Alkami Technology Inc ((ALKT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Alkami Technology Inc. recently held its earnings call, which conveyed a predominantly positive sentiment. The company demonstrated strong revenue growth, an expanding user base, and successful strategic acquisitions, positioning itself well for future growth despite some challenges such as the initial EBITDA loss from the MANTL acquisition and expected client churn.
Strong Revenue Growth
Alkami reported a robust 26% revenue growth for the fourth quarter of 2024 and for the full year, achieving a total revenue of $333.8 million. This significant increase underscores the company’s effective strategies and market positioning.
User Base Expansion
The company ended the quarter with an impressive 20 million users on the Alkami Platform, marking an increase of 2.5 million users from the previous year. This growth highlights Alkami’s ability to attract and retain a large and growing user base.
Improved Financial Metrics
Alkami achieved a 900 basis point expansion in its adjusted EBITDA margin and improved its operating cash flow by over $36 million for the year 2024. These metrics indicate a strong financial performance and operational efficiency.
Successful Strategic Acquisition
Alkami announced plans to acquire MANTL, which is expected to enhance its product offerings and cross-sell opportunities with minimal client overlap. This strategic move is anticipated to strengthen Alkami’s market position.
High Client Retention and Engagement
The company reported a digital banking ARR churn of less than 1% in 2024 and implemented 38 financial institutions, supporting 1.2 million digital users. This demonstrates Alkami’s strong client retention and engagement strategies.
MANTL EBITDA Loss
The acquisition of MANTL is expected to result in an adjusted EBITDA loss of $5 million for 2025. However, it is projected to be accretive by 2026, indicating a positive long-term outlook.
Churned Clients
Alkami expects to churn four clients in 2025, representing 175,000 users and less than 1% of ARR. This manageable churn reflects the company’s strong client retention capabilities.
Forward-Looking Guidance
Alkami provided detailed guidance for its future performance. For the first quarter of 2025, the company anticipates revenue between $93.5 million and $95 million, with an adjusted EBITDA of $9.5 million to $10.5 million. For the full year 2025, Alkami expects revenue between $440 million to $445 million, translating to growth of 32% to 33%, and adjusted EBITDA of $47 million to $51 million. The MANTL acquisition is expected to contribute approximately $30 million in revenue and a $5 million adjusted EBITDA loss in 2025, with MANTL’s ARR projected to grow over 30% by the end of 2025.
In summary, Alkami Technology Inc.’s earnings call highlighted a strong performance with significant revenue growth, user base expansion, and strategic acquisitions. Despite some challenges, the company’s forward-looking guidance and strategic initiatives indicate a promising future, reinforcing a positive sentiment among stakeholders.