Alkami Technology Inc ((ALKT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Alkami Technology Inc’s recent earnings call reflected a positive sentiment, highlighting significant revenue growth, user expansion, and the success of the MANTL acquisition. Despite some challenges such as client attrition and short-term dilution from MANTL, the company’s strong financial performance and promising market demand underscore a healthy business outlook.
Strong Revenue Growth
Alkami Technology Inc reported impressive revenue growth in Q2 2025, achieving a total revenue of $112.1 million. This represents a year-over-year growth of 36%, with organic growth contributing 28%. This robust performance underscores the company’s ability to expand its market presence and capitalize on new opportunities.
Increased Adjusted EBITDA
The company saw a significant improvement in its adjusted EBITDA, which rose to $11.9 million from $4.6 million in the previous year. This increase highlights Alkami’s operational efficiency and its ability to generate higher profitability.
Registered User Growth
Alkami’s platform registered a notable increase in users, exiting the quarter with 20.9 million registered users. This marks an increase of 2.3 million users from the prior quarter, indicating strong adoption and engagement with Alkami’s offerings.
MANTL Acquisition Success
The acquisition of MANTL has proven successful, adding 39 new clients in the first half of 2025. Notably, 14 of these are Alkami digital banking clients, showcasing the strategic fit and potential for cross-selling opportunities.
Successful Cross-Selling
In the first half of 2025, over 90% of new digital banking clients also purchased Alkami’s data and marketing solutions. This success in cross-selling demonstrates the value and appeal of Alkami’s comprehensive product suite.
Gross Margin Expansion
Alkami achieved a nearly 200 basis point expansion in its non-GAAP gross margin, reaching 65.1% in Q2 2025. This improvement reflects the company’s focus on cost management and operational efficiency.
Increase in ARR
The company increased its Annual Recurring Revenue (ARR) by 32%, exiting the quarter at $424 million. This growth in ARR is a testament to Alkami’s ability to secure long-term revenue streams and enhance its financial stability.
Positive Market Demand
Alkami continues to experience broad-based demand across its product portfolio, as reflected in its sales pipeline and client renewal success. This demand underscores the company’s strong market position and the growing importance of digital transformation in financial services.
Client Attrition
Despite the positive trends, Alkami faced client attrition, with five clients leaving its platform over the last 12 months. The company anticipates a churn total of four clients in 2025, highlighting a challenge in maintaining client retention.
Impact of Termination Fees
Termination fees from client attrition accounted for about 70% of the revenue beat in the quarter, indicating potential revenue volatility. This highlights the need for Alkami to manage client relationships effectively to mitigate future risks.
MANTL’s Short-Term Dilution
The MANTL acquisition was 190 basis points dilutive to the adjusted EBITDA margin and is expected to continue being dilutive over the next few years. This short-term dilution is a consideration for Alkami as it integrates MANTL into its operations.
Forward-Looking Guidance
Alkami Technology provided strong guidance for the upcoming periods, aiming for $443 million to $447 million in revenue for the full year, with an adjusted EBITDA between $51.5 million and $54 million. The company expects MANTL to contribute $31.5 million in revenue for the year, with a target of $60 million in ARR under contract by year-end. Alkami continues to emphasize digital transformation as a priority for financial institutions, indicating a positive outlook for future growth.
In conclusion, Alkami Technology Inc’s earnings call paints a picture of a company on a strong growth trajectory, with significant revenue and user expansion, and successful strategic acquisitions. While challenges such as client attrition and short-term dilution from MANTL exist, the overall sentiment remains positive, with promising forward-looking guidance and a focus on digital transformation driving future success.