Alkami Technology, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Alchemy Technologies Second Quarter 2025 Financial Results Conference Call. I'd like to turn the conference call over to Mr. Steve Tok, Vice President of Vessel Relations. Mr. Tok, please go ahead.

Thank you, Kelsey. 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 manners regarding our future performance. These statements are based on management's current views and expectations and are subject to certain 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 latest 10-K. Statements made during the call are being made as of today, and we undertake no obligation to update or revise these statements. 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 our financial results. The reconciliation of the comparable gap financial measures can be found in our earnings press release and in our filings with the SEC. I would now like to turn the call over to Alex Hufman.

Good afternoon, and thank you all for joining us.

Alchemy continued to deliver strong financial results in the second quarter. Driven by sustained top-line execution, while also exceeding our profit commitments. During the second quarter, Alchemy grew revenue 36% and generated $11.9 million in adjusted EBITDA. We exited the quarter with 20.9 million registered users on the Alchemy platform, up 2.3 million from the prior quarter. We continue to enjoy a healthy pipeline as digital transformation remains a priority for regional and community financial institutions. We are still seeing the industry dynamics that have driven Alchemy's growth today. Digital banking is a mandatory innovation. The number of digital accounts continues to grow, and modern technology and user experience remain the winning combination. This industry demand and our own execution has kept us in the top quintile of vertical SaaS growth even as we demonstrate the ability to create operating leverage in our business. In addition to our overall performance, we're pleased with the early commercial success of the Mantle acquisition. In the first half of 2025, Mantle added 39 new clients, a record for Mantle on a standalone basis. And among these 39, 14 are Alchemy digital banking clients, demonstrating an early ability to introduce Mantle into the Alchemy install base. If we achieve cross-sell results consistent with other acquisitions, This can have material implications for our future growth. As a reference point, historically 70%, and in the first half of 2025, over 90% of our new digital banking clients also bought our data and marketing solution, which is based upon our segment acquisition. As our clients realize the value of Mantle, we could see onboarding and account opening achieve a similar level of success. Along with our cross-sell opportunity, we now have two strategic platforms by which we can create a new logo relationship for Alchemy. In the first half of 2025, Alchemy sold 13 new logos with our digital banking platform. In the same period, Mantle sold 25 non-Alchemy new logos with our onboarding and account opening platform, increasing our year-to-date new logo ACV by over 70%. What do I mean when I say that onboarding and account opening is a strategic platform on par with digital banking? Two weeks ago, I was talking with the CEO of a regional financial institution in the middle of Pennsylvania. She told me, as the rate environment fluctuated over the last couple of years, we've managed by issuing high-cost promotional CDs and buying wholesale loans. But this is too costly over the long term. We have to attract core deposits from younger account holders, and the only way we will do this is with an elegant onboarding and account opening platform that will let us compete with Bank of America. Our market increasingly sees a modern onboarding and account opening platform as mandatory innovation for attracting and growing low-cost core deposits. Progress on product integration is exceeding our expectations as well. Our intent is to deeply integrate account opening with online banking and data and marketing. This will enable our clients to deliver the type of experience that only a few of the largest financial institutions and fintechs can create today. Let me give you some examples. First, FIs want to target a potential new account holder through a marketing program that leads them to the FI's website. Once the account is open, the new account holder is automatically registered and logged into digital banking. The account is funded, and then enabled for immediate use with digital card issuance and integration into digital wallets, increasing the ability for the FI's card to be top of wallet. The FI can use KYC data from account opening to set dynamic premium packages, like higher ACH, debit, and ATM limits for trusted account holders, and limit functionality for higher risk account holders. Second, if I want an integrated user experience, where personal and business data, documents, and account information flow across a single profile. This eliminates friction, which will increase conversion and cross-sell opportunities, as well as close the traditional fraud gap between account opening and online banking. Third, FIs want to deepen account holder relationships with a unified platform and embed data in marketing, which surfaces the next best product or service at the exact right moment inside the banking app with no redirects. All this boosts cost sell, increases wallet share, and cuts acquisition costs. The on-demand data from account opening, digital banking, and the core banking system allows VFI to create high propensity, lookalike audiences for future campaigns, which further drives growth and lower acquisition costs. These are just the first three experiences we are creating for our clients to bring to their account holders. The combination of a modern platform, award-winning digital banking, market-leading onboarding and account opening technology, and innovative data and marketing products will allow us to build capabilities for our clients that only a few of the largest FIs and fintechs can create. Our clients will have access to a digital sales and service platform that will allow them to compete with megabanks and own their markets. As we share our product roadmap with clients and prospects, the response is more enthusiastic than we anticipated when we evaluated the acquisition. With this in mind, we have decided to manage the separate Alchemy and Mantle sales teams under one leader, Nathaniel Harley, who was the Mantle co-founder and CEO. This will allow Alchemy to take advantage of the power of the integrated platform and enable Mantle to operate as a standalone brand to remain open when working with other technology providers. We're excited to have Nathaniel in this role as Alchemy has great depth of credit union experience to which Nathaniel adds bank knowledge as today roughly 70% of natural clients are banks. In closing, the demand environment for our products remains strong and I'm proud of our Alchemists who delivered another strong quarter for our investors. I'm energized by our continued innovation, and I look forward to seeing how the products and technology we're bringing to market power Alchemy's growth for the rest of 2025 and beyond. I'll now hand the call to Brian to take us through our financial results.

