Alkami Technology Signals Confident Growth In Earnings Call

Alkami Technology Inc ((ALKT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Alkami Technology’s latest earnings call struck an upbeat tone as management detailed strong top‑line growth, expanding margins, and healthy user metrics. Executives acknowledged a handful of temporary headwinds and structural limits on new‑logo wins, but emphasized cross‑sell, platform depth, and a new buyback as reasons for long‑term confidence.

Strong Top-Line Growth

Alkami reported Q1 revenue of $126.1 million, up 29% year over year, underscoring continued demand for its digital banking platform. Subscription revenue grew even faster at 30% and now represents 96% of total revenue, reinforcing the company’s recurring, highly visible model.

Robust Profitability and Operating Leverage

Profitability moved sharply higher, with adjusted EBITDA reaching $22.3 million and margins expanding about 540 basis points to 17.7%. Operating expenses fell to 47.1% of revenue, improving roughly 530 basis points as Alkami scales its cost base against accelerating revenue.

ARR and Backlog Momentum

Annualized recurring revenue ended Q1 at $494 million, up 22% from a year ago, supported by new wins and expansion. The company also highlighted about $71 million of ARR backlog from 40 new clients and roughly 1.4 million digital users that are expected to go live within the next 12 months.

User Growth and Revenue per User Expansion

Registered users climbed to 23 million, a 12% year‑over‑year increase that adds 2.5 million users to the platform. Revenue per user rose 9% to $21.46, with 1.2 million new users from implementations and 1.5 million from deeper adoption among existing financial institutions.

Strategic MANTL Integration and DSSP Traction

The MANTL acquisition provided a sizable boost, contributing roughly 14 percentage points of Q1 growth and adding 61 standalone clients since early 2025. At the same time, Alkami’s Digital Sales & Service Platform has grown from 11 to 48 clients, with DSSP deals delivering around 30% higher ARR than traditional online banking wins.

Healthy Financial Position and Capital Actions

Alkami closed the quarter with $77.6 million in cash and marketable securities and 15% higher operating cash flow than a year ago. Management repaid the remaining $15 million on its revolver and announced a $100 million stock repurchase program, signaling confidence in future cash generation.

High Retention and Long-Term Revenue Visibility

Digital banking ARR churn has stayed below 1% annually over the past three years, reflecting sticky customer relationships. Remaining performance obligations of roughly $1.7 billion, or about 3.5 times live ARR, give investors a long runway of contracted revenue.

Termination Fee Comparability Headwind

Management cautioned that reported Q2 growth will be muted by a large termination fee booked in Q2 2025, creating a roughly 3‑point drag on year‑over‑year comparisons. They also expect termination‑fee revenue to fall meaningfully in 2026, trimming growth by a few percentage points even as the core business remains healthy.

Temporary Increased Database Technology Costs

Non‑GAAP gross margin held roughly flat at 64.4% in Q1, restrained by higher database technology expenses. The company framed these costs as temporary and expects them to ease by the end of 2026, supporting a path toward structurally higher margins over time.

One-Time Shareholder-Related Expenses

Alkami incurred about $2.8 million of shareholder‑related defense costs over the last two quarters, including $2.2 million in Q1 alone. While further expenses are possible, management believes they should moderate from the elevated levels seen this quarter.

Dependence on MANTL for Near-Term Growth Lift

The March 2025 MANTL acquisition accounted for roughly 14 percentage points of Q1 year‑over‑year growth, making near‑term comparisons somewhat noisy. With MANTL fully in the base beginning in Q2, organic growth rates could appear to slow unless further acquisitions or outsized conversion wins emerge.

Uncertainty Around AI Commercialization and Monetization

The company showcased new AI prototypes and highlighted Alkami Engage’s data telemetry, pointing to future product potential. However, management is still experimenting with pricing and usage‑based models, and AI monetization is not yet embedded in the long‑term financial framework.

Market Structural Limitations on New Logo Acceleration

Alkami noted that the digital banking replacement market offers only about 300 potential renewals a year, capping the pool of near‑term opportunities. With typical wins of 30 to 40 new clients annually, management sees long‑term growth increasingly driven by selling more modules and functionality into existing customers.

Stock-Based Compensation and Near-Term Cost Levels

Stock‑based compensation is projected at around 14% of revenue in 2026, a sizable non‑cash expense that weighs on reported profitability metrics. Over time, Alkami aims to bring this ratio down toward 10%, which would support cleaner earnings leverage for shareholders.

Forward Guidance and Structural Outlook

Looking ahead, Alkami guided Q2 revenue to $128 million–$129 million with adjusted EBITDA of $17.9 million–$18.7 million, and full‑year 2026 revenue to $527.1 million–$530.9 million with $94.9 million–$97.9 million of adjusted EBITDA. Management expects roughly 500 basis points of margin expansion this year and reiterated long‑term goals including the Rule of 45 by 2030, gross margins near 70%, and steady EBITDA margin gains.

Alkami’s earnings call painted a picture of a recurring‑revenue business scaling efficiently, supported by strong user growth, high retention, and expanding product breadth. While comparability noise, temporary costs, and structural market limits pose near‑term challenges, management’s guidance and capital deployment suggest confidence that profitable growth remains firmly on track.