Alkami Announces First Quarter 2024 Financial Results

Rhea-AI Impact

(Neutral)

Rhea-AI Sentiment

(Neutral)

Insights

Alkami's announcement of a 26.9% increase in GAAP total revenue signifies a robust growth trajectory, particularly when juxtaposed with the tech sector's average. Expansion of GAAP gross margin to 57.8% and non-GAAP gross margin to 61.7% reflect operational efficiency improvements. These margins are particularly notable as they excel beyond the typical mid-50s percentages seen in similar firms, indicating a stronger monetization of their services.

The reduction in GAAP net loss from $(17.0) million to $(11.4) million suggests prudent cost management, even as the company scales. Furthermore, the swing to positive Adjusted EBITDA of $3.8 million, from a loss of $(2.9) million, could demonstrate a potential trend towards profitability, a key metric for investors seeking long-term value creation.

Alkami's customer growth, with an additional 3.0 million live registered users and the renewal of a major contract are indicative of a solid customer retention and acquisition strategy. This is further underscored by a significant 20% yearly growth in digital banking users, a metric that investors often scrutinize for future revenue potential.

The burgeoning demand for digital banking modernization in regional and community financial institutions, as highlighted by Alkami's CEO, points to a market ripe for further penetration. The successful user conference with 800 attendees from 220 financial institutions could signal strong industry engagement and the potential for new deals.

The increase in Annual Recurring Revenue (ARR) to $303 million, up 26.1%, is a significant marker of sustainability, especially in software service models where ARR is a important indicator of long-term viability and cash flow stability.

Alkami's progress in key initiatives to position as a premier digital banking provider is congruent with industry-wide moves towards cloud-based solutions. The technology sector and more specifically cloud-based services, are experiencing strong tailwinds due to the digital transformation acceleration. Alkami's ability to double the total contract value upon renewal with their largest client underscores their competitive advantage and pricing power in the marketplace.

05/01/2024 - 04:05 PM

PLANO, Texas, May 01, 2024 (GLOBE NEWSWIRE) -- Alkami Technology, Inc. (Nasdaq: ALKT) (“Alkami”), a leading cloud-based digital banking solutions provider for financial institutions in the U.S., today announced results for its first quarter ending March 31, 2024.

First Quarter 2024 Financial Highlights

GAAP total revenue of $76.1 million, an increase of 26.9% compared to the year-ago quarter;
GAAP gross margin of 57.8%, compared to 53.6% in the year-ago quarter;
Non-GAAP gross margin of 61.7%, compared to 58.1% in the year-ago quarter;
GAAP net loss of $(11.4) million, compared to $(17.0) million in the year-ago quarter; and
Adjusted EBITDA of $3.8 million, compared to a loss of $(2.9) million in the year-ago quarter.

Comments on the News

Alex Shootman, Chief Executive Officer, said, “In the first quarter, we delivered another quarter of robust performance. We ended Q1 with 18.1 million live registered users, up 3.0 million compared to the prior-year quarter as we continue to lead the industry in market share gains. In February of 2024, we renewed our largest client, which is a top 10 credit union, more than doubling the original total contract value and extending the relationship for another five years. And we continued our progress on the key initiatives that will position Alkami to be the premier digital banking provider.”

Shootman added, “In April, we hosted our largest-ever user conference, with more than 800 in-person attendees representing 220 financial institutions. Feedback from prospects and existing clients was consistent and unequivocal – there is a pronounced and growing need for modernization among regional and community financial institutions, and Alkami is well positioned to continue delivering market-leading solutions and strong growth.”

Bryan Hill, Chief Financial Officer, said, “We grew digital banking users on the Alkami platform by 20% compared to the prior-year quarter. We exited the quarter with Annual Recurring Revenue of $303 million, up 26.1% compared to the year-ago quarter. Our revenue per user continued to grow, ending the quarter at $16.71, driven by add-on sales and the addition of new clients who tend to onboard at a higher average RPU. We also expanded non-GAAP gross margin to 61.7%, representing an increase of approximately 360 basis points, demonstrating continued progress towards our 2026 non-GAAP gross margin objective of 65%.”

