Alkami Technology, Inc 10-Q for FY2026 Q3
Alkami Technology, Inc. (ALKT)
10-Q
2026-10-29
For: 2026-09-30
View Original
Added on
October 29, 2026
About this 10-Q
Alkami Technology, Inc filed this 10-Q on October 29, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $134.91M
- up 19.4% from $112.95M a year earlier
- Net loss
- $6.75M
- compared with a net loss of $14.8M a year earlier
- Diluted EPS
- -$0.06
- compared with -$0.14 a year earlier
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended September 30, 2026
or
For the transition period from ___________ to ___________
Commission File Number 001-40321
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (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 | ||||||
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.
☒ | Smaller reporting company | ||||||||||
Accelerated filer | ☐ | Emerging growth company | |||||||||
Non-accelerated filer | ☐ | ||||||||||
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 September 30, 2026 was 107,042,319 .
| TABLE OF CONTENTS | ||||||||
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(UNAUDITED)
| September 30, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Marketable securities | |||||||||||
| Accounts receivable, net | |||||||||||
| Deferred costs, current | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Right-of-use assets | |||||||||||
| Deferred costs, net of current portion | |||||||||||
| Intangibles, net | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities | |||||||||||
| Deferred revenues, current portion | |||||||||||
| Lease liabilities, current portion | |||||||||||
| Total current liabilities | |||||||||||
| Deferred revenues, net of current portion | |||||||||||
| Deferred income taxes | |||||||||||
| Convertible senior notes, net | |||||||||||
| Revolving loan | |||||||||||
| Lease liabilities, net of current portion | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.
1
ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(UNAUDITED)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenues(1) | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Amortization of acquired intangibles | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
| Non-operating income (expense): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| (Benefit from) provision for income taxes | ( | ( | ( | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average number of shares of common stock outstanding: | |||||||||||||||||||||||
| Basic and diluted | |||||||||||||||||||||||
(1) Includes amortization of acquired technology of $4.9 14.7 million and $11.7 million for the nine months ended September 30, 2026 and 2025, respectively.
The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.
2
ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(UNAUDITED)
Three months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon restricted stock unit vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Exercised stock options | — | — | |||||||||||||||||||||||||||||||||||||||
| Payments for taxes related to net settlement of equity awards | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Balance September 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon restricted stock unit vesting | ( | — | |||||||||||||||||||||||||||||||||||||||
| Exercised stock options | — | — | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Balance September 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon restricted stock unit vesting | ( | — | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under Employee Stock Purchase Plan (ESPP) | — | — | |||||||||||||||||||||||||||||||||||||||
| Exercised stock options | — | — | |||||||||||||||||||||||||||||||||||||||
| Payments for taxes related to net settlement of equity awards | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
| Balance September 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon restricted stock unit vesting | ( | — | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under ESPP | — | — | |||||||||||||||||||||||||||||||||||||||
| Exercised stock options | — | — | |||||||||||||||||||||||||||||||||||||||
| Capped calls | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation replacement awards related to merger consideration and attributable to pre-combination services | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||
Balance September 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.
3
ALKAMI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
Nine months ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization expense | ||||||||||||||
| Accrued interest on marketable securities, net | ( | ( | ||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Amortization of discount and debt issuance costs | ||||||||||||||
| Loss on impairment of intangible assets | ||||||||||||||
| Deferred taxes | ( | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Prepaid expenses and other assets | ( | ( | ||||||||||||
| Accounts payable and accrued liabilities | ||||||||||||||
| Deferred costs | ( | ( | ||||||||||||
| Deferred revenues | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchase of marketable securities | ( | ( | ||||||||||||
| Proceeds from sales, maturities, and redemptions of marketable securities | ||||||||||||||
| Purchases of property and equipment | ( | ( | ||||||||||||
| Capitalized software development costs | ( | ( | ||||||||||||
| Acquisition of business, net of cash acquired | ( | |||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Payments on revolving loan | ( | ( | ||||||||||||
| Debt issuance costs paid | ( | |||||||||||||
| Proceeds from ESPP issuances | ||||||||||||||
| Proceeds from issuance of convertible senior notes | ||||||||||||||
| Proceeds from borrowing under revolving loan | ||||||||||||||
| Purchase of capped calls | ( | |||||||||||||
| Payments for taxes related to net settlement of equity awards | ( | |||||||||||||
| Proceeds from stock option exercises | ||||||||||||||
| Repurchases of common stock | ( | |||||||||||||
| Net cash (used in) provided by financing activities | ( | |||||||||||||
| Net decrease in cash and cash equivalents | ( | ( | ||||||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.
4
ALKAMI TECHNOLOGY, INC.
Notes to the Unaudited Condensed Consolidated Financial Statements
(in thousands, except share and per share data)
(Unaudited)
Note 1. Organization
Description of Business
Alkami Technology, Inc. (the “Company”) is a cloud-based digital sales and service platform provider. The Company inspires and empowers community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States. The Company’s solution, the Alkami Digital Sales & Service Platform, consisting of the Alkami Digital Banking Platform, Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture. The Company cultivates deep relationships with its clients through long-term, subscription-based contractual arrangements, aligning its growth with its clients’ success and generating an attractive unit economic model. The Company was incorporated in Delaware in August 2011, and its principal offices are located in Plano, Texas.
Note 2. Summary of Significant Accounting Policies
The accompanying Condensed Consolidated Financial Statements reflect the application of significant accounting policies as described below.
Basis of Presentation and Consolidation
The interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All intercompany accounts and transactions are eliminated.
In the Company's opinion, the accompanying interim Unaudited Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim Unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes for the fiscal year ended December 31, 2025, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2026.
The Company has no sources of other comprehensive income, and accordingly, net loss presented each period is the same as comprehensive loss.
The Company has reclassified certain prior period amounts in the Unaudited Condensed Consolidated Statements of Operations and Notes to the Unaudited Condensed Consolidated Financial Statements to conform to the current period’s presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Operating Segment
The Company's chief operating decision maker, the Chief Executive Officer, assesses performance for the Company's single reportable segment and decides how to allocate resources based on the Company’s net loss (see the Unaudited Condensed Consolidated Statements of Operations).
5
Repurchases of Common Stock
The Company retires all common stock repurchased pursuant to its approved stock repurchase program. The Company records the par value of the common stock repurchased as a reduction of common stock and the excess of the purchase price over par as a reduction of additional paid-in capital, to the extent available, with any remaining excess charged to accumulated deficit on the Company's Unaudited Condensed Consolidated Balance Sheets.
Recent Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). The amendments in the ASU are intended to simplify the capitalization guidance by removing all references to software development project stages so that guidance is neutral to different software development methods. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption on its Condensed Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the Condensed Consolidated Statements of Operations, as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adoption on its Condensed Consolidated Financial disclosures.
Note 3. Property and Equipment, Net
Depreciation and amortization expense was $1.7 million and $4.9 million for the three and nine months ended September 30, 2026, respectively, and $1.3 million and $3.4 million for the three and nine months ended September 30, 2025, respectively.
Property and equipment, net, includes the following amounts at September 30, 2026 and December 31, 2025:
| (in thousands) | Useful Life | September 30, 2026 | December 31, 2025 | ||||||||||||||
| Capitalized software development costs | $ | $ | |||||||||||||||
| Equipment and software | |||||||||||||||||
| Leasehold improvements | |||||||||||||||||
| $ | $ | ||||||||||||||||
| Less: accumulated depreciation and amortization | ( | ( | |||||||||||||||
| Property and equipment, net | $ | $ | |||||||||||||||
Note 4. Revenues and Deferred Costs
The following table disaggregates the Company's revenue by major source for the three and nine months ended September 30, 2026 and 2025:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SaaS subscription services | $ | $ | $ | $ | |||||||||||||||||||
| Implementation services | |||||||||||||||||||||||
| Other services | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
The Company recognized approximately $28.3 million of revenue during the nine months ended September 30, 2026 that was included in deferred revenues in the accompanying Unaudited Condensed Consolidated Balance Sheets as of the beginning of the reporting period. For those contracts that were wholly or partially unsatisfied as of September 30, 2026, the Company’s remaining performance obligation totaled approximately $1.7 billion. The Company expects to recognize approximately 54.0 % of these remaining obligations as revenue over the next 24 months, an additional 32.7 % in the next 25 to 48 months, and the remaining balance thereafter. This estimate does not include estimated consideration for excess user and transaction processing fees that the Company expects to earn under its subscription contracts.
Contract assets totaled $4.6 million and $3.6 million as of September 30, 2026 and December 31, 2025, respectively, which are included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.
6
Deferred Cost Recognition
The Company capitalized $4.0 million and $7.3 million in deferred commissions costs during the three and nine months ended September 30, 2026, respectively, and $3.9 million and $7.4 million during the three and nine months ended September 30, 2025, respectively, and recognized amortization of $2.1 million and $6.0 million during the three and nine months ended September 30, 2026, respectively, and $1.5 million and $4.6 million during the three and nine months ended September 30, 2025, respectively. Amortization expense is included in sales and marketing expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations. Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying Unaudited Condensed Consolidated Balance Sheets in the amount of $34.3 million and $32.9 million as of September 30, 2026 and December 31, 2025, respectively.
