ALKAMI TECHNOLOGY, INC. Q1 FY2025 earnings call

• Revenue grew over 28% in Q1 2025, with adjusted EBITDA reaching $12 million. - Exited the quarter with 20.5 million registered users on the Alkami platform, up 2.3 million from the prior year quarter. - Successfully closed the MANTL acquisition. - Focused R&D investments on four product areas: onboarding and account opening, retail and commercial functionality, user experience and personalization. - Platform investments aimed at driving scalability, extensibility, maintaining reliability, and building data capability. - Co:lab event in Nashville had over 900 attendees, highlighting digital banking as a strategic focus. - Building a strategic development center in India to increase product and engineering capacity while maintaining profitability.

In the first quarter of 2025, Alkami achieved total revenue of $97.8 million, representing year-over-year growth of 28.5%. Subscription revenue grew 27% and accounted for 95% of total revenue. Adjusted EBITDA improved to $12.1 million compared to $3.8 million in the year-ago quarter. ARR increased by 33% to $404 million, and the company exited the quarter with $68 million of ARR in backlog for implementation. Subscription revenue was the primary driver, making up 95% of total revenue. The company also completed the acquisition of MANTL, the largest in its history.

• Second quarter 2025 revenue guidance: $109 million to $110.5 million, representing 33% to 35% growth year-over-year. Adjusted EBITDA guidance: $9 million to $10 million. - Full year 2025 revenue guidance: $443 million to $447 million, representing 33% to 34% growth year-over-year and organic growth of 25% to 26%. Adjusted EBITDA guidance: $49.5 million to $52.5 million. - MANTL's ARR under contract at December 31, 2025, is expected to be approximately $60 million, representing a growth rate of about 30% compared to the end of 2024.

• Macro environment uncertainty could impact client spending or decision-making. - Client attrition risk due to M&A and consolidation within the client base. - Integration challenges with acquisitions, including technology and go-to-market integration. - Competitive risks in the digital banking platform market, where maintaining differentiation is crucial.

Q: Was the $5 million spend for the offshore initiative lighter in Q1 and is the cadence proceeding as expected?

A: It is a lighter expense in Q1, with the majority of the expense concentrated in the third and fourth quarters of 2025. Progress is being made, with Alkamists in the India Global Capability Center and expecting to approach 170-180 offshore employees by the end of 2025.

Q: How much did MANTL contribute to the growth in revenue per user?

A: MANTL contributed about $1.80 to RPU this quarter, and going forward, a more normalized growth rate of around 7%-8% is expected.

Q: Can you frame the opportunity for cross-selling MANTL into the existing base and compare with prior acquisitions?

A: In Q1, MANTL had 5 transactions sold into the Alkami base. MANTL's go-to-market effort is more established than prior acquisitions like ACH Alert, and success similar to segment acquisition is expected to be achieved sooner.

Q: Where is the traction for MANTL, banks or credit unions?

A: Balanced demand on both banks and credit unions, with the product serving both retail and commercial, and demographics driving demand in credit unions to attract younger generations.

Q: How much of the RPO growth was organic in Q1?

A: Organic RPO growth was around 20%, with the combination of eight total contract signings (half renewals) driving it, and MANTL contributing the remaining 11 percentage points of growth year-over-year.

Q: What are you looking for in the next CFO candidate?

A: Echoing Bryan's comments, the company is looking for a candidate to provide a long transition plan and execute a public search effectively for a company like Alkami.

Q: What's the most important thing to get right over the next year?

A: Creating differentiation through combining digital banking, onboarding, account opening, and data platform to solve use cases and problems, which will help with win rates.

Q: Feedback from customers on potential deregulation in banking?

A: Conversations focus on open banking as an opportunity for customers to take share if they have the right technology, and credit union executives discuss potential regulatory changes but plan to adjust accordingly.

Q: Any changes to deal structures due to macro environment?

A: No observed differences in deal construction for new logos in terms of price points or number of products bought. Confidence in Alkami increases as more customers go live on the platform, leading to higher win rates against competitors.

Q: How much of ARR was inorganic in Q1?

A: Organic ARR growth was right at 22% for the quarter