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Alkami Technology (ALKT)
NASDAQ:ALKT
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Alkami Technology
(NASDAQ:ALKT)
64Neutral
Positive Factors
Acquisition Benefits
The strategic acquisition of MANTL offers cross-sell opportunities and potential for average revenue per user (ARPU) expansion.
Digital Banking Platform
The acquisition of MANTL enhances Alkami's digital banking platform, making it best-in-class by offering account opening, core digital banking, and analytics.
Revenue Growth
Subscription revenue growth was up 25% and margins came in better than expected.
Negative Factors
Earnings Estimates
The MANTL acquisition is expected to be dilutive to adjusted EBITDA in 2025, leading to a reduction in earnings estimates.
EBITDA Impact
The acquisition of MANTL is expected to negatively impact EBITDA by $5 million, affecting short-term profitability.
Stock Performance
Despite strong fundamentals, ALKT shares are down 22% year-to-date, presenting a contrast to the overall market performance.
Alkami Technology (ALKT) vs. S&P 500 (SPY)
Market Cap
$2.81B
Dividend YieldN/A
Average Volume (3M)1.54M
Price to Earnings (P/E)―
Beta (1Y)1.21
Revenue Growth26.06%
EPS Growth38.19%
CountryUS
Employees917
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)-0.41
Shares Outstanding102,232,925
10 Day Avg. Volume1,843,891
30 Day Avg. Volume1,535,899
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)8.13
Price to Cash Flow (P/CF)111.00
P/FCF Ratio111.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$42.44Price Target Upside54.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Alkami Technology Business Overview & Revenue Model
Company DescriptionAlkami Technology, Inc. offers a cloud-based digital banking platform in the United States. The company's platform allows financial institutions to onboard and engage new users, accelerate revenues, and enhance operational efficiency, with the support of a proprietary, cloud-based, multi-tenant architecture. It offers an end- to- end set of software products, which include Alkami Platform, Retail Banking Solutions, Business Banking Solutions, and The Alkami Difference. It serves community, regional, credit unions, and retail and business banking. Alkami Technology, Inc. was founded in 2009 and is headquartered in Plano, Texas.
How the Company Makes MoneyAlkami Technology generates revenue primarily through the sale of its cloud-based digital banking platform to financial institutions. The company's revenue model includes subscription fees, which are typically based on the number of users or the level of services provided. Alkami also generates income through implementation fees and ongoing support and maintenance services. Key revenue streams include long-term contracts with banks and credit unions that leverage Alkami's technology to improve their digital banking capabilities. Significant partnerships with technology providers and financial institutions further enhance Alkami's earning potential by expanding its reach and integration capabilities.
Alkami Technology Financial Statement Overview
Summary
Alkami Technology shows impressive revenue growth and improved cash flow, though profitability remains a challenge with negative profit margins. The balance sheet is strong with low leverage, indicating financial stability.Income Statement
Alkami Technology has demonstrated significant revenue growth, increasing total revenue by 26.1% from 2023 to 2024. The gross profit margin improved from 54.4% in 2023 to 58.9% in 2024, indicating enhanced cost efficiency. However, the company remains unprofitable with a negative EBIT margin of -13.4% and net profit margin of -12.2%. Despite improving EBITDA, profitability remains a challenge.78
Positive
Balance Sheet
The company's balance sheet is strong with a low debt-to-equity ratio of 0.05 and an equity ratio of 81.6%, indicating financial stability. However, the return on equity is negative at -11.4%, reflecting ongoing profitability challenges. The increase in stockholders' equity suggests potential for future growth.72
Positive
Cash Flow
Alkami Technology's cash flow position has improved significantly, with positive operating cash flow of $18.6 million in 2024 compared to negative cash flow in 2023. The free cash flow to net income ratio is -0.43, showing efficient cash utilization despite losses. This demonstrates improving cash management and operational efficiency.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 333.85M | 264.83M | 204.27M | 152.16M | 112.14M | Gross Profit |
| 196.63M | 144.11M | 108.32M | 83.81M | 59.16M | EBIT |
| -44.63M | -63.44M | -70.22M | -42.92M | -35.10M | EBITDA |
| -44.63M | -44.85M | -47.12M | -42.02M | -48.09M | Net Income Common Stockholders |
| -40.84M | -62.91M | -58.60M | -46.82M | -51.84M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 115.73M | 92.12M | 196.35M | 308.58M | 166.79M | Total Assets |
| 437.28M | 399.82M | 488.88M | 436.51M | 249.17M | Total Debt |
| 18.45M | 19.26M | 104.05M | 24.62M | 24.88M | Net Debt |
| -75.91M | -21.67M | -4.67M | -283.96M | -141.91M | Total Liabilities |
| 80.25M | 74.88M | 154.84M | 91.90M | 69.43M | Stockholders Equity |
| 357.03M | 324.94M | 334.05M | 344.61M | 179.74M |
| Cash Flow | Free Cash Flow | |||
| 17.40M | -23.79M | -42.49M | -32.66M | -40.29M | Operating Cash Flow |
| 18.60M | -17.50M | -37.79M | -28.96M | -38.15M | Investing Cash Flow |
| 23.04M | 33.91M | -224.01M | -22.02M | -27.22M | Financing Cash Flow |
| 11.79M | -87.82M | 61.18M | 192.27M | 225.05M |
Alkami Technology Technical Analysis
Negative
27.48
Price Trends
31.21
Negative
34.65
Negative
33.08
Negative
Market Momentum
-1.24
Negative
45.23
Neutral
89.74
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALKT, the sentiment is Negative. The current price of 27.48 is above the 20-day moving average (MA) of 26.88, below the 50-day MA of 31.21, and below the 200-day MA of 33.08, indicating a neutral trend. The MACD of -1.24 indicates Negative momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 89.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALKT.
