Alkami Technology (ALKT) 7 Aug 212021 Q2 Earnings call transcript

Welcome to the Second Quarter 2021 Alkami Technologies Financial Results Conference Call. My name is Vanessa, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. the Investor to Relations. turn Butler, host, now President, Vice will call your over Rhett I

June me Thank Hill, And to Hansen, Co-Founder for ended and Alkami Officer. Vanessa. Alkami's Alkami's earnings XXXX. you, Good Stephen and call Chief the afternoon Chief Executive Chief second Financial Bohanon are Strategy today's Bryan call on and Officer. welcome XX, Mike With Alkami's quarter Officer. Sales

trends, to forward-looking course management's and of risks call, including risks statements, current management's subject to performance current today's related views and performance risks and including the related to and the strategies, make expectations and are of statements uncertainties, regarding the our anticipated are During are uncertainties, performance. forward-looking risks various we various statements views operating expectations including to conference These financial and our operating financial and may and on company. and based subject

in Relations which these actual materially results financial this to any Our and differ Securities and of on actual or the the to Exchange differ statements forward-looking factors from distributed give may our cause expectations could in we be the results contemplated discuss forward-looking from included refer filings reflected will important our statements. forward-looking that we website assurance are and such today risk to Please release can our with prove statements no will afternoon Commission, press Investor that results, correct. the the available earlier by factors regarding to those review those materially

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motion, Lastly, clients about XX%. the stories and given their to XX% the XX%, testament was ensuring and results incredible engagement innovation us solutions, Alkami our Post of call. conversion like mobile through client capabilities team conversion, power Alkami client. discussed digital center each at clients our moments. important deliver mobile our form and This strategies key in of average mobile last this highlight an penetration success this growth the strategies to banking again our the our the tomorrow. of the the the are motion drivers of are factors today combined in drivers digital for incredibly Bryan against that few success in Prior our his these platform here briefly platform. remarks will importance Alkami penetration at power following Results of bedrock conversion for channel was of a four Stephen's innovation our with added this

turn let be over we remarks it it back that, and comments to prepared you few innovation over to to at the me to update end go-to-market turn Stephen. before Q&A. With the Stephen with I'll on a Bohanon go you, I'll Next, of activities. our

All right, Mike. thanks

-- quarter's last on on user banking team primary with across are emphasis functionality, Data and touched areas the focus mobile our experience I platform, while call, an business solutions. our engineering our enhancements As innovations extensibility

functionality clients streamlined focus, as software and delivered in and that we clients During latest management more scaling account features, we for discuss businesses new process with contain our banking perspective to analysis business the functionality registration well on-boarding briefly as provides capabilities payee exceptional payee mobile their thousands line From that this of each business business and a releases with new all area. to with business our quarter, launched I'll clients the payee.

needed feature In analysis for addition, key larger businesses, flexibility account service increases billing serve individual businesses. -- to the functionality a

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partner tools refreshed money now a ownership integration to real-time Our with provides drive and product Financial app in verification new visualization deeper and utilize from account help accounts. to user finally launched engagement new also that and we experience external solutions for movement Wellness

instant helping mitigate reduces the positive also time sites and and extensibility through process our perspective, Our verification at assistance been access smartphones to financial and is registered while voice have applications rate like a functionality trusted systems the matching. accounts. mitigate example that account like user clients product friction fraud devices account same trusted your account great holder the an verification experience From name delivering applications. new we or fraud. Registered launched aggregators PFM around helps abandonment during and are granted This of to another

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with functionality easier to continued to the project new to so which community, and submissions can view it makes monthly I'm activity Gold for manage momentum From potentially here ensure to continues increase lookout number SDK activity. and highest of June perspective, have end happy in size users they financial community fraudulent privacy Partner report developer their our Program applications for the XX. at extensibility which accounts, having Our be on an their our with and and own access

to grow. and data we continue set continues make Finally, in our to data investments

strategies. user this transforming across behavior our warehouse over more historical billion detailed XXX time superior growth comprehensive retail deep speed richest and financial has sets continue the new explore data; provides that their support through and based claims one of of we the are now What's collected financial that peers. growth to the and X insights executive dashboard individual to adoption, one, will country. a the The institutions and both With digital user institutions digital that benchmark KPIs along and to with Combine conclusion, believe benchmarks. funnel, this engagement, innovate against its with institutions institutions, executive financial transactions transaction that with users data the data adoption Alkami experience codified, that interaction or of performance than whether comparison differentiate across institutional our by digital the provide dashboard, more, we deepest into of formulate strategies believe a for and engagement across clients allows we data the new anonymized performance and digital extensibility taps we business Alkami conversion. into account our and in user is us KPIs products on transactions delivering across strategic institutions' deep actionable XX-key institutions like conversion. banking insight over level dataset of our we and across data our with with capabilities This two insights financial In banking equipping priorities

technical to and against clients competitors. central emerging offering engine and existing continues of Our and functional advantage our innovation be