The Company capitalized implementation costs of $3.5 million and $10.9 million during the three and nine months ended September 30, 2026, respectively, and $3.5 million and $8.8 million during the three and nine months ended September 30, 2025, respectively, and recognized amortization of $2.2 million and $6.2 million during the three and nine months ended September 30, 2026, respectively, and $1.5 million and $4.5 million during the three and nine months ended September 30, 2025, respectively. Amortization expense is included in cost of revenues in the accompanying Unaudited Condensed Consolidated Statements of Operations. These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying Unaudited Condensed Consolidated Balance Sheets in the amount of $35.1 million and $30.4 million as of September 30, 2026 and December 31, 2025, respectively.
Note 5. Accounts Receivable, net
Accounts receivable, net includes the following amounts at September 30, 2026 and December 31, 2025:
| September 30, | December 31, | ||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Trade accounts receivable | $ | $ | |||||||||
| Unbilled receivables | |||||||||||
| Total receivables | |||||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Reserve for estimated credits | ( | ( | |||||||||
| Total accounts receivable, net | $ | $ | |||||||||
Note 6. Accrued Liabilities
Accrued liabilities consisted of the following at September 30, 2026 and December 31, 2025:
| September 30, | December 31, | ||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Bonus accrual | $ | $ | |||||||||
| Commissions accrual | |||||||||||
| Client refund liability | |||||||||||
| Self-insured reserve | |||||||||||
| Accrued third-party solution costs | |||||||||||
| Accrued vendor purchases | |||||||||||
| Accrued hosting services | |||||||||||
| Other accrued liabilities | |||||||||||
| Total accrued liabilities | $ | $ | |||||||||
7
Note 7. Debt
Amended Credit Facility
On February 27, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, and other lenders party thereto. The Third Amendment, among other things, (i) extended the maturity date of the revolving commitment from April 29, 2027 to February 27, 2030, (ii) increased the amount of the revolving loan commitment by $100 million, for a total revolving commitment of $225 million (the “Revolving Facility”), (iii) extended the Financial Covenant Trigger Date (as defined therein) to December 31, 2026 or such earlier date as designated by the Company, (iv) reduced the applicable interest rate margins (1) prior to the Financial Covenant Trigger Date, from SOFR plus 3.00 % to 3.50 % per annum to SOFR plus 2.75 % to 3.25 % per annum, based on the Recurring Revenue Leverage Ratio (as defined therein) and (2) on or after the Financial Covenant Trigger Date, from SOFR plus 1.50 % to 3.00 % per annum to SOFR plus 1.25 % to 2.50 % per annum, based on the Consolidated Total Net Leverage Ratio (as defined therein), (v) permitted the acquisition of Fin Technologies, Inc., dba MANTL (“MANTL”) pursuant to the terms of the related merger agreement, (vi) permitted certain Permitted Convertible Indebtedness and Permitted Equity Derivative Transactions (as such terms are defined therein), subject to certain restrictions, and (vii) modified certain covenants.
Revolving Facility loans under the Amended Credit Agreement may be voluntarily prepaid and re-borrowed. The Amended Credit Agreement previously provided for a term loan, which was fully repaid in December 2023 and cannot be re-borrowed. The Company had borrowings of $60.0 million on the Revolving Facility during March 2025, with the proceeds used for the MANTL, which borrowings were fully repaid during the three months ended March 31, 2026. As of September 30, 2026, there were no borrowings outstanding under the Revolving Facility. The interest rate in effect for the Revolving Facility as of March 31, 2025 was 9.75 %. In April 2025, the rate decreased to 7.68 %, in July 2025, the rate increased to 7.70 %, and in December 2025, the rate decreased to 7.13 %, which remained the effective interest rate as of December 31, 2025. In January 2026, the rate decreased to 7.02 %, which remained the effective interest rate until full repayment as of March 31, 2026. Interest expense related to the outstanding borrowings on the Revolving Facility was none and $0.3 million for the three and nine months ended September 30, 2026, respectively, and $0.9 million and $2.4 million for the three and nine months ended September 30, 2025, respectively.
Obligations under the Amended Credit Agreement are guaranteed by the Company’s subsidiaries and secured by all or substantially all of the assets of the Company and its subsidiaries pursuant to an Amended and Restated Guarantee and Collateral Agreement.
The Amended Credit Agreement contains customary affirmative and negative covenants. Before the Financial Covenant Trigger Date, the following covenants are applicable: (i) an annual recurring revenue growth covenant requiring the loan parties to have recurring revenues in any four consecutive fiscal quarter period in an amount that is at least 10 % greater than the recurring revenues for the corresponding four consecutive quarter period in the previous year; and (ii) a liquidity (defined as the aggregate amount of cash in bank accounts subject to a control agreement plus availability under the Revolving Facility) covenant, requiring the loan parties to have liquidity, tested on the last day of each calendar month, of $35.0 million or more. After the Financial Covenant Trigger Date, the existing annual recurring revenue growth and liquidity financial covenants are no longer applicable, and the following covenants take effect: (i) a Consolidated Total Net Leverage Ratio requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 5.50 :1.00; (ii) a Consolidated Interest Coverage Ratio (as defined therein) requiring the ratio, for any fiscal quarter ending as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be more than 3.00 :1.00; and (iii) a Consolidated Senior Net Leverage Ratio (as defined therein) requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 3.50 :1.00.
The Third Amendment revised the free cash flow covenant, as calculated at the last day of each fiscal quarter for the period of 12 consecutive months then ending, requiring free cash flow to be not less than $(25.0 ) million for the fiscal quarters ending on or prior to September 30, 2025 and requiring free cash flow to be not less than $0 for the fiscal quarters ending on or after December 31, 2025 and on or prior to September 30, 2026.
On April 3, 2026, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Credit Agreement, which revised the operating covenant of the Amended Credit Agreement to permit the Group Members (as defined in the Amended Credit Agreement) to maintain accounts with Airwallex or its affiliates, provided that the aggregate amount of cash and cash equivalents maintained in such accounts does not at any time exceed $8.5 million.
On May 1, 2026, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Amended Credit Agreement, which permits the Company to use up to $100.0 million of its cash to repurchase its common stock.
The Amended Credit Agreement also contains customary events of default which, if they occur, could result in the termination of commitments under the Amended Credit Agreement, the declaration that all outstanding loans are immediately due and payable in whole or in part, and the requirement to maintain cash collateral deposits in respect of outstanding letters of credit. The Company was in compliance with all covenants as of September 30, 2026.
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2030 Convertible Notes
On March 13, 2025, the Company issued $345 million principal amount of 1.50 % convertible senior notes due March 15, 2030 (the “2030 Convertible Notes” or “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 13, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2030 Convertible Notes are the Company’s senior, unsecured obligations and bear interest at a rate of 1.50 % per year payable semiannually in arrears on March 15 and September 15 of each year, which began on September 15, 2025. Each $1,000 principal amount of the 2030 Convertible Notes will be convertible into 30.4681 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $32.82 per share, subject to adjustment upon the occurrence of specified events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As the Company issued the 2030 Convertible Notes on March 13, 2025, ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” became effective for the Company on January 1, 2025.
The 2030 Convertible Notes are convertible at the option of the holders of the 2030 Convertible Notes before November 15, 2029, only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of the 2030 Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) if the Company calls (or is deemed to have called) the 2030 Convertible Notes for redemption; or (4) upon the occurrence of certain corporate events or distributions on the Company’s common stock. From and after November 15, 2029, noteholders may convert their Notes at any time at their election, until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.
The 2030 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after March 20, 2028 and on or before the 62nd scheduled trading day immediately before the maturity date, but only if (i) the Notes are “freely tradable” (as defined in the Indenture) as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the most recent interest payment date occurring on or before the date the Company sends such notice; and (ii) the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends such redemption notice; and (2) the trading day immediately before the date the Company sends such redemption notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $75.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. No sinking fund is provided for the 2030 Convertible Notes, which means the Company is not required to redeem or retire the 2030 Convertible Notes periodically.
If certain corporate events that constitute a “fundamental change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of “fundamental change” includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.
As of September 30, 2026, the conditions allowing holders of the 2030 Convertible Notes to convert were not met.
The net carrying amount of the 2030 Convertible Notes consisted of the following (in thousands):
| (in thousands) | September 30, 2026 | ||||
| Principal | $ | ||||
| Unamortized debt discount | ( | ||||
| Unamortized debt issuance costs | ( | ||||
| Net carrying amount | $ | ||||
The debt discount and issuance costs are being amortized to interest expense over the term of the 2030 Convertible Notes using the effective interest rate method. The effective interest rate used to amortize the discount and issuance costs of the 2030 Convertible Notes is 2.14 %. For the three and nine months ended September 30, 2026 and 2025, interest expense related to the 2030 Convertible Notes consisted of the following (in thousands):
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Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Contractual interest expense | $ | $ | $ | $ | |||||||||||||||||||
| Amortization of debt discount and issuance costs | |||||||||||||||||||||||
| Total interest expense | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026, the 2030 Convertible Notes had a principal amount of $345 million and an estimated fair value of $304 million. The estimated fair value of the 2030 Convertible Notes, which are Level 2 financial instruments, was determined based on the quoted bid prices of the 2030 Convertible Notes in an over-the-counter market on the last trading day of the reporting period.
Capped Calls
In connection with the 2030 Convertible Notes, the Company has entered into privately negotiated capped call transactions with certain financial institutions pursuant to capped call confirmations (collectively, the “Capped Calls”). The premiums paid for the purchases of the Capped Calls were approximately $33.9 million. The Capped Calls have an initial strike price of approximately $32.82 per share, subject to certain adjustments substantially similar to those applicable to the corresponding 2030 Convertible Notes. The Capped Calls have an initial cap price of $47.74 per share, subject to certain adjustments.