2024 Financial Outlook

Alkami’s financial outlook is based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement Regarding Forward-Looking Statements.”

Alkami is providing guidance for its second quarter ending June 30, 2024 of:

GAAP total revenue in the range of $80.5 million to $82.0 million;
Adjusted EBITDA in the range of $2.8 million to $3.8 million.

Alkami is providing guidance for its fiscal year ending December 31, 2024 of:

GAAP total revenue in the range of $328.5 million to $333.0 million;
Adjusted EBITDA in the range of $20.5 million to $23.5 million.

Conference Call Information
The Company will host a conference call at 5:00 p.m. ET today to discuss its financial results with investors. A live webcast of the event will be available on the Alkami investor relations website at investors.alkami.com. In addition, a live dial-in will be available domestically at 1-800-836-8184 and internationally at 1-646-357-8785 using passcode 64781. A replay will be available in the Investor Relations section of the Alkami website.

About Alkami
Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in the United States that enables clients to grow confidently, adapt quickly and build thriving digital communities. Alkami helps clients transform through retail and business banking, digital account opening, payment security, and data analytics and marketing solutions. To learn more, visit https://www.alkami.com/.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking” statements relating to Alkami Technology, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its future cash flows and its financial outlook. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: Our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients’ use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital and other factors described in the Company’s filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Explanation of Non-GAAP Financial Measures and Key Business Metrics

The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in both frequency and impact on continuing operations. The company also uses results of operations excluding such items to evaluate the operating performance of Alkami and compare it against prior periods, make operating decisions, determine executive compensation, and serve as a basis for long-term strategic planning. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that Alkami believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors.

The company defines “Non-GAAP Cost of Revenues” as cost of revenues, excluding (1) amortization and (2) stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Gross Margin” as gross profit, plus (1) amortization and (2) stock-based compensation expense, all divided by revenue. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Research and Development Expense” as research and development expense, excluding stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.

The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.

The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.

The company defines “Non-GAAP Net Loss” as net loss, plus (1) provision for income taxes (2) gain on financial instruments, (3) amortization, (4) stock-based compensation expense, and (5) acquisition-related expenses. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Adjusted EBITDA” as net loss plus (1) provision for income taxes, (2) gain on financial instruments, (3) interest (income) expense, net, (4) depreciation and amortization (5) stock-based compensation expense, and (6) acquisition-related expenses. The company believes adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.

In addition, the Company also uses the following important operating metrics to evaluate its business:

The company defines “Annual Recurring Revenue (ARR)” by aggregating annualized recurring revenue related to SaaS subscription services recognized in the last month of the reporting period as well as the next 12 months of expected implementation services revenues in the last month of the reporting period. We believe ARR provides important information about our future revenue potential, our ability to acquire new clients, and our ability to maintain and expand our relationship with existing clients.

The company defines “Registered Users” as an individual or business related to an account holder of an FI client on our digital banking platform who has registered to use one or more of our solutions and has current access to use those solutions as of the last day of the reporting period presented. We price our digital banking platform based on the number of registered users, so as the number of registered users of our digital banking platform increases, our ARR grows. We believe growth in the number of registered users provides important information about our ability to expand market adoption of our digital banking platform and its associated software products, and therefore to grow revenues over time.

The company defines “Revenue per Registered User (RPU)” by dividing ARR for the reporting period by the number of registered users as of the last day of the reporting period. We believe RPU provides important information about our ability to grow the number of software products adopted by new clients over time, as well as our ability to expand the number of software products that our existing clients add to their contracts with us over time.

The company does not provide a reconciliation of our adjusted EBITDA outlook to GAAP net loss because certain significant information required for such reconciliation is not available without unreasonable efforts, including provision for income taxes, loss on financial instruments, stock-based compensation expense, and acquisition-related expenses, net, all of which may be significant.

ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(UNAUDITED)
	March 31,			December 31,
		2024			2023
Assets
Current assets
Cash and cash equivalents	$	44,179		$	40,927
Marketable securities		43,125			51,196
Accounts receivable, net		35,717			35,499
Deferred costs, current		11,081			10,329
Prepaid expenses and other current assets		11,531			10,634
Total current assets		145,633			148,585
Property and equipment, net		18,217			16,946
Right-of-use assets		15,479			15,754
Deferred costs, net of current portion		31,499			30,734
Intangibles, net		34,111			35,807
Goodwill		148,050			148,050
Other assets		4,653			3,949
Total assets	$	397,642		$	399,825
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	6,533		$	7,478
Accrued liabilities		16,902			19,763
Deferred revenues, current portion		12,497			10,984
Lease liabilities, current portion		1,242			1,205
Total current liabilities		37,174			39,430
Deferred revenues, net of current portion		17,525			15,384
Deferred income taxes		1,738			1,713
Lease liabilities, net of current portion		18,065			18,052
Other non-current liabilities		233			305
Total liabilities		74,735			74,884
Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023		—			—
Common stock, $0.001 par value, 500,000,000 shares authorized; and 97,515,483 and 96,722,098 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		98			97
Additional paid-in capital		769,608			760,210
Accumulated deficit		(446,799	)		(435,366	)
Total stockholders’ equity		322,907			324,941
Total liabilities and stockholders' equity	$	397,642		$	399,825

ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(UNAUDITED)
	Three months ended March 31,
		2024			2023
Revenues	$	76,127		$	59,996
Cost of revenues⁽¹⁾		32,095			27,858
Gross profit		44,032			32,138
Operating expenses:
Research and development		22,820			20,549
Sales and marketing		13,843			10,878
General and administrative		19,315			17,111
Acquisition-related expenses		60			186
Amortization of acquired intangibles		359			360
Total operating expenses		56,397			49,084
Loss from operations		(12,365	)		(16,946	)
Non-operating income (expense):
Interest income		1,082			1,726
Interest expense		(73	)		(1,757	)
Gain on financial instruments		112			210
Loss before income taxes		(11,244	)		(16,767	)
Provision for income taxes		189			196
Net loss	$	(11,433	)	$	(16,963	)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.12	)	$	(0.18	)
Weighted average number of shares of common stock outstanding:
Basic and diluted		96,945,232			92,397,341

⁽¹⁾ Includes amortization of acquired technology of $1.3 million for both the three months ended March 31, 2024 and 2023.

ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
	Three months ended March 31,
		2024			2023
Cash flows from operating activities:
Net loss	$	(11,433	)	$	(16,963	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		2,562			2,586
Accrued interest on marketable securities, net		(294	)		(398	)
Stock-based compensation expense		13,552			11,440
Amortization of debt issuance costs		32			45
Gain on financial instruments		(112	)		(210	)
Deferred taxes		25			47
Changes in operating assets and liabilities:
Accounts receivable		(218	)		(2,183	)
Prepaid expenses and other current assets		(1,633	)		(2,654	)
Accounts payable and accrued liabilities		(3,873	)		(1,290	)
Deferred costs		(1,311	)		(859	)
Deferred revenues		3,654			824
Net cash provided by (used in) operating activities		951			(9,615	)
Cash flows from investing activities:
Purchase of marketable securities		(7,149	)		(20,987	)
Proceeds from sales, maturities and redemptions of marketable securities		15,626			38,122
Purchases of property and equipment		(306	)		(229	)
Capitalized software development costs		(1,363	)		(1,141	)
Net cash provided by investing activities		6,808			15,765
Cash flows from financing activities:
Payments for taxes related to net settlement of equity awards		(5,678	)		(1,984	)
Proceeds from stock option exercises		1,171			1,416
Net cash used in financing activities		(4,507	)		(568	)
Net increase in cash and cash equivalents and restricted cash		3,252			5,582
Cash and cash equivalents and restricted cash, beginning of period		40,927			112,337
Cash and cash equivalents and restricted cash, end of period	$	44,179		$	117,919

ALKAMI TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share data)
(UNAUDITED)
	Three Months Ended
	March 31,
		2024			2023
GAAP total revenues	$	76,127			59,996

	March 31,
		2024			2023
Annual Recurring Revenue (ARR)	$	302,659		$	240,050
Registered Users		18,113			15,119
Revenue per Registered User (RPU)	$	16.71		$	15.88

