Alkami Technology, Inc. Q3 FY2025 earnings call

• Announced Cassandra Hudson as the new Chief Financial Officer, bringing over 20 years of experience. - Alkami grew revenue over 31%, adjusted EBITDA to $16 million, and had 21.6 million registered users on the platform, up 2.1 million from the prior year. - Added 10 new digital banking clients, including a top 20 credit union with 450,000 digital users. - MANTL had 29 new clients, 15 of which were existing Alkami clients. - Implemented 13 new digital banking clients in Q3, the most in a single quarter, and 15 MANTL clients on the onboarding platform. - Completed design work for the digital sales and service platform integration, with a dedicated engineering team working on the build. - Released new money movement hub, one-click SDK deployment in beta, and an agentic code creator prototype. - Created a new development team for the partner ecosystem to double the number of onboarded partners.

In the third quarter of 2025, Alkami achieved total revenue of $113 million, representing a year-over-year growth of 31.5% and organic growth exceeding 20%. Subscription revenue grew 31.5% and accounted for 96% of total revenue. Adjusted EBITDA was $16 million, up from $8.3 million in the year-ago quarter. The digital banking platform added 10 new clients, including 6 credit unions and 4 banks, with one being the largest new logo transaction in the company's history. The MANTL business had 29 new clients, 15 of which were new to Alkami. Year-to-date, the company signed 23 new logos with the digital banking platform and 39 new logo relationships with the onboarding platform in FIs not using Alkami's digital banking. Gross margin for the third quarter was 63.7%, expanding by nearly 100 basis points compared to the prior year. Operating expenses were $56.4 million, representing 50% of revenue with year-over-year operating leverage of approximately 360 basis points.

• For Q4 2025, revenue is expected to be in the range of $119.6 million to $121.1 million, with organic growth of 22%. Adjusted EBITDA is guided to be between $16.1 million and $17.1 million. - For full-year 2025, revenue is projected to be between $442.5 million and $444 million, and adjusted EBITDA is guided to be $56 million to $57 million, a raise from previous guidance.

• Timing of implementations can cause dislocations in quarterly comparisons, as the schedule depends on customer preferences for when they want to implement. - Competitive environment changes, though no specific company's results directly impact buying behavior, but the market is seeing a shift from buying digital banking from core providers to best-of-breed solutions. - Gross margin can be affected by factors like excess fees from third-party IP sales being lower than anticipated in a quarter.

Q: What enables more customer implementations in a quarter?

A: The services team rebuilt implementation methodology, collaborated better between teams, and replicated best implementation behaviors, including testing and third-party relationship management. The team has performed well, with 13 new digital banking clients implemented in Q3 and 3 clients going live in the same day.

Q: Factors behind backlog ticking up?

A: Backlog includes 1.7 million digital users, up from 1.2 million a year ago. MANTL is contributing significantly, with nearly reaching $60 million of ARR under contract. Cross-selling MANTL into existing clients and a 75% attachment rate of Segmint also contribute. The integration of 3 products provides a seamless experience desired by customers.

Q: Impact of Alkami and MANTL combination on new signings?

A: The combination has been well-received, with demand for MANTL's onboarding and account opening product from Alkami's base. MANTL joined Alkami, and the purchaser of MANTL solutions is often the same as for online banking, allowing for good cross-selling opportunities. However, projecting doubling sales is not accurate.

Q: Dynamics behind backlog slight tick down sequentially?

A: There was a significant implementation quarter with many new digital banking and MANTL clients implemented, pulling from the backlog. The large number of implementations, including 6 banks and a very large client, contributed to the slight tick down.