Financial Data and Key Metrics Changes - In Q4 2025, the company achieved total revenue of $208.2 million, a 14% year-over-year increase and a 3% sequential increase, primarily driven by subscription-based revenues [24] - Full year revenue reached $794.8 million, also up 14% from the previous year, marking the highest annual growth rate since 2021 [25] - Subscription revenue for the full year grew by 17%, accounting for 82% of total revenue, while total annualized recurring revenue (ARR) increased to $921 million, up 12% year-over-year [25][26] - Adjusted EBITDA for Q4 was a record $51.2 million, up 36% from the prior year, with full year adjusted EBITDA at $186.5 million, a 49% increase [31] Business Line Data and Key Metrics Changes - The Digital Banking Platform was a significant contributor to bookings success, with strong performance across banks and credit unions [10] - The risk and fraud solutions emerged as one of the fastest-growing product lines, highlighted by the largest fraud deal in company history with a $200 billion bank [11] - The company processed over $4 trillion in transaction volume in 2025, representing a 21% year-over-year growth [13] Market Data and Key Metrics Changes - The company reported a trailing 12-month total net revenue retention rate of 113%, up from 109% in 2024, indicating strong customer retention [27] - The revenue churn rate for 2025 was 5.2%, an increase from 4.4% in 2024, attributed to higher M&A activity [27][28] Company Strategy and Development Direction - The company aims to leverage its single-platform approach to enhance deposit growth and retention, positioning itself as a key player in the digital banking space [12] - The focus on AI is seen as a critical enabler for long-term strategy, with plans to integrate AI capabilities into existing products and develop new ones [20][22] - The company is targeting annual subscription revenue growth of approximately 12.5%-13% for 2027, with long-term profitability targets set for gross margins of at least 65% and adjusted EBITDA margins of at least 35% by 2030 [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment, citing improving credit quality and stable margins as supportive factors for growth entering 2026 [23] - The company anticipates that Tier One and enterprise activity will be weighted toward the back half of 2026, with a healthy pipeline of both net new and expansion opportunities [23][39] Other Important Information - The company ended 2025 with a cash balance of $433 million, down from $569 million, due to the retirement of convertible notes and stock repurchases [31] - The company generated free cash flow of $173 million for the year, representing a 93% conversion rate of adjusted EBITDA [32] Q&A Session Summary Question: Demand for solutions during core modernization - Management indicated that any decision by a financial institution to change technology, particularly core systems, opens up opportunities for the company, although quantifying this is challenging [41][42] Question: Visibility into subscription growth - Management expressed confidence in the subscription growth outlook, attributing it to strong bookings in the first half of 2026, which could drive upside for 2027 [44][45] Question: Cross-sell opportunities for fraud products - Management noted that only 10% of Tier One customers utilize all three product lines, indicating significant room for expansion, particularly in fraud solutions [51][52] Question: Balancing cash for share repurchases versus M&A - Management emphasized the flexibility provided by strong free cash flow, allowing for thoughtful capital allocation between share repurchases and potential M&A opportunities [53][54] Question: Digital banking market dynamics - Management described the demand for digital banking solutions as strong, with significant opportunities for growth as many banks still rely on legacy systems [60][61] Question: Time-to-revenue for risk and fraud products - Management indicated that standalone fraud solutions typically have faster implementation timelines compared to traditional digital banking solutions [62][63] Question: Demand trends for commercial solutions - Management highlighted that demand for commercial banking solutions has increased due to the importance of deposits, with expectations for continued strong demand [70][71] Question: Long-term margin targets - Management explained that the long-term margin targets are based on a combination of subscription revenue mix, cost efficiencies, and operational leverage [75][76]