to discuss sales engine. overall Next, momentum, like go-to-market I'd our

earnings I earlier our year of mentioned As investments call, our in the paying Cerra engine this new our off. in are and QX CMO marketing digital arrival Allison

very from pipeline and happy from digital With While meetings increased at leads reliance from as come are conferences some results. by has pre-COVID. times. year-to-date generation with our level feel for starting we're in-person We same lead channel and lead not digital outpacing non-digital strong back, pipeline to largest the generation picked three XX% quarter. the over they're the channels, our This the up in second sales as XX-month financial is evaluating banking new representing banks in up growth history. sales for last were measured business pipeline solutions really well new with year Trailing of digital has and the over our institutions by momentum their the

several As stated we I July. signed a moment during ago, banks

two ACH assets Specifically, to billion $X a banks in XX banking we $XXX platform our new billion our digital signed bank over to Solution. and with top Alert plus

regarding half would a wins July our the 'XX the provide of ACH confidence in go-to-market success The show to sales potential, new like identified I pipeline we more with gives me in ACH comments solutions Alert Our combined team to continues Alert pre-acquisition. few the first traction. acquisition. results

issued X had sales achieved patent and XX our we since fourth the quarter, the we've new of October acquisition XX, credit and During banks in unions.

term been sales increasing to near of in almost the ranging are be have innovation In in to integration around additional clients banking new assets. billion deeper penetration platform. products functionalities positive addition, four into expected large with from released our digital $XX $XX billion In perspective,

the delivered near during processing In Alkami to digital but a to most the sometime payments expect provider we more horizon the pipeline our performance. payment expected digital banks. exciting this and and QX including XXXX, banking. would execution Bryan the of multi-payment on aggregate, all banking lot only processing goal believe will risk a converting I'll offer have term, financial than we when not focus the previous now shots in originated our hand credit and perhaps this to institutions, electronic continue capabilities, we unions year end-to-end financial innovation across in discuss make first engine call On on to to is year origination

Thanks, good afternoon Stephen, and everyone.

across strong were results the financial quarter board. Second

Let possessing model subscription several based drivers. we highly me revenue a revenue, growth start enjoy predictable with

grow their utilizing success user to client digital refer growth. fuel to their as strategies the our First, platform communities, Alkami digital and organic this we

in of our expanding solutions adoption our offer Second, cross-sell the solutions, the clients' we activity.

continue We subscription for joining overall. the year. to the into sales, way revenue and XX second a typically the M&A functionality evaluate our shareholders to of banking Alkami which finally, subscription incumbent over and quarter risk banking revenue can with compared affecting the materialize adjusted with the drive and platform and growth. landscape months last factors we topline compelling growth performance digital Third, XX% subscription The digital organic timed to returns provider. and logo growth total the take term ARR along new of add contribution term, for M&A new clients revenue, total grew to revenue growth, contractual approximately as long are revenue our through in terms new revenue measure activity, drive to the both revenue Total ARR. features And

XXX,XXX platform recurring we last revenue $XXX.X user subscription strong XX% our achieved XX.X revenue. Digital of platform. We of digital and X.X this users been XX% million to ending driven or the live of the users of our over XX of leading digital driving we the months, Our million quarter registered of over to Underlying added on Annual ARR and total year-over-year growth growth. providers growth the represented XX%. revenue during user QX has growth months. one two with last total user digital XX the by are million it banking relates as believe performance, areas

second, we've digital clients supporting performance. our XX%. per million First, institutions user XX area final user digital increased financial implemented X.X the our adoption and million driving users, strong representing Revenue is have users by X organic of ARR their user growth

last X% by products been market offer a our $XX of from RPU on today. and quarter at blended per opportunity, the RPU has expansion $XX.XX derived user-based end per of digital the compares During two XX year. This the our we've expanded months, user XX areas. to per average we

advantage prior our add-on results. second, be And First, our several see sales responsible half and year. continue adding renew representing overall possessing We've are an managing for in four organization and adding client that new the the XX% will a the to from as our in resulting first our from than year digital to FIs exit selling cycle RPU, average to we we XXXX company clients. RPU. higher RPU products for is we to platform of sales more the renewal clients focus, our the of Renewal strategic total activity continue X% users renewed expect to

on non-GAAP margin, achieve to of years. next margins an is XXX We've to our expansion Moving to margin few -- that average model per year. over the XXX gross objective achieve basis XX% non-GAAP plan between also through on gross we to points this to stated XX% operating expansion target

candidly, is a objective this of our stated objective. ahead achieving towards bit progress Our

For expansion utilization, XX.X%, driven Expansion our support, functions gross XXX revenue period the cost basis was last primarily same efficiency of our revenue relationships. second improved by in have quarter scale, with over and the was margin and greater XXXX, client compared year. client third-party success cost non-GAAP an of efficiencies and implementation, points clients to

towards is Moving to EBITDA good to investment growth, profitability adjusted maintain operating sight expense, goal opportunities revenue yet balance our a with line or of positive.