Thanks, Alex, and good afternoon, everyone. In the second quarter of 2025, we continued to drive strong revenue growth and outperformed our profitability objectives. In the second quarter, We achieved total revenue of $112.1 million, representing year-over-year growth of 36% and organic growth of 28%. We improved adjusted EBITDA to $11.9 million, compared to $4.6 million in the year-to-go quarter. Subscription revenue grew 35% in the second quarter and represented 95% of total revenue. We increased ARR by 32% and exited the quarter at $424 million. We currently have approximately $68 million of ARR backlog for implementation, the majority of which will occur over the next 12 months, including our backlog of 40 new digital banking clients representing 1.3 million digital users. We exited the quarter with 280 live clients and 20.9 million registered users on our digital banking platform, representing registered user growth of approximately 2.3 million or 12% compared to last year. Over the last 12 months, we implemented 31 financial institutions and five clients left our platform. As a reminder, because of the long-term nature of our contracts, we have three to four quarters of visibility into upcoming client attrition. Currently, we expect to churn a total of four clients in 2025, representing less than 1% of ARR. We also have two clients merging with existing Alchemy Digital Banking clients where we will retain the digital users. Over the long term, we model digital banking ARR churn at 2% to 3% per year, which we have historically outperformed. Our churn produced higher than expected termination fees in the second quarter, and while this was in our 2025 full-year expectations, the timing between quarters can be uncertain. As a reminder, the primary driver of our churn is related to M&A activity within our client base, and we tend to benefit from this activity. In 2025, we expect to net over 300,000 users from financial institution consolidations. We ended the quarter with an RPU of $20.28, up 17% compared to a year ago, driven by the acquisition of Mantle and add-on sales success. We continue to see broad-based demand across our product portfolio. This is reflected in our sales pipeline, new logo and client renewal success, our ability to cross-sell new products into our install base, and now the rate at which we are seeing the market adopt the Mantle onboarding and account opening solution, as well as our marketing and data analytics solution. For the second quarter, we signed nine new digital banking platform clients and renewed six existing clients representing 15 online banking contract signings. One renewal during the quarter was for a top five client with over 700,000 digital users. We expect a total of 25 renewals in 2025. Mantle added 23 new clients in the second quarter, including three attached to Alchemy Digital Banking wins and six that are existing Alchemy Digital Banking clients. Our add-on sales effort continues to increase as a percentage of total sales. For the first half of 2025, our add-on sales effort, excluding Mantle, represented over 60% of new sales for the quarter. This compares to 55% for the first half of 2024. Our remaining performance obligation was approximately $1.6 billion, representing 3.7 times our live ARR and up 30% compared to a year ago. Now turning to gross margin. For the second quarter of 2025, We delivered non-GAAP gross margin of 65.1%, representing nearly 200 basis points of expansion compared to the prior year. We achieved gross margin expansion through