Alkami Technology NASDAQ: ALKT reported first quarter 2026 results that exceeded management’s expectations, driven by strong revenue growth, improved operating leverage, and continued momentum in its Digital Sales & Service Platform (DSSP) following the MANTL acquisition.
First-quarter performance tops expectations
Chief Executive Officer Alex Shootman said the company delivered “a strong first quarter,” citing 29% revenue growth and more than $22 million in adjusted EBITDA, both above expectations. The company closed six new digital banking relationships in the quarter, including two banks and three DSSP clients, and introduced “our first integrated capabilities for the Digital Sales & Service Platform and a new product called Alkami Engage,” according to Shootman.
Chief Financial Officer Cassandra Hudson reported Q1 revenue of $126.1 million, up 29% year over year. Subscription revenue grew 30% and represented 96% of total revenue. Hudson noted the timing of the MANTL acquisition, which closed March 17, 2025, contributed about 14 percentage points to the year-over-year growth rate in Q1 2026, with growth rates becoming “fully comparable beginning in the second quarter.”
Hudson said Alkami increased ARR by 22% to $494 million exiting the quarter, and ended Q1 with 307 clients and 23 million registered users, up 12% year over year. Revenue per user rose to $21.46, up 9%, driven primarily by MANTL, cross-sell execution, and increased adoption among existing clients.
- Non-GAAP gross margin: 64.4%, roughly flat year over year due to “higher database technology costs” the company expects to decline by the end of 2026.
- Operating expenses: $59.4 million, or 47.1% of revenue, improving 530 basis points year over year.
- Adjusted EBITDA: $22.3 million, or a 17.7% margin, expanding about 540 basis points year over year.
- Cash and marketable securities: $77.6 million; the company repaid the remaining $15 million on its revolver.
Hudson also said remaining performance obligations were approximately $1.7 billion, about 3.5x live ARR, which she said provides visibility into long-term revenue.
DSSP and MANTL integration highlighted as growth and conversion drivers
Shootman emphasized the company’s efforts to expand from a replacement-driven online banking market into a broader platform opportunity, arguing the “next phase” of growth will increasingly come from expanding value within each institution. He said the MANTL acquisition was strategic because it adds functionality that can encourage conversions and expands the install base.
As of the beginning of 2025, the company has grown from 11 to 48 clients with all three DSSP products, Shootman said, adding that more than half of all new logos since Q2 of last year have been DSSP. He also said DSSP new logos generate “a 30% uplift in ARR versus our historic online banking offering,” and management’s intent is to increase the number of institutions willing to switch off legacy systems.
Hudson said clients adopting multiple platform components tend to have higher initial contract values, longer contract durations, and stronger retention profiles over time, supporting ARPU expansion. On unit economics, she added that DSSP deals typically have about 30% higher ARPU than traditional new-logo digital banking deals, while implementation cost dynamics are “relatively consistent,” given the company implements all three products over the first 12 months.
On MANTL’s standalone momentum, Shootman said “standalone MANTL new logo creation has been outstanding,” with 61 clients added since the beginning of 2025. Hudson characterized Q1 as seasonally lighter and said MANTL “continued to track very well,” coming off what she called a record 2025.
Customer conference and product demonstrations focus on integrated front end
Shootman said Alkami’s annual client conference, Co:lab, set attendance records with more than 600 customer attendees, including 83 prospects. He said there was “no let up in digital transformation” demand, even as many institutions remain constrained by long-term contract cycles.
At the conference, Alkami demonstrated an “integrated front end” combining digital banking with deposit and loan origination, designed to help community institutions compete with larger banks and fintechs. Shootman said in a side-by-side comparison using real workflows, Alkami’s DSSP completed an end-to-end customer journey “in under 2 minutes,” compared with an industry benchmark of 5 minutes and other contestants in the 3–4 minute range.
AI prototypes and Alkami Engage introduced, with monetization still being evaluated
Shootman said AI was raised in every one of his 39 face-to-face customer meetings since the prior earnings call, with clients interested in applications including personalization, underwriting, fraud management, customer service, analytics, and offer management. He said Alkami’s base of more than 23 million account holders provides a foundation to apply AI capabilities at scale.
At Co:lab, Alkami demonstrated working AI prototypes, including prompt-driven development, natural language queries over platform data, and “co-pilots” for banker workflows and account holder experiences. These prototypes rely in part on Alkami Engage, which Shootman described as a new product that captures real-time user interaction data across the customer journey.
However, he cautioned that some items were prototypes rather than products ready for release, and he stressed monetization is the key open question. Shootman said the company is working through whether to price AI offerings simply and absorb potential cost risk or introduce usage-based metrics that clients may find difficult to model.
Guidance updated; stock repurchase program approved
Hudson provided an updated outlook that incorporates a year-over-year comparison headwind from termination fee revenue recognized in the second quarter of 2025.
- Q2 2026 revenue: $128 million to $129 million, growth of 14.2% to 15.1% (including an estimated ~3-point headwind from the prior-year termination fee).
- Q2 adjusted EBITDA: $17.9 million to $18.7 million, with a 14.3% margin at the midpoint, reflecting seasonal expense from the annual user conference.
- Full-year revenue: $527.1 million to $530.9 million, growth of 18.8% to 19.7%.
- Full-year adjusted EBITDA: $94.9 million to $97.9 million, with an 18.2% margin at the midpoint.
Hudson said the company expects approximately 500 basis points of adjusted EBITDA margin expansion in 2026, driven by operating leverage, efficiencies from offshore operations, and cost discipline, while also funding targeted AI investments. She also said stock-based compensation is expected to be about 14% of revenue for the year.
On quarterly growth dynamics, Hudson said revenue acceleration is expected to be “very specific to Q3,” tied to timing elements in the prior year. Shootman referenced prior commentary that termination fee timing affected comparisons last year as well.
Hudson also announced the board approved Alkami’s inaugural stock repurchase program of up to $100 million, calling it a milestone reflecting confidence in long-term growth and cash flow generation. She said the company intends to balance capital allocation between acquisitions, debt reduction, and opportunistic share repurchases.
During Q&A, Hudson said shareholder matters-related expenses incurred over the prior two quarters were “defense related in nature,” and she expects additional costs, though she said they should moderate from the elevated Q1 level.
On churn and retention, Hudson said Alkami has churned less than 1% of digital banking ARR annually over the past three years and expects to churn four digital banking clients in 2026, representing less than 1% of ARR. She also cited backlog: approximately $71 million of ARR pending implementation, representing 40 new clients and roughly 1.4 million digital users, with the majority expected to go live over the next 12 months.
About Alkami Technology NASDAQ: ALKT
Alkami Technology, Inc is a provider of cloud-based digital banking and engagement solutions tailored for banks and credit unions. The company's platform offers a comprehensive suite of online and mobile banking features, including bill payment, peer-to-peer transfers, card management, streamlined account opening and real-time alerts, all designed to enhance the end-user experience and drive customer loyalty.
Built on a multi-tenant, software-as-a-service (SaaS) architecture hosted in the cloud, Alkami's platform leverages modern APIs and a partner ecosystem to integrate third-party fintech applications and services.
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