Hello, welcome to Alkami's Fourth Quarter, 2022 Financial Results Conference Call. My name is Marlise, I'll be your operator for today's call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw a question, please press star then two. Please note this event is being recorded. I'll now turn the call over to Andrew Vinas. Andrew, please, you may begin. Thank you, operator. With me on today's call are Alex Shootman, Chief Executive Officer, and Bryan Hill, Chief Financial Officer. During today's call, we may make forward-looking statements about guidance and other matters regarding our future performance. These statements are based on management's current views and expectations and are subject to various risks and uncertainties. Our actual results may be materially different. For a summary of risk factors associated with our forward-looking statements, please refer to today's press release and the sections in our latest form 10-K and 10-Q entitled Risk Factors and Forward-Looking Statements. The statements made during the call are being made as of today, we undertake no obligation to update or revise any forward-looking statements. Also, unless otherwise stated, financial measures discussed on this call will be on a non-GAAP basis. We believe these measures are useful to investors in the understanding of our financial results. A reconciliation of comparable GAAP financial measures can be found in our earnings press release and in our quarterly filings with the SEC. I will now turn the call over to Alex. Thank you, Andrew, and thank you all for joining us today. This afternoon, I'm going to provide highlights of our fourth quarter operating results, observations on the demand environment, and recap our five key initiatives with some comments related to engineering our technology platform for scale before turning the call over to our CFO, Bryan Hill. I am pleased to report another quarter of strong performance as we continue to make progress on our key initiatives. In Q4 2022, Alkami grew revenue 31%, once again ahead of our expectations. We exited the quarter with 14.5 million live registered users on the Alkami platform, up 2.2 million compared to the prior year. We achieved a $4 million adjusted EBITDA loss in line with the high end of our guidance for the quarter and an important milestone on our path to adjusted EBITDA profitability, which we continue to expect to occur in 2023. These results reflect continued execution on all five of the five key initiatives I outlined at the beginning of 2022. Two of these initiatives were fundamental drivers to our performance for the year. First, to become the digital banking provider of choice for banks, similar to our competitive position with credit unions. Second, to drive growth by increasing add-on sales. For the full year of 2022, we've outperformed our expectations in both of these areas. We signed 37 new digital banking platforms, platform clients for the full year of 2022, of which approximately 30% were banks, and our bank wins increased 100% compared to 2021. As we expected, new logo sales were higher in Q4, 2021 than in Q4, 2022. However, 2022 was a more balanced year in terms of new contract signings throughout all quarters of the year, with Q4 being the high point of our new logo signings. We continued to gain add-on sales momentum in 2022, with add-on sales representing 37% of total sales for the full year of 2022, up from 24% in 2021. In addition, we renewed 11 client contracts during Q4 and 22 client contracts during the full year. Our results continue to demonstrate Alkami's passion and motivation to become the preferred digital banking provider in the industry. I am personally energized by the opportunities ahead. Next, I'd like to share some thoughts on our end market based upon observations and client interactions since our last earnings call. Despite the volatility in the macro environment, including challenges experienced by other fintech providers, we still see healthy demand for Alkami's digital banking platform and add-on offerings. Our new logo sales team continues to see normal RFP and vendor evaluation activity, as well as normal conversion timelines from evaluations to signed contracts. Our client sales teams, which generally see shorter sales cycles, are also experiencing steady activity, renewal conversions, and cross-selling opportunities. Overall, the factors I discussed in last quarter's call continue to drive demand. First, our clients require modern banking solutions. They consider investments in Alkami to be mandatory innovation in what is effectively their most important channel. Second, digital user counts continue to rise. We are experiencing double-digit user growth amongst our clients. Third, FIs are realizing that the data they have in their own core and digital banking systems is the best data available for them to target and deliver personalized and relevant communications and offers. Fourth, our target clients need to attract deposits, and they are investing in digital onboarding technologies and a great digital banking experience, including business banking, to attract new customers. These themes are why we expect to continue to see healthy demand and growth. Our qualified sales pipeline continues to grow at a strong pace. There are a few digital banking companies who can provide a modern cloud-based solution, along with the capacity and track record to manage nearly 2 million digital user implementations at a time. Alkami is proud to be a leader and one of the fastest-growing companies in the market. One year ago, I shared with you our five company priorities. First, to become the digital banking provider of choice for banks while maintaining our market leadership with credit unions. Second is to grow our add-on sales. Third is to engineer our technology platform for scale. Fourth is to become the employer of choice in our market. Fifth is to use M&A opportunistically to enhance our market position. On recent calls, I've discussed our first two