continued improvement in our hosting costs, driven by platform investments, as well as operating leverage across our post-sale operations. Moving on to operating expenses. For the second quarter of 2025, operating expense of $61.5 million was or 54.8% of revenue represented year-over-year operating leverage of approximately 340 basis points. We primarily drove operating leverage across R&D and G&A, where we continue to realize operational scale. We are on track for adding engineering talent at our Global Capability Center, located close to New Delhi in India's national capital region. We now have approximately 70 alchemists at this facility with an expectation of over 175 alchemists as we exit 2025. As we discussed the last several quarters, during 2025, we expect to invest approximately $5 million in this facility. We are still planning to complete the transition from our outsourcing partner during 2026, and we do not anticipate any impact on our 2026 financial targets. although we do expect to see a positive impact on margins beyond 2026. Related sales and marketing expense. We typically conduct our client conference in the second calendar quarter, resulting in approximately $3 million in seasonally higher expense during this quarter. However, in 2025, our client conference bridged two quarters, resulting in smaller, seasonally higher operating expenses in both quarters. In terms of go-to-market efficiency, we continue to rank among the best in SAS. Including our mantle acquisition, sales and marketing expenses are expected to be between 15% and 16% of revenue for 2025. Our adjusted EBITDA in the second quarter was $11.9 million, better than the high end of our expectations, and representing an adjusted EBITDA margin of 10.6%. The Mantle acquisition was 190 basis points diluted to our adjusted EBITDA margin in line with our expectations. We expect a positive adjusted EBITDA contribution for Mantle in 2026. Mantle will continue to be diluted to adjusted EBITDA margin over the next few years, albeit at a declining level. Turning to our balance sheet, we entered the core with $87 million of cash and marketable securities. During the second quarter, we used a portion of our cash on balance sheet to reduce our revolver by $10 million, bringing our current balance to $50 million. Now turning to guidance. For the third quarter of 2025, we are providing guidance for revenue in the range of $112.5 million to $114 million, which represents total revenue growth of 31% to 33%. For adjusted EBITDA, we are providing third quarter guidance in the range of $13 million to $14 million. For full year 2025, we are providing guidance for revenue in the range of $443 million to $447 million, representing total revenue growth at 33% to 34% and organic revenue growth at 25% to 26%. We have not changed our full year revenue guidance from last quarter due to the component of the second quarter beat related to the previously mentioned timing of termination fee revenue. We are also providing full-year adjusted EBITDA guidance of $51.5 million to $54 million, representing a raise of $1.8 million above the midpoint of our previous full-year guide. In conclusion, we are pleased with our impressive revenue growth and margin expansion. We remain positive about the demand environment and our continued ability to acquire, grow, and retain our clients. This gives us confidence in our ability to achieve our long-term financial objectives and drive shareholder value. And now I'll hand the call to the operator to take her questions.