The Capped Calls are generally expected to reduce potential dilution to the Company’s common stock and/or offset any potential cash payments that the Company could be required to make in excess of the principal amount of any converted 2030 Convertible Notes, with such reduction and/or offset subject to a cap.
The Capped Calls are separate transactions and are not part of the terms of the 2030 Convertible Notes. The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock and meet the requirements to be classified in equity and, as such, are not remeasured each reporting period. The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ equity during the nine months ended September 30, 2025.
Note 8. Stockholders' Equity
Equity Compensation Plans
Stock-based compensation expense was included in the Unaudited Condensed Consolidated Statements of Operations as follows:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Cost of revenues | $ | $ | $ | $ | |||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total stock-based compensation expenses | $ | $ | $ | $ | |||||||||||||||||||
In connection with the acquisition of MANTL in March 2025, the vesting of certain outstanding unvested equity awards was accelerated and settled in cash, resulting in the Company recognizing $3.9 million of stock-based compensation expense for the nine months ended September 30, 2025.
Stock Repurchase Program
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Note 9. Income Taxes
The Company recorded income tax benefit of $1.0 million and income tax expense of $1.6 million for the three and nine months ended September 30, 2026, respectively, resulting in an effective tax rate of 12.5 % and (6.5 )%, respectively, compared to income tax benefit of less than $0.1 million and $11.6 million for the three and nine months ended September 30, 2025, respectively, resulting in an effective tax rate of 0.2 % and 24.3 %, respectively.
The Company’s effective tax rates for the three and nine months ended September 30, 2026 and 2025 differ from the U.S. statutory tax rate primarily due to unfavorable permanent differences and changes in the valuation allowance recorded against the Company’s deferred tax assets. For the three and nine months ended September 30, 2025, the effective tax rate was further impacted by a deferred tax benefit resulting from the partial release of a pre-existing valuation allowance in connection with the MANTL business combination.
The Company recognizes deferred tax assets and liabilities based on the estimated future tax effects of temporary differences between the financial statement basis and tax basis of assets and liabilities given the provisions of enacted tax law. Management reviews deferred tax assets to assess their future realization by considering all available evidence, both positive and negative, to determine whether a valuation allowance is needed for all or some portion of the deferred tax assets, using a “more likely than not” standard. The assessment considers, among other matters: historical losses, a forecast of future taxable income, the duration of statutory carryback and carryforward periods, and ongoing prudent and feasible tax planning strategies. As a result, the Company has established a valuation allowance against most of its deferred tax assets as realization is not reasonably assured based upon a “more likely than not” threshold. The Company reassesses the realizability of deferred tax assets regularly, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available.
Note 10. Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these instruments. Cash equivalents include amounts held in money market accounts that are measured at fair value using observable market prices. Marketable securities include debt securities that are measured at fair value using observable inputs.
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.
Level 3. Significant unobservable inputs that are supported by little or no market activity.
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following tables summarize the Company’s financial assets measured at fair value as of September 30, 2026 and December 31, 2025 and indicate the fair value hierarchy of the valuation:
| Fair Value at Reporting Date Using | ||||||||||||||||||||||||||
| (in thousands) | September 30, 2026 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
Cash equivalents(1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketable securities: | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Commercial paper | ||||||||||||||||||||||||||
| U.S. Treasury debt securities | ||||||||||||||||||||||||||
| Total marketable securities | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Includes insured cash sweep account, cash sweep account, money market account and money market funds that have investments primarily in U.S. Government Agency debt, U.S. Treasury debt, U.S. Treasury Repurchase Agreements, U.S. Government Agency Repurchase Agreements, and corporate bonds that have a maturity of three months or less from the original acquisition date.
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| Fair Value at Reporting Date Using | ||||||||||||||||||||||||||
| (in thousands) | December 31, 2025 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
Cash equivalents(1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketable securities: | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Commercial paper | ||||||||||||||||||||||||||
| U.S. Treasury debt securities | ||||||||||||||||||||||||||
| International debt securities | ||||||||||||||||||||||||||
| Total marketable securities | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Includes insured cash sweep account, cash sweep account, money market account and money market funds that have investments primarily in U.S. Government Agency debt, U.S. Treasury debt, U.S. Treasury Repurchase Agreements, U.S. Government Agency Repurchase Agreements, and corporate bonds that have a maturity of three months or less from the original acquisition date.
Note 11. Earnings Per Share
Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.
Because the Company has reported a net loss for the three and nine months ended September 30, 2026 and 2025, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.
In connection with the offering of the 2030 Convertible Notes, the Company entered into Capped Calls that are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion. The impact of the Capped Calls is not included when calculating potentially dilutive shares since their effect is anti-dilutive.
The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three and nine months ended September 30, 2026 and 2025:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands, except shares and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average shares of common stock outstanding - basic and diluted | |||||||||||||||||||||||
| Net loss per common share - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The following potential shares of common stock were excluded from diluted net loss per share as the Company had a net loss in each of the periods presented:
As of September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Stock options | ||||||||||||||||||||||||||
| Restricted Stock Units | ||||||||||||||||||||||||||
| ESPP | ||||||||||||||||||||||||||
| 2030 Convertible Notes | ||||||||||||||||||||||||||
| Total anti-dilutive common share equivalents | ||||||||||||||||||||||||||
Note 12. Commitments and Contingencies
Legal Proceedings
The Company may become party to various legal actions during the ordinary course of business. Defending such proceedings is costly and can impose a significant burden on management and employees, the Company may receive unfavorable preliminary or interim rulings during litigation, and there can be no assurances that favorable final outcomes will be obtained. In addition, the Company’s industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets and other intellectual property and proprietary rights. Companies in our industry are often required to defend against litigation claims based on allegations of infringement or other violations of intellectual property rights. Furthermore, client agreements typically require the Company to indemnify clients against liabilities incurred in connection with claims alleging its solutions infringe the intellectual property rights of a third party. From time to time, the Company has been involved in disputes related to patent and other intellectual property rights of third parties, none of which has resulted in material liabilities. The Company expects these types of disputes may continue to arise in the future. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims that are likely to be asserted, is not reasonably likely to be material to the Company’s financial position, results of operations, or cash flows, taking into account established accruals for estimated liabilities.
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Note 13. Leases
The Company leases office space under non-cancellable operating leases for its corporate headquarters in Plano, Texas.
On February 24, 2026, the Company entered into an agreement for an office lease in India that became effective on March 9, 2026, with a lease term of five years . The Company recognized a lease liability and ROU asset of $4.8
Operating lease expense consisted of:
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Operating lease expense | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term lease expense and other(1) | ||||||||||||||||||||||||||
| Total lease expense | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Other lease expense includes variable lease expense. | ||||||||||||||||||||||||||
Supplemental Cash Flow Information
Nine months ended September 30, | |||||||||||
Cash flow information (in thousands) | 2026 | 2025 | |||||||||
Cash paid for operating lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations(1) | $ | $ | |||||||||
The future maturities of operating lease liabilities are as follows:
| (in thousands) | September 30, 2026 | |||||||
| 2026 (three months remaining) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total minimum lease payments | ||||||||
| Less: present value discount | ( | |||||||
| Total lease liability balance | $ | |||||||
In September 2026, the Company entered into agreements to assign its remaining rights and obligations under the lease for its headquarters in Plano, Texas to a third party effective on July 1, 2027. In connection with the agreements, the Company has agreed to make incentive payments to the third party totaling approximately $4.0 million, due within 30 days after the assignment effective date. The assignment and the Company’s payment obligation are contingent upon, among other things, the surrender of the premises on February 1, 2027, the landlord’s release of the Company from obligations arising under the lease after the assignment effective date and the landlord’s receipt of replacement security from the third party. Until the contingencies are resolved, the Company remains the primary obligor under the lease.
As of September 30, 2026, the Company continues to account for the lease, the related right-of-use asset and the related property and equipment (as disclosed in Note 3) under their existing terms, and no impairment has been identified related to the assignment. The Company will continue to monitor quarterly for impairment through the assignment effective date.
In September 2026, the Company incurred broker commissions of $2.1 million in connection with the assignment, which were included in general and administrative expenses for the three months ended September 30, 2026.
Note 14. Goodwill and Other Intangibles
Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are reviewed annually for impairment of value or when indicators of a potential impairment are present. As part of the Company’s business planning cycle, the Company performs an annual goodwill impairment test in the fourth quarter of the fiscal year. There were no indications of impairment of goodwill noted as of September 30, 2026. Goodwill has a carrying value of $403.4
Total intangible assets consisted of the following as of September 30, 2026 and December 31, 2025:
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As of September 30, 2026 | ||||||||||||||||||||
| (in thousands) | Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||
| Finite-lived: | ||||||||||||||||||||
| Customer Relationships | $ | $ | ( | $ | ||||||||||||||||
| Developed Technology | ( | |||||||||||||||||||
| Tradenames | ( | |||||||||||||||||||
Total amortizable intangible assets | ( | |||||||||||||||||||
Website domain name (Indefinite-lived) | — | |||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||
As of December 31, 2025 | ||||||||||||||||||||
| (in thousands) | Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||
| Finite-lived: | ||||||||||||||||||||
| Customer Relationships | $ | $ | ( | $ | ||||||||||||||||
| Developed Technology | ( | |||||||||||||||||||
| Tradenames | ( | |||||||||||||||||||
Total amortizable intangible assets | ( | |||||||||||||||||||
Website domain name (Indefinite-lived) | — | |||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||
Amortization expense recognized on intangible assets was $6.7 million and $19.9 million for the three and nine months ended September 30, 2026, respectively, and $6.7 million and $15.7 million for the three and nine months ended September 30, 2025, respectively.