opportunity where share of large we a for correct have are recognize is to cost profitability, lifecycle. market market address trade-off in near-term our gaining at and We the to

We is trajectory, continue on positive expect during to highly investment to basis M&A rate adjusted This upon our XXXX. run growth, reach activity. EBITDA and dependent a revenue

through expenses and is margin platform XXX points $XX.X period. quarter compared expansion, costs, total innovation R&D revenue to basis prior of second prior due expansion From percentage Despite to of year a compared we XX%, primarily the year. related of to With primarily personnel achieved over research of margin development XXXX, scale. XX% significant perspective, higher which initiatives, enhancements non-GAAP represented modestly revenue the are the and million,

the will we increase were and third trade cost Sales lower as and and from to to look COVID-XX all client revenue a shows, person. expansion. travel from higher and costs of resulting in our is costs employee-related attend who as to XX sales marketing nearly perspective, expense from We during quarter increases are of margin than XX% investors projects half expected XXXX, well or impact achieved and teams, the and continued during which the pandemic. than XX%, conferences you and a accelerate the host percentage of back to with leverage sales was in scale marketing speak industry prior conference, From non-GAAP of event the a which XXXX, primarily to sales basis revenue Total our annual excited year I partners, represented clients, headcount marketing through million and expect marketing our we $X.X we period. higher forward momentarily. expense will Despite platform associated able points incur as hybrid

expense event the primary costs, increased informative revenue, non-GAAP, non-GAAP $XX.X driver Adjusted choose who is points which accounting, our of to are EBITDA we million, the general contraction prior that adding now and equally be attend resource The Total insurance as expectations. new XXX However, $X.X necessary of administrative basis G&A represented nearly was $X.X XX% human up Relations the to those compared improvement higher to margin of will margin company, XX% million, million, was of public remotely. Total period. a quarter business loss $XXX,XXX. including was of and was net an legal Investor and personnel. loss for the contraction. ahead

certain mentioned, profit revenue As forward opportunity and previously performance. to and as a go-to-market investment of pull over priorities are accelerate the the we activities I and result innovation around taking

We to revenue on continue path and laser-focused balanced long-term be growth to profitability. most the

cash, onto over as of $XXX we cash had Moving XX, million XXXX. on June in balance sheet

million an XX, the expect in $XX of quarter million EBITDA guidance; third for revenue and million. we XXXX, Now, September ending to turning $X.X to $X.X range adjusted $XX the million to of loss

resulting quarter With to few will quarter, back $XXX For expect range similar with to to answers to third client levels of questions sequential back of we in to levels year the call XXXX, the fourth during incur the our downtick conference, and EBITDA closing and Mike December a segment to an XX, $XX.X turn adjusted now $XXX to we additional respect second to the the returning million mentioned, comments in expected costs QX the related as quarter $XX.X the well we EBITDA to priorities 'XX. loss year compared I and full expect in before revenue of the adjusted as as start of ending million million the call. for profitability half I our the investment million.

take And you, company. recap Gentlemen, quarter as full thank a you key points a public on want to Thank to just [indiscernible]. few first our couple seconds I Bryan.

and First, with of I'd particular financial UX emphasis clients a and at leveraging the results we deepest quarter Stephen engine mentioned UI and the center richest banking, differentiating of driving our in innovation Mobile, our Alkami's for emphasizing believe as for remained and company on the second dataset Business hindrance our is institutions. what say extensibility,

Our progress the union a the under guidance integrating with with the seen go-to-market history has results posted of ACH business. QX largest Alert innovation company's prospects by is and pipeline Allison's strong in healthy mix area times strategic and capabilities with a and positioned we've credit well engine of for our bank sales pivoted represented also in and the

Finally, reflected results outlook. are also financial our efforts and XXXX in solid

and and full As revenue our both prior the year. users the objectives non-GAAP for grew to quarter, gross and Bryan quarter XX% third we're $XX.X and total compared increased the mentioned, timeframe running revenue outlook second digital at grew the subscription million being XX% over of margin finally, year same we and we stated ahead our for the

a I'm our start all by this as reflect our proud commitment to Alkamists' on first results. leadership and teams company. I of mission, quarter, our and public this and vision, As energized our

regional the every and the for banking our digital in day. and we each best digital platform relentlessly that to what as for intend so a competence fully is change as space enduring US. Doing the community be, So financial choice passion institutions banking requires clients of

Q&A to While we're remain -- We in still public still now as hasn't than executing XXth our stronger While company. we're wavered the market, ever a we'll and focused deeply as as turn year like it new fulfilling operator. users, clients, for investors and up I'd now, our our over and And the benefits partners, open to ever are of to on our mission Alkamists. we be our purpose to our and

