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What changed in ALKAMI TECHNOLOGY, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ALKAMI TECHNOLOGY, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+410 added−337 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in ALKAMI TECHNOLOGY, INC.'s 2025 10-K

410 paragraphs added · 337 removed · 269 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+21 added−19 removed62 unchanged
Biggest changeOur clients choose the Alkami Digital Banking Platform to: • Onboard new registered users efficiently. • Engage registered users with self-service functions, proactive alerting and financial insights. • Grow revenues and registered users through new product and service offerings. • Guard registered user data and interactions to mitigate fraud. 7 Table of Contents We deliver this value proposition through the following 10 product categories, encompassing 34 products and more than 300 integrations as of December 31, 2024: • Digital Account Opening : Allows our clients’ customers to open new deposit accounts, including checking, savings, CD and Money Market accounts.
Biggest changeOur clients choose the Alkami Digital Sales & Service Platform to: • Onboard new registered users efficiently. • Engage registered users with self-service functions, proactive alerting and financial insights. • Grow revenues and registered users through new product and service offerings. • Guard registered user data and interactions to mitigate fraud across all solutions.
Our Platform and Ecosystem The Alkami Digital Banking Platform is a multi-tenant, single code base, continuous delivery platform powered by a true cloud infrastructure. Our platform integrates with core system providers and other third-party fintech providers, and acts as the primary interaction point among consumers, businesses and FIs.
Our Digital Banking Platform and Ecosystem The Alkami Digital Banking Platform is a multi-tenant, single code base, continuous delivery platform powered by a true cloud infrastructure. Our Platform integrates with core system providers and other third-party fintech providers, and acts as the primary interaction point among consumers, businesses and FIs.
We believe the review of this feedback has served to help us promote and improve our culture across our organization and has led us to create, implement or enhance a host of programs and initiatives: • embracing remote work and enabling our employees to do their best work from anywhere in the United States, allowing them to balance their work obligations with their personal lives; • learning and development programs that are designed to invest in the professional growth and continuous learning of employees and to cultivate leadership talent; • performance feedback and talent review programs designed to assess and identify areas for continued learning and training opportunities for employees and a succession bench for critical roles; • wellness, benefits and flexible time-off programs designed to assist employees and their families with maintaining physical and emotional wellbeing, while balancing the demands of being part of a high-growth company; • cohort programs that seek to identify and attract a broad pool of talent and offer opportunities for professional learning and potential future employment opportunities with Alkami; • employee committees focused on embracing our culture, inclusion, and belonging; and • charitable causes to help create opportunities for employees to join together to make a difference in the workplace and local communities.
We believe the review of this feedback has served to help us promote and improve our culture across our organization and has led us to create, implement or enhance a host of programs and initiatives: • embracing remote work and enabling our employees to do their best work from anywhere in the United States, allowing them to balance their work obligations with their personal lives; • learning and development programs that are designed to invest in the professional growth and continuous learning of employees and to cultivate leadership talent; • performance feedback and talent review programs designed to assess and identify areas for continued learning and training opportunities for employees and a succession bench for critical roles; • wellness, benefits and flexible time-off programs designed to assist employees and their families with maintaining physical and emotional wellbeing, while balancing the demands of being part of a high-growth company; • cohort programs that seek to identify and attract a broad pool of talent and offer opportunities for professional learning and potential future employment opportunities with Alkami; 12 Table of Contents • employee committees focused on embracing our culture, inclusion, and belonging; and • charitable causes to help create opportunities for employees to join together to make a difference in the workplace and local communities.
We believe the principal competitive factors for our solutions in the financial services markets we serve include the following: • alignment with the missions of our clients; • ability to provide a single platform for our clients’ consumer and commercial customers; • full-feature functionality across digital channels; • ability to integrate targeted offers for client customers across digital channels; • ability to support FIs in acquiring deposits with open API technologies; • SaaS delivery and pricing model; • ability to support both internal and external developers to quickly integrate with third-party applications and systems utilizing a SDK; • design of the client customer experience, including modern, intuitive and touch-centric features; • configurability and branding capabilities for clients; • familiarity of workflows and terminology and feature-on-demand functionality; • integrated multi-layered security and compliance of solutions with regulatory requirements; • quality of implementation, integration and support services; • domain expertise and innovation in financial services technology; • price of solutions; • ability to innovate and respond to client needs rapidly; and • rate of development, deployment and enhancement of solutions.
We believe the principal competitive factors for our solutions in the financial services markets we serve include the following: • alignment with the missions of our clients; • ability to provide a single platform for our clients’ consumer and commercial customers; • full-feature functionality across digital channels; • ability to integrate targeted offers for client customers and members across digital channels; • ability to support FIs in acquiring deposits with open API technologies; • SaaS delivery and pricing model; • ability to support both internal and external developers to quickly integrate with third-party applications and systems utilizing a SDK; • design of the client account holder experience, including modern, intuitive and touch-centric features; • configurability and branding capabilities for clients; • familiarity of workflows and terminology and feature-on-demand functionality; • integrated multi-layered security and compliance of solutions with regulatory requirements; • quality of implementation, integration and support services; • domain expertise and innovation in financial services technology; • price of solutions; • ability to innovate and respond to client needs rapidly; and • rate of development, deployment and enhancement of solutions.
We derive our revenues almost entirely from multi-year contracts for the Alkami Digital Banking Platform that have had an average contract life of approximately 70 months as of December 31, 2024. We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution.
We derive our revenues almost entirely from multi-year contracts for the Alkami Digital Banking Platform that have had an average contract life of approximately 70 months as of December 31, 2025. We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution.
Previously inconceivable, account opening, loan origination (and disbursement) and money transfers can now be executed within a matter of minutes, elevating digital user experience beyond branch location as the premier point of differentiation for our clients’ customers’ service and satisfaction. • Increasingly digital competitive landscape: The competitive landscape within banking in the United States and globally is shifting.
Previously inconceivable, account opening, loan origination and disbursement, and money transfers can now be executed within a matter of minutes, elevating digital user experience beyond branch location as a premier point of differentiation for our clients’ customers’ or members’ service and satisfaction. • Increasingly digital competitive landscape: The competitive landscape within banking in the United States and globally is shifting.
We believe this is critical to FIs as their models shift from physical to digital, enabling the creation of a digital community in the image of their broader brands and aligned with their strategic objectives. The Alkami Digital Banking Platform maintains more than 300 integrations as of December 31, 2024.
We believe this is critical to FIs as their models shift from physical to digital, enabling the creation of a digital community in the image of their broader brands and aligned with their strategic objectives. The Alkami Digital Banking Platform maintains more than 300 integrations as of December 31, 2025.
Consequently, the industry highly values platforms that mitigate much of this complexity with modern architectures that enable real-time integrations to all constituents of the digital banking ecosystem. • Focus on security: The increasingly interconnected and digital nature of finance renders FIs particularly vulnerable to cybersecurity attacks given the attractive nature of FIs as protectors of both capital and personal information.
Consequently, the industry highly values platforms that mitigate 5 Table of Contents much of this complexity with modern architectures that enable real-time integrations to all constituents of the digital banking ecosystem. • Focus on security: The increasingly interconnected and digital nature of finance renders FIs particularly vulnerable to cybersecurity attacks given the attractive nature of FIs as protectors of both capital and personal information.
These rapid advances are contributing to a substantial decline in bank physical branch traffic and a shift to digital banking platforms like Alkami’s as an FI’s primary channel of customer interaction. • Shift to the cloud: Today, many of the pillars serving as key differentiators across industries, including banking, stem from the benefits of cloud hosting and computing.
These rapid advances are contributing to a substantial decline in bank physical branch traffic and a shift to digital banking platforms like Alkami’s as an FI’s primary channel of account holder interaction. • Shift to the cloud: Today, many of the pillars serving as key differentiators across industries, including banking, stem from the benefits of cloud hosting and computing.
Cloud-based, multi-tenant infrastructures that are securely delivered enable technology providers to broadly distribute capabilities historically reserved only for the best resourced. Premier technology architectures can also leverage data that can be collected into a warehouse and quickly synthesized for consumption by clients in the service of their customers.
Cloud-based, multi-tenant infrastructures that are securely delivered enable technology providers to broadly distribute capabilities historically reserved only for the best resourced. Premier technology architectures can also leverage data that can be collected into a warehouse and quickly synthesized for consumption by clients in the service of their account holders.
New clients can be efficiently on-boarded, new client customers can be seamlessly added and product upgrades and updates can be delivered quickly. • Single Code Base: Our single code base is built upon a microservices architecture that leverages our multi-tenant model, compounding the efficiency of our infrastructure and software development lifecycle, regardless of the size, structure or complexity of the client.
New clients can be efficiently on-boarded, new client account holders can be seamlessly added and product upgrades and updates can be delivered quickly. • Single Code Base: Our single code base is built upon a microservices architecture that leverages our multi-tenant model, compounding the efficiency of our infrastructure and software development lifecycle, regardless of the size, structure or complexity of the client.
See “Risk Factors—Risks Relating to Our Intellectual Property, Software and Third-Party Licenses—Claims by others that we infringe upon, misappropriate or otherwise violate their intellectual property or other proprietary technology rights could have a material and adverse effect on our business, financial condition and results of operations.” Our Competition The market for digital solutions for financial services providers is highly competitive.
See “Risk Factors—Risks Relating to Our Intellectual Property, Software and Third-Party Licenses—Claims by others that we infringe upon, misappropriate or otherwise violate their intellectual property or other proprietary technology rights could have a material and adverse effect on our business, financial condition and results of operations.” 11 Table of Contents Our Competition The market for digital banking solutions for financial services providers is highly competitive.
Our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer penetration, incentivizing our clients to internally market and promote digital engagement.
Our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer or member penetration, incentivizing our clients to internally market and promote digital engagement.
The compliance of our solutions with these requirements depends on a variety of factors, including the functionality and design of our solutions, the classification of our clients, and the manner in which our clients and their customers utilize our solutions.
The compliance of our solutions with these requirements depends on a variety of factors, including the functionality and design of our solutions, the classification of our clients, and the manner in which our clients and their customers or members utilize our solutions.
While our original product suite was retail focused, as we enhanced our product suite to include greater depth of functionality for business banking in particular, we significantly expanded our addressable market as FIs increasingly seek a single digital banking platform for all their retail and business banking needs.
While our original product suite was retail focused, as we enhanced our product suite to include greater depth of functionality for business banking in particular, we significantly expanded our addressable market as FIs 10 Table of Contents increasingly seek a single digital banking platform for all their retail and business banking needs.
Our acquisition of ACH Alert brought an additional fraud prevention tool to our product suite. Segmint operates a marketing analytics and messaging delivery platform with patented software that enables FIs and merchants to understand and leverage data, interact with customers, and measure results.
Our acquisition of ACH Alert brought an additional fraud prevention tool to our product suite. Segmint operates a marketing analytics and messaging delivery platform with patented software that enables FIs and merchants to understand and leverage data, interact with account holders, and measure results.
This includes the ability to integrate with internal systems and the broader fintech ecosystem, modify and customize workflows, and elevate the look and feel of the Alkami Digital Banking Platform. Our Technology and Architecture Our platform is true cloud and entirely hosted and delivered on Amazon Web Services (“AWS”).
This includes the ability to integrate with internal systems and the broader fintech ecosystem, modify and customize workflows, and elevate the look and feel of our Platform. Our Technology and Architecture Our Platform is true cloud and entirely hosted and delivered on Amazon Web Services (“AWS”).
Our client success team is responsible for nurturing relationships holistically throughout the duration of the contract, ensuring that we understand their needs in real time and that our clients are deriving maximum value from the Alkami Digital Banking Platform.
Our client success team is responsible for nurturing relationships holistically throughout the duration of the contract, ensuring that we understand their needs in real time and that our clients are deriving maximum value from the Alkami Digital Sales & Service Platform.
We invested significant resources to build a technology stack that prioritized innovation velocity and speed-to-market given the importance of product depth and functionality in winning and retaining clients. In October 2020, we acquired ACH Alert, LLC (“ACH Alert”) to pursue adjacent product opportunities, such as fraud prevention and to expand our addressable market.
We invested significant resources to build a technology stack that prioritized innovation velocity and speed-to-market given the importance of product depth and functionality in winning and retaining clients. In October 2020, we acquired ACH Alert, LLC (“ACH Alert”) to pursue adjacent product opportunities, such as fraud prevention and to expand our addressable market. In April 2022, we acquired Segmint Inc.
Over the course of a client relationship, we seek to expand the number of products our clients embed within their digital experience as well as the digital penetration of the clients’ customer base. No single client represented more than 5% of our total revenues in the year ended December 31, 2024.
Over the course of a client relationship, we seek to expand the number of products our clients embed within their digital experience as well as the digital penetration of the clients’ customer or member base. No single client represented more than 5% of our total revenues in the year ended December 31, 2025.
The primary benefit of this model is to reduce the inefficiencies of traditional point-to-point integration strategies, instead offering a single point of integration allowing our clients’ customers to navigate seamlessly across channels.
The primary benefit of this model is to reduce the inefficiencies of traditional point-to-point integration strategies, instead offering a single point of integration allowing our clients’ account holders to navigate seamlessly across channels.
Our ability to grow revenues through deeper client customer penetration and cross-sell allowed us to increase annual recurring revenue from existing digital banking clients as of December 31, 2023 to 113% as of December 31, 2024 To support our growth and capitalize on our market opportunity, we have increased our operating expenses across all aspects of our business.
Our ability to grow revenues through deeper client customer or member penetration and cross-sell allowed us to increase annual recurring revenue from existing digital banking clients as of December 31, 2024 to 115% as of December 31, 2025. To support our growth and capitalize on our market opportunity, we have increased our operating expenses across all aspects of our business.
The key differentiators of the Alkami Digital Banking Platform include: • User experience : Personalized and seamless digital experience across user interaction points, including desktop, mobile, chat and SMS, establishing durable connections between FIs and their customers. • Integrations : Scalability and extensibility driven by more than 300 real-time integrations to back office systems and third-party fintech solutions as of December 31, 2024, including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening. • Deep data capabilities : Data synchronized and stored from back-office systems and third-party fintech solutions and synthesized into meaningful insights, targeted content, and other areas of monetization.
The key differentiators of the Alkami Digital Sales & Service Platform include: • User experience : Personalized and seamless digital experience across user interaction points, including desktop, mobile, chat and short message service (“SMS”), establishing durable connections between FIs and their account holders. • Integrations : Scalability and extensibility driven by more than 300 real-time integrations to back office systems and third-party fintech solutions as of December 31, 2025, including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening. • Deep data capabilities : Data synchronized and stored from back-office systems and third-party fintech solutions and synthesized into meaningful insights, targeted content, and other areas of monetization.
To remain competitive, we believe we must continue to invest in research and development, sales and marketing, client support and our business operations generally. Human Capital Resources As of December 31, 2024, we had 938 employees. We consider our current relationship with our employees to be good.
To remain competitive, we believe we must continue to invest in research and development, sales and marketing, client support and our business operations generally. Human Capital Resources As of December 31, 2025, we had 1,225 employees. We consider our current relationship with our employees to be good.
Item 1. Business. Overview Alkami is a cloud-based digital banking solutions provider. We inspire and empower community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States.
Item 1. Business. Overview Alkami is a cloud-based digital sales and service platform provider. We inspire and empower community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States.
We had 20.0 million, 17.5 million, and 14.5 million live registered users as of December 31, 2024, 2023, and 2022, respectively, representing a growth rate for one of our key revenue drivers of 14.2% from 2023 to 2024 and 20.4% from 2022 to 2023.
We had 22.4 million, 20.0 million, and 17.5 million live registered users as of December 31, 2025, 2024, and 2023, respectively, representing a growth rate for one of our key revenue drivers of 12.1% from 2024 to 2025 and 14.2% from 2023 to 2024.
The benefits of this infrastructure include resiliency, reliability and increased security; we achieved an average of 99.9% uptime in the year ended December 31, 2024. True cloud infrastructure is also remarkably scalable, allowing us to pursue our growth objectives without technological limitation.
The benefits of this infrastructure include resiliency, reliability and increased security; we achieved an average of over 99.95% uptime in the year ended December 31, 2025. True cloud infrastructure is also scalable, allowing us to pursue our growth objectives without technological limitation.
This speed and execution enables our clients to confidently grow and compete with many of the most technologically advanced FIs in the world. We synchronize, typically in real-time, the systems and modules into which we integrate while also accumulating a data warehouse that can be synthesized into actionable insights and business intelligence. FIs need access to accurate and complete data.