The following table shows the estimated annual amortization expense of the definite-lived intangible assets for the next five years and thereafter (in thousands):
2026 (three months remaining) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| $ | |||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission (“SEC”), including the audited consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.
Unless the context otherwise requires, all references in this report to the “Company,” “Alkami,” “we,” “us” and “our” refer to Alkami Technology, Inc., a Delaware corporation, and its consolidated subsidiaries taken as a whole.
Cautionary Note Regarding Forward-Looking Statements
Any statements made in this Quarterly Report on Form 10-Q that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipates,” “commits,” “expects,” “suggests,” “plans,” “believes,” “intends,” “estimates,” “targets,” “projects,” “seeks,” “should,” “can,” “could,” “would,” “may,” “will,” “forecasts,” “strategy,” “future,” “likely” or the negative of these terms or other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at such time. Forward-looking statements are not guarantees of future performance or results and are subject to and involve risks, uncertainties and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements. The following important factors, along with the factors discussed in “Risk Factors” in the Annual Report on Form 10-K, may materially affect such forward-looking statements:
•managing our rapid growth;
•attracting new clients and retaining and broadening our existing clients’ use of our solutions;
•maintaining, protecting and enhancing our brand;
•predicting the long-term rate of client subscription renewals or adoption of our solutions;
•the unpredictable, time-consuming and costly nature of our sales cycles;
•integration with and reliance on third-party software, content and services;
•integrating our solutions with other systems used by our clients;
•satisfying our clients and meeting their digital banking needs;
•our dependence on the data centers operated by third parties and third-party internet hosting providers;
•defects, errors or other performance problems associated with our solutions;
•retaining our management team and key employees and recruiting and retaining new employees;
•managing the increased complexity of our clients’ integration and functionality requirements;
•shifts in the number of account holders and registered users of our solutions, their use of our solutions and our clients’ implementation and client support needs;
•acquiring or investing in other companies or pursuing business partnerships;
•natural or man-made disasters;
•use and reliance upon technology and development resources in India;
•environmental and social matters;
•cybersecurity breaches or other compromises of our security measures or those of third parties upon which we rely;
•privacy and data security concerns, data collection and transfer restrictions, contractual obligations, laws, regulations and standards and our processing and use of the PI of end users;
•risks and challenges associated with the development and use of AI technologies;
•intense competition in the markets we serve;
•reliance on the financial services industry as the source of our revenue in the event of any downturn, consolidation or decrease in technological spend in such industry;
•evolving technological requirements and changes and additions to our solution offerings;
•reliance on the development of the market for digital banking solutions;
•regulations and laws applicable to us, our clients and our solutions, including the impact of tariffs and trade policies on us and our clients;
•protecting our intellectual property rights and defending ourselves against claims that we are misappropriating the intellectual property rights of others;
•using open-source software in our solutions or risks resulting in the disclosure of our proprietary source code to our clients;
•complying with license or technology agreements with third parties and our ability to enter into additional license or technology agreements on reasonable terms;
•litigation or threats of litigation;
•the fluctuation of our quarterly and annual results of operations relative to our expectations and guidance;
•the way we recognize revenue, beginning from the live use of the service, which causes changes in client subscriptions to not be immediately apparent in our reported operating results;
•our ability to raise sufficient capital in a timely manner and the resulting dilution and the terms of our Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”);
•unanticipated changes in tax laws or regulations;
•risks from our indebtedness and liabilities;
•our ability to meet certain operating and financial covenants and restrictions under our Amended Credit Agreement;
•our ability to raise necessary funds to repurchase the 2030 Convertible Notes or to pay any cash amounts due upon their maturity or
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conversion of the 2030 Convertible Notes and dilution to our common stock upon the conversion of the 2030 Convertible Notes;
•risks from our accounting method of the 2030 Convertible Notes;
•counterparty risk with respect to the Capped Calls;
•future strategic initiatives, including acquisitions of businesses and strategic investments;
•future sales of shares of our common stock, our lack of an intention to pay dividends and significant influence of our principal stockholders;
•provisions in the Indenture (as defined below) delaying or preventing beneficial takeover and anti-takeover and exclusive forum provisions in our governing documents;
•risks from our stock repurchase program;
•the volatility of the trading price of our common stock;
•risks from actions of activist stockholders or others; and
•significant expenses and administrative burdens as a public company.
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Overview
Alkami is a cloud-based digital sales and service platform provider. We inspire and empower community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States. Our solution, the Alkami Digital Sales & Service Platform, consisting of the Alkami Digital Banking Platform (“Platform”), Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture. We cultivate deep relationships with our clients through long-term, subscription-based contractual arrangements, aligning our growth with our clients’ success and generating an attractive unit economic model.
Alkami was founded to help level the playing field for FIs. Since then, our vision has been to create a platform that combines premium technology and fintech solutions in one integrated ecosystem, delivered as a software-as-a-service (“SaaS”) solution and providing our clients’ account holders with a single point of access to all things digital. We have invested significant resources to build a technology stack that prioritized innovation velocity and speed-to-market given the importance of product depth and functionality in winning and retaining clients. In October 2020, we acquired ACH Alert, LLC (“ACH Alert”) to pursue adjacent product opportunities, such as fraud prevention and to expand our addressable market. In April 2022, we acquired Segmint, Inc. (“Segmint”), a leading cloud-based financial data analytics and transaction data cleansing provider. In March 2025, we acquired Fin Technologies, Inc., dba MANTL (“MANTL”), to provide onboarding, account opening, and loan origination solutions that allow FIs to acquire commercial, business and retail customers through a variety of channels for deposit account and loan types.
During 2024, we established a subsidiary in India to support potential future operational needs. While our presence in India has grown since 2024, these operations remain immaterial to our Condensed Consolidated Financial Statements as of September 30, 2026.
Our domain expertise in retail and business banking has enabled us to develop a suite of products tailored to address key challenges faced by FIs. Due to our architecture, adding products through our single code base is fast, simple and cost-effective. The key differentiators of the Alkami Digital Sales & Service Platform include:
•User experience: Personalized and seamless digital experience across user interaction points, including desktop, mobile, chat and SMS, establishing durable connections between FIs and their customers or members.
•Integrations: Scalability and extensibility driven by more than 400 real-time integrations to back-office systems and third-party fintech solutions as of September 30, 2026, including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening.
•Deep data capabilities: Data synchronized and stored from back-office systems and third-party fintech solutions and synthesized into meaningful insights, targeted content, and other areas of monetization.
The Platform allows us to offer an end-to-end set of software solutions. Our typical relationship with an FI begins with a set of core digital banking functional components, which can expand over time to include a rounded suite of products across onboarding and account opening, marketing, data insights, account management, payments and receivables, admin, risk and reporting, business and commercial banking, retail banking, financial analytics, and extensibility.
We primarily go to market through an internal sales force. Given the long-term nature of our Platform contracts, a typical sales cycle can range from approximately three to 12 months, with the subsequent implementation timeframe generally ranging from six to 12 months depending on the depth of integration.
We derive our Platform revenues almost entirely from multi-year contracts that are based on an average contract life of approximately 70 months as of September 30, 2026. We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution. In these cases, our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer or member penetration, incentivizing our clients to internally market and promote digital engagement.
To support our growth and capitalize on our market opportunity, we have increased our operating expenses across all aspects of our business. In research and development, we continue to focus on innovation and bringing novel capabilities to our platform, extending our product
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depth. Similarly, we continue to expand our sales and marketing organization focusing on new client wins, cross-selling opportunities and client renewals.
For the three months ended September 30, 2026 and 2025, our total revenues were $134.9 million and $113.0 million, respectively, representing a 19.4% increase period-over-period. For the nine months ended September 30, 2026 and 2025, our total revenues were $390.9 million and $322.8 million, respectively, representing an increase of 21.1% period-over-period. SaaS subscription revenues, as further described below, represented 95.7% and 95.4% of total revenues for the three and nine months ended September 30, 2026, respectively, and 95.5% and 94.9% of total revenues for the three and nine months ended September 30, 2025, respectively. We incurred net losses of $6.7 million and $25.6 million for the three and nine months ended September 30, 2026, respectively, and net losses of $14.8 million and $36.2 million for the three and nine months ended September 30, 2025, respectively, largely on the basis of significant continued investment in sales, marketing, product development and post-sales client activities.
Recent Developments
Lease Assignment
In September 2026, we entered into agreements to assign our remaining rights and obligations under the lease for our headquarters in Plano, Texas to a third party effective on July 1, 2027. In connection with the agreements, we have agreed to make payments to the third party totaling approximately $4.0 million, due within 30 days after the assignment effective date. The assignment and our payment obligation are contingent on, among other things, the surrender the premises on February 1, 2027, the landlord’s release of our obligations arising under the lease after the assignment effective date and the landlord’s receipt of replacement security from the third party. Until the contingencies are resolved, we remain the primary obligor under the lease.
