Alkami Technology, Inc.

And so as a result of that, Mantle contributed about $1.80 to RPU this quarter. And then going forward, we'll expect a more normalized growth rate of around 7%, 8%. All right.

Thank you so much.

Your next question comes from the line of Chris Kennedy from William Blair. Your line is now open.

Yeah, good afternoon. Thanks for taking the question and congratulations, Brian, on the announcement. Alex, you talked about the strong cross-selling initially at Mantle. Can you just frame the opportunity there and maybe compare it with the experience that you've had at ACH Alert or Segment?

Yeah, thanks. We were pleased that in the first quarter Mantle had five transactions that they sold into the Alchemy base. And what's exciting for us is that's really before we start to put in the effort to do all of the account planning work, the account profiling work, getting the sales teams working together on pursuits. And so that initial success, along with the progress that we're seeing internally, provides us a lot of confidence in the cross-selling opportunity within the base. I would expect, if you looked at our ACH acquisition, that was more of a standalone product and it was applicable to some parts of our base. The segment acquisition was more of a product that would be integrated into our sales motion and it has been more applicable to our entire base. My expectation would be that the mantle acquisition behaves more like the Segment acquisition than the ACH Alert acquisition.

Yeah, and Chris, I'll add a couple of comments to Alex's. What we found with Segment, as you're aware, given it's a sales and marketing product, it's kind of a newer solution in the space, it took us a while to identify how to get to the right buyer in our end market. And so it took some time to gain the traction for Segment to become, you know, a part of, you know, like now 70% of our new logo transactions. And then even the cross-sell effort was a little bit more challenging because it was generally a different buyer in the financial institution. That's not, that's not the case with Mantle. Mantle and Segment, you know, oftentimes is the same or certainly common interest buyer in the financial institution. Mantle has a more established go-to-market effort in place. And so I would expect the success that we ultimately have realized on segment, we're going to achieve that much sooner as it relates to Mantle.

Got it. Very helpful. And then just to follow up on Mantle, the account opening is clear. Can you just talk a little bit about the LOS opportunity with Mantle and kind of what the competitive landscape is in that market?

When we made the last call, when we made the announcement about Mantle, what we said at that time, which is still the same today, is that Mantle has a group of development customers for whom they are building an LOS capability. And we are eagerly tracking that effort. And when that effort is successful, then as a company, we'll make a decision whether or not we're bringing an LOS application to market. So I want to be clear that this is still a development effort. It's a development effort with a set of clients. We expect the effort to be successful, but we'll make a decision about bringing a product to market more broadly after we see the results of that development effort.

Understood. Thanks for taking the questions.

Your next question comes from the line of Jacob Steffen from Lake Street Capital Market.

Your line is now open.

Hey, guys. Appreciate you taking the questions, and congrats, Brian, on all the success you've had with Alchemy here. Just wanted to touch a little bit on the mantle acquisition. Maybe you could kind of tell us where you're seeing the most traction. Is it on the credit union side?

Is it banks? Is it broadband?

Right now we're seeing balanced demand on both banks and credit unions. As we discussed in the acquisition call, one of the things that we really liked beyond, you know, the culture and the people of Mantle is the product itself serves both banks and credit unions and serves both retail and commercial. So right now we're seeing pretty balanced demand in both cases. What's driving the demand, and I mentioned this on the call, Every one of our customers, if you think about the credit union side, the average age of a customer in a credit union tends to skew a little bit older than the average age of a customer in a bank. And every one of our CEOs knows that. And every one of our CEOs is developing strategies to attract the next generation of members. And the most important element of the strategy to attract that next generation of members is... an account opening experience that matches the kind of account opening experience that folks are used to in all other aspects of their lives. So for us, what's exciting is it's balanced demand in both bank and credit union, but the demographics and the business strategy in the credit union, we think are going to be a really nice tailwind for driving Mantle into the credit union space.

Okay, got it. That's helpful.

And then maybe just touching on the backlog, 68 million of ARR. Sounds like a lot of that kind of uptick is from the mantle acquisition. But maybe, you know, what's the breakdown of, you know, banks to credit units in that 36 new customers?

