Executive Summary / Key Takeaways

• Alkami Technology, Inc. is a pivotal enabler of digital transformation for community, regional, and super-regional financial institutions (FIs), providing a cloud-based digital sales and service platform essential for competing with larger, technologically advanced banks.
• The strategic acquisition of MANTL, integrating its market-leading onboarding and account opening solutions with Alkami's digital banking and data analytics, creates a highly differentiated, end-to-end platform poised to drive significant cross-sell opportunities and expand market reach.
• Alkami demonstrates robust financial performance, marked by strong revenue growth (31.5% in Q3 2025), expanding non-GAAP gross margins (63.7% in Q3 2025), and improving adjusted EBITDA ($16.0 million in Q3 2025), reflecting effective operational leverage and strategic investments.
• The company's outlook for Q4 and full-year 2025 projects accelerating organic growth and further profitability gains, underpinned by a substantial implementation backlog and sustained market demand for modern digital solutions.
• Alkami's technological leadership, particularly its multi-tenant cloud architecture and ongoing innovation in AI-driven tools, strengthens its competitive moat against both traditional core providers and agile fintechs, positioning it for sustained market share expansion.

The Digital Imperative: Alkami's Foundation in a Transforming Industry

Alkami Technology, Inc. stands at the forefront of a critical industry shift, empowering community, regional, and super-regional financial institutions across the United States to thrive in an increasingly digital-first world. The company's core mission is to equip these FIs with a cloud-based digital sales and service platform, enabling them to effectively contend with the technological prowess and vast resources of mega banks and agile fintechs. This strategic imperative is underscored by the reality that digital banking is no longer a discretionary investment but a mandatory innovation for survival and growth.

The market opportunity remains substantial. Out of an addressable market comprising 250 million digital users, less than 30% currently utilize a contemporary platform. Furthermore, within Alkami's target segment of the top 2,500 FIs (excluding mega banks and super-regionals), over 900 credit unions and nearly 1,000 banks have yet to adopt a modern digital platform. This vast untapped potential, coupled with an anticipated $124 trillion intergenerational wealth transfer over the next 25 years, highlights the urgent need for FIs to attract and retain younger generations through elegant and efficient digital experiences. Alkami's overarching strategy is to consolidate premium technology and fintech solutions into a unified, software-as-a-service (SaaS) ecosystem, delivered via its proprietary, true cloud-based, multi-tenant architecture.

Technological Leadership and Innovation: Building the Competitive Moat

Alkami's competitive advantage is deeply rooted in its differentiated technology and relentless pursuit of innovation. The company's proprietary, true cloud-based, multi-tenant architecture forms the bedrock of its platform, offering tangible and quantifiable benefits to its clients and, by extension, to its own financial performance.

This architecture enables exceptional efficiency and scalability, evidenced by the migration of over 90% of its platform's microservice traffic to Kubernetes with auto-scaling capabilities. This operational efficiency translates into robust reliability, with the platform achieving 99.99% availability in 2024, a figure that uniquely includes maintenance windows. Furthermore, Alkami has demonstrated significant cost efficiency, improving its hosting cost per user by 26% from its quarterly high-water mark over the last three years. The platform's extensibility is a key differentiator, boasting over 300 real-time integrations with diverse back-office systems and third-party fintech solutions, allowing for thousands of unique client configurations. These capabilities collectively contribute to a personalized and seamless user experience across all interaction points and foster deep data capabilities that generate meaningful insights and targeted content for monetization.

Alkami's commitment to innovation extends to its robust research and development initiatives, which are actively shaping the future of digital banking. A primary focus is the integrated Digital Sales & Service Platform, which combines digital banking, onboarding, and data/marketing. The design work for this integrated platform is complete, with a dedicated engineering team now focused on its build. This integration is projected to generate a 30% uplift to new logo Annual Recurring Revenue (ARR), with 17 clients already under contract for all three technologies. The company is also developing advanced tools such as a money movement hub and a one-click SDK deployment (currently in beta). A particularly innovative project is the prototype of an agentic code creator for FIs, which is being trained on almost 3 million lines of code submitted to Alkami. This tool aims to provide a prompt-based code creation capability, allowing FIs to extend Alkami's functionality without the complex and costly process of building custom software. Additionally, Alkami has released two new treasury management features and introduced six more to its beta client community, enhancing its offerings for business banking. The MANTL loan platform, still in development with lighthouse clients, has already seen a pioneer client originate over $4 million in loans within its first six months of usage. To further bolster its innovation pipeline and improve customer satisfaction, Alkami has established a new development team dedicated to its partner ecosystem, aiming to double the number of partners onboarded annually.

