Thank you everyone. I'm Scott Dworshak, and I'm a Managing Director in our Technology Investment Banking practice at J.P. Morgan. Thank you everyone for joining our Fireside Chat today with Alkami. Alkami is a leading cloud-based digital banking software provider for financial institutions in the United States. Alkami helps clients transform through retail and business banking, digital account opening, loan origination, and multi-payment fraud prevention solutions. Today, I'm pleased to be joined by the Alkami leadership team. We have here Alex Shootman, CEO, and Bryan Hill, CFO. Alex and Bryan, thank you for joining us today for our Fireside Chat. Okay. Good to be here. Alex, can you tell us what attracted you to Alkami when you joined in November? It really was three things. First of all, there's a tremendous amount of change and innovation that's happening in the digital financial space, and Alkami's got a front door position. If you think about the digital banking platform and the relationship that we have with the financial institution, we see most of what's happening, in terms of, innovation and change that's occurring with the financial institution and being able to be present with that front door is pretty exciting. The second thing that was exciting to me about Alkami is when you're in a renewal business like Alkami or any SaaS company, you have to get your customers to agree to continue to do business with you, and that takes a great culture within a company. In getting to know Alkami, culture was part of the business strategy from the beginning. A culture of the kind of people that we hire, the innovation that we do, the time and care that we spend with our customers, and so that was important to me. Finally, if you're like me and Bryan, CEO, CFO, you wanna work for great ownership. The ownership of Alkami, the investors in Alkami have a very long-term view of the business, and I wanna be able to participate in building a company for the long term. The innovation, the culture, and the long-term view of the business. Maybe we can turn to financial performance a little bit, and especially the last quarter that you guys announced. Alkami had an impressive Q1 quarter with 35% YoY revenue growth. Can you talk a little bit about the overall demand environment, what you're seeing, you know, in the digital banking solutions you provide to financial institutions? Yeah. Maybe one way to answer that is right before we announced our earnings, we had our annual customer meeting. First time we were able to get, in real life, back together with our customers. We had almost 500 folks attending from over 85% of our customers, and we had several prospects live as well. It was really interesting listening to the customers because what they're really framing is that our ability to create a differentiated experience for our customers or our members is not an optional innovation for us. It's a mandatory innovation for us. They're not deciding should I invest in a modern digital experience, but really deciding who am I gonna invest in. For us, that's a pretty exciting place to be. We're not in a market that the demand drops from a day-to-day basis. We're in a market where there is consistent demand. Maybe we could have the next question for Bryan. You know, when you think about the revenue growth of the business, you know, 35% YoY last quarter, you know, and breakdown of that revenue growth, how is that breakdown, you know, between your FI customers, the number of live users that you have and average revenue per user? Sure. Yeah. The revenue model at Alkami is actually pretty fantastic. I mean, we have. We benefit from some really what I would say best-in-class SaaS unit economics, long-term contracts. Our average contract life is 70 months. Our gross retention is 98%, and 96% of our revenue is subscription-based. That affords us a significant amount of visibility into the future. We, when we think about the longer-term sustainable growth rate, what we've provided investors and others is a 25% organic sustainable growth rate. Within that, about 20% we expect to come from digital users. Our revenue model is based on digital users. The contract construct is minimums that escalate each year as you progress through the contract. There's some built-in NDR just in the contract structure. 20% of our growth rate comes from digital users. We're also benefiting from a nice macro backdrop. 50% of our user growth is just our clients who tend to be more technology forward-leaning. They're growing their user base between 13%-15% a year with the backdrop of a market that's growing, you know, high single digits. 50% of our user growth comes from new logos, and 50% comes from our clients growing. The other 5%, again, when you back out 25% total organic growth, 20% coming from digital user growth, 5% from [ARPU] expansion. We have on average 11 products installed into our base out of our 32, 33 products that we offer. This is a fairly significant land and expand opportunity, and within that is [ARPU] expansion over the long term. Got it. Maybe we could dig a little bit more into ARPU expansion. You know, what are some of the things that you're doing and seeing in the business and driving ARPU and some of the, you know, cross-selling initiatives that you guys have? Yeah. First and foremost, in 2019 we created a client sales team. Prior to that, it was all about landing the new logo, a large contract. You know, our clients average $900,000 a year in ARR, so these are significant arrangements with our clients. Historically, up until 2019, it was all about new logos. In 2019, we created and invested in a client sales team, and the client sales team's sole purpose is to expand within the base and then renew clients as the renewal opportunity surfaces. From that point forward, now our client sales team represents a significant amount of the TCV that's been originated. And I'll give you a couple of stats. In Q1, it was 40% of our total contract value that was originated, and in 2021 it was just over 20%. We're