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ALKAMI TECHNOLOGY, INC. (ALKT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered strong growth and profitability: revenue $89.7M (+25.6% YoY), non-GAAP gross margin 63.1% (+280 bps YoY), and adjusted EBITDA $10.2M (vs. $3.1M YoY); GAAP EPS was -$0.08 (vs. -$0.13 YoY) .
  • Announced definitive agreement to acquire MANTL for $400M EV; expected close by Mar 31, 2025, funded with ~$380M cash plus ~$13M RSUs; strategic fit to create a unified digital sales and service platform across onboarding, digital banking, and data/marketing .
  • FY25 guidance introduced: revenue $440–$445M (+32–33%), adjusted EBITDA $47–$51M; Q1 2025 revenue $93.5–$95.0M and adjusted EBITDA $9.5–$10.5M; includes ~$30M revenue and ~$5M adjusted EBITDA loss from MANTL in 2025, with accretion to adjusted EBITDA in 2026 .
  • Balance sheet and liquidity strengthened via revolver upsized to $225M and maturity extended to Feb 2030, supporting funding flexibility for MANTL and organic investments .

What Went Well and What Went Wrong

  • What Went Well

    • “Alkami grew revenue 26% and generated over $10 million in adjusted EBITDA” in Q4, capping “our first full year of positive Adjusted EBITDA” in 2024 .
    • Platform scale and efficiency: availability improved to 99.99% in 2024; hosting cost per user down 26% from recent peak, driving gross margin expansion; Kubernetes migration >90% complete .
    • Commercial traction and KPIs: ARR $356M (+22% YoY), 20M registered users (+2.5M YoY), RPU $17.81 (+7% YoY), RPO ~$1.4B, churn <1% ARR in 2024; add-on sales ~45% of new bookings and 42 client renewals in 2024 .

  • What Went Wrong

    • Despite margin gains, GAAP net loss persisted: Q4 GAAP net loss -$7.6M (EPS -$0.08), albeit improved YoY; indicates continuing non-cash and growth investments impact .
    • MANTL expected to be a ~$5M adjusted EBITDA drag in FY25 as Alkami prioritizes scaling the asset rather than near-term cost cuts; EBITDA accretion targeted from 2026 .
    • Est. data access: Wall Street consensus from S&P Global was unavailable during this analysis window, limiting beat/miss quantification vs. Street for Q4 (see Estimates Context) [GetEstimates error].

Financial Results

Quarterly trend (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$82.2 $85.9 $89.7
GAAP Gross Margin %59.4% 58.9% 59.3%
Non-GAAP Gross Margin %63.2% 62.8% 63.1%
Adjusted EBITDA ($USD Millions)$4.6 $8.3 $10.2
GAAP EPS ($USD)-$0.13 -$0.09 -$0.08

YoY comparison (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024YoY Change
Revenue ($USD Millions)$71.4 $89.7 +25.6%
GAAP Gross Margin %56.0% 59.3% +330 bps
Non-GAAP Gross Margin %60.3% 63.1% +280 bps
Adjusted EBITDA ($USD Millions)$3.1 $10.2 +$7.1
GAAP EPS ($USD)-$0.13 -$0.08 +$0.05

Q4 vs Estimates

MetricQ4 2024 ActualConsensus (S&P Global)Beat/Miss
Revenue ($USD Millions)$89.7 Unavailable (SPGI limit exceeded)N/A
Primary EPS ($USD)-$0.08 Unavailable (SPGI limit exceeded)N/A

KPIs

KPIQ2 2024Q3 2024Q4 2024
ARR ($USD Millions)$321.3 $342.1 $355.9
Registered Users (Millions)18.584 19.499 19.984
RPU ($USD)$17.29 $17.54 $17.81
RPO ($USD Billions)——~$1.4
ARR Backlog ($USD Millions)——$56.5
ARR Churn (% of Digital Banking ARR in 2024)——<1%

Segment breakdown: Not applicable; Alkami reports as a unified SaaS platform .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 2025N/A$93.5–$95.0 New
Adjusted EBITDA ($USD Millions)Q1 2025N/A$9.5–$10.5 New
Revenue ($USD Millions)FY 2025N/A$440–$445 New
Adjusted EBITDA ($USD Millions)FY 2025N/A$47–$51 New
MANTL ContributionFY 2025N/A$30M revenue; ($5M) adjusted EBITDA New
Non-GAAP Gross Margin % (Core)Exit 2025Prior long-term target 65% by 2026 Exit 2025 run-rate ~65%; MANTL accretive ~100 bps Pulled forward trajectory
Liquidity (Revolver)Ongoing$125M, 2027 maturity $225M, maturity to Feb 2030 Increased/extended