Pat with our question ahead. have first Securities. And from Please Walravens JMP Instructions] [Operator we go

just first I quarter second business. seeing what of deal mind of -- on and wave the the that today. out on would activity love I of pandemic you And -- if play Thank with know you everyone's Delta, the to just the public congratulations remind how of on your us you're start can so and impact then could you it did just Okay, great. as because it's a company. because It's now it

with Hi the Thanks Pat, the Good good question for here have way. to being by call. on you us.

jumped As all in call way the execution, change We we there every of that into financial squared track. and there I a just was we going would starting things kind our March. course the we of one midst the business and that commencing to activity continued with activities slowdown plan their few stage, of launches and of our in and held just of went We of our and new the new on pretty implementation slightly stayed financial elements one of our adjusting a much the for for been felt kind plan support on kind pandemic, this but RFPs operations. forms nailed XXXX we sales in world activities, like there, how made pretty We away be throughout tell else of and our opportunities a of went revenues all activities, of entered much on on and year. those to activities, in pretty quickly and XXX% about as you, everybody it virtual over in go-to-market the the We've weekend for we our to related like the implementation company to get that. financing a

by their of in see employees other did the our uptick of pretty into they not I the down we clients, that ready And a around base. hunkering credit getting considerations were small think concerns think a accounts, a and settled steady massive So, adoption and user good dealing I a with, adjustment some kind in user for after client of state. our

we're back. initiatives some marching at path end been into on coming have the coming some energy we May, And I'd of first felt so, this say, out new started the quarter, and feel quarter, of to starting energy a new bit client new of see, that kind new little and to ideas going looking In the back the a getting on who projects sales this we're things our as could and that been clients and new are during and implement. our already they the platform, period, strong for are for initiatives pretty of we've

or want So, Stephen past to summarize that's it, don't Bryan I would know question. of add how kind to I

we his activity of variant, delta about are RFP deterioration. asking as QX in year Yes us last new opportunity you and kind of new The that of as up. Good see QX some question. biggest I stuff back as some Mike kind well. this deal the as has absolutely what far think I coming Yes, think was the picked creation definitely says of dip way of Pat net

I have think versions them and or trade yet conferences some year. Other things the fully until vaccinations only like that. them of with thing it's be ones year still certain We're not mandatory back doing next kind delayed shows. out and of are the versions of may seeing kind of all of kinds this or

about to normal, that's is to terms that isn't RFP seeing in and but deal part pre-pandemic So, forth, what we're back so back that's -- quite of overall flow, generation, levels.

make Great, the glad making you you're effort And thank for to your I'm conference that. hybrid.

down been I around would we out facilities and started be with started tightening how that at this our we're to number we has hybrid our and to are for in think I going conditions client the point, say how do and lot, team path was we're doing trying with down clients their going again decide that also monitoring moving Pat, about respective to actually community of still their what a and it far -- things they're in our doing.

still the I clients it think a with impact actions operations. supporting comfortable with day-by-day in our interactions -- it, they're on our kind but is having of

All right. you perspective. Thank much for that very

Sure.

you. Thank

with have We next our from question JP Auty Morgan. Sterling

thanks. Hi Yes, guys.

versus the I'm upside, piece on you're going the curious, of much terms is? quantify much amount incremental work into of and head quota in top understand how generation programs, to funnel that investment, help kind of maybe marketing incremental go of that specifically. carrying the and us putting So some about is where lead of to that just go-to-market talking you're how count

Bryan, touch you a Fine little. will that

Good Yes, Sterling. for question. to talking again. Yes, thanks the you

for as to reps As for in marketing leader we're the activities, may the sales quarter it's in announced market. allocating last Vice President and there. we organization, We're banking level of to end, of community. quarter We've with a experience woman be within a lots because we couple activities, also the generation, around far sales I funnel as training our lead client go go-to-market, more characterize where it top digital funds predominantly likely that team, so and of further investing add quota-carrying this recently added would post

we furthering lot So trade at sources, in-person least of and success like or from activity just the more events that really have from continuing regeneration on that absent, now it's we're conferences. a and lower shows

kind And the that might revenue I around and kind about enhancement monetization sneak how that opportunity what XXXX, think could the if ACH to? we Great. lead of for -- one I'm follow-up. And of you should curious where

so in revenue map I'll is of It opportunity. the a and take it's items. more road flight

in of very be little. terms XXXX, impact in it revenue would So

advance some this product In terms activity, activity there We so the be we sell increased of implementations back will in later, half, related mentioning were could call. and occurring some sales it. on delivering actually to sales then of have in it the

we're they acquiring, Just very product great to others and into we to what fraud It something important because though asset static, understand platform. knowledge advancing so we in the to insight investment we on the with provide a provide Alert; an hold intend ACH update around would the to wasn't are it's that wanted further. community it's how that feel as team we take mitigation do in strong and

you. Thank Understood.

