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ALKAMI TECHNOLOGY, INC. (ALKT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 31.5% revenue growth to $112.954M and Adjusted EBITDA of $15.964M; GAAP gross margin was 56.8% and non-GAAP gross margin 63.7% .
  • Against S&P Global consensus, Alkami posted an EPS beat (Primary/Normalized EPS actual $0.130 vs est. $0.120; +$0.010) and a slight revenue miss (actual $112.954M vs est. $113.477M; -$0.523M). The company outperformed its Adjusted EBITDA target by ~18% in the quarter, per management commentary . Values retrieved from S&P Global.*
  • FY 2025 guidance was mixed: revenue narrowed to $442.5–$444.0M (lower midpoint vs prior), while Adjusted EBITDA was raised to $56.0–$57.0M; Q4 2025 guidance introduced at $119.6–$121.1M revenue and $16.1–$17.1M Adjusted EBITDA .
  • Catalysts: record implementations (13 clients; six banks), strong cross-sell momentum (Mantl and data/marketing), backlog and RPO visibility ($1.6B) and CFO transition (Cassandra Hudson) set up narrative into Q4 and 2026 .

What Went Well and What Went Wrong

What Went Well

  • Record implementation throughput: 13 new online banking clients, including six banks; company now serves 291 digital banking clients, with 21.6M registered users; RPO reached ~$1.6B (3.6x live ARR), ARR $449M (+31% YoY) .
  • Cross-sell momentum: Mantl added 29 new clients (15 existing Alkami), bringing 44 shared clients under contract; attachment rate for data/marketing at 75%, and cross-sell approached ~50% of new sales YTD .
  • Profitability and efficiency: non-GAAP gross margin expanded ~100bps YoY to 63.7%; Adjusted EBITDA rose to $15.964M; sales team productivity and GTM efficiency among best in SaaS, with S&M expected ~15% of revenue for 2025 .

Selected management quotes:

  • “We are particularly excited about the successful launch of 13 new financial institutions … a record for Alkami.” — CEO Alex Shootman .
  • “We exited the third quarter with annual recurring revenue of $449 million, up 31%, and revenue per registered user of $20.83, up 19%.” — CFO Bryan Hill .
  • “Mantle added 29 new clients … we now have 44 clients under contract that subscribe to both [platforms].” — CFO Bryan Hill .

What Went Wrong

  • Sequential margin headwind: GAAP gross margin fell vs Q2 (56.8% in Q3 vs 58.6% Q2); management cited third‑party IP fee dynamics as the main sequential driver .
  • Implementation timing shifted add‑on sales, marginally impacting in‑quarter revenue; management emphasized Q4 will see a step-up in organic growth due to heavier implementation schedule .
  • GAAP profitability: net loss widened YoY to $(14.804)M; GAAP EPS diluted at $(0.14), reflecting higher amortization, stock‑based comp, and interest expense from convertible notes .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$85.906 $97.835 $112.059 $112.954
GAAP EPS (Basic & Diluted, $)$(0.09) $(0.08) $(0.13) $(0.14)
Adjusted EBITDA ($USD Millions)$8.318 $12.069 $11.921 $15.964
GAAP Gross Margin (%)58.9% 59.0% 58.6% 56.8%
Non-GAAP Gross Margin (%)62.8% 64.3% 65.1% 63.7%

Revenue mix and KPIs:

KPIQ3 2024Q3 2025
Annual Recurring Revenue (ARR, $USD Millions)$342.101 $449.034
Registered Users (Millions)19.499 21.552
Revenue per Registered User (RPU, $)$17.54 $20.83
Digital Banking Clients (#)266 291
Remaining Performance Obligation (RPO, $USD Billions)$1.366 $1.608
Subscription Revenue (% of total)—96%

Estimates vs Actuals (S&P Global basis):

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$97.835 $112.059 $112.954
Revenue Consensus Mean ($USD Millions)*$94.381$109.835$113.477
OutcomeBeatBeatMiss
Primary EPS Actual ($)*$0.061$0.070$0.130
Primary EPS Consensus Mean ($)*$0.087$0.078$0.120
OutcomeMissMissBeat

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Total RevenueFY 2025$443.0–$447.0M $442.5–$444.0M Lowered (midpoint from $445.0M to $443.25M)
Adjusted EBITDAFY 2025$51.5–$54.0M $56.0–$57.0M Raised
GAAP Total RevenueQ4 2025—$119.6–$121.1M New
Adjusted EBITDAQ4 2025—$16.1–$17.1M New

