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ALKAMI TECHNOLOGY, INC. (ALKT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $97.8M, up 28.5% y/y and ~9% q/q; non-GAAP gross margin expanded to 64.3% and Adjusted EBITDA rose to $12.1M, exceeding prior quarter guidance .
  • Versus Wall Street consensus, revenue beat ($97.8M vs $94.4M*) but Primary EPS missed ($0.0606 vs $0.0869*); Adjusted EBITDA outperformed company guidance (consensus tracks EBITDA, not Adjusted EBITDA) [*Values retrieved from S&P Global].
  • FY25 guidance was raised to revenue $443–$447M and Adjusted EBITDA $49.5–$52.5M; Q2 2025 guidance introduced at revenue $109.0–$110.5M and Adjusted EBITDA $9–$10M .
  • Strategic catalysts: MANTL acquisition closed 3/17, already contributing $1.4M Q1 revenue; strong cross-sell traction (5 ALKT clients bought MANTL in Q1), and expanding bank presence; CFO retirement announced with long transition, minimizing execution risk .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profitability: revenue +28.5% y/y to $97.8M; Adjusted EBITDA $12.1M vs $3.8M y/y; non-GAAP gross margin 64.3% (+260 bps y/y) .
  • KPIs momentum: ARR reached $404M (+33% y/y), RPU $19.74 (+18% y/y), registered users 20.5M (+2.3M y/y), RPO ~$1.6B (3.9x ARR) .
  • Early MANTL synergy: closed earlier than expected, added $1.4M revenue in Q1; 5 ALKT clients purchased MANTL; cross-sell pipeline building confidence in bank and CU demand .

Quotes:

  • “Demand for digital banking…is not elastic. It is mandatory innovation if you are going to compete with Chase and Chime.” — CEO Alex Shootman .
  • “We exited the first quarter with annual recurring revenue of $404 million… and revenue per registered user of $19.74.” — CFO Bryan Hill .

What Went Wrong

  • EPS miss vs consensus: Primary EPS actual $0.0606 vs $0.0869* estimate; non-GAAP adjustments, acquisition-related expenses ($2.4M) and intangible impairment ($1.7M) weighed on earnings [*Values retrieved from S&P Global].
  • Seasonality/expense timing: Co:lab event costs occurred in both Q1 and Q2 (vs typical Q2), elevating OpEx; India expansion investment (~$5M for 2025) near-term margin headwind .
  • Slight GAAP gross margin downtick q/q (59.0% vs 59.3% in Q4), though non-GAAP gross margin improved to 64.3% .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$85.9 $89.7 $97.8
GAAP Gross Margin (%)58.9% 59.3% 59.0%
Non-GAAP Gross Margin (%)62.8% 63.1% 64.3%
GAAP Net Loss ($USD Millions)$(9.4) $(7.6) $(7.8)
GAAP Diluted EPS ($USD)$(0.09) $(0.08) $(0.08)
Adjusted EBITDA ($USD Millions)$8.3 $10.2 $12.1

Subscription mix:

MetricQ4 2024Q1 2025
Subscription Revenue (% of total)96% 95%

KPIs:

KPIQ3 2024Q4 2024Q1 2025
ARR ($USD Millions)$342.1 $355.9 $403.9
Registered Users (Millions)19.5 20.0 20.5
RPU ($USD)$17.54 $17.81 $19.74
RPO ($USD Billions)~$1.3 ~$1.4 ~$1.6
Digital Banking Clients (Count)266 272 278

Results vs Wall Street consensus (S&P Global):

MetricQ1 2025 ConsensusQ1 2025 ActualBeat/Miss
Revenue ($USD Millions)$94.38*$97.84 Beat
Primary EPS ($USD)$0.0869*$0.0606*Miss

Values with asterisks retrieved from S&P Global.

Drivers and non-GAAP adjustments:

  • Adjusted EBITDA excludes taxes, interest, D&A, stock-based comp, acquisition-related expenses, and impairment; company emphasizes non-GAAP measures to evaluate ongoing operations .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$440–$445 $443–$447 Raised
Adjusted EBITDA ($USD Millions)FY 2025$47–$51 $49.5–$52.5 Raised
Revenue ($USD Millions)Q1 2025$93.5–$95.0 Actual $97.8 Beat prior guide
Adjusted EBITDA ($USD Millions)Q1 2025$9.5–$10.5 Actual $12.1 Beat prior guide
Revenue ($USD Millions)Q2 2025—$109.0–$110.5 New
Adjusted EBITDA ($USD Millions)Q2 2025—$9.0–$10.0 New

Additional disclosures: MANTL expected FY25 revenue ~$31.4M and Adjusted EBITDA loss ~$5M; ARR under contract targeted ~$60M by YE25 (>30% y/y growth) .

