0001529274☐☐☐☐☐00015292742024-07-312024-07-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 31, 2024

ALKAMI TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware     001-40321     45-3060776
(State or Other Jurisdiction of Incorporation) (Commission File Number)     (I.R.S. Employer Identification Number)

5601 Granite Parkway, Suite 120, Plano, TX 75024
(Address of Principal Executive Offices) (Zip Code)
(877) 725-5264
Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareALKT
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐










Item 2.02. Results of Operations and Financial Condition.

On July 31, 2024, Alkami Technology, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

The information set forth in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibit 99.1, shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

On July 31, 2024, the Company posted an investor presentation to its website at www.alkami.com (the “Investor Presentation”). A copy of the Investor Presentation is furnished herewith as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

The information set forth in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibit 99.2, shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. By furnishing the information contained in the Investor Presentation, the Company makes no admission as to the materiality of any information in the Investor Presentation that is required to be disclosed solely by reason of Regulation FD.

Item 9.01. Financial Statements and Exhibits.
Exhibit NumberDescription
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Alkami Technology, Inc.
Date:July 31, 2024By:/s/ W. Bryan Hill
W. Bryan Hill
Chief Financial Officer


Exhibit 99.1

Alkami Announces Second Quarter 2024 Financial Results

PLANO, Texas, July 31, 2024 (PRNewswire) -- 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 June 30, 2024.

Second Quarter 2024 Financial Highlights

•GAAP total revenue of $82.2 million, an increase of 24.9% compared to the year-ago quarter;
•GAAP gross margin of 59.4%, compared to 53.9% in the year-ago quarter;
•Non-GAAP gross margin of 63.2%, compared to 58.7% in the year-ago quarter;
•GAAP net loss of $(12.3) million, compared to $(17.8) million in the year-ago quarter; and
•Adjusted EBITDA of $4.6 million, compared to a loss of $(2.5) million in the year-ago quarter.

Comments on the News

Alex Shootman, Chief Executive Officer, said, “In the second quarter, we delivered another quarter of tremendous operating and financial results. We ended the second quarter with 18.6 million live registered users, up 2.7 million compared to the prior-year quarter, and delivered excellent performance from new client wins, add-on sales and renewals. Alkami continues to lead the industry in terms of end user satisfaction and gains in market share, underscoring our commitment to deliver the best digital banking solution to regional and community financial institutions.”

Shootman added, “In the second quarter we signed eight new digital banking clients, including four credit unions and four banks. One of the wins was a tier one credit union that will be among our top clients in terms of ARR. We also won a large Midwestern bank that possesses a robust commercial banking growth strategy. The bank was an existing ACH Alert client where we cultivated a strong relationship and ultimately cross-sold our digital banking platform.”

Bryan Hill, Chief Financial Officer, said, “We achieved total revenue growth of 25% for the quarter, and more importantly, we achieved 28% subscription revenue growth. We exceeded our gross margin and adjusted EBITDA expectations, demonstrating continued progress towards our 2026 objectives of a non-GAAP gross margin of 65% and adjusted EBITDA margin of 20%.”


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 third quarter ending September 30, 2024 of:
•GAAP total revenue in the range of $83.8 million to $85.3 million;
•Adjusted EBITDA in the range of $5.8 million to $6.8 million.

