Alkami (ALKT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 25% year-over-year to $82.2M, driven by new clients, user growth, and ARPU expansion, with 18.6M registered users and eight new digital banking clients signed.

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

• Annual Recurring Revenue (ARR) reached $321.3M, up 25% year-over-year, with remaining performance obligations at $1.2B, up 26%.

• SaaS subscription services comprised 95% of total revenue, with strong add-on sales and client retention.

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

Financial highlights

• Non-GAAP gross margin expanded to 63.2% in Q2 2024 from 58.7% in Q2 2023; GAAP gross margin improved to 59.4% from 53.9%.

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

• Operating expenses were $47.8M (58% of revenue) with 520 basis points of operating leverage, mainly from R&D and G&A.

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

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

Outlook and guidance

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

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

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

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