As of September 30, 2026, we continue to account for the lease, the related right-of-use asset and the related property and equipment (as disclosed in Note 3 to our Notes to the Unaudited Condensed Consolidated Financial Statements) under their existing terms, and no impairment has been identified related to the assignment. We will continue to monitor quarterly for impairment through the assignment effective date.
In September 2026, we incurred broker commissions of $2.1 million in connection with the assignment, which were included in general and administrative expenses for the three months ended September 30, 2026.
Factors Affecting our Operating Results
Growing our FI Client Base. A key part of our strategy is to grow our FI client base. As of September 30, 2026, we served 323 FIs through the Platform and more than 1,000 clients when including unique clients only subscribing to one or a combination of Onboarding & Account Opening, Data & Marketing or Fraud Prevention products. Each of our digital banking client wins is a competitive takeaway, and as such, our historical ability to grow our client base has been a function of product depth, technological excellence and a sales and marketing function able to match our solutions with the strategic objectives of our clients. Our future success will significantly depend on our ability to continue to grow our FI client base through competitive wins.
Deepening Client Customer or Member Penetration. We primarily generate revenues through a per-user pricing model. Once we onboard a client, our ability to help drive incremental client customer or member digital adoption translates to additional revenues with very limited additional spend. Our FI clients are incentivized to market and encourage digital account sign-up based on identifiable improvement in customer engagement, as well as discounts received based on certain levels of customer or member penetration. We expect to continue to support digital adoption by client customers or members through continued investments in new products and platform enhancements. Our future success will depend on our ability to continue to deepen client customer or member penetration.
Expanding our Product Suite. Product depth is a key determinant in winning new clients. In a replacement market, we win based on our ability to bring a product suite to market that is superior to the incumbent, as well as to our broader competition. Of equal importance is the ability to cohesively deliver a deep product suite with as little friction as possible to the client customer or member. The depth of our product suite is a function of technology and platform partnerships. Our platform model with more than 400 integrations as of September 30, 2026 enables us to deliver thousands of configurations aligned with the digital platform strategies adopted by our clients. We expect our future success in winning new clients to be partially driven by our ability to continue to develop and deliver new, innovative products to FI clients in a timely manner. Furthermore, expanding our product suite expands our Revenue per Registered User (“RPU”) potential. For additional information regarding RPU, see “Key Business Metrics.”
Client Renewals. Our model and the stability of our revenue base is, in part, driven by our ability to renew our clients. In addition to extending existing relationships, renewals provide an opportunity to grow minimum contract value, as over the course of a contract term our clients often grow, or their needs evolve. Client renewals for our Platform are also an important lever in driving our long-term gross margin targets, as we generally achieve approximately 70% gross margin upon renewal. We had 9 and 20 client renewals in the three and nine months ended September 30, 2026, respectively. We expect client renewals to continue to play a key role in our future success.
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Continued Leadership in Innovation. Our ability to maintain a differentiated platform and offering is dependent upon our pace of innovation. Our single code base, built on a multi-tenant infrastructure and combined with continuous software delivery, enables us to bring new, innovative products to market quickly and positions us with what we believe is market-leading breadth in terms of product offerings and feature sets. We remain committed to investing in our platform, notably through our research and development spend, which was 24.2% and 24.3% of our revenues for the three and nine months ended September 30, 2026, respectively. Our future success will depend on our continued leadership in innovation.
Components of Results of Operations
Revenues
We derive substantially all of our revenues from SaaS subscription services charged for the use of our digital sales and service solution. The majority of our revenues are derived from multi-year contracts for the Platform, which have had an average contract life of approximately 70 months as of September 30, 2026. Subscription services are recognized over time on a ratable basis over the client agreement term beginning on the date our solution is made available to our client. The promised consideration may include fixed or variable amounts. Our clients with enterprise license contracts are invoiced on an agreed upon monthly rate throughout the contract term, which may include fixed monthly or annual rate escalations. Fixed dollar or percentage escalations that are not based on registered users are considered part of the fixed transaction price and recognized on a straight-line basis over the SaaS subscription period evenly. The majority of our client contracts are based on registered users, for which clients are invoiced a monthly contractual minimum fee for each licensed solution. In addition, to the extent clients exceed their contractual minimum commitments, we invoice a monthly subscription fee based on (i) the number of users on each licensed solution and (ii) the number of bill-pay and certain other transactions conducted through our Platform. Our pricing is tiered, with per-registered-user discounts applied as clients achieve higher levels of customer or member penetration, incentivizing our clients to internally market our products and promote digital engagement. Variable consideration earned for subscription fees in excess of contractual minimums is recognized as revenues in the month of actual usage. Our SaaS subscription fees include maintenance and support services, which are recognized together with the subscription on a straight-line basis over the contract term.
We receive implementation and other upfront fees for the implementation, configuration and integration of our Platform. We typically invoice these services as a fixed price per contract. These fees are not distinct from the underlying licensed SaaS subscription services. As a result, we recognize the resulting revenues on a straight-line basis over the client’s initial agreement term for our licensed SaaS solutions, commencing upon launch.
Occasionally, our clients request custom development and other professional services, which we provide. These are generally one-time requests and involve unique, non-standard features, functions, conversions, or integrations that are intended to enhance or modify their licensed SaaS solutions. We recognize revenues at the point in time the services are transferred to the client.
The following table disaggregates our revenues for the three and nine months ended September 30, 2026 and 2025 by major source:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SaaS subscription services | $ | 129,086 | $ | 107,867 | $ | 372,839 | $ | 306,534 | |||||||||||||||
| Implementation services | 3,706 | 3,509 | 10,691 | 9,025 | |||||||||||||||||||
| Other services | 2,119 | 1,578 | 7,363 | 7,289 | |||||||||||||||||||
| Total revenues | $ | 134,911 | $ | 112,954 | $ | 390,893 | $ | 322,848 | |||||||||||||||
See Note 4 of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional detail.
Cost of Revenues and Gross Margin
Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses, stock-based compensation, travel, and related costs for employees supporting SaaS subscription, implementation and other services. This includes the costs of our implementation, client support, development personnel responsible for maintaining and releasing updates to our Platform, as well as third-party cloud-based hosting services. Cost of revenues also includes the direct costs of bill-pay services and other third-party intellectual property included in our solutions, the amortization of acquired technology, the amortization of capitalized internal use software, and depreciation.
We capitalize certain personnel costs directly related to the implementation of our solutions to the extent those costs are recoverable from future revenues. We amortize the costs for an implementation once revenue recognition commences. The amortization period is typically five to seven years, which represents the expected period of client benefit. Other costs not directly recoverable from future revenues are expensed in the period incurred.
We intend to continue to increase our investments in our implementation, client support teams and technology infrastructure to serve our clients and support our growth. We expect cost of revenues to continue to grow in absolute dollars as we grow our business, but to vary as a percentage of revenues from period to period as a function of the efficiency and utilization of implementation and support personnel and the extent to which we recognize fees from bill-pay services and other third-party functionality integrated into our solutions. Our gross margin for the three and nine months ended September 30, 2026 was 57.5% and 57.6%, respectively, and 56.8% and 58.1% for the three and nine months ended September 30, 2025, respectively.
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The major components of cost of revenues are represented in the following table as percentages of revenues for the three and nine months ended September 30, 2026 and 2025, respectively:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (Cost component as a % of revenue) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Third-party hosting services | 5.3 | % | 4.9 | % | 5.4 | % | 5.0 | % | |||||||||||||||
| Direct costs of bill-pay and other third-party intellectual property | 21.3 | % | 19.3 | % | 20.5 | % | 18.6 | % | |||||||||||||||
| Implementation and client support teams | 7.9 | % | 9.2 | % | 8.1 | % | 9.1 | % | |||||||||||||||
| Development team (maintenance and updates) | 2.5 | % | 2.9 | % | 2.6 | % | 2.9 | % | |||||||||||||||
| Amortization | 4.4 | % | 5.0 | % | 4.6 | % | 4.3 | % | |||||||||||||||
| Stock-based compensation | 1.1 | % | 1.9 | % | 1.2 | % | 2.0 | % | |||||||||||||||
Operating Expenses
Research and Development. Research and development costs consist primarily of personnel-related costs for our engineering, information technology and product employees, including salaries, bonuses, other incentive-related compensation, employee benefits and stock-based compensation. In addition, we also include third-party contractor expenses, software development and testing tools, allocated corporate expenses and other expenses related to developing new solutions and upgrading and enhancing existing solutions. We expect research and development costs to increase as we expand our platform with new features and functionality, as well as enhance the existing Alkami Digital Sales & Service Platform. However, we expect that research and development expenses will decrease as a percentage of revenue over the long term.
Sales and Marketing. Sales and marketing expenses consist primarily of personnel-related costs of our sales, marketing and our client success employees, including salaries, bonuses, commissions, other incentive-related compensation, employee benefits and stock-based compensation. Sales and marketing expenses also include travel and related costs, outside consulting fees and marketing programs, including lead generation, costs of our annual client conference, advertising, trade shows and other event expenses. We expect sales and marketing expenses will continue to increase as we expand our direct sales teams to pursue our market opportunity.
General and Administrative. General and administrative expenses consist primarily of personnel-related costs for our executive, finance, legal, human resources, security and compliance and other administrative employees, including salaries, bonuses, commissions, other incentive-related compensation, employee benefits and stock-based compensation. General and administrative expenses also include accounting, auditing and legal professional services fees, acquisition-related expenses, loss on impairment of intangible assets, secondary offering related expenses, stockholder matters related expenses, lease assignment related expenses, travel and other unallocated corporate-related expenses, such as the cost of our facilities, employee relations, corporate telecommunication and software. We expect that general and administrative expenses will continue to increase as we scale our business and as we incur costs associated with being a publicly traded company, including legal, audit, business insurance and consulting fees. However, we expect that general and administrative expenses will decrease as a percentage of revenue over the long term.
