Alkami Announces First Quarter 2021 Financial Results
First Quarter 2021 Financial Highlights
- GAAP total revenue of
$33.3 million , an increase of 43% year-over-year; - GAAP gross margin of 53.4%, an expansion of nearly 470 basis points year-over-year;
- Non-GAAP gross margin of 54.5%, an expansion of approximately 540 basis points year-over-year;
- GAAP net loss of
($10.9) million compared to a net loss of($10.3) million in the prior year; and, - Adjusted EBITDA loss of
($6.1) million compared to a loss of($9.1) million in the prior year quarter.
Comments on the News
“The start to 2021 has been historic for Alkami,” said
“Alkami is on strong financial footing as we begin to execute our plan for 2021,” said
First Quarter 2021 Business Highlights
- Annual Recurring Revenue (ARR) of
$133.8 million , an increase of 39% year-over-year; - Registered Users of 10.0 million, an increase of 28% year-over-year;
- Revenue Per Registered User (RPU) of
$13.40 , an increase of 9% year-over-year; and, - Six client wins, including Liberty Bank, aggregating to over 215,000 digital banking users.
2021 Financial Outlook
Alkami’s financial outlook is based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement Regarding Forward-Looking Statements.”
- GAAP total revenue is expected to be in the range of
$34.0 million to$35.0 million ; - Adjusted EBITDA loss is expected to be in the range of
($7.5) million to($6.5) million .
- GAAP total revenue is expected to be in the range of
$144.0 million to$148.0 million ; - Adjusted EBITDA loss is expected to be in the range of
($26.5) million to($23.5) million .
Conference Call Information
The Company will host a conference call at
About
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking” statements relating to
Explanation of Non-GAAP Financial Measures
The company reports its financial results in accordance with accounting principles generally accepted in
The company defines “Annual Recurring Revenue (ARR)” by aggregating annualized recurring revenue related to SaaS subscription services recognized in the last month of the reporting period as well as the next 12 months of expected implementation services revenues for all clients on the platform in the last month of the reporting period. We believe ARR provides important information about our future revenue potential, our ability to acquire new clients, and our ability to maintain and expand our relationship with existing clients.
The company defines “Registered Users” 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 price our digital banking platform based on the number of registered users, so as the number of registered users of our digital banking platform increases, our ARR grows. We believe growth in the number of registered users provides important information about our ability to expand market adoption of our digital banking platform and its associated software products, and therefore to grow revenues over time.
The company defines “Revenue per Registered User (RPU)” by dividing ARR for the reporting period by the number of registered users as of the last day of the reporting period. We believe RPU provides important information about our ability to grow the number of software products adopted by new clients over time, as well as our ability to expand the number of software products that our existing clients add to their contracts with us over time.
The company defines “Non-GAAP Gross Margin” as gross profit, plus (1) amortization of intangible assets and (2) stock-based compensation expense, all divided by revenue. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Product Development Expense” as product development expense, excluding (1) amortization of intangible assets and (2) stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.
The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding (1) amortization of intangible assets and (2) stock-based compensation expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.
The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding (1) amortization of intangible assets, (2) stock-based compensation expense, (3) acquisition-related expenses, and (4) tender offer-related costs. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.
