Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2024

ALKAMI TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware 001-40321 45-3060776

(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)

5601 Granite Parkway, Suite 120, Plano, TX 75024

(Address of Principal Executive Offices) (Zip Code)

(877) 725-5264

Registrant’s Telephone Number, Including Area Code

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

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

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

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

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

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


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

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

Emerging growth company ☒

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

Item 2.02. Results of Operations and Financial Condition.

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

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

Item 7.01. Regulation FD Disclosure.

On October 30, 2024, the Company posted an investor presentation to its website at www.alkami.com (the “Investor Presentation”). A copy of the Investor Presentation is furnished herewith as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

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

Item 9.01. Financial Statements and Exhibits.


Exhibit Number						Description
99.1						Earnings Press Release, dated October 30, 2024
99.2						Investor Presentation, dated October 30, 2024
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Alkami Technology, Inc.

Date:

October 30, 2024

By:

/s/ W. Bryan Hill

W. Bryan Hill

Chief Financial Officer

Exhibit 99.1

Alkami Announces Third Quarter 2024 Financial Results

PLANO, Texas, October 30, 2024 (PRNewswire) -- Alkami Technology, Inc. (Nasdaq: ALKT) (“Alkami”), a leading cloud-based digital banking solutions provider for financial institutions in the U.S., today announced results for its third quarter ending September 30, 2024.

Third Quarter 2024 Financial Highlights

•GAAP total revenue of $85.9 million, an increase of 26.9% compared to the year-ago quarter;

•GAAP gross margin of 58.9%, compared to 54.0% in the year-ago quarter;

•Non-GAAP gross margin of 62.8%, compared to 58.7% in the year-ago quarter;

•GAAP net loss of $(9.4) million, compared to $(15.5) million in the year-ago quarter; and

•Adjusted EBITDA of $8.3 million, compared to $0.8 million in the year-ago quarter.

Comments on the News

Alex Shootman, Chief Executive Officer, said, “In the third quarter, we delivered continued out performance on both our financial and operating metrics. We ended Q3 with 19.5 million live registered users, up 2.6 million compared to the prior-year quarter, and delivered again on new logos, add-on sales and renewals.”

Shootman added, "In the third quarter we signed nine new digital banking clients, including six credit unions and three banks. We also renewed 14 clients, with several clients extending to 2031 and adding an additional 7 products to their portfolios. Alkami continues to distinguish itself as the leading digital banking provider as evidenced by several industry awards, including being named the top digital banking provider in credit union market share by FI Navigator and Best Banking App by Tearsheet."

Bryan Hill, Chief Financial Officer, said, “We achieved total revenue growth and subscription revenue growth of 27% for the quarter. We once again exceeded our gross margin and adjusted EBITDA expectations, demonstrating continued progress towards our 2026 objectives of a non-GAAP gross margin of 65% and adjusted EBITDA margin of 20%."

2024 Financial Outlook

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

Alkami is providing guidance for its fourth quarter ending December 31, 2024 of:

•GAAP total revenue in the range of $89.0 million to $90.0 million;

•Adjusted EBITDA in the range of $8.5 million to $9.0 million.

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

•GAAP total revenue in the range of $333.2 million to $334.2 million;

•Adjusted EBITDA in the range of $25.2 million to $25.7 million.

Conference Call Information

The Company will host a conference call at 5:00 p.m. ET today to discuss its financial results with investors. A live webcast of the event will be available on the Alkami investor relations website at investors.alkami.com. In addition, a live dial-in will be available domestically at 1-800-836-8184 and internationally at 1-646-357-8785, using passcode 68447. A replay will be available in the Investor Relations section of the Alkami website.

About Alkami

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

Cautionary Statement Regarding Forward-Looking Statements

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

Explanation of Non-GAAP Financial Measures and Key Business Metrics

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

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

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

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

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

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

The company defines “Adjusted EBITDA” as net loss plus (1) provision (benefit) for income taxes, (2) gain on financial instruments, (3) interest income, net, (4) depreciation and amortization (5) stock-based compensation expense, (6) secondary offering costs, and (7) acquisition-related expenses. The company believes adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.

