Alkami Technology, Inc. Q2 FY2025 earnings call

• Alkami delivered strong financial results in Q2 2025, with revenue growing 36% and adjusted EBITDA at $11.9 million.
• Exited the quarter with 20.9 million registered users on the Alkami Platform, up 2.3 million from the prior quarter.
• Early commercial success of the MANTL acquisition, with MANTL adding 39 new clients in H1 2025, 14 of which are Alkami digital banking clients.
• Progress on product integration of account opening with online banking and data/marketing is exceeding expectations, enabling clients to deliver enhanced user experiences.
• Strong sales pipeline, with 9 new digital banking platform clients signed and 6 existing clients renewed in Q2 2025. MANTL added 23 new clients in Q2 2025, including 3 attached to Alkami digital banking wins and 6 existing Alkami digital banking clients.

In the second quarter of 2025, Alkami achieved total revenue of $112.1 million, representing a 36% year-over-year growth and 28% organic growth. Subscription revenue grew 35% and accounted for 95% of total revenue. ARR increased by 32% to $424 million. The company exited the quarter with 20.9 million registered users on the Alkami Platform, a 12% increase from the prior year. Subscription revenue was the dominant segment, making up 95% of total revenue. The MANTL acquisition contributed to revenue growth, with MANTL adding 30% to 40% of ARR to new logo deals. The backlog for implementation was approximately $68 million, with a majority occurring over the next 12 months.

• Q3 2025 revenue guidance: $112.5 million to $114 million (31% to 33% growth).
• Q3 2025 adjusted EBITDA guidance: $13 million to $14 million.
• Full year 2025 revenue guidance: $443 million to $447 million (33% to 34% growth, 25% to 26% organic growth).
• Full year 2025 adjusted EBITDA guidance: $51.5 million to $54 million, a raise of $1.8 million above the midpoint of previous guidance.

• Churn risk: Primary driver is M&A within client base, but Alkami expects net gains from financial institution consolidations. Churn total for 2025 is expected to be 4 clients, less than 1% of ARR.
• Regulatory uncertainties: Implications of stablecoins and FedNow on community banks are still murky, with customers cautious about offering new products like stablecoins and managing fraud in real-time payment environments.
• Market dynamics: Dependence on industry demand for digital transformation, which while strong, is subject to economic and regulatory fluctuations.

Q: Pat Walravens asked about the GENIUS Act and stablecoins.

A: Alex Shootman said customers are concerned about retaining deposits if offering stablecoins and are slow rolling real-time payments due to fraud concerns.

Q: Adam Hotchkiss asked about M&A impact.

A: Alex Shootman said M&A in credit unions and banks benefits Alkami, with Bryan Hill noting Alkami has benefited from 500,000 net digital user gains from M&A over 4 years, including 200,000 in 2025.