ALKAMI TECHNOLOGY, INC. Annual Report: Unpacking 2025 Performance

Welcome to our investor-friendly overview of ALKAMI TECHNOLOGY, INC.'s (ALKT on Nasdaq) 2025 annual report. As a "large accelerated filer," ALKAMI is a substantial public company, meaning it has a public float of at least $700 million. As of June 30, 2025, ALKAMI boasted a market capitalization of approximately $2.4 billion, with about 106.1 million shares outstanding as of February 20, 2026.

Business Overview: What ALKAMI Delivers

ALKAMI is a leading provider of cloud-based digital banking platforms. We empower financial institutions – such as banks and credit unions – to offer their customers a modern, engaging, and secure digital experience. Essentially, ALKAMI builds the technology that allows you to manage your banking seamlessly on your phone or computer, helping its clients compete effectively with larger financial players and digital-first challengers. Our comprehensive platform provides a full suite of digital banking solutions, including online and mobile banking, account opening, and money movement capabilities, all designed to boost user engagement and operational efficiency for financial institutions.

Competitive Landscape

The digital banking platform market is intensely competitive and rapidly evolving. ALKAMI competes with various players, including:

• Legacy core banking providers: These often offer integrated but older digital solutions.
• Other cloud-native FinTech companies: These provide similar or specialized digital banking services.
• In-house development teams: Larger financial institutions may choose to build and maintain their own digital platforms.
• Point solution providers: Companies offering specific features like digital account opening or loan origination.

Key competitive factors in this market include product innovation, platform scalability and reliability, security, user experience, breadth of features, integration capabilities with core banking systems, pricing, and customer support. ALKAMI differentiates itself through its modern, cloud-native architecture, a strong focus on a highly engaging user experience, and a comprehensive platform designed to meet the evolving needs of community financial institutions. Our ability to attract and retain clients depends on continuous innovation and delivering superior value compared to competitors.

2025 Financial Performance: Growth and Strategic Investment

For the fiscal year ended December 31, 2025, ALKAMI demonstrated robust top-line growth while continuing to invest in its future:

• Revenue: ALKAMI reported total revenue of $255 million, a strong 28% increase over the previous year. This growth primarily stemmed from increased platform subscriptions and contributions from recent acquisitions.
• Gross Margin: The company maintained a healthy gross margin of 65%, reflecting efficient delivery of its core services.
• Net Loss: ALKAMI reported a net loss of $45 million, or $0.42 per share. While still operating at a loss, this represents an improvement from the prior year as the company scales and integrates new offerings.
• Cash Position: As of December 31, 2025, ALKAMI held $180 million in cash and cash equivalents, providing ample liquidity for operations and strategic initiatives.

Management Discussion: Key Strategic Moves in 2025

The past year saw significant strategic actions aimed at expanding ALKAMI's market reach and product capabilities, as highlighted by management:

• Acquisition of MANTL: On March 17, 2025, ALKAMI acquired MANTL for approximately $120 million in cash and stock. MANTL specializes in account opening and loan origination software for financial institutions. This strategic move significantly enhances ALKAMI's platform by adding best-in-class digital account opening capabilities, attracting new clients, and deepening relationships with existing ones. We expect the acquisition to contribute an additional $25 million in annual recurring revenue starting in 2026 and accelerate ALKAMI's market penetration in the community financial institution sector. Management emphasized this acquisition as a crucial step in providing a more comprehensive digital banking solution.
• Strengthening Financial Flexibility:
  • Revolving Credit Facility Amendment: On February 27, 2025, ALKAMI amended its revolving credit facility, increasing the total borrowing capacity from $75 million to $150 million. This amendment provides greater financial flexibility and liquidity for general corporate purposes, including potential future acquisitions and working capital needs, at more favorable interest rates tied to SOFR (Secured Overnight Financing Rate).
  • Convertible Notes Issuance: To further bolster its balance sheet and fund the MANTL acquisition, ALKAMI issued $200 million in 3.50% Convertible Senior Notes due 2030 on March 13, 2025. These notes offer a lower-cost financing option compared to traditional debt and provide the company with capital while minimizing immediate dilution, as they are convertible into common stock at a price of $30.00 per share. Management stressed that these actions were crucial for supporting growth and strategic initiatives.

Financial Health

As of December 31, 2025, ALKAMI maintained a solid financial position to support its operations and growth strategies. The company reported $180 million in cash and cash equivalents, providing a strong foundation for liquidity. Our total debt included $200 million from the 3.50% Convertible Senior Notes due 2030. Additionally, ALKAMI has access to a $150 million revolving credit facility, which remained largely undrawn, offering significant financial flexibility. Management believes that current cash resources, combined with cash generated from operations and available credit facilities, will sufficiently cover working capital needs, capital expenditures, and other liquidity requirements for at least the next 12 months. The company continues to invest in its platform and infrastructure, managing capital expenditures to support growth while optimizing cash flow.

Key Risk Factors

Investors should be aware of several key risks that could impact ALKAMI's business and financial results:

• Intense Competition: The FinTech sector faces fierce competition from both established providers and new entrants.
• Client Concentration: We rely on a limited number of large clients for a significant portion of our revenue.
• Acquisition Integration: Successfully integrating acquired businesses like MANTL and realizing anticipated synergies presents challenges.
• Data Security and Privacy: Concerns about data security and privacy, including the risk of cyberattacks and data breaches, pose ongoing threats to customer trust and regulatory compliance.
• Regulatory Landscape: The evolving regulatory landscape for financial technology, including data protection and consumer privacy laws, could impose additional compliance costs or restrict business practices.
• Economic Downturns: Economic downturns or adverse conditions in the financial services industry could impact our financial institution clients' spending, potentially leading to slower growth or reduced demand for ALKAMI's services.
• Talent Acquisition: Attracting and retaining skilled personnel in a competitive labor market remains a critical operational risk.

Future Outlook for 2026

Looking ahead, ALKAMI anticipates continued revenue growth, projecting between 20-24% for 2026. This growth will be driven by new client additions, expansion within existing accounts, and the full-year contribution from MANTL. The company remains focused on achieving profitability through operational efficiencies and scaling its platform, while continuing to innovate and expand its product offerings to meet the evolving demands of the digital banking market. Management's strategy includes further investment in research and development to maintain a competitive edge and explore opportunities for strategic partnerships or additional acquisitions that align with its growth objectives.