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

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

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

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

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


ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(UNAUDITED)
	September 30,		December 31,
	2024		2023
Assets
Current assets
Cash and cash equivalents	$	80,956	$	40,927
Marketable securities	20,033		51,196
Accounts receivable, net	42,408		35,499
Deferred costs, current	12,046		10,329
Prepaid expenses and other current assets	13,563		10,634
Total current assets	169,006		148,585
Property and equipment, net	21,038		16,946
Right-of-use assets	14,875		15,754
Deferred costs, net of current portion	34,666		30,734
Intangibles, net	30,718		35,807
Goodwill	148,050		148,050
Other assets	3,840		3,949
Total assets	$	422,193	$	399,825
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	5,591	$	7,478
Accrued liabilities	28,049		19,763
Deferred revenues, current portion	13,088		10,984
Lease liabilities, current portion	1,309		1,205
Total current liabilities	48,037		39,430
Deferred revenues, net of current portion	16,267		15,384
Deferred income taxes	1,774		1,713
Lease liabilities, net of current portion	17,395		18,052
Other non-current liabilities	216		305
Total liabilities	83,689		74,884
Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized; and 100,496,654 and 96,722,098 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	100		97
Additional paid-in capital	806,962		760,210
Accumulated deficit	(468,558)		(435,366)
Total stockholders’ equity	338,504		324,941
Total liabilities and stockholders' equity	$	422,193	$	399,825


ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(UNAUDITED)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Revenues	$	85,906	$	67,703	$	244,193	$	193,462
Cost of revenues(1)	35,289		31,153		100,773		89,300
Gross profit	50,617		36,550		143,420		104,162
Operating expenses:
Research and development	24,133		21,755		70,862		63,170
Sales and marketing	14,406		11,933		45,213		36,694
General and administrative	22,147		18,290		62,074		53,608
Acquisition-related expenses	—		—		195		220
Amortization of acquired intangibles	359		359		1,076		1,076
Total operating expenses	61,045		52,337		179,420		154,768
Loss from operations	(10,428)		(15,787)		(36,000)		(50,606)
Non-operating income (expense):
Interest income	1,147		2,080		3,490		5,822
Interest expense	(180)		(1,931)		(327)		(5,514)
Gain on financial instruments	—		201		—		421
Loss before income taxes	(9,461)		(15,437)		(32,837)		(49,877)
Provision (benefit) for income taxes	(19)		39		355		323
Net loss	$	(9,442)	$	(15,476)	$	(33,192)	$	(50,200)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.09)	$	(0.16)	$	(0.34)	$	(0.54)
Weighted average number of shares of common stock outstanding:
Basic and diluted	99,435,002		94,675,358		98,165,903		93,477,486

(1) Includes amortization of acquired technology of $1.3 million for both the three months ended September 30, 2024 and 2023, and $4.0 million for both the nine months ended September 30, 2024 and 2023.


ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
	Nine months ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(33,192)	$	(50,200)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	7,854		7,841
Accrued interest on marketable securities, net	(928)		(2,059)
Stock-based compensation expense	43,822		37,914
Amortization of debt issuance costs	161		110
Gain on financial instruments	—		(430)
Gain on lease modification	—		(375)
Deferred taxes	61		118
Changes in operating assets and liabilities:
Accounts receivable	(6,909)		(5,020)
Prepaid expenses and other current assets	(2,619)		(2,631)
Accounts payable and accrued liabilities	6,316		5,223
Deferred costs	(5,067)		(3,959)
Deferred revenues	2,987		1,271
Net cash provided by (used in) operating activities	12,486		(12,197)
Cash flows from investing activities:
Purchase of marketable securities	(30,721)		(109,593)
Proceeds from sales, maturities and redemptions of marketable securities	62,812		97,852
Purchases of property and equipment	(1,036)		(774)
Capitalized software development costs	(5,009)		(3,843)
Net cash provided by (used in) investing activities	26,046		(16,358)
Cash flows from financing activities:
Principal payments on debt	—		(2,125)
Debt issuance costs paid	(363)		(341)
Proceeds from Employee Stock Purchase Plan issuances	2,598		2,407
Payment of holdback funds from acquisition	—		(1,000)
Payments for taxes related to net settlement of equity awards	(12,820)		(11,029)
Proceeds from stock option exercises	12,082		7,287
Net cash provided by (used in) financing activities	1,497		(4,801)
Net increase (decrease) in cash and cash equivalents and restricted cash	40,029		(33,356)
Cash and cash equivalents and restricted cash, beginning of period	40,927		112,337
Cash and cash equivalents and restricted cash, end of period	$	80,956	$	78,981


ALKAMI TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except per share data)
(UNAUDITED)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
GAAP total revenues	$	85,906		$	67,703		$	244,193		$	193,462

	September 30,
	2024			2023
Annual Recurring Revenue (ARR)	$	342,101		$	274,976
Registered Users	19,499			16,891
Revenue per Registered User (RPU)	$	17.54		$	16.28

