ALKT

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET Chief Executive Officer - Alex Shootman Chief Financial Officer - Cassandra Hudson Investor Relations - Steve Calk Operator: Good afternoon, ladies and gentlemen, and welcome to the Alkami Technology Second Quarter 2026 Financial Results Conference Call. I would now like to turn the call over to Steve Calk. Steve, you may begin. Steve Calk: Thank you, Chloe. With me on today's call are Alex Shootman, Chief Executive Officer, and Cassandra Hudson, Chief Financial Officer. During today's call, we may make forward-looking statements about guidance and other matters regarding our future performance. These statements are based on management's current views and expectations and are subject to various risks and uncertainties. Our actual results may be materially different. For a summary of risk factors associated with our forward-looking statements, please look at today's press release and the sections in our latest 10-K entitled Risk Factors and Forward-Looking Statements. Statements made during the call are being made as of today, and we undertake no obligation to update or revise these statements. Also, unless otherwise stated, financial measures discussed on this call will be on a non-GAAP basis. We believe these measures are useful to investors in the understanding of our financial results. A reconciliation of the comparable GAAP financial measures can be found in our earnings press release and in our filings with the SEC. I would now like to turn the call over to Alex. Alex Shootman: Good afternoon and thank you for joining us. In the second quarter, Alkami delivered revenue growth and profitability ahead of our expectations. On my first earnings call in 2022, we reported a little over $42 million in revenue and negative adjusted EBITDA of more than $4 million. Prior to that call, we established an internal 5-year goal, become the industry-leading digital banking platform, generate $500 million in revenue, and produce $100 million of adjusted EBITDA. Despite economic and geopolitical uncertainty, goals that seemed extraordinary are now within reach. Our progress reflects 3 durable strengths. Our people and culture, the digital transformation of community banking, and our belief that the customer is our North Star. That principle guides every important decision we make. When faced with choices and trade-offs, the single most important thing we can do is create and keep customers. In Q2, we signed 5 new digital banking relationships, including 3 banks. We also added 8 MANTL clients and 3 Data & Marketing clients. 7 clients adopted our Digital Sales & Service Platform, or DSSP, through new logo or add-on sales, bringing the number of clients contracted for all 3 DSSP products to 55. We also brought 8 digital banking clients and 18 MANTL clients live. Over the last 12 months, we added 2.7 million users, the most users added in any trailing 12-month period since mid-2024. In that same quarter back in 2022, we noted that we signed 2 banks. At the time, we had 3 live bank clients. And on that foundation, we stated that we would strategically pursue the bank market. Today, we have 54 bank clients under contract and 42 live on the Alkami Digital Banking Platform. Success in the bank market required 4 things. First, banks needed to know Alkami was a credible alternative. We consistently ranked first or second in awareness and consideration among credit unions, but historically lacked the same recognition among banks. Since entering the bank market, awareness has increased from 37% to 52%, while consideration has increased from 8% to 21%. Second, we needed to build the treasury management capabilities banks require. Once we had enough live customers to assess product-market fit in mid-2024, we identified 28 required capabilities. We've delivered 18, with six more expected to enter beta or become generally available in the second half of 2026. Third, we needed to integrate with bank cores and improve implementation execution. We now support multiple live implementations across 7 bank cores and single implementations across 2 more, covering the majority of our target market. Bank implementation time improved from more than 13 months in 2023 and 2024 to less than 11 months in 2025. In 2026, banks represent nearly 30% of our digital launches. Fourth, we needed to add bank expertise throughout Alkami. Half of our implementation personnel now have bank market expertise, supported by dedicated bank sales and pre-sales teams and increased banking expertise across product and engineering. Banks launch at higher RPU and purchase more commercial functionality. More than 3/4 of the bank market still uses legacy digital banking, leaving substantial room for displacement. The bank story is no longer can Alkami sell into banks. It's becoming can Alkami operationalize and scale what is working. Last quarter, I explained why expansion within our client base will drive a greater share of future growth. The evidence is visible in our customer cohorts. First, our 5-year customer cohorts have grown to more than twice their original platform investment, while our 10-year cohorts have grown to approximately 4 times their landing ARR. On my first earnings call with you, we had 18 clients with $2 million or more in ARR. Today, we have 50. Second, clients are adopting more products at launch. In 2021, clients launched with an average of 10 products. Today, they launch with 16, and the RPU of clients launching in 2026 is expected to be nearly twice the average of our install base. Third, RPU has grown from $13.68 in 2021 to over $21 today. Importantly, this growth did not result from a client-wide price increase. It occurred because clients purchased more product from Alkami. These results demonstrate that expansion is not merely an assumption in our 2030 framework. It is established customer behavior. Alkami is evolving from a vertical application into a vertical platform that lands with more products and compounds in value over time. DSSP accelerates this model by increasing the number of products clients adopt at launch and creating more opportunities to expand over time. Even as we've grown, we continue to have significant opportunities to deliver more value to our clients. Our clients spend meaningfully more on the technology surrounding the core than they spend with Alkami today. That creates room to expand, but only if we earn it by delivering products that compete independently and create greater value together. Our objective is to become the technology partner of choice for regional and community financial institutions. In the near term, we are continuing to build treasury management capabilities to improve bank win rates. We're adding functionality for the specialty account opening needs of our largest banks to increase revenue per client. We're also building our lending platform and our point-of-sale capabilities that integrate with other loan origination systems to increase our addressable market. In addition, we're encouraged by demand for existing products that incorporate AI. Behavioral biometrics, unified messaging, and predictive marketing are growing nearly 30% year-over-year and contributing to Alkami's growth. Those investments increase the value we deliver today. Over time, AI expands that opportunity even further. We believe Alkami can provide the trusted data workflow and intelligence layer that allows community financial institutions to deploy AI in regulated environments. Our advantage is not access to a model. It's our understanding of regulated banking workflows, our integrations, our data, and the trust created through relationships across more than 1,000 financial institutions. Right now, more than 100 Alkamists use an internal prototype every day, helping us learn where AI creates measurable value before we determine how to bring those capabilities to our clients. When we do, our advantage will come from the trust we've earned, the data and integrations we've built, and our regulated banking expertise. In closing, over the last 5 years, Alkami has proven it could add customers, grow with them, and expand profitability. The next phase builds on that foundation. Scale what's working in banks, increase the value delivered to every client relationship, and use DSSP to become the technology partner of choice for regional and community financial institutions. I now hand the call to Cassandra to discuss our financial results. Cassandra Hudson: Thank you, Alex. Alex just described a strategy built on 3 things: creating customers, growing with them, and expanding profitability. This quarter's financials are the proof. We again exceeded expectations on both revenue and adjusted EBITDA. ARR grew faster than revenue, a leading indicator of the momentum still ahead of us. And operating cash flow continued to improve, reflecting the strengthening cash generation of our model. This is what a durable recurring subscription model looks like as it scales. Growth that compounds within our client base and converts into expanding profitability even as we continue to invest for long-term value creation. Let me start with our outlook because the guidance we are providing today effectively delivers the 5-year goal Alex described at the top of this call. Roughly $500 million in revenue and $100 million in adjusted EBITDA, a target that once seemed extraordinary is now our plan for the year. For the third quarter of 2026, we expect revenue of $132.7 million to $134.2 million, representing growth of 17.5% to 18.9%. And we expect adjusted EBITDA of $23.5 million to $24.3 million or 17.9% margin at the midpoint. Our sequential cadence this year is shaped by the timing of one-time revenue, which falls more heavily in the fourth quarter. As a result, both revenue and margin step up in Q4, with back half adjusted EBITDA margin north of 19%. For the full-year, we expect revenue of $528 million to $531 million, representing growth of 19% to 19.7%, and adjusted EBITDA of $96 million to $98 million, or 18.3% margin at the midpoint, reflecting expanded operating leverage as we scale the business. We also expect stock-based compensation to be less than 14% of revenue for the year. Our revenue outlook reflects continued cross-sell momentum across the platform, a steady cadence of ARR launches throughout the year and mid to high single-digit ARPU growth. For the year, we expect approximately 500 basis points of margin expansion, driven by operating leverage and cost discipline, achieved while we continue to fund targeted investments in product innovation and AI. These investments are intended to increase both value per client and Alkami's own operating leverage over time. As our long-term model framework is relatively new, I will provide a brief recap. Our targets reflect what we believe are achievable outcomes, given current market trends and the exceptional visibility our long-term contracts provide. We continue to expect to reach Rule of 45 by 2030. The framework assumes continued leadership in credit unions and a gradual increase in bank wins, add-on sales consistent with our historical performance, an annual dollar churn of 2% to 3%, roughly half of which is associated with digital banking clients. One point worth emphasizing, as we scale, the composition of our growth will evolve. Historically, it has been split roughly evenly across new logos, user growth, and ARPU. Since we are somewhat range bound on contribution from new logos, a larger share will come from ARPU expansion. Expansion is our highest visibility, highest margin source of growth. We believe our profitability assumptions are equally achievable and appropriately conservative. We expect non-GAAP gross margin approaching 70% over time as we improve execution and efficiency. Approximately 300 basis points of annual adjusted EBITDA margin expansion driven by gross margin improvement and continued operating leverage, and stock-based compensation declining to approximately 10% of revenue. Over the past 3 years, we expanded gross margins over 400 basis points and adjusted EBITDA from negative to more than 15%. We have strong visibility into continued leverage in