Yeah, so we got 36 clients in backlog and 16 of those are banks. As you would expect, the banks are carrying a much higher RPU of around $30. The credit unions are carrying an RPU of just under $20. The sequential step-up in backlog from Q4 is largely driven by Mantle. Mantle has a significant ARR backlog. as well as a significant number of financial institutions backlog. It's around 50 financial institutions in backlog for mail.

That's great, Collar. I appreciate you taking the questions. Congrats.

Your next question comes from the line of Charles Neben from Stephens.

Your line is now open.

Good afternoon, and thank you for taking my question. I want to ask Chris's question from a slightly different angle. Sounds like there's some early signs of progress in terms of cross-selling Mantle into your existing base. So I understand you didn't change the assumptions for the full-year 2025 guide, but is there anything that's occurred over the past few weeks since the close that made you rethink or change the way you're going to approach sales and marketing or cross-sell, maybe accelerating some of your initiatives over the next year to drive synergies over the medium to long term?

You know, the thesis that we had in the acquisition remains how we plan to execute the business. There's a fantastic sales and marketing machine inside of Mantle. And that machine is going to continue to run and sell Mantle new logos in the broader market outside of the Alchemy customer base. Then we have our client sales executive team that's assigned to our customer base. They will be selling Mantle into our customer base. And then we have an Alchemy new logo sales team that's selling new logo online banking, and they are selling Mantle mantle into new logo online banking opportunities. So that was the thesis that we had when we made the acquisition. And that's the plan that, at least at this point in time, that's the plan that we're going to continue to execute against.

Got it. And as a follow-up, really nice result on the RPO growth this quarter. And I understand some of it is from... Some of it is probably from Mantle, but I was wondering if you could parse out how much of the growth was on an organic basis and if there were anything unusual in terms of larger deals or pull-forwards and renewals that occurred during the quarter.

No, we experienced in 2024, we had a lot of good renewal success. A lot of the pull-forwards we experienced were in 2024. We had eight total contract signings in the first quarter of 2025. Half of those were renewals. So the combination of those eight, though, were the driver of organic RPO growth, which is around 20%. And then, of course, we drop in mantle that drives the other 11 percentage points of growth year over year.

Got it. Thanks for all the color, and Brian, congratulations on your announcement.

Thanks, Chad. Your next question comes from the line of Jeff Vandy from Craig Hallam. Your line is now open.

Great. Thanks for taking the questions, Brian. I'll add my congrats. You'll be missed. Sorry to see you going, but certainly wish you all the best. A number of questions, a few housekeeping mostly. In terms of the analytics side, I want to circle back to that maybe a little bit. Where is that in terms of, I think I might have heard Alex reference an attach rate on new bookings, but just if you could state that again, and maybe in the context of total revenue, wondering where you are at this point in terms of analytics.

Yeah, we don't split out the revenue, Jeff, as you can imagine, because the way we go to market is a combined offering. And when you start unpacking discounts and those kinds of things, you really kind of start losing the trail on revenue at an individual basis. But what we've been experiencing, and this has been for, I would say, the last four to six quarters, we're having an attachment rate of about 70% of Mantle on all new logo wins. I'm sorry, yeah, segment, all new logo wins. And then even for ACH Alert, when I've It's a bank FI that we're winning. We have an attachment rate at 75 up to 80%. So Mantle carries a much higher average ARR than both of those solutions. And we feel that we can achieve somewhere close to the segment attachment rate. So when you think in terms of deal value, you know, a couple of things should happen. We should see a higher deal value. And then with these mantle differentiation, we should also start experiencing a bit higher win rate on new logo.

Very helpful. And you continue to see the add on add ons ramp as well. Any thoughts on goals for, add-ons as a percent of the bookings for the year, for 25?

I think the long-term shape of the business that we've articulated for a few years is that in terms of new ARR, we'd like half of that to come from add-on sales, half of that to come from new logos. And in terms of new logos themselves, over time, we'd like half of that to come from credit unions and half of that to come from banks.

That's right. And I'll only qualify what Alex just mentioned is we'll include Mantle as an add-on sale, just like we do Segment and ACH Alert when we sell that into a new logo for those products. So in other words, not as part of a new logo deal. And so you will see the 50% from add-on sales trend up over time as Mantle continues to have success just adding new logos to their book of business.