This speed and execution enables our clients to confidently grow and compete with many of the most technologically advanced FIs in the world. We synchronize, typically in real-time, the systems and modules into which we integrate while also accumulating data in the data lake that can be synthesized into actionable insights and business intelligence.
We have designed our solutions to improve our clients’ ability to achieve their core objectives, including new client growth, customer engagement, increasing and holding deposits, making loans, facilitating money movement and lowering overall operating costs. Importantly, we make our clients more competitive against the megabanks, challenger banks and other technology-enabled competitors.
We have designed our solutions to improve our clients’ ability to achieve their core objectives, including new customer or member growth, account holder engagement, increasing and holding deposits, making loans, facilitating money movement, protecting account holders, and lowering overall operating costs. Importantly, we make our clients more competitive against megabanks, challenger banks and other technology-enabled competitors.
On one hand, the megabanks continue to invest substantially in absolute terms to provide technology services to U.S. banking customers.
On one hand, the megabanks continue to invest substantially to provide technology services to U.S. banking customers.
Our Clients As of December 31, 2024, we served 272 FIs through the Alkami Digital Banking Platform and over 750 clients when including unique clients only subscribing to one or a combination of ACH Alert, MK or Segmint products. Our clients include community, regional and super-regional credit unions and banks across both retail and business banking.
Our Clients As of December 31, 2025, we served 301 FIs through the Alkami Digital Banking Platform and over 960 clients when including unique clients only subscribing to one or a combination of ACH Alert, Segmint, or MANTL products. Our clients include community, regional and super-regional credit unions and banks across both retail and business banking.
Cross-sell contributed 45% of total contract value (“TCV”) in 2024, highlighting our significant continued opportunity to grow within our existing client base.
Cross-sell contributed 54% of total contract value (“TCV”) in 2025, highlighting our significant continued opportunity to grow within our existing client base.
Across our clients’ customer base, the average registered user logged onto the digital application three times per week, in 2024, providing our clients more opportunities to engage with their customers than a physical branch-based relationship, further highlighting the motivation for our clients to promote client customer digital adoption.
Across our clients’ customer or member base, the average registered user logged onto the digital application three to four times per week, in 2025, providing our clients more opportunities to engage with their account holders than a physical branch-based relationship, further highlighting the motivation for our clients to promote client customer or member digital adoption.
We primarily go to market through an internal sales force. Given the long-term nature of our contracts for the Alkami Digital Banking Platform, a typical sales cycle can range from approximately three to 12 months, with the subsequent implementation timeframe generally ranging from six to 12 months depending on the depth of integration.
Given the long-term nature of our contracts for the Alkami Digital Banking Platform, a typical sales cycle can range from approximately three to 12 months, with the subsequent implementation timeframe generally ranging from six to 12 months depending on the depth of integration.
While technology is involved in almost every function a bank performs, we typically see FIs’ technology spend increase in response to, or in preparation for, the following trends: • Heightened user expectations: The digitization of everything from taxis, to food delivery, to commerce has conditioned consumers and businesses to maintain heightened user experience expectations that extend to financial services, particularly when it relates to everyday financial services, such as banking services.
While technology impacts nearly every function within a bank, we typically see FIs’ increase their technology investment in response to, or in anticipation of, the following trends: • Heightened user expectations: The digitization of everything from taxis to food delivery to commerce has conditioned consumers and businesses to maintain heightened user experience expectations that extend to financial services, particularly when it relates to everyday financial services, such as banking services.
In 2024 and 2023, we spent 28.8% and 32.0%, respectively, of revenues on research and development, underlining our commitment to ongoing innovation.
In 2025 and 2024, we spent 26.7% and 28.8%, respectively, of revenues on research and development, underlining our commitment to ongoing innovation.
We expect cross-sell to continue to contribute meaningfully to our growth. ◦ Customer penetration: While we recently achieved more than 20.0 million live registered digital banking users (“registered users”), we estimate this only represents 72% of our clients’ total customers as of December 31, 2024.
We expect cross-sell to continue to contribute meaningfully to our growth. ◦ Customer or member penetration: While we recently achieved more than 22 million live registered digital banking users (“registered users”), we estimate this only represents 73% of our clients’ total account holders as of December 31, 2025.
We offered nine products in 2015, and as of December 31, 2024, 34 products were available through the Alkami Digital Banking Platform. During 2024, our clients purchased an average of 14 products from us.
We offered nine products in 2015, and as of December 31, 2025, 36 products were available through the Alkami Digital Sales & Service Platform. During 2025, our clients purchased an average of 16 products from us.
Our acquisition of Segmint added unique data models and customer segmentation tools (Key Lifestyle Indicators or “KLIs”) to our platform's capabilities, enabling our clients to creatively segment and refine their marketing campaigns. • Data Insights: Enables clients to build internal analytical tools.
Our acquisition of Segmint added unique data models and behavioral data tags to our Platform's capabilities, enabling our clients to creatively segment and refine their marketing campaigns. • Data Insights: Enables clients to build internal analytical tools.
In addition to the intellectual property that we own, we license certain third-party technologies and intellectual property, which are integrated into some of our solutions. The efforts we have taken to protect our intellectual property rights may not be sufficient or effective.
Despite substantial investment in research and development activities, we have not focused on patents and patent applications historically. In addition to the intellectual property that we own, we license certain third-party technologies and intellectual property, which are integrated into some of our solutions. The efforts we have taken to protect our intellectual property rights may not be sufficient or effective.
Our total revenues were $333.8 million, $264.8 million, and $204.3 million for 2024, 2023, and 2022, respectively, representing growth rates of 26.1% from 2023 to 2024 and 29.6% from 2022 to 2023. SaaS subscription services, as further described below, represented 95.6%, 95.3%, and 95.2% of total revenues for 2024, 2023, and 2022, respectively.
Our total revenues were $443.6 million, $333.8 million, and $264.8 million for 2025, 2024, and 2023, respectively, representing growth rates of 32.9% from 2024 to 2025 and 26.1% from 2023 to 2024. SaaS subscription services, as further described below, represented 95.0%, 95.6%, and 95.3% of total revenues for 4 Table of Contents 2025, 2024, and 2023, respectively.
The modern bank robber is armed with no more than a computer and can attack from anywhere in the world, and consequently, FIs are constantly under threat.
The modern bank robber is armed with no more than a computer and can attack from anywhere in the world, and consequently, FIs are constantly under threat. For this reason, FIs are making substantial technology investments in cybersecurity and security more broadly.
We believe that the comprehensive integration among our solution offerings and our clients’ internal and third-party systems, combined with our deep industry expertise, including our domain expertise in retail and business banking, reputation for consistent, high-quality client support, pace at which we bring innovation to market, and unified cloud-based digital banking and SaaS solutions distinguish us from the competition. 10 Table of Contents With respect to our digital banking platform, we compete against a number of companies, including Candescent, Q2 Holdings, Inc. and Temenos AG in the online, consumer and small business banking space.
We believe that the comprehensive integration among our solution offerings and our clients’ internal and third-party systems, combined with our deep industry expertise, including our domain expertise in retail and business banking, reputation for consistent, high-quality client support, pace at which we bring innovation to market, and unified cloud-based digital banking and SaaS solutions distinguish us from the competition.
Privacy and Information Safeguard Laws In the ordinary course of our business, we and our clients using our solutions access, collect, store, use transmit and otherwise process certain types of data, including personal information (“PI”), which subjects us and our clients to certain privacy and information security laws in the United States and internationally, including, for example, the GLBA, CCPA and other state privacy regulations, and other laws, rules and regulations 12 Table of Contents designed to regulate consumer information and data privacy, security and protection, and mitigate identity theft.
In order to comply with our obligations under these laws, we are required to implement operating policies and procedures to protect the privacy and security of our clients’ and their customers’ or members’ information and to undergo periodic audits and examinations. 13 Table of Contents Privacy and Information Safeguard Laws In the ordinary course of our business, we and our clients using our solutions access, collect, store, use transmit and otherwise process certain types of data, including personal information (“PI”), which subjects us and our clients to certain privacy and information security laws in the United States and internationally, including, for example, the GLBA, CCPA and other state privacy regulations, and other laws, rules and regulations designed to regulate consumer information and data privacy, security and protection, and mitigate identity theft.
We founded Alkami to help level the playing field for FIs. Since then, our vision has been to create a platform that combines premium technology and fintech solutions in one integrated ecosystem, delivered as a SaaS solution and providing our clients’ customers with a single point of access to all things digital.
Since then, our vision has been to create a platform that combines premium technology and fintech solutions in one integrated ecosystem, delivered as a SaaS solution and providing our clients’ account holders, which include customers for banks and members for credit unions, with a single point of access to all things digital.
These timely insights extend across administration, marketing and strategy, informing decision-making for FIs and increasing user stickiness. For instance, our clients can identify users with a credit card or loan from another FI and market targeted, competing products to these users. This granular level of insight allows Alkami clients to digitally and systematically drive growth through smarter marketing and forecasting.
FIs need access to accurate and complete data. These timely insights extend across administration, marketing and strategy, informing decision-making for FIs and increasing user stickiness. For instance, our clients can identify users with a credit card or loan from another FI and market targeted, competing products to these users.
The Alkami Digital Banking Platform offers an end-to-end set of digital banking software products.
The Alkami Digital Banking Platform allows us to offer an end-to-end set of software solutions.
We incurred net losses of $40.8 million, $62.9 million, and $58.6 million for 2024, 2023, and 2022, respectively, largely due to significant continued investment in sales, marketing, product development and post-sales client activities.
We incurred net losses of $47.7 million, $40.8 million, and $62.9 million for 2025, 2024, and 2023, respectively, largely due to significant continued investment in sales, marketing, product development and post-sales client activities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information.
Our 2024 new client cohort has contracted, on average, for 20 of our offered products. Our target clients include the top 2,500 FIs by assets excluding those with assets greater than $450 billion (“megabanks”). We had 272, 236 and 199 FIs as Alkami Digital Banking Platform clients as of December 31, 2024, 2023, and 2022, respectively.
As of December 31, 2025, our client base, on average, used 16 of our 36 offered products. Our 2025 new client cohort has contracted, on average, for 19 of our offered products. Our target clients include the top 2,500 FIs by assets excluding those with assets greater than $450 billion (“megabanks”).
Importantly, this team supports retention and deepens the relationship with the client, providing us with the best opportunity to renew clients upon contract expiration, often coupled with an extension of the relationship to additional products. Our marketing team oversees all aspects of the Alkami brand, including public relations, digital marketing, social media, product marketing, graphic design, conferences and events.
Importantly, this team supports retention and deepens the relationship with the client, providing us with the best opportunity to renew clients upon contract expiration, often coupled with an extension of the relationship to additional products.
Our typical relationship with an FI begins with a set of core functional components, which can extend over time to include a rounded suite of products across account opening, marketing, data insights, card experience, money movement, customer service, business banking, financial wellness, security and fraud protection and extensibility.
Our typical relationship with an FI begins with a set of core functional components, which can expand over time to include a rounded suite of products across onboarding and account opening, marketing, data insights, account management, payments and receivables, admin, risk and reporting, business and commercial banking, retail banking, financial analytics, and extensibility.
We compete with new and established point solution vendors and core processing vendors, as well as internally developed solutions.
With respect to our Digital Banking Platform, we compete with core processing vendors that also provide digital banking solutions, and with digital banking companies. With respect to our other solutions, we compete with new and established point solution vendors and core processing vendors, as well as with internally developed solutions.
Our Growth Strategies We intend to continue to invest to grow our business and expand our addressable market by applying the following strategies: • Deepen existing client relationships: We expect to continue to deepen our existing client relationships, increasing both the number of registered users and the number of products per client: 6 Table of Contents ◦ Cross-sell: We continue to broaden our product set to address the needs of our client base.
Our Platform, purpose-built for financial institutions, delivers tangible results to clients, including increased registered user growth, increased product usage, operational efficiencies and account holder retention that ultimately provides banks and credit unions a sustainable competitive advantage. 6 Table of Contents Our Growth Strategies We intend to continue to invest to grow our business and expand our addressable market by applying the following strategies: • Deepen existing client relationships: We expect to continue to deepen our existing client relationships, increasing both the number of registered users and the number of products per client: ◦ Cross-sell: We continue to broaden our product set to address the needs of our client base.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information. 4 Table of Contents Our Industry The United States banking industry is massive, with almost $26 trillion in assets on the balance sheets of nearly 9,500 FIs as of December 31, 2022, according to call report data published by the Federal Financial Institutions Examinations Council (“FFIEC”) and the National Credit Union Administration (“NCUA”).
Our Industry The United States banking industry is massive, with almost $26 trillion in assets on the balance sheets of over 9,000 FIs as of December 31, 2023, according to call report data published by the Federal Deposit Insurance Corporation (“FDIC”) and the National Credit Union Administration (“NCUA”).
Products range from basic SMS and push notification capabilities to digital authentication and chat and conversational tools, both digitally as well as by human interaction. • Business Banking: Through real-time insight into cash position and our data capabilities, we equip clients to compete for businesses of all sizes—all while simplifying the back office with a single platform with an industry-leading user experience.
Our acquisition of ACH Alert enhanced our Platform’s capabilities in this product category. • Business & Commercial Banking: Through real-time insight into cash position and our data capabilities, we equip clients to compete for businesses of all sizes—all while simplifying the back office with a single platform with an industry-leading user experience.
The vast majority of our technology is invisible to our clients’ customers; however, our premier user experience delivered in partnership with our clients is highly visible.
This granular level of insight allows Alkami clients to digitally and systematically drive growth through smarter marketing and forecasting. The vast majority of our technology is invisible to our clients’ account holders; however, our premier user experience delivered in partnership with our clients is highly visible.
Unlike the long tail of very small institutions, this target client base is also far more likely to grow organically and through acquisition. 9 Table of Contents Our typical FI relationship begins with a subset of the Alkami Digital Banking Platform as part of a SaaS subscription contract, with an average contract life for those contracts of approximately 70 months as of December 31, 2024.
Our typical FI relationship begins with a subset of the Alkami Digital Banking Platform as part of a SaaS subscription contract, with an average contract life for those contracts of approximately 70 months as of December 31, 2025.
The Alkami Value Proposition We have grown rapidly since 2009 by understanding our clients’ objectives and pain points, including adding more than 5 million live registered users from December 31, 2022 to December 31, 2024.
This depth of product configurability and optionality is made possible by the software adapters we have built to standardize access to solutions offered by third-party vendors. The Alkami Value Proposition We have grown rapidly since 2009 by understanding our clients’ objectives and pain points, including adding nearly 5 million live registered users from December 31, 2023 to December 31, 2025.
Our solution, the Alkami Digital Banking Platform, allows FIs to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture. We cultivate deep relationships with our clients through long-term, subscription-based contractual arrangements, aligning our growth with our clients’ success and generating an attractive unit economic model.
Our solution, the Alkami Digital Sales & Service Platform, consisting of the Alkami Digital Banking Platform (“Platform”), Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture.
For this reason, FIs are making substantial technology investments in cybersecurity and security more broadly. 5 Table of Contents FIs take varying approaches to technological evolution, partially driven by philosophy, but predominantly driven by resources that are available to them.
FIs take varying approaches to technological evolution, partially driven by philosophy, but predominantly driven by resources that are available to them.
Our multi-tenant architecture, combined with continuous delivery, allows us to implement new and existing features in lockstep with our clients’ evolving needs.
Our multi-tenant architecture, combined with continuous delivery, allows us to implement new and existing features in lockstep with our clients’ evolving needs. Our technological infrastructure provides a speed-to-market advantage, which often allows us to remain a step ahead of competitors who operate single-tenant or other legacy architecture.
Powered by data scientists and artificial intelligence, Segmint’s innovative product line offers a variety of ways to optimally use customer data to deepen relationships and grow the customer’s business. Our Solution The Alkami Digital Banking Platform provides FIs with a complete digital banking solution designed to facilitate and meet the needs of both retail and business users.
Powered by data scientists and artificial intelligence (“AI”), Segmint’s innovative product line offers a variety of ways to optimally use account holder data to deepen relationships and grow the account holder’s business.
We believe based on third-party estimates that this segment of the market represents an opportunity of more than 200 million registered users and offers the greatest potential lifetime value, considering the cost and resources to acquire and service the relationship However, banking is not a static industry, and over the last several decades, technology has emerged as a differentiating factor among FIs, driving market share gains, operational efficiencies and improved regulatory compliance.
