alk-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-40321

ALKAMI TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		45-3060776
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

5601 Granite Parkway,	Suite 120
Plano,	TX	75204
(Address of Principal Executive Offices)		(Zip Code)

(877) 725-5264

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	ALKT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Smaller reporting company	☐
Accelerated filer	☒	Emerging growth company	☒
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of registrant’s common stock outstanding as of June 30, 2023 was 94,228,876.


TABLE OF CONTENTS


PART I ‑ FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Operations	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II ‑ OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

Signatures		32

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(UNAUDITED)


	June 30,		December 31,
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	90,296	$	108,720
Marketable securities	86,010		87,635
Accounts receivable, net	28,152		26,246
Deferred implementation costs, current	8,923		7,855
Prepaid expenses and other current assets	12,927		11,709
Total current assets	226,308		242,165
Property and equipment, net	15,305		13,561
Right of use assets	13,539		14,670
Deferred implementation costs, net of current portion	26,571		24,783
Intangibles, net	39,200		42,593
Goodwill	148,050		148,017
Other assets	3,955		3,096
Total assets	$	472,928	$	488,885
Liabilities and Stockholders' Equity
Current liabilities
Current portion of long-term debt	$	5,313	$	3,188
Accounts payable	1,046		4,291
Accrued liabilities	23,262		21,643
Deferred revenues, current portion	8,814		8,835
Lease liabilities, current portion	3,170		3,657
Total current liabilities	41,605		41,614
Long-term debt, net	78,157		81,392
Deferred revenues, net of current portion	13,740		13,904
Deferred income taxes	1,829		1,712
Lease liabilities, net of current portion	14,798		15,817
Other non-current liabilities	275		400
Total liabilities	150,404		154,839
Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized; and 94,228,876 and 92,112,749 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	94		92
Additional paid-in capital	729,607		706,407
Accumulated deficit	(407,177)		(372,453)
Total stockholders’ equity	322,524		334,046
Total liabilities and stockholders' equity	$	472,928	$	488,885

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(UNAUDITED)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Revenues	65,763		50,530		125,759		95,320
Cost of revenues(1)	30,289		23,257		58,147		43,237
Gross profit	35,474		27,273		67,612		52,083
Operating expenses:
Research and development	20,866		16,595		41,415		30,751
Sales and marketing	13,883		10,204		24,761		18,101
General and administrative	18,207		18,731		35,318		35,777
Acquisition-related expenses, net	34		796		220		(582)
Amortization of acquired intangibles	357		331		717		426
Total operating expenses	53,347		46,657		102,431		84,473
Loss from operations	(17,873)		(19,384)		(34,819)		(32,390)
Non-operating income (expense):
Interest income	2,016		424		3,742		532
Interest expense	(1,826)		(863)		(3,583)		(1,151)
Gain (loss) on financial instruments	10		(254)		220		(387)
Loss before income taxes	(17,673)		(20,077)		(34,440)		(33,396)
Provision for income taxes	88		156		284		243
Net loss	$	(17,761)	$	(20,233)	$	(34,724)	$	(33,639)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.19)	$	(0.22)	$	(0.37)	$	(0.37)
Weighted-average number of shares of common stock outstanding:
Basic and diluted	93,334,725		90,707,381		92,868,623		90,459,503

(1) Includes amortization of acquired technology of $1.4 million and $0.9 million for the three months ended June 30, 2023 and 2022, respectively, and $2.7 million and $1.2 million for the six months ended June 30, 2023 and 2022, respectively.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(UNAUDITED)


		Three months ended June 30, 2023
	Common Stock		Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
		Shares			Amount
Balance March 31, 2023		92,864,741	$	93		$	717,450	$	(389,416)	$	328,127
Stock-based compensation		—	—			13,205		—		13,205
Issuance of common stock upon restricted stock unit vesting		710,837	1			—		—		1
Common stock issued under Employee Stock Purchase Plan (ESPP)		271,880	—			2,407		—		2,407
Exercised stock options		381,418	—			1,386		—		1,386
Payments for taxes related to net settlement of equity awards		—	—			(4,841)		—		(4,841)
Net loss		—	—			—		(17,761)		(17,761)
Balance June 30, 2023		94,228,876	$	94		$	729,607	$	(407,177)	$	322,524


		Three months ended June 30, 2022
	Common Stock			Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
			Shares			Amount
Balance March 31, 2022			90,469,637	$	90		$	669,284	$	(327,259)	$	342,115
Stock-based compensation			—	—			11,475		—		11,475
Issuance of common stock upon restricted stock unit vesting			196,258	—			—		—		—
Common stock issued under ESPP			199,887	—			1,841		—		1,841
Exercised stock options			170,325	1			346		—		347
Net loss			—	—			—		(20,233)		(20,233)
Balance June 30, 2022			91,036,107	$	91		$	682,946	$	(347,492)	$	335,545


		Six months ended June 30, 2023
	Common Stock			Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
			Shares			Amount
Balance December 31, 2022			92,112,749	$	92		$	706,407	$	(372,453)	$	334,046
Stock-based compensation			—	—			24,817		—		24,817
Issuance of common stock upon restricted stock unit vesting			1,003,428	1			—		—		1
Common stock issued under ESPP			271,880	—			2,407		—		2,407
Exercised stock options			840,819	1			2,801		—		2,802
Payments for taxes related to net settlement of equity awards			—	—			(6,825)		—		(6,825)
Net loss			—	—			—		(34,724)		(34,724)
Balance June 30, 2023			94,228,876	$	94		$	729,607	$	(407,177)	$	322,524


		Six months ended June 30, 2022
	Common Stock			Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
			Shares			Amount
Balance December 31, 2021			89,954,657	$	90		$	658,374	$	(313,853)	$	344,611
Stock-based compensation			—	—			21,449		—		21,449
Issuance of common stock upon restricted stock unit vesting			278,308	—			—		—		—
Common stock issued under ESPP			199,887	—			1,841		—		1,841
Exercised stock options			603,255	1			1,282

SEC Form 10-Q filed by Alkami Technology Inc.