Alkami is providing guidance for its fiscal year ending December 31, 2024 of:
•GAAP total revenue in the range of $330.5 million to $333.5 million;
•Adjusted EBITDA in the range of $22.0 million to $24.0 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 83045. 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 commercial banking, digital account opening, and data and marketing solutions. To learn more, visit 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) (loss) 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) (loss) gain on financial instruments, (3) interest income, 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)
June 30,December 31,
20242023
Assets
Current assets
Cash and cash equivalents$61,432 $40,927 
Marketable securities25,962 51,196 
Accounts receivable, net38,952 35,499 
Deferred costs, current11,478 10,329 
Prepaid expenses and other current assets14,132 10,634 
Total current assets151,956 148,585 
Property and equipment, net19,539 16,946 
Right-of-use assets15,180 15,754 
Deferred costs, net of current portion32,542 30,734 
Intangibles, net32,414 35,807 
Goodwill148,050 148,050 
Other assets4,176 3,949 
Total assets$403,857 $399,825 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable$5,794 $7,478 
Accrued liabilities20,879 19,763 
Deferred revenues, current portion12,572 10,984 
Lease liabilities, current portion1,275 1,205 
Total current liabilities40,520 39,430 
Deferred revenues, net of current portion16,445 15,384 
Deferred income taxes1,760 1,713 
Lease liabilities, net of current portion17,736 18,052 
Other non-current liabilities212 305 
Total liabilities76,673 74,884 
Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023
— — 
Common stock, $0.001 par value, 500,000,000 shares authorized; and 98,985,370 and 96,722,098 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
99 97 
Additional paid-in capital786,201 760,210 
Accumulated deficit(459,116)(435,366)
Total stockholders’ equity327,184 324,941 
Total liabilities and stockholders' equity$403,857 $399,825 


ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(UNAUDITED)
Three months ended June 30,
Six months ended June 30,
2024202320242023
Revenues$82,160 $65,763 $158,287 $125,759 
Cost of revenues(1)
33,389 30,289 65,484 58,147 
Gross profit48,771 35,474 92,803 67,612 
Operating expenses:
Research and development23,909 20,866 46,729 41,415 
Sales and marketing16,964 13,883 30,807 24,761 
General and administrative20,612 18,207 39,927 35,318 
Acquisition-related expenses135 34 195 220 
Amortization of acquired intangibles 358 357 717 717 
Total operating expenses61,978 53,347 118,375 102,431 
Loss from operations(13,207)(17,873)(25,572)(34,819)
Non-operating income (expense):
Interest income1,261 2,016 2,343 3,742 
Interest expense(74)(1,826)(147)(3,583)
(Loss) gain on financial instruments(112)10 — 220 
Loss before income taxes(12,132)(17,673)(23,376)(34,440)
Provision for income taxes185 88 374 284 
Net loss$(12,317)$(17,761)$(23,750)$(34,724)
Net loss per share attributable to common stockholders:
Basic and diluted$(0.13)$(0.19)$(0.24)$(0.37)
Weighted average number of shares of common stock outstanding:
Basic and diluted98,103,527 93,334,725 97,524,379 92,868,623 

(1) Includes amortization of acquired technology of $1.4 million for both the three months ended June 30, 2024 and 2023, and $2.7 million for both the six months ended June 30, 2024 and 2023.














ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
Six months ended June 30,
20242023
Cash flows from operating activities:
Net loss$(23,750)$(34,724)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense5,175 5,146 
Accrued interest on marketable securities, net(787)(1,179)
Stock-based compensation expense28,565 24,399 
Amortization of debt issuance costs65 80 
Gain on financial instruments— (177)
Deferred taxes47 85 
Changes in operating assets and liabilities:
Accounts receivable(3,453)(1,906)
Prepaid expenses and other current assets(3,790)(1,882)
Accounts payable and accrued liabilities(653)(2,126)
Deferred costs(2,569)(2,856)
Deferred revenues2,649 (185)
Net cash provided by (used in) operating activities1,499 (15,325)
Cash flows from investing activities:
Purchase of marketable securities(15,588)(62,640)
Proceeds from sales, maturities and redemptions of marketable securities41,609 65,622 
Purchases of property and equipment(731)(417)
Capitalized software development costs(3,015)(2,661)
Net cash provided by (used in) investing activities22,275 (96)
Cash flows from financing activities:
Principal payments on debt—(1,063)
Debt issuance costs paid—(341)
Proceeds from Employee Stock Purchase Plan issuances2,598 2,407 
Payment of holdback funds from acquisition—(1,000)
Payments for taxes related to net settlement of equity awards(12,795)(6,825)
Proceeds from stock option exercises6,928 2,802 
Net cash used in financing activities(3,269)(4,020)
Net increase (decrease) in cash and cash equivalents and restricted cash 20,505 (19,441)
Cash and cash equivalents and restricted cash, beginning of period40,927 112,337 
Cash and cash equivalents and restricted cash, end of period$61,432 $92,896 


