Alkami Technology, Inc. · NASDAQ:ALKT
Alkami Technology — Q1 2024 Earnings Presentation
25 slides from Alkami Technology's earnings presentation, May 1, 2024
Slide 1: Alkami Technology, Inc.
Alkami Technology, Inc. Proprietary Information. Alkami Technology
Slide 2: Forward-Looking Statements
2 © A lk am i T ec h n o lo gy , I n c. This presentation contains “forward-looking” statements relating to Alkami Technology, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its future cash flows and its financial outlook. These forward-lookin
Slide 3: Who We Are
3 © A lk am i T ec h n o lo gy , I n c. Who We Are • Cloud-based digital banking platform serving U.S. financial institutions What We Do • Empower FIs to grow, drive user engagement and improve operational efficiency • Leverage broad product set enabling retail and commercial banking How We Do It •
Slide 4: U.S. Digital Banking User Distribution
4 © A lk am i T ec h n o lo gy , I n c. U.S. Digital Banking User Distribution Users in millions by asset range, including megabanks Source: FI Navigator
Slide 5: Alkami's Addressable Market: User Characteristics
5 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market: User Characteristics 250M+ digital users, excluding megabanks Total market digital users growing 5-8% historically, driven by: ● Increasing number of accounts per customer ● Ease of new account opening via digital tools ● Demograph
Slide 6: Go-To-Market Cadence
6 © A lk am i T ec h n o lo gy , I n c. Go-To-Market Cadence We focus on the top 2,500 FIs excluding the megabanks Industry average contract length is 5 years, translating to approximately 500 contracts up for renewal annually 500 Annual Renewals 2,500 Target Clients v 9,000+ FIs Over 9,000 FIs in t
Slide 7: Alkami's Addressable Market Growing Healthy $14 billion TAM
7 © A lk am i T ec h n o lo gy , I n c. Alkami’s Addressable Market Growing healthy $14 billion TAM Total Addressable Market • 250M digital users x $58 ARPU • Digital users growing 5% to 8% annually • 30+ products today vs. 9 in 2015 Core Platform • 250M digital users x $35 ARPU • Existing client di
Slide 8: Multiple Levers Driving Growth
8 © A lk am i T ec h n o lo gy , I n c. Multiple Levers Driving Growth ● Clients driven by new logo wins, historically among credit unions, with a growing presence among banks ● Registered users grow as we add new logos and as clients add users ● RPU driven by product penetration at initial sale and
Slide 9: Alkami's Digital Sales & Service Platform
9 © A lk am i T ec h n o lo gy , I n c. Alkami’s Digital Sales & Service Platform Onboard Engage Grow Guard Sales Service Digital Account Opening Marketing Data Insights Card Experience Customer Service Commercial Services Financial Wellness Security & Fraud Protection Money Movement Extensibility C
Slide 10: Product Strategy
10 © A lk am i T ec h n o lo gy , I n c. Product Strategy ● Lead with UX ● Deepen integrations with cores & third party systems ● Hyperfocus on Commercial Banking & DAO ● Data Integrity ● Integrating Flux, Segmint and Digital Banking further ● Monetizing data ● Streamlined, trackable and performant
Slide 11: How We Achieve Our Long-term Objectives
11 © A lk am i T ec h n o lo gy , I n c. How We Achieve Our Long-term Objectives Market Leadership Maintain Strong Credit Union Position Grow Bank Mindshare and Capabilities Drive Add-On Sales Scale and Continued Cost Discipline Continuous Product and Platform Improvement
Slide 12: Financial Overview
Alkami Technology, Inc. Proprietary Information. Financial Overview
Slide 13: Q1 2024 Financial Performance
13 © A lk am i T ec h n o lo gy , I n c. Q1 2024 Financial Performance $M ● Q1’24 revenue growth of 27% driven by new clients, existing client user growth and ARPU growth ● GM expansion consistent with our plan to increase GM 200-300 bps per year through 2026 ● Adj EBITDA expansion driven by continu
Slide 14: First Quarter 2024 Highlights
14 © A lk am i T ec h n o lo gy , I n c. First Quarter 2024 Highlights 3/31/24 $303M ARR Subscription Revenue Mix as of 3/31/24 96% Subscription Revenue 12/31/23 115% Net Dollar Retention Remaining Performance Obligations as of 3/31/24 $1.2B RPO Digital Banking Clients 244 Q1 2024 206 Q1 2023 Regist
Slide 15: Client Base Expansion
15 © A lk am i T ec h n o lo gy , I n c. Client Base Expansion 2020 151 177 199 236 37 57 67 89 2021 2022 2023 ARR growth driven by larger new logos and increased product penetration 244 91 Q1’24 Total Digital Banking Platform Clients Clients with ARR > $1M
Slide 16: Strong Historical Revenue Growth
16 © A lk am i T ec h n o lo gy , I n c. Strong Historical Revenue Growth $M
Slide 17: Gross Margin Expansion Driven by Scale and Efficiency
17 © A lk am i T ec h n o lo gy , I n c. Gross Margin Expansion Driven by Scale and Efficiency $M
Slide 18: Best-in-Class GTM Efficiency
18 © A lk am i T ec h n o lo gy , I n c. Best-in-Class GTM Efficiency ● Long-term contract structure reduces annual GTM motion ● Alkami average client retention of 97% - 98% ● 2026E reflects continued growth in S&M spend related to bank market expansion and increased product depth ● Historical high
Slide 19: Clear Path to Manage Equity Dilution
19 © A lk am i T ec h n o lo gy , I n c. Clear Path to Manage Equity Dilution
Slide 20: 2024 Financial Guidance
20 © A lk am i T ec h n o lo gy , I n c. 2024 Financial Guidance $M 2024E reflects midpoint of management guidance provided May 1, 2024 ● Second quarter 2024 revenue guidance of $80.5 million to $82 million, and adjusted EBITDA guidance of $2.8 million to $3.8 million ● Full year 2024 revenue guidan
Slide 21: Attractive Long-Term Profile
21 © A lk am i T ec h n o lo gy , I n c. Attractive Long-Term Profile Expect substantial margin improvement through scale, product mix and operational efficiency
Slide 22: Selected Historical Data
22 © A lk am i T ec h n o lo gy , I n c. Selected Historical Data 2020 2021 2022 2023 Q1’24 Digital banking platform clients 151 177 199 236 244 Growth % 17% 12% 19% 18% Digital banking platform users (M) 9.7 12.4 14.5 17.5 18.1 Growth % 28% 18% 20% 20% Live ARR ($M) $ 128.0 $ 169.0 $ 226.1 $ 291.0
Slide 23: Non-GAAP Reconciliations ($000s)
23 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)
Slide 24: Non-GAAP Reconciliations ($000s)
24 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)
Slide 25: Non-GAAP Reconciliations ($000s)
25 © A lk am i T ec h n o lo gy , I n c. Non-GAAP Reconciliations ($000s)