ALKT — Alkami Technology, Inc.

Summary of Alkami's Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $113 million, up 31.5% year-over-year; organic growth exceeded 20%.
• Adjusted EBITDA: $16 million, compared to $8.3 million in Q3 2024, representing an adjusted EBITDA margin of 14.1%.
• Annual Recurring Revenue (ARR): Increased over 31% to $449 million; $67 million of ARR in backlog for implementation.
• Registered Users: 21.6 million, up 2.1 million (11%) from the previous year.
• Client Base: 291 live clients, with 10 new clients added in Q3, including a significant new logo transaction.

2. Strategic Updates and Business Highlights

• CFO Transition: Bryan Hill announced his retirement, with Cassandra Hudson appointed as the new CFO.
• Strong Sales Performance: Best Q3 sales quarter ever, with 10 new clients added to the digital banking platform and 29 new clients for the MANTL onboarding platform.
• Product Development: Successful integration of Alkami and MANTL platforms; new product features and enhancements were highlighted, including a money movement hub and treasury management features.
• Market Position: Alkami serves 5 of the top 20 credit unions in the U.S. and continues to see positive market reception for its combined offerings.

3. Forward Guidance and Outlook

• Q4 2025 Revenue Guidance: Expected between $119.6 million and $121.1 million, indicating a 22% organic growth rate.
• Full Year 2025 Revenue Guidance: Projected between $442.5 million and $444 million, with adjusted EBITDA guidance of $56 million to $57 million.
• Long-Term Growth: Management remains optimistic about growth opportunities, citing over 900 credit unions and nearly 1,000 banks still not on modern platforms.

4. Bad News, Challenges, or Points of Concern

• Implementation Timing: Some client implementations were pushed to Q4, impacting revenue recognition in Q3; this could lead to fluctuations in quarterly performance.
• Gross Margin Pressure: Q3 gross margin was 63.7%, slightly down from previous quarters due to third-party IP costs; however, year-over-year gross margin improved by 100 basis points.
• Market Competition: The competitive landscape is evolving, with a shift towards best-of-breed solutions, which may require ongoing adaptation in sales strategies.

5. Notable Q&A Insights

• Implementation Scheduling: Management noted that client preferences for implementation timing can lead to seasonal variations, impacting quarterly revenue.
• Market Dynamics: There is a growing trend among community banks to adopt best-of-breed solutions rather than relying solely on core providers, which could benefit Alkami.
• AI Utilization: Interest in AI applications is rising among financial institutions, with many exploring generative and agentic AI technologies for enhancing customer experience.
• Cross-Selling Success: Cross-selling efforts are strong, with nearly 50% of new sales coming from existing clients, particularly benefiting from the MANTL acquisition.

Overall, Alkami reported strong financial performance in Q3 2025, with significant growth in revenue and user base, while also navigating challenges related to implementation timing and competitive pressures. The company remains positive about future growth opportunities and strategic initiatives.