Thank you. Ladies and gentlemen, we'll now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Did you wish to decline from the polling process? Please press the star, followed by the two. If you are using a secret phone, please lift the handset before pressing any keys. One moment, please, for your first question.

And your first question comes from Sackett Kalia from Barclays. Please go ahead.

Hey, good evening, team. This is Ryan Powderly on for Sackett tonight. Thanks for taking the question. You know, Alex, I need to start with you. Now that you're starting to get some of these new logos attaching Mantle onto deals from the start, I'm just kind of curious what kind of starting ARPU for these new logos are you seeing compared to the blended average of around $20 a year for a tier in Q2?

Yeah, I'll take that one, Ryan. The way to think about Mantle is Mantle adds 30% to 40% of ARR to a new logo deal. So for the new logos that we've been landing over the last couple of years, that are online banking new logos. They average around $800,000 of ARR, and you can expect, you know, between 30% and 40% higher value when attaching Mantle.

But what I would add to that, this is Alex, is on a standalone basis, so recall that Mantle's client base is 70% in the bank market, and there's some larger banks that Mantle sells. And on a standalone basis, in a full omni-channel solution for a larger bank, this can open up a multi-million dollar relationship with us, even on a standalone basis.

Got it. That's super helpful. Brian, even for my follow-up for you, I think we added about 400K just using round numbers of new users this quarter. I'm just curious how that parses out between new customers versus existing. I think in the past we've talked about adding around 100K per month in users from the existing base. Just curious if that equation has changed at all.

Thanks. Yeah, so in 2025, our implementation schedule for online banking new clients that we're implementing, it's more back half heavy. So in the second quarter of the approximately 400,000 digital users that we added, 25% of those were from implementations, and the remaining 75% was the net amount added from existing clients, because we did have a couple of clients that attributed during the quarter.

Very helpful. Thanks, guys. Thank you. And your next question comes from Chris Kennedy from William Bliss.

Please go ahead.

Yeah, good afternoon. Thanks for taking the question. Can you just give us an update on the bank channel and how Mansell can improve that opportunity or your position to capture that?

Thanks. I continue to be pleased with the progress that we're making in the bank market. You know, if you look at where we are today from an online banking perspective, banks under contract represent 13%, not 30, excuse me, 13%. of our total clients under contract. In 2024, we implemented 11 banks. And right now we plan to implement 16 banks on the online banking platform. But once again, what's exciting about putting Alchemy and Mantle together is given Mantle's presence in the bank market, that represents another way for us to create a new significant relationship in the bank market. So overall, I'm pleased with the progress that we're making in the bank market.

Great. Thanks for that. And then just a small one. Is there any way to quantify the term fees that were brought ahead, pulled forward a little bit? Thanks for taking the questions.

Yeah, term fees during the quarter represented about 70% of the Bs. So we beat, from a revenue base, we beat the high end of our guidance, 1.6 million, and the term fees that shifted from the back half of 2025 into the quarter were about a million. It's also important to note that by the term fee accelerating into the second quarter, that also means the client left the platform. in the second quarter. And so the ARR associated with that, the subscription revenue associated with that client is no longer in the back half of the year.

And then the part I would add is, you know, we use the terminology termination fee, but termination fee is almost 100% related to M&A activity in the market. And as you noted in Brian's prepared remarks, we continue to be a net gainer in terms of M&A activity.

Great. Thanks for taking the questions. Thank you. And your next question comes from Ella Smith from JPMorgan. Please go ahead. Hi. This is on for Ella Smith. Thanks for taking our questions. First from us, now that you've had a few months of cross-selling Mantle, would you share if there's any certain customer type that's been most attracted in the product?

Yeah, this is Alex. I would just say kind of to my prepared remarks, this is a good intersection of a good product and a market need. So if you think about up until the interest rate increase just a couple of years ago, interest rates were pretty low for a very long time, and so money was very sticky inside of financial institutions. When the interest rates increased, money got hot and started moving you know, in chasing higher interest rates. And as I noted, and the CEO's comments were the same as almost every customer I met with, folks tried to react in the moment by doing things like issuing promotional CDs and doing a lot of things that were expensive to be able to attract deposits so that they could make loans, which is obviously how they make money. And that's kind of become, okay, that's now business as usual. We're now having to be in a perpetual attraction of deposits and core deposits. So really the buyer for us is almost any financial institution. And that's being driven by the fact that their business environment changed quite a bit since 2022. Thank you.

That's helpful. Also from us, are there any particular products or capabilities that are supporting your endeavors to win with the regional banking customers specifically? Well, two things.

One, obviously, with respect to onboarding and account opening, that is strong in the bank market. Our ACH Alert product, positive pay product, is strong in the bank market. And then we continue to build out our treasury management capability, which is attractive to the regional bank market.

Great. Thank you for taking our questions. Thank you.

