Alkami Technology's Q3 2025: Contradictions Emerge on Implementation Timing, MANTL Integration, AI Use Cases, and Mantle Acquisition Impact

Date of Call: October 30, 2025

Financials Results

• Revenue: $113.0M, up 31.5% YOY; organic growth >20%
• Gross Margin: 63.7% non-GAAP, nearly +100 bps YOY (9M 64.4%)
• Operating Margin: Adjusted EBITDA margin 14.1% (Adjusted EBITDA $16.0M); operating expense 50% of revenue, ~360 bps operating leverage YOY

Guidance:

• Q4 2025 revenue expected $119.6M–$121.1M (midpoint implies ~22% organic growth)
• Q4 2025 adjusted EBITDA expected $16.1M–$17.1M
• FY2025 revenue guidance $442.5M–$444.0M
• FY2025 adjusted EBITDA guidance $56M–$57M (raise ~ $4M vs prior midpoint)

Business Commentary:

• Revenue Growth and Client Additions:
• Alkami Technology reported revenue of $113 million for Q3 2025, representing 31.5% year-over-year growth.

• The growth was driven by adding 10 new clients on its digital banking platform and 29 new clients for the Mantle platform, including six credit unions and four banks.

• Adjusted EBITDA Expansion:

• Alkami achieved an adjusted EBITDA of $16 million for Q3 2025, up from $8.3 million in the year-ago quarter.

• This expansion was due to improved operating leverage in R&D and G&A, and the implementation of new cost-saving measures.

• Mantle's Integration and Sales Growth:

• Since the Mantle acquisition, Alkami has seen 29 new clients for the Mantle platform, with 15 being existing Alkami clients.

• The strong performance is attributed to the integration of Mantle's onboarding and account opening solutions with Alkami's digital banking platform, leading to improved cross-selling capabilities.

• Operating Cash Flow and Cash Position:

• For the first nine months of 2025, Alkami's operating cash flow was $26 million, more than 2.5 times the year-ago period.
• The improvement is attributed to strong cash generation and the use of cash to reduce the revolver, maintaining a healthy cash position of $91 million.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted strong results: revenue +31.5% YOY to $113M, adjusted EBITDA $16M (14.1% margin), ARR exited at $449M and backlog/ARR of ~$67M; commentary on product wins, Mantle cross-sell, record implementations and raised FY EBITDA guidance supports a constructive tone.

Q&A:

• Question from Andrew Schmidt (KeyBank Capital Markets): Can you dig into the Q4 organic growth (any Mantle/inorganic impact) and comment on whether recent vendor disruptions benefit Alkami or change the competitive environment?
  Response: Organic growth is accelerating driven by implementation timing — management expects ~350k more users to be implemented in Q4 vs prior year; underlying demand remains healthy and community banks are increasingly willing to adopt best‑of‑breed platforms, with Mantle as a differentiator.

• Question from Patrick Walravens (Citizens Bank): Are financial institutions adopting AI/agentic tools and how is Alkami approaching AI use cases or building AI-enabled capabilities?
  Response: Every FI is experimenting with generative/agentic AI; Alkami already embeds AI in data/marketing and chat, is training an LLM on ~3M lines of customer-submitted code to enable prompt-based code creation, and has agentic banker pilots underway.

• Question from Zach (Barclays): Was the shift of implementations into Q4 due to a few customers or changing seasonality — how should we think about impact on revenue vs ARR?
  Response: Implementation timing is driven by client scheduling and modest seasonality (preferences for late Q1/early Q2 and post‑Labor Day to Thanksgiving), causing quarter‑to‑quarter revenue timing differences while bookings/ARR trajectory remains intact with a year‑end ARR step‑up expected.

• Question from Jacob Stephan (Lake Street Capital Markets): You referenced ~900 middle‑market institutions not on modern platforms — can you help segment the remaining opportunity and comment on low‑hanging fruit vs longer cycles?
  Response: Substantial runway remains: Alkami has 291 live online banking customers today and the target set (top 2,500 FIs excluding mega banks/super regionals) still includes >900 credit unions and nearly 1,000 banks not on contemporary platforms, many on multi‑year contracts so opportunity is multi‑year.

• Question from Jacob Stephan (Lake Street Capital Markets): What drove the sequential gross margin step‑down in Q3 — Mantle, cloud costs, or other items?
  Response: Sequential margin pressure was mainly from lower‑than‑expected third‑party IP fee revenue; despite that, gross margin expanded ~100 bps YOY and management expects to exit the year just under 65% gross margin.

• Question from Elyse Kanner (JPMorgan): What enabled the record number of implementations in Q3?
  Response: Services/product/engineering replicated best‑practice implementation methodologies and improved collaboration (plus scale at 20M+ users), boosting throughput to 13 new online banking implementations and multiple same‑day go‑lives.

• Question from Elyse Kanner (JPMorgan): What factors led to the backlog increase and what is its composition?
  Response: Backlog grew to ~1.7M digital users (from ~1.2M a year ago) driven materially by Mantle sales and add‑on bookings; Mantle is nearing its ~$60M ARR target and add‑ons/Segment attachments (~75% attach) raise ARR per new client.