Amortization of Acquired Intangibles. Amortization of acquired intangibles represents the amortization of intangible assets recorded in connection with our business acquisitions, which are amortized on a straight-line basis over the estimated useful lives of the related assets.
Non-operating Income (Expense)
Non-operating income (expense) consists primarily of interest income from our cash balances, interest expense from borrowings under our revolving loan facility under the Amended Credit Agreement (the “Revolving Facility”) and 2030 Convertible Notes, amortization of debt discount and deferred debt costs, unrealized gains or losses on marketable securities and realized gains on sales of marketable securities.
(Benefit From) Provision for Income Taxes
Our effective tax rate differs from the statutory tax rate primarily due to unfavorable permanent differences and changes in the valuation allowance recorded against the Company’s deferred tax assets.
As a result of our valuation allowance, (benefit from) provision for income taxes consists primarily of current state income taxes, current foreign income taxes, and deferred taxes related to the tax amortization of acquired goodwill, offset by a deferred tax benefit attributable to the partial release of the Company’s pre-existing valuation allowance related to the MANTL business combination. See Note 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.
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Results of Operations
The results of operations presented below should be reviewed in conjunction with the Unaudited Condensed Consolidated Financial Statements and notes included elsewhere in this filing. The following table presents our selected Unaudited Condensed Consolidated Statements of Operations data for the three and nine months ended September 30, 2026 and 2025.
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenues | $ | 134,911 | $ | 112,954 | $ | 390,893 | $ | 322,848 | |||||||||||||||
Cost of revenues (1) (2) | 57,332 | 48,812 | 165,632 | 135,328 | |||||||||||||||||||
| Gross profit | 77,579 | 64,142 | 225,261 | 187,520 | |||||||||||||||||||
Operating expenses(2): | |||||||||||||||||||||||
| Research and development | 32,598 | 30,091 | 94,997 | 87,207 | |||||||||||||||||||
| Sales and marketing | 18,260 | 19,337 | 61,036 | 60,227 | |||||||||||||||||||
| General and administrative | 31,263 | 25,889 | 83,766 | 80,245 | |||||||||||||||||||
| Amortization of acquired intangibles | 1,706 | 1,706 | 5,120 | 3,981 | |||||||||||||||||||
| Total operating expenses | 83,827 | 77,023 | 244,919 | 231,660 | |||||||||||||||||||
Loss from operations | (6,248) | (12,881) | (19,658) | (44,140) | |||||||||||||||||||
| Non-operating income (expense): | |||||||||||||||||||||||
| Interest income | 628 | 1,026 | 2,074 | 3,286 | |||||||||||||||||||
| Interest expense | (2,092) | (2,978) | (6,450) | (6,967) | |||||||||||||||||||
Loss before income taxes | (7,712) | (14,833) | (24,034) | (47,821) | |||||||||||||||||||
| (Benefit from) provision for income taxes | (967) | (29) | 1,574 | (11,610) | |||||||||||||||||||
Net loss | $ | (6,745) | $ | (14,804) | $ | (25,608) | $ | (36,211) | |||||||||||||||
(1) Includes amortization of acquired technology of $4.9 million for both the three months ended September 30, 2026 and 2025, and $14.7 million and $11.7 million for the nine months ended September 30, 2026 and 2025, respectively.
(2) Includes stock-based compensation expenses as follows:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Cost of revenues | $ | 1,454 | $ | 2,103 | $ | 4,682 | $ | 6,445 | |||||||||||||||
| Research and development | 5,820 | 5,726 | 16,204 | 16,584 | |||||||||||||||||||
| Sales and marketing | 2,095 | 3,572 | 7,403 | 9,969 | |||||||||||||||||||
| General and administrative | 9,858 | 9,328 | 25,740 | 27,248 | |||||||||||||||||||
| Total stock-based compensation expenses | $ | 19,227 | $ | 20,729 | $ | 54,029 | $ | 60,246 | |||||||||||||||
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The following table presents our reconciliation of GAAP net loss to adjusted EBITDA for the periods indicated.
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net loss | $ | (6,745) | $ | (14,804) | $ | (25,608) | $ | (36,211) | |||||||||||||||
| (Benefit from) provision for income taxes | (967) | (29) | 1,574 | (11,610) | |||||||||||||||||||
| Interest expense, net | 1,464 | 1,952 | 4,376 | 3,681 | |||||||||||||||||||
| Depreciation and amortization | 8,310 | 7,869 | 24,725 | 19,055 | |||||||||||||||||||
| Stock-based compensation expense | 19,227 | 20,729 | 54,029 | 60,246 | |||||||||||||||||||
| Acquisition-related expenses | 758 | 247 | 1,306 | 3,138 | |||||||||||||||||||
| Loss on impairment of intangible assets | — | — | — | 1,655 | |||||||||||||||||||
Stockholder matters related expenses(1) | 2,104 | — | 5,443 | — | |||||||||||||||||||
Lease assignment related expenses(2) | 2,131 | — | 2,131 | — | |||||||||||||||||||
Adjusted EBITDA(3) | $ | 26,282 | $ | 15,964 | $ | 67,976 | $ | 39,954 | |||||||||||||||
(1) Stockholder matters related expenses consist primarily of legal, consulting, advisory fees and other related costs, including expenses related to the strategic review process, which was completed in the third quarter of 2026.
(2) Lease assignment related expenses relate to expenses incurred for the execution of the lease assignment arrangement.
(3) Adjusted EBITDA is a non-GAAP financial measure and should not be considered an alternative to GAAP net loss as a measure of operating performance or as a measure of liquidity. For additional information regarding adjusted EBITDA, see “Key Business Metrics.”
Key Business Metrics
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure and should not be considered an alternative to GAAP net loss as a measure of operating performance or as a measure of liquidity. We define adjusted EBITDA as net loss before (benefit from) provision for income taxes; interest expense, net; depreciation and amortization; stock-based compensation expense; acquisition-related expenses; loss on impairment of intangible assets; stockholder matters related expenses; and lease assignment related expenses. We believe 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.
Annual Recurring Revenue (ARR). We calculate 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 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.
Registered Users. We define a registered user as an individual or business related to an account holder of an FI client on our digital banking platform and has access as of the last day of the reporting period presented. We exclude individuals or businesses that solely use the products and services of our acquisitions. 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.
Revenue per Registered User (RPU). We calculate RPU by dividing ARR as of the last day of 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.
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Comparison of Three and Nine Months Ended September 30, 2026 and 2025
Revenues
Three months ended September 30, | Change | Nine months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 134,911 | $ | 112,954 | $ | 21,957 | 19.4 | % | $ | 390,893 | $ | 322,848 | $ | 68,045 | 21.1 | % | |||||||||||||||||||||||||||||||
| September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Annual Recurring Revenue (ARR) | $ | 533,154 | $ | 449,034 | $ | 84,120 | 18.7 | % | |||||||||||||||||||||||||||||||||||||||
| Registered Users | 24,363 | 21,552 | 2,811 | 13.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Revenue per Registered User (RPU) | $ | 21.88 | $ | 20.83 | $ | 1.05 | 5.0 | % | |||||||||||||||||||||||||||||||||||||||
Revenues increased by $22.0 million, or 19.4%, and $68.0 million, or 21.1%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025.
The increase of $22.0 million in revenues for the three months ended September 30, 2026 was primarily attributable to growth in our SaaS subscription services revenue, driven by user growth on our Platform, from both existing client digital user growth and new client implementations, and higher RPU from selling additional solutions.
The increase of $68.0 million in revenues for the nine months ended September 30, 2026 was primarily attributable to growth in our SaaS subscription services revenue, driven by user growth on our Platform, from both existing client digital user growth and new client implementations, and higher RPU from selling additional solutions.
As of September 30, 2026, our existing clients added 1.5 million digital users and we implemented 36 new clients onto our platform representing 1.4 million digital users since September 30, 2025.
Cost of Revenues
Three months ended September 30, | Change | Nine months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||
| Cost of revenues | $ | 57,332 | $ | 48,812 | $ | 8,520 | 17.5 | % | $ | 165,632 | $ | 135,328 | $ | 30,304 | 22.4 | % | |||||||||||||||||||||||||||||||
| Percentage of revenues | 42.5 | % | 43.2 | % | 42.4 | % | 41.9 | % | |||||||||||||||||||||||||||||||||||||||
Cost of revenues increased by $8.5 million, or 17.5%, and $30.3 million, or 22.4%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025.
The increase of $8.5 million in cost of revenues for the three months ended September 30, 2026 was primarily driven by $6.7 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform and $1.6 million in higher hosting costs.
The increase of $30.3 million in cost of revenues for the nine months ended September 30, 2026, was primarily driven by $20.3 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, $5.0 million in higher hosting costs, and a $3.1 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL.
Our gross margin for the three and nine months ended September 30, 2026 was 57.5% and 57.6%, respectively, and 56.8% and 58.1% for the three and nine months ended September 30, 2025, respectively. The driver for the decrease in gross margin for the nine months ended September 30, 2026 compared to the same period in 2025 is primarily related to increased third-party and hosting costs.