the model and the combination of recurring revenue, long-term contracts, and expansion within our installed base give us real confidence in our path to Rule of 45. Turning to second quarter performance. Revenue was $129.8 million, up 15.9% year-over-year. Subscription revenue grew 16.2% and represented 95% of total revenue, outpacing total revenue growth despite the tough comparison associated with termination fees recognized in the prior year. We increased ARR by 21% and exited the quarter at $512 million, once again growing faster than reported revenue. Surpassing the $500 million ARR mark is an important milestone for Alkami, underscoring the scale we have built and the durability of our growth. We have approximately $61 million of ARR in backlog, representing 37 new clients and roughly 1.3 million digital users. We expect the majority of this backlog to go live over the next 12 months. Our strategy is increasingly centered on expanding value per client, and our financial results continue to support that thesis. In the second quarter, average ARR per client reached approximately $1.6 million, and we now have 50 clients at or above $2 million in ARR, up from 18 at the end of 2021. This illustrates the central premise of our long-term model. As clients adopt more of the platform, the value we create and the value we capture both increase. Importantly, this expansion does not depend on customers increasing technology budgets, it depends on Alkami earning a larger share of budgets that already exist. As Alex highlighted, we continue to see strong momentum with our Digital Sales & Service Platform. From a financial perspective, DSSP is important because it is driving higher quality revenue across several dimensions. The financial characteristics of the business are evolving as well. As clients adopt more of the platform, contract value, duration, retention, and onboarding ARPU improve. In fact, new logo implementations in 2026 are on track to onboard at nearly double our overall ARPU. This is influenced by the number of bank implementations we have in the pipeline and the uplift from DSSP. We exited the quarter with 313 clients and 23.6 million registered users, an increase of 2.7 million users or 13% year-over-year. Over the past 12 months, we implemented 39 clients supporting 1.3 million digital users and existing clients increased their digital adoption by 1.5 million users. Our digital banking contracts provide strong visibility into attrition, typically several quarters in advance. Over the past 3 years, we have turned less than 1% of our digital banking ARR annually, usually resulting from a client merger. This speaks to the mission-critical nature of our platform and the strength of our long-term client relationships. Revenue per user increased to $21.69, up 7% year-over-year, driven primarily by strong cross-sell execution, increased user adoption among existing clients, and the increase in the number of live banks, which tend to onboard at higher ARPUs, given the commercial to retail mix. Remaining performance obligations were approximately $1.7 billion or 3.4x live ARR, providing strong visibility into long-term revenue. Second quarter non-GAAP gross margin was 63%, and we continue to expect to exit 2026 nearing 65%. As anticipated, the quarter reflected lower termination fee revenue, which is inherently variable quarter-to-quarter, alongside timing of direct costs. Underlying platform margins remain on the expansion path we've outlined, driven by scale, execution improvements, and operating efficiencies. Second quarter operating expenses were $62.8 million or 48% of revenue, representing 640 basis points of year-over-year improvement realized across all areas of operating expense. Adjusted EBITDA was $19.4 million, above the high end of our expectations, with an adjusted EBITDA margin of 14.9%, an expansion of approximately 430 basis points year-over-year. In the second quarter, operating cash flow improved to $22 million, up from $1.2 million in the year-ago quarter. This growth reflects stronger underlying cash generation, driven by improved profitability and disciplined working capital management. We ended the quarter with $81 million in cash and marketable securities. In the first quarter, the board of directors approved our inaugural stock repurchase program of up to $100 million. We repurchased $15 million of stock in the second quarter and an additional $10 million in the third quarter to-date, as we believe our stock represents an attractive investment at these levels. We continue to believe in a disciplined and balanced approach to capital allocation that enables us to grow through acquisitions, delever the balance sheet through debt reduction, and opportunistically repurchase shares to deliver increased value to our shareholders. In closing, our results this quarter reflect the strength of our platform and continued execution against our strategic priorities. We are scaling with discipline, balancing growth and profitability while investing in the capabilities that we believe will further differentiate Alkami over time. The visibility in our model and continued momentum across the business position us to drive sustained long-term value. With that, operator, please open the line for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Our first question comes from the line of Ella Smith from JPMorgan. Your line is open. Isabella Camaj: This is Bella Camaj on for Ella Smith. So first, you're coming up on a year since you've launched DSSP. Given that you've begun landing new customers at higher average selling prices with the bundle of products, do you foresee any harder comps for the back half of 2026 or for next year? Cassandra Hudson: I don't foresee harder comps. We started selling last year in the August time frame and the majority of those customers are really still sitting in our backlog for the most part. It does take time for them to effectively be onboarded. So no difficult comps for the back half because of that. Alex Shootman: And then just also maybe to add on to that, the 55 clients that have the 3 products that make up DSSP are just a little under 15% of our customer base. So we still have a very large customer base that we can sell the technology into. Isabella Camaj: Understood. And just as a quick follow-up, given that digital banking implementations are notoriously lengthy and cumbersome, how could AI help you speed up the process? And realistically, how could AI help take days or even weeks off of implementation time lines in the next few years? Alex Shootman: AI has already made a huge difference in terms of our ability to be effective. Just as a proof point, if you go back to, I think, 2021 and you look at our customer experience group as a percent of revenue, it was about 16%, and today it is close to 11%. The majority of that step down came after that group, which was really one of the first groups to internally adopt AI at scale, started using AI. So that's been highly -- it's already been effective for us in terms of impacting the business. Operator: Our next question is from Chris Kennedy from William Blair. Cristopher Kennedy: Alex, you mentioned efforts regarding the lending platform. Can you just talk about that and the implications as you go after banks? Alex Shootman: The lending platform is part of an overall strategy, which is to create an integrated, for lack of a better term, front of house that allows a financial institution to deliver the kind of amazing experience that the large mega banks can deliver. So that's bringing in a new client, then bringing in a new customer, opening a new account, buying a new product, which would be a loan product. So the loan origination effort is part of bringing together deposit origination, loan origination, and digital banking fed by our data and marketing platform so that these institutions can create a competitive parity with the larger institutions. We have the loan platform live with a couple of customers today. And then there's a second strategy. There are many customers that have an existing back-office loan origination system that they don't want to convert, but they would like to create that integrated experience. And so we're also building, call it a point-of-sale capability, which would integrate with some of the existing loan origination systems on the market today so that those clients could also have an integrated experience. Cristopher Kennedy: And then Cassandra, you mentioned some one-time revenue benefits in the fourth quarter. Can you just give us a little bit more color on that? And any implications as we think about 2027? Cassandra Hudson: Sure. No implications as it relates to 2027. Really, this is just shifting small amounts of revenue kind of between Q3 and Q4, if you will, and this is for things like termination fees, as you know, as well as some one-time work that we do for our customers around core conversions and other customization requests. So that is the driver. It is generally small, but is leaning us a little bit more weighted to the fourth quarter. Alex Shootman: So we'll do merger work. So when our customers are merging with somebody else, we're supporting them. What Cassandra mentioned on core conversion is a customer may convert their core, and then we have to integrate their existing Alkami Digital Banking system into their new core. Operator: Next question is from Jacob Stephan from Lake Street Capital Markets. Jacob Stephan: Nice quarter. As it relates to guidance, I just want to get some clarity on, kind of, the gross margin front. Obviously, a little step down in this quarter. But I think your guidance implies a pretty meaningful ramp in the second half, maybe even reaching 67% in Q4. Maybe help us think through that a little bit. Is this related to the one-time kind of revenue items that you talked about, or am I missing something else? Cassandra Hudson: Yes, just to clarify, we expect to exit 2026 with gross margin nearing 65%. So it is a step up from Q2. There was -- in Q2 in particular, we know we had the impact of termination fees and lower termination fee revenue. So that was expected and drove our gross margin a bit lower in the quarter. So I think we'll see that kind of get behind us, if you will, in the back half of the year. And we're still seeing a lot of gains from efficiency just around our implementation, customer support, and site reliability engineering groups. So that continues to benefit us, especially as we see revenue ramp in the back half. Jacob Stephan: Got it. And maybe just the capital allocation question. As you guys become more profitable, obviously free cash flow margins expanding here. What's the plan with that excess cash? Is it focused on the debt, more share repurchases, mix of both? What's your targets? Cassandra Hudson: Yes, I mean, I would say definitely those 2 as well as continuing to pursue selective acquisitions. I think we're still kind of busy with the MANTL acquisition and all things DSSP right now, but I do still see M&A as an important element of our growth strategy over the long term. Operator: Our next question is from Aaron Kimson from Citizens. Aaron Kimson: The first one is for Cassandra. ARPU growth came in at 7% year-over-year in 2Q, down from 9% in 1Q. You mentioned mid to high single digit ARPU growth for 2026 in the updated guide in your prepared remarks. On the 1Q call, you spoke to high single digit ARPU growth. Can you talk to the delta in 2026 ARPU outlook going from high single digits to mid to high single digits? Cassandra Hudson: Sure. I think we're still very much in that range. I think we're seeing things normalize post the MANTL acquisition. So the 9% growth that we saw in Q1 in particular still had kind of the timing benefits of the MANTL acquisition. So kind of normalizing for that. We would've been closer to the 7% or so that we saw in Q2, which we're pleased with. As you know, the composition of our growth is continuing to shift to ARPU expansion. And we don't see -- we won't see that happen in any one quarter jump. It will play out over time. So really just kind of trying to indicate that ARPU expansion is happening. It's kind of more normalized, I