Non-GAAP Cost of Revenues
Set forth below is a presentation of the company’s “Non-GAAP Cost of Revenues.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP cost of revenues	$	32,095		$	27,858
Amortization		(1,775	)		(1,599	)
Stock-based compensation expense		(1,178	)		(1,146	)
Non-GAAP cost of revenues	$	29,142		$	25,113

Non-GAAP Gross Margin
Set forth below is a presentation of the company’s “Non-GAAP Gross Margin.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP gross margin		57.8	%		53.6	%
Amortization		2.3	%		2.6	%
Stock-based compensation expense		1.6	%		1.9	%
Non-GAAP gross margin		61.7	%		58.1	%

Non-GAAP Research and Development Expense
Set forth below is a presentation of the company’s “Non-GAAP Research and Development Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP research and development expense	$	22,820		$	20,549
Stock-based compensation expense		(3,998	)		(3,775	)
Non-GAAP research and development expense	$	18,822		$	16,774

Non-GAAP Sales and Marketing Expense
Set forth below is a presentation of the company’s “Non-GAAP Sales and Marketing Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP sales and marketing expense	$	13,843		$	10,878
Stock-based compensation expense		(2,031	)		(1,590	)
Non-GAAP sales and marketing expense	$	11,812		$	9,288

Non-GAAP General and Administrative Expense
Set forth below is a presentation of the company’s “Non-GAAP General and Administrative Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP general and administrative expense	$	19,315		$	17,111
Stock-based compensation expense		(6,345	)		(4,733	)
Non-GAAP general and administrative expense	$	12,970		$	12,378

Non-GAAP Net Loss
Set forth below is a presentation of the company’s “Non-GAAP Net Loss.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP net loss	$	(11,433	)	$	(16,963	)
Provision for income taxes		189			196
Gain on financial instruments		(112	)		(210	)
Amortization		2,134			1,959
Stock-based compensation expense		13,552			11,244
Acquisition-related expenses		60			186
Non-GAAP net loss	$	4,390		$	(3,588	)


Adjusted EBITDA
Set forth below is a presentation of the company’s “Adjusted EBITDA.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended
	March 31,
		2024			2023
GAAP net loss	$	(11,433	)	$	(16,963	)
Provision for income taxes		189			196
Gain on financial instruments		(112	)		(210	)
Interest (income) expense, net		(1,009	)		31
Depreciation and amortization		2,562			2,586
Stock-based compensation expense		13,552			11,244
Acquisition-related expenses		60			186
Adjusted EBITDA	$	3,809		$	(2,930	)

Investor Relations Contact
Steve Calk
ir@alkami.com

Media Relations Contacts
Marla Pieton
marla.pieton@alkami.com

Valerie Kerner
alkami@fullyvested.com

FAQ

What were Alkami's GAAP total revenue results for the first quarter of 2024?

Alkami reported GAAP total revenue of $76.1 million for the first quarter of 2024, representing a 26.9% increase compared to the year-ago quarter.

How many live registered users did Alkami have at the end of the first quarter of 2024?

Alkami ended the first quarter of 2024 with 18.1 million live registered users, up 3.0 million compared to the prior-year quarter.

What was Alkami's Annual Recurring Revenue at the end of the first quarter of 2024?

Alkami's Annual Recurring Revenue at the end of the first quarter of 2024 was $303 million, reflecting a 26.1% increase compared to the year-ago quarter.

Alkami Announces First Quarter 2024 Financial Results

Insights

FAQ

What were Alkami's GAAP total revenue results for the first quarter of 2024?

How many live registered users did Alkami have at the end of the first quarter of 2024?

What was Alkami's Annual Recurring Revenue at the end of the first quarter of 2024?

NASDAQ:ALKT

ALKT Rankings

ALKT Latest News

ALKT Stock Data

Trending News

Alkami Announces First Quarter 2024 Financial Results

Insights

Financial Analyst

Market Research Analyst

Technology Industry Expert

FAQ

What were Alkami's GAAP total revenue results for the first quarter of 2024?

How many live registered users did Alkami have at the end of the first quarter of 2024?

What was Alkami's Annual Recurring Revenue at the end of the first quarter of 2024?

NASDAQ:ALKT

ALKT Rankings

ALKT Latest News

ALKT Stock Data