Summary
Alkami Technology closed fiscal 2022 with fourth-quarter revenue of $55.5 million, up 30.9% from the prior-year quarter. Full-year revenue was $204.3 million, up 34.2% from 2021. The top line grew at a similar pace to the prior year, but profitability remains under pressure. Fourth-quarter GAAP gross margin was 51.6%, down from the prior-year quarter. Full-year gross margin was 53.0%, down from 2021. Operating loss for the fourth quarter was $5.5 million, narrower than the prior-year quarter. Net loss for the quarter was $4.9 million, also narrower. For the full year, net loss widened to $58.6 million from 2021. Diluted loss per share for the full year was $0.64, narrower than the prior year. Adjusted EBITDA loss was $4.0 million in the fourth quarter, against $4.4 million in the prior-year quarter, and $17.6 million for the full year, against $22.0 million in 2021.
Operational momentum stayed strong. Alkami exited the fourth quarter with 14.5 million digital banking users, up 18% from the year-ago quarter. The company added approximately 2.2 million digital banking users in 2022, including approximately 800,000 in the fourth quarter. Annual recurring revenue was $226 million at December 31, 2022, up 34% compared with December 31, 2021. Management reported 37 new logos in 2022 and 22 client renewals during the year. The platform served 199 financial institutions as of December 31, 2022, with over 350 clients across the ACH Alert, MK and Segmint products. Alkami also pointed to more than 280 real-time integrations and an average contract life of approximately 70 months. SaaS subscription services represented 95.2% of total revenues for 2022. Research and development spend was 33.9% of revenues for the year. The company completed the Segmint acquisition on April 25, 2022, with aggregate consideration of approximately $135.0 million.
Cash generation remains the weak spot. Fourth-quarter operating cash flow was negative $13.7 million, down 13.0% from the prior-year quarter. Full-year operating cash flow was negative $37.8 million, down 30.5% from 2021. Capital expenditures were $0.09 million in the fourth quarter, down 62.8% from the prior-year quarter. For the full year, capital expenditures were $1.06 million, down 5.6% from 2021. The current portion of deferred revenue was $8.84 million at December 31, 2022, up 7.8% from the prior-year quarter. Remaining performance obligations were $893.4 million, up 37.0% from the prior-year quarter. That backlog gives some visibility into future revenue, though it does not change the near-term cash burn. The Amended Credit Agreement carries an annual recurring revenue growth covenant and a liquidity covenant of $15.0 million, tested monthly, plus an ARR growth test requiring recurring revenues in any four consecutive fiscal quarter period to be 10% greater than the matching period a year earlier.
Guidance points to continued growth but still no GAAP profitability. For the first quarter ending March 31, 2023, Alkami issued a GAAP total revenue outlook alongside an adjusted EBITDA loss in the range of $4.5 million to $3.5 million. For the calendar year ending December 31, 2023, the company issued a full-year GAAP total revenue outlook alongside an adjusted EBITDA loss in the range of $7.0 million to $4.0 million. The adjusted EBITDA targets still allow for losses as Alkami keeps investing in sales, marketing and product development. Risks cited in the filing include a limited operating history and a history of operating losses, the ability to attract new clients and retain and expand existing clients, long and unpredictable sales cycles, intense competition, reliance on third-party software and services, cybersecurity breaches and system disruptions, integration of acquired companies, regulatory compliance, and the ability to attract and retain key employees. Macro conditions that sway technology spend at financial institutions are another swing factor.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $55.5M | $53.4M | +4.0% | $42.4M | +30.9% |
| Gross profit | $28.7M | $27.6M | +4.0% | $23.1M | +23.9% |
| Gross margin | 51.6% | 51.6% | +0.0 pp | 54.5% | -2.9 pp |
| Research & development | $20.4M | $18.2M | +11.7% | $12.9M | +57.8% |
| Sales & marketing | $9.0M | $9.7M | -7.5% | $6.4M | +40.2% |
| General & administrative | $17.1M | $18.3M | -6.6% | $16.9M | +1.6% |
| Total operating expenses | $34.2M | $47.4M | -27.9% | $36.2M | -5.6% |
| Operating income (loss) | -$5.5M | -$19.8M | +72.3% | -$13.0M | +57.9% |
| Operating margin | -9.9% | -37.1% | +27.2 pp | -30.7% | +20.8 pp |
| Net income (loss) | -$4.9M | -$20.0M | +75.5% | -$13.3M | +63.2% |
| Net margin | -8.8% | -37.5% | +28.7 pp | -31.5% | +22.6 pp |
| Diluted EPS | -$0.05 | -$0.22 | +$0.17 | -$0.21 | +$0.16 |
Risks
Alkami reported a net loss of $58.6 million for FY2022, with operating loss widening to $57.7 million from $42.9 million for FY2021. MD&A attributes the loss to continued investment in sales, marketing, product development and post-sales client activities and expects losses for the foreseeable future.
