Summary
Alkami Technology reported first quarter fiscal 2023 revenue of $60.00 million, up 33.9% from the prior-year quarter. Growth came from registered user gains, higher revenue per user and the Segmint acquisition, which closed in April 2022 and added $3.5 million. SaaS subscription services were 95.9% of total revenue. Gross profit rose 29.5% to $32.14 million, but gross margin slipped 1.8 percentage points to 53.6% as cost of revenues climbed faster than revenue.
Cost of revenues rose 39.4% to $27.9 million. That increase included $3.4 million of higher third-party partner costs, $1.1 million more for hosting and $1.0 million of added amortization of intangibles tied to Segmint. Personnel costs tied to headcount growth added to the pressure.
The bottom line moved the other way. Operating loss widened to $16.95 million, and net loss widened to $16.96 million. Diluted loss per share was $0.18, compared with a loss of $0.15 in the prior-year quarter. Operating margin improved 0.8 percentage points to -28.2%, helped by general and administrative expense that edged up just 0.4%. Research and development expense rose 45.2% and sales and marketing expense rose 37.7% as the company kept investing in product and go-to-market capacity. Adjusted EBITDA loss narrowed to $2.9 million from $3.6 million, and non-GAAP gross margin was 58.1%, close to the 58.3% reported a year earlier.
Operating metrics kept expanding. Annual recurring revenue reached $240.1 million as of March 31, 2023, up 35.7% from $176.9 million a year earlier. Registered users hit 15.1 million, up 17.9%, and revenue per registered user rose 15.1% to $15.88. The company closed six new logos and renewed three clients during the quarter. Add-on sales accounted for more than half of new sales. Management said 42 new logos and significant add-on orders were in implementation, representing $47.1 million in annual recurring revenue. Alkami served 206 financial institutions on its platform and more than 370 clients through the ACH Alert, MK and Segmint products.
Cash flow stayed negative. Net cash used in operating activities was $9.62 million. Capital expenditures were $0.23 million, down 18.8%. Deferred revenue, current portion, rose 23.0% to $9.85 million, and remaining performance obligations climbed 36.3% to $902.90 million, a backlog signal for future subscription revenue. Cash, cash equivalents and marketable securities totaled $185.4 million at March 31, 2023, against an accumulated deficit of $389.4 million.
Guidance for the second quarter ending June 30, 2023 includes an adjusted EBITDA loss of $4.5 million to $3.5 million. For the full calendar year ending December 31, 2023, management guided to an adjusted EBITDA loss of $6 million to $3 million. The company also issued revenue guidance for the second quarter and the full year, though it does not reconcile adjusted EBITDA to net loss because certain significant items are not available without unreasonable effort. The filing lists familiar risks: a history of operating losses, dependence on winning and retaining clients, long sales cycles, reliance on third-party software and hosting, intense competition, and cybersecurity threats. Management also addressed the banking turmoil of March 2023, saying it sees no exposure to loss from Silicon Valley Bank's receivership and no impact to liquidity or financing. The amended credit agreement requires liquidity of at least $15.0 million, and the company reported covenant compliance as of March 31, 2023.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $60.0M | $55.5M | +8.0% | $44.8M | +33.9% |
| Gross profit | $32.1M | $28.7M | +12.1% | $24.8M | +29.5% |
| Gross margin | 53.6% | 51.6% | +1.9 pp | 55.4% | -1.8 pp |
| Research & development | $20.5M | $20.4M | +0.9% | $14.2M | +45.2% |
| Sales & marketing | $10.9M | $9.0M | +21.0% | $8.0M | +36.1% |
| General & administrative | $17.1M | $17.1M | -0.1% | $15.7M | +9.2% |
| Total operating expenses | $49.1M | $34.2M | +43.7% | $37.8M | +29.8% |
| Operating income (loss) | -$16.9M | -$5.5M | -209.2% | -$13.0M | -30.3% |
| Operating margin | -28.3% | -9.9% | -18.4 pp | -29.0% | +0.8 pp |
| Net income (loss) | -$17.0M | -$4.9M | -245.3% | -$13.4M | -26.5% |
| Net margin | -28.3% | -8.8% | -19.4 pp | -29.9% | +1.7 pp |
| Diluted EPS | -$0.18 | -$0.05 | -$0.13 | -$0.15 | -$0.03 |
Risks
Net loss widened to $16.96 million in the quarter ended March 31, 2023 from $13.41 million in the prior-year quarter, and loss from operations widened to $16.95 million from $13.01 million, driven by continued investment in sales, marketing, product development and post-sales client activities. Gross margin also declined to 53.6% in the quarter from 55.4% in the prior-year quarter as cost of revenues rose 39.4%, outpacing revenue growth.
The March 2023 failure and receivership of Silicon Valley Bank, which was resolved when First-Citizens Bank & Trust Company assumed all of SVB's deposits and loans as of March 27, 2023, underscores stress in the banking sector that is the sole source of Alkami's revenue. Management states it does not believe it has exposure to loss from SVB's receivership, but the filing reiterates reliance on the financial services industry in the event of any downturn, consolidation or decrease in technological spend.
The MD&A flags client renewals as a key driver of revenue stability and long-term gross margin targets, yet Alkami recorded only three client renewals in the quarter ended March 31, 2023, compared with 22 for the full year ended December 31, 2022. Low renewal volume relative to the prior-year total highlights dependence on renewals to grow minimum contract value.
The Amended Credit Agreement matures on April 29, 2025 and carries a $85.0 million term loan plus a $40.0 million revolving facility, with interest at SOFR plus a margin of 3.00% to 3.50%. It requires an annual recurring revenue growth covenant of 10% above the prior-year corresponding four-quarter period and a minimum liquidity covenant of $15.0 million tested monthly. Total interest expense rose to $1.8 million in the quarter ended March 31, 2023 from $0.3 million in the prior-year quarter.
The MD&A describes a typical sales cycle of approximately three to 12 months followed by an implementation timeframe of generally six to 12 months depending on integration depth, making revenue timing unpredictable and dependent on competitive takeaway wins to grow the FI client base of 206 institutions as of March 31, 2023.
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 FY2023 (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.