• Revenue Growth: 26% year-over-year growth for both Q4 2024 and the full year, reaching $333.8 million.
• Adjusted EBITDA: Over $10 million in Q4 2024 and $26.9 million for the full year, compared to a loss of $1.6 million in 2023.
• Adjusted EBITDA Margin Expansion: 900 basis points for the full year 2024.
• Operating Cash Flow: Improved by over $36 million in 2024, reaching $18.6 million.
• Subscription Revenue: Grew 26.5% in 2024, representing 96% of total revenue.
• Annual Recurring Revenue (ARR): Increased by 22%, exiting Q4 2024 at $356 million.
• Gross Margin: Non-GAAP gross margin of 63.1% in Q4 2024, expanding nearly 280 basis points year-over-year.
• Operating Expenses: Non-GAAP operating expenses of $46.8 million in Q4 2024, representing 52% of revenue and a 500 basis point improvement in operating leverage.
• Registered Users: 20 million users on the Alkami platform at the end of 2024, up 2.5 million from the previous year.
• Client Base: 272 clients at the end of Q4 2024, with 39 new clients in backlog.
• Guidance for Q1 2025: Revenue expected between $93.5 million to $95 million, with adjusted EBITDA between $9.5 million to $10.5 million.
• Full Year 2025 Guidance: Revenue projected between $440 million to $445 million, with adjusted EBITDA between $47 million to $51 million.

• Warning! GuruFocus has detected 2 Warning Signs with ACHR.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alkami Technology Inc (NASDAQ:ALKT) reported a 26% revenue growth for the fourth quarter of 2024, contributing to a strong full-year performance.
• The company achieved an adjusted EBITDA of over $10 million in Q4 2024, with a full-year adjusted EBITDA margin expansion of 900 basis points.
• Alkami ended 2024 with 20 million users on its platform, an increase of 2.5 million users compared to the previous year.
• The acquisition of MANTL is expected to enhance Alkami's platform by providing a comprehensive onboarding and account opening solution, creating cross-sell opportunities.
• Alkami's gross margin improved by nearly 280 basis points year-over-year in Q4 2024, driven by hosting cost efficiencies and platform investments.

Negative Points

• Alkami Technology Inc (NASDAQ:ALKT) faces intense competition from mega banks and fintechs that have heavily invested in digital technology.
• The company anticipates an adjusted EBITDA loss of $5 million from the MANTL acquisition in 2025, although it expects the acquisition to be accretive starting in 2026.
• Alkami's current account opening solution is limited to digital channels and a few deposit types, necessitating the acquisition of MANTL to meet broader market needs.
• The company expects to churn 4 clients in 2025, representing 175,000 users and less than 1% of ARR.
• Alkami's operating expenses remain significant, with non-GAAP operating expenses representing 52% of revenue in Q4 2024, despite achieving operating leverage.

Q & A Highlights

Q: How does MANTL compare with your existing account opening solutions, and what is the potential impact of the cross-sell opportunity? A: The current account opening offering is digital-only and limited to a few deposit types. MANTL provides a comprehensive solution that operates across digital, call centers, and branches, supporting a wide range of account types and structures. This acquisition addresses the broader needs of financial institutions, especially with the normalization of interest rates, making deposit attraction and loan issuance critical. (Alex Shootman, CEO)

Q: What do you see in terms of the competitive environment in the market with the MANTL acquisition? A: Clients typically face outdated capabilities from core providers, smaller market players, or attempt to develop their own solutions. MANTL stands out with its user experience design, core agnosticism, and integration with over 20 core systems. MANTL's technology delivers superior outcomes, such as faster account opening times and automated decisions, compared to industry standards. (Alex Shootman, CEO)

Q: Can you provide more details on the EBITDA loss for MANTL and when it will become accretive? A: MANTL is expected to be EBITDA accretive starting in 2026. The focus is on scaling MANTL's operations efficiently, leveraging Alkami's resources without disrupting MANTL's growth trajectory. Revenue synergies are anticipated to become evident in 2026, primarily in the latter half. (W. Bryan Hill, CFO)

Q: How did the acquisition of MANTL come about, and what was the process? A: Alkami and MANTL have known each other since 2019, maintaining a relationship over the years. The acquisition was driven by a strategic need identified by Alkami's Customer Advisory Board for a comprehensive onboarding experience. The decision was based on cultural alignment, market needs, and the quality of MANTL's management team. (Alex Shootman, CEO)

Q: What are the prospects for cross-selling Alkami's platform into MANTL's customer base? A: MANTL's client base is similar to Alkami's, with financial institutions having assets between $500 million and $10 billion. This similarity provides a significant opportunity for cross-selling Alkami's digital banking platform into MANTL's base and vice versa. Both companies have had success in this market segment, making the client bases complementary. (W. Bryan Hill, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.