Thank you.

from comes Andrew Smith Citi. with Our next question

curious a you Hey the evolving speaking, taking ask in market hoping how a guys, for bank could and the about as the nature you focused is particularly the and wins was more I a with my July, mentioned banks conversations generally go-to-market, good talk side, how just about on bank those clients, wins more quarter. the question to question progress in evolving? bit commercial two of and Thanks. get bank here you more know on you're thanks little wanted are reference I congrats

one. This Hi. is Stephen, take this I'll Yes.

would I next have, to easier you references right on So get more say gets the building that here. The the is hit the there momentum it you one. and it

would I smaller, say ever that list what system deals over had live, were more we system. of of those we're and functionality terms a getting would obviously and we've little system winning their GAAP some, is so of their earlier, that those reason one that that you to XX% pipeline would I -- launch. banking been accounts and now, And to list be to the list kept business in have probably of -- really people things are is get it the time current are certain had your I that features smaller largest actually out but we've replace easier more do bank the that willing clients and in of say because got and sales so the have and getting out you'll that mentioned we're us you enhancing smaller to lot done getting think number more the right you I trust order kind of convert those That able to and getting, the that for a in

don't but positive so, in signs or we in get is So, the credit I'd those only to in in but contracted consumer actual there that say expect all yet. year in areas the are it deals. also not I it's are We to the say pipeline, and not the obviously union next and that momentum there the would there levels where side on space the the

quarter, to it. in guys you that organic the And a the the and Thanks. of the lives, quick when helpful, Super get thank to just Got any Performance outperformance quarter that organic for you nature good have growth of then quarter. into for follow-up. -- in the but the revenue does curious go outperformance, just visibility kindly visit going that. sense primarily related user

question? that Andrew, could you repeat

get growth color revenue like or on time that? expectations Sure. got in key anything you've were, I more to June a drivers was where the hoping exceeding the was just outperformance little the lives, quarter, whether it

Yes.

more clients on a during perspective, saw increase but during user that with of to impactful story or what existing in in and fairly growth mild high were the QX mid-year we saw our of the XXX,XXX modest equally the over a expect of continue to of quarter. users less the recovery that saw result a just XXXX the compared the the coming We which or -- QX platform out back XXX,XXX growth that quarter implementations towards end from maybe quarter, quarter more that saw we was increase we in implemented We the user roll and in What couple as coming seeing covered recover of over QX. we and So, last off were but things QX. for QX. the is from user in attributed the grew a as in pandemic, a users of that we that organic and things couple of and mentioned a important, users an recover QX, absolutely so pandemic low through QX, more nice we

user year-on-year, area our would quarter. nice revenue ARPU during up, In X% revenue we addition expect to grew items, X% those we and per of that's pick where the growth sustainable another model

can leverage this of So, and of benefit most of different during are those is our quarter. that part model seeing, firing there we revenue levers utilize on several the and we're we're

a lot appreciate the guys, makes I Thanks it. it, momentum. Got

Barclays. Saket with have our from we And Kalia next question

Bryan. Okay, my start of questions ARPU this how couple kind of great great. you coming XXX,XXX touched about back bit, back of Hey, how does adds, just maybe the think half year, that the with taking net off that new those you next in about users are in sense? ARPU and was registered over in the think question, quarters you last to little of the for that the for -- at do I'll of maybe Hi, the of users makes you those thanks Maybe increase I but maybe on a kind here that see, cadence customer guys. wonder

No, great question. a that's

modestly So be QX what implementations an going QX QX. in you're down and will to see in is user uptick from

be implementation to XXX,XXX range. year So, should the back of that in half the XXX,XXX

half In continue clients to for terms year our in we of continue on organic to to expect would XX% the the grow -- year-on-year. of to a level user back XX% growth,

of ahead nice bit excited XX continued expectations XX.X platform, the to growth should our and the year, on the about million somewhere that. a which is So exit full we million between users live for user we're year

overall As selling $XX that user average implementations expect -- QX, around per new and above a company somewhere that QX RPU, to much force per it competent our and in between the on than up initial is more are so seeing on be to XX average coming is driving products as on company order in products XX. we ARPU per level at related initial in which becoming when relates average higher more the some cases, products to our We're the year, to users the and and XX, is XX that order. sales at XX,

force of to logo they're within a selling sales the products company landing when as and offer. more has products more our new attraction lots So,

more of could it, space. stand on for sense. Got competitors on that It the you a pipeline A touch entrenched makes have of where capabilities. win to the list your in Maybe of decreasing, you the a follow-up focus about there, here obviously feel as banking how for a about business you from point, gap versus ton sounds maybe like, Steve. the bit little can lot wondering my -- well. Mike, of competitive here lot nice that you or trended, believe you, part I'm those a if how rates some is

Yes.

happy I year many was for stay would look give months, that I at which kind how to XX like being at hard say way because the normalize think a invited numbers look We I is particular of be that we're to it's of the deals it our to would ago it. for we will because trailing probably great win this us rate of best more to. to quarter. what on

times to how in we So wants invited party only one rate, that's to the you a they X weren't where XX win only great XX%, you is but but would have you you that find parties.