priorities, on this call, I'd like to provide some comments on our third priority, engineering our technology platform for scale. In 2022, Alkami implemented 30 new clients representing 1.1 million registered users at launch. If you go back to the beginning of 2020 until the end of 2022, Alkami grew our live registered users by 103%. We believe our ability to execute complex implementation projects at this scale and engineer a technology platform that can sustain this growth is a significant and sustainable competitive advantage. When we think about engineering our technology platform for scale, it is not only about expanding the platform but also injecting innovation that allows Alkami to continue to be a technology company that provides financial solutions. Our focus is on expanding the platform while we reduce the incremental unit cost of serving a user and evolving the platform so that it serves the future needs of the market with speed and quality. Our clients tell us that they've grown tired of trying to make their legacy systems dance. They want to focus their core banking application on back-office accounting and invest in a new operating platform that can scale and become their primary digital sales and service system. We believe Alkami can be that platform, and to make this happen, we are driving innovation in three areas. First, the Alkami platform from inception is a cloud-based, single-instance, multi-tenant SaaS system with security as a foundation. Of this, we have the opportunity to rapidly adopt new advances in storage, database, and compute architectures and technologies such as Kubernetes messaging layers and federated schemas to slow the growth of our compute cost while increasing the reliability, quality, and performance of our platform. Second, we will innovate in the technology necessary to connect Alkami to the myriad of legacy systems that exist in the market. This is the most time-consuming portion of our implementations, the planned innovation will result in faster projects for our clients and less cost for Alkami to onboard new clients. Third, as our clients mature the use of their digital sales and service channel, they will want increased data capabilities for their customers. This is why we made the Segmint acquisition. We are integrating the data capabilities of Alkami and Segmint into a modern financial data platform that provides for the data collection, persistence, transformation, and actionable insights necessary for Alkami clients to make data-driven decisions to grow their business. With this as a backdrop, I am pleased to announce that we just welcomed Deep Varma as Chief Technology Officer of Alkami. Prior to Alkami, Deep was Chief Technology Officer of Varo Bank, where he built the technology infrastructure for one of the nation's fastest-growing neobanks. Prior to Varo, Deep was part of the Zillow Group technology leadership team, where he led all engineering functions across the Trulia business, successfully migrating to the cloud and creating the data platform that presents a unified view of customer home information, including search and personalization. He's also launched two successful startups and held leadership roles at Yahoo, ABB, and IBM Besides his experience, Deep is a genuinely good human being who cares about culture and community. This is why we're excited to have him join Alkami. The platform efforts I've just discussed are expected to benefit our long-term gross margin profile and will positively impact growth, client retention, and R&D productivity. To be clear, these efforts are not necessary to achieve our 2023 gross margin objective and should be thought of as upside to our goal of reaching non-GAAP gross margins of 65%. In closing, thank you all for joining the call to hear about Alkami's Q4 results. We are proud of the quarter. We are energized by the opportunity in front of us. With that, let me turn the call over to Bryan to provide more detail on our financial results and walk through our 2023 financial outlook. Thanks, Alex. Good afternoon, everyone. Fourth quarter results continue the momentum we experienced during the rest of 2022 across all our key metrics. For the fourth quarter of 2022, we achieved revenue of $55.5 million, which outperformed the high end of our financial guidance and represented growth of 31%. This was driven by strong performance across our primary revenue drivers. We implemented 9 new clients in the quarter, bringing our digital platform client count to 199, compared to 177 in the prior year. We now have 44 new clients in our implementation backlog, representing 1.6 million digital users. We exited the quarter with 14.5 million registered users live on our digital banking platform, up 2.2 million or 18% compared to last year, and up sequentially 810,000 digital users. Over the last 12 months, digital user growth continues to be driven by two areas. First, we implemented 30 financial institutions supporting 1.1 million digital users. Second, our existing clients increased their digital user adoption by 1.4 million users. Offsetting digital user growth was churn of just over 300,000 digital users, of which the majority is represented by a single client that transitioned off our platform during Q3 of 2022. We continue to maintain a very high gross retention rate of just over 97% measured in terms of annual recurring revenue, or ARR, and digital users retained over the last 12 months. We ended the quarter with an RPU of $15.55, which is 14% higher than last year. This compares to our blended market opportunity of approximately $58 per digital user. The Segmint acquisition contributed $0.91 or 7% of RPU expansion, along with RPU expansion of $0.96 or 7%, driven by add-on sale success and the addition of new clients who tend to onboard with a higher average RPU. Subscription revenue grew 33% compared to the prior year quarter and represents approximately 96% of total revenue. We increased ARR by 34% and exited the fourth quarter at $226.1 million. In