seeing that investment starting to pay off. Combining with the investment just in people and sales reps, now we're investing a bit more in marketing to drive the demand within the base. But in terms of the products that we're seeing where we're gaining traction, it's around money movement products, security products, financial wellness, and some of what we call client service products, which include like chatbot and other types of products that allow the consumer or business of a financial institution to self-serve through their needs versus going into a branch or calling a contact center. Maybe just building on that, we made an investment. We did not replace the head of sales. We actually brought in an investment of a Chief Revenue Officer named Carl Cross. One of the reasons why we did that is we've had a very strong, as Bryan mentioned, we've got a very strong sales motion in terms of new logo. The ability to get an account management team combined with a marketing team, when you think about it, this is a pretty finite customer set. The motion of doing account-based marketing with the right specific messaging and incentives to an account to buy a new product from us was a new skill set for us. That's why we brought in Carl Cross to be able to work with the marketing team and build that add-on sales capability. On the recent earnings call, just to talk about new logo wins, you mentioned Alkami had 5 new logo wins last quarter, 4 were banks. You know, what is Alkami doing to grow, you know, the number of banks that you currently serve? Well, first of all, there's some things that are happening in the banks that help the market come our way. Alkami started on the retail side of the business. Because we started on the retail side of the business, we've always been focused on a great user experience. That historically was really important to the retail side of the business. Increasingly, that's becoming important to a bank that has commercial customers. Those commercial customers are being influenced by the same thing that we're all being influenced by, and they want a great user experience. First of all, the market is kind of coming our way in terms of what's important to the market. Secondly, if you go back a few years, our largest credit union customers started bringing on business, businesses as their customers, and they started having a need for commercial type of capability, commercial cash management type of capability. A few years ago, we started building that and investing basically in the product that a bank wants when a bank wants to attract a commercial account. That's what we've now put into the market. We feel like we're really competitive in this space. By the end of the year, we'll feel like we'll be able to serve a bank who wants to have a commercial customer who's all the way up to maybe $200 million of revenue, which is almost 99% of the businesses in the United States. Fundamentally great product investment along with the bank market that's starting to want the user experience that we have. Just a couple of more comments on the way we view the market in total. We focus on the top 2,000 financial institutions below the mega banks. There's 10,000 financial institutions in total. We focus on the top 2,000. Roughly half of those are credit unions and half of those are banks. That's why the bank side of the market is so important to us. As a result of the investments that we had been making leading into 2021, we started becoming part of more bank deals. Then our sales pipeline started to really build as it related to banks. We closed five bank logos in 2021, and as you mentioned, Scott, we closed four in the first quarter of 2022. Our view is today, we'll close between 30 and 40 new credit union new logos each year. 2-3 years out, we'll close an equal number of banks. This year, somewhere in the neighborhood of 10 or maybe slightly more than 10. That'll slowly progress to where we're covering about half of the market as it relates to credit unions and banks and what's coming up for renewal each year. Maybe just to go on that, [lane on], and between credit unions and banks from a product perspective, you know, what do you need to do differently to serve those two different constituents? What we need to do, we have been doing. Fundamentally, a bank who wants to have a commercial customer needs to have some complex cash management capabilities. 3 or 4 years ago, we did not have those capabilities in our product, and that's what we've been building. The second thing that we've had to do is to bring into our message channel, think of that as sales and marketing, and our product team. We brought in product managers that come out of banks to help us sell the products. We brought marketers that come out of selling to banks and salespeople. From a product perspective, I was talking to one of our sales reps the other day who used to be a branch manager for Citibank, and his comment to me is, "Alex, at this point in time, we have all the product that we need to be successful in banks. We have to learn to sell differently because selling into a credit union is a little bit different than selling into a bank." I feel really good about the product part right now. I feel good about the people that we've put into the organization, and now it's a little bit of the execution of selling into a market that's a little bit different than we've sold into in the past. I think you touched a little bit about this, but you've highlighted in your earnings calls the importance of innovation, in the business and especially around things like user experience, security, data, or even access. Can you talk about some of the recent investments you've been making in both the platform and the products? Two, I'll cover two. The first one we're very excited about. If you think about our customers historically, more web application users than mobile application users. Certainly, there's beginning to be generational change within our customers' customers. Now, there's becoming a majority of the customers