Alkami's Digital Banking Play: Why Clearwater's Adoption Signals a Fintech Infrastructure Boom

The financial services industry is undergoing a seismic shift. As digital-first banking becomes the norm, credit unions and regional banks are racing to modernize their tech stacks—and Alkami Technology (NASDAQ: ALKT) is positioned to capitalize. The recent adoption of its platform by Clearwater Credit Union, Montana’s largest community development financial institution, underscores a critical inflection point: scalable banking technology is no longer optional. It’s a lifeline for institutions seeking to compete in a world where every customer touchpoint is digital. For investors, this is a call to action—a chance to bet on a company at the epicenter of fintech infrastructure’s next wave of growth.

The Clearwater Case Study: A Blueprint for Digital Transformation

Clearwater’s decision to adopt Alkami’s platform is a masterclass in strategic tech investment. With $1.2 billion in assets and 65,000 members, the credit union faces a paradox familiar to its peers: how to serve a growing membership without expanding costly physical branches. Alkami’s solution? A unified digital banking platform that operates as a “top-tier digital branch,” available 24/7. By leveraging Alkami’s Data & Marketing Solutions, Clearwater can now analyze transaction data to anticipate members’ financial needs—whether saving for a home, managing debt, or planning retirement.

This move isn’t just about convenience; it’s about profitability. Deborah Colby, Clearwater’s CMO, calls the platform a tool to “walk alongside” members, fostering loyalty through personalized service. For Alkami, this partnership serves as a case study in how its SaaS model generates recurring revenue while enabling clients to deepen customer relationships. The credit union’s reliance on Alkami’s API integrations to connect with third-party fintech providers further highlights the platform’s scalability—a critical advantage as institutions seek to offer omnichannel banking.

The Financials: A SaaS Engine in Overdrive

Alkami’s Q1 2025 results validate its position as a leader in fintech infrastructure. Let’s parse the numbers:

• Revenue Growth: GAAP revenue surged 28.5% year-over-year to $97.8 million, with ARR hitting $404 million (+33% Y/Y). This recurring revenue model ensures steady cash flows, a hallmark of SaaS dominance.
• Margin Expansion: Non-GAAP gross margins rose to 64.3%, up from 61.7% in Q1 2024. As scale advantages compound, margins will continue to improve.
• User Growth: 20.5 million registered users (+12.8% Y/Y), with revenue per user jumping 18% to $19.74. This reflects both net user acquisition and cross-selling of add-on services to existing clients.

The recent acquisition of MANTL, a digital onboarding specialist, adds strategic depth. While it incurred a short-term EBITDA drag in Q1, MANTL’s projected $60 million in ARR by year-end 2025 signals long-term value. Alkami’s integration of MANTL’s technology into its platform creates a flywheel effect: smoother onboarding drives faster client activation, which in turn boosts retention and upsell opportunities.

Why This Is a "Buy" Now: Sector Tailwinds and Defensible Moats

The Clearwater deal isn’t an outlier—it’s part of a structural shift. Regional banks and credit unions, which collectively hold $8.3 trillion in U.S. assets, are under relentless pressure to modernize. Their legacy systems are costly to maintain and ill-equipped for digital-native customers. Alkami’s platform addresses this pain point head-on, offering:

1. Scalable Infrastructure: A single, unified platform reduces IT complexity and costs, while enabling institutions to compete with megabanks.
2. Network Effects: More users mean more data, which powers personalized financial wellness tools. This creates a virtuous cycle: better service → happier customers → stronger retention.
3. Defensive Cash Flow: SaaS revenue is sticky and predictable. With 33% ARR growth and a 64% gross margin, Alkami’s model is recession-resistant.

The Investment Thesis: A Prime Play on Financial Tech’s Future

Alkami’s stock has underperformed its peers in recent quarters, creating a buying opportunity. Consider the catalysts ahead:

• Market Share Gains: With 800+ institutional partners and a pipeline of credit unions and regional banks, the addressable market remains vast.
• Margin Upside: As MANTL’s integration matures, EBITDA accretion is likely by 2026.
• Regulatory Tailwinds: The Biden administration’s push for community banking modernization could accelerate demand for Alkami’s tools.

The risks? Execution on MANTL’s integration and competition from rivals like Fiserv (FISV) or Jack Henry (JKHY). But Alkami’s focus on mid-tier institutions—a segment underserved by larger players—creates a defensible niche.

Conclusion: Alkami’s Moment is Now

The Clearwater partnership isn’t just about one credit union; it’s a template for how fintech infrastructure providers can unlock value in a $12 billion digital banking software market. With its SaaS model, network effects, and secular growth drivers, Alkami is a rare stock that combines high growth with defensive characteristics. This is a buy for investors who want to profit from the digital transformation of finance—and who recognize that the institutions building the future of banking are already choosing Alkami.

Action Item: Consider initiating a position in ALKT now, with a focus on long-term appreciation as the digital banking boom accelerates.