Within this market, we target the top 2,500 FIs by assets excluding megabanks. We believe based on third-party estimates that this segment of the market represents an opportunity of more than 200 million registered users and offers the greatest potential lifetime value, considering the cost and resources to acquire and service the relationship.
Intellectual Property We rely on a combination of patent, trademark, trade secrets and copyright laws, as well as confidentiality procedures and contractual restrictions, to establish, maintain and protect our proprietary rights. Despite substantial investment in research and development activities, we have not focused on patents and patent applications historically.
We leverage online and offline marketing channels through digital marketing, account-based marketing, social media, and events, among other tactics. Intellectual Property We rely on a combination of patent, trademark, trade secrets and copyright laws, as well as confidentiality procedures and contractual restrictions, to establish, maintain and protect our proprietary rights.
In 2024, for instance, we were recognized as a "Best Place to 11 Table of Contents Work in Financial Technology," a "Best and Brightest Companies to Work For in Dallas," as well as a "Best Company for Career Growth," a "Best Engineering Team,” and a "Best Product and Design Team" from Comparably.
We have received third-party recognition for our employee engagement. In 2025, we earned 19 employee engagement awards including recognition as a “Best Place to Work in Financial Technology,” a “Best and Brightest Company to Work For in Dallas,” as well as a “Best Company for Career Growth,” “Best Engineering Team,” and “Best Product and Design Team” from Comparably.
As of December 31, 2024, this entity had immaterial operations and did not have a significant impact on our business operations. Our domain expertise in retail and business banking has enabled us to develop a suite of products tailored to address key challenges faced by FIs.
Our domain expertise in retail and business banking has enabled us to develop a suite of products tailored to address key challenges faced by FIs. Due to our architecture, adding products through our single code base is fast, simple and cost-effective.
We are increasingly winning FIs with more sophisticated needs as we grow our market presence and product capabilities.
We are increasingly winning FIs with more sophisticated needs as we grow our market presence and product capabilities. In the second half of 2025, over 50% of deals won included new clients purchasing solutions inclusive of our Alkami Sales and Service Platform.
Our business banking solution includes comprehensive payment and receivable solutions, sub-user permissions management, automated billing, payment fraud prevention, and actionable reporting all built into a secure and scalable platform. • Financial Wellness: Aggregates and synthesizes information that client customers need in order to make informed financial decisions.
Our business banking solution includes comprehensive payment and receivable solutions, sub-user permissions management, automated billing, payment fraud prevention, and actionable reporting all built into a secure and scalable platform. • Retail Banking: Through intuitive digital experiences and data-driven personalization, we enable FIs to attract, engage, and retain consumers across every stage of the relationship.
Our acquisition of Segmint added unique data models and customer segmentation tools (primarily KLIs) to our platform's capabilities, enabling our clients to better understand, model, and predict their customers' preferences, lifestyle, and financial needs. • Card Experience : Includes features that allow for cardholder alerts and control preferences, card account maintenance features for self-service, and digital card capabilities. • Money Movement: Includes fully integrated money movement tools to increase deposits, facilitate payments and transfers, and drive consistent user engagement.
This includes Quick Apply for streamlined account opening for current account holders, Instant Account Verification (IAV), and cardholder alerts and control preferences, card account maintenance features for self-service, and digital card capabilities. • Payments & Receivables: Includes fully integrated money movement tools to increase deposits, facilitate payments and transfers, and drive consistent user engagement.
The Alkami Digital Banking Platform seamlessly integrates third-party services into a consistent digital banking experience that is portable across multiple user interfaces. • Customer Service: Includes a suite of products digitizing and streamlining communications around largely administrative functions.
The Alkami Digital Banking Platform seamlessly integrates third-party services into a consistent digital banking experience that is portable across multiple user interfaces. • Admin, Risk, & Reporting: Includes risk-based multi-factor authentication and suspicious transaction monitoring as well as multi-channel payment fraud prevention and information reporting tools.
The technology that powers our platform is foundational to our success and ability to deliver a distinct value proposition to our clients, characterized by the following: • Premier user experience: The Alkami Digital Banking Platform enables our clients to leverage technology to deliver a premier user experience.
The technology that powers our Platform is foundational to our success and ability to deliver a distinct value proposition to our clients, characterized by the following: • Accelerated Lifecycle Growth: By bringing together best-in-class Onboarding & Account Opening, Digital Banking, and Data & Marketing into one unified Platform, FIs can convert more applicants, increase primacy and expand relationships over time.
Our marketing efforts are focused on promoting direct sales, inbound lead generation and brand building. We leverage online and offline marketing channels through digital marketing, account-based marketing, social media, and events, among other tactics.
Our marketing team oversees all aspects of the Alkami and acquired brands, including public relations, digital marketing, social media, our website, product marketing, graphic design, conferences and events. Our marketing efforts are focused on promoting direct sales, inbound lead generation and brand building.
For our business, this approach is tremendously scalable, enabling us to serve larger and smaller institutions alike from a single platform, with a full product suite across both retail and business banking operations. • Velocity of innovation: Our ability to win and retain clients is a function of consistently striving to offer a platform with products and configurations that exceeds those of our competition.
The result is faster execution, streamlined integration, and a consistent, secure digital experience that evolves as their strategy evolves. • Velocity of innovation: Our ability to win and retain clients is a function of consistently striving to offer a platform with products and configurations that exceeds those of our competition.
Removed
In addition, in September 2021, we acquired MK Decisioning Systems, LLC (“MK”), a technology platform for digital account opening, credit card and loan origination solutions. In April 2022, we acquired Segmint Inc. (“Segmint”), a leading cloud-based financial data analytics and transaction data cleansing provider. During 2024, we established a new subsidiary in India to support potential future operational needs.
Added
We cultivate deep relationships with our clients through long-term, subscription-based contractual arrangements, aligning our growth with our clients’ success and generating an attractive unit economic model. We founded Alkami to help level the playing field for FIs.
Removed
Due to our architecture, adding products through our single code base is fast, simple and cost-effective, and we expect product penetration to continue to increase as we broaden our product suite. As of December 31, 2024, our client base, on average, used 14 of our 34 offered products.
Added
(“Segmint”), a leading cloud-based financial data analytics and transaction data cleansing provider. In March 2025, we acquired Fin Technologies, Inc. dba MANTL (“MANTL”), to provide onboarding, account opening, and loan origination solutions that allow FIs to acquire commercial, business and retail customers or members through a variety of channels for deposit account and loan types.
Removed
These FIs range from megabanks, which collectively held approximately $12 trillion in assets, to significantly smaller local community banks and affinity credit unions.
Added
During 2024, we established a new subsidiary in India to support potential future operational needs. While our presence in India has grown since 2024, these operations remain immaterial to our consolidated financial statements as of December 31, 2025.
Removed
The United States banking industry generated over $1 trillion in gross income in 2022, according to FFIEC and NCUA call reports, highlighting a significant market opportunity that drives intense competition and a magnitude of economic importance, which requires considerable regulation, both locally and nationally.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur principal risks include risks associated with: • managing our rapid growth; • attracting new clients and retaining and broadening our existing clients’ use of our solutions; • maintaining, protecting and enhancing our brand; • predicting the long-term rate of client subscription renewals or adoption of our solutions; • the unpredictable and time-consuming nature of our sales cycles; • integration with and reliance on third-party software, content and services; • integrating our solutions with other systems used by our clients; • satisfying our clients and meeting their digital banking needs; • our dependence on the data centers operated by third parties and third-party internet hosting providers; • defects, errors or other performance problems associated with our solutions; • retaining our management team and key employees and recruiting and retaining new employees; • managing the increased complexity of our clients’ integration and functionality requirements; • shifts in the number of account holders and registered users of our solutions, their use of our solutions and our clients’ implementation and client support needs; • acquiring or investing in other companies or pursuing business partnerships; • natural or man-made disasters; • use and reliance upon technology and development resources in India; • environmental and social matters; • cybersecurity breaches or other compromises of our security measures or those of third parties upon which we rely; • privacy and data security concerns, laws, regulations and standards and our processing and use of the PI of end users; • intense competition in the markets we serve; • reliance on the financial services industry as the source of our revenue in the event of any downturn, consolidation or decrease in technological spend in such industry; • evolving technological requirements and changes and additions to our solution offerings; • reliance on the development of the market for digital banking solutions; • regulations and laws applicable to us, our clients and our solutions; • protecting our intellectual property rights and defending ourselves against claims that we are misappropriating the intellectual property rights of others; • using open-source software in our solutions or risks resulting in the disclosure of our proprietary source code to our clients; • complying with license or technology agreements with third parties and our ability to enter into additional license or technology agreements on reasonable terms; • litigation or threats of litigation; • the fluctuation of our quarterly and annual results of operations relative to our expectations and guidance; 13 Table of Contents • the way we recognize revenue, which has the effect of delaying changes in the subscriptions for our solutions from being reflected in our operating results; • our limited operating history, our history of operating losses and our ability to use our net operating loss carryforwards; • our ability to raise sufficient capital and the resulting dilution and the terms of our Amended Credit Agreement (as defined below); • unanticipated changes in tax laws or regulations; • loss of emerging growth company status; • future strategic initiatives, including acquisitions of businesses and strategic investments; • future sales of shares of our common stock, our lack of an intention to pay dividends and significant influence of our principal stockholders; and • anti-takeover and exclusive forum provisions in our governing documents.
Biggest changeOur principal risks include risks associated with: • managing our rapid growth; • attracting new clients and retaining and broadening our existing clients’ use of our solutions; • maintaining, protecting and enhancing our brand; • predicting the long-term rate of client subscription renewals or adoption of our solutions; • the unpredictable, time-consuming and costly nature of our sales cycles; • integration with and reliance on third-party software, content and services; • integrating our solutions with other systems used by our clients; • satisfying our clients and meeting their digital banking needs; • our dependence on the data centers operated by third parties and third-party internet hosting providers; • defects, errors or other performance problems associated with our solutions; • retaining our management team and key employees and recruiting and retaining new employees; • managing the increased complexity of our clients’ integration and functionality requirements; • shifts in the number of account holders and registered users of our solutions, their use of our solutions and our clients’ implementation and client support needs; • acquiring or investing in other companies or pursuing business partnerships; • natural or man-made disasters; • use and reliance upon technology and development resources in India; • environmental and social matters; • cybersecurity breaches or other compromises of our security measures or those of third parties upon which we rely; • privacy and data security concerns, data collection and transfer restrictions, contractual obligations, laws, regulations and standards and our processing and use of the PI of end users; • risks and challenges associated with the development and use of AI technologies; • intense competition in the markets we serve; • reliance on the financial services industry as the source of our revenue in the event of any downturn, consolidation or decrease in technological spend in such industry; • evolving technological requirements and changes and additions to our solution offerings; • reliance on the development of the market for digital banking solutions; • regulations and laws applicable to us, our clients and our solutions, including the impact of tariffs and trade policies on us and our clients; 14 Table of Contents • protecting our intellectual property rights and defending ourselves against claims that we are misappropriating the intellectual property rights of others; • using open-source software in our solutions or risks resulting in the disclosure of our proprietary source code to our clients; • complying with license or technology agreements with third parties and our ability to enter into additional license or technology agreements on reasonable terms; • litigation or threats of litigation; • the fluctuation of our quarterly and annual results of operations relative to our expectations and guidance; • the way we recognize revenue, beginning from the live use of the service, which causes changes in client subscriptions to not be immediately apparent in our reported operating results; • our ability to raise sufficient capital in a timely manner and the resulting dilution and the terms of our Amended Credit Agreement (as defined below); • unanticipated changes in tax laws or regulations; • risks from our indebtedness and liabilities; • our ability to meet certain operating and financial covenants and restrictions under our Amended Credit Agreement (as defined below); • our ability to raise necessary funds to repurchase the 2030 Convertible Notes (as defined below) or to pay any cash amounts due upon their maturity or conversion of the 2030 Convertible Notes and dilution to our common stock upon the conversion of the 2030 Convertible Notes; • risks from our accounting method of the 2030 Convertible Notes; • counterparty risk with respect to the Capped Calls (as defined below); • future strategic initiatives, including acquisitions of businesses and strategic investments; • future sales of shares of our common stock, our lack of an intention to pay dividends and significant influence of our principal stockholders; • provisions in the Indenture (as defined below) delaying or preventing beneficial takeover and anti-takeover and exclusive forum provisions in our governing documents; • the volatility of the trading price of our common stock; • risks from actions of activist stockholders or others; and • significant expenses and administrative burdens as a public company Risks Relating to Our Business Our business and operations have experienced rapid growth, and if we do not appropriately manage future growth, if any, or are unable to improve our systems and processes, our business, financial condition and results of operations may be adversely affected.
Our business, financial condition and results of operations could be materially and adversely affected if our clients are not satisfied with our digital banking solutions or our systems and infrastructure fail to meet their needs. Our business depends on our ability to satisfy our clients and meet their digital banking needs.
If our clients are not satisfied with our digital banking solutions or our systems and infrastructure fail to meet their needs, our business, financial condition and results of operations could be materially and adversely affected. Our business depends on our ability to satisfy our clients and meet their digital banking needs.
If we are successful in acquiring an additional business, we may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • our inability to integrate or benefit from acquired technologies or services; • unanticipated costs or liabilities associated with the acquisition; • incurrence of acquisition-related costs; • difficulty integrating the technology, accounting systems, operations, control environments and personnel of the acquired business and integrating the acquired business or its employees into our culture; • difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business; • difficulty converting the clients of the acquired business to our solutions and contract terms, including disparities in licensing terms; • additional costs for the support of the professional services model of the acquired company; • diversion of management’s attention and other resources; • adverse effects to our existing business relationships with business and clients; • the issuance of additional equity securities that could dilute the ownership interests of our stockholders; • incurrence of debt on terms unfavorable to us or that we are unable to repay; • incurrence of substantial liabilities; • difficulties retaining key employees of the acquired business; and • adverse tax consequences, substantial depreciation or deferred compensation charges.
If we are successful in acquiring an additional business, we may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • an inability to integrate or benefit from acquired technologies or services; • unanticipated costs or liabilities associated with the acquisition; • incurrence of acquisition-related costs; • difficulty integrating the technology, accounting systems, operations, control environments and personnel of the acquired business and integrating the acquired business or its employees into our culture; • difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business; • difficulty converting the clients of the acquired business to our solutions and contract terms, including disparities in licensing terms; • additional costs for the support of the professional services model of the acquired company; • diversion of management’s attention and other resources; • adverse effects to our existing business relationships with business and clients; • the issuance of additional equity securities that could dilute the ownership interests of our stockholders; • incurrence of debt on terms unfavorable to us or that we are unable to repay; • incurrence of substantial liabilities; • difficulties retaining key employees of the acquired business; and • adverse tax consequences, substantial depreciation or deferred compensation charges.
Any cybersecurity attacks, security breaches, phishing attacks, ransomware attacks, computer malware, computer viruses, computer hacking attacks, unauthorized access, coding or configuration errors or similar incidents experienced by us or our third-party providers could result in material operational disruptions and the material loss, compromise or corruption of client or client customer data (including PI) or data we rely on to provide our solutions, including our analytics initiatives and offerings, and impair our ability to provide our solutions and meet our clients’ requirements, resulting in decreased revenues and otherwise adversely affecting our business, financial condition and results of operations.
Any cybersecurity attacks, security breaches, phishing attacks, ransomware attacks, computer malware, computer viruses, computer hacking attacks, unauthorized access, coding or configuration errors or similar incidents experienced by us or our third-party providers could result in material operational disruptions and the material loss, compromise or corruption of client or client customer or member data (including PI) or data we rely on to provide our solutions, including our analytics initiatives and offerings, and impair our ability to provide our solutions and meet our clients’ requirements, resulting in decreased revenues and otherwise adversely affecting our business, financial condition and results of operations.
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that: (i) unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for: (A) any derivative action or proceeding brought on behalf of the Company, (B) any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former director, officer, other employee, agent or stockholder to the Company or our stockholders, including, without 30 Table of Contents limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (C) any action asserting a claim against the Company or any of our current or former directors, officers, other employees, agents or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (D) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine; (ii) unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the rules and regulations promulgated thereunder; (iii) the exclusive forum provisions are intended to benefit and may be enforced by the Company, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering; (iv) any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to these provisions; and (v) failure to enforce the foregoing provisions would cause us irreparable harm, and we will be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions.
