Core Insights - The company reported strong financial results for the third quarter, exceeding guidance with non-GAAP revenue of $175 million, a 13% year-over-year increase, and subscription revenue growth of 18% year-over-year [1][19] - The company achieved its previously disclosed goal of reaching the Rule of 30 on total revenue by late 2024, indicating solid operational execution and growth strategy [5][28] - Adjusted EBITDA for the quarter was $32.6 million, reflecting a 66% increase from the previous year, and free cash flow reached $35 million, significantly up from $10 million year-to-date in 2023 [25][26] Financial Performance - Non-GAAP revenue for Q3 was $175 million, up 13% year-over-year and 1% sequentially, driven primarily by subscription-based revenues [19][27] - Subscription revenue accounted for over 80% of total revenue, highlighting a strategic shift towards higher-margin recurring revenue streams [18][19] - Total annualized recurring revenue (ARR) grew to $796 million, a 15% increase year-over-year, with subscription ARR reaching $655 million, up 20% year-over-year [21][22] Sales and Market Activity - The company secured 6 enterprise and Tier 1 deals in the quarter, including significant wins with top 50 U.S. banks, showcasing strong demand for its digital banking solutions [5][30] - Notable wins included a top 50 bank selecting the digital banking platform and a Tier 2 bank adopting the entire platform for various segments, indicating a robust sales pipeline [6][7] - The company experienced its strongest quarter for cross-sell bookings, with significant contributions from its partner ecosystem [11][12] Operational Efficiency - Gross margins improved to 56%, up from 53.9% year-over-year, driven by a higher mix of subscription revenues and increased operational efficiencies [23] - Total operating expenses decreased as a percentage of revenue, reflecting improved scaling of sales and marketing expenses [24] - The company generated free cash flow as a percentage of adjusted EBITDA expected to exceed 70% for the full year of 2024, indicating strong cash flow management [26] Future Outlook - The company forecasts Q4 non-GAAP revenue between $178.1 million and $181.1 million, with full-year revenue expected to grow by 11% [27][28] - Subscription revenue growth is anticipated to reach approximately 16% year-over-year for the full year, exceeding initial projections [27][28] - The company remains optimistic about its growth trajectory, with expectations for continued strong performance in 2025 [28][41]