No formal guidance provided for OpEx line items, OI&E, tax rate, dividends in the quarter’s disclosures .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Digital banking momentum & market leadershipAwards, strong user growth; FI Navigator and Tearsheet accolades; 27% subscription growth 20M users (+2.5M YoY); “Best Banking App” reaffirmed; continued add-on and renewals Strengthening
Add-on sales and RPU expansionAdd-on sales underpin growth; long-term target margins Add-on ~45% of new sales; RPU up 7%; renewals +12% ARR run rate Positive
Platform scale, availability, and margin efficiencyNon-GAAP GM progressing toward 65% by 2026 99.99% availability; Kubernetes migration; hosting cost per user -26%; Q4 non-GAAP GM 63.1% Improving
Offshore capability centerNoted in prior commentary as future lever ~$5M investment in 2025; no 2026 target impact; margin benefits beyond 2026 In build-out
MANTL acquisition strategyNo prior acquisitions in 2024; ACH Alert precedent $400M EV; multi-channel account opening; ~112 live FI clients; accelerates cross-sell and TAM Major strategic step
Macro/Deposits focusGeneral tailwinds mentioned Normalized rates heighten deposit competition; MANTL boosts conversion and automated KYC Heightened priority

Management Commentary

  • “During the fourth quarter of 2024, Alkami grew revenue 26% and generated over $10 million in adjusted EBITDA… availability has increased to 99.99% for 2024… hosting cost per user has improved by 26%... improved gross margin of almost 600 basis points since 2021” — Alex Shootman, CEO .
  • “We exited the quarter at $356 million ARR… 272 clients and 20 million registered users… churned less than 1% of digital banking ARR in 2024” — Bryan Hill, CFO .
  • “We’ve agreed to acquire MANTL for an enterprise value of $400 million… purchase price represents less than 7x projected ARR under contract at the end of 2025… IRR of about 30% before considering revenue synergies” — Bryan Hill, CFO .
  • “For full year 2025… revenue $440–$445M… adjusted EBITDA $47–$51M… MANTL accretive to adjusted EBITDA starting in 2026” — Bryan Hill, CFO .

Q&A Highlights

  • Product scope and differentiation: MANTL versus Alkami’s current offering—MANTL spans digital, branch, call center, and complex account roles; integrates with >20 cores; median retail opening ~5 minutes, business <10 minutes; ~85% automated decisions .
  • Cross-sell opportunity: Minimal client base overlap; MANTL brings ~8M users with $5–$6 RPU to Alkami; complementary segments (70% banks MANTL vs. 90% credit unions Alkami) .
  • Synergies timing: FY25 adjusted EBITDA drag (~$5M) split ~$2M Q2, ~$2M Q3, ~$1M Q4; expense leverage in G&A and future global capability center; revenue synergies expected to show in 2H26 .
  • Margin trajectory: Core non-GAAP GM targeted ~65% by exit 2025; MANTL gross margin ~75% and accretive ~100 bps to Alkami’s gross margin .
  • Strategic backdrop: Long-standing relationship; CAB feedback prioritized end-to-end onboarding; aim to build a ~$1B revenue company in 4–5 years .

Estimates Context

  • S&P Global consensus estimates were unavailable during the analysis window due to request limits, so beat/miss versus Street could not be quantified. Based on company guidance (Q1 2025 and FY 2025), sell-side models will likely need to incorporate the ~$30M MANTL revenue and the ~$5M adjusted EBITDA drag in 2025, with EBITDA accretion in 2026 . Values retrieved from S&P Global were unavailable due to API limits.

Key Takeaways for Investors

  • Momentum intact: sequential revenue growth ($82.2M → $85.9M → $89.7M) and margin expansion underpin multi-year targets; execution remains strong across logos, add-ons, and renewals .
  • Strategic catalyst: The MANTL acquisition materially enhances Alkami’s platform differentiation and cross-sell potential across banks and credit unions, addressing deposit origination and onboarding pain points—a likely medium-term rerating driver as synergies emerge .
  • Near-term model updates: Incorporate FY25 revenue guide ($440–$445M) and ~$5M adjusted EBITDA headwind from MANTL; monitor Q1 guide ($93.5–$95.0M, $9.5–$10.5M EBITDA) for pace of organic growth normalization .
  • Gross margin trajectory: Core business tracking to ~65% non-GAAP GM by exit 2025; MANTL accretive to GM (~100 bps), suggesting blended margin uplift over time .
  • Liquidity and funding flexibility: $225M revolver through 2030 plus cash and shelf capacity support M&A funding and ongoing investments without undue balance sheet strain .
  • Operating leverage and efficiency: Continued improvements in hosting costs, implementation efficiency, and scale drive structural margin gains; offshore capability center becomes a margin lever post-2026 .
  • Watch datapoints: MANTL close/timing, cross-sell traction (2H26 revenue synergies), bank win rate, RPU mix shift from MANTL’s lower RPU base, and updated Street estimates once consensus data is accessible .

Citations:
8-K and exhibits:
Q4 2024 press release and financials:
MANTL acquisition press release:
Q4 2024 earnings call transcript:
Q3 2024 press release:
Q2 2024 press release: