Alkami Technology (ALKT) 23 Feb 232022 Q4 Earnings call transcript

Hello and welcome to Alkami's Fourth Quarter 2022 Financial Results Conference call. My name is Marise [ph] and I'll be your operator for today's call. [Operator instructions] Please note, this event is being recorded.

I'll now turn the call over to Andrew Venus. Andrew please, you may begin.

operator. you, Thank today's and on Alex Chief Shootman, With Hill, call Chief Officer Bryan Financial Executive me are Officer.

are future During today's and These views our guidance uncertainties. and risks are statements forward-looking management's subject statements and performance. to expectations call, we other may matters make based current on and various about regarding

Our actual different. materially results may be

entitled the being forward-looking to forward-looking statements. risk any the XX-K to today's refer For of a please Form statements. forward-looking risk summary and of no revise call latest release factors factors and sections and The statements, and in obligation our associated undertake or we XX-Q made with our made today in press update statements as are

on to found basis. are earnings of a these and measures unless A in financial measures investors believe can non-GAAP be in with the on Also, measures financial be otherwise We useful stated, understanding GAAP SEC. financial reconciliation discussed in results. filings our of the comparable our our quarterly release will this press call

the now will to Alex. call I over turn

key environment comments This scale, recap and Bryan technology before results, Andrew, today. over joining our observations us call quarter provide to I'm the for our going all CFO, related Hill. to on to demand for engineering you, thank highlights five operating some you our of Thank initiatives platform afternoon with fourth and our turning the

important the EBITDA line in prior a milestone XXXX. we which the on achieved XX.X to our EBITDA continue an registered to to path the of Alkami the $X profitability, on and on to pleased we am million with with million progress grew of of ahead loss adjusted adjusted expect X.X once end for to and strong up I Alkami make XX% platform users We our continue occur again report we another key guidance million our live exited quarter the compared as QX revenue initiatives. performance quarter to in our expectations. In XXXX, high quarter year,

the five of reflect banks, Two These results to drivers provider unions continued and at outlined sales. I to of execution second, add-on banking increasing beginning for year; to our XXXX. by were competitive our the initiatives the key digital the initiatives choice become fundamental these similar position with five of all performance drive for first, on to of growth credit

For outperformed our XXXX, full expectations both XXXX, the platform compared banking XX signed digital banks, were which for of our XX% full clients increased of we've areas. bank wins XXXX. a these approximately of new in year and the XXX% year We platforms, of to

higher we than new As in XXXX were QX expected, logo XXXX. QX sales in

logo more new the a of year new contract high year, in throughout point all signings. the of was balanced XXXX our with signing quarters terms being QX However, of

to sales with of up continued We XX% in sales representing for gain from of add-on XXXX momentum total full sales XXXX. year XXXX, in add-on XX% the

client In addition, XX year. and during the full QX contracts we contracts XX client during renewed

personally preferred become Alkami's energized banking and in by provider continue industry, to passion am and results opportunities demonstrate the the I to Our the ahead. motivation digital

and for Next, in volatility end other add-on Despite call. challenges providers, experienced the earnings macro demand thoughts observations including I'd interactions digital to by market still Alkami's our last banking client some offerings. our we upon share and the healthy on see like environment, since based FinTech platform

activity see normal vendor sign new to RFP well normal continues evaluations evaluation timelines as conversion and contracts. to team Our sales logo as from

experiencing cycles sales which are renewal Our and opportunities. client shorter generally sales also see cross-selling conversions, activity, steady teams,

Overall, demand. the continue factors drive discussed I in quarter's to call last

innovation Alkami in important be effectively and mandatory consider solutions in to they First, channel. their our clients require is modern what banking investments most

our amongst to accounts continue experiencing are user clients. rise double-digit growth we user digital and Second,

have in personalized they offers. Third, systems the FIs relevant to and [ph] and the core them data communications their are and for target digital is deliver available banking own data and best that realizing

need fourth, themes to great new And expect including see attract and banking growth. clients are in business digital target technologies digital These onboarding attract healthy our and deposits experience, why customers. continue investing to banking they we demand to and to a are

user market. companies provide a to Our record be along a who in Alkami few the cloud-based a leader, qualified and is time. track banking the growing million proud fastest grow there of sales digital pipeline solution to strong nearly continues pace, X companies with and at are capacity a implementations modern, digital at to one the can manage a

you with shared I priorities. ago, our company five year One

our digital for of the become unions. credit with to banking market choice provider maintaining First, leadership banks, while

Second, grow is to sales. our add-on

Fourth, engineer of Third, for scale. employer position. enhance is our to to become M&A market choice is opportunistically market, our technology and to the platform use to our fifth, in is

our until by a and our and sustainable On XXXX, execute representing competitive priorities this provide third to complex engineering XX ability two sustain XXXX, We calls, live Alkami recent implementation projects XXX%. technology platform advantage. that discussed significant first I've implemented of can back the million technology this and at growth users our end some Alkami and this XXXX, believe beginning of the engineer scale. for at grew you to like new at is our platform registered if on scale our In priority registered call comments users on clients go X.X I'd to launch,

about only also to our be the is financial injecting think not allows technology for technology to continue about a Alkami it platform, company provides we platform scale, but expanding engineering that that innovation solutions. When

cost evolving reduce platform the future and it that with serves the platform user so the the market needs Our of the speed and of quality. is focus expanding incremental unit we on a serving while

driving platform that and to platform believe that digital that make sales accounting be banking become We systems areas. and system. application new tired can scale they've want we're grown trying can to operating clients this and core primary tell us a three to legacy back their in invest Our They happen, make focus in their service office Alkami innovation and on their of dance.

First, is a cloud-based as the a from Alkami platform foundation. SaaS instance multi-tenant system security inception single with

new have as to opportunity slow compute the advances storage messaging we architectures adopt and increasing of and rapidly compute the technologies platform. this, cost the database to while schema Kubernetes, growth quality reliability, of Because federated performance layers our such and and our in of

and technology time-consuming for Second, that most connect Alkami market. we in Alameda cost clients. This of legacy will innovation the in for innovate is our to necessary onboard planned systems result faster the the myriad new and our will in to the the clients less of projects portion implementations, exist

their of want use we service for and our channel, digital This their Segment Third, why acquisition. the is as will digital use they clients mature, sales the data of capabilities increased mature, customers. made the their

capabilities clients driven data segment data that grow business. to and modern provides We data of Alkami insights platform their are necessary into the make data for for actionable financial and integrating a decisions transformation, Alkami collection, the persistence, to

business, With I where infrastructure welcomed this am he Alkami, search fastest unified and view part technology Chief of presents just information, Deep Prior the Deep that cloud leadership creating the as officer data led customer nation's we was as including a successfully Trulia for the of Alkami. of and Deep Zillow across of home was backdrop, migrating where of to Varo, announce the the personalization. to built Chief Varma neobanks. all team to pleased Technology Varo Bank, to technology platform growing the the one Officer engineering functions Prior we Technology Group that

excited being successful human Deep two Yahoo, cares who launched as good and and have roles to ABB Alkami. also culture leadership Besides his He's join held a start-ups this community, genuinely why experience, him and we're at and is IBM. about

as are to client and reaching be The platform I've non-GAAP will not XX%. clear, our productivity. But to objective efforts margin and expected to and of gross long-term these should goal to thought necessary just our efforts benefit be our profile upside margins impact R&D positively gross discussed margin achieve XXXX growth, retention of are of gross

In thank QX to call for the all results. closing, you about hear joining Alkami's

of over are to turn detail to in are And quarter XXXX financial we our financial our more with Bryan through the the that, outlook. provide energized and and proud opportunity by me walk of call the results We let front on us.

results Thanks, XXXX momentum Fourth key across the our all Alex, metrics. quarter rest the experienced during and good of afternoon continue we everyone.

fourth XX%. This of achieved the revenue outperformed we end which $XX.X represented across XXXX, strong driven and of high the million, by growth of guidance was performance quarter of revenue For our drivers. primary financial our

count year. We million new nine XXX implemented XX digital clients to new have in backlog are platform clients now We users. X.X implementation the prior in that compared the bringing our digital representing XXX quarter, client to

last the driven last sequentially digital year We areas. on XX.X banking two registered continues XXX,XXX to exit million quarter the XX be compared growth or platform months, live XX% users up and to users our digital digital user up over X.X million by with

we supporting XX digital X.X institutions million implemented First, financial users.

user Offsetting which majority X.X during off by Second, our users, million which of our over growth, is their of existing digital clients adoption by that users. digital platform transitioned digital represented at single the churn XXX,XXX just client a QX user XXXX. increased

the a maintain quarter $XX digital to blended $XX.XX, or retained than last with gross opportunity approximately our ended of This ARR an annual higher months. last user. is revenue of high retention to XX% and recurring of digital year. at over over just very continue We users measured which the terms XX% rate per in XX RPU We compares market

or $X.XX expansion X% clients $X.XX along a expansion addition or and by new to onboard with of contributed of of average with RPU. the add-on segment ARPU The X% tend success sale acquisition ARPU driven higher who

of We quarter increased million. the to XX% XX% compared $XXX.X XX% year the represents grew revenue exited revenue. quarter ARR total at approximately and Subscription by prior fourth and

$XX over we XX the million implementation addition, In have next for in approximately ARR months. of backlog currently

implementation later and year XXXX, visibility our Our XXXX will which exit in a to successful in I outline ARR combined provide financial backlog into guidance.

see to portfolio. our demand product continue healthy We across

outpaced Keep performance by were XX%. sales mind, fourth XXXX new the quarter. XXXX overweight sales Our new to XXXX in

have I quarter's year. call, XXXX new evenly on the last sales for occurred As said more throughout

signed of the fourth signed the clients new digital XX which platform quarter. for We XX year, full during banking

for XXXX. of yield to focus XX% Our XX% continues add-on XXXX for sales to new representing compared for returns and XXXX XX% sales

to addition and in ARR representing backlog. sales, our adding client for client of sales add-on client live our over obligation contract renewed million renewals responsible is In our XX% or to We purchase XXX client contract remaining XX team client's relationships XXXX.

ago. is XXXXXXXXX% backlog contract a now client our year higher client, than Our

Now, turning Quarter we few would primarily in quarters. implementation was of for the IT client third margin our year. compared gross investments party the constrain higher margin by expansion team our implementation to a Previously, partners. XX.X% fourth in cost and our and XXXX, margin profitability client was non-GAAP driven to XX.X% team highlighted prior gross quarter dilution for from margin

renewed we early concurrency We XXXX agreement significant distributed in for future have curve costs the gross will quarter IP XXXX, GR a bent margin partner a end now qX, certain more in that benefit resulted Also dilution. in evenly margin project that resulting project. provide gross during

our amended will basis margin with expect combined partner expansion us agreement, we gross points per back third to party IP year. our Concurrency, on recently of XXX path objective put

non-GAAP of target margin a XX%. Our gross model operating is

our As level of by a revenue, target XXXX. we average gross expansion at of XXX reaching points on margin to scale roughly achieve XX% we per pace year basis expect our the

is reaching addition, margin gross simply It our not the is In in milestone final the destination. journey. next XX%

gross continue to drive margin XX% above discussing for of expect to expansion. gross purposes We margin

investments million revenue we addition our to cost XX.X level, efficiency, unit hosting in beyond our The enable digital expected at in investing implementation users. well economic and our factors scale the support platform. a us our scale of level for to current lower improve are infrastructure These first, ongoing to of reduce cloud most are are platform important

integrated revenue structure IP typically we accretive digital to to our associated with cost These adjusted third to are share Second, margin, party agreements, are expect EBITDA. banking generally but into structured gross improve as arrangements which platform. further typically the diluted very our

its we increases and The to requires revenue for business, our cost over each margin our contract these renewing continued agreements margin. implementation implementation both scale success counting gross and improve amortize new we As our term. for first client gross arrangements third, improve opportunity for will

in renew clients this in amount no a at headwind unit possesses contracts, As level. XXXX. gross longer renew XX and similar economic their to XXXX expect We renew our clients margin a

cost. year Moving revenue. XX.X% margin the quarter was to dilution XXXX, by for XX.X% infrastructure or higher primarily a revenue non-GAAP represented driven expenses consulting and R&D was headcount million expense of fourth operating of of $XX.X ago R&D cloud

invested have for we scale. As in platform technology our

experience full for operating However, did of we points. year XXX leverage margin in XXXX, basis expansion

to and while reminder, to invest achieve our expand XX% currently our our R&D As target is a platform, to we operating model objective. leverage expect of to we continue revenue

and During the of year million sales XX $X.X and as well. marketing XX X, marketing of expenses prior and revenue represented quarter XX% gap XX% were sales revenue from

FinTech our company comparables. majority the outperforms efficiency SaaS growth go-to-market Our of and peers high

our scale We as go-to-market maintain gain expect to and we slightly efficiency share. improve or the market business

terms will approximately spend hold marketing expenses In the which of $X.X sales bear our of we client higher is progression in throughout our when year. the marketing conference, of the to results sales in second highest with of quarterly than mind and million expense XXXX, other quarter quarters $X and annual

general XX% administrative of scale. million prior attributable the and $XX.X primarily expansion of The and approximately quarter Non margin g was XX% or expense year revenue revenue. a revenue was is to

g company behind a a our investments level are sustainable reached as public have of us. We of spend majority the

during expectation as to fourth quarter loss revenue and towards an at we the expectations expect our which leverage adjusted expense the is prior profitability better to with as was million, We XX% high line revenue percentage of in with of objectives year end the our XX% XXXX, EBITDA our quarter. $X of XX% for move G&A a than

As which XX% also operating expect now We to is to achieve with full goal. the our target of XXXX, adjusted EBITDA a for margin target coincides our exceed the achievement XX%. year model an this of gross margin reminder,

Similar EBITDA we but final the the XXXX business adjusted XXXX. to EBITDA margin our along margin continue scale not to gross A and our is objective, next XX% after moved journey adjusted milestone positive the to QX to goal,

approach balanced and flow TAM opportunity profit cash timeline these Alkami attractive on banking. our also full believe to take the a to targets achieved and afford invest generation, responsibly while advantage to We position allowing of provided level high market in large digital

statement, income stock-based want some the from becoming investors. of software importance which increasing topic we understand commentary I on provide on moving a to Before among is compensation,

his a of our stock-based had and for we former result our our compensation. anomaly comp retirement. the of expense, shares XXXX, stock-based was This therefore In accelerated impacted CEO's significant in a which vesting accounting

XXXX, a we look to percentage normalize XXXX, approximately XX% to long-term expect scale. compensation X% revenue we as scale during to forward to be to XX we to and and of continue digits beyond high decline of XXXX to to revenue As revenue stock-based expect compensation revenue, as we we stock-based of single

and of over and a to moving sheet, the million in of on marketable over Now quarter securities just balance XXX we just the ended XX cash million debt. with half

becoming with We positive quarter fourth several represents are the of EBITDA reach cash multiples our necessary positive it net to position cash as of capital comfortable free flow adjusted occurring shortly XXXX. for after

million. loss the million to the Now EBITDA to million revenue an in $XX loss million of for in $X range full quarter range for million of XXXX, guidance to We're turning for to for adjusted adjusted the and to $X.X year $XX $X.X $XXX guidance providing of XXXX. revenue guidance first $XXX in we providing million EBITDA X million are an million of of

expense be of I trough such the expect the adjusted we the EBITDA year, XXXX in with conference, a first exit than to positive. QX earlier, mentioned summarize, of second impact the modestly losses executing as adjusted we expect timing we our client quarter lower across because all XXXX of are quarter EBITDA modestly Additionally, point areas as and of the business. To to our

banks among contribution top and position our add-on We increasing in in strength. from concert sales with with a attractive marketplace are momentum already improving the our growing line

in gross profitability we beyond. focused XXXX, meaningful are on margin We to are and on crossing and organization adjusted into an as track EBITDA XXXX expansion achieve in

final in a margin XXXX. margin comment, EBITDA XX% expect we gross XX% and a objectives As crossover adjusted

the I'll that, for questions. hand the operator call to With

Napoli go comes Blair. Bob ahead. from from please William question Bob, [Operator instructions] Our first

nice hear to you Really challenges? view the you the as just for and specific biggest specific out XXXX very kind for put see trends there? on as you afternoon. do to XXXX guidance challenges what do to Good What and maybe confidence guidance to the biggest what the that XXXX, getting gives of

going we'll work. we do then Alex. start, to do things. two I'm have kind to two, talk is to One confidence of where continue This and about

to my is in for stated banking comments, we them. believe mandatory a innovation investment digital I to customers platform that a who As continue talk

digital appropriate well. And but the they been it them capabilities, it not has grow them for channel, primarily, them can can data channel continue just to other which a understand a for use that top become as and also be channel line this service with that allows their of sales to

how from the signals this from market so about investment comes to really is And confidence financial side futures. institution's important

need victory product real to and to Bryan which so kind for we to. the cost want to to need manage, your to cutting in no along us that thing be There's investment we margin in gross investments get about wins be of to we best with and we to -- how balance to targets mentioned space. this the the product future, wise get the the continue

the confidence and a continue be scale out the platform signals work the So market we is any for to comments, in you do that do talked hard in to product I short, have about, to invest of as platform, great growth. have that comes future able build to the Bryan? Then from

that a to next given of give me years, environment we couple the Yeah, in, the and that comments given Alex headed was a three let we're felt and lot couple. we're I, this of area constructive where in have economic a Bob, you it we're important provide look, we in having. the more investor things, confidence but And conversations some over

the and live I First feel implementation continue rises minimum. compound of demand. visibility year for into we to guidance off, at coming XX% we to as amount that. the tremendous the the into ARR as that year each backlog The a well business XXXX have can healthy have, We that still speaks that

among see starting wins. We're bank. seeing among and bank a in, the win seeing as momentum relates rate it to momentum we're of bank number we're to deals that Second, we're participating rising