that are using the mobile application. Without boring y'all, historically, we built an application for Android, and we built an application for iOS. That was good. Those were the two major platforms, but we essentially were supporting building two platforms. That can be a drag on your pace of innovation. What we did is we undertook a project to completely re-platform our mobile application into one unified platform, which is a technology called Flutter, which now we can write once and basically run on both platforms. It does two things for us. The first is essentially doubling our productivity throughput so we can be more innovative. The second thing is it allowed us to create a much better software development kit or SDK for our customers. Because if you think about what they really want to do is kind of customize a little bit their mobile experience for their customers to create competitive advantage for themselves. We just had our first brand new customer, ORNL, go live two weeks ago on the platform. We had another customer go live last week, and we'll start moving our customers over to that new user experience. That also allowed us to refresh the user experience as well. The second thing where we're spending a lot of time is on building our API capabilities so that the platform itself is API, kind of an API-first platform. We have two different types of customers if you think about it. One type of customer will say, "Alkami, you're really smart, and you figured out the right security products for us to have, the right, pay products, the right RDC products, and I want you to bundle all of that. And you provide the single point of contact to basically a completely bundled digital banking experience." Then we have another set of customers that are saying, "Hey, I've got my own development team. I'm gonna pick the FinTech innovation that I put into a platform, and I really want to get that integrated into my digital banking platform." We've always been a very integration-forward platform, but now what we're doing is making the API itself a product. Those are the two things that I'm interested in, and I know you've got one near and dear to your heart. Yeah. I mean, a couple of things that we've recently been able to achieve. From a product strategy perspective, we either organically develop a product, we partner and resell, IT or third-party FinTech solution providers through our platform, and there's deep integration involved in that. It's not just a single sign-on type of strategy, or we acquire. The partnership channel is also a source of acquisitions for us. Since our history, we've acquired three companies, but the two more recent ones, one was just a very early-stage technology digital account opening. Think of that as kind of middle of the funnel for the client journey of a financial institution. The second is on top of that, recently, we announced that we acquired a company called Segmint, and Segmint provides data analytics and managed marketing solutions, so huge consumers of data and then taking that data and customizing marketing strategies down to the unit level or the consumer business level of a financial institution. We're working our way around the client journey of a financial institution. Those are very exciting for us because they ultimately feed the digital banking platform, which is where our revenue model is driven from. That's a great segue to maybe talking a little bit about your most recent acquisition, which you just mentioned, which is Segmint. You know, some of the things you guys talked about was very exciting around data and analytic capabilities of the business. You know, can you talk about what Segmint brings and what makes you excited about it? If you think about the marketer in a bank. What they know is first of all, they know that they have to create targeted, personalized communications because their customers are expecting it. Plus, every marketer knows that targeting plus relevancy equals conversion, right? So if I can know my segment, my target market, I understand what they're interested in, and I create a communication that is tied to that, I'll get good conversion. Well, that's been really hard for banks. It's been hard for banks because think about where all the data is. The data is in the core application, and the data is in the digital banking application. Segmint was exciting for us for a couple of reasons. Number one, it's on brand-new infrastructure, so it's a completely brand-new data architecture itself. The team is really good at machine learning and artificial intelligence, and they're really good at coming up with these things called Key Lifestyle Indicators. It also is interesting because it takes the data out of the cores themselves. Now they're taking all the data out of the core to all the transactions that happen in the core, and then imagine Alkami is taking all the data that's happening out of the digital banking application. Think about this, in most of our customers, their customers are aggregating all of their credit cards, not just that institution's credit card, but all of their credit cards, they're aggregating in the digital banking application. Now we have this incredible data set from core transactions, the digital banking application, all the aggregated credit card spend, and the Segmint team turns that into thousands of Key Lifestyle Indicators. Those Key Lifestyle Indicators then the financial institution uses to do their marketing. It gets even cooler than that because where they actually wanna place the communications is in what channel? In the digital banking channel, right? Now they've taken all of that content, they're creating their offers, and then Alkami has the ability to take that and place that back in either the mobile application or in the web application. It's actually really exciting. I think the way you think about Alkami long term is we've always had a digital banking application, right? We're gonna continue to have a great digital banking application. You now start to see us be able to