Alkami (ALKT) Q2 Revenue Jumps 36%

Key Points

• GAAP revenue reached $112.1 million in Q2 2025, up 36.4% year over year and exceeding estimates by $2.09 million.

• Adjusted EBITDA grew to $11.9 million, over 25% above internal targets.

• Annual Recurring Revenue climbed nearly 32% year over year.

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Alkami Technology (NASDAQ:ALKT), a cloud-focused provider of digital banking platforms for financial institutions, delivered its earnings release for the second quarter of fiscal 2025 on July 30, 2025. The headline news was GAAP revenue of $112.1 million in Q2 2025, which rose 36.4% year over year (GAAP) and came in $2.09 million ahead of analyst estimates of $110.01 million (GAAP). Adjusted EBITDA reached $11.9 million, also topping management’s prior guidance. These results reflected strong performance in recurring revenue, user adoption, and effective integration of the MANTL acquisition. Despite continued transformation and margin progress, the company reported a persistent GAAP net loss. Overall, the period marked a step forward for Alkami thanks to GAAP revenue outperformance, growing product adoption, and operational improvements, though expenses and acquisition-related charges remained notable watch areas.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategy

Alkami Technology operates as a SaaS (software-as-a-service) company delivering digital banking platforms to regional and community banks and credit unions. Its cloud-based platform focuses on providing financial institutions with a single, scalable interface to serve users across banking products and channels. Alkami’s competitive edge lies in its true multi-tenant cloud architecture, making it easier for clients to integrate with over 300 real-time systems, covering everything from account opening and onboarding to data analytics and security.

The company’s recent strategy emphasizes expanding its product suite, integrating acquisitions like MANTL, and increasing the average number of products per client. Key success factors include seamless integration, recurring revenue from long-term contracts, and building a comprehensive digital banking ecosystem for clients. Management also targets growth by deepening client relationships and investing in global engineering resources, most recently through a new capability center in India.

Quarter Highlights: Financials, Operations, and Products

Alkami’s GAAP revenue rose 36.4% year over year, surpassing GAAP consensus estimates. With Annual Recurring Revenue (ARR) climbing nearly 32% compared to the prior year. Registered users, a central metric for the business, increased by 2.3 million over the past 12 months as of Q2 2025, totaling more than 20.9 million. Revenue per registered user also advanced 17%, reflecting greater adoption of additional products and the successful cross-selling efforts involving the MANTL acquisition.

Adjusted EBITDA, representing earnings before interest, taxes, depreciation, amortization, and certain non-cash expenses, rose sharply from the prior year’s quarter. Non-GAAP gross margin expanded by 1.9 percentage points.

Product innovation remained a focal point. With the MANTL acquisition now closed, Alkami added 23 new onboarding and account opening product wins—including three new digital banking clients and six cross-sell wins to existing clients. The company’s digital banking suite now features 34 products, and clients, on average, deploy 14 of them, indicating high levels of adoption. Success with account onboarding products is seen as key, given the priority regional and community banks place on streamlining new customer acquisition, as confirmed by management's direct client feedback.

One-time transactions during the period related mainly to the purchase and integration of MANTL, which caused cash balances to decrease and led to an increase in both balance sheet liabilities and assets. Higher operating costs, including stock-based compensation and R&D expense, also weighed on net margins. Alkami’s business model, with less than 1% annual churn in client relationships, continued to deliver stable recurring revenue, but observers should note ongoing GAAP net losses and increased leverage from recent financing activities alongside strategic investments.

Looking Forward: Guidance and Future Focus

Management issued guidance for the coming quarter and fiscal year. GAAP revenue is expected in the range of $112.5 million to $114.0 million for Q3 2025, and adjusted EBITDA is forecasted between $13.0 million and $14.0 million. The company reaffirmed its previous outlook for FY2025. Management projects GAAP total revenue to reach between $443.0 million and $447.0 million, with adjusted EBITDA (non-GAAP) forecasted in a $51.5 million to $54.0 million band. No major changes were made to the full-year forecast despite ongoing macroeconomic discussion in the sector.

Investors should watch several critical areas, including the continued integration of MANTL, cross-selling momentum, and the scaling of offshore engineering resources in India. Persistent GAAP losses, a higher cash burn in connection with recent M&A activity, and growth in expenses related to product and market expansion are important considerations for upcoming quarters. With the company’s revenue model still anchored in recurring, subscription contracts and strong client retention, the path to translating margin and scale gains into sustained profitability remains in focus for both management and shareholders.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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