us that confidence. some provides So

revenue on Second the front our sales is momentum. add-on also

contributes a sales that of total expect to XX% out XX% in add-on we even years. to continue TCV potentially in new sales and Now our future XXXX, of and level

even reasons So a margin. relates It growth revenue with slowdown achieving have a that gross gross XX% I call. provides it did XXXX EBITDA this described to for adjusted expansion XX% a the confidence further starts We hitting in XX% achieving margin margin. that as the our in us in

previous concurrency now a con, relates as it distributed margin evenly ahead XX%. to in XXXX, that investments I maybe more project sales the we're to of described better in implementation XXXX calls to those with a gross on exit for then and manage relates it through XX%, resulted implementation us as new year really ability slightly as

and us the, efficient XX% gives in then marketing we as that expenses, have down a So great your operating And margin visibility in gross a work sales XXXX. you already by achieving market. way through in go to very

marketing relates saw as of and we've XXX a line already investments will revenue scale XXX over to and of that year and year. full continue over sales operating item Efficiency year in it percent OpEx basis to made basis QX company and we leverage for G&A, our is provide XXXX public points the revenue. of points

as investment market. down more there in in to really and efficiency R&D platform So, then and gains product the of for to the investing lots comes bringing for investing platform momentum in controllable I but still what it view

market XXXX. We in expect between four products somewhere bring to new to to three

a when items together reach guide for and these on have a of really multi-year to confidence providing So amount level in come a profitability. I more tremendous of of will acceptable Alex we more all

And sales big follow super seems on That's a that cross is how working the how is is It like just on and particular and you. what segment cross working? opportunity. sales, thank to Great, helpful. in up

you just user, cross in per some sales on to it as and So relates with sales? expect see steady color to user cross a growth revenue kind of per little revenue

Sorry. is Hey, Bob, this Alex.

they and right and the existing is, our a that the They thing sales about understand highly covers I'd tell industry, really customers. It's They you to thing contributor professional customers I'm sales team the their in by a encouraged understand that first that's customers. proud their obviously the team. do is key The place success.

was call surface think had XX, barely us. Segment I and we then we're that I would just, scratching were either deals deals that be that customers new really think synergy just exciting would had that XX add-on and I deals with or the what segment. new we're deals We besides for

have if If digital to they you you the a and the bank think a of what for their then out use system, walled best their their self-contained have existing micro data investments alongside what content allows amongst stack, have possible, within segment be tens key it understand really in those is, deliver garden data that that banking a data customer channel. then segments is that to to comes bank about marketing where lifestyle segments tech that comes of able system to offers of and core indicators, target and thousands micro base and they that will,

are this they of digital financial the institutions beginning in understand this their that marketing just holy what and is grail the is need of to channel. All

really their digital need a that for customers channel, Segment what's synergy happened what far. I'm, create to so understand as able this in is I So excited be excited continues pretty about to with the interact uplift I'm about us. big to market I'm to they think the going the and with

really Yeah, money Bob, theme significant from contributed first product a family not that our year. contributor. in the just quarters movement the QX majority terms the the of product themes was categories change of in that the did effort, to for the and of The sales category three add-on

product which alert, significant and marketing account pretty includes and XXXX analytics an category, Our which finally which a products segment. includes that includes, client conversational chat which was contributor family and chatbot and fraud category, from AI then acquisition was security, and ACH services the

products, in give newer XX% areas. step product family the some four call some those market. are those the those are And really through would those to if So our success products add-on I and came of back really categories consideration of you sales

products our available logos, bringing either cross-sell through really from nine XX which available which presents now that when new years to back averaged not opportunity. products install ago they several certainly is are, So we and in or these base, Alkami, were were what not

you. much. it. very Great. you appreciate Thank Thank Appreciate,

Andrew, we'll go Andrew, I'm now Andrew. go. you proceed a there Andrew Andrew. And ahead. from please sorry. now? are Thank Citi with ahead from okay question Go Schmidt Yeah, we you.

Great, much. thank Alex. Bryan. Thanks to results great for so Hey my the step Good a the quarter. wanted up resilience question. you to of just into in demand Hey, environment here. a dig good hear obviously, I the taking in the little the terms and bit. wins It's fourth

Maybe net talk coming clearly, top for for a because or at backlog you're lot. the rate the the pipeline, wins year. logo XXXX, Thanks about to and bit of on thinking we're a I'm elevated back for little thinking and additions just you're net environment see, curious it's an great to how setup the about about funnel how wins based user but

Yeah, This Alex. is Andrew?