open up an aperture long term in terms of, wow, there's an entire data business that we ought to be able to have. In making the investments that we're making in the platform, there's also a financial platform business that we could have in the long term. I'm not talking about the next 18 months, but you know, long-term vision of Alkami is an application business, a financial data and analytics capability, and a financial platform capability as well. That sounds really exciting. Definitely congrats on the acquisition. Maybe we could take a step back and talk about the competitive landscape a little bit. There's a lot going on in the market. You have some legacy players. You have next gen players like yourself. You know, in terms of a competitive moat, what differentiates Alkami from other players? You know, why are you winning in the market? Why are you taking share? You know, what separates you guys from the pack? Yeah, I'll start, and I know that you've got some things to add, Bryan. First of all, if you think about what gets us excited is there's a lot of runway. Bryan earlier talked about our target market, not mega banks, but the institutions below that. If you think about the institutions below that, just in the United States, there's about 180 million digital seats available. We're fourth in terms of number of seats, right? The next on the list is Q2, which is above us, and then DI and then Fiserv. If you just look at Alkami and Q2, Alkami, 12, 13 million seats. I think Q2 might have 19 million seats. I could have that wrong, but let's say that's close enough. Just between those two, if we're number three and number four, there's a tremendous amount of runway that we have in front of us. First of all, back to the market. That's exciting. We get more focused on how do we capture from 12 million- 180 million. In terms of the competitive space, it truly is. It's a replacement market, right? I mean, the majority of this, nobody's buying. Nobody's never had digital banking for their customers. What customers have to have now is they have to have a great experience, and they have to have the ability to plug financial innovation into their platform. Alkami's always winning formula has been we're the best at a user experience, and we're the most open platform with the highest ability to do integration. We love the market, we love the runway in the market, and we kinda like our competitive position. Yeah. I would add in the future what's also gonna be a driver is the data element. The Segmint acquisition complements what we were already doing from a data perspective. In some respects it accelerates what we were doing. It's user experience, it's the speed at which we can deliver innovation. The fact that we are really the only multi-tenant continuous delivery offering in the space, and combined with the data, and that will continue to differentiate for us. We often get asked about Q2 and other specific competitors. To Alex's point, we don't have to win against any one of those because it's a large market. There's a nice macro that's driving growth in the market to 8%-9% a year. We're really at number four, a low penetration into that space. It gives us lots of run rate for user growth over the longer term. That's fantastic. I guess before we turn it over to Q&A, I'll ask one other question. You know, there's been a focus on both growth and profitability, especially in the last In the last six months, you know, what are you doing differently or not in terms of your strategy around, you know, how to think about, you know, continuing your fast growth, but also thinking about sort of the long-term profitability of the business? Yeah. In some respects, we're sticking to our kind of strategy, which we've had since we became public. Our view is we will be on a run rate basis, Adjusted EBITDA positive or break-even as we enter 2023. We are fully funded on our balance sheet today to reach that. From a capital perspective, we've really never been in a better position than we are today. How we get there is through continued gross margin expansion. In Q1, we expanded our gross margin 380 basis points. We're right under 60%. We're right at 58%. Our target operating model is at least at scale over the next several years to reach a 65% gross margin. We're extremely efficient in sales and marketing today. It's only 16% of revenue. Where we have invested a lot of our money, and quite honestly, I think it was the winning strategy in the platform. Most SaaS companies our size, all of you know this better than I, really we're 27% of revenue for R&D and 16% for sales and marketing, most companies are flipped at this stage in their life cycle. Again, our investment in product has in some respects been our best sales and marketing investment as well. As it relates to G&A, it's just a matter of scale. I mean, as we went from private to public, now we just need to scale those additional public company costs. Over time, with revenue growth, we'll scale that line as well. Great. I would just say both Bryan and I have experiences running a couple $100 million-dollar software companies that make money, and that's just kind of our philosophy is once you get to a certain size, you got to figure out how to make money. We're not making any. Because of the shape of the income statement, we're not sitting here spending 50% of sales on sales and marketing, trying to acquire the last customer and trying to decide should that be 50% or 40%. We're spending the money on the product and the platform and customer support, and we're building a franchise for the long term, and we're pretty comfortable with the shape of the income statement and the progress of the company. Okay. Maybe we can open up the floor to Q&A. Hey, guys. Thanks for taking my question. Just wanted to ask for any incremental color that you guys could provide, on how the product is, you know, working at banks, excitement for in that amongst that product segment, and maybe comment on the ease of the sales process, you know, to banks given it's outside of the