addition, we currently have approximately $49 million of ARR in backlog for implementation over the next 12 months. Our 2022 exit ARR and implementation backlog combined to provide visibility into a successful year in 2023, which I will outline later in our financial guidance. We continue to see healthy demand across our product portfolio. Our 2022 new sales performance outpaced 2021 by 30%. Keep in mind, 2021 new sales were overweight to the fourth quarter. As I said on last quarter's call, new sales for 2022 have occurred more evenly throughout the year. We signed 37 new digital banking platform clients for the full year, of which 15 signed during the fourth quarter. Our add-on sales focus continues to yield returns representing 37% of new sales for 2022, compared to 24% for 2021 and 17% for 2020. In addition to add-on sales, our client sales team is responsible for client contract renewals. In 2022, we renewed 22 client relationships, representing 11% of our live ARR and adding over $143 million to our clients' remaining purchase obligation or client contract backlog. Our client contract backlog is now $893 million, 38% higher than a year ago. Turning to gross margin and profitability. For the fourth quarter of 2022, non-GAAP gross margin was 56.4% compared to 57.1% in the prior-year quarter. Margin dilution was primarily driven by higher costs from our client implementation team and our third-party IP partners. Previously, we highlighted investments in our client implementation team would constrain margin expansion for a few quarters. We have now bent the project concurrency curve that resulted in 2022 gross margin dilution. Also during Q4, we renewed early a significant IP partner agreement resulting in certain in-quarter costs that will provide future gross margin benefit. For 2023, a more evenly distributed project concurrency, combined with our recently amended third-party IP partner agreement, we expect will put us back on path to our gross margin expansion objective of 200 basis points per year. Our target operating model is a non-GAAP gross margin of 65% as we scale our revenue. We expect to achieve our target gross margin at a pace of roughly 200 basis points of expansion on average per year, reaching the 65% level by 2026. In addition, reaching 65% gross margin is not the final destination. It is simply the next milestone in our journey. We expect to continue to drive gross margin above 65%. For purposes of discussing gross margin expansion, the most important factors for us in addition to revenue scale are, first, we are investing in our platform to enable scale well beyond our current level of 14.5 million digital users. These investments are expected to reduce our cloud hosting infrastructure at a unit economic level, improve implementation efficiency, and lower the ongoing cost to support our platform. Second, we expect to further improve the cost structure associated with third-party IP integrated into our digital banking platform. These arrangements are typically structured as revenue share agreements, which are generally dilutive to our gross margin, but typically very accretive to adjusted EBITDA. As we scale our business, our opportunity to improve gross margin for these arrangements increases. Third, continued success renewing client agreements will improve our gross margin. The accounting for implementation revenue and cost requires we amortize both for each new implementation over its first contract term. Clients renew their contracts, our gross margin no longer possesses this headwind at a unit economic level. We renewed 22 clients in 2022 and expect to renew a similar amount in 2023. Moving to operating expenses. For the fourth quarter of 2022, non-GAAP R&D expense was $16.4 million or 29.6% of revenue. A year ago, R&D represented 27.8% of revenue. Margin dilution was primarily driven by higher headcount, consulting, and cloud infrastructure costs as we have invested in our technology platform for scale. For full year 2022, we did experience operating leverage and margin expansion of 180 basis points. As a reminder, our target operating model is to leverage R&D to 20% of revenue while we continue to invest and expand our platform. We currently expect to achieve our objective during 2026. Non-GAAP sales and marketing expenses were $7.9 million, or 14% of revenue. In the prior year quarter, sales and marketing represented 14% of revenue as well. Our go-to-market efficiency outperforms our fintech peers and the majority of high-growth SaaS company comparables. We expect to maintain or slightly improve our go-to-market efficiency as we scale the business and gain market share. In terms of the progression of sales and marketing expenses throughout 2023, bear in mind the second quarter is when we will hold our annual client conference, which results in our highest quarterly sales and marketing expense with approximately $1.5 million to $2.2 million of higher spend than other quarters of the year. Non-GAAP general and administrative expense was $11.6 million or 21% of revenue. In the prior year quarter, G&A was approximately 27% of revenue. The margin expansion is primarily attributable to revenue scale. We have reached a sustainable level of G&A spend as the majority of our public company investments are behind us. We expect to leverage G&A expense as a percentage of revenue as we move towards our profitability objectives with an expectation at 10% to 12% of revenue during 2026. Our adjusted EBITDA loss for the fourth quarter was $4 million, which is in line with the high end of our expectations and 10% better than the prior year quarter. As a reminder, our target operating model is to exceed an adjusted EBITDA margin of 20%. We now expect to achieve this target for the full year of 2026, which also coincides with the achievement of our 65% gross margin goal. Similar to our gross margin goal, a 20% adjusted EBITDA margin is not the final objective, but the next milestone after we move to positive adjusted