Management noted FY Adjusted EBITDA was raised “just under $4M above the midpoint of our previous full-year guide” .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Technology initiativesFocus on integrating Mantl; delivering best digital sales & service platform Agentic workflows and prompt-based code creator for SDK; AI embedded in data/marketing and chat; pilots underway Expanding AI use cases and developer enablement
Bank market tractionExpanding presence in bank market 4 new bank wins; 6 bank implementations in Q3; 33 banks live; growing willingness of banks to buy best-of-breed Accelerating
Cross-sell (Mantl & Data/Marketing)Mantl added 23 clients in Q2; integration narrative 29 Mantl clients added in Q3; 44 shared clients; data/marketing attach ~75% Strengthening
Implementation cadenceStrong user growth (20.5M Q1; 20.9M Q2) Record 13 implementations; Q4 expected step-up in organic growth due to scheduling; add-on implementations more Q4-weighted Peak throughput; Q4 heavier
Gross margin trajectoryNon-GAAP GM 64.3% (Q1), 65.1% (Q2) 63.7% (Q3); sequential headwind from third‑party IP fee dynamics; ahead of plan to reach ~65% by end of 2026 Near-term dip; long-term improving
Leadership/OrgCFO retirement announced New CFO Cassandra Hudson appointed effective Nov 1, 2025 Transition executed

Management Commentary

  • Strategy: “Demand among regional and community financial institutions continues to drive favorable pipeline … early momentum in demand for holistic solutions such as Alkami’s Digital Sales & Service Platform” — CEO .
  • Execution: “We exited the third quarter with ARR of $449M, up 31%, and RPU of $20.83, up 19% … We outperformed our Adjusted EBITDA target by 18%” — CFO .
  • Market dynamics: “Less than 30% of the addressable market are on a contemporary platform … demand has remained consistent” — CFO .
  • Q4 setup: “Q4 is really our greatest implementation quarter … step up in organic revenue growth in Q4” — CFO .
  • CFO transition: Appointment of Cassandra Hudson with track record in IPOs and profitable scaling; Bryan Hill to transition to consultant role .

Q&A Highlights

  • Organic growth acceleration in Q4: Implementation timing and backlog support a higher organic growth step-up; year-end live ARR growth targeted at ~22–23% .
  • Competitive environment: Banks increasingly willing to adopt best-of-breed digital banking separate from core suites; Alkami showcased bank implementations and treasury roadmap .
  • AI/product innovation: Agentic AI pilots (agent-based banker; SDK prompt-based code creation) and embedded AI in data/marketing improving personalization and workflow .
  • Gross margin: Sequential decline attributed to third‑party IP economics; long-term path to ~65% by 2026 remains intact .
  • Cross-sell and Mantl: Strong shared-client growth and cross-sell rate; Mantl approaching ~$60M ARR under contract; loan origination evaluated via lighthouse clients before general availability .

Estimates Context

  • Q3 2025: EPS (Primary/Normalized) beat by ~$0.010 ($0.130 vs $0.120); revenue modest miss by ~$0.523M ($112.954M vs $113.477M). Management outperformed Adjusted EBITDA expectations, citing scale and efficiency . Values retrieved from S&P Global.*
  • Q1–Q2 2025: Revenue beats; EPS came in below consensus, consistent with the company’s focus on Adjusted EBITDA rather than non-GAAP EPS disclosure in filings . Values retrieved from S&P Global.*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Implementation-driven Q4 setup: Expect organic growth acceleration driven by heavier implementation schedule and $67M ARR in backlog; monitor conversion of add‑on/Mantl implementations .
  • Cross-sell engine is working: Mantl and data/marketing attach rates support ARR growth and higher ARPU ($20.83), reinforcing land-and-expand economics .
  • Profitability trajectory: Despite a sequential GM dip, non-GAAP margin expanded YoY and long-term GM target (~65% by 2026) remains on track; FY Adjusted EBITDA guidance raised to $56–$57M .
  • Guidance mix matters: FY revenue guidance midpoint trimmed while EBITDA raised; Q4 guidance introduced — prioritize EBITDA trajectory and execution against Q4 implementations .
  • Market share gains in banks: Record bank implementations and growing best‑of‑breed adoption in community banks; supports multi-year pipeline .
  • Leadership transition: New CFO (Hudson) brings public company and M&A discipline; continuity supported by Hill’s consulting role — watch capital allocation and margin scaling cadence .
  • Trading lens: Q3 delivered an S&P EPS beat and slight revenue miss; near-term stock narrative hinges on Q4 execution, cross-sell conversion, and visibility (RPO $1.6B) . Values retrieved from S&P Global.*

Footnote: Values retrieved from S&P Global.*