Company Overview - Alkami is a cloud-based digital banking platform serving U S financial institutions [5] - The company enables FIs to effectively compete with larger, more technologically advanced competitors [6] - Alkami empowers FIs to grow, drive user engagement, and improve operational efficiency [8] Market Opportunity and Strategy - Alkami's addressable market includes FIs with assets from $100 million to $450 billion, representing over 250 million digital users [11] - The total addressable market (TAM) is approximately $14 billion, based on 250 million digital users and $58 revenue per user (RPU) [12, 13] - The company focuses on the top 2,500 FIs, excluding megabanks, with an industry average contract length of 5 years, translating to approximately 500 annual renewals [16] - MANTL acquisition positions Alkami as a premier digital banking provider, expanding the market and stimulating go-to-market strategy [31] Financial Performance and Guidance - Q2 2025 revenue growth was 36%, driven by the MANTL acquisition, new clients, user growth, and ARPU growth [45] - The company's ARR increased 32% to $424 million [46] - Remaining performance obligation (RPO) reached $1.6 billion, representing 3 7 times live ARR [46] - Full year 2025 revenue guidance is $443 million to $447 million, with adjusted EBITDA guidance of $51 5 million to $54 0 million [69]

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% [23] - Adjusted EBITDA improved to $12.1 million compared to $3.8 million in the same quarter last year [23] - The company exited the quarter with an Annual Recurring Revenue (ARR) of approximately $400 million, reflecting a 33% increase [23] Business Line Data and Key Metrics Changes - Subscription revenue grew by 27% in Q1 2025, accounting for 95% of total revenue [23] - The company added 36 new digital banking clients, representing 1.1 million digital users, and exited the quarter with 278 live clients and 20.5 million registered users [24] - Revenue per user (RPU) increased by 18% to $19.74, driven by the Mantle acquisition and successful add-on sales [25] Market Data and Key Metrics Changes - The company reported a strong demand environment for digital banking, with no observed decline in demand from regional and community financial institutions [6][10] - The company’s sales pipeline remains robust, with a healthy mix of new logos and client renewals [25] - The company expects to churn only four clients in 2025, representing less than 1% of ARR, indicating strong client retention [24] Company Strategy and Development Direction - The company is focused on enhancing its product offerings in onboarding and account opening, retail and commercial functionality, user experience, and personalization [13] - The Mantle acquisition is expected to drive cross-selling opportunities and enhance the company's competitive position in the digital banking space [15][44] - The company is building a strategic development center in India to increase product and engineering capacity while maintaining profitability commitments [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2026 financial objectives outlined in previous earnings calls, citing a strong implementation backlog and sales pipeline [6] - The management noted that digital banking has shifted from a budget agenda to a capital allocation agenda for clients, emphasizing its strategic importance [9] - The company anticipates that the Mantle business will be accretive to adjusted EBITDA in 2026, with expected ARR under contract of approximately $60 million by the end of 2025 [33] Other Important Information - The company completed the acquisition of Mantle on March 17, 2025, for an enterprise value of $393 million [30] - The company ended the quarter with $95 million in cash and marketable securities and expanded its credit facility from $125 million to $225 million [29] 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 expected to concentrate in Q3 and Q4 of 2025 [36][37] Question: What contributed to the growth in revenue per user? - Mantle contributed about 1.8 to RPU this quarter, with a more normalized growth rate expected going forward [39][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 be smoother than previous acquisitions [44][46] Question: Where is the most traction seen with the Mantle acquisition? - Balanced demand is observed in both banks and credit unions, with a focus on enhancing account opening experiences [51][53] Question: What are the implications of potential deregulation in the banking industry? - Open banking could present opportunities for customers to gain market share if they have the right technology [93][94] Question: What would it take for banks to slow spending on digital banking? - There would need to be extraordinary dislocation for banks to halt their digital banking projects, as these are often budgeted line items [97][98]