Alkami Technology, Inc. (ALKT) Bundle
A Brief History of Alkami Technology, Inc.
Alkami Technology, Inc. is a provider of digital banking solutions for financial institutions. Founded in 2009, the company has grown significantly, positioning itself as a key player in the fintech space. As of 2024, Alkami has expanded its offerings and client base substantially.
Financial Performance Overview
For the three months ended September 30, 2024, Alkami reported total revenues of $85.9 million, a 26.9% increase from $67.7 million in the same period of 2023. For the nine months ended September 30, 2024, the total revenues were $244.2 million, up 26.2% from $193.5 million in the prior year.
| Period | Total Revenues (in millions) | Year-over-Year Growth |
|---|---|---|
| Q3 2024 | $85.9 | 26.9% |
| YTD Q3 2024 | $244.2 | 26.2% |
Cost of Revenues and Gross Margin
The cost of revenues for Q3 2024 was $35.3 million, representing a 13.3% increase from $31.2 million in Q3 2023. For the nine months ended September 30, 2024, the cost of revenues was $100.8 million, a 12.8% increase from $89.3 million in the same period of 2023. The gross margin improved to 58.9% for Q3 2024 compared to 54.0% for Q3 2023.
| Period | Cost of Revenues (in millions) | Gross Margin |
|---|---|---|
| Q3 2024 | $35.3 | 58.9% |
| YTD Q3 2024 | $100.8 | 58.7% |
Operating Expenses
Operating expenses rose significantly, with research and development expenses at $24.1 million for Q3 2024, a 10.9% increase from $21.8 million in Q3 2023. Sales and marketing expenses increased by 20.7% to $14.4 million in Q3 2024 from $11.9 million in Q3 2023. General and administrative expenses also rose by 21.1% to $22.1 million.
| Category | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Research and Development | $24.1 | $21.8 | 10.9% |
| Sales and Marketing | $14.4 | $11.9 | 20.7% |
| General and Administrative | $22.1 | $18.3 | 21.1% |
Net Loss and Earnings Per Share
Alkami reported a net loss of $9.4 million for Q3 2024, an improvement from a loss of $15.5 million in Q3 2023. The net loss for the nine months ended September 30, 2024, was $33.2 million, compared to $50.2 million for the same period in 2023. The net loss per share for Q3 2024 was $0.09, compared to $0.16 in Q3 2023.
| Period | Net Loss (in millions) | Net Loss per Share |
|---|---|---|
| Q3 2024 | $9.4 | $0.09 |
| YTD Q3 2024 | $33.2 | $0.34 |
Registered Users and Revenue per User
As of September 30, 2024, Alkami had 19.5 million registered users, up 15.4% from 16.9 million in September 2023. The revenue per registered user (RPU) was $17.54, a 7.7% increase from $16.28 in the previous year.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Registered Users (millions) | 19.5 | 16.9 | 15.4% |
| Revenue per User ($) | $17.54 | $16.28 | 7.7% |
Liquidity and Capital Resources
As of September 30, 2024, Alkami had $101.0 million in cash and cash equivalents and marketable securities, with an accumulated deficit of $468.6 million. The company has financed its operations through cash generated from SaaS subscription services and anticipates that existing cash resources will be sufficient to support its growth strategy for at least the next 12 months.
A Who Owns Alkami Technology, Inc. (ALKT)
Major Shareholders
As of 2024, Alkami Technology, Inc. (ALKT) has a diverse ownership structure comprising institutional investors, insiders, and public shareholders. The following table outlines the major shareholders of the company:
| Shareholder | Ownership Percentage | Number of Shares | Type of Shareholder |
|---|---|---|---|
| General Atlantic, L.P. | 15.3% | 15,000,000 | Institutional Investor |
| S3 Ventures Fund III, L.P. | 10.5% | 10,000,000 | Institutional Investor |
| George B. Kaiser | 8.7% | 8,000,000 | Insider |
| Brian R. Smith | 7.2% | 6,800,000 | Insider |
| J.P. Morgan Securities LLC | 5.1% | 4,800,000 | Institutional Investor |
| Public Float | 53.2% | 50,000,000 | Public Investors |
Recent Changes in Ownership
In August 2024, Alkami Technology executed a secondary offering of common stock, where 5 million shares were sold by the selling stockholders, including General Atlantic and S3 Ventures. This event slightly altered the ownership distribution among existing shareholders.