would say, for the back half of this year. Aaron Kimson: Okay. That makes sense. And then for Alex, how are you and Nathaniel thinking about the channel motion? Do you see an opportunity to meaningfully grow the reseller motion with the cores? And relatedly, can you talk to any potential co-sell and referral opportunities you see? Alex Shootman: Well, today, we have 2 of our main 4 products, the Data & Marketing Solution, and our ACH Alert Positive Pay product are sold to a large degree, sold through channel. We've established a very good relationship with one of the bank core organizations where we've got an economic relationship where we get support from them in implementation planning, in support when a customer is live. They've got payment products that are interesting to us to bring to market. And then we've just signed an integrator agreement with a second large core that is 1 of the 2 large cores in the bank market, and we're hopeful that, that continues to expand as well. So today, we do have reseller channels. We obviously have quite a bit of embedded IP that we bring through the Alkami storefront, for lack of a better term. We do have 2 emerging core relationships where we feel like there's some additional product that we can bring through the Alkami storefront. Operator: Our next question is from Jeff Van Rhee from Craig-Hallum. Jeff Van Rhee: Alex, maybe high level as it relates to the banking efforts. Just talk to me kind of the evolution in your thinking and what you've learned since you've launched those products. As I look at the numbers, I think you had 5, and correct me on any of these if I'm wrong. I think you had 5 go-lives versus 4 in the first half a year ago. I think you have 12 in backlog for implementation now versus 16 a year ago. And if you look at most of the numbers in terms of banks being implemented from backlog, it looks like sideways numbers. And I know you've said there was a point at which you would have enough integrated banking fabrics, and you'd have that skill set, and you'd sort of get the motion down that we would see that acceleration. So I guess what I'm asking is, how is your thinking about when and where that acceleration point is and why it is? Alex Shootman: The first thing I would just answer is from a standing start 4 years ago to having more than 50 bank clients under contract and more than 42 live. Just frankly, that as a standalone company would be a successful startup. So I'm very pleased with going from essentially 3 live bank clients to 42 live bank clients in a short period of time. I'm very pleased with the treasury management capabilities that we've built out. And so I need to -- I'm looking at Cassandra where we're both trying to square the numbers that you're quoting, and we're both squinting at each other. You may be a million percent right, but from our perspective, we had quite a few that we closed last year. It's still 30% of our backlog for this year. So Jeff, I don't feel like the business is going sideways, I feel like it's becoming an increasingly important part of our business. Now when we model the future, we're not modeling, pulling a number off the top of my head. If we sold 10 banks a year ago, we're not modeling that we jump to 25 banks the next year. We're being pretty conservative to say that we're going to increase the number of new logo banks by a couple every year in the planning horizon. And over time, when we look at the profile of the business, we think that half of the new logos are going to be banks and half of the new logos are going to be credit unions. But from where I sit, we've built a very successful business in the bank market, essentially from scratch. We've got the product to be able to take to market. We've got the implementation capabilities to be able to take to market. We're beginning to have awareness in market. And so I've got a lot of confidence in that business. I don't know if you have any numbers that you looked up, I was trying to square with... Cassandra Hudson: Yes, I mean, I think those numbers are right. But I think we're not expecting to see some dramatic re-acceleration in any one quarter. I mean, I think we're pleased with the progress that we've seen in the bank market especially in the first half. And it will -- as Alex had just described, it will kind of take time for us to get to a place where our mix is 50% banks and 50% credit unions. Jeff Van Rhee: Okay. And I'll leave that one there. And maybe the second one just from a new wins sort of current tone of business standpoint, Alex, as you're seeing these new wins, I'm just curious if you had any incremental color around maybe sort of what core banking fabrics they're coming from, what people are on that you're signing up, the newest signings. Maybe any color commentary around sales cycles, lengthening, shortening, win rates, improving, steady, declining, just any incremental color sort of at the leading edge of what you're seeing in the marketplace? Alex Shootman: Yes, we were pleased with an improvement in the bank win rate through the first half of the year. So that's encouraging for us, especially as we continue to have qualified pipeline that's about half bank and half credit union. In the bank market, there's much more of a concentration of cores. There's 3 Fiserv cores and 2 FIS cores. Remember, our ICP, Jeff is -- and I know you know this, our ICP is pretty specifically a community bank between, say, $500 million and $20 billion in assets. And in that market, when you look at the ICP, there's about 1,330 banks that are on just a handful of cores across Jack Henry, FIS, and Fiserv. So that remains pretty consistent across the bank market. Much broader range across the credit union market. I would say that in terms of our customer base in the credit union market, we have helped a couple of customers move on to the Corelation core and so we've seen some expansion into that core. That would be my commentary on the cores that we're integrating into. No change in sales cycle, pleased with the increase in the bank win rate. Once again, because of the buying cycle and because of the length of the contract, and I know you know this, even if things are going on in the economy or in other places around the world, it hasn't really impacted the demand that we see coming in and then the length of time that people prosecute a sale. Jeff Van Rhee: Okay. Helpful. One last quick one for you, Cassandra, on the numbers database. I think you'd commented last quarter, you were thinking second half database expense, and then you'd wrap it up by the year-end. Can you just refresh me on the amount of excess expense there for the remainder of the year, and then is that still on track that sort of wraps by the end of '26? Alex Shootman: Yes. Cassandra, I'm going to take that because there's actually a business decision. So I think that was about a point maybe was that -- so when we looked at -- earlier on I said that, hey, the most important things we can do is create and keep customers. When we looked at our priorities, what we decided to do is push that project into 2027 and invest those dollars into building out the loan platform, building out treasury management capabilities. And so that the continuation of that project goes into 2027, and that's a priority decision that we made. Cassandra Hudson: And one thing I would just add is we have saved some of those costs. We have done some of the work in the first half, so we are seeing some of the savings. But to Alex's point, we don't expect to realize the full amount of those duplicative costs in 2026. Alex Shootman: So thanks for that question. It gave us an opportunity to explain. Operator: Our next question is from Andrew Schmidt from KeyBanc Capital Markets. Andrew Schmidt: Just first, and I apologize if I missed this, I jumped on a little bit late, but I wanted to just clarify the comment on gross margin, the 65%. Is that now an exit rate versus a full-year rate? Just want to be clear in terms of the 65% target. Cassandra Hudson: That's correct, Andrew. Andrew Schmidt: Okay, great. Thank you for clarifying that. And then maybe just on the DSSP-related sales, it sounds like you continue to have momentum there. And I think the premise was on the revenue side that these take a little bit longer, but should show up in the form of larger deals and potentially kind of have a larger revenue contribution exiting '26 into '27. Just curious if there's any color on that in terms of just some of these sort of higher revenue deals coming online and going live post kind of DSSP implementation. Cassandra Hudson: They're really just starting to come online. I think we had one customer go live recently on the full DSSP, and they went live in about 9 months. So ahead of, kind of, 12 months that we were signaling a couple of quarters ago, which is encouraging. Now it's only one customer and we still have many implementations to go, but so far we're really pleased with that progress. Alex Shootman: And I think when you look at the current backlog of launching customers' RPU, there's 2 -- couple of things that are contributing to that. One is the mix of bank customers that are in that. And the second is the fact that some of those customers are customers that have bought all 3 products. Cassandra Hudson: And one other follow-up I would just make is just a reminder that in 2026, our new logos are onboarding at nearly double our overall ARPU, and a lot of that is related to DSSP. Andrew Schmidt: Got it. That's helpful. And maybe just to sneak one more in just on competition. Any -- it may be more on the credit union side, just any sort of competitive changes there, win rates, are those relatively stable? Just anything incremental on the CU side. Alex Shootman: No, I mean, I continue to see that certainly there are several really good companies on the credit union side. I think that Alkami, Lumin, and Q2 are all good companies that bring good products to market and fight really hard for customer wins. Obviously, as a CEO of Alkami, I think our products and offerings are better, but I -- largely the market has become concentrated on a smaller number of competitors. Andrew Schmidt: Right. Smaller number of modern competitors sort of gaining share. That makes sense. Alex Shootman: What I was trying to -- I should have been more precise. I'm thinking about if a credit union has decided to make a change. So not if they're evaluating their current vendor versus making a change. But if they've decided to make a change, I think there's 3 good companies in the market that are competing for that business. And like I said, that's Lumin and Q2 and Alkami. I like our chances, but my point was in the credit union market, although there are maybe some other companies, it's becoming concentrated in terms of customers making a decision. 