EBITDA in Q4 of 2023 and continue to scale our business along the journey to 2026. We believe these high-level targets achieved on the timeline provided afford a balanced approach to profit and cash flow generation while also allowing Alkami to responsibly invest to take full advantage of our attractive market position and large TAM opportunity in digital banking. Before moving on from the income statement, I want to provide some commentary on stock-based compensation, which we understand is a metric of increasing importance among software investors. In 2022, we had a significant anomaly in our stock-based comp expense, which was a result of our former CEO's retirement. This accelerated the vesting of his shares and therefore impacted our accounting for stock-based compensation. As we look forward to 2023, we expect stock-based compensation to be approximately 9% of revenue. Beyond 2023, as we scale revenue, we expect stock-based compensation to decline to 10% to 12% of revenue during 2026 and to normalize to a long-term high single-digits% of revenue as we continue to scale. Moving on to the balance sheet. We ended the quarter with just over $196 million of cash and marketable securities and just over $84.5 million of debt. We are comfortable with our net cash position as it represents several multiples of capital necessary to reach free cash flow positive occurring shortly after becoming adjusted EBITDA positive for the fourth quarter of 2023. Turning to guidance. For the first quarter of 2023, we are providing guidance for revenue in the range of $58 million-$59 million and an adjusted EBITDA loss of four and a half to three and a half million. For full year 2023, we are providing guidance for revenue in the range of $255 million to $260 million and an adjusted EBITDA loss of $7 million-$4 million. Additionally, because the impact of expense timing, such as our client conference, as I mentioned earlier, we expect the second quarter to be the trough point of our adjusted EBITDA losses in 2023, modestly lower than the first quarter of the year, and we expect to exit 2023 with Q4 adjusted EBITDA modestly positive. To summarize, we are executing across all areas of the business. We are improving our already attractive position in the marketplace with increasing momentum among banks and a growing contribution from add-on sales. In concert with our top line strength, we are focused as an organization on crossing into adjusted EBITDA profitability in 2023, and we are on track to achieve meaningful gross margin expansion in 2023 and beyond. As a final comment, we expect to cross over 65% gross margin and 20% adjusted EBITDA margin objectives in 2026. With that, I'll hand the call to the operator for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Bob Napoli from William Blair. Bob, please go ahead. Good afternoon. I mean, really nice to hear the very specific guidance for 2026, on the trends to 2026. Maybe just what do you see as kind of the biggest challenges? You know, what gives you the confidence to put out that specific guidance, for, you know, 2026? What do you view as the biggest challenges to getting there? Hey, Bob. Go ahead. Go ahead. Yeah. Let me start. This is Bob. This is Alex. Let me start. We'll kind of talk about two things. One, confidence, and then two, you know, where do we have to continue to do work. As I stated in my comments, we continue to talk to customers who believe that a digital banking platform investment is a mandatory innovation for them. They continue to understand that this digital channel can become for them not just a service channel, which it has been primarily, you know, but with the appropriate use of data, and other capabilities, it can also be a sales channel for them that allows them to grow their top line as well. The confidence side comes from, really from market signals about how important this investment is to financial institutions' futures. You know, Bryan kind of mentioned the thing for us to manage which, you know, best product wins in this space. There's no real victory in cutting costs to your future. We need to be wise about how we balance the investment in the product, along with the, you know, investments to continue to get to the gross margin targets that we want to get to. In short, confidence comes from the market signals. The hard work that we have to do is continue to build a great product, and invest in the platform, as I talked about, to be able to scale out that platform for the future growth. Did you have any comments, Bryan? Yeah, a couple things, Bob. Look, we felt it was important to provide more constructive comments in this area, given the economic environment that we're in, given some of the investor conversations that we're having. Alex and I, we have a lot of confidence in where we're headed over the next three years. Let me give you a couple. First off, we still have, you know, healthy demand. We feel that we can continue to compound the business each year at 25% minimum. The guidance speaks to that for 2023, and the live AR that I have coming into the year as well as the implementation backlog sizes, a tremendous amount of visibility into that. Second, we're starting to see momentum among bank wins. We're seeing momentum among the number of bank deals that we're participating in, and we're seeing a rising win rate as it relates to banks. That provides us some confidence. Second on the revenue front is also our add-on sales momentum. Add-on sales contributes 37% of our total TCV of new sales in 2022, and we expect that to continue and even out to potentially a 50% level in future years. That provides us even further confidence in achieving the 25% minimum revenue growth. As it relates to achieving a 20% adjusted EBITDA margin, it starts with hitting a 65% gross margin. We did have a slowdown in our gross margin expansion in 2022 for the reasons that I described on this call and I described on previous calls as it relates to implementation project concurrency. We're