I've strong in couple pipeline, in drop seen unions demand credit consistent over off. but that off, the the see That we balance As balanced pipeline I maybe we consistent mentioned in credit movement And of continue consistent on future in between to the and comments, pipeline other my as sometime evenly future, banks unions. we a predict calls, pipeline. can't of have not said quarters so kind is and and growth just between banks. drops the last seen the that We've

the is more though Yeah works overweight XXXX, to evenly that were because and an the sales just in pipeline distributed through even way as XXXX. year, It qX. there wasn't pronounced Andrew, still the in

So then building continue But the back at and XXXX, XXXX the of was our you XX in qX XX, levels, exit go XX, QX pipeline year. when as your from as pipeline up far XX year than likely want it you as most one you to the you're into sales go. through lowest is sales from larger

very our continue up sales confident aspirations. our that numbers to year to in revenue to achieve in So we order this put need we feel

would our third. a is a comment and that a pipeline when Now, between Alex banks. previous been, make have evenly where say the distributed That did about unions change contributed quarters we from I credit banks from is

participating So we're deals and banks, to seeing seeing we're winning. more that activity more we're in we're banks, as from relates

increasing is credit banks, rate our very rate previous and as staying years. Our, win win has unions in our it is among among constant

think in space, particularly the channel. I So the of for this resilience speaks digital through banking to need all the this innovation

lot just a of banks and Makes more suggest banks that a the outgrow as think and a that have of larger then growth comment sense. part ARPU does mix, beyond onboarding lean perhaps terms when And the it. maybe see more Got we'll we of in for XXXX being the that you're of towards union. users products consume credit that perhaps to lower relative about

build-up the Just we how change the about, Thanks. curious might about as forward. think model going

our has the changed importance the understand bank Yeah. institutions. What of in adding is position of market Well, we our unions credit credit not XX% has thoughts addressable market in financial and com, on on unions about focus the consisting mix is remain we leading our will changed.

is number look credit we out equal an originate when an as banks unions. sell view Now we our several into of as years, will

objective, exactly term also ARR four the bank bank same the a per but will of more have that achieve longer we a characteristics have business of will and banking as fewer a products over user. the revenue platform the and in credit next How our users, higher a between years. result opportunity resulting Generally will think what three client for to our the can suggesting. change That's you we base that were is union,

have And president before call and that the the with you. we provide would, he call time me I looked experience. they to one that's video first to add a afford a interesting off couldn't we Alkami, got an a earnings had right thing we this I that told of understanding great at just then amongst Alex, I the bank Angie, would banks is increasing digital modern there is

experience. The we need you. Alkami, you modern give to we we looked that able not customers at second user be afford time decide to afford afford can't our we to because we couldn't This time a

that bank. our user So banks important that because think seeing I will our that's a that really, experience is the that D&A, to D&A think a a it tailwinds user for have really a been we're great is us in realization provide to I other great thing build has experience. been And

on to And, to Are a Obviously, It I banks at one that up based cost some kind grabs and of tab sense. maybe more curious see opportunity just seeing I'll be that versus just it want beginning beginnings there, breed of breaks you this guys. way. a your lot when year. if RFPs big leave on solutions commentary, makes more the the you little best is in for full platform starting you're your inertia focused Yeah, all? having question. bit we're since indications each of But versus, said Thanks. like, that, on such. that more down sounds potentially of any seeing at

think the you third only most the thing probably half. Bryan last pipeline two-thirds half which point unions, it's the back a the of to right through comment would, was credit was and year, I now just I thing to made, would only banks, I yeah, and is that closer

we have So evidence that objective that right now. I think the

of roughly times we Right. And, we competed number in that XXXX in in competed the in bank two XXXX. opportunities

we're we're continues we to our that that deals, competing more retail rising rising will banking. pivot that banks. business opportunities platform that saying These towards pipeline It's continue not just business suspect real full actual pipeline and So and banking now are, for in.

We ahead. Mayank from Needham. Tandon will question please Mayank, a from go now have

ARPU 'XX; the think still dip and at decelerate trying for Sam this quarter to user taking questions year Hey from but the this the growth because, for this revenue for growth strong in should touch XX%, balance we year. between is about gains some a and so should to did ask on growth it and today. the here. nice just was get guys, into ARPU results Thanks question and obviously think how we Wanted about to how sequentially, Thanks. that on Mayank color algorithm

the we X% algorithm that five think X%, the Yeah, way growth. per revenue to user growth about is

through the came much the inorganic sale with from But for was Half XX%. was existing than higher cross having as a X% the so be just clients. quarter well an of, segment that This average acquisition, of RPU clients onboarding really would company as component. activity the other

growth. implementing clients which new logos So change, we from backlog growing. of that clip XXX,XXX we'll other growing that'll come clients at from will a And our our this about just user And come XX% month. means year. the don't a that to digital think generally will suspect users half roughly be a We half of XX our that

it. Got

Did you have give just contribution quarter that that's for q Yeah, quick I in you Okay. missed? that last the them then segment guys think gave Because year. item. And year helpful. guys of quarter. one housekeeping might you this one March this for Last I acquired

yeah, So

million adjusted them. and we point April in Segment $X we guidance added our acquired We, at which in the

remainder XXXX the million revenue in So $X $X came for and that of Segment right of million contribution. at