Non-GAAP Cost of Revenues
Set forth below is a presentation of the company’s “Non-GAAP Cost of Revenues.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
GAAP cost of revenues	$	35,289		$	31,153		$	100,773		$	89,300
Amortization	(1,895)			(1,686)			(5,463)			(4,923)
Stock-based compensation expense	(1,407)			(1,507)			(3,932)			(4,140)
Non-GAAP cost of revenues	$	31,987		$	27,960		$	91,378		$	80,237

Non-GAAP Gross Margin
Set forth below is a presentation of the company’s “Non-GAAP Gross Margin.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
GAAP gross margin	58.9		%	54.0		%	58.7		%	53.8		%
Amortization	2.3		%	2.5		%	2.3		%	2.6		%
Stock-based compensation expense	1.6		%	2.2		%	1.6		%	2.1		%
Non-GAAP gross margin	62.8		%	58.7		%	62.6		%	58.5		%

Non-GAAP Research and Development Expense
Set forth below is a presentation of the company’s “Non-GAAP Research and Development Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
GAAP research and development expense	$	24,133		$	21,755		$	70,862		$	63,170
Stock-based compensation expense	(4,492)			(4,116)			(12,746)			(11,854)
Non-GAAP research and development expense	$	19,641		$	17,639		$	58,116		$	51,316


Non-GAAP Sales and Marketing Expense
Set forth below is a presentation of the company’s “Non-GAAP Sales and Marketing Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
GAAP sales and marketing expense	$	14,406	$	11,933	$	45,213	$	36,694
Stock-based compensation expense	(2,327)		(1,906)		(6,649)		(5,309)
Non-GAAP sales and marketing expense	$	12,079	$	10,027	$	38,564	$	31,385

Non-GAAP General and Administrative Expense
Set forth below is a presentation of the company’s “Non-GAAP General and Administrative Expense.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
GAAP general and administrative expense	$	22,147	$	18,290	$	62,074	$	53,608
Stock-based compensation expense	(7,031)		(6,389)		(20,495)		(16,611)
Secondary offering costs	(810)		—		(810)		—
Non-GAAP general and administrative expense	$	14,306	$	11,901	$	40,769	$	36,997

Non-GAAP Income (Loss) Before Income Taxes
Set forth below is a presentation of the company’s “Non-GAAP Income (Loss) Before Income Taxes.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
GAAP loss before income taxes	$	(9,461)	$	(15,437)	$	(32,837)	$	(49,877)
Gain on financial instruments	—		(201)		—		(421)
Amortization	2,254		2,045		6,539		5,999
Stock-based compensation expense	15,257		13,918		43,822		37,914
Secondary offering costs	810		—		810		—
Acquisition-related expenses	—		—		195		220
Non-GAAP Income (loss) before income taxes	$	8,860	$	325	$	18,529	$	(6,165)



Adjusted EBITDA
Set forth below is a presentation of the company’s “Adjusted EBITDA.” Please reference the “Explanation of Non-GAAP Measures” section.
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
GAAP net loss	$	(9,442)	$	(15,476)	$	(33,192)	$	(50,200)
Provision (benefit) for income taxes	(19)		39		355		323
Gain on financial instruments	—		(201)		—		(421)
Interest income, net	(967)		(149)		(3,163)		(308)
Depreciation and amortization	2,679		2,695		7,854		7,841
Stock-based compensation expense	15,257		13,918		43,822		37,914
Secondary offering costs	810		—		810		—
Acquisition-related expenses	—		—		195		220

Adjusted EBITDA	$	8,318	$	826	$	16,681	$	(4,631)

Investor Relations Contact

Steve Calk

ir@alkami.com

Media Relations Contacts

Marla Pieton

marla.pieton@alkami.com

Valerie Kerner

alkami@fullyvested.com

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

2 © A lk am i T ec h n o lo gy , I n c. This presentation contains “forward-looking” statements relating to Alkami Technology, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its future cash flows and its financial outlook. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. Factors that may materially affect such forward-looking statements include: Our limited operating history and history of operating losses; our ability to manage future growth; our ability to attract new clients and retain and expand existing clients’ use of our solutions; the unpredictable and time-consuming nature of our sales cycles; our ability to maintain, protect and enhance our brand; our ability to accurately predict the long-term rate of client subscription renewals or adoption of our solutions; our reliance on third-party software, content and services; our ability to effectively integrate our solutions with other systems used by our clients; intense competition in our industry; any downturn, consolidation or decrease in technology spend in the financial services industry, including as a result of recent closures of certain financial institutions and liquidity concerns at other financial institutions; our ability and the ability of third parties on which we rely to prevent and identify breaches of security measures (including cybersecurity) and resulting disruptions of our systems or operations and unauthorized access to client customer and other data; our ability to successfully integrate acquired companies or businesses; our ability to comply with regulatory and legal requirements and developments; our ability to attract and retain key employees; the political, economic and competitive conditions in the markets and jurisdictions where we operate; our ability to maintain, develop and protect our intellectual property; our ability to respond to evolving technological requirements to develop or acquire new and enhanced products that achieve market acceptance in a timely manner; our ability to estimate our expenses, future revenues, capital requirements, our needs for additional financing and our ability to obtain additional capital and other factors described in the Company’s filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in both frequency and impact on continuing operations. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that Alkami believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors. Cautionary Statement Regarding Forward-Looking Statements