ALKAMI TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share data)
(UNAUDITED)
Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP total revenues$82,160 $65,763 $158,287 $125,759 
June 30,
20242023
Annual Recurring Revenue (ARR)$321,284 $256,811 
Registered Users18,584 15,849 
Revenue per Registered User (RPU)$17.29 $16.20 
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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP cost of revenues$33,389 $30,289 $65,484 $58,147 
Amortization(1,793)(1,638)(3,568)(3,237)
Stock-based compensation expense(1,347)(1,487)(2,525)(2,633)
Non-GAAP cost of revenues$30,249 $27,164 $59,391 $52,277 
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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP gross margin59.4 %53.9 %58.6 %53.8 %
Amortization2.2 %2.5 %2.3 %2.5 %
Stock-based compensation expense1.6 %2.3 %1.6 %2.1 %
Non-GAAP gross margin63.2 %58.7 %62.5 %58.4 %
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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP research and development expense$23,909 $20,866 $46,729 $41,415 
Stock-based compensation expense(4,256)(3,963)(8,254)(7,738)
Non-GAAP research and development expense$19,653 $16,903 $38,475 $33,677 


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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP sales and marketing expense$16,964 $13,883 $30,807 $24,761 
Stock-based compensation expense(2,291)(1,813)(4,322)(3,403)
Non-GAAP sales and marketing expense$14,673 $12,070 $26,485 $21,358 
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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP general and administrative expense$20,612 $18,207 $39,927 $35,318 
Stock-based compensation expense(7,119)(5,489)(13,464)(10,222)
Non-GAAP general and administrative expense$13,493 $12,718 $26,463 $25,096 
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 EndedSix Months Ended
June 30,June 30,
2024202320242023
GAAP net loss $(12,317)$(17,761)$(23,750)$(34,724)
Provision for income taxes185 88 374 284 
Loss (gain) on financial instruments112 (10)— (220)
Amortization2,151 1,995 4,285 3,954 
Stock-based compensation expense15,013 12,752 28,565 23,996 
Acquisition-related expenses135 34 195 220 
Non-GAAP net loss$5,279 $(2,902)$9,669 $(6,490)


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 EndedYear Ended
June 30,June 30,
2024202320242023
GAAP net loss$(12,317)$(17,761)$(23,750)$(34,724)
Provision for income taxes185 88 374 284 
Loss (gain) on financial instruments 112 (10)— (220)
Interest income, net(1,187)(190)(2,196)(159)
Depreciation and amortization2,613 2,560 5,175 5,146 
Stock-based compensation expense15,013 12,752 28,565 23,996 
Acquisition-related expenses135 34 195 220 
Adjusted EBITDA$4,554 $(2,527)$8,363 $(5,457)

Investor Relations Contact
Steve Calk
ir@alkami.com

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

Valerie Kerner
alkami@fullyvested.com




Alkami Technology, Inc. Proprietary Information. Alkami Technology Second Quarter 2024

 
2 © A lk am i T ec h n o lo gy , I n c. This presentation 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. 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. 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. Cautionary Statement Regarding Forward-Looking Statements

 
3 © A lk am i T ec h n o lo gy , I n c. Who We Are • Cloud-based digital banking platform serving U.S. financial institutions What We Do • Empower FIs to grow, drive user engagement and improve operational efficiency • Leverage broad product set enabling retail and commercial banking How We Do It • Powerful, scalable technology stack • Modern architecture, multi-tenant • Continuous integration, delivery and deployment Who We Serve • Community, regional and super-regional FIs Alkami Technology, Inc. We enable FIs to effectively compete with larger, more technologically advanced and well-resourced competitors Financial Institutions Digital Banking Consumer and Commercial Users FinTech Partners