through that now. A more evenly distributed new sales year 2022 has resulted in the ability for us to better manage those investments as it relates to implementation. Really exit 2023 with a gross margin, you know, in 60%, maybe slightly ahead of 60%. That gives us great visibility in the, in achieving a 65% gross margin by 2026. As you work your way down through operating expenses, we already, in sales and marketing, have a very efficient go-to-market, you know, efficiency as it relates to sales and marketing as a percent of revenue. G&A, we've already made our public company investments, and revenue scale will continue to provide operating leverage in that line item of OpEx. We saw 500 basis points for the full year of 2022 and over 600 basis points in Q4 year-over-year. You know, lots of momentum there. It really comes down to what I view as controllable investment in R&D, but still investing in the platform for efficiency gains and investing in the platform for bringing more product to market. We expect to bring somewhere between three to four new products to market in 2023. All these items come together for Alex and I to have a tremendous amount of confidence in providing more of a multiyear guide on when we will reach, you know, really a more acceptable level of profitability. Great. Thank you. That's, that's super helpful. Just to follow up on, the cross-sales and, you know, what is working in particular on cross-sales? How is Segmint? Is Segmint, you know, how is that working? It seems like a big opportunity. Just, some color on cross-sales and as it relates to revenue per user, you expect to see a steady what kind of growth in revenue per user with cross-sales? Sorry. Hey, Bob, this is Alex. The first thing I'll tell you is, I'm really proud and encouraged about the sales team that's in place that covers our existing customers. It's a highly professional sales team. They understand the industry. They understand their customers. They do the right thing by their customers. That is obviously a key contributor to the success. Segmint was really exciting for us. We had 13, what I would call synergy deals. That would be either add-on deals or deals that were new customers. We had 40 new deals besides that. I think that we're just barely scratching the surface with Segmint. If you think about what Segmint is, it really is a self-contained marketing tech stack, if you will, for a bank that comes alongside existing investments and allows that bank to have a walled garden where they have the best data possible, the data that comes out of their core system, their digital banking system, and then use that data to understand amongst tens of thousands of key lifestyle indicators, what micro-segments they have within their customer base, and then be able to target offers to those micro-segments and deliver that content in-channel. I mean, all of this is the holy grail of marketing, and the financial institutions are just beginning to understand that this is what they need in their digital channel. I'm really excited about what's happened with Segmint so far. I'm excited about the synergy. I think that as the market continues to understand what they need to be able to interact with their customers in the digital channel, this is going to create a pretty big uplift for us. Yeah. Bob, just in terms of the product categories that contributed to the majority of our add-on sales effort, the theme in Q4 did not really change from the themes for the first three quarters of the year. The money movement product family category, that was a significant contributor. Our client services account category, which includes, you know, chat and chatbot and conversational AI products. Fraud and security, which includes ACH Alert, which was an acquisition from 2020. That was a pretty significant contributor. Then finally, the marketing and analytics product family category, which includes Segmint. Those four product family categories really are the, I would call 75% of our add-on sales success came through those areas. If you step back and, you know, give some consideration to those products, those are really some of the newer products in the market. Our install base, which averaged 9 to 10 products, from several years ago when we were bringing in new logos, these products really, either were not available or certainly not available through Alkami. Now they are, which is what presents that back, cross-sell opportunity. Great. Thank you. Thank you very much. Appreciate it. Now we'll proceed with a question from Andrew Schmidt from Citi. Andrew, please go ahead. Andrew, I'm sorry. Andrew, are you okay now? Yeah, there we go. Thank you. Go ahead, Andrew. Great. Thank you so much. Hey, Alex. Hey, Bryan. Good results here. Thanks for taking my question. I wanted to dig into the just the demand environment a little bit. It's good to hear the the resilience and obviously, you know, great step up in terms of the the wins in the fourth quarter. Maybe talk a little bit about based on top of funnel pipeline, how you're thinking about just the environment for net wins or net logo wins and, you know, additions to the the user backlog for 2023. 