And your next question comes from Jeff Van Ree from Craig Hallam. Please go ahead.

Great. Thanks. Thanks for taking my questions, guys. Just a few. Starting maybe with Mantle, you talked about 39 new customers. I think you referenced 14 were Alchemy digital banking customers. Kind of curious about the other customers there. You know, were most of those going into an existing digital banking platform and layering on top? Were they going in with a new digital system being implemented just You've got a little more visibility into those customers that are not on Alchemy. Wondering what you're learning there.

Thanks for the question. Obviously, every customer already has a digital banking system. As we've talked about before, it's a 100% replacement market. And so one of the great things about putting Alchemy and Mantle together is Mantle has the ability to open a new account for Alchemy even though there's an existing digital banking platform in place. And so that's primarily the new logos that were and continue to be won by Mantle Standalone is into a bank or credit union that's got an existing digital banking platform.

Interesting. Great. And on the sales front, Alex, I think you commented about you really like what you were seeing in the pipeline. Maybe just spend a minute and expand a bit more on what you're seeing there. And specifically, along those lines, really two specific questions. You're putting Mantle and Alchemy teams under one leader. Curious your thought process, what triggered that here? And then also related to the sales and sales pipeline, I think last year you had 21 new logos in the second half. Just kind of curious if you even could put as fine a point on it as to say you think you could be up over that year over year.

Well, I would be silly to forecast the number of new logos in the back half of the year. But our pipeline continues to be strong, and it continues to be balanced between banks and credit unions. So we're pleased with the pipeline. The decision on putting the Alchemy sales team and the Mantle sales team under one leader is really the following. If you think about what we have learned and executed from a go-to-market perspective, We've got a standalone Mantle team that sells Mantle to customers that may have Alchemy or may not have Alchemy. And that go-to-market is very precise. Go win new logos for Mantle. We have an account management team that takes care of the Alchemy online banking customers. And that go-to-market is very clear. Those account managers should look for Mantle opportunities and then bring in the Mantle sales team. The place where we had the biggest opportunity to bring together messaging and go-to-market approach is when we've got a new customer pursuit that's online banking, and there's an interest in Mantle as well. And that was where we had kind of two different sales teams that were trying to work things out under two different sales leaders, and we wanted to make sure that we took advantage of what we think is is pretty powerful differentiation in terms of the product offering that comes from data marketing platform integrated with online banking, integrated with onboarding and account opening. So in summary, the thinking process of bringing the teams together, we had a good motion on account management. We had a good motion on Mantle new logo. We had a good motion on Alchemy online banking new logo. We needed to create a really good motion when there was both a mantle and an online banking opportunity because, once again, we think that creates a strategic advantage for us in those opportunities.

Great. That's helpful. Thank you. Thank you.

And your next question comes from Charles Mappin from Stevens. Please go ahead.

Hi. Good afternoon, and thank you for taking my question. I saw a release during the quarter indicating that Mantle is now working with Plaid. My question is, following J.P. Morgan's announcement that they intend to charge for access to consumer data, do you expect that to have any potential implications on either Mantle or Alchemy's business?

Well, first of all, account aggregation, instant account verification, transaction cleansing, transaction data enrichments, These are all very desired capabilities by the end users of financial institutions. And so these are, you know, these are capabilities that we offer within the online banking platform. These are capabilities that we offer within the onboarding and account opening platform. And so I think we are in the same place as most of the rest of the industry where we are waiting and watching how the industry reacts to the potential fees that JP Morgan may push through. So from my perspective, there are very important capabilities. We've obviously read and heard what JP Morgan intends to do, but what we really need to do is see what finally happens within the industry, and then we'll make adjustments to our strategy based upon that.

Got it. Thank you. And as a follow-up, I could appreciate that there's a substantial opportunity for synergies with Mantle. And, you know, at some point we'll just look at the business as one unit. However, I guess my question is, is there any way to parse out the contribution to that $68 million, the backlog from Mantle this quarter? I'm getting questions on, you know, how we should think about that from an organic standpoint.