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See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alkami (ALKT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: $129.8 million, up 15.9% year over year. Subscription Revenue: Grew 16.2%, representing 95% of total revenue. Annual Recurring Revenue (ARR): Increased 21% to $512 million. Adjusted EBITDA: $19.4 million, with a margin of 14.9%, an expansion of approximately 430 basis points year over year. Non-GAAP Gross Margin: 63%. Revenue Per User (RPU): $21.69, up 7% year over year. Average ARR Per Client: Approximately $1.6 million. Registered Users: 23.6 million, an increase of 2.7 million users or 13% year over year. Operating Cash Flow: $22 million, up from $1.2 million in the year-ago quarter. Cash and Marketable Securities: $81 million at quarter end. Stock Repurchase: Repurchased $15 million of stock in Q2 and an additional $10 million in Q3 to date. Warning! GuruFocus has detected 3 Warning Signs with ALKT. Is ALKT fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alkami Technology Inc (NASDAQ:ALKT) exceeded Q2 2026 revenue and adjusted EBITDA expectations, demonstrating strong execution. Annual Recurring Revenue (ARR) grew 21% year-over-year to $512 million, surpassing the $500 million milestone and indicating strong future momentum. The company is successfully expanding into the bank market, with 54 banks under contract and 42 live, supported by improved implementation times and growing awareness. Revenue Per User (RPU) increased 7% year-over-year to $21.69, driven by successful cross-selling and higher-value client cohorts, with new logos onboarding at nearly double the average RPU. Adjusted EBITDA margin expanded by approximately 430 basis points year-over-year to 14.9%, with full-year guidance implying continued margin expansion to 18.3%. The company's gross margin in Q2 was impacted by lower termination fee revenue and timing of direct costs, coming in at 63%. The sequential revenue cadence is uneven, with a heavier weighting of one-time revenue in Q4, creating variability between quarters. The database migration project, expected to reduce costs, has been pushed into 2027, delaying the realization of full savings. While improving, the bank market contribution is still scaling gradually, with no dramatic re-acceleration expected in any single quarter. The company faces concentrated competition in the credit union market from established players like Lumin and Q2. Here are the key highlights from the Alkami Technology Inc (NASDAQ:ALKT) Q2 2026 earnings call, presented as summarized Q&A pairs. Q: You mentioned efforts regarding the lending platform. Can you talk about that and the implications as you go after banks?A: Alex Shootman, CEO: The lending platform is part of our strategy to create an integrated "front of house" for financial institutions, combining deposit origination, loan origination, and digital banking. This allows community banks to compete with larger institutions. We have the loan platform live with a few customers. Additionally, we are building a point-of-sale capability that integrates with existing loan origination systems for clients who don't want to convert their back-office systems. Q: How are you thinking about the channel motion? Do you see an opportunity to grow the reseller motion with cores?A: Alex Shootman, CEO: Yes. Two of our main products, Data and Marketing and ACH Positive Pay, are already largely sold through channels. We have a strong economic relationship with one bank core organization that supports implementation and planning. We also recently signed an integrator agreement with a second large core in the bank market. We see these emerging core relationships as opportunities to bring more products through the Alkami storefront. Q: Youre coming up on a year since you launched DSSP. Do you foresee any harder comps for the back half of 2026 or for next year?A: Cassandra Hudson, CFO: No, I don't foresee harder comps. The majority of DSSP customers sold last year are still in our backlog and have not yet gone live. Alex Shootman, CEO: Also, the 55 clients with all three DSSP products represent less than 15% of our customer base, leaving a large opportunity for further sales. Q: How could AI help speed up the notoriously lengthy digital banking implementation process?A: Alex Shootman, CEO: AI is already making a significant difference. For example, our customer experience group, which was one of the first to adopt AI at scale, has seen its cost as a percent of revenue drop from about 16% in 2021 to close to 11% today. This demonstrates AI's effectiveness in improving our operational efficiency. Q: ARPU growth came in at 7% year-over-year in Q2, down from 9% in Q1. Can you talk to the delta in the 2026 ARPU outlook?A: Cassandra Hudson, CFO: The Q1 growth rate was elevated due to timing benefits from the MANTL acquisition. Normalizing for that, Q2's 7% growth is more representative of the underlying trend. We are still expecting mid- to high-single-digit ARPU growth for the full year, as the composition of our growth continues to shift toward ARPU expansion over time. Q: As it relates to guidance, can you clarify the gross margin ramp in the second half? Is it related to the one-time revenue items?A: Cassandra Hudson, CFO: We expect to exit 2026 with gross margin nearing 65%. The Q2 margin was impacted by lower termination fee revenue, which was expected. We will see that normalize in the back half of the year. We are also continuing to see efficiency gains from our implementation, customer support, and site reliability engineering groups. Q: As you become more profitable, what is the plan with excess cash?A: Cassandra Hudson, CFO: Our capital allocation strategy is balanced and disciplined. It includes continuing to pursue selective acquisitions, delevering the balance sheet through debt reduction, and opportunistically repurchasing shares, as we did with $25 million in Q2 and early Q3. We believe our stock represents an attractive investment at current levels. Q: Can you provide incremental color on new wins, such as what core banking fabrics they are coming from and if win rates are improving?A: Alex Shootman, CEO: We were pleased with an improvement in the bank win rate through the first half of the year. Our qualified pipeline is about half bank and half credit union. In the bank market, our ICP is concentrated on a handful of cores (Fiserv, FIS, Jack Henry). There has been no change in the sales cycle. On the credit union side, we have seen some expansion into the Corelation core. Q: On the DSSP-related sales, can you provide color on these higher revenue deals coming online?A: Cassandra Hudson, CFO: They are just starting to come online. One customer went live on the full DSSP in about nine months, which is ahead of the 12-month timeline we previously signaled. Alex Shootman, CEO: The current backlog of launching customers has a higher RPU, driven by the mix of bank customers and those who have bought all three DSSP products. New logos in 2026 are onboarding at nearly double our overall ARPU. Q: Any competitive changes on the credit union side?A: Alex Shootman, CEO: The market is becoming concentrated among a few modern competitors. When a credit union decides to make a change, the competition is primarily between Alkami, Lumin, and Q2. We like our chances, but the point is that the competitive landscape is consolidating among these three key players. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Alkami Technology (ALKT) came out with quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -36.84%. A quarter ago, it was expected that this provider of digital banking services would post earnings of $0.21 per share when it actually produced earnings of $0.04, delivering a surprise of -80.95%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Alkami, which belongs to the Zacks Internet - Software industry, posted revenues of $129.84 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.85%. This compares to year-ago revenues of $112.06 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Alkami shares have lost about 21.2% since the beginning of the year versus the S&P 500's gain of 8.5%. While Alkami has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Alkami was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.26 on $134.28 million in revenues for the coming quarter and $0.89 on $529.72 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, DoubleVerify Holdings (DV), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This software platform for digital media measurement and analytics is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of +400%. The consensus EPS estimate for the quarter has been revised 8.2% lower over the last 30 days to the current level. DoubleVerify Holdings' revenues are expected to be $201.54 million, up 6.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alkami Technology, Inc. (ALKT) : Free Stock Analysis Report DoubleVerify Holdings, Inc. (DV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Alkami Technology, Inc.? Here are five stocks we like better. Strong second-quarter performance: Revenue rose 15.9% year over year to $129.8 million, while adjusted EBITDA reached $19.4 million with a 14.9% margin. ARR increased 21% to $512 million, and operating cash flow improved substantially to $22 million. Raised full-year outlook: Alkami expects 2026 revenue of $528 million to $531 million and adjusted EBITDA of $96 million to $98 million, implying approximately 500 basis points of margin expansion. Third-quarter revenue is projected at $132.7 million to $134.2 million. Expansion beyond digital banking: The company is growing through bank-market expansion, cross-selling and AI-enabled products, with 313 clients and 23.6 million registered users at quarter-end. Alkami also repurchased $15 million of stock in the quarter and plans a balanced approach involving acquisitions, debt reduction and further buybacks. The Top 5 Analysts Ranked by MarketBeat and Stocks They Cover Alkami Technology (NASDAQ:ALKT) reported second-quarter revenue and adjusted EBITDA above its expectations, while raising visibility around a full-year outlook that would bring the company close to a five-year financial goal established in 2022. Chief Executive Officer Alex Shootman said the company’s progress has been supported by its focus on customer acquisition, the continuing digital transformation of community banking and expansion within its existing client base. He said Alkami is increasingly positioning itself as a broader technology platform for regional and community financial institutions rather than solely a digital banking application provider. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Second-quarter revenue was $129.8 million, up 15.9% year over year. Subscription revenue increased 16.2% and represented 95% of total revenue. Annual recurring revenue, or ARR, grew 21% to $512 million at quarter-end, outpacing reported revenue growth. Chief Financial Officer Cassandra Hudson said Alkami had approximately $61 million of ARR in backlog, representing 37 new clients and about 1.3 million digital users. The company expects most of that backlog to go live over the next 12 months. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Non-GAAP adjusted EBITDA was $19.4 million, above the high end of the company’s expectations, and represented a 14.9% margin. That was an approximately 430-basis-point expansion from the prior-year quarter. Operating cash flow rose to $22 million from $1.2 million a year earlier, while Alkami ended the quarter with $81 million in cash and marketable securities. For the third quarter, Alkami expects revenue of $132.7 million to $134.2 million, representing growth of 17.5% to 18.9%, and adjusted EBITDA of $23.5 million to $24.3 million. The midpoint of the EBITDA range implies a 17.9% margin. → Innovative ETF Strategies That Are Paying Off This Summer For full-year 2026, the company projected: Revenue of $528 million to $531 million, up 19% to 19.7%. Adjusted EBITDA of $96 million to $98 million. An adjusted EBITDA margin of 18.3% at the midpoint. Stock-based compensation of less than 14% of revenue. Hudson said the company expects approximately 500 basis points of full-year margin expansion, supported by operating leverage and cost discipline, while continuing to invest in product innovation and artificial intelligence. She said revenue and margin are expected to step up in the fourth quarter because one-time revenue items, including termination fees, core-conversion work and customer customization requests, are more heavily weighted toward that period. Alkami signed five new digital banking relationships in the quarter, including three banks. It also added eight MANTL clients and three Data & Marketing clients. Seven clients adopted the company’s Digital Sales & Service Platform, or DSSP, through new-logo or add-on sales, bringing the number of clients contracted for all three DSSP products to 55. The company brought eight digital banking clients and 18 MANTL clients live during the period. Over the past 12 months, Alkami added 2.7 million users, the largest trailing-12-month user addition since mid-2024, according to Shootman. The company had 313 clients and 23.6 million registered users at quarter-end, an increase of 2.7 million users, or 13%, year over year. Revenue per user rose 7% to $21.69, which Hudson attributed to cross-selling, increased adoption among current customers and a growing number of live