seeing being are lot a to existing invited for that natural So seeing most we're our we're seeing what that think is, -- we're really that as us from of references means I those, consultants us, seeing more we're RFPs, the getting encouraging clients. to the

just name out marketing through engine, our our And our is kind getting is there. name give so, of

just [ph]. that we're our of it's I would So, bank in the that And we've is pickup number deals substantial seen holding win rate in. so -- for take a steady; say word we're invited

is thing business And today, business credit about opening our Yes. are clients in becoming banking business credit to platform. add increasingly the using other banking investments our users more close union is some banking our live up our opportunity important would of aspect in union I half the of

up on users the over business the platform Our XX% almost are prior year.

just union also our side. impacting So it's segment sales in it's completing credit not the of our was benefiting the market, bank I that. just

that's it, helpful. very Got Thank you.

you. Thank

next from with We have William Napoli Bob our Blair. question

afternoon, know, of in your like certainly we gross the Brian, that, the then half expectations Mike, and trends had in coming has just the dramatic in this longer XXXX, pretty margin Hey on of maybe Thank progression you're the but the gross been that, the What you -- expectations your may the be term, Nice still Brian, ahead back you. XXXX, that Good but Stephen, has it's just Rhett. pretty trends, margin quarter. changed? and that that you're and are for year. into cadence, year went some and I Nice through of expectations

Yes.

hasn't for point. this XXXX and at cadence changed So the XXXX

two impact sell third-party mix keep down solutions certainly we part future goes from deliver go of innovations, story our it's IT a we really CapEx. on groups. our component costs cost and because certainly our platform our mind next through team we're our through of capped roadshow we're efficiency revise think at So, where to outward so renting as expansion still we we as advantage XXX the XXX of fabulous big and organic third-party go-to-market much view even points basis will it. activity, of cost on before is to And IPO but It for to hosting implementation seeing of reselling an the the the IP of to ability Revenue and in a don't we targeting more XXX% And be job has we're adding XX% mentioned, we're large the we development, through related and us margin call, that's years. the also competition, which M&A cost is need AWS, a impact in is part in pass understanding third-party could reach in hosting ultimately that user mix QX can those items or in that think whether the to The an we XX%, quickly where for partner, than a doing, go. driving largest a incredible in per big includes can cost in where is since us within also those perspective. amount

CapEx I margin and or of say team we that achieving So And our the nice our still can't leverage. finally through for cost implementation in have sales do competitors on components our of gross pandemic. peer product, many have enough we're comps the implementation not then

can think associated I we they've cost that with from the the learned how implementation. along means which more remote setting, how and they've same a satisfaction travel some to lessons way, level provide learned be do less the efficient, less of service client and and

gross is benefiting over So the our and what that good is now it out a learned fact last of XX margin. we've months, that's come

going of repeat I to QX, advance so For much half we're the to and get don't want going details, QX. we're the over beyond year, to back

that client revenue bled significantly due points in would quarter, XXX margin XXX expansion lot be a in termination, absent of XXXX. and that, we at XXXX -- see basis more a I part to the gross one-time margin event you'll for for XXX that XXX but points up that gross have than of us think the full landed QX year, to large basis to in

have you you partner. the and lot ACH ACH partners are of is Thank Alert, you looking, most see to perspective, type third-party what then, to partners, and where third-party should regard? third-party on lot ACH seemed which other M&A that's you. in Alert be have are a you a of focused And success with of the From expected a transactions that

as honestly the to or activity maybe ACH of ACH would areas focus third-party not alert can, any for and has a sourcing security then digital Yes, wellness data to area another for channel a key partners of pursue very repeat us of analytic it we the would that heavily acquisition that changed and account we alert sized love the M&A we quite as have larger for we type financial And especially and slightly and to relates if would that marketing over view something be openings for talent us that's success and area over revenue course channel product. key we activity.

the in to customers add banking the like services is of or place. services I'd lose the Ultimately, probably other that area would that have, business you? service be for Bob, they we -- did other commercial payments

I'm queue. the question? like Would the has you line me from proceed sorry; dropped to next his to

great. That'd be be would great

That'd will well. Bob back. be great be would know We be great. Bob pretty

you. Thank

question KeyBanc. from with Josh next Our is Beck

and of seeing Thank wanted taking go Mike just comments, within you're that you the the so of to I for team. to back industry. question earlier your much some about pace the change acceleration

been there. it's like, drumbeat, seems it a later. So really obviously on that and steepening some I'm been what's these structurally of always like that curious feels so curves, just driving by curious mentioned really is but There's things maybe what you adoption I'm it are maybe

approaching the are news how I'm space? So the kind banks just everything, and of curious, that

credit themselves that Josh. bankers it Well, is up union They transformation interesting, financial space it's This about hyper leaders access, -- of a for is element availability underneath on to, of not they aware user whatever sure that's there if they actually, market it. a the chose as product we've if that the product idea and are of experience every lot the because being of proposition talked it, of services offering hyper in not presented digitally as virtually before whole today. it oriented aware of the digital sneaking render of the could but is is it's itself pricing is,