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Demand environmentStable, long-term digital transformation; add-on mix shifts with rates Continued strength; bank wins up; #1 CU market share Pipeline healthy; “mandatory innovation”; record Co:lab engagement Strengthening narrative
Data/AI differentiationData & marketing as key differentiator; 12 AI models; rising attach rates TAM expansion with integrated onboarding + data “Anticipatory banking” vision; real-time insights for fraud and revenue Expanding scope
Offshoring/R&D executionPlan to build captive India capability; ~1 pt margin invest in 2025 Expanded revolver; $5M 2025 offshoring spend ~40 employees in India; cadence heavier in H2’25 Execution progressing
Bank vs CU tractionCredit union cadence steady; bank opportunities increasing 42 banks under contract; 23 live Balanced demand across banks and CUs for MANTL Improving bank penetration
Regulatory/Open BankingEarly-stage; potential tailwind, pace uncertain —If open banking materializes, opportunity with right tech Watchful
M&A/AcquisitionsPipeline improving; disciplined buyer Announced MANTL acquisition; strategic fit Closed MANTL; early cross-sell traction Integration underway

Management Commentary

  • Strategy and positioning: “We are spending our R&D dollars on onboarding and account opening, retail and commercial functionality, user experience and personalization.” — CEO .
  • Demand clarity: “We have not seen any decline in the demand for digital banking.” — CEO .
  • MANTL synergy and product roadmap: “MANTL…serves both retail and commercial; sessions were full…and cross-selling…has just begun.” — CEO .
  • Profitability trajectory: “Adjusted EBITDA in the first quarter was $12.1M…margin 12.3%.” — CFO .
  • ARR/RPU growth drivers: “MANTL contributed about $1.80 to RPU this quarter…expect normalized growth of around 7–8% going forward.” — CFO .

Q&A Highlights

  • Offshoring cadence: $5M 2025 spend skewed to Q3–Q4; ~170–180 offshore employees by YE25 (many transitioned from prior vendor) .
  • RPU drivers: MANTL contributed ~$1.80 to RPU; add-ons and higher-RPU new logos also supportive .
  • Cross-sell momentum: 5 MANTL transactions sold into ALKT base in Q1; expected to behave more like Segmint (broad applicability) than ACH Alert .
  • LOS update: MANTL LOS in development with customers; decision to broaden offering after successful development .
  • Backlog composition: 36 digital banking clients in backlog; 16 banks (~$30 RPU) and CUs just under $20 RPU; MANTL backlog ~50 institutions .
  • RPO growth: ~20% organic RPO growth; +11 pts from MANTL y/y .
  • Market share: ALKT leading user share gains vs top 5 providers (FI Navigator data) .
  • Macro resilience: Customers prioritizing digital banking despite expense management; long-cycle, mission-critical contracts .

Estimates Context

  • Q1 2025 revenue beat consensus; Primary EPS missed. Adjusted EBITDA exceeded ALKT guidance but is not directly comparable to S&P “EBITDA” consensus (different definition).
  • Number of estimates: 10 for revenue and EPS in Q1 2025; indicates solid coverage depth [*Values retrieved from S&P Global].
MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD Millions)$94.38*$97.84
Primary EPS ($USD)$0.0869*$0.0606*

Values with asterisks retrieved from S&P Global.

Implications: Street models likely adjust upward on revenue trajectory (helped by early MANTL contribution and pulled-forward Co:lab revenue), while EPS estimates may incorporate near-term integration costs, stock-based compensation, and event timing impacts .

Key Takeaways for Investors

  • Revenue momentum and non-GAAP margin expansion continue; Q1 beat prior guidance with raised FY25 outlook—supports multiple expansion on execution .
  • MANTL is a tangible growth lever: early cross-sells, balanced bank/CU demand, and clear flywheel with ALKT Digital Banking and Data/Marketing; FY25 contribution quantified with EBITDA turning accretive in 2026 .
  • KPIs trending favorably (ARR, RPU, RPO, users), underpinning visibility; backlog mix suggests higher RPU tailwind from banks .
  • Near-term EPS variability reflects integration costs, impairment, SBC, and event timing; focus on Adjusted EBITDA and non-GAAP gross margin trajectory to gauge operational progress .
  • Strategic investment in India expands R&D capacity while preserving medium-term profitability goals; heavier spend H2’25 is transitory .
  • Transition risk from CFO retirement mitigated by extended runway and consulting arrangement through Dec 2026 .
  • Trading lens: positive revenue/Adjusted EBITDA momentum and guidance raise are constructive; watch Q2 print for MANTL cross-sell cadence, bank traction, and margin evolution vs guidance .