Alkami (ALKT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 27% year-over-year to $85.9 million, with adjusted EBITDA of $8.3 million and improved net loss, both ahead of expectations.

• Registered users reached 19.5 million, up 15% year-over-year, with 266 digital banking platform clients and nine new clients signed in Q3.

• SaaS subscription services comprised over 95% of total revenue, with strong growth in revenue per user and client renewals extending to 2031.

• Recognized as a top digital banking provider by multiple third parties and industry awards.

• Data and marketing solutions are increasingly a differentiator, with over 70% of new client wins in 2024 including these products.

Financial highlights

• Q3 2024 total revenue was $85.9 million, up 27% year-over-year; subscription revenue made up over 95% of total revenue.

• Annual Recurring Revenue (ARR) reached $342.1 million, up 24% year-over-year; remaining performance obligations rose to $1.3 billion.

• Adjusted EBITDA for Q3 was $8.3 million, with a margin of 9.7%; GAAP net loss improved to $(9.4) million.

• Non-GAAP gross margin expanded to 62.8% in Q3 2024, up from 58.7% year-ago.

• Free cash flow for Q3 was $8.7 million; cash and marketable securities totaled $101 million at quarter-end.

Outlook and guidance

• Q4 2024 revenue guidance: $89–$90 million; adjusted EBITDA: $8.5–$9 million.

• Full year 2024 revenue guidance: $333.2–$334.2 million (26% growth); adjusted EBITDA: $25.2–$25.7 million.

• 2026 targets: 65% gross margin and 20% adjusted EBITDA margin; Rule of 40 expected on a run rate basis by end of 2025.