'Cause clearly, you know, we're back at an elevated rate, and it's great to see. I'm curious how you're thinking about the setup for for the coming year. Thanks a lot. Andrew, this is Alex. As I mentioned, in my comments, we continue to see a strong pipeline. That pipeline is kind of evenly balanced between banks and credit unions. As I've said on other calls, you know, we can't predict the future, so maybe sometime in the future that demand drops off. Over the last couple of quarters, we just have not seen that drop off. We've seen consistent growth in the pipeline, consistent movement in the pipeline, and consistent balance between credit unions and banks. Yeah. Andrew, you know, the way that the pipeline works through the year, because even though sales were more evenly distributed in 2022, there still is an overweight to Q4. It just wasn't as pronounced in 2022. When you go into the year, your sales pipeline is most likely at one of the lowest levels, and then you're building it up as you continue through the year. Our Q4 exit sales pipeline in 2022 was larger than Q4 from 2021, from 2020, 2019, as far back as you wanna go. We feel very confident in our sales numbers that we need to put up this year in order to continue to achieve our revenue aspirations. Alex did make a comment that our pipeline is evenly distributed between credit unions and banks. That is a change from where we have been, I would say, from the previous quarters when banks contributed about a third. We're seeing more activity from banks. We're seeing that we're participating in more deals as it relates to banks, and we're winning, our win rate is increasing among banks. Our win rate among credit unions is staying very constant as it has in previous years. I think all this speaks to the resilience of the need for innovation in this space, particularly through the digital banking channel. Got it. Makes a lot of sense. The comment in terms of just, you know, banks being a larger part of the, you know, the mix, does that suggest that when we think about the growth outgrow for 2023 and beyond, that we'll see, you know, more of a lean towards ARPU as you may be onboarding, banks that, you know, perhaps consume more products and perhaps have, you know, lower users relative to credit unions? Just curious about, you know, how the buildup might change as we think about the model going forward. Thanks. Yeah. Well, I mean, our thoughts on the mix is we will remain you know, in the market leading position in adding credit unions. Our focus on credit unions has not changed. What has changed is we understand the importance of our addressable market consisting about 50% of bank financial institutions. When we look out several years, our view is we will sell into and originate an equal number of banks as credit unions. That's our longer term objective, and we think we can achieve that over the next three to four years. How that will change the characteristics of our client base is exactly what you were suggesting. Generally, for the same ARR opportunity between a bank and a credit union, the bank will have fewer users but will also have more products as a result of the business banking platform, resulting in a higher revenue per user. The one thing I would add to that, Andrew, that's interesting is, you know, there is an increasing understanding amongst banks that they have to provide a great modern digital experience. I just got off a video call with the president of a bank right before we had this earnings call. He told me, "Alex, the first time we looked at Alkami, we couldn't afford you. The second time we looked at Alkami, we couldn't afford you. This time we've decided that we can't afford not to afford you because we need to be able to give our customers a modern user experience." I think that the other thing that we're seeing in banks is a realization that it is really, really important to have a great user experience for a bank. I think that will provide us tailwinds because that's been our DNA. Our DNA has been to build a great user experience. Yeah, that makes a lot of sense. You know, since you said that, I just wanna tab on, you know, one question. Obviously, you know, the, you know, big opportunity is potentially when some of this inertia breaks down, you have more kind of RFPs up for grabs each year. Are you starting to see that at all? It sounds like, you know, based on your commentary, we're maybe at the beginning innings of seeing banks be a little bit more, you know, focused on having best-in-breed versus more cost and full platform solutions such. Just curious, you know, if you're seeing any indications that way. I'll leave it there, guys. Thanks a lot. I think the only thing I would say. Yeah, the only thing I would just point you back to is the comment that Bryan made, which was, you know, through most of last year, the pipeline was, you know, a third banks, two-thirds credit unions, and right now it's probably closer to half and half. I think that's it. That's the objective evidence that we have right now. Right. We competed in roughly two times the number of bank opportunities in 2022 that we competed in in 2021. We're seeing rising pipeline, rising actual real opportunities that we're competing in. It's not just for business banking. These are, you know, full platform deals, retail and business banking. We suspect that that will continue now that our pipeline continues to pivot more towards banks. We will now have a question from Mayank Tandon from Needham. Mayank, please go ahead. Hey, guys. This is Sam on for Mayank today. Thanks for taking the question. Some nice results here. Wanted to ask a question on the growth algorithm for 2023. You know, how should we think about revenue growth in the year and the balance between ARPU gains and user growth? Because, you know, ARPU this quarter was obviously still strong at 14%, but it did decelerate and dip to touch sequentially. Just trying to get some color into how we should think about that for this year. Thanks. Yeah. The way that we think about the growth algorithm is 7%, 5%-7% revenue per user growth. This quarter was 14%, half was really from having the Segmint acquisition, so that would be an inorganic component. The other 7% came through just cross-sell activity as well as onboarding clients with a much higher RPU than, you know, the average of the company for existing clients. We don't suspect that that'll change, which means 18%-20% digital user growth, and that will roughly come, you know, half from, you know, our backlog of new logos that we'll be implementing this year, and the other half will come from just our clients growing. We generally think about our clients growing at a clip of, you know, 100,000 users a month. Got it. Okay. Yeah, that's helpful. Then just one quick housekeeping item. Last quarter, you guys gave