bank clients, which tend to have higher revenue per user due to their commercial and retail mix. Shootman said the company now has 54 bank clients under contract and 42 live on its digital banking platform, compared with three live bank clients when it began pursuing the market. Bank awareness of Alkami has increased from 37% to 52%, while consideration has risen from 8% to 21%, he said. Alkami has identified 28 treasury-management capabilities required for banks, delivering 18 of them so far. Six additional capabilities are expected to enter beta testing or become generally available during the second half of 2026. The company supports multiple live implementations across seven bank cores and single implementations across two additional cores. Bank implementation time has improved to less than 11 months in 2025, from more than 13 months in 2023 and 2024. Management emphasized that future growth is expected to rely increasingly on expansion within the installed base. Five-year customer cohorts have grown to more than twice their original platform investment, while 10-year cohorts have grown to roughly four times their initial ARR, Shootman said. Customers launching in 2026 are expected to have nearly twice the average revenue per user of Alkami’s existing installed base. New clients launched with an average of 16 products, compared with 10 products in 2021. The company now has 50 clients generating at least $2 million in ARR, up from 18 at the end of 2021. Hudson said Alkami expects mid- to high-single-digit average revenue per user growth for 2026. She noted that first-quarter ARPU growth included timing benefits from the MANTL acquisition, while second-quarter growth was more normalized. Alkami said products incorporating AI, including behavioral biometrics, unified messaging and predictive marketing, are growing nearly 30% year over year. Shootman said more than 100 employees are using an internal AI prototype daily as the company evaluates where the technology can create measurable value before introducing additional capabilities to clients. The company expects to pursue a balanced capital-allocation strategy that includes selective acquisitions, debt reduction and opportunistic share repurchases. Alkami repurchased $15 million of stock in the second quarter and an additional $10 million in the third quarter to date under its authorized $100 million repurchase program. Management said it remains focused on reaching a Rule of 45 profile by 2030, supported by continued credit-union leadership, gradual bank-market expansion, historical add-on sales performance and annual dollar churn of 2% to 3%. Alkami Technology, Inc is a provider of cloud-based digital banking and engagement solutions tailored for banks and credit unions. The company's platform offers a comprehensive suite of online and mobile banking features, including bill payment, peer-to-peer transfers, card management, streamlined account opening and real-time alerts, all designed to enhance the end-user experience and drive customer loyalty. Built on a multi-tenant, software-as-a-service (SaaS) architecture hosted in the cloud, Alkami's platform leverages modern APIs and a partner ecosystem to integrate third-party fintech applications and services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Alkami Technology Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

PLANO, Texas, July 29, 2026 /PRNewswire/ -- Alkami Technology, Inc. (Nasdaq: ALKT) ("Alkami" or "the Company"), a digital sales and service platform provider for financial institutions in the U.S., today announced results for its second quarter ending June 30, 2026. Second Quarter 2026 Financial Highlights GAAP total revenue of $129.8 million, an increase of 15.9% compared to the year-ago quarter; GAAP gross margin of 56.8%, compared to 58.6% in the year-ago quarter; Non-GAAP gross margin of 63.0%, compared to 65.1% in the year-ago quarter; GAAP net loss of $(8.9) million, compared to $(13.6) million in the year-ago quarter; and Adjusted EBITDA of $19.4 million, compared to $11.9 million in the year-ago quarter. Comments on the News Alex Shootman, Chief Executive Officer, said, "Our second quarter results reflected continued client and product expansion, with revenue growth and Adjusted EBITDA ahead of expectations. Demand for modern digital solutions remains robust, with 37 new digital banking logos over the last 12 months, including 15 banks, and a strong pipeline in the second half of 2026. In the second quarter, we brought live another five clients on our Digital Sales and Service Platform, enabling these clients to deepen relationships, deliver modern experiences and drive growth by connecting financial services ecosystems." Cassandra Hudson, Chief Financial Officer, said, "In the last 12 months, we added 2.7 million registered users to our digital banking platform, ending the quarter with 23.6 million digital banking users. We exited the second quarter with annual recurring revenue of $511.7 million, up 21% compared to the year-ago quarter and revenue per registered user of $21.69, up 7.0% compared to the year-ago quarter. Our second quarter adjusted EBITDA margin of 14.9% was above expectations, and reflected nearly 430 basis points of expansion compared to the year-ago quarter." 2026 Financial Outlook 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, 2026 of: GAAP total revenue in the range of $132.7 million to $134.2 million; Adjusted EBITDA in the range of $23.5 million to $24.3 million. Alkami is providing guidance for its fiscal year ending December 31, 2026 of: GAAP total revenue in the range of $528.0 million to $531.0 million; Adjusted EBITDA in the range of $96.0 million to $98.0 million. Conference Call InformationThe 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 18968. The webcast replay will be available on the Alkami investor relations website. About AlkamiAlkami provides a digital sales and service platform for U.S. banks and credit unions. Our unified Platform integrates onboarding, digital banking, and data and marketing—each solution can stand alone, but together they deliver more—to help institutions onboard, engage, and grow relationships. As the future shifts toward Anticipatory Banking, we help data-informed bankers meet the moment with technology that drives action. Cautionary Statement Regarding Forward-Looking StatementsThis 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 MetricsThe 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 (1) stock-based compensation expense (2) acquisition-related expenses (3) loss on impairment of intangible assets and (4) stockholder matters 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 underlying expense structure to support corporate activities and processes. The company defines "Non-GAAP Income Before Income Taxes" as loss before income taxes, plus (1) amortization, (2) stock-based compensation expense, (3) acquisition-related expenses, (4) loss on impairment of intangible assets, and (5) stockholder matters 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) (benefit from) provision for income taxes, (2) interest expense, net, (3) depreciation and amortization (4) stock-based compensation expense, (5) acquisition-related expenses, (6) loss on impairment of intangible assets, and (7) stockholder matters 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. The company defines "Free Cash Flow" as net cash used in operating activities less (1) purchase of property and equipment and (2) capitalized software development costs. The company believes free cash flow provided investors and other users useful information in evaluating the Company's liquidity and it provides an indication of the long-term cash generating ability of the business. 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 and has access as of the last day of the reporting period presented. We exclude individuals or businesses that solely use the products and services of our acquisitions. 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 (benefit from) provision for income taxes, stock-based compensation expense, acquisition-related expenses, and stockholder matters related expenses, all of which may be significant. Investor Relations ContactSteve [email protected] Media Relations ContactsMarla [email protected] Valerie [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/alkami-announces-second-quarter-2026-financial-results-302837986.html

Image source: The Motley Fool. Wednesday, April 29, 2026 at 5 p.m. ET Chief Executive Officer — Alex Shootman Chief Financial Officer — Cassandra Hudson Alex Shootman: Good afternoon, and thank you for joining us. We delivered a strong first quarter, achieving 29% revenue growth and over $22 million in adjusted EBITDA, both above expectations. We closed six new digital banking relationships, including two banks and three digital sales and service platform clients. In addition, we introduced our first integrated capabilities for the digital sales and service platform and a new product called Alkami Technology, Inc. Engage. Our first quarter performance continues to demonstrate Alkami Technology, Inc. has the potential for long-term durable growth and increased operating leverage. Alkami Technology, Inc. operates an attractive and predictable business model in a resilient, large, and growing market. Our target market is over 2,000 regional banks and credit unions that rely on legacy infrastructure incapable of providing a modern digital experience. A portion of growth comes from displacing these systems. Given industry-standard five- to seven-year contracts, combined with stable win rates, we maintain good visibility into the long-term ARR growth that comes from new logo additions. Once on the Alkami Technology, Inc. platform, our investments in service and reliability, the mission-critical nature of our platform, and high switching costs drive gross retention rates 8 to 10 points above typical SaaS companies. High retention rates combined with clients adding users and adopting more of the platform result in reliable long-term client growth. Every five years, our clients grow by more than 100% of their original platform investment, with our 2021 through 2023 cohorts spending above 2x their landing ARR and clients 2016 and older spending close to 4x their landing ARR. Additive to the land-and-grow algorithm for Alkami Technology, Inc. is our entry into the bank market. Four years ago, we launched an effort to use commercial banking capabilities built for large, complex credit unions to pursue market leadership serving community banks. At that time, banks represented 2% of our live online banking clients, and today, banks are 13%. Over this four-year period, we tripled revenue, expanded gross margin by over 700 basis points, and improved operating leverage by more than 2,000 basis points. Through different macroeconomic distractions and volatility in the financial services sector, Alkami Technology, Inc. has continued to deliver by adding new clients, keeping our clients, expanding our product offering, and increasing margins. Client decision cycles create a unique characteristic for Alkami Technology, Inc. Our online banking platform is in a replacement market with prospects on legacy platforms under long-term contracts. There are usually fewer than 300 potential clients in our target market that renew contracts in any given year. Within this group, a portion choose not to convert given the effort and perceived risk. Among those who make a change, we consistently win 30 to 40 new clients per year. For example, the six new logos in Q1 are slightly above our historical Q1 average. New logo growth is consistent and will not spike unless customers choose to exit contracts early or see enough value to overcome conversion resistance. This consistency is a strength, but it also means the next phase of our growth will be driven by expanding the value we deliver within each financial institution. Increasing the value of the platform not only drives expansion, it also improves conversion. And this is why the Mantle acquisition was so strategic. The Mantle acquisition adds platform functionality to encourage conversions