Alkami Technology Risk Analysis
Alkami Technology disclosed 48 risk factors in its most recent earnings report. Alkami Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alkami Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.74B | 31.16 | 21.90% | 1.27% | 5.36% | 8.62% | |
73 Outperform | $24.57B | 16.05 | 6.94% | 1.01% | 4.68% | 63.39% | |
65 Neutral | $46.87B | 88.10 | -47.82% | ― | 14.49% | 21.85% | |
64 Neutral | $2.81B | ― | -11.98% | ― | 26.06% | 38.19% | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% |
* Technology Sector Average
Performance Comparison
ALKT
Alkami Technology
27.48
2.91
11.84%
FICO
Fair Isaac
1,887.00
637.39
51.01%
GPN
Global Payments
99.92
-32.43
-24.50%
JKHY
Jack Henry & Associates
179.39
7.88
4.59%
Alkami Technology Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -5.11% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a predominantly positive outlook with strong revenue growth, user base expansion, and strategic acquisitions. Although there are challenges such as the initial EBITDA loss from the MANTL acquisition and expected client churn, the overall performance and strategic direction indicate a strong position for future growth.Highlights
Strong Revenue Growth
Alkami reported a 26% revenue growth for the fourth quarter of 2024 and a 26% growth for the full year 2024, achieving total revenue of $333.8 million.
User Base Expansion
The company ended the quarter with 20 million users on the Alkami Platform, up 2.5 million from the prior year.
Improved Financial Metrics
Alkami achieved a 900 basis point expansion in adjusted EBITDA margin and improved operating cash flow by over $36 million for the year 2024.
Successful Strategic Acquisition
Alkami announced plans to acquire MANTL, enhancing its product offerings and cross-sell opportunities with minimal client overlap.
High Client Retention and Engagement
Alkami achieved a digital banking ARR churn of less than 1% in 2024 and implemented 38 financial institutions supporting 1.2 million digital users.
Lowlights
MANTL EBITDA Loss
The MANTL acquisition is expected to result in an adjusted EBITDA loss of $5 million for 2025, although it is projected to be accretive by 2026.
Churned Clients
Alkami expects to churn four clients in 2025, representing 175,000 users and less than 1% of ARR.
Company Guidance
During the Alkami Technology Fourth Quarter 2024 Financial Results Conference Call, the company provided detailed guidance and metrics for its future performance. For the full year 2024, Alkami reported a revenue growth of 26% and an adjusted EBITDA margin expansion of 900 basis points, resulting in an adjusted EBITDA of $26.9 million compared to a loss of $1.6 million in 2023. The company also highlighted that subscription revenue grew by 26.5% and represented almost 96% of total revenue. For the first quarter of 2025, Alkami provided revenue guidance in the range of $93.5 million to $95 million, representing growth of 23% to 25%, with an adjusted EBITDA guidance of $9.5 million to $10.5 million. For the full year 2025, Alkami anticipates revenue between $440 million to $445 million, translating to growth of 32% to 33%, and adjusted EBITDA of $47 million to $51 million. The acquisition of MANTL 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.Alkami Technology Corporate Events
M&A TransactionsFinancial Disclosures
Alkami Technology Acquires MANTL for $400 Million
Positive
Feb 27, 2025
On February 27, 2025, Alkami Technology announced its agreement to acquire MANTL, a company specializing in onboarding and account opening solutions for financial institutions, for $400 million. This acquisition aims to enhance Alkami’s digital banking platform, positioning it as a leading digital sales and service platform in the industry. Additionally, Alkami reported strong financial performance for the fourth quarter of 2024, with significant revenue growth and improved profitability, and expects the acquisition to contribute positively to its financial results in the coming years.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.