Operating Expenses
Three months ended September 30, | Change | Nine months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | $ | 32,598 | $ | 30,091 | $ | 2,507 | 8.3 | % | $ | 94,997 | $ | 87,207 | $ | 7,790 | 8.9 | % | |||||||||||||||||||||||||||||||
| Sales and marketing | 18,260 | 19,337 | (1,077) | (5.6) | % | 61,036 | 60,227 | 809 | 1.3 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 31,263 | 25,889 | 5,374 | 20.8 | % | 83,766 | 80,245 | 3,521 | 4.4 | % | |||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 1,706 | 1,706 | — | — | % | 5,120 | 3,981 | 1,139 | 28.6 | % | |||||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 83,827 | $ | 77,023 | $ | 6,804 | 8.8 | % | $ | 244,919 | $ | 231,660 | $ | 13,259 | 5.7 | % | |||||||||||||||||||||||||||||||
| Percentage of revenues | 62.1 | % | 68.2 | % | 62.7 | % | 71.8 | % | |||||||||||||||||||||||||||||||||||||||
22
Research and Development
Research and development expenses increased by $2.5 million, or 8.3%, and $7.8 million, or 8.9%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025.
For the three months ended September 30, 2026, the increase of $2.5 million was primarily due to a $1.8 million increase in personnel-related costs resulting from headcount growth in our engineering, and product teams dedicated to platform enhancements and innovation and $0.4 million in higher hosting costs.
For the nine months ended September 30, 2026, the increase of $7.8 million was primarily due to a $7.0 million increase in personnel-related costs resulting from headcount growth in our engineering and product teams dedicated to platform enhancements and innovation, $1.3 million in higher hosting costs, and $1.3 million in higher software costs. These expenses were partially offset by $1.5 million in lower consulting costs and an increase of $0.8 million in capitalized development costs.
Sales and Marketing
Sales and marketing expenses decreased by $1.1 million, or 5.6%, and increased by $0.8 million, or 1.3%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025.
For the three months ended September 30, 2026, the decrease was primarily due to a $1.7 million decrease in personnel-related costs, partially offset by an increase in costs related to the timing of industry conferences and trade shows of $0.8 million.
For the nine months ended September 30, 2026, the increase was primarily due to $1.0 million of higher costs related to the timing of industry conferences and trade shows and $0.9 million in higher various other costs, partially offset by a $1.1 million decrease in personnel-related costs.
General and Administrative
General and administrative expenses increased by $5.4 million, or 20.8%, and $3.5 million, or 4.4%, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025.
For the three months ended September 30, 2026, the increase of $5.4 million was primarily due to increases in stockholder matters related expenses of $2.1 million, $2.1 million of lease assignment related expenses, and $1.2 million in higher various other costs.
For the nine months ended September 30, 2026, the increase of $3.5 million was primarily due to increases in stockholder matters related expenses of $5.4 million, $2.1 million of lease assignment related expenses, and $0.9 million in facilities expenses, partially offset by lower acquisition related expenses of $1.8 million, a decrease in loss on impairment of $1.7 million, and lower personnel-related costs of $1.3 million.
Amortization of Acquired Intangibles
Amortization of acquired intangibles was consistent for the three months ended September 30, 2026, compared to the same period in 2025.
Amortization of acquired intangibles increased by $1.1 million for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to the acquisition of intangible assets as part of the acquisition of MANTL in March 2025 and related additional amortization.
Non-Operating Income (Expense)
Non-operating expense decreased by $0.5 million for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to lower net interest expense related to the payoff of the Revolving Facility in March 2026.
Non-operating expense increased by $0.7 million for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to the increase in interest expense related to the 2030 Convertible Notes.
(Benefit From) Provision for Income Taxes
The Company recorded income tax benefit of $1.0 million and income tax expense of $1.6 million for the three and nine months ended September 30, 2026, respectively, resulting in an effective tax rate of 12.5% and (6.5)%, respectively, compared to income tax benefit of less than $0.1 million and $11.6 million for the three and nine months ended September 30, 2025, respectively, resulting in an effective tax rate of 0.2% and 24.3%, respectively.
The Company’s effective tax rates for the three and nine months ended September 30, 2026 and 2025 differ from the U.S. statutory tax rate primarily due to unfavorable permanent differences and changes in the valuation allowance recorded against the Company’s deferred tax assets. For the three and nine months ended September 30, 2025, the effective tax rate was further impacted by a deferred tax benefit resulting from the partial release of a pre-existing valuation allowance in connection with the MANTL business combination.
23
Liquidity and Capital Resources
As of September 30, 2026, we had $85.2 million in cash and cash equivalents and marketable securities, and an accumulated deficit of $549.5 million. Our net losses have been driven by our investments in developing our Digital Sales & Service Platform, expanding our sales, marketing and implementation organizations, and scaling our administrative functions to support our rapid growth.
We funded the acquisition of MANTL through the issuance of the 2030 Convertible Notes, borrowings on our Revolving Facility, and cash from our balance sheet.
We have financed our operations primarily through cash generated from the sale of SaaS subscription services. Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support client usage and growth in our client base, increased research and development expenses to support the growth of our business and related infrastructure, increased general and administrative expenses associated with being a publicly traded company, investments in office facilities, repurchases under our stock repurchase program, and other capital expenditure requirements and any potential future acquisitions or other strategic transactions.
We believe that our existing cash resources, including our Revolving Facility, will be sufficient to finance our continued operations, growth strategy, planned capital expenditures and the additional expenses we expect to incur as a public company for the short term (at least the next 12 months) and longer term (beyond the next 12 months). We may, from time to time, seek to raise additional capital to support our growth, including to fund acquisitions, as we did with the issuance of the 2030 Convertible Notes to fund, in part, the acquisition of MANTL. Any equity financing we may undertake could be dilutive to our existing stockholders, and any additional debt financing we may undertake could require debt service and financial and operational requirements that could adversely affect our business.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
Nine months ended September 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 39,131 | $ | 26,300 | |||||||
| Net cash used in investing activities | $ | (5,888) | $ | (393,464) | |||||||
| Net cash (used in) provided by financing activities | $ | (46,380) | $ | 330,121 | |||||||
Net Cash Provided by Operating Activities
During the nine months ended September 30, 2026, net cash provided by operating activities was $39.1 million, which consisted of a net loss of $25.6 million, adjusted by non-cash charges of $80.6 million and net cash outflows from the change in net operating assets and liabilities of $15.9 million. The non-cash charges were primarily comprised of depreciation and amortization expense of $24.7 million and stock-based compensation expense of $54.0 million. The net cash outflows from the change in our net operating assets and liabilities were primarily due to a $10.0 million increase in accounts receivable, a $5.4 million increase in deferred costs, and a $1.0 million increase in prepaid expenses and other assets.
During the nine months ended September 30, 2025, net cash provided by operating activities was $26.3 million, which consisted of a net loss of $36.2 million, adjusted by non-cash charges of $65.8 million and net cash outflows from the change in net operating assets and liabilities of $3.3 million. The non-cash charges were primarily comprised of depreciation and amortization expense of $19.1 million, stock-based compensation expense of $56.3 million (exclusive of $3.9 million of stock-based compensation expense for unvested equity awards settled in cash related to MANTL acquisition), loss on impairment of intangible assets of $1.7 million, and net other non-cash charges of $0.7 million, partially offset by deferred taxes of $12.0 million. The net cash outflows from the change in our net operating assets and liabilities were primarily due to a $10.5 million increase in accounts receivable, a $5.9 million increase in prepaid expenses and other assets (inclusive of $2.6 million of prepaid stock-based compensation related to the acquisition of MANTL), and a $6.5 million increase in deferred costs, partially offset by a $14.4 million increase in accounts payable and accrued liabilities and a $5.2 million increase in deferred revenues.
Net Cash Used in Investing Activities
During the nine months ended September 30, 2026, net cash used in investing activities was $5.9 million, primarily consisting of $5.4 million related to capitalized software development costs. Our investing activities included purchases and sales, maturities, and redemptions of marketable securities in the ordinary course of managing our investment portfolio, which did not have a material net effect on cash flows.
During the nine months ended September 30, 2025, net cash used in investing activities was $393.5 million, primarily consisting of $375.5 million related to our acquisition of MANTL, $35.9 million in purchases of marketable securities, $5.3 million related to capitalized software development costs and $1.2 million related to capital expenditures related to updates for computers and other equipment, partially offset by $24.3 million in proceeds from sales, maturities, and redemptions of marketable securities.
24
Net Cash (Used in) Provided by Financing Activities
For the nine months ended September 30, 2026, net cash used in financing activities was $46.4 million, which was primarily due to $25.0 million in repurchases of common stock, $15.0 million of payments on the revolving loan under the Revolving Facility, and $11.2 million for payments related to net settlement of equity awards, partially offset by $3.1 million in proceeds from issuances under the Employee Stock Purchase Plan (“ESPP”).
For the nine months ended September 30, 2025, net cash provided by financing activities was $330.1 million, which was primarily due to proceeds of $335.5 million from the issuance of the 2030 Convertible Notes, proceeds of $60.0 million from revolver loan borrowings, $2.9 million in proceeds from issuances under the ESPP, and $2.4 million in proceeds from the exercise of stock options to purchase 0.3 million shares of our common stock, partially offset by $33.9 million paid for the Capped Calls, $35.0 million of payments on the revolving loan, and $1.9 million of debt issuance costs paid.