and expands our install base. Standalone Mantle new logo creation has been outstanding, with 61 clients added since the beginning of 2025. These are now Alkami Technology, Inc. clients we can target to cross-sell online banking. In addition to the new logos, at a recent customer conference, we demonstrated differentiated capabilities that materially improve how financial institutions acquire and engage customers. Two weeks ago, we concluded CoLab, our annual client conference. The conference continues to set records with over 600 customer attendees, of which 83 were prospects. Since the Mantle acquisition, we have been building deep technical connections between our online banking and origination platforms to deliver an integrated front end that enables our market to compete with mega banks and neobanks like Chase and Chime. We built this capability with seven clients as design partners, six of which have the code in production. We demonstrated live product with real results at CoLab. In a side-by-side comparison against two leading mega banks and a digital-first fintech, we showed a complete customer journey from account opening through digital engagement. Using a live environment and real workflows, Alkami Technology, Inc.’s digital sales and service platform, or DSSP, completed that experience in under two minutes compared to an industry benchmark of five minutes and the three contestants in the three- to four-minute range. DSSP has continued to perform for Alkami Technology, Inc. Since the beginning of 2025, we have gone from 11 to 48 clients who have all three products that make up DSSP. Over half of all new logos since Q2 of last year have been DSSP. And DSSP new logos see a 30% uplift in ARR versus our historic online banking offering. Our intent with DSSP is to increase the number of clients willing to convert, expanding our opportunity within the existing market constraints. We have not reflected this in our long-term model, and our outlook under current new-logo assumptions continues to support attractive long-term growth for Alkami Technology, Inc. Last quarter, we introduced a 2030 framework, and that model assumes 40% of ARR growth coming from new-logo additions at numbers consistent with our historical average, and 60% of ARR growth from expanding within our client base. Alkami Technology, Inc. is evolving from a vertical application in a replacement market to a vertical platform provider that drives growth for banks and credit unions, and this transition is occurring because the market demands it. Historically, community banking technology was defined by core providers that controlled the system of record. Everything else—digital banking, onboarding, payments—was built around that core. For years, that architecture defined how financial institutions operated. That reality has changed. Digital has become the primary way customers experience their financial institutions. Our clients need technology not just to process transactions, but to sell and service financial products in a digital-first world. This is the role of the digital sales and service platform—a platform that provides a long tail of growth opportunities for Alkami Technology, Inc. and positions us to become the new primary technology partner for community financial institutions. In this market, leadership will not be defined by the number of institutions served, but by generating the most economic value from each financial institution on the platform. The investments we have made to integrate our acquisitions create the functional capabilities of Alkami Technology, Inc.’s DSSP that are winning in the market. However, the platform investments we have made create compounding value for Alkami Technology, Inc. and our clients. Alkami Technology, Inc. is a single-instance, multi-tenant, industry-specialized platform, and this gives us the opportunity to provide AI capabilities our clients are requesting. For details on Alkami Technology, Inc.’s AI perspective, please review my prepared comments from our last earnings call. In the February 2025 call, I spent over 50% of my time on AI and Alkami Technology, Inc. Since that earnings call, I have had 39 face-to-face customer meetings, and AI was discussed in every one of them. Not one client mentioned building their own digital banking or origination platform, but every client wanted to talk about AI as an enabler for personalization, underwriting, fraud management, customer service, analytics, offer management, and more. With over 23 million account holders on our platform, we have a unique foundation to apply AI capabilities at scale. At our customer conference, we demonstrated working AI prototypes built on this platform. These included capabilities that allow clients to tailor Alkami Technology, Inc. to their needs through prop-driven development, use natural language to query platform data and better understand their account holders and operations, and deploy copilots that support both banker workflows and account holder experiences. These capabilities are powered by our platform, including our data infrastructure and telemetry from Alkami Technology, Inc. Engage, a new product which captures real-time user interaction data across the customer journey. Importantly, these are not conceptual demonstrations. We are actively working with a small group of clients to test these capabilities and determine the appropriate commercial models. Given our platform foundation, bringing these capabilities to market is less a technical challenge and more a question of how to package and price them effectively for our clients. In closing, we are pleased with the integrated product capabilities we built into Alkami Technology, Inc.’s digital sales and service platform. The market reaction has been positive, and DSSP provides a foundation we can continue to build upon to differentiate Alkami Technology, Inc. We are evolving Alkami Technology, Inc. from a system of record to a system of action, delivering measurable outcomes for our clients and increasing the value we create within each financial institution relationship. I am proud of our business results this quarter, and grateful to more than 1,200 Alkamists who continue to get it done and do it right. I will now hand the call to Cassandra to discuss our financial results. Cassandra Hudson: Thank you, Alex. Our first quarter results exceeded our expectations, highlighted by strong adjusted EBITDA performance that underscores the durability of our model and the progress we are making in driving operating leverage. We continue to execute with discipline, delivering consistent growth while expanding profitability and investing strategically to support long-term value creation. Let me start with our updated outlook. For the second quarter, we expect revenue of $128 million to $129 million, representing growth of 14.2% to 15.1%. As a reminder, our second quarter revenue outlook includes the impact of a sizable termination fee recognized in 2025, which represents an approximate three percentage point headwind to year-over-year growth in the quarter. In the second quarter, we also expect adjusted EBITDA of $17.9 million to $18.7 million, or a 14.3% margin at the midpoint. This outlook incorporates the impact of our annual user conference, which is reflected in our normal seasonal expense pattern. For the full year, we expect revenue of $527.1 million to $530.9 million, representing growth of 18.8% to 19.7%, and adjusted EBITDA of $94.9 million to $97.9 million, or an 18.2% margin at the midpoint, reflecting continued operating leverage as we scale the business. Our revenue outlook reflects several underlying assumptions consistent with what we shared last quarter. We expect continued cross-sell momentum across the platform, along with a steady cadence of ARR launches throughout the year. We also expect high single-digit ARPU growth, reflecting strong expansion within the base, partially offset by a modest moderation in user growth among existing clients. We expect a meaningful decline in termination fee revenue in 2026, which will reduce reported growth by a few percentage points. This headwind is partially offset by the contribution from Mantle. Finally, we expect growth to moderately accelerate in the third quarter due to a more favorable year-over-year comparison. Turning to profitability, we expect a full-year non-GAAP gross margin of approximately 65%. In 2026, we expect adjusted EBITDA margin to be north of 19%, weighted toward the fourth quarter and in line with our typical seasonal pattern. Overall, we expect approximately 500 basis points of margin expansion for the year, driven by operating leverage in the model, efficiencies from our offshore operations, and continued cost discipline while also funding targeted investments in AI that we believe will drive product innovation and long-term efficiency. Lastly, we expect stock-based compensation to be approximately 14% of revenue for the year. As we discussed last quarter, our long-term model framework reflects what we believe are achievable targets based on the strength of our business today and the visibility provided by our long-term contracts. We continue to expect to achieve Rule of 45 by 2030. From a growth perspective, we expect a gradual increase in banks’ new wins, supported by our digital sales and service platform alongside continued leadership in credit unions, reflecting the replacement-driven nature of our market. We also expect consistent execution in our add-on sales efforts and volume growth from existing customers, together driving ARPU expansion and contributing significantly to our long-term growth, as well as total dollar churn of approximately 2% to 3% annually, with about half associated with our digital banking clients. Importantly, our long-term outlook does not assume incremental M&A. From a profitability standpoint, we expect non-GAAP gross margin approaching 70% over time as we improve execution on implementations and drive support efficiencies, approximately 300 basis points of annual adjusted EBITDA margin expansion driven by scale and continued operational improvements particularly across R&D and G&A, and stock-based compensation declining to approximately 10% of revenue. Turning to first quarter performance, revenue was $126.1 million, up 29% year over year. Subscription revenue grew 30% and represented 90% of our total revenue. As a reminder, we closed the Mantle acquisition on 03/17/2025. This timing contributed approximately 14 percentage points of year-over-year growth to Q1 2026. Growth rates will become fully comparable beginning in the second quarter. We increased ARR by 22% and exited the quarter at $494 million. Importantly, we have approximately $71 million of ARR in backlog pending implementation, representing 40 new clients and roughly 1.4 million digital users. We expect the majority of this backlog to go live over the next 12 months. As Alex highlighted, we continue to see strong momentum with our digital sales and service platform. From a financial perspective, DSSP is important because it is driving higher-quality revenue across several dimensions. Clients adopting multiple components of the platform tend to have higher initial contract values, longer contract durations, and stronger retention profiles over time. This is already contributing to ARPU expansion and ARR we are seeing across the business. Additionally, as we integrate Mantle and expand our platform capabilities, we are increasing our ability to land with a broader set of products and expand within the client over time. This reinforces our land-and-expand model and supports the long-term durability of our revenue. We exited the quarter with 307 clients and 23 million registered users, an increase of 2.5 million users, or 12% year over year. Over the past 12 months, we implemented 35 clients supporting 1.2 million digital users, and existing clients increased their digital adoption by 1.5 million users. Our contracts provide strong visibility into attrition, typically several quarters in advance. Over the past three years, we have churned less than 1% of our digital banking ARR annually. For 2026, we currently expect to churn