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that: (i) unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for: (A) any derivative action or proceeding brought on behalf of the Company, (B) any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former director, officer, other employee, agent or stockholder to the Company or our stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (C) any action asserting a claim against the Company or any of our current or former directors, officers, other employees, agents or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (D) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine; (ii) unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the rules and regulations promulgated thereunder; (iii) the exclusive forum provisions are intended to benefit and may be enforced by the Company, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering; (iv) any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to these provisions; and (v) failure to enforce the foregoing provisions would cause us irreparable harm, and we will be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions.
As a result, our current or potential competitors might be able to adapt more quickly to new technologies and client customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisitions or other opportunities more readily, or develop and expand their product and service offerings more quickly than we can.
As a result, our current or potential competitors might be able to adapt more quickly to new technologies and client customer or member needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisitions or other opportunities more readily, or develop and expand their product and service offerings more quickly than we can.
If we are not able to detect and identify activity on our platform that might be nefarious in nature or design processes or systems to reduce the impact of similar activity at a third-party provider, our clients and/or clients’ customers could suffer material harm, including because many of our products and services are integrated with or connected to our clients’ systems and processes.
If we are not able to detect and identify activity on our platform that might be nefarious in nature or design processes or systems to reduce the impact of similar activity at a third-party provider, our clients and/or clients’ customers or members could suffer material harm, including because many of our products and services are integrated with or connected to our clients’ systems and processes.
These provisions include: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or to repeal certain provisions of our amended and restated certificate of incorporation, including anti-takeover provisions related to our classified board of directors, voting in the election of directors, rights to fill board vacancies, the ability of our board of directors to alter our amended and restated bylaws without stockholder approval, the inability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by our board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or to repeal certain provisions of our amended and restated certificate of incorporation, including anti-takeover provisions related to our classified board of directors, voting in the election of directors, rights to fill board vacancies, the ability of our board of directors to alter our amended and restated bylaws without stockholder approval, the inability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; 34 Table of Contents • the requirement that a special meeting of stockholders may be called only by our board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
We, like other organizations, particularly in the financial technology sector, are vulnerable to and have experienced cybersecurity attacks, insider threats and other incidents that threaten the confidentiality, integrity and availability of critical IT Systems and PI or other information regarding clients, client customers, vendors, employees, third-party providers, or our company and business.
We, like other organizations, particularly in the financial technology sector, are vulnerable to and have experienced cybersecurity attacks, insider threats and other incidents that threaten the confidentiality, integrity and availability of critical IT Systems and PI or other information regarding clients, client customers or members, vendors, employees, third-party providers, or our company and business.
In particular, under the GDPR, fines of up to 20 million euros or up to 4% of the annual global revenues of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. Such penalties are in addition to any civil litigation claims by clients and data subjects.
In particular, under the EU GDPR, fines of up to 20 million euros or up to 4% of the annual global revenues of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. Such penalties are in addition to any civil litigation claims by clients and data subjects.
On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank (“SVB”), a division of First-Citizens Bank & Trust Company, as Administrative Agent, and the other lenders party thereto.
On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as Administrative Agent, and the other lenders party thereto.
In addition, certain elements of our solutions process and store PI, including banking and payment data and other PI regarding our clients’ customers, such as social security numbers, and we may also have access to PI during various stages of the implementation process or during the course of providing client support.
In addition, certain elements of our solutions process and store PI, including banking and payment data and other PI regarding our clients’ customers or members, such as social security numbers, and we may also have access to PI during various stages of the implementation process or during the course of providing client support.
Information security risks for banking and technology companies such as ours have significantly increased in recent years, in part because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.
Information security risks for banking and technology companies such as ours have significantly increased in recent years, in part because of the proliferation of new technologies, such as AI, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.
Our revenue growth rates may decline or fluctuate as a result of a number of factors, including client spending levels, client dissatisfaction with our solutions, decreases in the number of client customers, changes in the type and size of our clients, pricing changes, competitive conditions, the loss of our clients to other competitors and general economic conditions.
Our revenue growth rates may decline or fluctuate as a result of a number of factors, including client spending levels, client dissatisfaction with our solutions, decreases in the number of client customers or members, changes in the type and size of our clients, pricing changes, competitive conditions, the loss of our clients to other competitors and general economic conditions.
We cannot anticipate or prevent all techniques used by threat actors to obtain unauthorized access or to sabotage systems or implement adequate preventative measures. Additionally, we and client customers integrate our solutions with certain third-party systems used by our clients, which have access to PI and other data about our clients.
We cannot anticipate or prevent all techniques used by threat actors to obtain unauthorized access or to sabotage systems or implement adequate preventative measures. Additionally, we and client customers or members integrate our solutions with certain third-party systems used by our clients, which have access to PI and other data about our clients.
Any inability to satisfy regulatory or contractual expectations in connection with applicable regulations and guidance could adversely affect our ability to conduct our business, including attracting and maintaining clients, require significant costs to correct, harm our reputation, or lead to liability to third parties, including our customers or their consumers.
Any inability to satisfy regulatory or contractual expectations in connection with applicable regulations and guidance could adversely affect our ability to conduct our business, including attracting and maintaining clients, require significant costs to correct, harm our reputation, or lead to liability to third parties, including our clients or their consumers.
Risks Relating to our Financial Results, Operating History and Capital Structure Our quarterly and annual results of operations are likely to fluctuate in future periods. We expect to experience quarterly or annual fluctuations in our results of operations due to a number of factors, many of which are outside of our control.
Risks Relating to our Financial Results, Operating History, Indebtedness and Capital Structure Our quarterly and annual results of operations are likely to fluctuate in future periods. We expect to experience quarterly or annual fluctuations in our results of operations due to a number of factors, many of which are outside of our control.
We have experienced unlawful attempts to disrupt or gain access to our IT Systems, and we are vulnerable to future attacks that may result in unauthorized access to or disclosure of client customer PI or other data and disruption of our or our clients’ operations.
We have experienced unlawful attempts to disrupt or gain access to our IT Systems, and we are vulnerable to future attacks that may result in unauthorized access to or disclosure of client customer or member PI or other data and disruption of our or our clients’ operations.
If we are unable to anticipate client requirements or work with our clients successfully on implementing new solutions or features in a timely manner or enhance our existing solutions to meet our clients’ requirements, our business, financial condition and results of operations could be materially and adversely affected. 22 Table of Contents If the market for digital banking solutions develops more slowly than we expect or changes in a way that we fail to anticipate, our sales would suffer and our business, financial condition and results of operations could be materially and adversely affected.
If we are unable to anticipate client requirements or work with our clients successfully on implementing new solutions or features in a timely manner or enhance our existing solutions to meet our clients’ requirements, our business, financial condition and results of operations could be materially and adversely affected. 25 Table of Contents If the market for digital banking solutions develops more slowly than we expect or changes in a way that we fail to anticipate, our sales would suffer, and our business, financial condition and results of operations could be materially and adversely affected.
For these reasons, we may not be able to utilize a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows. Unanticipated changes in tax laws or regulations could have an adverse effect on our business and result of operations. We are subject to federal, state, and local income taxes.
For these reasons, we may not be able to utilize a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows. Unanticipated changes in tax laws or regulations could have an adverse effect on our business and results of operations. We are subject to federal, state, and local income taxes.
In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent clients from potentially terminating their contracts with us.
In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent clients from terminating their contracts with us.
In addition, new privacy and security legislation may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies Internationally, many jurisdictions have established their own data privacy and security legal framework with which we or our clients may need to comply as client customers travel outside of the United States, including, but not limited to, the European Union (“EU”).
In addition, new privacy and security legislation may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies Internationally, many jurisdictions have established their own data privacy and security legal framework with which we or our clients may need to comply as client customers or members travel outside of the United States, including, but not limited to, the United Kingdom (“UK”) and the European Union (“EU”).
Addressing stakeholder expectations can result in a diversion of resources and management attention, and any failure to successfully navigate such expectations, as well as evolving interpretations of any existing governmental laws or requirements, may result in reputational harm, issues attracting and retaining employees or customers, regulatory or investor engagement, or other adverse impacts to our business.
Addressing stakeholder expectations can result in a diversion of resources and management attention, and any failure to successfully navigate such expectations, as well as evolving interpretations of any existing governmental laws or requirements, may result in reputational harm, issues attracting and retaining employees or clients, regulatory or investor engagement, or other adverse impacts to our business.
As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset post-change taxable income may be subject to limitations. In addition, a portion of our NOLs generated in prior periods, if not utilized, will begin to expire in 2034 and 2024 for federal and state purposes, respectively.
As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset post-change taxable income may be subject to limitations. In addition, a portion of our NOLs generated in prior periods, if not utilized, will begin to expire in 2034 and 2027 for federal and state purposes, respectively.
While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful or cost effective. Our brand promotion activities may not generate customer awareness or yield increased revenues, and even if they do, any increased revenues may not offset the expenses we incur in building our brand.
While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful or cost effective. Our brand promotion activities may not generate client awareness or yield increased revenues, and even if they do, any increased revenues may not offset the expenses we incur in building our brand.
In such cases, we could face exposure to legal claims, particularly if the client and/or client customer suffered actual harm.
In such cases, we could face exposure to legal claims, particularly if the client and/or client customer or member suffered actual harm.
Factors that might cause quarterly or annual fluctuations in our results of operations include: • the timing of large subscriptions and client terminations, renewals or failures to renew; • our ability to attract new clients and retain and grow revenues from existing clients; • our ability to maintain, expand, train and achieve an acceptable level of production from our sales and marketing teams; • the timing of our introduction of new solutions or updates to existing solutions; • our ability to grow and maintain our relationships with our ecosystem of third-party partners, including integration partners and referral partners; • the success of our clients’ businesses; • new government regulations; • changes in our pricing policies or those of our competitors; • the amount and timing of our expenses related to the expansion of our business, operations and infrastructure; • any impairment of our intangible assets, capitalized software, long-lived assets or goodwill; • future costs related to acquisitions of content, technologies or businesses and their integration; 26 Table of Contents • natural disasters, outbreaks of disease or public health crises; and • general economic conditions.
Factors that might cause quarterly or annual fluctuations in our results of operations include: • the timing of large subscriptions and client terminations, renewals or failures to renew; • our ability to attract new clients and retain and grow revenues from existing clients; • our ability to maintain, expand, train and achieve an acceptable level of production from our sales and marketing teams; • the timing of our introduction of new solutions or updates to existing solutions; • our ability to grow and maintain our relationships with our ecosystem of third-party partners, including integration partners and referral partners; • the success of our clients’ businesses; • new government regulations; • changes in trade policies and restrictions, including tariffs; • changes in our pricing policies or those of our competitors; 29 Table of Contents • the amount and timing of our expenses related to the expansion of our business, operations and infrastructure; • any impairment of our intangible assets, capitalized software, long-lived assets or goodwill; • future costs related to acquisitions of content, technologies or businesses and their integration; • natural disasters, outbreaks of disease or public health crises; and • general economic conditions.
Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to approvals that are beyond our control. In addition, we have limited experience in acquiring other businesses and the market reaction to our acquisitions may be unfavorable, which may impact our stock price.
Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to conditions that are beyond our control. In addition, we have limited experience in acquiring other businesses, and the market reaction to our acquisitions may be unfavorable, which may impact our stock price.
Matters subject to review and examination by the FFIEC, federal and state regulatory agencies and external auditors include, but are not limited to, our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities and the design of our solutions, as well as our systems and technical infrastructure, our cybersecurity posture, our business recovery planning, our management and our financial condition.
Matters subject to review and examination by the FFIEC, federal and state regulatory agencies and external auditors include, but are not limited to, our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities and the design of our solutions, as well as our systems and technical infrastructure, our information security and notification obligations, our cybersecurity posture, our business recovery planning, our management and our financial condition.
In addition, because we leverage third-party providers, including cloud, software, data center and other critical technology vendors to deliver our solutions to our clients and their customers, we rely heavily on the data security technology practices and policies adopted by these third-party providers.
In addition, because we leverage third-party providers, including cloud, software, data center and other critical technology vendors to deliver our solutions to our clients and their customers or members, we rely heavily on the data security technology practices and policies adopted by these third-party providers.
In operating our business and providing services and solutions to our clients, we collect, use, store, transmit and otherwise process sensitive employee and client data, including PI regarding client customers and other individuals, in and across multiple jurisdictions, including at times, across national borders.
In operating our business and providing services and solutions to our clients, we collect, use, store, transmit and otherwise process sensitive employee and client data, including PI regarding client customers or members and other individuals, in and across multiple jurisdictions, including at times, across national borders.
Additionally, if we are unable to address our clients’ needs or preferences in a timely fashion or further develop and enhance our solutions, or if a client is not satisfied with the quality of work performed by us or with the technical support services rendered, we could incur additional costs to address the situation, and clients’ dissatisfaction with our solutions could damage our ability to maintain or expand our client base.
Additionally, if we are unable to address our clients’ needs or preferences in a timely fashion or further develop 16 Table of Contents and enhance our solutions, or if a client is not satisfied with the quality of work performed by us or with the technical support services rendered, we could incur additional costs to address the situation, and clients’ dissatisfaction with our solutions could damage our ability to maintain or expand our client base.
Given the unpredictability of the timing, nature and scope of cybersecurity attacks and other security-related incidents, it is impossible to comprehensively secure IT Systems or the data and PI we maintain in our databases, and we cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of data or PI, other security events that impact the confidentiality, integrity or availability of data, PI or our IT Systems, or the related costs of mitigating the consequences from such events.
Given the unpredictability of the timing, nature and scope of cybersecurity attacks and other security-related incidents, it is impossible to comprehensively secure IT Systems or the data and PI we maintain or use in our business, and we cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of data or PI, other security events that impact the confidentiality, integrity or availability of data, PI or our IT Systems, or the related costs of mitigating the consequences from such events.
In addition, our obligations under the Amended Credit Agreement are guaranteed by our subsidiaries and secured by all or substantially all of our assets and our subsidiaries’ assets. The security interest granted over our assets could limit our ability to obtain additional debt financing.
Our obligations under the Amended Credit Agreement are guaranteed by our subsidiaries and secured by all or substantially all of our assets and our subsidiaries’ assets. The security interest granted over our assets could limit our ability to obtain additional debt financing.
If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement, misappropriation or violation claims 25 Table of Contents against us, such payments, costs or actions could have a material adverse effect on our competitive position, business, financial condition and results of operations.
If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement, misappropriation or violation claims against us, such payments, costs or actions could have a material adverse effect on our competitive position, business, financial condition and results of operations.
Our ability to monitor such third parties’ security measures is limited, and a vulnerability in a third-party system with which we integrate could result in a disruption to our IT Systems or unauthorized access to or disclosure, modification, misuse, loss or destruction of our clients’ and client customers’ PI and other data, including our business information.
Our ability to monitor such third parties’ security measures is limited, and an exploited vulnerability in a third-party system with which we integrate could result in a disruption to our IT Systems or unauthorized access to or disclosure, modification, misuse, loss or destruction of our clients’ and client customers’ or members’ PI and other data, including our business information.
We are subject to various risks associated with environmental and social matters. There is increased scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other environmental and social matters.
We are subject to various risks associated with environmental and social matters. There is increased scrutiny from investors, clients, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other environmental and social matters.
Assuring that our products adapt to changes in the compliance obligations or expectations of our customers requires significant expense and devotion of resources on our part, which may adversely affect our ability to operate profitably.
Assuring that our products adapt to changes in the compliance obligations or expectations of our clients requires significant expense and devotion of resources on our part, which may adversely affect our ability to operate profitably.
For example, the third-party service offerings that we resell typically have a much higher cost of revenues than the service offerings that we have internally developed, so any increase in sales of third-party services as a proportion of our subscriptions would have an adverse effect on our overall gross margin and results of operations.
For example, the third-party service offerings that we resell typically have a much higher cost of revenues than the 18 Table of Contents service offerings that we have internally developed, so any increase in sales of third-party services as a proportion of our subscriptions would have an adverse effect on our overall gross margin and results of operations.
The Alkami Digital Banking Platform integrates with other third-party systems used by our clients, including core processing and payment systems. We do not have formal arrangements with many of these third-party providers regarding our access to their application program interfaces to enable these client integrations.
The Alkami Digital Sales & Service Platform integrates with other third-party systems used by our clients, including core processing and payment systems. We do not have formal arrangements with many of these third-party providers regarding our access to their application program interfaces to enable these client integrations.
In recent years, there has been increasing enforcement activity in the areas of digital accessibility, privacy, data protection and information security in various markets in which our customers operate.
In recent years, there has been increasing enforcement activity in the areas of digital accessibility, privacy, data protection and information security in various markets in which our clients operate.