For investors, these technological advancements are critical. They not only establish a formidable competitive moat but also directly contribute to higher Revenue Per User (RPU), improved client retention, and expanded market opportunities. By offering superior, integrated solutions that FIs would struggle to replicate internally, Alkami solidifies its position as an indispensable partner in the ongoing digital transformation.

Strategic Expansion: The MANTL Acquisition and Synergistic Growth

Alkami's history is marked by strategic acquisitions designed to broaden its product portfolio and market reach. Following the acquisitions of ACH Alert (fraud prevention in 2020) and Segmint (data analytics in 2022), the company completed its most significant acquisition to date on March 17, 2025, with Fin Technologies, Inc., operating as MANTL. This $375 million (net of cash acquired) transaction was a pivotal move to solidify Alkami's position as the premier digital sales and service platform. The acquisition of MANTL also led to a $1.7 million impairment loss on certain assets of MK Decisioning Systems, LLC, acquired in 2021, reflecting a strategic re-evaluation of its prior onboarding solutions in light of MANTL's superior capabilities.

MANTL's market-leading onboarding and account opening solutions are a strategic imperative for FIs seeking to attract and grow low-cost core deposits. MANTL offers a multi-tenant, core-agnostic platform that supports all channels—digital, in-branch, call center, and relationship managers—for both consumer and business deposit accounts. Its technology significantly streamlines the onboarding process, with a median retail account opening experience of 5 minutes (compared to an industry average of 15 minutes) and a median business account opening experience of 8 minutes (versus an industry average of 3.5 hours). Critically, 85% of applications receive an automated decision.

The MANTL acquisition has already demonstrated significant synergistic potential. In Q3 2025, MANTL added 29 new clients, with 15 of these being entirely new to Alkami. Year-to-date through Q3 2025, MANTL secured 68 new logos, including 29 existing Alkami clients, showcasing early cross-sell success. The number of clients utilizing both Alkami digital banking and MANTL has grown to 44, up from 15 at the time of acquisition. This cross-selling momentum is further bolstered by the success of the Segmint data and marketing solution, which achieved an attachment rate of over 90% with new digital banking clients in the first half of 2025. The integration of MANTL with Alkami's digital banking and Segmint's data and marketing platform is expected to create a powerful "flywheel effect," driving increased digital banking users and accounts per household for clients. MANTL's client base, approximately 70% banks, also strategically complements Alkami's historical strength in credit unions, expanding Alkami's footprint in the bank market.

Financial Performance and Operational Excellence

Alkami's financial results underscore its strategic execution and operational effectiveness. For the third quarter of 2025, the company reported total revenue of $113.0 million, marking a robust 31.5% increase year-over-year. For the nine months ended September 30, 2025, total revenue reached $322.8 million, representing a 32.2% increase compared to the same period in 2024. This growth was primarily fueled by increased user adoption on the digital banking platform from both existing clients and new implementations, successful cross-selling of additional solutions leading to higher Revenue Per User (RPU), and elevated termination fees from clients involved in mergers and acquisitions. The MANTL acquisition contributed $11 million to revenue in Q3 2025 and $22.7 million for the nine months ended September 30, 2025.

Despite continued significant investments in sales, marketing, product development, and post-sales client activities, Alkami improved its adjusted EBITDA to $16.0 million in Q3 2025, compared to $8.3 million in the prior-year quarter. The non-GAAP gross margin for Q3 2025 was 63.7%, representing nearly 100 basis points of expansion year-over-year, driven by improved hosting cost efficiency and operating leverage in post-sale operations. While the GAAP gross margin for Q3 2025 was 56.8%, a decrease from 58.9% in Q3 2024, this was primarily due to increased amortization of intangible assets following the MANTL acquisition. Operating expenses in Q3 2025 were $56.4 million, or 50% of revenue, demonstrating year-over-year operating leverage of approximately 360 basis points, particularly in research and development (R&D) and general and administrative (G&A) functions. The MANTL acquisition was 190 basis points dilutive to Alkami's adjusted EBITDA margin in Q2 2025, aligning with management's expectations, and is projected to become accretive in 2026.