The company defines “Non-GAAP Operating Income (Loss)” as operating income (loss), plus (1) amortization of intangible assets, (2) stock-based compensation expense, (3) acquisition-related expenses, and (4) tender offer-related costs. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Net Income (Loss)” as net income, plus (1) convertible preferred stock deemed and accrued dividends, (2) (gain) loss on financial instruments, (3) amortization of intangible assets, (4) stock-based compensation expense, (5) acquisition-related expenses, and (6) tender offer-related costs. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Net Income (Loss) per Share” as Non-GAAP Net Income divided by Weighted Average Shares Outstanding. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Adjusted EBITDA” as net loss before provision for income taxes, plus (1) (gain) loss on financial instruments, (2) interest (income) expense, net, (3) amortization of intangible assets, (4) depreciation, (5) stock-based compensation expense, (6) tender offer-related costs, and (7) acquisition-related costs. The company believes adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands, except share and per share data) | ||||||||
(UNAUDITED) | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 162,075 | $ | 166,790 | ||||
Accounts receivable, net | 14,614 | 14,103 | ||||||
Deferred implementation costs, current | 5,063 | 4,745 | ||||||
Prepaid expenses and other current assets | 9,742 | 7,598 | ||||||
Total current assets | 191,494 | 193,236 | ||||||
Property and equipment, net | 10,308 | 10,461 | ||||||
Deferred implementation costs, net of current portion | 15,096 | 14,858 | ||||||
Intangibles, net | 8,057 | 8,266 | ||||||
16,542 | 16,218 | |||||||
Other assets | 6,522 | 6,127 | ||||||
Total assets | $ | 248,019 | $ | 249,166 | ||||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | 625 | $ | 313 | ||||
Accounts payable | 4,725 | 360 | ||||||
Accrued liabilities | 16,125 | 13,099 | ||||||
Deferred rent and tenant allowance, current | 661 | 596 | ||||||
Deferred revenues, current portion | 6,715 | 6,116 | ||||||
Total current liabilities | 28,851 | 20,484 | ||||||
Long-term debt, net | 24,267 | 24,566 | ||||||
Warrant liability | 4,336 | 2,692 | ||||||
Deferred revenues, net of current portion | 13,835 | 14,424 | ||||||
Deferred rent and tenant allowance, net of current portion | 5,726 | 5,867 | ||||||
Other non-current liabilities | 1,393 | 1,393 | ||||||
Total liabilities | 78,408 | 69,426 | ||||||
Redeemable Convertible Preferred Stock | ||||||||
Redeemable convertible preferred stock, |
443,540 | 443,263 | ||||||
Stockholders’ Equity (Deficit) | ||||||||
Common stock, |
7 | 5 | ||||||
Additional paid-in capital | 3,974 | - | ||||||
Accumulated deficit | (277,910 | ) | (263,528 | ) | ||||
Total stockholders’ equity (deficit) | (273,929 | ) | (263,523 | ) | ||||
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) | $ | 248,019 | $ | 249,166 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands, except share and per share data) | |||||||
(UNAUDITED) | |||||||
Three Months Ended |
|||||||
Revenues | $ | 33,262 | $ | 23,210 | |||
Cost of revenues | 15,497 | 11,902 | |||||
Gross profit | 17,765 | 11,308 | |||||
Operating expenses: | |||||||
Research and development | 10,913 | 9,689 | |||||
Sales and marketing | 5,406 | 4,640 | |||||
General and administrative | 10,385 | 7,158 | |||||
Total operating expenses | 26,704 | 21,487 | |||||
Loss from operations | (8,939 | ) | (10,179 | ) | |||
Non-operating income (expense): | |||||||
Interest income | 14 | 29 | |||||
Interest expense | (310 | ) | (104 | ) | |||
Loss on financial instruments | (1,644 | ) | (1 | ) | |||
Loss before income taxes | (10,879 | ) | (10,255 | ) | |||