 
4 © A lk am i T ec h n o lo gy , I n c. U.S. Digital Banking User Distribution Users in millions by asset range, including megabanks Source: FI Navigator, December 2023

 
5 © A lk am i T ec h n o lo gy , I n c. Go-To-Market Cadence We focus on the top 2,500 FIs excluding the megabanks Industry average contract length is 5 years, translating to approximately 500 contracts up for renewal annually 500 Annual Renewals 2,500 Target Clients v 9,000+ FIs Over 9,000 FIs in the United States• Sales team drives outbound lead generation, cross selling and account management • Client success team supports retention and deepens the relationships with our clients Highly targeted annual renewal class allows us to focus sales resources Note: Excludes financial institutions with assets greater than $450B

 
6 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market Growing healthy $14 billion TAM Total Addressable Market • 250M digital users x $58 ARPU • Digital users growing 5% to 8% annually • 30+ products today vs. 9 in 2015 Core Platform • 250M digital users x $35 ARPU • Existing client digital penetration of <80% expected to converge to near 100% DOA/LOS • Acquired Q3 2021 - Digital Account Opening and Unsecured Loan Origination ACH Alert • Acquired Q4 2020 - Fraud Prevention Segmint • Acquired Q2 2022 - Managed Marketing & AI 250M users represents FIs with assets between $100M and $450B Sources: NCUA, FDIC, FI Navigator, Cornerstone Advisors and Alkami internal research

 
7 © A lk am i T ec h n o lo gy , I n c. Multiple Levers Driving Growth ● Clients driven by new logo wins, historically among credit unions, with a growing presence among banks ● Registered users grow as we add new logos and as clients add users ● RPU driven by product penetration at initial sale and by add on sales, and is offset by volume discounts as existing clients add users Note: RPU and ARR include subscription and recurring implementation services revenue

 
8 © A lk am i T ec h n o lo gy , I n c. Alkami’s Digital Sales & Service Platform Onboard Engage Grow Guard Sales Service Digital Account Opening Marketing Data Insights Card Experience Customer Service Commercial Services Financial Wellness Security & Fraud Protection Money Movement Extensibility Comprehensive digital banking to help FIs manage costs and remain competitive

 
9 © A lk am i T ec h n o lo gy , I n c. Product Strategy ● Lead with UX ● Deepen integrations with cores & third party systems ● Hyperfocus on Commercial Banking & DAO ● Data Integrity ● Integrating Flux, Segmint and Digital Banking further ● Monetizing data ● Streamlined, trackable and performant APIs ● Enhanced SDK to enable easier customization ● Developer Portal MVP Data Services Platform ServicesDigital Banking The Three Product Pillars

 
10 © A lk am i T ec h n o lo gy , I n c. How We Achieve Our Long-term Objectives Market Leadership Maintain Strong Credit Union Position Grow Bank Mindshare and Capabilities Drive Add-On Sales Scale and Continued Cost Discipline Continuous Product and Platform Improvement

 
Alkami Technology, Inc. Proprietary Information. Financial Overview

 
12 © A lk am i T ec h n o lo gy , I n c. Q2 2024 Financial Performance $M ● Q2’24 revenue growth of 25% driven by new clients, existing client user growth and ARPU growth ● GM expansion consistent with our plan to increase GM 200-300 bps per year through 2026 ● Adjusted EBITDA expansion driven by continued scale and efficiencies in Research & Development, Sales & Marketing and General & Administrative Note: Gross margin % on a non-GAAP basis