the segment contribution for the quarter. Did you guys give that for one Q this year that I might have missed? I think you acquired them in March of last year. Yeah. We acquired Segmint in April, and we adjusted our guidance $9 million at the point in which we added them. $9 million for the remainder of 2022, and Segmint came in right at that $9 million of revenue contribution. Got it. All right. Thanks, guys. Our next question comes from Charles Nabhan from Stephens. Charles, please go ahead. Good afternoon, thank you for taking my question. Just a couple quick ones from me. First, does the deceleration in the M&A environment have any impact on user growth, or your expectations for the next year for revenue? The user growth for us, generally is coming from our clients growing organically. We have benefited from some consolidation. In fact, we had a renewal in January, February of 2023, which was a result of a merger, and it's gonna bring in a significant number of users at a FI level in 2024. We do benefit from that, but generally it's more from organic growth within the financial institution. Got it. It's good to see you're winning in the market and some very constructive positive commentary. Just curious, in terms of the feedback you hear from your from your neobanks and credit union clients, I'm just curious where you're specifically differentiating on these RFPs. Is it technology? Is it service? Is it all the above? What I'm getting at here is just curious where you're winning specifically. Yeah. The reasons why a customer chooses Alkami are, number 1, they have a commitment to provide a great user experience for their consumer. We continue to rate at the very top of the app store scores on user experience that's known in the market, that's understood by buyers. It starts with, are you a available performant secure system that I can count on? Do you provide my consumers a great user experience? Are you on a modern technology platform that allows you to innovate, and allows me... The other thing that our customers have come to understand is, you know, $200 billion spent on fintech by venture capitalists, you know, over the last 18 months or so, has created products that their consumers want. They wanna understand, can I take a product that my consumer wants to use and integrate it into my digital banking, what I would begin to call not just an application, but our digital banking platform. Then there's one that's kind of an intangible that is really important to customers, which is, you know, are you a down-to-earth, approachable company that's humble, that's customer-focused, that we're gonna be able to work with? Because they understand that they're getting into a seven, eight, nine-year relationship. A lot of the customers that are looking to make a decision actually will spend multiple days at our headquarters visiting with 40, 50 different Alkamists across the organization. Because like I said, they understand they're not just buying a product for one year's worth of use. They're getting into a long-term relationship with a company. Those are the things when people make a decision to buy Alkami, they make a decision to buy Alkami for those reasons. Got it. I appreciate that color. If I could sneak in one last quick one, and apologize in advance if you touched on this, but how should we think about the growth rate for Segmint, the Segmint component of the revenue base over the next year? We haven't provided specific, you know, outlook as it relates to Segmint, but we do have a lot of excitement and confidence on where it is in the market. Segmint, since we acquired Segmint in April, Segmint created 50 new client relationships. 37 or so of those, 40 of those came from their standard go-to-market motion that they had prior to us acquiring them. Over the last couple of quarters of 2022, we started gaining quite a bit of momentum and including Segmint in new logo opportunities, as well as cross-selling back into our base. We're in the very, very early innings of gaining traction there, and we expect Segmint to continue to be a fairly significant contributor to our RPU expansion. Got it. I appreciate the color, guys. Thank you. Our next question comes from Josh Beck from KBCM. Josh, please go ahead. Hey, guys, you have Maddie on for Josh. Just wanted to say thank you for all the granularity you're giving on guidance and in the quarter. It's been super helpful. Just in terms of the healthy backlog and implementation timeline that you guys mentioned, how are you thinking about the penetration that you're at for the total market opportunity, is my first question. My second question is: how should we be thinking about margin expansion going forward? Obviously, you mentioned the 200 basis points expansion. Should that all just naturally come from the scaling of revenue, or are there any additional cost-cutting initiatives that you guys need to take? Thanks. Yeah. I'll take the first one and let Bryan touch the second. I would say we don't have cost-cutting initiatives, so I'll start with that. We. I'll let Bryan kind of talk to the gross margin expansion. We think we're in really, really early innings of a pretty large market. I think we said that we're at 14.5 million live registered users. You know, the overall market is 280 million plus users, of which a third of those might be owned by a small number of mega banks and mega credit unions. If you just kind of think of two-thirds of that being a market where everybody already has a digital banking platform, and that market is very fragmented, with a significant number of those digital banking users being on legacy platforms that are not a great experience. We feel like we're in pretty early days of a pretty large TAM that we can go after. I'll let Bryan talk about gross margin expansion. Yeah. Yeah. Just before I move on to gross margin expansion, back to the market penetration. Today we're less than 8%, 7% penetrated in the overall market. As Alex mentioned, you know, at the most