Alkami Technology Touts $500M ARR, AI Upside and Bank Demand at Fintech Event

Key Points

• Alkami said annual recurring revenue reached nearly $500 million, up 22%, and it is guiding to just under $530 million in 2025 revenue with adjusted EBITDA approaching $100 million. The company also reported low churn of less than 1% of ARR.
• Management highlighted strong demand from regional banks and credit unions that want digital banking capabilities similar to larger institutions. Alkami said it has a large addressable market, predictable contract renewal cycles, and a growing backlog of customers to implement.
• AI is being positioned as an upside opportunity rather than a threat, with customers interested in fraud detection, underwriting, marketing and automation use cases. Alkami said it already uses AI in products like audience recommendations and “best next offer” tools.

Alkami Technology NASDAQ: ALKT executives outlined the company’s growth strategy, financial outlook and market positioning during a William Blair fintech and payments event, emphasizing demand from regional banks and credit unions seeking digital capabilities comparable to large banks and fintechs.

Chief Executive Officer Alex Shootman said Alkami provides a cloud-native digital banking platform that regional and community financial institutions can white label for their own customers. He said many smaller institutions lack the internal staffing and capital of large banks such as JPMorgan Chase, Bank of America or Capital One, even as their customers increasingly expect similar digital banking experiences.

“Alkami is a cloud-native digital banking platform that is built to help regional and community financial institutions compete with money center banks and fintechs and survive,” Shootman said.

Company Sees Predictable Demand From Contract Cycles

Shootman described Alkami’s addressable market as roughly 9,000 banks and credit unions in the United States, with an ideal customer profile focused on larger institutions using legacy digital banking infrastructure. He said that includes 1,330 banks and 900 credit unions on back-end systems where Alkami has integration experience and that meet its size targets.

Because digital banking contracts often run five to seven years, Shootman said Alkami has a relatively predictable view into new customer opportunities. He said potential buyers typically begin evaluating upgrades about two years before contracts expire, with an approximately one-year buying cycle followed by a one-year implementation cycle. Alkami’s revenue begins when customers go live on the platform.

He said the company’s model is built around winning new logos, bringing customers onto the platform and then expanding customer spend over time as additional products are adopted.

Digital Sales and Service Platform Highlighted

Shootman said digital banking has expanded significantly beyond basic functions such as checking balances, moving money and depositing checks. Today, he said, users expect capabilities including AI chatbots, fraud detection, payments integrations and credit score access.

He also highlighted Alkami’s integrated digital sales and service platform, which combines the company’s data and marketing platform, online banking and origination capabilities. Shootman said the effort began with Alkami’s acquisition of MANTL, which he described as a dominant deposit origination platform. The acquisition closed at the end of the first quarter of last year, and Alkami spent the second half of the year integrating MANTL with its existing offerings.

When Alkami acquired MANTL, Shootman said 11 customers used all three products. By the end of the most recent quarter, that number had grown to nearly 50 customers.

Shootman said higher interest rates created pressure for banks and credit unions to attract deposits, exposing weaknesses in many smaller institutions’ digital account-opening experiences. He said some institutions still required customers to print and sign PDF forms or contact call centers during online account opening.

Q1 Metrics and 2025 Guidance Discussed

Chief Financial Officer Cassandra Hudson said Alkami signed six new logos in the first quarter, with half tied to the company’s digital sales and service platform offering. The company implemented seven clients and ended the quarter with about 307 clients on its digital banking platform.

Hudson said Alkami had 40 customers in backlog, representing about 1.4 million digital users, with the majority expected to be implemented over the next 12 months. The company exited the quarter with 23 million registered digital users, up 2.5 million, or 12%, year over year.

Annual recurring revenue grew 22% to nearly $500 million, Hudson said. Remaining performance obligations totaled about $1.7 billion, or roughly 3.5 times current ARR. She said churn remains low, with digital banking clients churning at less than 1% of ARR.

Hudson described three main growth drivers:

• New logo additions, expected to contribute about 25% of growth;
• Expansion of existing customers’ user bases, also expected to contribute about 25%;
• Average revenue per user growth, expected to contribute about 50% as customers buy more products.

Hudson said Alkami customers tend to double in size over four to five years and quadruple over a 10-year period as customers. She said the company generated about $126 million in first-quarter revenue and is guiding to just under $530 million in revenue at the midpoint for the year, with adjusted EBITDA approaching $100 million.

Looking to 2030, Hudson said Alkami expects gross margins to approach 70%, adjusted EBITDA margins to expand by about 300 basis points on average between now and 2030, and the company to achieve Rule of 40 performance during that timeframe.

AI Viewed as an Opportunity

During the question-and-answer session, Shootman said Alkami’s customers are primarily interested in AI tools that can help with fraud loss, underwriting, marketing and back-office automation.

He said AI represents more of an opportunity than a risk for the company, citing potential use cases such as automated underwriting. However, he noted regulatory considerations vary by state. Shootman said customers have raised concerns about explainability requirements in states such as Colorado, while one customer in Texas routes all underwriting through an AI model.

Shootman said Alkami already uses AI in its products, including audience recommendation models and “best next offer” capabilities within its data and marketing platform.

Bank Market Expansion and Competitive Positioning

Shootman said Alkami began targeting the bank market in 2020, when it had two live bank customers. He said the company reached product-market fit in 2022 and 2023, then spent the following years filling product gaps. Alkami now has more than 50 bank customers under contract and almost 40 bank customers live, he said.

Hudson said credit unions typically have more account holders and lower ARPU, while banks generally have fewer account holders but higher ARPU due to commercial and business banking needs. Shootman added that investments in commercial banking capabilities also help credit union customers that are pursuing business deposits.

Asked about competition with FIS and Fiserv, Shootman said Alkami often works well with their core banking systems but competes against their digital banking capabilities. He said customers are weighing whether Alkami’s digital capabilities are strong enough to justify a system conversion, while generally selling into an existing budget rather than creating an entirely new spending category.

Hudson also said she has been impressed by the complexity of Alkami’s platform since joining the company, citing roughly 400 integrations and a functioning cross-sell and upsell engine as key aspects of the business.

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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