yes, part a threat. And it of is it's so, it possibility and an banks differentiator now I take of more think is than is, the enabler a it only that

what's so see Stephen more often unions, in ever it why boardrooms [ph] now digital, banks on credit on you'd in going than matter. is and So,

awareness consumer or in of sense recognition that is action consumer feeling side what and we're on with on our converted to and appreciation the -- side. so the big status business And

takes competencies. just differentiate to something Hey not industries, So anything? think really leader than think scoring, have direct the with good doable as before. of and the us now a could ways to into their field idea marketplace call seem with their other in if seen crypto a holistic a partners we the let's you are plays could those more just happened more for -- aggregate, like so had that to it value it [indiscernible] feeling we're get do eyes more the could and have you they credit doable, and tools big digital we be more achievable on and seen more that to of we it can immediately I the recently, reachable, of It the add awakening more prop us already they is of ourselves into good think that's creating view example if would on in opens institution leveling Alkami type acceleration and integrated of if possibilities that And the are versus the this from bring the in so the a here Rhett, of accessible a is that customers, topics PFMs us. do product it to partner is the a are and business a acceleration, or on like director, other service while a to corners the consumer, financial product, institution we're of offering is that the a, like in that we world direct a just financial saw chunk

Right, was that well stated. very

super helpful. the well great, that's Well, thanks Okay. for color,

a as poor leading sure new you in haven't your happening if have of of and own already differentiation financial that products used and is that consumers I we it digital lot. can probably you all are and I'm to field And I do that, -- no banking this the think. of do way any leveling see so is days institutions These going, just the lives for

like that's down And want just good -- at 'XXs, first a be that. And follow-up at looking the very Bryan, that's indicator. the step obviously -- for just It's seems growth then half. take will the think it it's growth just hear. maybe in looking I really that's encouraging like to just in revenue high from to the ARR back half, Well

moving that be there conservatism are of and what the big should bridge parts of us help any thinking some areas just maybe about? we So

Yes.

I to momentum bit the in to for point business. a had users a on think, and a XX% we'll and termination close We that into run of the year revenue had that us from Steve, fee basis we're into are XXXX. results live predominantly will was good that we we you expected, will the large visibility implemented, in one understand which of good what the were impacted our rate on items of so would higher just than perspective a year XXXX, to QX of implement full the looking and adjust half rolling growth based again visibility that's we users before the back that back to backlog of those being at provide exit XXX,XXX XXX,XXX have will QX I earlier users as mentioned, truly on

which The at team add-on client other unknown variable is pace sales our really the closes business.

For is over sales terms last to within of the in cell or the and quite increasing. they new of actually mix TCB year, actually client of team this that bit sales a big half of the are first is sold, client first up sales up half picking attributed year

more that XX quicker. those cycle. sell momentum to to we much a goes we continues, So versus around X products month It's implement to when implementation backlog month XX are days extent that XX the into that

trend, it if so an in it nicely is the back that's and, continues for So half, up XXXX. encouraging

Excellent. Thanks, team.

speed I there am -- business thing different in its this that during the sorry, to is year on I a every of is that just story pipeline, new to the pandemic implications of of then awareness kind you like that customers is down related of digital, of up the to kind one only description we've talking to their our slowdown picking platform and on every up. to in our heard as business, almost slowing emphasis sales the on and shifting about of relates for initiatives those back it of half and and add had back as their existing ones the and or in their the existing

under Anybody this next the going to as that had. or looks whatever year delta pandemic so to be discussions part is unwind after right next trajectory the is what how is see key a that, going and kind we delta like, of half yet. of And [indiscernible] whatever back This we've it's predict of next to variance next component variant the is of be that's the going variant that is it subject this don't couple and now. how of, of out, year quarters and element the the year here to hard play next to

Thanks, So helpful Mike. context.

you. Thank

is Mayank with Needham. Our question Tandon from next

and you. questions the did expand. Most have been on but one I have my evening. land Thank of Good answered,

number, products in I customer product XX terms terms you you the and the what today, of where base across think the your is portfolio are sort you mentioned penetration? of have today penetration of in looking Bryan that today we get you'll time? XX see over of magic more but just over to products number the terms to that time, at map And in road sure where I'm XX are

on so generating out than logos XX. have average, What around landing on we in the new actually products to each that average, installed XX sales with we're is Yes, averaging the in 'XXs client. with products its up today, we're XX more as XX some our anywhere and cases, is, new I mentioned, from seeing team

think I for is equally So encouraging that's encouraging. us,

sell the logo If really prior at team and increased of one XX/XX/XXXX side. sales that's base look at effort the for client our combined you just seeing with comparing the are on in we're where or products new has the product penetration new except into penetration success year, we the to every that the in the team

the penetrated So, going we're fully to when of give I to XX. you be cadence can't exact