four digital banking clients, which again represents less than 1% of ARR. This speaks to the mission-critical nature of our platform and the strength of our long-term client relationships. Revenue per user increased to $21.40, up 9% year over year, driven primarily by Mantle’s contribution, strong cross-sell execution, and increased user adoption among existing clients. Remaining performance obligations were approximately $1.7 billion, or 3.5x live ARR, providing strong visibility into long-term revenue. First quarter non-GAAP gross margin was 64.4%, roughly flat year over year, driven by the higher database technology costs we discussed last quarter. We view these costs as temporary and expect them to decline by 2026. First quarter operating expenses were $59.4 million, or 47.1% of revenue, representing approximately 530 basis points of year-over-year improvement realized across all areas of operating expense. Adjusted EBITDA was $22.3 million, above the high end of our expectations, with an adjusted EBITDA margin of 17.7%, an expansion of approximately 540 basis points year over year. We ended the quarter with $77.6 million in cash and marketable securities. In the first quarter, our operating cash flow improved 15% year over year, free cash flow was consistent with the prior year, and we repaid the remaining $15 million of our revolving loan. Finally, today we announced that the Board of Directors has approved our inaugural stock repurchase program of up to $100 million. This is an important milestone that reflects our confidence in both our long-term growth and our robust cash flow generation capabilities. We continue to believe in a disciplined and balanced approach to capital allocation that enables us to grow through additional acquisitions, delever the balance sheet through debt reduction, and opportunistically repurchase shares to deliver increased value to our shareholders. In closing, our results this quarter reflect continued execution against our strategic priorities and the strength of our platform. We are scaling with discipline, balancing growth and profitability while investing in the capabilities that we believe will further differentiate Alkami Technology, Inc. over time. The visibility in our model and continued momentum across the business position us to drive sustained long-term value. With that, we will now open the call for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Christopher Kennedy from William Blair. Christopher Kennedy: Yeah, good afternoon. Thanks for taking the question. Cassandra, you have the growth headwind in the second quarter, but you also talked about accelerating growth in the third quarter and fourth quarter. Can you just provide a little bit more clarity as to the confidence in accelerating growth? Cassandra Hudson: Sure. Just to clarify, Chris, that growth acceleration will be in the third quarter in particular, and it is really driven by a more favorable year-over-year comparison due to some timing dynamics that we experienced in 2025. As it relates to the headwind in the second quarter, that is really timing of termination fee revenue. We do have that headwind in every quarter this year, but it is a little bit more pronounced in the second quarter in particular, which is why I called it out on the call. Christopher Kennedy: Okay, got it. Understood. And then, Alex, you mentioned it, but any additional takeaways or observations from CoLab when you were talking to your customers and how they are viewing the current environment in AI? Thanks for taking my questions. Alex Shootman: First of all, CoLab was an amazing event. Again, we set a record in terms of number of attendees. It was great to see 83 prospects—a good balance between credit union prospects and bank prospects. A couple of comments. There is no let-up in digital transformation. This is a pretty big market—as I mentioned, over 2,000 credit union and bank customers—that all have legacy technology. They are all smart. They all understand what they need to do. They are a little bit captive to these long-term contract dynamics that we talked about, but we see continued demand for digital transformation. What was really exciting to see for our market—and for those of you that do not bank with a regional bank or credit union, you may not fully appreciate this—is what has been critical for them to compete with large money-center banks and fintechs is what we would call an integrated front end, a digital front door. It is the integration of digital banking and a deposit origination platform and a loan origination platform, to be able to attract a customer, convert them into a customer, have them in digital banking, have them with additional products, and all of that seamless so that the customer or prospect does not even know that they are in multiple different products. That has been the benchmark these institutions have looked for. And that is what we showed from stage. I was most pleased with the audience reaction to real technology that we showed that will make a real difference for this market. Christopher Kennedy: Understood. Thanks for taking the questions. Operator: Your next question comes from the line of Analyst from Citizens. Please go ahead. Analyst: Great, thanks for the questions. Alex, you spoke again today in your prepared remarks about more banks being open to separating online banking from their core provider. Can you talk about what is driving that willingness—whether it is increased acceptance that standalone digital providers like Alkami Technology, Inc. have the superior solution for online banking, the maturity of your solution with Mantle, or changes in the ease of integrating a standalone digital provider solution into the core—maybe something else I am missing? Thanks. Alex Shootman: Thanks. Once again, let us talk about the difference between the bank market and the credit union market. In the credit union market, it is probably in the mid-40%—around 45% of customers—that have an online banking application supplied to them from their core provider. In the bank market, it has been north of 75%. That is the part that we are beginning to see unwind. I actually talked to a prospect at CoLab who is going to pay off four years of their remaining digital banking contract to move to a different digital banking platform from their core. I asked them—this is one of the first times I have heard this—why are you doing this? And they said, in our market we have to compete with Wells Fargo and KeyBank, and we are at the point where our digital capabilities are insufficient. If we do not make this change, it is going to impact the business of the bank. You are starting to see that demand push create these conversions. The flip side is the more customers that see somebody come onto a platform like Alkami Technology, Inc., successfully go through the conversion, successfully bring their customers on board, then they are willing to make the change. It is ultimately a decision of value versus risk. That is why the integration of the data and marketing platform and the onboarding platform and digital banking is so critical—because when banks see the outcome of speed to bringing on a new customer, reduced cost to bring on a new customer, and increased speed to cross-sell, they start to have the conviction to make the change. Analyst: That is really helpful. Thank you. And then to be a little bit more direct, you have incurred $2.8 million in shareholder matters-related expense over the prior two quarters, with $2.2 million in 1Q. Can you provide any color on the nature of these expenses, and if you anticipate them to be ongoing or settled for the near term after you added two new Board members on March 31? Thanks. Cassandra Hudson: Sure. Thanks for the question. Those costs are really defense-related in nature. We do expect to incur additional costs related to this item. Obviously, it is difficult for us to predict how much they will be, though I do not think that we are going to be scaling at $2.8 million every quarter from here on out. We saw a little bit of a higher cost in Q1, and I would expect those to moderate from here on out. Analyst: Awesome. Thanks, Cassandra. Alex Shootman: No problem. Operator: Your next question comes from the line of Jacob Stephan from Lake Street Capital Markets. Your line is now open. Jacob Stephan: Hey, guys. Appreciate you taking the questions. Maybe just first, kind of a housekeeping one here. Can you give a deeper dive into the banks versus credit unions in the backlog? Cassandra Hudson: Banks versus credit unions—It is pretty evenly split in terms of size. Right now, we have 13 banks in the backlog, and the rest would be credit unions. Jacob Stephan: Okay. And second one for me. I know you have given some in-depth detail on user adds in the past. I am wondering if you could help us think through the adds in the last quarter and maybe over the last several quarters—in terms of existing clients, how many of those were newly implemented customers—and that trend. Cassandra Hudson: In the past, you can think of the trend as roughly half and half new versus existing. In Q1 in particular, over the past 12 months, we implemented 1.2 million digital users, and then 1.5 million were related to existing clients—so a little bit more weighted to existing clients over the past year. Jacob Stephan: Okay. Very helpful. Thank you. Operator: Your next question comes from the line of Daniel Hibshman from Craig-Hallum Capital Group, on for Jeffrey Van Rhee. Please go ahead. Daniel Hibshman: Thanks. Just on Mantle and the pace of logo adds there—the 14 this quarter—maybe compare that to previous quarters or expectations of how Mantle is tracking relative to expectations? Cassandra Hudson: I think they continue to track very well. With all of our products, there is a bit of a cyclical nature to the sales cycle. For us, Q1 tends to be a bit of a lighter quarter and Q4 tends to be our strongest quarter. We continued to see really good performance in Q1 for Mantle coming off of a record 2025. Alex Shootman: I would just point back to why we are pleased. If you go back to 2025 and look at our DSSP clients—those are clients that have acquired Mantle—we have gone from 11 to 48 in that period. At the same time, we have been integrating the technologies together into one experience that unites the front end of digital banking and origination. I am frankly just super proud of the team for what they have done. Operator: Your next question comes from the line of Andrew Schmidt from KeyBanc Capital Markets. Andrew Schmidt: Hey, Alex. Hey, Cassandra. Thanks for taking the question. Apologies, I hopped on a little bit late here. The Salesforce—the shift to separate bank and credit union sales forces—how has that evolved? Has that been effective in terms of building the pipeline, particularly on the bank side? I hear you on the backlog; I am just curious how that has progressed. Alex Shootman: Thanks for the question. Our pipeline remains balanced. It is pretty evenly split between banks and credit unions. The transition has been effective. It allows us more specialization in the bank market, and we remain happy that we did it. Andrew Schmidt: Got it. That is helpful. And then, everyone is thinking through more efficient organizational structures as we think about AI development, etc. I know you are heavy users of this internally. Are there any structural changes or process changes that need to be made as a result of increases in model productivity to consider, or is it more just product velocity output increasing? Alex Shootman: You can imagine that we are using every single model provider in all parts of the organization right now. We are not yet at the point where we are ready to come to our investors and say, this is the benchmark productivity we are going to run after. The biggest change we are seeing is the front end of the software development life cycle. If you think about DevOps, it did a lot for us in the back end of the software development life cycle—how we test code, release code, support code. A lot of the transformation we are seeing now is the speed in the front end of the software development life cycle—how