What They Do
Alkami provides cloud-based digital banking software to community banks and credit unions, helping them compete with larger financial institutions through modern online and mobile banking platforms. They serve 301 financial institution clients with 22.4 million registered users, generating revenue through subscription fees and implementation services. The company recently expanded into digital sales and marketing through its MANTL acquisition, creating a comprehensive Digital Sales and Service Platform (DSSP).
Investment Thesis
**Strong recurring revenue model** — 95% of revenue is subscription-based with $480M ARR growing 35% YoY and $1.7B in contracted backlog (3.6x live ARR)**Successful acquisition integration** — MANTL integration driving 30% ARR uplift for DSSP clients, with 58% of H2 new deals including the full platform vs. just digital banking**Accelerating profitability** — Adjusted EBITDA margin expanded 530 bps to 13.3% in 2025, targeting 18.1% in 2026 with long-term "Rule of 45" goal by 2030Key Risks
**Margin pressure from technology costs** — Temporary database technology investments of "couple million dollars" impacting near-term profitability**Revenue headwind from fee changes** — 75% decline in termination fee revenue expected to reduce 2026 growth by several percentage pointsGrowth Story
Revenue grew 33% to $444M in 2025, with guidance calling for 18.5-19.6% growth in 2026 to ~$528M. Growth is driven by strong client acquisition (39 new logos in 2025), expanding into the bank market (50 banks now under contract), and cross-selling success with revenue per user up 20% to $21.44. The company is targeting continued double-digit growth through market share gains in the fragmented community banking software market.
Profitability Profile
Gross margins of 64.1% are expanding toward a long-term target of 70%, while EBITDA margins jumped from 8% to 13.3% in 2025. The company generated $34M in free cash flow and expects 90% FCF conversion from EBITDA by 2030. Management is guiding to 18.1% EBITDA margins in 2026, demonstrating clear operating leverage as the business scales.
Competitive Position
Alkami competes in the fragmented community bank software market against players like Q2 and Fiserv, with differentiation through comprehensive platform capabilities and strong client service. The MANTL acquisition created a unique end-to-end offering from account opening to digital banking, positioning them ahead of point-solution competitors. Their focus on mid-tier institutions ($1B-$50B assets) provides a sweet spot between smaller credit unions and enterprise banks.
Recent Momentum
Q4 delivered exceptional results with 35% revenue growth and $19M EBITDA beating consensus, driven by strong new client wins (16 in Q4) and successful cross-selling. The quarter demonstrated the power of the DSSP strategy with significant ARR uplifts for bundled clients. Management raised 2026 guidance above Street expectations, signaling confidence in sustained momentum.
What Wall Street Thinks
Analysts are increasingly optimistic following the strong Q4 beat and raised guidance, with 2026 EPS estimates of $0.81 suggesting continued confidence in the profitability trajectory. The successful MANTL integration and accelerating bank market penetration have addressed previous concerns about growth sustainability. Debate likely centers on the sustainability of current growth rates as the company scales.
The Bottom Line
Alkami is successfully executing a land-and-expand strategy in community banking software, with the MANTL acquisition proving to be a game-changer that's driving both growth acceleration and margin expansion while positioning the company for sustained double-digit revenue growth.