Alkami derives all revenues from financial institutions, and the filing warns that consolidation, distress or decreased technology spend in that industry could materially hurt results. MD&A notes it served 199 FIs through the Alkami Platform as of December 31, 2022 and that future success depends on competitive takeaway wins.
The filing says a typical sales cycle can range from approximately three to 12 months, with implementation generally taking six to 12 months, making revenue timing unpredictable. MD&A states client wins are competitive takeaways and depend on product depth, technology and sales execution.
Risk factors state implementation challenges and client integration requirements can delay revenue recognition and in some cases revenue may never be recognized. MD&A reports deferred implementation costs increased $8.4 million in FY2022 operating cash flows as Alkami continued implementation spend.
Risk factors note that resold third-party services carry much higher cost of revenues and a mix shift toward them would hurt gross margin. Reported figures show gross margin declined to 53.0% for FY2022 from 55.1% for FY2021, down 2.0 percentage points, while cost of revenues rose 40.4%.
The Amended Credit Agreement includes an $85.0 million term loan and a $40.0 million revolver, with a recurring revenue growth covenant of 10% and a monthly liquidity covenant of $15.0 million. A default could allow lenders to accelerate debt, and variable SOFR-based interest exposes Alkami to higher rates.
As a financial technology provider, Alkami processes personal information and has been subject to attempted cybersecurity attacks; breaches could lead to regulatory investigations, litigation and client contract termination. Privacy regulation is expanding, including the CCPA and CPRA effective January 1, 2023, and GDPR fines.
Risk factors say the digital banking market is intensely competitive, with point solution and core processing vendors and possible new entrants such as cloud and search providers having greater resources. Competitive pressure could cause price reductions, reduced revenues and loss of market share.
Alkami completed the Segmint merger for approximately $135.0 million in April 2022 and risk factors warn it has limited experience acquiring businesses and may fail to integrate or achieve expected benefits. MD&A attributes additional costs and amortization to Segmint and records a $15.5 million gain on revaluation of MK contingent consideration.
The filing says success depends on CEO Alex Shootman and other key employees, and competition for software developers and executives is intense. Stock-based compensation expense rose to $44.6 million for FY2022 from $14.5 million for FY2021, increasing retention cost and sensitivity to equity value.
Alkami primarily serves clients from Amazon Web Services data centers and states it cannot easily switch AWS operations to another cloud provider. Disruption or interference with AWS could impair delivery, increase operating costs and harm client relationships.
Alkami has substantial net operating loss carryforwards, and Sections 382 and 383 could limit their use after ownership changes. A portion of NOLs will begin expiring in 2033 for federal and 2024 for state purposes.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Adjusted EBITDA
Registered Users
Revenue per Registered User (RPU)
Annual Recurring Revenue (ARR)
FI Clients (Alkami Platform)
Summary, forecast, risks and KPIs are extracted from ALKAMI TECHNOLOGY, INC.'s SEC filings for Q4 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.