Yep. Very helpful. And then maybe just last, I think, Alex, it might have been in the script of the release, but you talked about a continue to lead the industry in share gains. Just expand on that a little bit. Any thoughts on any quantification around that or in particular where that's coming from? Or most interestingly, maybe changes in where that share gain is coming from?

Those comments would be related to third-party data that measures users, digital users in the marketplace, and the third-party data that we use is FI Navigator, and so that's the source of the data.

Yeah, when you look at the top five market share owners in terms of users, Alchemy is outperforming all five at a pretty fast rate. No one's really adding two and a half to three million digital users a year, but in terms of just pure percentage gain and market share, Alchemy is leading the path.

Got it. Great. Thanks for taking the questions, guys. Appreciate it.

Your next question comes from the line of Patrick Walravens from Citizens Bank. Your line is now open.

Okay, great. Thank you. You know, Brian, everyone else is congratulating you, but I'm sad to see you go. So when did you decide?

When did I just, you know, Pat, I knew out of everyone who asked me this question, it was going to be Pat Walraven. And I'm going to miss you, Pat, because I really enjoy working with you. But no, seriously, to answer the question, you know, this is obviously a big decision for me. it's one where you take a lot of things into consideration. You know, and I reflected on, you know, really the success we've had at Alchemy. And then you factor in your age and changing family circumstances and those kinds of considerations, and then you make the decision. And so the decision for me was really 2026 is the year that I plan to walk away from this. And so then you really come down to a couple other key considerations is, well, what's the best time to announce it once you make the, you know, the casual decision and not really the formal decision of communicating the company. And what I thought about, Pat, as it relates to that is really how are you leaving the company where you were the CFO? Because it's very important to me. that I'm walking away from a company knowing that it's performing well and it's going to continue to perform well. Brian Hill's CFO exit is not going to be a situation where a company drops off after the CFO leaves. And that's very, very important to me because we've accomplished way too much at Alchemy for that to be the case. And then the last consideration, or I guess a couple more considerations, is around, well, what about the team? What about the CFO team? And the CFO team is more than ready to deal with the challenges that can occur by bringing in a new CFO. It is the absolute best CFO team I've ever worked with. And I'm very proud to have built this team over the last six years. And then finally, it's how much time do you want to give and provide the company? And in order for Alchemy to bring in the right CFO, which it should attract top talent given our performance, given the management team and what we're trying to accomplish here, I wanted to make sure that Alex and the board had plenty of time to find the right candidate. So not a situation where there's a quick exit of a CFO and there's a, you know, a shot clock running that the company feels like they need to make a rush decision. I mean, Alchemy and Alex needs to do this very thoughtfully and they need to do it quite honestly with the transparency of, you know, it being known what's going on and not a confidential search and those kinds of things. So really all that played into it, Pat, and that's how we landed where we are today. That's actually super helpful.

Okay, so Alec, for you, what are you looking for in the next candidate?

We've scraped some of Brian's skin cells and we've sent them off to a DNA place and we're cloning him right now. I would just echo what Brian said. I think the company plus Brian have been thoughtful about providing investors with a long transition plan, and then making the situation public so that we can execute a public search. With an asset like Alchemy, it's going to be a whole lot more effective executing a public search than trying to run a confidential search.

All right, great. And if I could do one more, just big picture, Alex, what's the most important thing for you to get right over the next year?

We have an opportunity to really create some space between us and the market from a differentiation perspective in the use cases and problems that we solve by bringing together digital banking, onboarding and account opening, and our data platform. And when we do that, as a digital banking provider, There's just going to be a lot of space between us and everybody else, which is going to, in my opinion, which is going to really help our win rate. So that's probably the most important thing that we can do, Pat, in the near term is take what we understand as the use cases that we can deliver with this technology and bring it to life in some customers and then have those customers show the outcomes that they've achieved from Alchemy. And that's going to help with our competitive competitive win rates.

Great. Thank you both.

Your next question comes from the line of Adam Hotchkiss from Goldman Sachs. Your line is now open.