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

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

5 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market: User Characteristics 250M+ digital users, excluding megabanks Total market digital users growing 5-8% historically, driven by: ● Increasing number of accounts per customer ● Ease of new account opening via digital tools ● Demographics, including post-COVID shift to ex-urban areas, decline in unbanked and underbanked customers Digital user growth historically uncorrelated with contraction in branches or number of FIs Addressable Market = FIs with assets from $100M to $450B, representing 250M+ digital users Legacy Providers include Fiserv, FIS, JKHY, DI and other small or point solutions Sources: NCUA, FDIC, FI Navigator, Cornerstone Advisors and Alkami internal research, December 2023 Legacy Providers: 210M+ User Growth: 5-8% QTWO: 24M User Growth: 9% (6/30/24) Alkami: 19.5M User Growth: 15% (9/30/24)

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

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

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

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

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

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

Alkami Technology, Inc. Proprietary Information. Financial Overview

13 © A lk am i T ec h n o lo gy , I n c. Q3 2024 Financial Performance $M ● Q3’24 revenue growth of 27% driven by new clients, existing client user growth and ARPU growth ● GM expansion consistent with our plan to increase GM 200-300 bps per year through 2026 ● Adjusted EBITDA expansion driven by continued scale and efficiencies in Research & Development, Sales & Marketing and General & Administrative Note: Gross margin % on a non-GAAP basis

14 © A lk am i T ec h n o lo gy , I n c. Operating and Financial Highlights Q3 2024 $342M ARR Subscription Revenue Mix as of 9/30/24 95% Subscription Revenue 12/31/23 115% Net Dollar Retention Remaining Performance Obligations as of 9/30/24 $1.3B RPO Digital Banking Clients 266 Q3 2024 229 Q3 2023 Registered Users 19.5M16.9M Q3 2024Q3 2023 ● Signed 9 new digital banking platform clients in Q3 ● Implemented 12 clients in Q3, bringing digital platform client count to 266 ● 36 new clients in implementation backlog, representing 1.3M digital users ● Exited Q3 with 19.5M registered users, up 2.6M or 15%. Drivers: (i) FIs implemented in last twelve months represent 1.2M registered users and (ii) existing clients increased their registered users by 1.4M ● Increased ARR 24% to $342M ● Remaining performance obligation reached $1.3B representing 3.8 times live ARR and was 30% higher than a year ago ● LTM churn of 0% vs long-term expected annual churn modeled at 2-3%

15 © A lk am i T ec h n o lo gy , I n c. Client Base Expansion 2020 151 177 199 236 37 57 67 89 2021 2022 2023 ARR growth driven by larger new logos and increased product penetration 266 104 Q3’24 Total Digital Banking Platform Clients Clients with ARR > $1M

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

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

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

23 © A lk am i T ec h n o lo gy , I n c. Selected Historical Data 2020 2021 2022 2023 Q3’24 Digital banking platform clients 151 177 199 236 266 Growth % 17% 12% 19% 16% Digital banking platform users (M) 9.7 12.4 14.5 17.5 19.5 Growth % 28% 18% 20% 15% Live ARR ($M) $ 128.0 $ 169.0 $ 226.1 $ 291.0 342.1 Growth % 32% 34% 29% 24% RPU $ 13.22 $ 13.68 $ 15.55 $ 16.63 17.54 Growth % 3% 14% 7% 8% RPO ($M) $ 510 $ 652 $ 893 $ 1,140 1,286 Growth % 28% 37% 28% 30% Notes: Segmint acquisition completed in Q2’22, driving one-time increase in RPU Q3’24 growth compares to Q3’23

Cover	Oct. 30, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Oct. 30, 2024
Entity Registrant Name	ALKAMI TECHNOLOGY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40321
Entity Tax Identification Number	45-3060776
Entity Address, Address Line One	5601 Granite Parkway
Entity Address, Address Line Two	Suite 120
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75024
City Area Code	877
Local Phone Number	725-5264
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	ALKT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001529274
Amendment Flag	false