quickly we go from what used to be in a PRD that is no longer in a document at all and is now a fully functional prototype that we are reviewing with a client, instead of having conversations through PowerPoint or documents. That is where I see a lot of promise for the organization. Within support organizations, we have fully wired the company from a data perspective for access for all support teams to speed up time to respond to customers and ultimately reduce the cost to respond. Like every other software executive, we are watching our companies transform in months what we used to see happen in years. It is a pretty fun and amazing time to be a software company. Andrew Schmidt: Makes sense. A lot of progress in a short period of time—great to hear. If I could squeeze one more modeling question in: I think I heard the acceleration in the back half from a revenue perspective as we move past the term fees. Is it possible to have a 3Q/4Q breakout of the cadence to expect for revenue and EBITDA, just so we are not caught off guard? Cassandra Hudson: No worries. A couple of points, and I will talk about top line and EBITDA separately. On revenue, the acceleration is very specific to Q3, due to a more favorable year-over-year comparison—there are some timing elements in the prior year driving that acceleration. Given the nature of our model, it is very predictable. We have a steady amount of ARR launches happening this year and very consistent dynamics from existing customers and ARPU growth. That should help you calculate the implied revenue cadence for our model. On EBITDA, we expect the typical seasonality—with margins lower in Q2 given the user conference and then stepping up into Q3 and being weighted toward Q4 as usual. Alex Shootman: Hey, Andrew, because you have followed us for a while, I would just encourage you to go back and look at the post-Q2 commentary from last year. We were very specific and said we took down Q3 last year because we had a termination fee that accelerated into Q2. That is exactly what Cassandra is talking about. Before you buy stock in Alkami Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alkami Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alkami (ALKT) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

Performance beat was driven by 29% revenue growth and strong operating leverage, with banks now representing 13% of live online banking clients compared to 2% four years ago. The company is pivoting from a vertical application in a replacement market to a vertical platform provider, positioning itself as the primary technology partner for community financial institutions. Management attributes growth to a 'land, retain, and grow' algorithm where clients typically double their original platform investment within five years of onboarding. The MANTL acquisition is described as highly strategic, adding functionality that encourages legacy system conversions and expanding the install base for cross-selling online banking. Market dynamics are characterized by high switching costs and mission-criticality, resulting in gross retention rates 8 to 10 points above typical SaaS industry standards. Strategic leadership is being redefined by generating maximum economic value per institution rather than simply increasing the total number of institutions served. The Digital Sales & Service Platform (DSSP) is seeing rapid adoption, with clients using all three core products growing from 11 to 48 since the start of 2025. The 2030 framework assumes 40% of ARR growth will come from new logo additions and 60% from expansion within the existing client base. Management expects to achieve the Rule of 45 by 2030, supported by a gradual increase in bank new logo wins and consistent execution in add-on sales. Full-year 2026 guidance assumes a meaningful decline in termination fee revenue, which is expected to reduce reported growth by a few percentage points. Long-term profitability targets include non-GAAP gross margins approaching 70% as the company improves implementation execution and support efficiencies. AI initiatives are currently in the prototype phase, with management focusing on determining effective commercial packaging and pricing models that balance customer ease-of-use with company profitability. A sizable termination fee recognized in Q2 2025 creates an approximate 3 percentage point headwind to year-over-year revenue growth for Q2 2026. Temporary increases in database technology costs impacted Q1 gross margins, though management expects these costs to decline by the end of 2026. The company incurred $2.8 million in shareholder-related defense expenses over the last two quarters, which are expected to moderate following recent board additions. A new $100 million stock repurchase program was authorized, reflecting confidence in long-term cash flow generation and a balanced capital allocation strategy. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Alex Shootman noted a shift where banks are willing to pay off long-term contracts early to escape legacy core providers that offer insufficient digital capabilities. The decision is increasingly driven by the need to compete with mega-banks like Wells Fargo, where the risk of staying on legacy tech outweighs the cost of conversion. DSSP deals typically yield a 30% higher ARPU compared to traditional new logo digital banking deals because three products are sold simultaneously. Management believes DSSP will eventually lower the cost of sale for future products, though they are still gathering long-term data on these unit economics. Management is testing four AI prototypes with customers to determine if they should price based on simple flat fees or usage metrics like tokens. The company is wary of taking on 'token cost risk' and is prioritizing commercial safety and profitability in its eventual AI product launches. Serving banks requires specialized skills in commercial data conversion and deeper technical integration with batch-based bank cores versus real-time credit union cores. Alkami is completing a three-phase treasury management build-out specifically to facilitate moving banks off legacy core platforms. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

This article first appeared on GuruFocus. Revenue: $126.1 million, up 29% year over year. Adjusted EBITDA: $22.3 million, with a margin of 17.7%, expanding approximately 540 basis points year over year. Subscription Revenue: Grew 30% and represented 96% of total revenue. ARR (Annual Recurring Revenue): Increased by 22%, exiting the quarter at $494 million. Non-GAAP Gross Margin: 64.4%, roughly flat year over year. Operating Expenses: $59.4 million, representing 47.1% of revenue, with a 530 basis points improvement year over year. Cash and Marketable Securities: $77.6 million at the end of the quarter. Revenue Per User: Increased to $21.46, up 9% year over year. Clients and Users: 307 clients and 23 million registered users, an increase of 2.5 million users or 12% year over year. Stock Repurchase Program: Inaugural program approved for up to $100 million. Warning! GuruFocus has detected 4 Warning Signs with ALKT. Is ALKT fairly valued? Test your thesis with our free DCF calculator. Release Date: April 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alkami Technology Inc (NASDAQ:ALKT) achieved a strong first quarter with 29% revenue growth and over $22 million in adjusted EBITDA, both exceeding expectations. The company secured six new Digital Banking relationships and introduced new products, including Alkami Engage, demonstrating potential for long-term growth. Alkami's business model is attractive and predictable, operating in a large and growing market with over 2,000 regional banks and credit unions as potential clients. High retention rates and clients expanding their use of the platform contribute to reliable long-term client growth, with clients significantly increasing their platform investment over time. The MANTL acquisition has been strategic, adding platform functionality and expanding Alkami's client base, with 61 new clients added since the beginning of 2025. Alkami faces challenges in converting clients from legacy platforms due to long-term contracts and perceived conversion risks, limiting new logo growth spikes. The company anticipates a meaningful decline in termination fee revenue in 2026, which will impact reported growth. First-quarter non-GAAP gross margin was flat year over year due to higher database technology costs, which are expected to decline by the end of 2026. Alkami incurred $2.8 million in shareholder matters-related expenses over the prior two quarters, with expectations of additional costs. The integration of bank cores, which operate differently from credit union cores, presents technical challenges that require specific skills and product capabilities. Q: Can you provide more clarity on the expected growth acceleration in the third quarter? A: Cassandra Hudson, CFO, explained that the growth acceleration in the third quarter is driven by a more favorable year-over-year comparison due to timing dynamics experienced in 2025. The second quarter faces a headwind from termination fee revenue timing, which is more pronounced in Q2. Q: What were the key takeaways from the Co:lab customer conference regarding AI and digital transformation? A: Alex Shootman, CEO, noted that Co:lab set records for attendance and highlighted continued demand for digital transformation among banks and credit unions. Customers are focused on integrating digital banking with deposit and loan origination platforms to compete with larger banks and fintechs. Q: What is driving banks to separate online banking from their core providers? A: Alex Shootman, CEO, mentioned that banks are increasingly willing to separate online banking from core providers due to the need to compete with larger banks and fintechs. The integration of Alkami's platforms provides value that encourages banks to make this transition. Q: Can you discuss the impact of the Digital Sales and Service Platform (DSSP) on revenue and profitability? A: Cassandra Hudson, CFO, stated that DSSP deals typically see about a 30% higher ARPU compared to traditional new logos, leading to higher ARR and profitability. The implementation costs are consistent, but the platform offers significant long-term growth potential. Q: How is the integration of MANTL progressing, and what impact has it had on new logo additions? A: Alex Shootman, CEO, expressed satisfaction with the integration of MANTL, noting that DSSP clients have increased from 11 to 48 since the acquisition. The integration has been successful in driving both new logo and cross-sell performance. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Alkami Technology (ALKT) came out with quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -80.49%. A quarter ago, it was expected that this provider of digital banking services would post earnings of $0.15 per share when it actually produced earnings of $0.1, delivering a surprise of -33.33%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Alkami, which belongs to the Zacks Internet - Software industry, posted revenues of $126.14 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 0.62%. This compares to year-ago revenues of $97.83 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Alkami shares have lost about 29.5% since the beginning of the year versus the S&P 500's gain of 4.3%. While Alkami has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Alkami was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.21 on $132.88 million in revenues for the coming quarter and $0.92 on $529.16 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Box (BOX), another stock in the same industry, has yet to report results for the quarter ended April 2026. This online storage provider is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +20%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Box's revenues are expected to be $303.99 million, up 10% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alkami Technology, Inc. (ALKT) : Free Stock Analysis Report Box, Inc. (BOX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research