Our next question Charles, comes go from please ahead. from Stephens. Charles Nabhan

afternoon, taking thank my for you Good and question.

a couple me. from Just quick ones

your expectations or revenue? on any impact for in First, M&A next growth does the year environment for the user deceleration have the

is So the user coming organically. our growing us clients, from for growth generally

We consolidation. have some benefited from

which XXXX. a In significant February users a renewal was in and merger, a XXXX, in of a fact, level of it's going result bring at in a of had we to number January

benefit but organic do from financial growth we So, the generally institution. more within from it's that,

it. Got

Is these curious where Is you, above? getting where What your but service? union the the you're new So specifically hear it's is winning positive terms just you're good it some curious where to banks clients, where constructive your of are technology, in curious on see commentary, specifically. feedback just your is -- here from and I'm it in RFPs. market from it you're you I'm and just at winning the credit all differentiating very

customer reasons provide they number to a one why great commitment The a for experience have consumer. are, Alkami a chooses Yeah. user their

We by rate the top at continue the to of market that's of that's understood store known app the on experience user at in scores app scores very the buyers.

provide a my with platform a you capitalists allows technology allows I Are modern experience? so, consumers products great their can user is, so customers have And you that last spent by XX to that are venture or thing FinTech consumers $XXX has me, And want. other the on created innovate? to months in that our a starts it system on billion count the come you on understand Do are you that performant you available on? secure

and wants into product to they so consumer use And want banking? can to take that it my I digital integrate a my understand,

would work an to are banking down is, that they seven, there's with platform. then focused not into to an a important intangible And you eight, able digital be earth we're of kind just customers, approachable call, I nine to What our all really, begin relationship. to but a application, one that's that customer humble, understand that which because they're is to really that's going that's getting year company

looking organization. product They're long-term with actually A the I headquarters they're visiting XX, alchemists that with a into of of Because days across are year's customers getting company. a our use. said, the worth just not with for will XX at like a a understand lot they make to spend a multiple different relationship buying one decision

a make things, to the Alkami make So for those decision those when to reasons. decision a are they people buy buy Alkami,

color. I sneak on the that quick revenue how advance should appreciate last for touched in think segment I of one one, it. And Segment Got component the rate apologize base growth the this, over and next if could but about year? you if the we in

but provided do had haven't Segment we of go they lot as so, acquired XX and relationships, those relates market. excitement April it from prior client us motion specific came to of it we new XX on So segment standard to created or them. their to XX acquiring have since those market in Segment, Segment, of that where a the in outlook confidence is we

couple opportunities of including gaining into we momentum logo new quarters the a and as and as started XXXX, quite well of bit our Over segment cross-selling back last base. of

early and contributor in our we to very, expansion. a of there, we're innings the significant traction So gaining be to RPU the, very to continue Segment fairly expect

Got guys. it. caller you. appreciate Thank the I

KBCM. question comes ahead. go from next from Josh Josh, Our please Beck

on guys, Hey have Josh. you for Maddie

on say to granularity quarter and the you're giving wanted guidance thank all the in for Just you it's helpful. been super

terms healthy question. are total first guys about that the implementation for thinking opportunity penetration timeline the mentioned, and of the Just you're is my in market how that at you backlog you

the there second thinking that are scaling going the basis mentioned should any XXX forward? you Obviously question about cutting from how guys just expansion be points expansion. you we cost all take? my that additional initiatives is, of or And revenue Should naturally margin Thanks. come to need

the take one. I'll first Yeah,

have let, of we second, innings the I'll would let talk touch I'll say market. We, Bryan don't in so gross we're expansion. We margin Bryan to I'll kind early pretty really, a the but Let that. cost initiatives, we think so of start with cutting I really large

The of registered said XXX by think I small owned is be and mega we of of plus those at overall XX we're million users. that users, a third market a half and credited number mega banks which a live might unions. million