Potential clients may also prefer to continue their relationship with their existing partner rather than change to a new partner regardless of product performance or features. As a result, even if the features of the Alkami Digital Banking Platform are superior, clients may not purchase our solution.
Potential clients may also prefer to continue their relationship with their existing partner rather than change to a new partner regardless of product performance or features. As a result, even if the features of the Alkami Digital Sales & Service Platform are superior, clients may not purchase our solution.
The Alkami Digital Banking Platform is complex and may contain defects or errors when implemented or when new functionality is released, or when we modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends.
The Alkami Digital Sales & Service Platform is complex and may contain defects or errors when implemented or when new functionality is released, or when we modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends.
An adverse outcome in such litigation or proceedings 24 Table of Contents may expose us to a loss of our competitive position, expose us to significant liabilities or require us to seek licenses that may not be available on commercially acceptable terms, if at all.
An adverse outcome in such litigation or proceedings may expose us to a loss of our competitive position, expose us to significant liabilities or require us to seek licenses that may not be available on commercially acceptable terms, if at all.
If such changes take place, there is a risk that our effective tax rate may be favorably or unfavorably affected, impacting our result of operations. The Trump administration has proposed a number of changes to the U.S. tax system.
If such changes take place, there is a risk that our effective tax rate may be favorably or unfavorably affected, impacting our results of operations. The Trump administration has proposed or implemented a number of changes to the U.S. tax system.
Our current and potential future operations in India are subject to certain risks, including: • difficulties and costs of staffing and managing foreign operations as well as additional employment regulations, union workforce negotiations and potential disputes; • heightened exposure to changes in economic, security and political conditions, civil unrest, armed conflicts and acts of terrorism; • different standards of protection for intellectual property rights and confidentiality; • the effects of pandemics, epidemics or other health crises on general health and economic conditions and natural disasters; • fluctuations in foreign currency exchange rates and global market volatility; • compliance with local laws and regulations, including privacy and security laws and regulations and labor laws; • compliance with laws governing doing business outside the United States, including foreign or domestic legal and regulatory requirements resulting in the imposition of new or more onerous sanctions and anti-corruption laws, export and import controls, trade restrictions, tariffs, duties, taxes, embargoes, exchange or other government controls; • laws and business practices favoring local companies; and • management of potentially adverse tax consequences from India, the United States, or both, as a result of our multi-jurisdiction operations. 18 Table of Contents The enforcement of intellectual property rights and confidentiality protections in India may not be as effective as in the U.S. or other countries.
Our current and potential future operations in India 19 Table of Contents are subject to certain risks, including: • difficulties and costs of staffing and managing foreign operations as well as additional employment regulations, union workforce negotiations and potential disputes; • heightened exposure to changes in economic, security and political conditions, civil unrest, armed conflicts and acts of terrorism; • different standards of protection for intellectual property rights and confidentiality; • the effects of pandemics, epidemics or other health crises on general health and economic conditions and natural disasters; • fluctuations in foreign currency exchange rates and global market volatility; • compliance with local laws and regulations, including privacy and security laws and regulations and labor laws; • compliance with laws governing doing business outside the United States, including foreign or domestic legal and regulatory requirements resulting in the imposition of new or more onerous sanctions and anti-corruption laws, export and import controls, trade restrictions, tariffs, duties, taxes, embargoes, exchange or other government controls; • laws and business practices favoring local companies; and • management of potentially adverse tax consequences from India, the United States, or both, as a result of our multi-jurisdiction operations.
In addition, our clients contractually require notification of certain data security compromises and include representations and warranties in their contracts with us that our solutions comply with certain legal and technical standards related to data security and privacy and meet certain service levels.
In addition, our clients contractually require notification of certain data security compromises and include representations and warranties in their contracts with us that our solutions comply with certain legal and technical standards related to data security and privacy and meet certain 21 Table of Contents service levels.
The introduction of new solutions by our competitors, the market acceptance of competitive solutions based on new or alternative technologies, such as artificial intelligence and machine learning technologies, or the emergence of new technologies or solutions in the broader financial services industry could render our solutions obsolete or less effective.
The introduction of new solutions by our competitors, the market acceptance of competitive solutions based on new or alternative technologies, such as AI and machine learning technologies, or the emergence of new technologies or solutions in the broader financial services industry could render our solutions obsolete or less effective.
From time to time, we have discovered, and may in the future discover, defects or errors in 16 Table of Contents our solutions. Any performance problems or defects in our solutions could materially and adversely affect our business, financial condition and results of operations.
From time to time, we have discovered, and may in the future discover, defects or errors in our solutions. Any performance problems or defects in our solutions could materially and adversely affect our business, financial condition and results of operations.
Our directors, officers and other principal stockholders, in the aggregate, beneficially owned approximately 32% of the outstanding shares of Alkami as of December 31, 2024. These stockholders currently have, and likely will continue to have, significant influence with respect to the election of our board of directors and approval or disapproval of all significant corporate actions.
Our directors, officers and other principal stockholders, in the aggregate, beneficially owned approximately 41% of the outstanding shares of Alkami as of December 31, 2025. These stockholders currently have, and likely will continue to have, significant influence with respect to the election of our board of directors and approval or disapproval of all significant corporate actions.
Some of our client agreements require us to issue credits for downtime in excess of certain thresholds and in some instances give our clients the ability to terminate their 15 Table of Contents agreements with us in the event of significant amounts of downtime.
Some of our client agreements require us to issue credits for downtime in excess of certain thresholds and in some instances give our clients the ability to terminate their agreements with us in the event of significant amounts of downtime.
Defects, errors or other performance problems in the Alkami Digital Banking Platform could harm our reputation, result in significant costs to us, impair our ability to sell our solutions and subject us to substantial liability.
Defects, errors or other performance problems in the Alkami Digital Sales & Service Platform could harm our reputation, result in significant costs to us, impair our ability to sell our solutions and subject us to substantial liability.
The regulatory framework 20 Table of Contents governing the collection, processing, storage, use and sharing of certain information, particularly financial and other PI, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations.
The regulatory framework governing the collection, processing, storage, use and sharing of certain information, particularly financial and other PI, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations.
Any future incurrence of debt or issuance of equity securities could adversely affect the value of our common stock. 27 Table of Contents Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial NOLs during our history.
Any future incurrence of debt or issuance of equity securities could adversely affect the value of our common stock. 30 Table of Contents Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial net operating losses (“NOLs”) during our history.
Additionally, we cannot guarantee that our insurance coverage would be sufficient to cover all losses or that relevant insurance will be available in the future on economic terms or at all. Further, the Alkami Digital Banking Platform involves flexible and complex software solutions, which by their very nature are subject to misconfigurations, implementation errors, “bugs,” defects or other security vulnerabilities.
Additionally, we cannot guarantee that our insurance coverage would be sufficient to cover all losses or that relevant insurance will be available in the future on economic terms or at all. 20 Table of Contents Further, the Alkami Digital Sales & Service Platform involves flexible and complex software solutions, which by their very nature are subject to misconfigurations, implementation errors, “bugs,” defects or other security vulnerabilities.
Nothing in our current certificate of incorporation or bylaws or our restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in federal court, to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law. Item 1B. Unresolved Staff Comments.
Nothing in our current certificate of incorporation or bylaws or our restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in federal court, to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law.
Our success and future growth depend upon the continued services of our management team, in particular Alex Shootman, our Chief Executive Officer, W. Bryan Hill, our Chief Financial Officer, and other key employees, including in the areas of research and development, marketing, sales, services and general and administrative functions.
Our success and future growth depend upon the continued services of our management team, in particular Alex Shootman, our Chief Executive Officer, Cassandra Hudson, our Chief Financial Officer, and other key employees, including in the areas of research and development, marketing, sales, services and general and administrative functions.
Claims that we have misappropriated the confidential information or trade secrets of third parties could similarly harm our business.
Claims that we have 28 Table of Contents misappropriated the confidential information or trade secrets of third parties could similarly harm our business.
If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted, for example due to viruses or denial of service or other attacks on their systems, or due to human error, intentional bad acts, power loss, hardware failures, telecommunications failures, fires, wars, terrorist attacks, floods, earthquakes, hurricanes, tornadoes or similar catastrophic events, we could experience disruption in our ability to offer our solutions and adverse perception of our solutions’ reliability, or we could be required to retain the services of replacement providers, which could increase our operating costs and materially and adversely affect our business, financial condition and results of operations.
If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted, for example due to viruses or denial of service or other attacks on their systems, or due to human error, intentional bad acts, power loss, hardware failures, telecommunications failures, fires, wars, terrorist attacks, floods, earthquakes, hurricanes, tornadoes or similar catastrophic events, we could experience disruption in our ability to offer our solutions and adverse perception of our solutions’ reliability, or we could be required to retain the services of replacement providers, which could increase our operating costs and materially and adversely affect our business, financial condition and results of operations. 17 Table of Contents Furthermore, prolonged interruption in the availability, or reduction in the speed or other functionality, of our products or services could materially harm our reputation and business.
A vulnerability in our third- 19 Table of Contents party providers’ software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in a material compromise to the confidentiality, integrity or availability of our IT Systems or the data housed in our third-party solutions.
An exploited vulnerability in our third-party providers’ software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in a material compromise to the confidentiality, integrity or availability of our IT Systems or the data housed in our third-party solutions.
The EU has adopted the General Data Protection Regulation (“GDPR”), which contains numerous requirements and changes from previously existing EU law, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.
The UK and EU have adopted a General Data Protection Regulation (“GDPR”), which contains numerous requirements and changes from existing law, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.
Recently, for instance, a large financial services company has been successfully enforcing certain patents related to the use of remote deposit capture technology--a process that virtually every FI offers to its end users.
For instance, a large financial services company successfully enforced certain patents related to the use of remote deposit capture technology--a process that virtually every FI offers to its end users.
The EU’s data protection landscape is currently evolving, resulting in possible significant operational costs for internal compliance and risk to our business.
The UK’s and EU’s data protection landscape is continuing to evolve, resulting in possible significant operational costs for internal compliance and risk to our business.
The concentrated voting power of these stockholders could have the effect of delaying or preventing a significant corporate transaction, including an acquisition, divestiture, or merger. This influence over our affairs could, under some circumstances, be adverse to the interests of the other stockholders.
The concentrated voting power of these stockholders could have the effect of delaying or preventing a significant corporate transaction, including an acquisition, divestiture, or merger. This influence over our affairs could, under some circumstances, be adverse to the interests of the other stockholders. Provisions in the Indenture could delay or prevent an otherwise beneficial takeover of us.
Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as we generally recognize subscription revenues from new clients over the applicable subscription terms once they have begun live use of our services.
Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as we generally recognize subscription revenues from new clients over the applicable subscription terms once they have begun live use of our services. We have a history of operating losses and may not achieve or maintain profitability in the future.
Any future indebtedness, combined with our other financial obligations, could increase our vulnerability to adverse changes in general economic, industry and market conditions, limit our flexibility in planning for, or reacting to, changes in our business and the industry and impose a 28 Table of Contents competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
Any future indebtedness, combined with our other financial obligations, could increase our vulnerability to adverse changes in general economic, industry and market conditions, limit our flexibility in planning for, or reacting to, changes in our business and the industry and impose a competitive disadvantage compared to our competitors that have less debt or better debt servicing options. 31 Table of Contents The terms of our Amended Credit Agreement require us to meet certain operating and financial covenants and place restrictions on our operating and financial flexibility.
Furthermore, if we issue additional equity securities, stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock.
Furthermore, if we issue additional equity securities or some or all of the 2030 Convertible Notes are converted, stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock.
While its operations are currently immaterial, we may face challenges related to regulatory compliance, tax implications, labor laws, currency fluctuations, and operational scaling in the future.
We may face challenges related to regulatory compliance, tariffs, tax implications, labor laws, currency fluctuations, and operational scaling in the future.
Implementation delays may also require us to delay revenue recognition under the related client agreement longer than expected.
Implementation delays, whether from implementation challenges or our strategic decisions, may also require us to delay revenue recognition under the related client agreement longer than expected.
We also have incurred debt pursuant to our Amended Credit Agreement (as defined below), and the lenders have rights senior to holders of common stock to make claims on our assets. The terms of our Amended Credit Agreement could restrict our operations, and we may be unable to service or repay the debt.
We also have incurred debt pursuant to our Amended Credit Agreement (as defined below), and the Indenture (as defined below) and the lenders have rights senior to holders of common stock to make claims on our assets.
As we sign more contracts, we will generally have an increasing amount of contracts coming up for renewal. If our clients do not renew their subscriptions for our solutions on similar pricing terms, our revenues may decline and it could have a material and adverse effect on our business, financial condition and results of operations.
If our clients do not renew their subscriptions for our solutions on similar pricing terms, our revenues may decline and it could have a material and adverse effect on our business, financial condition and results of operations.
We have a history of operating losses and may not achieve or maintain profitability in the future. Since inception, we have incurred net losses as we have spent significant funds on organizational and start-up activities, to recruit key managers and employees, to develop our solutions and client support resources and for research and development.
Since inception, we have incurred net losses as we have spent significant funds on organizational and start-up activities, to recruit key managers and employees, to develop our solutions and client support resources and for research and development.
These rules are subject to varying interpretation and could be changed, modified, or applied adversely to us as a result of factors outside of our control.
Each jurisdiction has different rules and regulations governing sales and use, consumption, and similar taxes. These rules are subject to varying interpretation and could be changed, modified, or applied adversely to us as a result of factors outside of our control.
The success of any enhanced or new solution depends on several factors, including timely completion, adequate testing and market release and acceptance of the solution. Any new solutions that we develop or acquire may not be introduced in a timely or cost-effective manner, may contain defects or may not achieve the broad market acceptance necessary to generate significant revenues.
Any new solutions that we develop or acquire may not be introduced in a timely or cost-effective manner, may contain defects or may not achieve the broad market acceptance necessary to generate significant revenues.
We have incorporated and may continue to incorporate artificial intelligence/machine learning solutions and features within our business, which may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents. Furthermore, the use of generative artificial intelligence has made it easier for threat actors to develop and evolve attacks.
We have incorporated and will likely continue to incorporate AI/machine learning solutions and features within our business, which gives rise to additional and evolving cybersecurity risks. Furthermore, the use of generative AI has made it easier for threat actors to develop and evolve attacks.
Any difficulties in the integration of acquired businesses or unexpected penalties, liabilities or asset impairments in connection with such acquisitions or investments could have a material adverse effect on our business, financial condition and results of operations. 29 Table of Contents Risks Related to Ownership of Our Common Stock Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.
Any difficulties in the integration of acquired businesses or unexpected penalties, liabilities or asset impairments in connection with such acquisitions or investments could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Ownership of Our Common Stock Transactions relating to our 2030 Convertible Notes may affect the value of our common stock.
An adverse result of such litigation could require us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable, cause a delay to the development of our products and services, require us to stop selling all or a portion of our products and services, require us to redesign certain components of our platform using alternative non-infringing technology or practices, which could require significant effort and expense.
An adverse result of such litigation could require us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable, cause a delay to the development of our products and services, require us to stop selling all or a portion of our products and services, require us to redesign certain components of our platform using alternative non-infringing technology or practices, which could require significant effort and expense. 27 Table of Contents Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Cybersecurity attacks and other malicious internet-based activity continue to increase, evolve in nature and become more sophisticated, and providers of digital products and services have been and are expected to continue to be targeted.
In addition, we have acquired and continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to significant cybersecurity risks. Cybersecurity attacks and other malicious internet-based activity continue to increase, evolve in nature and become more sophisticated, and providers of digital products and services have been and are expected to continue to be targeted.
One or more states where we do not collect taxes may successfully assert that such taxes are applicable, which could result in material tax assessments, including for past sales, as well as penalties and interest. The terms of our Amended Credit Agreement require us to meet certain operating and financial covenants and place restrictions on our operating and financial flexibility.
One or more states where we do not collect taxes may successfully assert that such taxes are applicable, which could result in material tax assessments, including for past sales, as well as penalties and interest.
The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation.
The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches involving defined categories of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. The CCPA also created a new state agency vested with authority to implement and enforce the CCPA.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs designed, our CISO and CCO are members of the management team and are primarily responsible for assessing and managing our 31 Table of Contents material risks from cybersecurity threats, as well as our overall cybersecurity risk management program. As designed, our CISO is responsible for supervising both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Biggest changeDirectors receive presentations on cybersecurity topics from our CISO as part of the board of directors’ continuing education. Our CISO and CCO are members of the management team and are primarily responsible for assessing and managing our material risks from cybersecurity threats, as well as our overall cybersecurity risk management program.