Provision for income taxes | - | - | |||||
Net loss | $ | (10,879 | ) | $ | (10,255 | ) | |
Less: cumulative dividends and adjustments to redeemable convertible preferred stock | (277 | ) | (277 | ) | |||
Net loss attributable to common stockholders: | $ | (11,156 | ) | $ | (10,532 | ) | |
Net loss per share attributable to common stockholders: | |||||||
Basic and diluted | $ | (2.00 | ) | $ | (2.31 | ) | |
Weighted average number of shares of common stock outstanding: | |||||||
Basic and diluted | 5,584,182 | 4,569,020 | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
(UNAUDITED) | |||||||
Three Months Ended | |||||||
2021 |
2020 |
||||||
Cash Flows from Operating Activities: | |||||||
Net loss | $ | (10,879 | ) | $ | (10,255 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization expense | 786 | 652 | |||||
Stock-based compensation expense | 1,418 | 459 | |||||
Amortization of debt issuance costs | 13 | 19 | |||||
Loss on financial instruments | 1,644 | 1 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (512 | ) | (1,246 | ) | |||
Prepaid expenses and other current assets | (1,207 | ) | (1,675 | ) | |||
Accounts payable and accrued liabilities | 7,382 | (2,351 | ) | ||||
Deferred implementation costs | (556 | ) | (787 | ) | |||
Deferred rent and tenant allowances | (76 | ) | (42 | ) | |||
Deferred revenues | 35 | 435 | |||||
Net cash used in operating activities | (1,952 | ) | (14,790 | ) | |||
Cash Flows from Investing Activities: | |||||||
Purchases of property and equipment | (180 | ) | (1,195 | ) | |||
Capitalized software development costs | (244 | ) | - | ||||
Acquisition of business | (326 | ) | - | ||||
Net cash used in investing activities | (750 | ) | (1,195 | ) | |||
Cash Flows from Financing Activities: | |||||||
Borrowings on line of credit | - | 13,000 | |||||
Proceeds from stock option exercises | 2,829 | 52 | |||||
Deferred IPO issuance costs paid | (1,345 | ) | - | ||||
Payments on capital lease obligations | - | (11 | ) | ||||
Repurchase of common stock | (3,497 | ) | - | ||||
Net cash (used in) provided by financing activities | (2,013 | ) | 13,041 | ||||
Net decrease in cash and cash equivalents | (4,715 | ) | (2,944 | ) | |||
Cash and cash equivalents and restricted cash, beginning of period | 171,663 | 11,982 | |||||
Cash and cash equivalents and restricted cash, end of period | $ | 166,948 | $ | 9,038 |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP total revenues | $ | 33,262 | $ | 23,210 | |||||||||||
Annual Recurring Revenue (ARR) | $ | 133,807 | $ | 95,944 | |||||||||||
Registered Users | 9,989 | 7,817 | |||||||||||||
Revenue per Registered User (RPU) | $ | 13.40 | $ | 12.27 | |||||||||||
Non-GAAP Cost of Revenues | |||||||||||||||
Set forth below is a presentation of the company’s “Non-GAAP Cost of Revenues.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP cost of revenues | $ | 15,497 | $ | 11,902 | |||||||||||
Amortization of intangible assets | (118 | ) | - | ||||||||||||
Stock-based compensation expense | (233 | ) | (92 | ) | |||||||||||
Non-GAAP cost of revenues | $ | 15,146 | $ | 11,810 | |||||||||||
Non-GAAP Gross Margin | |||||||||||||||
Set forth below is a presentation of the company’s “Non-GAAP Gross Margin.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP gross margin | 53.4 | % | 48.7 | % | |||||||||||
Amortization of intangible assets | 0.4 | % | 0.0 | % | |||||||||||
Stock-based compensation expense | 0.7 | % | 0.4 | % | |||||||||||
Non-GAAP gross margin | 54.5 | % | 49.1 | % | |||||||||||
Set forth below is a presentation of the company’s “Non-GAAP Research and Development Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP research and development expense | $ | 10,913 | $ | 9,689 | |||||||||||
