Summary
Alkami Technology reported first quarter fiscal 2022 GAAP revenue of $44.8 million, up 34.7% from the prior-year quarter. Gross profit rose to $24.8 million, and gross margin improved to 55.4%, up 2.0 percentage points. Operating loss widened to $13.0 million, and operating margin slipped to negative 29.0%, down 2.2 percentage points. Net loss widened to $13.4 million. Diluted EPS was negative $0.15, compared with negative $2.00 in the prior-year quarter. The company is still losing money on a GAAP basis, and the loss grew even as revenue expanded.
Cash generation moved the other way. Operating cash flow was negative $8.3 million, down from the prior-year quarter. Capital expenditures were $0.3 million, up 56.7% from the prior-year quarter. The current portion of deferred revenue rose 19.3% to $8.0 million, and remaining performance obligations increased 26.9% to $662.3 million. Those contracted balances point to a larger backlog behind the reported revenue. On a non-GAAP basis, the Adjusted EBITDA loss was $3.6 million, compared with $6.1 million in the prior-year quarter, and non-GAAP gross margin was 58.3% versus 54.5% a year earlier.
Operating metrics kept climbing. Alkami exited the quarter with 12.8 million digital banking users, up 28% from the year-ago quarter, and Annual Recurring Revenue of $176.9 million, up 32.2%. Management said add-on sales accounted for over 40% of new sales, and that 40 new logos plus significant add-on sales orders in implementation represented $37 million in Annual Recurring Revenue. The company closed five new logos and renewed four clients during the quarter. It served 179 financial institutions through the Alkami Platform and over 150 clients through the ACH Alert and MK suites, which management described as 38.3% annual client growth since March 31, 2021. The average contract life was about 70 months, and the platform carried 230 integrations as of March 31, 2022. Two corporate actions followed the quarter. Alkami closed the acquisition of Segmint Inc. on April 25, 2022 for approximately $135.5 million. On April 29, 2022 it amended its credit agreement, adding a $40.0 million revolving facility, an $85.0 million term loan and an accordion feature of up to $50.0 million.
Guidance for the second quarter ending June 30, 2022 includes an Adjusted EBITDA loss in the range of $7.0 million to $5.5 million, alongside a GAAP total revenue range. For the full fiscal year ending December 31, 2022, the company guides to an Adjusted EBITDA loss in the range of $21.0 million to $18.0 million and a GAAP total revenue range. The outlook assumes the Segmint deal closes into the numbers, and management expects Segmint to contribute approximately $9.0 million of revenue and an Adjusted EBITDA range of $1.0 million loss to an immaterial positive amount for the full year. Segmint's annual recurring revenue under contract at December 31, 2022 is expected to land between $15 million and $17 million, which management frames as 30% to 50% growth over the same metric at December 31, 2021. The risk list is familiar for a high-growth software company. It includes a limited operating history and a history of operating losses, the ability to manage rapid growth, the ability to attract new clients and keep existing ones, merger integration work, and intense competition. Alkami also flags its dependence on the financial services industry, reliance on third-party software and services, security breaches, evolving regulation, and the possible need to raise more capital. Heavy stock-based compensation, which totaled $9.8 million in the quarter, remains a drag on GAAP results and a reason the gap between GAAP and non-GAAP profitability stays wide.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.8M | $42.4M | +5.5% | $33.3M | +34.7% |
| Gross profit | $24.8M | $23.1M | +7.2% | $17.8M | +39.7% |
| Gross margin | 55.4% | 54.5% | +0.8 pp | 53.4% | +2.0 pp |
| Research & development | $14.2M | $12.9M | +9.7% | $10.9M | +29.7% |
| Sales & marketing | $8.0M | $6.4M | +24.7% | $5.4M | +47.8% |
| General & administrative | $15.7M | $16.9M | -7.0% | $10.4M | +50.9% |
| Total operating expenses | $37.8M | $36.2M | +4.6% | $26.7M | +41.6% |
| Operating income (loss) | -$13.0M | -$13.0M | +0.1% | -$8.9M | -45.5% |
| Operating margin | -29.0% | -30.7% | +1.7 pp | -26.9% | -2.2 pp |
| Net income (loss) | -$13.4M | -$13.3M | -0.4% | -$10.9M | -23.2% |
| Net margin | -29.9% | -31.5% | +1.5 pp | -32.7% | +2.8 pp |
| Diluted EPS | -$0.15 | -$0.21 | +$0.06 | -$2.00 | +$1.85 |
Risks
Alkami's growth depends on winning competitive takeaway deals from financial institutions, and a typical sales cycle runs roughly three to 12 months with an implementation period of six to 12 months afterward. The company states its future success will significantly depend on its ability to continue to grow its FI client base, while the MD&A lists the unpredictable and time-consuming nature of its sales cycles among factors that could cause actual results to differ.
The company relies on the financial services industry as the source of its revenue, serving 179 FIs through the Alkami Platform as of March 31, 2022 plus over 150 clients through the ACH Alert and MK suites. Adoption, renewals and per-registered-user pricing all move with conditions inside that single vertical.
Total stock-based compensation expense rose to $9.8 million for the three months ended March 31, 2022 from $1.4 million in the prior-year quarter, and the quarter's cost increases were driven largely by personnel-related cost growth across cost of revenues, research and development, sales and marketing and general and administrative. The company flags retaining its management team and key employees and recruiting and retaining new employees as a risk to meeting its guidance.
Cost of revenues for the three months ended March 31, 2022 included $1.9 million in higher costs of third-party partners whose solutions Alkami resells as part of the digital platform, out of a $4.5 million total increase. The company identifies its integration with and reliance on third-party software, content and services as a factor that may materially affect forward-looking statements.
The company closed the Segmint merger on April 25, 2022 for aggregate consideration of approximately $135.5 million, its third acquisition following ACH Alert and MK, and general and administrative expense for the three months ended March 31, 2022 rose $0.7 million from acquisition-related expenses, net tied to Segmint transaction costs. Merger and acquisition execution is listed among the company's forward-looking risk factors.
Net cash used in operating activities was $8.3 million for the three months ended March 31, 2022, down $6.3 million versus the $2.0 million used in the prior-year quarter, driven by a $3.3 million net cash outflow from the change in net operating assets and liabilities primarily from a $2.5 million increase in accounts receivable and a $0.4 million decrease in deferred revenues. On April 29, 2022 the company entered an Amended Credit Agreement with an $85.0 million term loan and a $40.0 million revolver subject to a recurring revenue growth covenant and a monthly $10.0 million liquidity covenant.
The company states it continues to face significant uncertainty concerning the duration of the COVID-19 pandemic as well as the severity of any future infection surges, and notes that work-from-home measures created challenges in executing sales and implementations that have resurfaced due to renewal of certain actions and restrictions and which may be exacerbated if those measures are prolonged.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Adjusted EBITDA
Registered Users
Revenue per Registered User (RPU)
Annual Recurring Revenue (ARR)
Summary, forecast, risks and KPIs are extracted from ALKAMI TECHNOLOGY, INC.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.