Yeah, I mean, Chuck, as you can imagine, it's hard to parse out any one product because of the manner in which we sell. It includes multiple products as it relates to new logos, and we have standalone products for add-on sales and cross-sales, and then obviously there's a component that's also related to standalone segment, which is marketing data analytics, and then manual for account opening and onboarding. So it's It wouldn't be fair to look at any one product. Now, what I can tell you is the backlog, if we were to parse out mantle, is continuing to grow. Our ideas and forecasts for back half sales would lead you to believe that our implementation backlog will continue to grow and even be at a higher point when we exit 2025. But to provide it for just a single product, it almost isn't a relevant data point.

Got it. All right. Thanks for the call, guys. Appreciate it. Thank you. And the next question comes from Bianca Tandon from UHAM.

Please go ahead.

Thank you. Good evening. Maybe for you, Alex, first. Alex, there's been a lot of talk about deregulation within the banking sector being a potential tailwind for tech spend. I'm just curious, have you seen any indications of that so far and what you're hearing from the bank customers in terms of their appetite for spending if there is deregulation? Maybe just any color on that would be helpful.

Yeah, thanks for the question. As we've noted over the last few years, the nature of of online banking and now increasingly the nature of account opening and onboarding doesn't have a lot of elasticity depending upon what's happening either in regulation, deregulation, a hot economy or a slow economy. These are fundamental building blocks of the systems that you have to have to run a bank. You have to have a core system. You have to have an onboarding system. You have to have an LOS system. You have to have a digital banking system. You have to have payment systems. You have to manage fraud. And so at least for alchemies, now it may be true that on more discretionary spend in other areas of IT that are around banks that with deregulation that could cause more spending associated with that. But in terms of these necessary systems, There's just consistent spend for these systems almost irrespective of what's happening in the economy.

Got it. Okay. Thank you for that. And then maybe just turning to Brian. Brian, in terms of the levers to growth, as we think about the ARPU, which has been growing pretty nicely the last couple of quarters, the user growth has been obviously good, but maybe moderated from what we've seen historically. How are we thinking about those levers going forward for the balance of 2025 and then maybe even a little bit longer term?

I mean, the contribution from each of those levers should continue to be consistent. So today, you know, ARR growth of about 12% or rather user growth of about 12% and ARPU expansion on an organic basis in that 6% to 7% range. Now, Oracle will continue to outpace that rate as we have success with selling our digital account opening, online banking, and marketing data analytics products together. I mean, what's interesting is today out of, you know, our 320 contracted clients, 16 of those today have all three of those offerings. Now contrast that with approximately a third of our clients under contract have marketing and data analytics. So our view is as we continue the integration strategy of these three platforms together, we can uplift the digital opening piece. So the online account opening solution to be at a comparable level at some point in the future as marketing and data analytics in terms of penetration.

Okay. Thank you for that. Very helpful. Appreciate it. Thank you. And your next question comes from Pat Walvrens from Citizens. Go ahead.

Oh, great. Thank you. I mean, this part's a lot of questions as a comment. It's great to see Joe Payne joining the board. It's been a long time. My question, though, Alex, is around the Genius Act and stable coins and how we think about the implications of that for community banks. I mean, I guess what the risks are and then the community bank lobby, I think, helped put some restrictions in there.