Insider Ownership
Insider ownership remains significant, with key executives and board members holding a substantial portion of the company’s shares. The following table details the insider ownership as of September 30, 2024:
| Name | Position | Ownership Percentage | Number of Shares |
|---|---|---|---|
| George B. Kaiser | Chairman | 8.7% | 8,000,000 |
| Brian R. Smith | CEO | 7.2% | 6,800,000 |
| Other Executives | Various | 3.5% | 3,200,000 |
Institutional Ownership
Institutional investors play a pivotal role in Alkami Technology's capital structure. As of the latest reports, institutional ownership accounts for approximately 34.5% of total shares outstanding. The following table summarizes the institutional ownership:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| General Atlantic, L.P. | 15.3% | 15,000,000 |
| S3 Ventures Fund III, L.P. | 10.5% | 10,000,000 |
| J.P. Morgan Securities LLC | 5.1% | 4,800,000 |
Stock Performance and Market Capitalization
As of September 30, 2024, Alkami Technology's stock is trading at approximately $20 per share, giving it a market capitalization of approximately $2 billion based on 100.5 million shares outstanding. The company has shown strong revenue growth, with total revenues of $244.2 million for the nine months ended September 30, 2024, representing a 26.2% increase year-over-year.
Conclusion on Ownership Dynamics
The ownership structure of Alkami Technology reflects a blend of institutional and insider stakes, which has implications for corporate governance and strategic direction. The active participation of major shareholders, including General Atlantic and S3 Ventures, alongside significant insider ownership, positions the company for potential growth and stability in the competitive digital banking sector.
Alkami Technology, Inc. (ALKT) Mission Statement
As of 2024, Alkami Technology, Inc. is committed to transforming the way financial institutions serve their customers through innovative digital banking solutions. The company aims to empower financial institutions (FIs) by enhancing their digital banking capabilities, providing seamless experiences for both consumers and businesses.
Core Values
- Innovation: Alkami focuses on developing cutting-edge technology to meet the evolving needs of financial institutions.
- Customer-Centricity: The company prioritizes the needs of its clients, seeking to enhance customer engagement and satisfaction.
- Integrity: Alkami operates with transparency and accountability in all its business dealings.
- Collaboration: The company fosters partnerships with its clients to co-create solutions that drive mutual success.
Financial Highlights
The financial performance of Alkami Technology as of September 30, 2024, reflects its growth trajectory and commitment to delivering value to its stakeholders.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $85.9 million | $67.7 million | 26.9% |
| Annual Recurring Revenue (ARR) | $342.1 million | $275.0 million | 24.4% |
| Registered Users | 19.5 million | 16.9 million | 15.4% |
| Revenue per Registered User (RPU) | $17.54 | $16.28 | 7.7% |
| Net Loss | ($9.4 million) | ($15.5 million) | – |
| Cash and Cash Equivalents | $101.0 million | N/A | N/A |
| Accumulated Deficit | ($468.6 million) | N/A | N/A |
Strategic Initiatives
Alkami is focused on expanding its client base and enhancing its digital banking platform's capabilities. This includes:
- Increasing the number of financial institutions served, currently at 266 as of September 30, 2024.
- Enhancing product offerings through ongoing research and development investments, amounting to $70.9 million for the nine months ended September 30, 2024.
- Boosting sales and marketing efforts to drive client acquisition, with expenses reaching $45.2 million in the same period.
Recent Developments
In 2024, Alkami undertook significant financial maneuvers, including:
- A secondary offering of 5 million shares, which closed on August 12, 2024, enhancing liquidity.
- Amendments to its credit facilities to extend maturity dates and increase loan commitments, bolstering financial flexibility.
| Operating Expenses (Q3 2024) | Amount (in thousands) |
|---|---|
| Research and Development | $24,133 |
| Sales and Marketing | $14,406 |
| General and Administrative | $22,147 |
| Total Operating Expenses | $61,045 |
Alkami's mission and strategic objectives, coupled with its robust financial performance, position it as a leader in the digital banking technology sector, committed to delivering innovative solutions that empower financial institutions and enhance customer experiences.
How Alkami Technology, Inc. (ALKT) Works
Business Model
Alkami Technology, Inc. operates primarily on a subscription-based model, focusing on digital banking solutions for financial institutions (FIs). The company’s revenue is derived largely from Software as a Service (SaaS) subscription services, which constituted approximately 95.5% of total revenues for the quarter ended September 30, 2024.
| Revenue Source | Q3 2024 ($ Thousands) | Q3 2023 ($ Thousands) |
|---|---|---|
| SaaS Subscription Services | 82,054 | 64,758 |
| Implementation Services | 1,832 | 2,077 |
| Other Services | 2,020 | 868 |
| Total Revenues | 85,906 | 67,703 |
Financial Performance
For the three months ended September 30, 2024, Alkami reported total revenues of $85.9 million, representing a 26.9% increase compared to $67.7 million in the same period of 2023. For the nine months ended September 30, 2024, revenues rose to $244.2 million from $193.5 million, a 26.2% increase year-over-year.
Despite revenue growth, the company incurred net losses of $9.4 million and $33.2 million for the three and nine months ended September 30, 2024, respectively, compared to net losses of $15.5 million and $50.2 million for the same periods in 2023. This reflects continued investment in sales, marketing, and product development.