Debt Transactions
On February 27, 2025, the Company entered into the Third Amendment to the Amended Credit Agreement (“Third Amendment”) and subsequently borrowed $60 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of MANTL, which were fully repaid during the three months ended March 31, 2026. As of September 30, 2026, there were no borrowings outstanding under the Revolving Facility. Refer to Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for more information regarding the Amended Credit Agreement.
On March 13, 2025, the Company issued $345 million 2030 Convertible Notes. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 13, 2025, between the Company and the U.S Bank Trust Company, National Association, as the trustee. In connection with the issuance of the 2030 Convertible Notes, the Company entered into the Capped Calls. Refer to Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for more information regarding the 2030 Convertible Notes and Capped Calls.
On April 3, 2026, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Credit Agreement, which revised the operating covenant of the Amended Credit Agreement to permit the Group Members (as defined in the Amended Credit Agreement) to maintain accounts with Airwallex or its affiliates, provided that the aggregate amount of cash and cash equivalents maintained in such accounts does not at any time exceed $8.5 million.
On May 1, 2026, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Amended Credit Agreement, which permits the Company to use up to $100.0 million of its cash to repurchase its common stock.
Total interest expense, including commitment fees and unused line fees, was $2.1 million and $6.5 million for the three and nine months ended September 30, 2026, respectively, and $3.0 million and $7.0 million for the three and nine months ended September 30, 2025, respectively.
Interest expense related to the 2030 Convertible Notes and Revolving Facility was $1.8 million and none, respectively, for the three months ended September 30, 2026, and $5.4 million and $0.3 million, respectively, for the nine months ended September 30, 2026. Interest expense related to the 2030 Convertible Notes and Revolving Facility was $1.9 million and $0.9 million, respectively, for the three months ended September 30, 2025, and $4.0 million and $2.4 million, respectively, for the nine months ended September 30, 2025.
In conjunction with closing the Amended and Restated Credit Agreement in 2022, First Amendment in 2023, Second Amendment in 2024, and Third Amendment in February 2025, we incurred issuance costs of $0.9 million, $0.3 million, $0.4 million, and $0.9 million, respectively, which were deferred and scheduled to be amortized over the remaining term of the agreement. In conjunction with the issuance of the 2030 Convertible Notes, the Company recognized an original issue discount of $9.5 million and debt issuance costs of $0.9 million, which were capitalized as components of the carrying amount and included in Convertible senior notes, net in the Unaudited Condensed Consolidated Balance Sheets. See Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.
Unamortized discounts and debt issuance costs totaled $8.3 million and $10.0 million as of September 30, 2026 and December 31, 2025, respectively. Amortization expense related to unamortized discounts and debt issuance costs (included in interest expense in the Unaudited Condensed Consolidated Statements of Operations) totaled $0.6 million and $1.7 million for the three and nine months ended September 30, 2026, respectively, and $0.6 million and $1.4 million for the three and nine months ended September 30, 2025, respectively.
Stock Repurchase Program
On April 23, 2026, the Board authorized a stock repurchase program to repurchase up to $100.0 million of the Company’s common stock. Repurchases under the program may be made from time to time, at management’s discretion, using a variety of methods, including open market purchases, privately negotiated transactions, and other means all in accordance with federal securities laws and other applicable legal requirements, including pursuant to one or more Rule 10b5-1 trading plans. The timing and size of any repurchases will be determined by management based on prevailing share prices, general economic and market conditions, the Company’s liquidity and capital needs, and other factors deemed relevant. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or terminated at any time at the discretion of the Board.
During the three and nine months ended September 30, 2026, the Company repurchased on the open market 531,620 and 1,416,195 shares for $10 million and $25 million, respectively. As of September 30, 2026, $75.0 million remained available for future stock repurchases under the stock repurchase program.
25
Contractual Obligations and Commitments
There were no material changes to our contractual obligations and commitments as of September 30, 2026, compared to those discussed as of December 31, 2025 in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies and Significant Judgments and Estimates
In preparing our unaudited Condensed Consolidated Financial Statements in conformity with GAAP, we must make decisions that impact the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgments based on our understanding and analysis of relevant circumstances, historical experience, and actuarial valuations. Actual amounts could differ from those estimated at the time the Condensed Consolidated Financial Statements are prepared.
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.
Recently Issued Accounting Pronouncements
See Note 2 of the Notes to the Unaudited Condensed Consolidated Financial Statements included elsewhere in this report for a discussion of recent accounting pronouncements and future application of accounting standards.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates.
Interest Rate Risk
We are subject to interest rate risk in connection with our Amended Credit Agreement. Interest rate changes generally impact the amount of our interest payments and, therefore, our future net income and cash flows, assuming other factors held constant. Assuming the amounts outstanding under our Amended Credit Agreement are fully drawn, a hypothetical 10% change in interest rates would not have a material impact on our consolidated financial statements. Our cash and cash equivalents consist primarily of interest-bearing accounts. Such interest-earning instruments carry a degree of interest rate risk. To minimize interest rate risk in the future, we intend to maintain our portfolio of cash equivalents in a variety of investment-grade securities, which may include commercial paper, money market funds and government and non-government debt securities. Because of the short-term maturities of our cash, cash equivalents, and marketable securities, we do not believe that an increase in market rates would have any significant negative impact on the realized value of our investments.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures at September 30, 2026, the last day of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, at September 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting, identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) under the Exchange Act, that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
26
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Our management believes that there are no claims or actions pending against us, the ultimate disposition of which would have a material impact on our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors
There are no material changes to the risk factors previously disclosed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026, other than the additional risk factor discussed below.
Share repurchases could increase the volatility of the trading price of our common stock and diminish our cash reserves, and we cannot guarantee that our stock repurchase program will enhance long-term stockholder value.
On April 23, 2026, our Board authorized a stock repurchase program to repurchase up to $100.0 million of our common stock. Repurchases under the stock repurchase program may be made from time to time, at management’s discretion, using a variety of methods, including open market purchases, privately negotiated transactions, and other means all in accordance with federal securities laws and other applicable legal requirements, including pursuant to one or more Rule 10b5-1 trading plans. The timing and size of any repurchases will be determined by management based on prevailing share prices, general economic and market conditions, our liquidity and capital needs, and other factors deemed relevant. The stock repurchase program does not obligate us to repurchase any specific number of shares, and may be modified, suspended, or terminated at any time at the discretion of the Board. The stock repurchase program has been authorized through December 31, 2028. Repurchases of shares of our common stock could affect the trading price of our common stock and could increase volatility of securities. Similarly, the future announcement of the modification, termination, or suspension of the stock repurchase program, or our decision not to utilize the full authorized repurchase amount under the stock repurchase program, could result in a decrease in the trading price of our common stock. In addition, the stock repurchase program could reduce our cash reserves, which may impact our ability to finance our growth, fund working capital, strategic acquisitions or business opportunities, execute our strategic plan or deploy cash for other general corporate purposes. Although the stock repurchase program is intended to enhance long-term stockholder value, there can be no assurance that it will do so, because the trading price of our common stock may decline below the levels at which we repurchased our shares, and short-term stock price fluctuations could reduce the effectiveness of the stock repurchase program.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information about our share purchase activity during the three months ended September 30, 2026.
Period (1) | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Be Purchased Under the Plans or Programs (in thousands)(1) | ||||||||||||||||||||||
July 1, 2026 - July 31, 2026 | 531,620 | $ | 18.81 | 531,620 | $ | 75,000 | ||||||||||||||||||||
August 1, 2026 - August 31, 2026 | — | $ | — | — | $ | 75,000 | ||||||||||||||||||||
September 1, 2026 - September 30, 2026 | — | $ | — | — | $ | 75,000 | ||||||||||||||||||||
| 531,620 | 531,620 | |||||||||||||||||||||||||
(1) In April 2026, our Board authorized a stock repurchase program to repurchase up to $100.0 million of the Company’s common stock. During the three months ended September 30, 2026, the Company repurchased on the open market 531,620 shares for $10 million. For further information, see Note 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
27
Item 6. Exhibits
| EXHIBIT INDEX | |||||||||||||||||
| Incorporated by Reference | |||||||||||||||||
| Exhibit | Description | Form | File No. | Exhibit | Filing Date | ||||||||||||
| 31.1 | |||||||||||||||||
| 31.2 | |||||||||||||||||
| 32.1* | |||||||||||||||||
| 32.2* | |||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||||||||||||||
* The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Alkami Technology, Inc. | |||||||||||
| Date: | October 29, 2026 | By: | /s/ Alex Shootman | ||||||||
| Alex Shootman | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| Date: | October 29, 2026 | By: | /s/ Cassandra Hudson | ||||||||
| Cassandra Hudson | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
29
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Alex Shootman, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Alkami Technology, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 29, 2026 | /s/ Alex Shootman | ||||
| Alex Shootman | |||||
| Chief Executive Officer and Director | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Cassandra Hudson, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Alkami Technology, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 29, 2026 | /s/ Cassandra Hudson | ||||
| Cassandra Hudson | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q of Alkami Technology, Inc. (the “Company”) for the quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 29, 2026 | /s/ Alex Shootman | ||||
| Alex Shootman | |||||
| Chief Executive Officer and Director | |||||
| (Principal Executive Officer) | |||||
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q of Alkami Technology, Inc. (the “Company”) for the quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 29, 2026 | /s/ Cassandra Hudson | ||||
| Cassandra Hudson | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||