Great. Thanks so much for taking the questions. Pat is difficult to follow up on, but echoing my best wishes to you going forward, Brian. I wanted to touch back on just broader capital allocation priorities at banks. You mentioned the the 90 cents out of a dollar going to digital account opening. I thought that was a pretty striking concentration. Curious how sustainable you think that is, and maybe just remind us what it is about the environment we're in today, whether that's just the operating environment or where FIs are in their broader digital banking transformation that's driving that.

I want you to picture in your mind for a bit, you're in a regional bank or a credit union. And the technology platform that you have is an amalgamation of several different legacy capabilities that you're trying to operate on. And now your competition is Chase and your competition is Chime. And when somebody is opening an account in either of those environments, it's a very elegant one or two minute experience that looks like any other new digital experience that they have. Now, you're this regional bank and you're trying to recreate that experience and do that across all of these legacy technologies. And what those bank accrediting CEOs will tell me is they are personally embarrassed about the experience that they are providing to somebody where it's 20 minutes. It's walk into the branch and sign some paperwork. It's just nothing that is anything close to what people experience. Well, the combination of Alchemy and Mantle allows a regional institution to punch way above its weight and deliver an experience that's every bit as good as a Chase experience or a Chime experience. And when you're faced with an existential need to add customers, and to add members and to add deposits for the long-term health of your institution, it's a really nice environment to sell into when you've got the right products.

Okay, understood. That's really helpful, Culler. And then, Brian, would you just remind us the integration lift that's left for Mantle? I know you mentioned a couple of cross-sells already, which is great to hear, but what about the product makes it either easier or harder to fully integrate than some of your other acquisitions?

You know, there's not, in our view, there's not any major blockers there from an integration perspective. I mean, there's several different integrations you really have to think about. The first is how broadly have they integrated into the core offering of the larger core providers. And Mantle has made a ton of progress there. In fact, that's probably one of their more significant differentiators. And then there's the integration into our platform from a technology perspective. So we're delivering more when you sell Mantle and Alchemy together versus Mantle combined with one of our competitors. That'll take a little bit of time to accomplish, but we're already making moves in that direction. And then finally, there's the integration as it relates to operations and go-to-markets. And as Alex pointed out in his prepared comments, we're already making a lot of progress in that area. So the Mantle team, the more I'm around them, the more impressed I am and impressed with this acquisition, how it is the correct strategy for Alchemy. I've been involved in a lot of acquisitions over the last 36 years, and I think Mantle is going to prove to be one of the best.

Great. Thank you very much.

Your next question comes from the line of Mayank Tandon from Needham. Your line is now open.

Thank you. Good evening, Brian. Let me extend my congratulations as well. It's been a pleasure working with you. Don't be missed. Thank you. To Alex. Alex, as we came into this year, there was a lot of talk about deregulation in the banking industry. I know it's still early days with the new administration. What's sort of the feedback from your customers, both prospective customers and current customers on any potential deregulation? And if you could be a little bit more specific in terms of if it does happen, what are the implications for a company like Alchemy?

I'll tell you, the big thing that kind of came out in a discussion is, is open banking really going to occur? And the reality is if open banking occurs, we think it's an opportunity for our customers to take share if they've got the right technology. Because all of a sudden, if you've got portability of accounts and you're in a local community and you feel disconnected from a mega bank and you've got the right technology to move people over to your institution, it gives you an opportunity to take share. So to the extent that open banking ever happens, materializes in the conversations that we have with our customers. They think it's an opportunity for them to go on offense, but they would need the technology to be able to go on offense. But that's been the majority of the conversation that I've had with folks. Other than within some credit union executives, and this is, I wouldn't call this as an opening up, but in some credit union executives, There's discussions about are the regulations going to change in terms of taxing credit unions or not taxing credit unions. But every single credit union executive that I talk to says, if it changes, we'll figure out, we'll make an adjustment, we'll figure out how to manage our business. So those have been the two conversations that I've been part of.

Got it. And then let me ask you this. I buy into the view, as you said, this is mission critical and the banks are still spending despite all the uncertain environment that we're in right now. What would it take for banks to then maybe slow spending? Have they talked about that? What would it actually take for them to push out some of these implementations by 6, 12, 18 months? We haven't seen that yet, and it's great to hear the visibility in your model, but I'm just sort of playing devil's advocate. What would it cost to derail some of the growth in the near term if it were to happen?