Alkami's Annual Recurring Revenue (ARR) reached $449.03 million as of September 30, 2025, reflecting a 31.3% year-over-year increase. The company exited Q3 2025 with 21.6 million registered users, an increase of 2.1 million from the prior year. Revenue Per User (RPU) stood at $20.83, up 19% year-over-year, with organic RPU growth at 7% excluding the MANTL impact. The remaining performance obligation (RPO) was approximately $1.6 billion as of September 30, 2025, representing 3.6 times its ARR and providing strong revenue visibility.

Liquidity remains robust, with $90.9 million in cash and cash equivalents and marketable securities as of September 30, 2025. Net cash provided by operating activities for the nine months ended September 30, 2025, was $26.3 million, a significant increase from $12.5 million in the same period of 2024. This figure was over 2.5 times higher than the prior year, excluding $7 million in one-time acquisition-related items.

The company's capital structure includes $345 million in 1.50% convertible senior notes due March 15, 2030, and $25 million outstanding on a $225 million revolving credit facility, which matures in February 2030. Management is confident that existing cash resources and the credit facility provide sufficient liquidity for both short-term and long-term operational and growth needs.

Competitive Landscape and Market Positioning

Alkami operates in a highly competitive digital banking sector, where its core mission is to empower FIs to compete effectively against larger, more established players and agile fintechs. Alkami's competitive advantages, or moats, are primarily derived from its proprietary technology and integrated platform strategy.

Its proprietary, true cloud-based, multi-tenant architecture provides superior agility, scalability, and cost efficiency compared to the legacy systems often utilized by competitors or in-house solutions. This technological foundation allows Alkami to offer a more flexible and efficient platform, which can translate into faster deployment times and better scalability for its clients. The integrated Digital Sales & Service Platform, which seamlessly combines market-leading onboarding (MANTL), digital banking (Alkami), and data analytics (Segmint), creates a unique value proposition. This end-to-end suite is a "game changer," fostering a "network effect" that enhances client value and strengthens Alkami's market position. Furthermore, Alkami's proven implementation expertise and award-winning user experience are significant differentiators, as demonstrated by a record 13 new client implementations in Q3 2025.

When compared to direct competitors:

• Fiserv (FISV): A large financial services technology provider with a broad product portfolio and extensive customer network. Alkami's specialized, cloud-native platform offers greater flexibility and ease of integration for smaller institutions, potentially leading to faster deployment and better scalability. While Fiserv benefits from its sheer scale and wider distribution, Alkami leads in specialized technological adaptability.
• Jack Henry & Associates (JKHY): Known for integrated technology solutions, core processing, and a focus on stability and compliance for community banks and credit unions. Alkami's multi-tenant cloud architecture provides greater operational efficiency and user-centric innovation, potentially positioning it better for rapid digital demands. Jack Henry's longer history provides established relationships and compliance expertise, but Alkami leads in innovation speed and growth trajectory.
• Q2 Holdings (QTWO): Specializes in cloud-based digital banking platforms with an emphasis on user-friendly interfaces and API-driven ecosystems. Both Alkami and Q2 focus on cloud solutions, but Alkami's multi-tenant operations may offer broader institutional coverage without extensive customization, while Q2 excels in API flexibility. Alkami's comprehensive end-to-end suite aims for faster revenue acceleration for clients.

A significant industry trend benefiting Alkami is the increasing willingness of community banks to adopt "best-of-breed" digital banking solutions independently of their core providers. This shift away from monolithic suite purchases represents a substantial tailwind for Alkami, whose platform is designed for seamless integration with various core systems. Alkami is actively outperforming its top five market share owners in terms of user growth, consistently adding 2.5 million to 3 million digital users annually.