 
13 © A lk am i T ec h n o lo gy , I n c. Operating and Financial Highlights 6/30/24 $321M ARR Subscription Revenue Mix as of 6/30/24 95% Subscription Revenue 12/31/23 115% Net Dollar Retention Remaining Performance Obligations as of 6/30/24 $1.2B RPO Digital Banking Clients 254 Q2 2024 218 Q2 2023 Registered Users 18.6M15.8M Q2 2024Q2 2023 ● Signed 8 new digital banking platform clients in Q2 ● Implemented 10 clients in Q2, bringing digital platform client count to 254 ● 39 new clients in implementation backlog, representing 1.6M digital users ● Exited Q2 with 18.6M registered users, up 2.7M or 17%. Drivers: (i) FIs implemented in last twelve months represent 1.3M registered users and (ii) existing clients increased their registered users by 1.4M ● Increased ARR 25% to $321M ● Remaining purchase obligation reached $1.2B representing almost 4 times live ARR and was 26% higher than a year ago ● LTM churn of 0% vs long-term expected churn of 2-3%

 
14 © A lk am i T ec h n o lo gy , I n c. Client Base Expansion 2020 151 177 199 236 37 57 67 89 2021 2022 2023 ARR growth driven by larger new logos and increased product penetration 254 96 Q2’24 Total Digital Banking Platform Clients Clients with ARR > $1M

 
15 © A lk am i T ec h n o lo gy , I n c. Technology Demand and Product Expansion Drive ARR Cohort ARR Expansion Via User Growth and Cross-Sell Success ARR Expansion Drivers ● Long-term contracts ● Escalating contract minimums ● Gross client retention ● Growth in digital user adoption ● Product cross-sell Note: As of 12/31/23

 
16 © A lk am i T ec h n o lo gy , I n c. Strong Historical Revenue Growth $M

 
17 © A lk am i T ec h n o lo gy , I n c. Gross Margin Expansion Driven by Scale and Efficiency $M

 
18 © A lk am i T ec h n o lo gy , I n c. Best-in-Class GTM Efficiency ● Long-term contract structure reduces annual GTM motion ● Alkami average client retention of 97% - 98% ● 2026E reflects continued growth in S&M spend related to bank market expansion and increased product depth ● Historical high sales team productivity and GTM efficiency; LTM increase in ARR to S&M expense is 1.4x, among the best in SaaS ● Continued GTM efficiency driven by cross-sale success and upsell opportunities from user growth among our existing client base

 
19 © A lk am i T ec h n o lo gy , I n c. Clear Path to Manage Equity Dilution

 
20 © A lk am i T ec h n o lo gy , I n c. 2024 Financial Guidance

 
21 © A lk am i T ec h n o lo gy , I n c. Attractive Long-Term Profile Expect substantial margin improvement through scale, product mix and operational efficiency

 
22 © A lk am i T ec h n o lo gy , I n c. Selected Historical Data 2020 2021 2022 2023 Q2’24 Digital banking platform clients 151 177 199 236 254 Growth % 17% 12% 19% 17% Digital banking platform users (M) 9.7 12.4 14.5 17.5 18.6 Growth % 28% 18% 20% 17% Live ARR ($M) $ 128.0 $ 169.0 $ 226.1 $ 291.0 321.3 Growth % 32% 34% 29% 25% RPU $ 13.22 $ 13.68 $ 15.55 $ 16.63 17.29 Growth % 3% 14% 7% 7% RPO ($M) $ 510 $ 652 $ 893 $ 1,140 1,218 Growth % 28% 37% 28% 26% Notes: Segmint acquisition completed in Q2’22, driving one-time increase in RPU Q2’24 growth compares to Q2’23

 
23 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)

 
24 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)

 
25 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)

 
v3.24.2
Cover
Jul. 31, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 31, 2024
Entity Registrant Name ALKAMI TECHNOLOGY, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40321
Entity Tax Identification Number 45-3060776
Entity Address, Address Line One 5601 Granite Parkway
Entity Address, Address Line Two Suite 120
Entity Address, City or Town Plano
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75024
City Area Code 877
Local Phone Number 725-5264
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.001 par value per share
Trading Symbol ALKT
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001529274
Amendment Flag false
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