Alkami Technology, Inc.

Hello and welcome to Alchemy's fourth quarter 2021 financial results conference call. My name is Adrienne and I'll be your operator for today's call. At this time, all participants are on a list and only mode. Later, we'll conduct a question and answer session. During the question and answer session, if you have a question, please press star then one on your touchtone phone. Please note this conference call is being recorded. And I'll turn the call over to Steve Cox. Steve, you may begin.

Thank you, Operator. With me on today's call are Alex Schutman, Chief Executive Officer, and Brian Hill, Chief Financial Officer. During today's call, we may make forward-looking statements about guidance and other matters regarding our future performance. These statements are based on management's current views and expectations and are subject to various risks and uncertainties. Our actual results may be materially different. For a summary of risk factors associated with our forward-looking statements, please refer to today's press release and the sections in our 10-K entitled Risk Factors and Forward-Looking Statements. The statements made during the call are being made as of today, and we undertake no obligation to update or revise any forward-looking statement. Also, unless otherwise stated, financial measures discussed on this call will be on a non-GAAP basis. We believe these measures are useful to investors in the understanding of financial results. A reconciliation of comparable GAAP financial measures can be found in our earnings press release and in our quarterly filings with the SEC. And now I'll turn the call over to Alex.

Thank you, Steve. And thank you all for joining us today for a fourth quarter 2021 earnings call. I am pleased to report that we delivered strong performance, both for the fourth quarter and the full year. Brian will discuss the numbers in a few minutes, but let me give you some highlights. In the fourth quarter, we grew revenue by 27%, which was ahead of our expectations. We exited 2021 with nearly 12.4 million live registered users on the Alchemy platform. This is up nearly 950,000 sequentially and up nearly 2.7 million users compared to the end of 2020. In terms of sales, the fourth quarter was the most successful in our 12-year history. We closed 22 new logos during the quarter and renewed five existing clients, a testament to our technology, quality, and support, and a huge shout out here to our alchemists for a job very well done. I'm excited and grateful to be at Alchemy. I've joined a great team with innovative technology and a vibrant culture. Since early November, I've spent time with clients, prospects, investors, and employees, and conversations with these stakeholders confirm that our strategy is sound, our product portfolio is on target, and our dedication to our clients runs deep in the values of the organization. When I've asked clients why they selected Alchemy, I've consistently heard four reasons. First, our market-leading user experience. Our user experience reflects the design principles and integration expertise that is embedded in our product and engineering teams, and this is validated by testimonials, independent research, and mobile app store ratings. Second is the speed at which we bring new products to market. Our platform is built on modern cloud technology principles. It's open, extensible, microservice-based, and multi-tenant, with rapid scalability and continuous integration, delivery, and deployment. With this foundation, we can deliver what our clients are asking for. the ability to compete with the most progressive megabanks, neobanks, and fintechs in their markets. Well, in the fourth quarter alone, we developed an early release. We delivered an early release of our all-new mobile application. We launched clients on our new crypto product, launched our integration to BioCatch, which is a new fraud mitigation platform, and launched our first client who's using Salesforce as their primary core. is our proven track record of execution. Alchemy is one of the leaders in new digital banking users converted over the last several years, and our client services organization continues to build a more predictable implementation experience with 28 clients going live during 2021 and 38 digital banking platform implementations underway. And we've done this despite a larger and more sophisticated product set than we offered just a few years ago. Fourth is our commitment to deliver a complete solution through building, partnering, or making strategic acquisitions. Our recent acquisition of MK Decision, now Alchemy's digital account opening and loan origination solution, demonstrates this commitment. In Q4, we sold this solution to three digital banking platform clients already capitalizing on this great market opportunity. Our customers are increasingly depending on Alchemy to be the platform on which they are delivering more of their end-to-end customer experience and we are committed to increasing the range of our portfolio. We also continue to see tailwinds in a macro environment that is beneficial to our clients. The financial services market has been consolidating for some time and M&A activity in 2021 was at its highest level in more than a dozen years. The financial institutions that we serve are the acquirers in this market, and their digital user growth, which was 14% in 2021, is higher than the market average. This demonstrates that the strength of their digital banking platform often informs both the strategy and the competitive position of these FIs. Banks and credit unions in our target market view digital banking as core to their transformation, and they need a partner to advance their innovation agenda. and we at Alchemy are proud to be that partner. Alchemy has built a great foundation, and we are well prepared for our next phase of growth. Since there is strong demand, execution will be the key to our success. As such, Alchemy will focus on five aspects of our business to drive growth over the next several years. First, we will become the digital banking provider of choice for banks, while maintaining a market leadership position with credit unions. Regional and community banks want a quality alternative among digital banking providers. Over the last few years, we've made significant product investments in our commercial banking offering and are now positioned competitively in this market. Multiple new bank client signings in 2021 demonstrate that Alchemy can be a force in the bank market. Our technology, User experience, product functionality, client support, and predictable deployment have made us a de facto leader in the credit union market, and these same strengths will make us the leader in the bank market. Second, we will increase our focus on growing add-on sales. Our client relationships are strong, and they are asking us to provide them with more capabilities. To serve this need, our product portfolio has tripled in five years. We've recently built an add-on sales organization and will increase sales and marketing investment in this part of our business. I am pleased to announce that last week we added Carl Cross to Alchemy as Chief Revenue Officer. Carl is an experienced sales leader who's had a significant impact at Workfront and AppSense among other enterprise software providers. I've known Carl for some time, and I'm confident that Carl will help take Alchemy into our next chapter of growth. Third, we will allocate increased investment to make our platform the foundation of our clients' technology portfolio. I've heard a common theme from clients. They expect Alchemy to be the digital banking platform for their fintech ecosystem. They understand that they're in competition with many of the innovators in their market, given that no company can predict every winner in a fintech industry that has raised $132 billion in 2021 alone. Our customers want a platform that integrates with innovation regardless of origin. And we are building that platform as evidenced by the nearly 1,000 SDK submissions we received in 2021, which is almost double what we received in 2020. We envision a future in which the Alchemy Digital Banking Cloud enables wide-ranging innovation for our customers. Fourth, we are strengthening our focus on talent. The marketplace is competitive. And there is increasing pressure across the industry to attract and retain talent. As a young, thriving company that is on the forefront of digital transformation, we believe we can compete effectively in the talent market and view success in the talent market as a necessary investment and core to achieving our near and long-term objectives. I'm happy to announce that in Q4, we added Julie Hoagland to the executive team as Chief Human Resource Officer. Julie has over 25 years of HR experience in building highly effective cultures at companies like DaVita and HBO. She's already taken our talent acquisition and culture to the next level. Fifth, we will execute on our M&A strategy. We have virtually unlimited opportunities to expand our portfolio and accelerate our expertise. Although extensibility of our platform is critical to our strategy of allowing clients to connect with third parties of their choosing, There are circumstances where it makes more sense for us to require companies to be able to shape the development of the underlying functionality for the benefit of our clients. As we continue to grow and improve our access to capital, M&A will be a regular feature of our growth profile. In closing, I'm excited to be here, and I'm confident that Alchemy has the right strategy, talent, and technology. We're in an attractive market as digital banking is a must-have component for modern FIs. And we will succeed by enhancing our business banking portfolio, investing in sales and marketing to support add-on sales, building out our platform capabilities, developing our talent, and remaining agile on the M&A front. With that, let me turn the call over to Brian.