Outlook and Growth Trajectory

Alkami's outlook for the remainder of 2025 and beyond reflects continued confidence in its growth strategy and operational execution. For the fourth quarter of 2025, the company projects revenue in the range of $119.6 million to $121.1 million. The midpoint of this guidance implies an organic growth rate of 22%, representing a 200 basis point acceleration over Q3's organic growth. Adjusted EBITDA for Q4 2025 is guided between $16.1 million and $17.1 million.

For the full year 2025, Alkami has raised its adjusted EBITDA guidance to a range of $56 million to $57 million, nearly $4 million above the midpoint of its previous forecast. Total revenue for the full year is expected to be between $442.5 million and $444 million. This positive outlook is underpinned by several key assumptions and growth drivers:

• Implementation Schedule: Q4 2025 is anticipated to see approximately 350,000 more user implementations than Q4 2024, driving a significant step-up in organic revenue and ARR growth.
• MANTL Accretion: The MANTL business is projected to become accretive to adjusted EBITDA starting in 2026, leveraging Alkami's operational scale. MANTL's ARR under contract is expected to reach approximately $60 million by December 31, 2025, representing a growth rate exceeding 30% year-over-year. Over a multi-year period, MANTL is expected to contribute a couple of points of incremental organic growth and be accretive to gross margin.
• Gross Margin Expansion: Alkami expects to exit 2025 with a full-year gross margin just under 65%, ahead of its previously stated 2026 target.
• Sales and Marketing Efficiency: Sales and marketing expenses are projected to be approximately 15% of revenue for 2025, reflecting continued high productivity of the sales team.
• Robust Backlog: The company holds approximately $67 million in ARR backlog for implementation, with the majority expected to be recognized over the next 12 months, providing strong revenue visibility.
• Low Churn: Alkami anticipates churning only four clients in 2025, representing less than 1% of ARR, a rate that consistently outperforms its long-term model of 2% to 3%.
• India Global Capability Center: The $5 million investment in 2025 for the India GDC, which will host over 150 Alkamists by year-end, is expected to enhance product and engineering capacity and contribute positively to margins beyond 2026.

These projections are supported by consistent execution, with Alkami having met or exceeded both revenue and adjusted EBITDA guidance for 19 consecutive quarters as a public company.

Risks and Considerations

While Alkami's growth trajectory is compelling, investors should consider several key risks. The company carries substantial indebtedness and liabilities, including $345 million in convertible senior notes and $25 million outstanding on its revolving credit facility. This debt could limit cash flow available for operations, increase vulnerability to adverse economic conditions, and potentially dilute existing stockholders if the convertible notes are converted. Furthermore, Alkami is exposed to counterparty credit risk related to its unsecured capped call transactions. The accounting treatment for the convertible notes is also expected to result in higher reported losses due to amortization of debt discount and issuance costs, and there is a potential for reclassification of the liability to current, which could impact reported working capital.

Operational challenges include the inherent integration risk associated with complex acquisitions like MANTL, although management reports strong progress. The highly competitive intensity of the digital banking market necessitates continuous innovation to maintain a lead over both entrenched incumbents and agile fintechs. Lastly, while demand for digital banking is considered inelastic, FIs are managing expenses more closely in the current macroeconomic environment, which could, in extreme scenarios, impact decision timelines, though this has not been observed to date.

Conclusion

Alkami Technology, Inc. is strategically positioned as an indispensable partner for financial institutions navigating the imperative of digital transformation. Its core investment thesis is built upon a powerful combination of a proprietary, multi-tenant cloud platform, a history of strategic acquisitions, and a relentless focus on innovation. The integration of MANTL's market-leading onboarding solutions with Alkami's digital banking and data analytics creates a formidable "digital sales and service platform" that offers FIs a unique competitive advantage in attracting, engaging, and growing their customer base.

The company's consistent financial performance, marked by robust revenue growth, expanding margins, and improving cash flow, underscores its operational excellence and the effectiveness of its land-and-expand strategy. With a strong implementation backlog, accelerating organic growth, and a clear roadmap for MANTL's accretion, Alkami's outlook remains highly positive. Despite risks associated with indebtedness and competitive pressures, Alkami's technological leadership and deep understanding of its market's evolving needs position it for sustained growth and value creation, making it a compelling investment in the evolving fintech landscape.