core credit union. The question was around the length of the sales process and then the parts of the product that are exciting. Is that? We're just asking, you know, you talk about the products, you know, so what's next? So if you think about what Bryan said earlier, it's a 5-7-year contract, right? These are. This is the front door of the digital branch, right? This is something that the financial institution goes through a considerable effort from a decision process. It's probably a 6- to 9- to 10-month buying cycle. It involves the entire senior team of the organization. It usually involves that entire senior team making the trip to Plano and spending two days and meeting with every single function in our company. Once again, they're buying a relationship that they hope is gonna last for 15 years, right? Because they don't want to have to replace this again. I would just say it's a very thoughtful buying cycle that the customer is truly evaluating whether or not the company can meet their needs. Once again, the needs that they have are around my customers are changing demographically, and I need to provide a friendly, intuitive digital-first experience for them for me to be able to attract and retain a customer. We did a study leading up to our conference on generational preferences for financial institutions, and we found some pretty interesting things. One is, it was almost 60% of Millennials had changed financial institutions because of a poor digital experience. These are all really smart executives, and they get it. Number one, they need to deliver a great experience. Number two, they stopped fighting FinTech. They started saying, "You know what? FinTech's no longer an enemy of mine. FinTech's creating some great products that I need to be able to offer my customers." To give you an example, we have a partnership with a company called BioCatch, which is a really cool security capability, biometric security capability. Rather than trying to compete with that, financial institutions are just saying, "Let me adopt that and figure out how to plug it into the platform." Anything you want to add to that? Mm-mm. Did that answer? Yeah. Okay, cool. You guys recently launched a new crypto product. Can you just give a little bit of color on how that's going and a little bit of color on the product as well? No, that's a great example of a product where we're working with our clients to solve a problem for them. Mid-market financial institutions have been flush with deposits coming out of the pandemic, and as a result of that, they have capital requirements and reserve requirements. Their main problem has been, or a main problem, is I either need to have more loans and have more lending, or I need to have a strategy for moving cash off of my balance sheet without losing those deposits. Our crypto product, which is where we've partnered with a company called NYDIG, and they offer a Bitcoin solution. It allows for the consumer or customer of a financial institution to buy and sell crypto or Bitcoin, but it stays within the walls of the financial institution. Unlike if they were to open a wallet with Coinbase or if they were to use Robinhood or someone else, those funds are now outside of the financial institution. In some respects, they're gone. You know, we're helping them solve a problem with lowering their balance, but also lowering their deposit balances, but then also keeping the capital within the walls of the financial institution. It's not on the balance sheet of the financial institution. There's no reserve requirements. There's no regulatory issues with the financial institution as a result, but they still have line of sight into the capital. Once again, in this study that we did, 62% of Millennials and Gen Z said that in a retail environment in the next few years, retail environment will accept Bitcoin. When they go to their financial institution, it's an expectation. Yeah. that this is an asset that they ought to be able to buy and sell. Our customer, we have one customer that I met with that in a quarter, they had $40 million leave their institution, and go out into Coinbase. To Bryan's point, they're looking for ways to keep that within their institution. Let's just zoom out and talk about macro for a second. Lingering impact of COVID, potential impact from higher interest rates and inflationary impacts on the sales pipeline. From a customer perspective, the customers that I've met with were. Their concern prior to probably the last 4-6 weeks was they had too many deposits, right? They weren't making enough loans. There's a little bit of a guarded optimism that maybe things balance out a bit. I think, in terms of us specifically, I would say the only macro impact on our business is there's a couple of very specific technology skills that the inflation rate on wages has gotten pretty high. I would say that's the one thing that we've kind of managed both post-COVID and in this environment. It's not across all the skills in the organization, but because what Bryan said earlier is we're on a modern cloud-first platform, there's a lot of demand for those skills. There's some of those skills that there's a pretty high inflation pressure on. From a demand perspective, the end market is still extremely healthy. We saw a bit of deferring decisions early on in the pandemic. As a result of that, the new opportunities that we were creating feeding into the 6-9-month sales cycle actually had some softness in new sales in the first half of last year. What we're experiencing now is our sales pipeline is double of what it was a year ago. That same trend or that trend line from 2021, we do not expect to occur in 2022. I mean, the end market is very strong, particularly 40% of our sales pipeline is represented by banks. Again, some of the investments that we've made in the platform, some of the investments we've made on the marketing side of our business is resulting in generating even significant demand on the bank side of the market. Thank you, guys, for joining today. Appreciate it.