Alkami (ALKT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $82.2 million, up 24.9% year-over-year, with subscription revenue up 28% and ARR at $321.3 million; registered users grew 17.3% to 18.6 million.

• Adjusted EBITDA was $4.6 million, marking the fourth consecutive quarter of positive adjusted EBITDA and a turnaround from $(2.5) million in Q2 2023.

• Net loss narrowed to $12.3 million from $17.8 million in Q2 2023.

• Signed eight new digital banking clients, including a Tier 1 credit union and a large Midwestern bank, bringing total clients to 254.

• Recognized as the first digital banking solution certified by J.D. Power for outstanding mobile banking experience.

Financial highlights

• ARR increased 25% year-over-year to $321.3 million, with $52 million in ARR backlog for implementation.

• ARPU rose 7% year-over-year to $17.29, driven by add-on sales and new client onboarding.

• Non-GAAP gross margin expanded 450 basis points to 63.2%; GAAP gross margin improved to 59.4% from 53.9% year-over-year.

• Operating expenses were $62.0 million in Q2 2024, with R&D at 29.1% of revenue.

• Cash, cash equivalents, and marketable securities totaled $87.4 million as of June 30, 2024.

Outlook and guidance

• Q3 2024 revenue guidance: $83.8–$85.3 million; adjusted EBITDA: $5.8–$6.8 million.

• Full-year 2024 revenue guidance: $330.5–$333.5 million; adjusted EBITDA: $22–$24 million.

• Confident in achieving 2026 targets, including 20% adjusted EBITDA margin and 65% gross margin.

• Management expects existing cash and expanded credit facility to support operations and growth for at least the next 12 months.