TAM pretty And about a large being that think expansion. legacy Bryan And experience. that being and are margin has in go of talk a of so if you a just We we two we're pretty of everybody market not those days banking I'll significant a that thirds great already of platforms banking kind very with digital is platform after. digital that market a number like early where fragmented let can gross of on users feel

to before market just gross the I And to move on penetration. back margin expansion, Yeah.

we're the overall today in so So, penetrated market. X%, less than X%

where at, than banking our but mentioned more in platform. of Alkami's users adding penetrated it's, Alex the market at the it's the certainly any most to space to is as As, level provider the digital Alkami digital other higher than banking, digital

on So in a four there's pace not over no users where market have next today. which three we're the based users adding doubled we the would years, reason see to why opportunity we our

for can extensible we, quickly innovation innovation today. the provides and market added that flexibility a we sits where think we and an So is be issue, platform there's and which saturation through don't Alkami feel market is hungry

From have on a to of provided margins today cutting We're achieve point platform profile. gross invest comments gross ability going our in to as to bit quite more constructive I a Alex's narrative to margin to our But products our my we're to to continue to add We're margin our efficiently, margin. platform provide platform. costs. as prepared scale will which clients through more our in perspective, going the gross investing not to our well

will leverage d the we're operating mentioned how also impact our this. through our gross other we'll doing can while All while words, gain I renewals that. In leverage r also spend and margin.

point clients renew we to level, the basis a unit XXX success a So achieve we very which at gross basis expansion at renewing economic a client, at level. high margin we contract a when have rate XXX point

an to leverage that addition able that, economies some be near kind an And we'll restructuring area provide party as the of our will expansion. XXXX. digital we that's in then those that's Alkami. finally to add arrangement of platform, But continue our continue related in IP users more had to suspect margin to partners, third QX where we to in scale we term to success that And gross to arrangements revenue areas us

wondering credit kind between I if IT in, general? of IT banks willingness you maybe unions XXXX Awesome. one that budgets I just looking the sneak additional appreciate versus towards one of any on spend last And in If guys color. could are differences seeing

IT full obviously the the is the of bank credit Yeah, conversations that's spend, their innovation scrutinizing they environment talk stack mandatory so is have IT them. stack heard the but and presidents of their you've where and digital channel, union they're budget with that me their an prioritize full this banking a, right that because I that about and understanding a for CEOs of

channel. be of that bank's IT so don't there but the of be shaving. on imagine on that banking, far other digital banking But I digital they we the fringes to in that the So, would not industry stack full a could other a banking that any want than seen things would speak have budget investment for digital I

ahead. Ravens J from from We Patrick go question have Patrick, p a please m

for Patrick, question good on for thank you taking on and results of the the the quarter. Owen congrats is this This in for

wondering the a kind on So of the, questions effect logo its was previous two on versus of combining net little on two gross new margins. of the I additions add-on versus more

of gross business different about you lines guys do and considering think of do the philosophically pursuing margin? going effects kind its you two on And those guys how how

that we I'll about of that product out company about a like, want we effect. they're when think where think the sales. half logos growth getting with shape answer their add-on half new new and it's ought Bryan people let into look, would TCV the got a software growth and start people with future that enterprise about, TCV from SaaS company a from their you talked do that's when to healthy I business business their of to saying

a professional and understanding customer account row that to and where with business front into what their they're time relationship how really is has you've real are, their customer their about acquired you've a banking the gives and team engaged that and what have us is a platform, good insight customer, By would that got areas digital with a thinking seat a invest. they priority

we we should allows that build gives that's acquisitions that back partnerships us, that us cycle make. the virtuous product kind that or feeds so have or into and then a products that organization And we management of our the viewers should the should

investment half So, team really their a the software your we in where product a into with good their priorities gives a really SaaS your you success It's healthy all, got you've think team end management if customer organization. and that's about TCV great from and coming that sales. And enterprise of team you've company. account then really new mind, these the sales got of between about add-on feedback first begin of, are, insight good with customers

the So general. that's about how in business we think

Let about impacting we in it how Bryan margin. about gross talk think the

most of one the mean less the today integrations that implementation launch logo on important to add-on the average order that occur sale logo is the from And sales. XX by system in Alkami in and for has effort perspective. new effort sale platform a an an new significantly maybe the add-on from even The, Yeah. I implementation process. A the couple what is benefits is add-on first

some still complication is There, there.

it's integrations margin profile. of the helps to results in implementation However, cost that gross terms occur the a, those integrated been able which lower once platform has a effort leverage that in

an revenues speed is order going go much from revenue Secondly, to the quicker. add-on to sale,

sales, success having and extent So to that organic add-on to profile. we're our growth acceleration it the can an be

Great. Thanks so And for it much that's for that. me.

Q&A End of

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