See "Risk Factors—Risks Relating to Cybersecurity or Data Privacy—A breach or other compromise of our security measures or those of third parties we rely on could materially and adversely impact our reputation, business, financial condition and results of operations.” Otherwise, however, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
See "Risk Factors—Risks Relating to Cybersecurity or Data Privacy—A breach or other compromise of our security measures or those of third parties we rely on could materially and adversely impact our reputation, business, financial 36 Table of Contents condition and results of operations.” Otherwise, however, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Key elements of our cybersecurity risk management program include: • a security team principally responsible for managing our security controls and our response to cybersecurity incidents; • a compliance team principally responsible for managing our risk assessments, which are designed to help identify material cybersecurity risks to our critical systems and information; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training for our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for partners and vendors.
Key elements of our cybersecurity risk management program include: • a security team principally responsible for managing our security controls and our response to cybersecurity incidents; • a compliance team principally responsible for managing our risk assessments, which are designed to help identify material cybersecurity risks to our critical systems and information; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training for our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for partners and vendors based on each partner’s or vendor’s respective risk profile and level of criticality to our operations.
Our interim CISO’s experience includes over 20 years of helping to build global cybersecurity programs in various industries. Our CCO, who is responsible for our technology risk management program, has over 25 years of experience building and leading risk management and compliance programs in large institutions across multiple geographies.
Our CCO, who is responsible for our technology risk management program, has over 30 years of experience building and leading risk management and compliance programs in large institutions across multiple geographies.
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Directors receive presentations on cybersecurity topics from our CISO as part of the board of directors’ continuing education. Although our CISO resigned in January of 2025, we have elevated an internal candidate to the role of interim CISO while we search for a replacement.
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Our CISO is responsible for supervising both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CISO’s experience includes over 15 years of helping to build global cybersecurity programs in companies ranging from Fortune 500 to high-growth middle stage entities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures. Not applicable. 32 Table of Contents PART II
Biggest changeMine Safety Disclosures. Not applicable. 37 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNote that historic stock price performance is not necessarily indicative of future stock price performance. 33 Table of Contents Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the three months ended December 31, 2024. Item 6. [Reserved] 34 Table of Contents
Biggest changeIssuer Purchases of Equity Securities We did not repurchase any of our equity securities during the three months ended December 31, 2025. Item 6. [Reserved] 38 Table of Contents
The graph set forth below compares the cumulative total stockholder return on our common stock between April 14, 2021 (the date of our IPO) and December 31, 2024, with the cumulative total return of the S&P 1500 Application Software Index (“SP1500 ASI”) and the Russell 2000 Index (“RUT”).
The graph set forth below compares the cumulative total stockholder return on our common stock between April 14, 2021 (the date of our IPO) and December 31, 2025, with the cumulative total return of the S&P 1500 Application Software Index (“SP1500 ASI”) and the Russell 2000 Index (“RUT”).
Our initial public offering (“IPO”) was priced at $30.00 per share on April 15, 2021. As of December 31, 2024, we had 16 holders of record of our common stock.
Our initial public offering (“IPO”) was priced at $30.00 per share on April 15, 2021. As of December 31, 2025, we had 16 holders of record of our common stock.
This graph assumes the investment of $100 at the closing stock price on April 14, 2021 in our common stock and the S&P 1500 Application Software Index and Russell 2000 Index, and assumes the reinvestment of dividends, if any.
This graph assumes the investment of $100 at the closing stock price on April 14, 2021 in our common stock and the S&P 1500 Application Software Index and Russell 2000 Index, and assumes the reinvestment of dividends, if any. Note that historic stock price performance is not necessarily indicative of future stock price performance.
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Use of Proceeds from Registered Securities On April 15, 2021, we completed our IPO, in which we issued and sold 6,900,000 shares of our common stock, including 900,000 shares of common stock that were sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares of common stock at $30.00 per share.
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The offering terminated after the sale of all securities registered pursuant to the IPO Registration Statement. Our IPO resulted in net proceeds of $192.8 million after deducting underwriting discounts, commissions and other offering costs.
Removed
With the proceeds from our IPO, the Company paid in full accumulated dividends on our previously outstanding shares of Series B redeemable convertible preferred stock, which totaled approximately $5.0 million. The remainder of the net proceeds were used for general corporate purposes, including working capital and operating expenses.
Removed
As of December 31, 2024, we had used all of the net proceeds from our IPO.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents our selected consolidated statements of operations data for the years ended December 31, 2024, 2023, and 2022. 38 Table of Contents Year ended December 31, ($ in thousands, except share and per share amounts) 2024 2023 2022 Revenues $ 333,849 $ 264,831 $ 204,270 Cost of revenues (1) 137,219 120,720 95,946 Gross profit 196,630 144,111 108,324 Operating expenses (1) : Research and development 96,211 84,661 69,329 Sales and marketing 59,765 48,557 36,811 General and administrative 83,650 72,900 71,247 Acquisition-related expenses, net 195 263 (12,529) Amortization of acquired intangibles 1,435 1,435 1,155 Total operating expenses 241,256 207,816 166,013 Loss from operations (44,626) (63,705) (57,689) Non-operating income (expense): Interest income 4,560 8,095 2,696 Interest expense (461) (7,384) (3,850) Gain (loss) on financial instruments — 534 (200) Loss on extinguishment of debt — (409) (18) Loss before income taxes (40,527) (62,869) (59,061) Provision (benefit) for income taxes 308 44 (461) Net loss $ (40,835) $ (62,913) $ (58,600) (1) Includes stock-based compensation expenses as follows: Year ended December 31, ($ in thousands) 2024 2023 2022 Cost of revenues $ 5,366 $ 5,584 $ 4,389 Research and development 17,279 15,995 11,398 Sales and marketing 9,049 7,220 4,042 General and administrative 27,743 22,432 24,763 Total stock-based compensation expenses $ 59,437 $ 51,231 $ 44,592 The following table presents our reconciliation of GAAP net loss to adjusted EBITDA for the periods indicated.
Biggest changeThe following table presents our selected consolidated statements of operations data for the years ended December 31, 2025, 2024, and 2023. 42 Table of Contents Year ended December 31, ($ in thousands, except share and per share amounts) 2025 2024 2023 Revenues $ 443,639 $ 333,849 $ 264,831 Cost of revenues (1)(2) 187,040 137,219 120,720 Gross profit 256,599 196,630 144,111 Operating expenses (2) : Research and development 118,396 96,211 84,661 Sales and marketing 80,141 59,765 48,557 General and administrative 100,892 83,650 72,900 Acquisition-related expenses 3,463 195 263 Amortization of acquired intangibles 5,688 1,435 1,435 Loss on impairment of intangible assets 1,655 — — Total operating expenses 310,235 241,256 207,816 Loss from operations (53,636) (44,626) (63,705) Non-operating income (expense): Interest income 4,160 4,560 8,095 Interest expense (9,486) (461) (7,384) Gain on financial instruments — — 534 Loss on extinguishment of debt — — (409) Loss before income taxes (58,962) (40,527) (62,869) (Benefit from) provision for income taxes (11,310) 308 44 Net loss $ (47,652) $ (40,835) $ (62,913) (1) Includes amortization of acquired technology of $16.6 million, $5.4 million, and $5.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Provision (Benefit) for Income Taxes Our effective tax rate differs from the statutory tax rate primarily due to the impact of the valuation allowance against our deferred tax assets and state tax expense.
(Benefit from) Provision for Income Taxes Our effective tax rate differs from the statutory tax rate primarily due to the impact of the valuation allowance against our deferred tax assets and state tax expense.
Cost of Revenues and Gross Margin Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses, stock-based compensation, travel and related costs for employees supporting our SaaS subscription, implementation and other services.
Cost of Revenues and Gross Margin Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses, stock-based compensation, travel, and related costs for employees supporting SaaS subscription, implementation and other services.
We derive our Alkami Digital Banking Platform revenues almost entirely from multi-year contracts that are based on an average contract life of approximately 70 months as of December 31, 2024. We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution.
We derive our Alkami Digital Banking Platform revenues almost entirely from multi-year contracts that are based on an average contract life of approximately 70 months as of December 31, 2025. We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution.
In these cases, our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer penetration, incentivizing our clients to internally market and promote digital engagement. To support our growth and capitalize on our market opportunity, we have increased our operating expenses across all aspects of our business.
In these cases, our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer or member penetration, incentivizing our clients to internally market and promote digital engagement. To support our growth and capitalize on our market opportunity, we have increased our operating expenses across all aspects of our business.
Our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer penetration, incentivizing our clients to internally market our products and promote digital engagement. Variable consideration earned for subscription fees in excess of contractual minimums is recognized as revenues in the month of actual usage.
Our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer or member penetration, incentivizing our clients to internally market our products and promote digital engagement. Variable consideration earned for subscription fees in excess of contractual minimums is recognized as revenues in the month of actual usage.
Refer to Note 13 of the Notes to the Consolidated Financial Statements for further details . Critical Accounting Policies and Significant Judgments and Estimates In preparing our consolidated financial statements in conformity with U.S. GAAP, we must make decisions that impact the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures.
Refer to Note 14 of the Notes to the Consolidated Financial Statements for further details . Critical Accounting Policies and Significant Judgments and Estimates In preparing our consolidated financial statements in conformity with U.S. GAAP, we must make decisions that impact the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures.
Net Cash Provided by Investing Activities During the year ended December 31, 2024, net cash provided by investing activities was $23.0 million, primarily consisting of $71.3 million in proceeds from sales, maturities, and redemptions of marketable securities, partially offset by $40.4 million for the purchase of marketable securities, $6.7 million related to capitalized software development costs, and capital expenditures related to updates for computer and other equipment of $1.2 million.
During the year ended December 31, 2024, net cash provided by investing activities was $23.0 million, primarily consisting of $71.3 million in proceeds from sales, maturities, and redemptions of marketable securities, partially offset by $40.4 million for the purchase of marketable securities, $6.7 million related to capitalized software development costs, and capital expenditures related to updates for computer and other 46 Table of Contents equipment of $1.2 million.
In research and development, we continue to focus on innovation and bringing novel capabilities to our platform, extending our product depth. Similarly, we continue to expand our sales and marketing organization focusing on new client wins, cross-selling opportunities and client 35 Table of Contents renewals.
In research and development, we continue to focus on innovation and bringing novel capabilities to our platform, extending our product 39 Table of Contents depth. Similarly, we continue to expand our sales and marketing organization focusing on new client wins, cross-selling opportunities and client renewals.
In determining whether implementation services are distinct from subscription services, we considered various factors including the significant level of integration, interdependency, and interrelation between the implementation and subscription service, as well as the inability of the clients’ personnel or other service providers to perform significant portions of the services.
In determining whether implementation services are distinct from subscription services, the Company considered various factors including the significant level of integration, interdependency, and interrelation between the implementation and subscription service, as well as the inability of the clients’ personnel or other service providers to perform significant portions of the services.
We expect cost of revenues to continue to grow in absolute dollars as we grow our business, but to vary as a percentage of revenues from period to period as a function of the utilization of implementation and support personnel and the extent to which we 37 Table of Contents recognize fees from bill-pay services and other third-party functionality integrated into our solutions.
We expect cost of revenues to continue to grow in absolute dollars as we grow our business, but to vary as a percentage of revenues from period to period as a function of the utilization of implementation and support personnel and the extent to which we recognize fees from bill-pay services and other third-party functionality integrated into our solutions.
We expect research and development costs to increase as we expand our platform with new features and functionality, as well as enhance the existing Alkami Digital Banking Platform. Sales and Marketing.
We expect research and development costs to increase as we expand our platform with new features and functionality, as well as enhance the existing Alkami Digital Sales & Service Platform. Sales and Marketing.
A discussion regarding our financial condition and results of operation for the fiscal year ended December 31, 2024, compared to the fiscal year ended December 31, 2023, is presented below.
A discussion regarding our financial condition and results of operation for the fiscal year ended December 31, 2025, compared to the fiscal year ended December 31, 2024, is presented below.
The key differentiators of the Alkami Digital Banking Platform include: • User experience : Personalized and seamless digital experience across user interaction points, including desktop, mobile, chat and SMS, establishing durable connections between FIs and their customers. • Integrations : Scalability and extensibility driven by more than 300 real-time integrations to back-office systems and third-party fintech solutions as of December 31, 2024, including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening. • Deep data capabilities : Data synchronized and stored from back-office systems and third-party fintech solutions and synthesized into meaningful insights, targeted content, and other areas of monetization.
The key differentiators of the Alkami Digital Sales & Service Platform include: • User experience : Personalized and seamless digital experience across user interaction points, including desktop, mobile, chat and SMS, establishing durable connections between FIs and their customers or members. • Integrations : Scalability and extensibility driven by more than 300 real-time integrations to back-office systems and third-party fintech solutions as of December 31, 2025, including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening. • Deep data capabilities : Data synchronized and stored from back-office systems and third-party fintech solutions and synthesized into meaningful insights, targeted content, and other areas of monetization.
General and administrative expenses also include accounting, auditing and legal professional services fees, secondary offering costs, travel and other unallocated corporate-related expenses, such as the cost of our facilities, employee relations, corporate telecommunication and software.
General and administrative expenses also include accounting, auditing and legal professional services fees, secondary offering related expenses, stockholder matters related expenses, travel and other unallocated corporate-related expenses, such as the cost of our facilities, employee relations, corporate telecommunication and software.
A discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2023, compared to the fiscal year ended December 31, 2022, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.
A discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2024, compared to the fiscal year ended December 31, 2023, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025.
(2) Adjusted EBITDA is a non-GAAP financial measure and should not be considered an alternative to GAAP net loss as a measure of operating performance or as a measure of liquidity. For additional information regarding adjusted EBITDA, see “Key Business Metrics.” 39 Table of Contents Key Business Metrics Adjusted EBITDA.
(3) Adjusted EBITDA is a non-GAAP financial measure and should not be considered an alternative to GAAP net loss as a measure of operating performance or as a measure of liquidity. For additional information regarding adjusted EBITDA, see “Key Business Metrics.” 43 Table of Contents Key Business Metrics Adjusted EBITDA.
In conjunction with closing the Amended Credit Agreement in 2022, First Amendment in 2023, and Second Amendment in 2024, we incurred issuance costs of $0.9 million, $0.3 million and $0.4 million, respectively, which were deferred and were scheduled to be amortized over the remaining term of the agreement.
In conjunction with closing the Amended and Restated Credit Agreement in 2022, First Amendment in 2023, Second Amendment in 2024, and Third Amendment in March 2025, we incurred issuance costs of $0.9 million, $0.3 million, $0.4 million, and $0.9 million, respectively, which were deferred and scheduled to be amortized over the remaining term of the agreement.
We believe that our existing cash resources, including our Amended Credit Agreement, will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses we expect to incur as a public company for the short term (at least the next 12 months) and longer term (beyond the next 12 months).
We believe that our existing cash resources, including our Revolving Facility, will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses we expect to incur as a public company for the short term (at least the next 12 months) and longer term (beyond the next 12 months).
Client renewals are also an important lever in driving our long-term gross margin targets, as we generally achieve 36 Table of Contents approximately 70% gross margin upon renewal. We had 42 client renewals in the year ended December 31, 2024. We expect client renewals to continue to play a key role in our future success. Continued Leadership in Innovation.
Client renewals are also an important lever in driving our long-term gross margin targets, as we generally achieve approximately 70% gross margin upon renewal. We had 30 client renewals in the year ended December 31, 2025. We expect client renewals to continue to play a key role in our future success. 40 Table of Contents Continued Leadership in Innovation.
Overview Alkami is a cloud-based digital banking solutions provider. We inspire and empower community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States.
Overview Alkami is a cloud-based digital sales and service platform provider. We inspire and empower community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States.
The non-cash charges were primarily comprised of depreciation and amortization expense of $10.5 million, stock-based compensation expense of $59.4 million, and other net activity of $0.3 million, partially offset by accrued interest on marketable securities of $1.1 million.
The non-cash charges were primarily comprised of depreciation and amortization expense of $10.5 million, stock-based compensation expense of $59.4 million, partially offset by accrued interest on marketable securities of $1.1 million.
SaaS subscription revenues, as further described below, represented 95.6%, 95.3%, and 95.2% of total revenues for the years ended December 31, 2024, 2023, and 2022, respectively.
SaaS subscription revenues, as further described below, represented 95.0%, 95.6%, and 95.3% of total revenues for the years ended December 31, 2025, 2024, and 2023, respectively.