Amortization of intangible assets | - | - | |||||||||||||
Stock-based compensation expense | (299 | ) | (105 | ) | |||||||||||
Non-GAAP research and development expense | $ | 10,614 | $ | 9,584 | |||||||||||
Non-GAAP Sales and Marketing Expense | |||||||||||||||
Set forth below is a presentation of the company’s “Non-GAAP Sales and Marketing Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP sales and marketing expense | $ | 5,406 | $ | 4,640 | |||||||||||
Amortization of intangible assets | (91 | ) | - | ||||||||||||
Stock-based compensation expense | (103 | ) | (33 | ) | |||||||||||
Non-GAAP sales and marketing expense | $ | 5,212 | $ | 4,607 | |||||||||||
Non-GAAP General and Administrative Expense | |||||||||||||||
Set forth below is a presentation of the company’s “Non-GAAP General and Administrative Expense.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP general and administrative expense | $ | 10,385 | $ | 7,158 | |||||||||||
Amortization of intangible assets | - | - | |||||||||||||
Stock-based compensation expense | (783 | ) | (229 | ) | |||||||||||
Acquisition-related expenses | (638 | ) | - | ||||||||||||
Non-GAAP general and administrative expense | $ | 8,964 | $ | 6,929 | |||||||||||
Non-GAAP Net Loss | |||||||||||||||
Set forth below is a presentation of the company’s “Non-GAAP Net Loss.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP net loss attributable to common stockholders | $ | (11,156 | ) | $ | (10,532 | ) | |||||||||
Convertible preferred stock deemed and accrued dividends | 277 | 277 | |||||||||||||
Loss on financial instruments | 1,644 | 1 | |||||||||||||
Amortization of intangible assets | 209 | - | |||||||||||||
Stock-based compensation expense | 1,418 | 459 | |||||||||||||
Acquisition-related expenses | 638 | - | |||||||||||||
Non-GAAP net loss | $ | (6,970 | ) | $ | (9,795 | ) | |||||||||
Adjusted EBITDA | |||||||||||||||
Set forth below is a presentation of the company’s “Adjusted EBITDA.” Please reference the “Explanation of Non-GAAP Measures” section. | |||||||||||||||
Three Months Ended | |||||||||||||||
2021 | 2020 | ||||||||||||||
GAAP net loss | $ | (10,879 | ) | $ | (10,255 | ) | |||||||||
Provision for income taxes | - | - | |||||||||||||
Loss on financial instruments | 1,644 | 1 | |||||||||||||
Interest expense, net | 296 | 75 | |||||||||||||
Amortization of intangible assets | 209 | - | |||||||||||||
Depreciation | 577 | 652 | |||||||||||||
Stock-based compensation expense | 1,418 | 459 | |||||||||||||
Acquisition-related expenses | 638 | - | |||||||||||||
Adjusted EBITDA | $ | (6,097 | ) | $ | (9,068 | ) | |||||||||
Adjusted EBITDA Guidance | |||||||||||||||
Set forth below is a presentation of the company’s “Adjusted EBITDA” for the three months ending |
|||||||||||||||
Three Months Ending | Twelve Months Ending | ||||||||||||||
June 30, 2021 | December 31, 2021 | ||||||||||||||
Low | High | Low | High | ||||||||||||
GAAP net loss | $ | (13,335 | ) | $ | (11,975 | ) | $ | (46,604 | ) | $ | (42,594 | ) | |||
Provision for income taxes | - | - | - | - | |||||||||||
Loss on financial instruments | 1,360 | 1,300 | 3,004 | 2,944 | |||||||||||
Interest expense, net | 300 | 250 | 1,200 | 1,000 | |||||||||||
Amortization of intangible assets | 250 | 200 | 950 | 800 | |||||||||||
Depreciation | 800 | 700 | 3,300 | 3,000 | |||||||||||
Stock-based compensation expense | 2,500 | 2,400 | 9,150 | 8,850 | |||||||||||
Acquisition-related expenses | 625 | 625 | 2,500 | 2,500 | |||||||||||
Adjusted EBITDA | $ | (7,500 | ) | $ | (6,500 | ) | $ | (26,500 | ) | $ | (23,500 | ) |
Investor Relations Contact
ir@alkami.com
Media Relations Contacts
jennifer.cortez@alkami.com
audrey@outlookmarketingsrv.com
Source: Alkami Technology, Inc.