• Question from Adam Hotchkiss (Goldman Sachs): How are cross‑sells and upsells tracking relative to historical trends and how do they contribute to upside vs visible revenue?
  Response: Excluding Mantle, cross‑sells represented just under 50% of new sales YTD (up ~4 percentage points vs 2024), ahead of plan and expected to accelerate as Mantle attachment increases.

• Question from Adam Hotchkiss (Goldman Sachs): From an innovation standpoint, what does Mantle bring — does it let Alkami pull forward strategic product initiatives?
  Response: Mantle delivers integrated onboarding/account opening capabilities and a high‑velocity product team, enabling seamless front‑end customer journeys and accelerating monetizable feature development across the combined platform.

• Question from Christopher Kennedy (William Blair): What drove the four new bank wins in the quarter — was it related to combining the sales forces or product capabilities?
  Response: Bank wins are driven by banks shifting toward best‑of‑breed: Alkami’s implementation track record, growing treasury management capabilities, and demonstrable product roadmap gave prospects confidence to switch.

• Question from Christopher Kennedy (William Blair): Can you update on Mantle's loan origination initiative and the go‑to‑market timing/opportunity?
  Response: Loan origination is in lighthouse client pilots; management will validate product‑market fit with those clients and decide late‑year/early‑next year before general availability — it is not yet a sellable GA product.

• Question from Jeff Van Rhee (Craig Hallum): Is Mantle's new‑client signing pace accelerating because of the Alkami tie‑up (e.g., are signings nearly doubling)?
  Response: Mantle is experiencing strong cross‑sell into Alkami’s install base because buyer alignment and existing relationships match well; early traction exceeds previous acquisitions' early performance, though management declined to project doubling.

• Question from Jeff Van Rhee (Craig Hallum): You cited ~$67M of ARR/backlog for implementation — why did that tick down sequentially despite strong signings?
  Response: The slight sequential tick reflects conversion of backlog to live revenue due to an unusually large implementation quarter (highest new online banking implementations), not weakening demand; strong implementation throughput reduced backlog.

Contradiction Point 1

Implementation Methodology and Timing

It involves changes in the implementation methodology and timing, which directly impact revenue expectations and company growth strategies.

Why did the Q4 revenue growth outlook decline slightly, and is this due to inorganic factors or Mantle-related issues? - Andrew Schmidt(KEYBANK CAPITAL MARKETS)

2025Q3: The downturn is due to the timing of implementations. In Q4, there will be close to 350,000 more users implemented compared to last year, leading to a 22% increase in organic growth, which is higher than Q3's. - Bryan Hill(CFO)

What can you share about the 39 new MANTL customers, including their integration progress and key insights? - Jeffrey Van Rhee(CRAIG-HALLUM CAPITAL GROUP LLC)

2025Q2: Our 80% of new implementations were bank-focused for the quarter, which as you know, has higher initial setup costs and tends to have larger user base sizes. - Alex Shootman(CEO)

Contradiction Point 2

MANTL's Integration and Cross-Sell Opportunities

It involves the integration and cross-sell opportunities of MANTL, which are critical for revenue growth and market expansion.

How are cross-sell and upsell initiatives performing compared to historical trends? - Adam Hotchkiss(GOLDMAN Sachs)

2025Q3: MANTL adds 30% to 40% of ARR to a new logo deal. For online banking new logos averaging around $800,000 of ARR, attaching MANTL results in 30% to 40% higher value. - Bryan Hill(CFO)

What insights can you share on the 39 new MANTL customers, including their integration and lessons learned? - Jeffrey Van Rhee(CRAIG-HALLUM CAPITAL GROUP LLC)

2025Q2: MANTL opens new accounts even with existing digital banking platforms. These customers are primarily into a bank or credit union with an existing digital banking platform. This integration provides new logo opportunities. - Alex Shootman(CEO)

Contradiction Point 3

AI Integration and Use Cases

It involves the role and development of AI in Alkami's product set, which can impact product innovation and market positioning.

Is AI-driven digital application development gaining traction in the market, and what use cases can enhance Alkami's product offerings? - Patrick Walravens (Citizens Bank)

2025Q3: AI use cases are popular, especially in areas like precise audience segmentation and chat products. Alkami is working on an AI-driven code creator and an agent-based banker capability to enhance client interactions across systems. - Alex Shootman(CEO)

What is your AI and machine learning strategy in consumer banking, and where do you see it driving value with market evolution? - Christopher Kennedy (William Blair)

2024Q4: We focus on the application side of AI and not the underlying algorithms or models because we can leverage existing libraries for common tasks like sentiment analysis, text generation, and data classification. - Alex Shootman(CEO)

Contradiction Point 4

Mantle Acquisition and Integration

It involves the impact of the Mantle acquisition on Alkami's business, which can affect strategic partnerships and market expansion.

How is the Mantle acquisition impacting new signings? - Jeff Van Rhee (Craig Hallum)

2025Q3: The acquisition is enhancing Mantle's success due to its alignment with Alkami's existing customer relationships and the demand for a highly intuitive onboarding product. - Alex Shootman(CEO)

What changes have been made to the Blackwell GPU, and how do they impact revenue and customer reactions? - Vivek Arya (Bank of America Securities)

2024Q4: Our vision is for our bank customers to have a seamless end-to-end digital banking experience. The addition of the Mantle platform enhances that vision. - Alex Shootman(CEO)