The conversations that I have with customer executives, they are managing their expenses, right? So they are managing their expenses more closely than they were managing their expenses a couple of years ago. But what they're doing is they are – cutting off some other projects, but they're not cutting off their digital banking project. Remember, these contracts are five to seven year contracts. You have, let's call it a nine month to a year process to go through the conversion. So when you back up from the date that they need the conversion to go live, back up a year, and then say maybe a nine month sales cycle before that, and recognize that we're selling into a budgeted line item, they're going to go through with their decision unless there was, I can't game it, like there'd have to be some extraordinary dislocation for them to stop going through some of these decisions. All I can say is it could happen. To date, we haven't seen it happen. To date, we've seen people following through with their decision process, their decision timelines, wanting to get The biggest constraint we normally have is we cap to some degree our conversion calendar because we want to make sure that we're doing a good job for our customer. So most of the conversations we have with a customer are, hey, let's make sure that we get you into our calendar in time for when your contract's up and making sure that we're doing a good job. And I would just say To date, we haven't had any conversations about customers slowing down their decision process based on economics on the digital banking side.

And Maya, this isn't really a question of, are you going to cut costs as it relates to your digital banking platform? As financial institutions are looking for areas for opportunity, most of them are working in a distributed network. And distributed networks are expensive. But if you have a channel that can touch 100% of your base or you have the same cost in a single location that touches 10% of your base, you're going to reevaluate the distribution of your offer versus cut the channel that has high touch as it relates to your customer base. So that's really the decision process that they go through and they think about. As it relates to implementation timelines and those kinds of things, they want to move to the new platform as soon as they can. The real question for Alchemy is to make sure that you're investing in your platform, which we do. You're continuing to create a gap, and you can widen that gap. from what the incumbent offers today, which we do both organically, and then we've also done with Mantle and the segment and ACH Alert acquisitions. And it's always staying ahead of the competition because the focus on digital banking is only going to increase. It's not going to decrease.

So I would characterize our posture as rational optimists. So we're aware that something could change. We have not seen anything change yet in the demand environment.

That's a great perspective. Thank you so much for the details. Congrats.

Your next question comes from the line of Anthony DeLise from KeyBank Capital Markets.

Your line is now open.

Hi, this is Anthony DeLise. I'm for Alex Markgraf. Alex, your comments regarding clients not reducing digital banking is clear. However, I'm curious if you've observed any changes to the structures of the deals from your pipeline conversations due to the macro environment. And then my second question is, as Alchemy has made this push to serve more banks, is there anything you can share on how recent banking implementations have impacted your pipeline conversations with other banks?

Thank you.

I'll kind of turn to Brian. I haven't seen any deal construction differences in the new logos that are coming into our deals in terms of the price points or the number of products that they're buying. What's going to begin to occur when we're talking to new banks that will emerge as we convert the bank customers that are in implementation into live customers is the new customers are going to increase their confidence in signing on to Alchemy because we'll now have three examples, four examples, five examples, or more on a particular core. And in the bank market, there's a concentration of cores that's a little bit higher concentration in the bank market than there is in the credit union market. So in summary, my expectation would be as we convert the customer's that are in the implementation pipeline into live customers. That will increase our win rate over our number one competitor, which I want to remind us all that our number one competitor is staying with the incumbent. And so as these banks start seeing other customers come live on our platform, that will increase their confidence to not stay with the incumbent and move over to Alchemy.

Your next question comes from the line of Alexey Gogolev from JPMorgan. Your line is now open.

Hi. Thank you. One more quick one from me. How much of ARR was inorganic this quarter?

Our organic ARR growth was right at 22% for the quarter.

Got it. Okay. Thank you so much, and congrats again, Brian.

Thank you.

There are no further questions at this time.

I'll now hand the call over to Alex Schuttman for closing remarks.

Okay. Thank you, everyone, for joining us today. To our investors for your questions and for following the company, to our clients for your continued partnership, and to our alchemists for outstanding work in the quarter. Have a great evening and thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.