balanced demand from both banks and credit unions, with a focus on enhancing account opening experiences [53] Company Strategy and Development Direction - The company aims to leverage its digital banking platform to enhance customer acquisition and onboarding experiences, emphasizing the importance of a seamless digital experience [10][87] - Investments are being made in product development, particularly in onboarding, user experience, and personalization [14] - The company is building a strategic development center in India to increase product and engineering capacity while maintaining profitability commitments [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2026 financial objectives, citing a strong sales pipeline and successful acquisition integration [7] - The demand for digital banking is viewed as essential for regional and community financial institutions to compete effectively [8] - Management indicated that the current macroeconomic environment has not led to a reduction in digital banking demand, with clients prioritizing their digital agendas [9][10] Other Important Information - The Mantle acquisition was completed on March 17, 2025, for an enterprise value of $393 million, which is expected to be accretive to adjusted EBITDA in 2026 [31][34] - The company has expanded its credit facility from $125 million to $225 million, enhancing its financial flexibility [30] Q&A Session Summary Question: Was the $5 million spend for the offshore initiative lighter in Q1? - Yes, it was a lighter expense in Q1, with the majority of the expense expected to concentrate in the third and fourth quarters of 2025 [38] Question: What contributed to the growth in revenue per user? - Mantle was the largest contributor, followed by success in add-on sales and new clients adopting more products [40] Question: Can you frame the cross-selling opportunity with Mantle? - Mantle had five transactions sold into the Alchemy base, and the integration is expected to yield significant cross-selling opportunities [46] Question: Where is the most traction seen with the Mantle acquisition? - Balanced demand is observed from both banks and credit unions, with a focus on enhancing account opening experiences [53] Question: What would it take for banks to slow spending on digital banking? - It would require extraordinary dislocation, as banks are managing expenses but not cutting digital banking projects [99][100]