penetrated level of the market, it's certainly higher than where Alkami is at. Alkami's adding more digital users than any other provider in the space, to our digital banking platform. We see a market opportunity where over the next three to four years, there's no reason why we would not have doubled our users based on the pace at which we're adding users today. We, we don't feel there's a market saturation issue, and we think the market is hungry for innovation and innovation that can be added quickly and provides flexibility through an extensible platform, which is where Alkami sits today. From a gross margin perspective, I provided quite a bit of constructive narrative in my prepared comments today on gross margin. To Alex's point, we're not going to achieve our margins through cutting costs. We're gonna continue to invest in our platform. We're investing in our platform to provide more products to our clients, as well as to have the ability to scale our platform more efficiently, which will add to our gross margin profile. All the while, we'll also leverage our R&D spend while we're doing this. In other words, we'll gain operating leverage through that. I also mentioned how renewals can impact our gross margin. At a unit economic level, when we renew a client, which we have a very high success rate at renewing clients, we achieve a 300 to 500 basis point gross margin expansion at the contract level. Finally, our third-party IP partners, that's an area where we had some success in restructuring an arrangement in Q4 of 2022, and we suspect as we continue to add more digital users to our platform, we'll be able to continue to leverage the economies related to those arrangements to Alkami. That, that's kinda near-term areas in addition to revenue scale that will provide us gross margin expansion. Awesome, and I appreciate that additional color. If I could sneak one last one in. Just wondering if you guys are seeing any differences on the willingness of IT spend between banks versus maybe credit unions, kinda looking towards 2023 IT budgets in general? Yeah, I mean, the conversations that I have with bank presidents and credit union CEOs, is that obviously because of the environment, they're scrutinizing the full stack of their IT budget and the full stack of their IT spend, but they prioritize their digital banking channel, right? That's where you've heard me talk about an understanding that this is a mandatory innovation for them. I don't wanna speak for any other industry other than digital banking, but I could imagine that on the fringes of a full stack of a bank's IT budget, that there would be things that they would be shaving. So far, we have not seen that on the digital banking investment and the digital banking channel. Amazing. Thanks for taking my questions. We have a question from Patrick Walravens from JMP. Patrick, please go ahead. Hi, this is Owen on for Patrick, and thank you for taking the question and for the, congrats on the good results this quarter. I was wondering a little more on, kinda combining two of the previous questions on, the add-on versus net new logo additions versus its effect on gross margins and kind of, philosophically, how do you guys think about going out and pursuing those two different lines of business, considering its effects on the gross margin? I'll let you answer the effect. I mean, I would start with saying, you know, when Bryan talked about, look, when we think out into the future, we think that a healthy enterprise SaaS software company that's got a product that people like, and it's a company that people wanna do business with, ought to shape their business where they're getting about half of their new TCV growth from new logos and about half of their TCV growth from add-on sales. I mean, by the time you've acquired a customer and have a good relationship with a customer, and you've got a professional account team that is engaged with that customer and understanding their business and really has a front-row seat to how they're thinking about their digital banking platform, what that gives us is real insight into what their priority areas are, where they would invest. That's kind of a virtuous cycle that then feeds back into our product management organization and gives us view of the products that we should build or the partnerships that we should have or the acquisitions that we should make. We think of, first of all, begin with the end in mind, a really healthy enterprise SaaS software company. It's got about half of their new TCV that's coming from add-on sales. If you've got a really good account team, between your sales team and your customer success team, you get really good insight with these customers about where their investment priorities are, and that gives you a great feedback into the product management organization. That's how we think about the business in general. Let Bryan talk about how we think about it in impacting the gross margin. Yeah. A couple of benefits from add-on sales. The first and maybe even the most important is an add-on sale is significantly less effort in the implementation process. What I mean by that is a new logo today for Alkami has, you know, on average 20 system integrations that occur in order to launch the platform and the new logo. The add-on sale effort from an implementation perspective, there is still some complication there. However, it's able to leverage those integrations that occur once the platform has been integrated. That results in a lower implementation effort in terms of cost, which helps the gross margin profile. Secondly, an add-on sale, the speed to revenues going from order to revenue is much quicker. To the extent that we're having success in add-on sales, it can be an acceleration to our organic growth profile. Great. Thanks so much for that. That's it for me. Thank you. This concludes our question and answer session, and it also concludes the conference. Thank you for attending today's presentation. You may now disconnect.