Components of Results of Operations Revenues Our client relationships are predominantly based on multi-year contracts for the Alkami Digital Banking Platform that have had an average contract life of approximately 70 months as of December 31, 2024. We derive the majority of our revenues from SaaS subscription services charged for the use of our digital banking solution.
Components of Results of Operations Revenues We derive substantially all of our revenues from SaaS subscription services charged for the use of our digital sales and service solution. Our client relationships are predominantly based on multi-year contracts for the Alkami Digital Banking Platform that have had an average contract life of approximately 70 months as of December 31, 2025.
We remain committed to investing in our platform, notably through our research and development spend, which was 28.8% of our revenues for the year ended December 31, 2024. Our future success will depend on our continued leadership in innovation.
We remain committed to investing in our platform, notably through our research and development spend, which was 26.7% of our revenues for the year ended December 31, 2025. Our future success will depend on our continued leadership in innovation.
The net cash outflows from the change in our net operating assets and liabilities were primarily due to an $7.7 million increase in deferred costs and a $9.3 million increase in accounts receivable, partially offset by a $3.6 million increase in deferred revenues, a $0.4 million decrease in prepaid expenses and other assets, and a $0.1 million increase in accounts payable and accrued liabilities.
The net cash outflows from the change in our net operating assets and liabilities were primarily due to an $12.3 million increase in deferred costs, an $11.3 million increase in accounts receivable, and a $9.4 million increase in prepaid expenses and other assets, partially offset by a $19.7 million increase in accounts payable and accrued liabilities, and a $9.7 million increase in deferred revenues.
The major components of cost of revenues are represented in the following table as percentages of revenues for the years ended December 31, 2024, 2023, and 2022, respectively: Year ended December 31, (Cost component as a % of revenue) 2024 2023 2022 Third-party hosting services 5.9 % 7.5 % 7.8 % Direct costs of bill-pay and other third-party intellectual property 18.2 % 17.4 % 16.3 % Implementation and client support teams 9.6 % 12.7 % 14.8 % Development team (maintenance and updates) 3.6 % 3.3 % 3.6 % Amortization 2.2 % 2.5 % 2.2 % Stock-based compensation 1.6 % 2.1 % 2.1 % Depreciation — % 0.1 % 0.1 % Operating Expenses Research and Development.
Our gross margin for the years ended December 31, 2025, 2024, and 2023 was 57.8%, 58.9%, and 54.4%, respectively. 41 Table of Contents The major components of cost of revenues are represented in the following table as percentages of revenues for the years ended December 31, 2025, 2024, and 2023, respectively: Year ended December 31, (Cost component as a % of revenue) 2025 2024 2023 Third-party hosting services 5.2 % 5.9 % 7.5 % Direct costs of bill-pay and other third-party intellectual property 18.9 % 18.2 % 17.4 % Implementation and client support teams 8.9 % 9.6 % 12.7 % Development team (maintenance and updates) 2.9 % 3.6 % 3.3 % Amortization 4.4 % 2.2 % 2.5 % Stock-based compensation 1.9 % 1.6 % 2.1 % Depreciation — % — % 0.1 % Operating Expenses Research and Development.
We define adjusted EBITDA as net loss before provision (benefit) for income taxes; (gain) loss on financial instruments; interest (income) expense, net; depreciation and amortization; stock-based compensation expense; secondary offering costs; acquisition-related expenses, net; and loss on extinguishment of debt.
We define adjusted EBITDA as net loss before (benefit from) provision for income taxes; gain on financial instruments; interest expense (income), net; depreciation and amortization; stock-based compensation expense; secondary offering related expenses; acquisition-related expenses; loss on extinguishment of debt; loss on impairment of intangible assets; and stockholder matters related expenses.
Given the long-term nature of our Alkami Digital Banking Platform contracts, a typical sales cycle can range from approximately three to 12 months, with the subsequent implementation timeframe generally ranging from six to 12 months depending on the depth of integration.
We primarily go to market through an internal sales force. Given the long-term nature of our Alkami Digital Banking Platform contracts, a typical sales cycle can range from approximately three to 12 months, with the subsequent implementation timeframe generally ranging from six to 12 months depending on the depth of integration.
Additionally, we have operating leases for real estate and equipment that include future minimum payments with initial terms of one year or more. Total future operating lease payments at December 31, 2024 are $25.7 million. Within the next 12 months, operating lease payments are 43 Table of Contents expected to be $2.7 million.
Additionally, we have operating leases for real estate and equipment that include future minimum payments with initial terms of one year or more. Total future operating lease payments at December 31, 2025 are $23.2 million. Within the next 12 months, operating lease payments are expected to be $2.8 million.
Total future commitments for these obligations over the next five years is $95.2 million. Of this amount, $38.4 million is due within the next 12 months. Refer to Note 12 of the Notes to the Consolidated Financial Statements for further details.
Total future commitments for these obligations over the next five years is $77.5 million. Of this amount, $44.4 million is due within the next 12 months. Refer to Note 13 of the Notes to the Consolidated Financial Statements for further details.
Non-operating Income (Expense) Non-operating income (expense) consists primarily of interest income from our cash balances, interest expense from borrowings under our revolving line of credit, amortization of deferred debt costs, unrealized gains or losses on marketable securities and realized gains on sales of marketable securities.
Non-operating Income (Expense) Non-operating income (expense) consists primarily of interest income from our cash balances, interest expense from borrowings under our Revolving Facility and 2030 Convertible Notes, amortization of debt discount and deferred debt costs, unrealized gains or losses on marketable securities and realized gains on sales of marketable securities.
We may, from time to time, seek to raise additional capital to support our growth. Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business.
Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business.
For the years ended December 31, 2024, 2023, and 2022, our total revenues were $333.8 million, $264.8 million, and $204.3 million, respectively, representing a growth rate of 26.1% from 2023 to 2024 and 29.6% from 2022 to 2023.
For the years ended December 31, 2025, 2024, and 2023, our total revenues were $443.6 million, $333.8 million, and $264.8 million, respectively, representing a growth rate of 32.9% from 2024 to 2025 and 26.1% from 2023 to 2024.
Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Our estimates are inherently uncertain and subject to refinement.
We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Our estimates are inherently uncertain and subject to refinement.
These expenses were partially offset by an increase of $1.4 million in capitalized development costs. Sales and Marketing Sales and marketing expenses increased $11.2 million, or 23.1%, for 2024 compared to 2023.
These expenses were partially offset by an increase of $1.3 million in capitalized development costs. Sales and Marketing Sales and marketing expenses increased $20.4 million, or 34.1%, for 2025 compared to 2024.
Our most critical accounting estimates include the following: Revenue Recognition We derive the majority of our revenues from SaaS subscription services charged for the use of our digital banking solutions. SaaS subscription services are generally recognized as revenues over the term of the contract as a series of distinct SaaS services bundled into a single performance obligation.
Our most critical accounting estimates include the following: Revenue Recognition The Company derives substantially all of its revenues from SaaS subscription services charged for the use of its digital sales and service solutions. SaaS subscription services are generally recognized as revenue over the term of the contract as a series of distinct SaaS services bundled into a single performance obligation.
As a result, we defer any arrangement fees for implementation services and recognize such amounts over time on a ratable basis as one performance obligation with the underlying subscription revenue commencing when the client goes live on the platform, which corresponds with the date the client obtains access to our digital banking solution and begins to benefit from the service.
As a result, the Company defers any upfront fees associated with implementation services and recognizes such amounts over time on a ratable basis as one performance obligation with the underlying subscription revenue commencing when the client goes live on the platform, which corresponds with the date the client obtains access to the Company’s digital sales and service solution and begins to benefit from the service.
During the year ended December 31, 2023, net cash provided by investing activities was $33.9 million, primarily consisting of $181.0 million in proceeds from sales, maturities, and redemptions of marketable securities, partially offset by $140.8 million for the purchase of marketable securities, $5.2 million related to capitalized software development costs, and capital expenditures related to updates for computer and other equipment of $1.1 million.
Net Cash (Used in) Provided by Investing Activities During the year ended December 31, 2025, net cash used in investing activities was $397.6 million, primarily consisting of $375.5 million related to our acquisition of MANTL, $45.2 million for the purchase of marketable securities, $7.1 million related to capitalized software development costs and capital expenditures related to updates for computer and other equipment of $1.5 million, partially offset by $31.8 million in proceeds from sales, maturities, and redemptions of marketable securities.
Alkami was founded to help level the playing field for FIs. Since then, our vision has been to create a platform that combines premium technology and fintech solutions in one integrated ecosystem, delivered as a software-as-a-service (“SaaS”) solution and providing our clients’ customers with a single point of access to all things digital.
Since then, our vision has been to create a platform that combines premium technology and fintech solutions in one integrated ecosystem, delivered as a software-as-a-service (“SaaS”) solution and providing our clients’ account holders with a single point of access to all things digital.
Year ended December 31, ($ in thousands) 2024 2023 2022 Net loss $ (40,835) $ (62,913) $ (58,600) Provision (benefit) for income taxes 308 44 (461) (Gain) loss on financial instruments — (534) 200 Interest (income) expense, net (4,099) (711) 1,154 Depreciation and amortization 10,508 10,631 8,075 Stock-based compensation expense 59,437 51,231 44,592 Secondary offering costs (1) 1,337 — — Acquisition-related expenses, net 195 263 (12,529) Loss on extinguishment of debt — 409 18 Adjusted EBITDA (2) $ 26,851 $ (1,580) $ (17,551) (1) Pursuant to the requirements of the Fourth Amended and Restated Investors’ Rights Agreement, dated as of September 24, 2020, by and among the Company and the investors listed therein, the Company incurred secondary offering costs on behalf of the Selling Stockholders related to the offerings closed on August 12, 2024 and November 8, 2024.
Year ended December 31, ($ in thousands) 2025 2024 2023 Net loss $ (47,652) $ (40,835) $ (62,913) (Benefit from) provision for income taxes (11,310) 308 44 Gain on financial instruments — — (534) Interest expense (income), net 5,326 (4,099) (711) Depreciation and amortization 26,912 10,508 10,631 Stock-based compensation expense 80,098 59,437 51,231 Secondary offering related expenses (1) — 1,337 — Acquisition-related expenses 3,463 195 263 Loss on extinguishment of debt — — 409 Loss on impairment of intangible assets 1,655 — — Stockholder matters related expenses (2) 599 — — Adjusted EBITDA (3) $ 59,091 $ 26,851 $ (1,580) (1) Pursuant to the requirements of the Fourth Amended and Restated Investors’ Rights Agreement, dated as of September 24, 2020, by and among the Company and the investors listed therein, the Company incurred secondary offering related expenses on behalf of the Selling Stockholders related to the offerings closed on August 12, 2024 and November 8, 2024.
The following disaggregates our revenues for the years ended December 31, 2024, 2023, and 2022 by major source: Year ended December 31, 2024 2023 2022 (in thousands) SaaS subscription services $ 319,243 $ 252,348 $ 194,387 Implementation services 7,604 8,488 6,941 Other services 7,002 3,995 2,942 Total revenues $ 333,849 $ 264,831 $ 204,270 See Note 4 of the Notes to the Consolidated Financial Statements for additional detail.
The following disaggregates our revenues for the years ended December 31, 2025, 2024, and 2023 by major source: Year ended December 31, 2025 2024 2023 (in thousands) SaaS subscription services $ 421,674 $ 319,243 $ 252,348 Implementation services 12,596 7,604 8,488 Other services 9,369 7,002 3,995 Total revenues $ 443,639 $ 333,849 $ 264,831 See Note 5 of the Notes to the Consolidated Financial Statements for additional detail.
We incurred net losses of $40.8 million, $62.9 million, and $58.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, largely due to significant continued investment in sales, marketing, product development and post-sales client activities. Recent Developments Second Amendment to Amended and Restated Credit Agreement.
We incurred net losses of $47.7 million, $40.8 million, and $62.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, largely due to significant continued investment in sales, marketing, product development and post-sales client activities. Recent Developments Merger with MANTL.
We capitalize certain personnel costs directly related to the implementation of our solutions to the extent those costs are recoverable from future revenues. We amortize the costs for an implementation once revenue recognition commences. The amortization period is typically five to seven years, which represents the expected period of client benefit.
We amortize the costs for an implementation once revenue recognition commences. The amortization period is typically five to seven years, which represents the expected period of client benefit. Other costs not directly recoverable from future revenues are expensed in the period incurred.
During the year ended December 31, 2023, net cash used in operating activities was $17.5 million, which consisted of a net loss of $62.9 million, adjusted by non-cash charges of $58.2 million and net cash outflows from the change in net operating assets and liabilities of $12.8 million.
During the year ended December 31, 2024, net cash provided by operating activities was $18.6 million, which consisted of a net loss of $40.8 million, adjusted by non-cash charges of $69.2 million, and net cash outflows from the change in net operating assets and liabilities of $9.8 million.
Clients are typically charged a one-time, upfront implementation fee and recurring annual and monthly access fees for the use of our digital banking solution. Implementation and integration of the digital banking platform is complex, and we have determined that the one-time, upfront services are not distinct.
Clients are typically charged a one-time, upfront implementation fee and recurring annual and monthly access fees for the use of the Company’s Digital Sales and Service solution. Implementation and integration of the digital sales and service platform is complex, and the Company has determined that the one-time, upfront services are not distinct from the related SaaS subscription services.
Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgments based on our understanding and analysis of relevant circumstances, historical experience, and actuarial valuations. Actual amounts could differ from those estimated at the time the consolidated financial statements are prepared.
Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgments based on our understanding and analysis of relevant circumstances, historical experience, and actuarial valuations.
We define a registered user as an individual or business related to an account holder of an FI client on our digital banking platform who has registered to use one or more of our solutions and has current access to use those solutions as of the last day of the reporting period presented.
We define a registered user as an individual or business related to an account holder of an FI client on our digital banking platform and has access as of the last day of the reporting period presented. We exclude individuals or businesses that solely use the products and services of our acquisitions.
In connection with the acquisition of MANTL, on February 27, 2025, the Company entered into a Third Amendment to the its Amended and Restated Credit Agreement dated as of April 29, 2022, which, among other things, extended the maturity date of the revolving commitment, increased the amount of the revolving loan commitment, permits certain convertible indebtedness and equity derivative transactions, subject to certain restrictions, and modified certain covenants.
In connection with the acquisition of MANTL, on February 27, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to its Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), which, among other things, extended the maturity date of the Revolving Facility (as defined below), increased the amount of the Revolving Facility commitment, extended the Financial Covenant Trigger Date (as defined therein), reduced the applicable interest rate margins, permitted the acquisition of MANTL pursuant to the terms of the Merger Agreement, permitted certain convertible indebtedness and equity derivative transactions, subject to certain restrictions, and modified certain covenants.
Our platform model with more than 300 integrations as of December 31, 2024 enables us to deliver thousands of configurations aligned with the digital platform strategies adopted by our clients.
The depth of our product suite is a function of technology and platform partnerships. Our platform model with more than 300 integrations as of December 31, 2025 enables us to deliver thousands of configurations aligned with the digital platform strategies adopted by our clients.
We expect that general and administrative expenses will continue to increase as we scale our business and as we incur costs associated with being a publicly traded company, including legal, audit, business insurance and consulting fees. Acquisition-Related Expenses, net. Acquisition-related expenses, net, include acquisition-related expenses primarily related to accrual of deferred compensation, legal, consulting and professional fees.
We expect that general and administrative expenses will continue to increase as we scale our business and as we incur costs associated with being a publicly traded company, including legal, audit, business insurance and consulting fees. However, we expect that general and administrative expenses will decrease as a percentage of revenue over the long term. Acquisition-Related Expenses.
Our future success will significantly depend on our ability to continue to grow our FI client base through competitive wins. Deepening Client Customer Penetration. We primarily generate revenues through a per-registered-user pricing model. Once we onboard a client, our ability to help drive incremental client customer digital adoption translates to additional revenues with very limited additional spend.
Our future success will significantly depend on our ability to continue to grow our FI client base through competitive wins. Deepening Client Customer or Member Penetration. We primarily generate revenues through a per-registered-user pricing model.
Net Cash Provided by (Used in) Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $11.8 million, which was primarily due to proceeds of $20.2 million from stock option exercises to purchase 2.6 million shares of common stock and proceeds from issuances under the Employee Stock Purchase Plan (“ESPP”) of $4.7 million, partially offset by payments for taxes related to net settlement of equity awards of $12.8 million and debt issuance costs of $0.4 million. 42 Table of Contents For the year ended December 31, 2023, net cash used in financing activities was $87.8 million, which was primarily due to $85.0 million of principal payments on term debt, payments for taxes related to net settlement of equity awards of $16.0 million, payment of an acquisition related holdback of $3.6 million and debt issuance costs paid of $0.3 million, partially offset by proceeds of $13.0 million from the exercise of stock options to purchase 2.2 million shares of our common stock and proceeds from issuances under the ESPP of $4.1 million.