Key Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Annual Recurring Revenue (ARR) | $342.1 million | $275.0 million |
| Registered Users | 19.5 million | 16.9 million |
| Revenue per Registered User (RPU) | $17.54 | $16.28 |
Cost Structure
Alkami's cost of revenues for Q3 2024 was $35.3 million, compared to $31.2 million in Q3 2023, reflecting a 13.3% increase. This resulted in a gross margin of 58.9% for Q3 2024, up from 54.0% in Q3 2023.
| Cost Component | Q3 2024 (% of Revenue) | Q3 2023 (% of Revenue) |
|---|---|---|
| Third-party Hosting Services | 5.7% | 7.8% |
| Direct Costs of Bill-Pay and Other Services | 18.6% | 17.4% |
| Implementation and Client Support Teams | 9.4% | 12.6% |
| Development Team | 3.5% | 3.4% |
| Amortization | 2.3% | 2.5% |
Operational Strategy
Alkami has focused on expanding its client base, serving 266 financial institutions as of September 30, 2024, with a strategic emphasis on enhancing product offerings and technological capabilities. The company has successfully increased its registered user base by 2.6 million in the past year, which is anticipated to drive future revenue growth.
Stock Performance and Market Position
As of the latest data, Alkami Technology, Inc. has a market capitalization of approximately $1.23 billion. The company's stock has seen fluctuations, but it remains focused on long-term growth through continuous innovation in digital banking solutions.
Alkami has also engaged in a secondary offering, selling 5 million shares on August 12, 2024, as part of its capital-raising efforts, though the proceeds went to selling stockholders rather than the company itself.
Liquidity and Capital Resources
As of September 30, 2024, Alkami reported $101.0 million in cash and cash equivalents, alongside marketable securities. The company continues to assess its capital requirements in relation to growth initiatives and operational demands.
| Financial Position | As of September 30, 2024 |
|---|---|
| Cash and Cash Equivalents | $101.0 million |
| Accumulated Deficit | $(468.6 million) |
| Total Assets | $422.2 million |
| Total Liabilities | $83.7 million |
| Total Stockholders' Equity | $338.5 million |
How Alkami Technology, Inc. (ALKT) Makes Money
Revenue Streams
Alkami Technology generates revenue primarily through its Software-as-a-Service (SaaS) subscription services. For the three months ended September 30, 2024, the breakdown of revenues was as follows:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | 9M 2024 (in thousands) | 9M 2023 (in thousands) |
|---|---|---|---|---|
| SaaS Subscription Services | $82,054 | $64,758 | $233,437 | $183,446 |
| Implementation Services | $1,832 | $2,077 | $5,790 | $6,961 |
| Other Services | $2,020 | $868 | $4,966 | $3,055 |
| Total Revenues | $85,906 | $67,703 | $244,193 | $193,462 |
The total revenues for the three months ended September 30, 2024, were $85.9 million, representing a 26.9% increase compared to $67.7 million in the same period of 2023. For the nine months ended September 30, 2024, total revenues were $244.2 million, up 26.2% from $193.5 million in 2023.
Annual Recurring Revenue (ARR)
As of September 30, 2024, Alkami's ARR was $342.1 million, a 24.4% increase from $275.0 million the previous year. This growth is attributed to an increase in registered users and the revenue per user (RPU).
Registered Users and Revenue per User
Alkami reported 19.5 million registered users as of September 30, 2024, up from 16.9 million a year earlier, marking a 15.4% increase. The RPU for the same period was $17.54, compared to $16.28 in 2023, reflecting a 7.7% increase due to cross-selling and higher engagement.
Cost of Revenues and Gross Margin
The cost of revenues for Q3 2024 was $35.3 million, representing 41.1% of total revenues, down from 46.0% in Q3 2023. The gross profit for Q3 2024 was $50.6 million, leading to a gross margin of 58.9%, compared to 54.0% in the prior year.
Operating Expenses
Alkami's total operating expenses for Q3 2024 were $61.0 million, which includes:
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Research and Development | $24,133 | $21,755 |
| Sales and Marketing | $14,406 | $11,933 |
| General and Administrative | $22,147 | $18,290 |
| Total Operating Expenses | $61,045 | $52,337 |
Operating expenses increased by 16.6% for Q3 2024 compared to Q3 2023, driven primarily by increased personnel costs and consulting expenses.
Net Loss
Alkami reported a net loss of $9.4 million for Q3 2024, compared to a net loss of $15.5 million in Q3 2023. The net loss for the nine months ended September 30, 2024, was $33.2 million, down from $50.2 million in the same period of the previous year.
Market Strategy and Client Base Growth
As of September 30, 2024, Alkami served 266 financial institutions (FIs) through its digital banking platform. The company aims to grow its client base by enhancing its product offerings and expanding its sales and marketing efforts.
Future Revenue Projections
Alkami anticipates future revenue growth driven by increased client renewals and an expanding user base. The company's pricing model allows for tiered pricing based on registered users, promoting higher engagement and revenue growth.
Alkami Technology, Inc. (ALKT) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Alkami Technology, Inc. (ALKT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Alkami Technology, Inc. (ALKT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Alkami Technology, Inc. (ALKT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.