Alkami Technology, Inc. (ALKT) Earnings

Management highlights

• Strategic Progress & 5-Year Goal Update - Alchemy's 2022 5-year goal to reach $500 million in annual revenue and $100 million in adjusted EBITDA as a leading digital banking platform for regional/community financial institutions is now within reach and incorporated into 2026 full-year guidance. - The bank market expansion strategy has advanced from establishing credibility to operationalizing and scaling successful go-to-market: bank awareness of Alchemy increased from 37% to 52%, consideration increased from 8% to 21%; 18 of 28 required treasury management capabilities have been delivered, with 6 more planned for H2 2026 beta/GA launch; Alchemy now supports implementations across 9 bank cores covering most of the target market, and average bank implementation time has fallen from over 13 months (2023-2024) to under 11 months in 2025; half of implementation personnel now have dedicated bank market expertise. • Customer Expansion Growth Model - Expansion within the existing client base is now the highest visibility, highest margin source of future growth, as new logo contribution is range-bound: 5-year customer cohorts have grown to more than twice their original ARR, 10-year cohorts have grown to approximately 4x original landing ARR; the number of clients with $2 million or more in ARR increased from 18 in 2022 to 50 in Q2 2026. - Average products per client at launch increased from 10 in 2021 to 16 in 2026, and revenue per user (RPU) grew from $13.68 in 2021 to over $21 today, with all growth driven by additional product purchases rather than company-wide price increases. • Long-Term Strategic Priorities - Alchemy is building toward becoming the trusted regulated AI workflow and intelligence layer for community financial institutions, leveraging its existing expertise in regulated banking workflows, client integrations, proprietary data, and established trust across 1,000+ financial institutions; an internal AI prototype is currently tested by 100+ employees to identify measurable value before client launch. - Additional strategic investments include expanding the lending platform and point-of-sale integration capabilities for existing third-party loan origination systems to increase addressable market, and building specialty account opening functionality for large bank clients to boost client revenue.

Guidance

• Q3 2026 guidance: Revenue is expected between $132.7 million and $134.2 million, representing 17.5% to 18.9% year-over-year growth. Adjusted EBITDA is expected between $23.5 million and $24.3 million, with a 17.9% margin at the midpoint. • Full year 2026 guidance has been updated to $528 million to $531 million in total revenue (19% to 19.7% year-over-year growth) and $96 million to $98 million in adjusted EBITDA (18.3% margin at the midpoint), bringing the 5-year 2022 target into the current year's plan. This represents approximately 500 basis points of full-year adjusted EBITDA margin expansion. • Full year 2026 expects gross margin to exit the year nearing 65%, with back-half 2026 adjusted EBITDA margin above 19%. 2026 ARPU growth is guided to mid-to-high single digits, down slightly from prior high single-digit guidance due to post-acquisition normalization, and stock-based compensation is expected to be less than 14% of revenue. • Long-term guidance reaffirms the target to reach Rule 45 by 2030, with annual adjusted EBITDA margin expansion of ~300 basis points, non-GAAP gross margin approaching 70% over time, and stock-based compensation declining to ~10% of revenue. The long-term framework assumes annual dollar churn of 2% to 3%, with half of churn related to digital banking clients.

Segment performance

Alchemy Technology reports financial results aggregated for its digital banking and related platform business, with disaggregated growth highlights for key product lines: 1) Core Digital Banking Platform: Total exiting Q2 2026 ARR is $512 million, growing 21% year-over-year. Annual digital banking ARR attrition is less than 1% over the past three years. There are 54 contracted bank clients and 42 live bank clients on the platform, with banks representing nearly 30% of 2026 digital launches. Total registered users reached 23.6 million, growing 13% year-over-year, with 2.7 million new users added in the trailing 12 months. 2) Digital Sales and Service Platform (DSSP): 55 clients are currently contracted for all three DSSP products, representing just under 15% of Alchemy's total customer base of 313. New logo implementations in 2026 that include DSSP are on track to onboard at nearly double Alchemy's overall average ARPU, driving higher quality revenue with improved contract value, duration, retention, and onboarding ARPU. 3) AI-enabled existing products (behavioral biometrics, unified messaging, predictive marketing): These products are growing nearly 30% year-over-year, contributing disproportionately to overall company growth.

Risks & headwinds

No new material risks were disclosed on the call. Management noted that forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from projected outcomes, and directed investors to review the full list of risk factors in the company's latest 10-K filing. Key known risks include the length of bank implementation cycles, slower-than-expected client adoption of new products like DSSP and AI capabilities, and competitive pressures in both the bank and credit union segments.

Analyst Q&A

• Q: With DSSP launched a year ago driving higher new client average selling prices, will this create harder year-over-year comparables for the back half of 2026 or 2027? How much untapped DSSP demand remains? /

  A: Management does not expect harder comps, because most DSSP clients sold to date remain in the onboarding backlog and have not yet been recognized as revenue. Only ~15% of Alchemy's total customer base has purchased all three DSSP products, leaving a large existing installed base for continued cross-sell growth, so no difficult comps are anticipated.

• Q: How can AI reduce the lengthy digital banking implementation timeline, and what realistic improvements can be expected over the next few years? /

  A: AI has already delivered measurable efficiency gains: the customer experience group as a share of revenue fell from 16% in 2021 to nearly 11% today, with most of that reduction driven by early large-scale AI adoption in the group. This efficiency gain has already shortened effective implementation timelines, with additional incremental gains expected as AI is deployed across more implementation and operational functions.

• Q: Given recent sideways movement in the number of banks moving from backlog to live launch, when should we expect acceleration in bank market growth, and what has Alchemy learned from its bank expansion efforts? /

  A: Alchemy has grown from 3 live bank clients four years ago to 54 contracted and 42 live banks today, which is already strong progress for a new market built from scratch. Management is guiding for gradual, conservative annual growth in new bank logos (increasing by a couple per year in planning), with a long-term target of a 50/50 mix of new bank and new credit union logos, with no expectation of dramatic one-quarter acceleration. Bank win rate has improved through the first half of 2026, with a qualified pipeline that is already half bank and half credit union.

• Q: What is Alchemy's plan for excess cash as profitability and free cash flow margins improve? /

  A: Alchemy maintains a balanced, disciplined capital allocation approach: it will continue opportunistic share repurchases under the existing $100 million program (having already repurchased $25 million in Q2 and early Q3), will prioritize debt reduction to strengthen the balance sheet, and will continue pursuing selective acquisitions to support long-term growth, with current focus on integrating the prior Mantle acquisition and rolling out DSSP.