For the year ended December 31, 2024, net cash provided by financing activities was $11.8 million, which was primarily due to proceeds of $20.2 million from stock option exercises to purchase 2.6 million shares of common stock and proceeds from issuances under the ESPP of $4.7 million, partially offset by payments for taxes related to net settlement of equity awards of $12.8 million and debt issuance costs of $0.4 million.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year ended December 31, (in thousands) 2024 2023 Net cash provided by (used in) operating activities $ 18,597 $ (17,502) Net cash provided by investing activities $ 23,041 $ 33,911 Net cash provided by (used in) financing activities $ 11,794 $ (87,819) Net Cash Provided by (Used in) Operating Activities During the year ended December 31, 2024, net cash provided by operating activities was $18.6 million, which consisted of a net loss of $40.8 million, adjusted by non-cash charges of $69.2 million, and net cash outflows from the change in net operating assets and liabilities of $9.8 million.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities $ 42,906 $ 18,597 Net cash (used in) provided by investing activities $ (397,594) $ 23,041 Net cash provided by financing activities $ 323,786 $ 11,794 Net Cash Provided by Operating Activities During the year ended December 31, 2025, net cash provided by operating activities was $42.9 million, which consisted of a net loss of $47.7 million, adjusted by non-cash charges of $94.1 million, and net cash outflows from the change in net operating assets and liabilities of $3.5 million.
We recognize the consideration transferred (i.e., purchase price) in a business combination as well as the acquired business’ identifiable assets, liabilities, and any non-controlling interests at their acquisition date fair value. The excess of the consideration transferred over the fair value of the identifiable assets, liabilities, and non-controlling interest, is recorded as goodwill in our consolidated financial statements.
Business Combinations Our acquisitions are accounted for using the acquisition method of business combinations accounting. We recognize the consideration transferred (i.e., purchase price) in a business combination as well as the acquired business’ identifiable assets, liabilities, and any non-controlling interests at their acquisition date fair value.
As of December 31, 2024, we served 272 FIs through the Alkami Digital Banking Platform and over 750 clients when including unique clients only subscribing to one or a combination of ACH Alert, MK or Segmint products.
A key part of our strategy is to grow our FI client base. As of December 31, 2025, we served 301 FIs through the Alkami Digital Banking Platform and over 960 clients when including unique clients only subscribing to one or a combination of ACH Alert, Segmint, or MANTL products.
This includes the costs of our implementation, client support and development personnel responsible for maintaining and releasing updates to our platform, as well as third-party cloud-based hosting services. Cost of revenues also includes the direct costs of bill-pay services and other third-party intellectual property included in our solutions, depreciation, and the amortization of acquired technology.
This includes the costs of our implementation, client support, development personnel responsible for maintaining and releasing updates to our Platform, as well as third-party cloud-based hosting services.
As a result of our valuation allowance, provision for income taxes consists primarily of current state income taxes and deferred taxes related to the tax amortization of acquired goodwill.
As a result of our valuation allowance, (benefit from) provision for income taxes consists primarily of state income taxes and deferred taxes related to the tax amortization of acquired goodwill, offset by a deferred tax benefit attributable to the partial release of the Company’s pre-existing valuation allowance related to the MANTL business combination.
Provision for Income Taxes The Company recorded a provision for income taxes of $0.3 million and less than $0.1 million, resulting in an effective tax rate of (0.8)% and (0.1)% for 2024 and 2023, respectively.
(Benefit from) Provision for Income Taxes The Company recorded a benefit from income taxes of $11.3 million and a provision for income taxes of $0.3 million for the years ended December 31, 2025 and 2024 respectively, resulting in an effective tax rate of 19.2% and (0.8)% for 2025 and 2024, respectively.
Our net losses have been driven by our investments in developing our digital banking platform, expanding our sales, marketing and implementation organizations, and scaling our administrative functions to support our rapid growth. We have financed our operations primarily through cash generated from the sale of SaaS subscription services.
Our net losses have been driven by our investments in developing our Digital Sales & Service Platform, expanding our sales, marketing and implementation organizations, and scaling our administrative functions to support our rapid growth.
The Alkami Digital Banking Platform offers an end-to-end set of digital banking products.
The Alkami Digital Banking Platform allows us to offer an end-to-end set of software solutions.
Our performance obligation for the SaaS series of services includes standing ready over the term of the contract to provide access to all the clients’ customers and process any transactions initiated by those customers. We invoice clients each month for the contracted minimum number of registered users with an additional amount for registered users in excess of those minimums.
The Company’s performance obligation for the SaaS series of services includes standing ready over the term of the contract to provide access to all of the clients’ users and process any transactions initiated by those users.
Acquisition-Related Expenses, Net Acquisition-related expenses, net was $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively. Amortization of Acquired Intangibles Amortization of acquired intangibles was $1.4 million for both of the years ended December 31, 2024 and 2023.
Amortization of Acquired Intangibles Amortization of acquired intangibles was $5.7 million and $1.4 million for the years ended December 31, 2025 and 2024 respectively.
Other costs not directly recoverable from future revenues are expensed in the period incurred. We intend to continue to increase our investments in our implementation, client support teams and technology infrastructure to serve our clients and support our growth.
We intend to continue to increase our investments in our implementation, client support teams and technology infrastructure to serve our clients and support our growth.
In addition, these expenses are inclusive of any gain or loss on revaluation of contingent consideration. Amortization of Acquired Intangibles. Amortization of acquired intangibles represents the amortization of intangible assets recorded in connection with our business acquisitions, which are amortized on a straight-line basis over the estimated useful lives of the related assets.
Acquisition-related expenses are primarily related to insurance, legal, consulting and professional fees incurred for the acquisition of MANTL. Amortization of Acquired Intangibles. Amortization of acquired intangibles represents the amortization of intangible assets recorded in connection with our business acquisitions, which are amortized on a straight-line basis over the estimated useful lives of the related assets.
The increase was primarily due to an $8.6 million increase in personnel-related costs (which includes stock-based compensation of $1.8 million) resulting primarily from headcount growth in our sales and marketing teams. In addition, we incurred $1.7 million in higher consulting costs, and $1.0 million in higher travel costs for our sales team.
The increase was primarily due to an $15.5 million increase in personnel-related costs (which includes stock-based compensation of $4.5 million) associated with headcount growth in our sales and marketing teams.
Unamortized debt issuance costs totaled $0.5 million, $0.3 million, and $0.7 million as of December 31, 2024, 2023, and 2022 respectively. Amortization expense totaled $0.2 million, $0.4 million, and $0.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Amortization expense related to unamortized discounts and debt issuance costs (included in interest expense in the consolidated statements of operations) totaled $2.0 million, $0.2 million, and $0.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Comparison of the years ended December 31, 2024 and 2023 Revenues Year ended December 31, Change ($ in thousands) 2024 2023 $ % Revenues $ 333,849 $ 264,831 $ 69,018 26.1 % December 31, 2024 2023 Annual Recurring Revenue (ARR) $ 355,874 $ 291,049 $ 64,825 22.3 % Registered Users 19,984 17,502 2,482 14.2 % Revenue per Registered User (RPU) $ 17.81 $ 16.63 $ 1.18 7.1 % Revenues increased $69.0 million, or 26.1%, for 2024 compared to 2023.
Comparison of the years ended December 31, 2025 and 2024 Revenues Year ended December 31, Change ($ in thousands) 2025 2024 $ % Revenues $ 443,639 $ 333,849 $ 109,790 32.9 % December 31, 2025 2024 Annual Recurring Revenue (ARR) $ 480,346 $ 355,874 $ 124,472 35.0 % Registered Users 22,406 19,984 2,422 12.1 % Revenue per Registered User (RPU) $ 21.44 $ 17.81 $ 3.63 20.4 % Revenues increased $109.8 million, or 32.9%, for 2025 compared to 2024.
The Company was in compliance with all covenants as of December 31, 2024. Total interest expense, including commitment fees and unused line fees, for the years ended December 31, 2024, 2023, and 2022 was $0.5 million, $7.4 million and $3.9 million, respectively.
Total interest expense, including commitment fees and unused line fees, was $9.5 million, $0.5 million and $7.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Interest expense related to the 2030 Convertible Notes and Revolving Facility was $5.8 million and $2.8 million for the year ended December 31, 2025, respectively.
Our FI clients are incentivized to market and encourage digital account sign-up based on identifiable improvement in customer engagement, as well as discounts received based on certain levels of customer penetration. We expect to continue to support digital adoption by client customers through continued investments in new products and platform enhancements.
Once we onboard a client, our ability to help drive incremental client customer or member digital adoption translates to additional revenues with very limited additional spend. Our FI clients are incentivized to market and encourage digital account sign-up based on identifiable improvement in customer engagement, as well as discounts received based on certain levels of customer or member penetration.
Our solution, the Alkami Digital Banking Platform, allows FIs to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture. We cultivate deep relationships with our clients through long-term, subscription-based contractual arrangements, aligning our growth with our clients’ success and generating an attractive unit economic model.
Our solution, the Alkami Digital Sales & Service Platform, consisting of the Alkami Digital Banking Platform, Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture.
Our typical relationship with an FI begins with a set of core functional components, which can extend over time to include a rounded suite of products across account opening, marketing, data insights, card experience, money movement, customer service, business banking, financial wellness, security and fraud protection and extensibility. We primarily go to market through an internal sales force.
Our typical relationship with an FI begins with a set of core functional components, which can expand over time to include a rounded suite of products across onboarding and account opening, marketing, data insights, account management, payments and receivables, admin, risk and reporting, business and commercial banking, retail banking, financial analytics, and extensibility.
Our most significant accounting policies, including Revenue Recognition and Business Combinations, are described in Note 2 of the Notes to the Consolidated Financial Statements. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments, or estimates.
Actual amounts could differ from those estimated at the time the consolidated financial statements are prepared. 47 Table of Contents Our most significant accounting policies, including Revenue Recognition and Business Combinations, are described in Note 2 of the Notes to the Consolidated Financial Statements.
As a result of our valuation allowance, provision for income taxes consists primarily of state income taxes and deferred taxes related to the tax amortization of acquired goodwill. Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this filing.
See Notes 3 and 10 of the Notes to the Consolidated Financial Statements for further information. Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this filing.
Our future success will depend on our ability to continue to deepen client customer penetration. Expanding our Product Suite. Product depth is a key determinant in winning new clients. In a replacement market, we win based on our ability to bring a product suite to market that is superior to the incumbent, as well as to our broader competition.
In a replacement market, we win based on our ability to bring a product suite to market that is superior to the incumbent, as well as to our broader competition. Of equal importance is the ability to cohesively deliver a deep product suite with as little friction as possible to the client customer or member.
The increase was primarily due to a $6.5 million increase in personnel-costs (which includes stock-based compensation of $5.3 million) resulting primarily from headcount growth, higher audit and consulting fees of $2.4 million, higher software costs of $1.7 million, and $1.3 million of secondary offering costs. These expenses are partially offset by $1.1 million lower miscellaneous other costs.
The increase was primarily due to a $14.6 million increase in personnel-costs (which includes stock-based compensation of $8.1 million) associated with headcount growth and higher software costs of $2.2 million. Acquisition-related expenses Acquisition-related expenses increased $3.3 million for 2025 compared to 2024 primarily related to insurance, legal, consulting, and professional fees incurred for the acquisition of MANTL.
MANTL provides onboarding and account opening solutions that allow financial institutions to acquire commercial, business, and retail customers through a variety of channels for many deposit account types. Pursuant to the terms of the Merger Agreement, the Company has agreed to acquire MANTL for approximately $380 million, subject to customary purchase price adjustments.
MANTL provides onboarding and account opening solutions that allow FIs to acquire commercial, business and retail customers through a variety of channels for many deposit account types. The aggregate consideration paid in exchange for all of the outstanding equity interests of MANTL was approximately $375 million, net of cash acquired.
These expenses were partially offset by a decrease in hosting costs of $0.4 million. 40 Table of Contents Operating Expenses Year ended December 31, Change ($ in thousands) 2024 2023 $ % Research and development $ 96,211 $ 84,661 $ 11,550 13.6 % Sales and marketing 59,765 48,557 11,208 23.1 % General and administrative 83,650 72,900 10,750 14.7 % Acquisition-related expenses, net 195 263 (68) (25.9) % Amortization of acquired intangibles 1,435 1,435 — — % Total operating expenses $ 241,256 $ 207,816 $ 33,440 16.1 % Percentage of revenues 72.3 % 78.5 % Research and Development Research and development expenses increased $11.6 million, or 13.6%, for 2024 compared to 2023, primarily due to a $5.8 million increase in personnel-related costs (which includes stock-based compensation of $1.3 million) resulting primarily from headcount growth, $5.4 million in higher consulting costs, $1.1 million in higher hosting costs, and higher miscellaneous other costs of $0.7 million.
The driver for the decrease in gross margin for the year ended December 31, 2025 compared to the same period in 2024 is primarily related to the increased amortization of intangible assets included in cost of revenues due to the acquisition of MANTL. 44 Table of Contents Operating Expenses Year ended December 31, Change ($ in thousands) 2025 2024 $ % Research and development $ 118,396 $ 96,211 $ 22,185 23.1 % Sales and marketing 80,141 59,765 20,376 34.1 % General and administrative 100,892 83,650 17,242 20.6 % Acquisition-related expenses 3,463 195 3,268 1675.9 % Amortization of acquired intangibles 5,688 1,435 4,253 296.4 % Loss on impairment of intangible assets 1,655 — 1,655 100.0 % Total operating expenses $ 310,235 $ 241,256 $ 68,979 28.6 % Percentage of revenues 69.9 % 72.3 % Research and Development Research and development expenses increased $22.2 million, or 23.1%, for 2025 compared to 2024, primarily due to a $20.4 million increase in personnel-related costs (which includes stock-based compensation of $5.2 million) associated with headcount growth, $1.5 million in higher hosting costs, and $1.3 million in higher software costs.
Cost of Revenues Year ended December 31, Change ($ in thousands) 2024 2023 $ % Cost of revenues $ 137,219 $ 120,720 $ 16,499 13.7 % Percentage of revenues 41.1 % 45.6 % (4.5) % (9.9) % Cost of revenues increased $16.5 million, or 13.7%, for 2024 compared to 2023, generating a gross margin of 58.9% for 2024 compared to a gross margin of 54.4% for 2023.
Cost of Revenues Year ended December 31, Change ($ in thousands) 2025 2024 $ % Cost of revenues $ 187,040 $ 137,219 $ 49,821 36.3 % Percentage of revenues 42.2 % 41.1 % 1.1 % 2.7 % Cost of revenues increased $49.8 million, or 36.3%, for 2025 compared to 2024.
The increase in cost of revenues was primarily driven by $14.6 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, and a $0.6 million increase in personnel-related costs (which includes a decrease in stock-based compensation of $0.2 million) resulting from headcount increases supporting our growth in the following teams: client implementation, site reliability engineering and client support, as well as higher miscellaneous other costs of $1.7 million.
The increase in cost of revenues was primarily driven by $22.9 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, an $12.1 million increase in personnel-related costs (which includes stock-based compensation of $2.9 million, of which $1.0 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), an $11.2 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL, and $3.5 million in higher hosting costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssuming the amounts outstanding under our Amended Credit Agreement are fully drawn, a hypothetical 10% change in interest rates would not have a material impact on our consolidated financial statements. Our cash and cash equivalents consist primarily of interest-bearing accounts. Such interest-earning instruments carry a degree of interest rate risk.
Biggest changeAssuming the amounts outstanding under our Amended Credit Agreement are fully drawn, a hypothetical 10% change in interest rates would not have a material impact on our 48 Table of Contents consolidated financial statements. Our cash and cash equivalents consist primarily of interest-bearing accounts. Such interest-earning instruments carry a degree of interest rate risk.
Because of the short-term maturities of our cash, cash equivalents, and marketable securities, we do not believe that an increase in market rates would have any significant negative impact on the realized value of our investments. 45 Table of Contents
Because of the short-term maturities of our cash, cash equivalents, and marketable securities, we do not believe that an increase in market rates would have any significant negative impact on the realized value of our investments. 49 Table of Contents

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