to renewals, another we always more I'm the truly that the to more that, and be continue and as is we're always because I tell saying sell focus a prop. that Stephen is bit land I expand approaching in to that of will that add the renewed he's I'm chasing penetrated I answer that to of going you are client squirming the we're renewing can me the continue be be clients, very clients think from here relationship approaching seat sales have from a client obviously can't for mean, CFO finance and us X% and time a our but of not because I and the seeing all to success this you just years little I we to sales. with assure think half maintain innovate a the drive benefits refresh relationship and kidding they the as renewal, as first allow year, the that's the bit signing to side, never but half we a sales renewal have is product digital and -- to force more I will it I can mean team is renewal a us. more XXX% much five they're back will base as lot value it area closer I'm products have close our our for a great a in of gets because of we've close but story when years know we user And with with up and the try process. and seven another we through the product

to some institution. bring financial so the innovation value the and the company selling the in respects, can we're And that

That's very helpful perspective.

maybe Just banking that that's how it to the FI the leverage as a is very up market, success the Is quick table? partners. move you critical follow-up, on and given something in corporate

been said that FI other tried you So templates firms the partners, Right have there's sorry. say FI you to partners? use. Did of now,

platform maybe, the we that almost up is major latest there to position latest so and move, implementation have partners. year, frequently used releases for speed a third-party the kind successfully What keep on and Successfully quickly for XXXX expectation. us impossible our version., SI of and given a what's a we of releases our found

this we solution is point of our least exceptionally that to have core So, decided part we've at competencies of at do that well. our implementation that is that something

You of to essential product because our list are bit it's lift case clients it, in we've it's that make of our version but just and consideration, last the others like the knowledge anywhere near maybe that that that our work. implementation unique study and the heard we not a so feel about little of and kind counting future to expertise on

using so, of that of but doing down them. that one there. it some elements accelerate the this partners And other going We're not of we're helping path for part us of is

from seeing as item we're then And the you're market financially, managing contract their the segment also moving the towards this gating on they side. of gating the expansion, personnel into our implementation that margin a a is technology and and that still process provider and even in much smaller our implementation have when we as don't FIs and address across bit perspective we is that the nice incumbent implementation is in teams, not item typically

a a the successful that partner. a to item through successful worked which not closely we're a then growing very financial in our we platform, but gating a bit revenue speed experience, not the disadvantage by be with but in ensure bringing the at we're third-party of the in seeing model So, can them client of experience launch

Thank point. appreciate Good color. much. I you the so

Thank you.

Napoli. our go have ahead, We follow-up from Please sir. Bob

we back. you'd Hey, we were were hoping definitely you'd hoping be back;

associated to that sales the the know logos? looks cross that how my answer think, had And great was a gave off then, could from much what versus many growth us growth, how you versus new new institutions quarter if, a revenue just of I I'll PCD that won in logos. quarter second imagine kicked and somehow. from took given sale cross metric I I users. PCD get your it the question; the you don't on like you last wondering transcript, from A) you tell have was I'd

Yes.

to being prior the team XX sales client in and this We're of number half for sales our year of the ago. our the approaching so more months XX% first half that's attributed first percent to of compared So year. that, XX%, to

the in to state closed is XXXX kind year. from of we now lower benefit seeing nine we we're closed. our more very the The that new the story and some logos story of have every in first of of the traction first cycle. to nice what a market closing, the been logos several So of we're the a that of the to that of and that terms medium that to year we found new of just there, story financial XXXX quarter, had going has XXXX in have the We in half end size the also institutions compares to benefiting nine XXXX, and year, half had in and selling to and large sales implementation we've is

but the look are large the a I half year. feel and are close expected at so look have would we're deals the some pipeline of when great There looking that of very we going to at uniquely in chance we opportunities Now year, our of way bit the that at back out the of first not and the of year. let's pleased wait half XXXX, what happens kind see little of our it's first and the sales it's control, with of velocity. the We're in for see a back half dual half

pipeline, by the in So, deal we year. what didn't saw in -- XXXX went actually if strong decline we this but, of that remarks you half as quarter QX for really increasing a market think Mike's you point close opportunities don't again of first time. to and half comment, we the back. very in QX the over and going QX exited QX, force QX the coming the were about and of we see spoke QX-QX not then XXXX. the QX our deals opportunities case given variant the the our has back of pre-pandemic is from QX, of what and seeing kind and pipeline end kick another the us think opportunities a in delta as in But those we driven sales were that's activity first his To the in earlier wait we of decisions; making I that's yet us. the that of see into that pretty important is the was opportunities which seeing expected saw pandemic, in year know we at and point, was in of the have to this on a half bit XXXX, us in into carried to of as is we prepared that saw and loss what different much this a position we're but type Stephen through we're confidence and

concludes This all for you. And, today, for thank our concludes session. question-and-answer our you you Thank participation. joining We thank this your conference.

disconnect. now may You