Thanks for that question, Pat. When I sit with customers, we have the conversation that we have, which is, well, maybe there's some possibility that stablecoins just blow up the entire community bank and credit union ecosystem. And then we kind of go, well, we shouldn't plan around that because if that happens, y'all aren't going to be here and we're not going to be here. So what do we really think is going to happen? And the way that the customers are thinking about something like stablecoin is, is this is a product that we need to be able to offer to our customers so that we can retain deposits. So if a customer wants to, if one of their clients, one of their members, one of their account holders wants to access stablecoin, then what our customers want to do is to be able to not have their deposits leave so that their customer can buy stablecoins. So most of our conversation has been what stablecoin products do you think you're going to offer, which is still pretty murky. And then when you offer those, we need to be able to embed your ability to offer those deeply into the user experience so that your customer never feels like they're leaving the digital banking experience if they're going to go acquire stablecoin. So in general... we have about a two-minute, well, it could blow up the world, and then none of us would be around, so we don't need to worry about a conversation. And then it shifts to, okay, I need to make sure that deposits don't leave, so how can this be a product that I offer? But in general, I would say, Pat, VAT plus FedNow are still very early in terms of people having a good sense of what they should bet on. And when I talk about FedNow, I mean in terms of allowing their customers to make real-time payments. Most of our customers are still concerned about their ability to manage fraud in that kind of environment. So they're kind of slow rolling the real-time payment piece. And then they're Cognizant of stable coin, but still not sure what's going to be the winner in that space that they should be offering.

All right. Thank you for all that, Keller. Thank you.

And the next question comes from Adam Hodgkins from Goldman Sachs. Please go ahead.

Great. Thanks so much for taking the questions. I wanted to ask around M&A. I know historically, You've talked about how mergers at the low end of the market could benefit Alchemy by bringing more credit unions and banks into your buy box. Is there any updated view around how M&A impacts you guys, particularly as we see some larger financial institutions in the space pick up activity there? Thanks so much.

Yeah, I'll probably provide some overall comment, and Brian may have some things he wants to share from a numbers perspective. I was talking to a credit union CEO, a large credit union CEO on the West Coast about a month ago, and his view was there's a couple of pretty large mergers that have been announced that have not yet completely been approved, but when those mergers get approved, then this person felt like, that was going to be a, you know, an impetus for some more M&A activities. But remember, there's a big difference between bank M&A and credit union M&A. Bank M&A, you think about that done more as a traditional acquisition process that you would think of like if two software companies decided to, one decided to acquire the other. A credit union merger, is still an agreement between two boards that the members would be served better by the merger of the two entities. So it tends to be less of a strict economic decision the way that a bank M&A happens. But in general, I think the sense within the customer base is there's a couple of big ones that are on the edge, and if they get approved, then you might see more mergers happen, which in general to date has been good for us. I think, Brian, you had some numbers in the prepared remarks.

Yeah, just a couple of comments on consolidation activity. In most markets, depending on how you price your product, consolidation can result in really a lower TAM. It can result in lower number of buyers in your market. That's not really the case as it relates to Alchemy and other digital banking providers, because when there's a merger of financial institutions, they're merging due to gaining market share and not consolidating existing clients together. And so the TAM really remains unchanged, and so our market opportunity doesn't change at all. As it specifically relates to Alchemy over the last, four years, we've benefited close to 500,000 net digital user gains from M&A activity. Some of that was skewed to 2025, where we did have one consolidation that resulted in close to 200,000 additional users on our platform. So Alchemy's been fortunate to actually benefit from M&A activity. That's typically because we focus on the top 2,500 financial institutions in the marketplace outside of the megabanks, and those tend to be the financial institutions that are acquiring or merging with financial institutions beneath them in terms of size.

Okay, that's really helpful, Keller. Thanks for that. And then I wanted to ask the Mantle backlog question a bit of a different way. Is there any way to parse out the impact to ARR revenue this quarter for Mantle? Or said another way, if that's more challenging, how has sort of Mantle contribution trended relative to the $31 million you had expected for the year? Thanks again.

Yes, so Mantle, and this will be disclosed in our 10Q tomorrow, but in terms of revenue, Mantle contributed just over $10 million of revenue in the quarter. That's probably slightly ahead of what we were expecting for the quarter. And then for the full year, Mantle's still on track to do a couple of things. One, achieve the $31.5 million or so of revenue that we included in our guidance. But more importantly, because of the adoption that we're seeing in the market, achieving the $60 million of ARR under contract, that's becoming more and more in focus, and we think we'll probably at least do that in 2025. So that's a nice performance as it relates to mantle for the year.

Okay. Thanks so much, Brian. Thank you.

There are no more further questions at this time. So ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation. You may now disconnect.