MANTL SaaS solution

Search documents
Alkami(ALKT) - 2024 Q4 - Earnings Call Transcript
2025-02-28 01:56
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, and the company ended the quarter with a cash and marketable securities balance of just under $116 million [42][44] Business Line Data and Key Metrics Changes - Subscription revenue grew by 26.5% in 2024, accounting for nearly 96% of total revenue [31] - The annual recurring revenue (ARR) increased by 22%, reaching $356 million, with approximately $56.5 million of ARR in backlog for implementation [32] - The revenue per user (RPU) increased by 7% to $17.81, driven by successful add-on sales [35] Market Data and Key Metrics Changes - Alkami ended 2024 with 272 clients and 20 million registered users, marking a growth of approximately 2.5 million users or 14% compared to the previous year [33] - The company churned less than 1% of its digital banking ARR in 2024, with expectations to maintain a churn rate of 2% to 3% per year in the long term [34] Company Strategy and Development Direction - Alkami's strategy includes a five-point plan focusing on success in the bank market, leveraging add-on sales, investing in platform efficiency, attracting talent, and pursuing acquisitions [10] - The acquisition of MANTL is expected to enhance Alkami's position as a premier digital banking platform, providing a comprehensive onboarding and account opening solution [22][45] - The company aims to generate half of its new logo wins from the bank market and half from the credit union market, with a focus on cross-selling opportunities post-acquisition [12][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum heading into 2025, with guidance for Q1 2025 revenue between $93.5 million and $95 million, representing a growth of 23% to 25% [49] - For the full year 2025, revenue guidance is set between $440 million and $445 million, indicating a growth of 32% to 33% [50] - The management highlighted the importance of improving account opening experiences for financial institutions to remain competitive against larger banks and fintechs [19][20] Other Important Information - Alkami's gross margin for Q4 2024 was 63.1%, with expectations to reach 65% by 2026 [39][114] - The company has expanded its credit facility from $125 million to $225 million, extending the maturity date to February 2030 [45] Q&A Session Summary Question: How does MANTL compare with your existing account opening solutions? - The current offering is digital-only for limited deposit types, while MANTL provides a comprehensive solution across various channels and account types [56][58] Question: What is embedded in the 2025 outlook between user growth and ARPU expansion? - Organic user growth is expected in the 14% to 15% range, with ARPU expansion projected at 6% to 8% [60][61] Question: What is the competitive environment for MANTL? - MANTL faces competition from outdated core providers and smaller players, but its technology offers superior user experience and integration capabilities [70][72] Question: What are the prospects for MANTL's EBITDA to go from negative to positive? - The transition to positive EBITDA is primarily driven by revenue scale and leveraging Alkami's resources for growth [96][98] Question: How will cross-selling opportunities look post-acquisition? - Both companies have similar client bases, allowing for effective cross-selling of products and services [108][110] Question: What is the long-term margin trajectory for gross profit margin? - Alkami aims for a gross margin of 65% by 2026, with MANTL expected to contribute positively to this margin [114]