What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-07-31 · 105 added, 107 removed, 315 unchanged (40% of the section changed)

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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.

Alkami is a cloud-based digital banking solutions provider.

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 Banking Platform, allows FIs to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture.

Our solution, the Alkami Digital Sales and Service Platform, allows FIs to onboard and engage 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.

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During 2024, we established a new subsidiary in India to support potential future operational needs.

As of June 30, 2025, this entity had immaterial operations and did not have a significant impact on our consolidated financial results.

As of September 30, 2025, this entity had immaterial operations and did not have a significant impact on our consolidated financial results.

We will continue to assess the impact of this entity as operations evolve.

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Due to our architecture, adding products through our single code base is fast, simple and cost-effective.

The key differentiators of the Alkami Digital Banking Platform include:

The key differentiators of the Alkami Digital Sales and Service Platform include:

• User experience:

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• Integrations :

Scalability and extensibility driven by more than 300 real-time integrations to back-office systems and third-party fintech solutions as of June 30, 2025 , including core systems, payment cards, mortgages, bill pay, electronic documents, money movement, personal financial management and account opening.

Scalability and extensibility driven by more than 300 real-time integrations to back-office systems and third-party fintech solutions as of September 30, 2025, 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 Alkami Digital Banking Platform offers an end-to-end set of digital banking products.

The Alkami Digital Sales and Service Platform offers an end-to-end set of digital banking products.

Our typical relationship with an FI begins with a set of core functional components, which can extend over time to include a rounded suite of products across account opening, marketing, data insights, card experience, money movement, customer service, business banking, financial wellness, security and fraud protection and extensibility.

We primarily go to market through an internal sales force.

Given the long-term nature of our Alkami Digital Banking 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 Alkami Digital Banking Platform revenues almost entirely from multi-year contracts that are based on an average contract life of approximately 70 months as of June 30, 2025.

Given the long-term nature of our Alkami Digital Sales and Service 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 Alkami Digital Sales and Service Platform revenues almost entirely from multi-year contracts that are based on an average contract life of approximately 70 months as of September 30, 2025.

We predominantly employ a per-registered-user pricing model, with incremental fees above certain contractual client minimum commitments for each licensed solution.

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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 June 30, 2025 and 2024, our total revenues were $112.1 million and $82.2 million, respectively, representing a 36.4% increase period-over-period.

For the six months ended June 30, 2025 and 2024, our total revenues were $209.9 million and $158.3 million, respectively, representing an increase of 32.6% period-over-period.

SaaS subscription revenues, as further described below, represented 94.5% and

94.7% of total revenues for the three and six months ended June 30, 2025, respectively, and 95.4% and 95.6% of total revenues for the three and six months ended June 30, 2024, respectively.

We incurred net losses of $13.6 million and $21.4 million for the three and six months ended June 30, 2025, respectively, and net losses of $12.3 million and $23.8 million for the three and six months ended June 30, 2024, respectively, largely on the basis of significant continued investment in sales, marketing, product development and post-sales client activities.

For the three months ended September 30, 2025 and 2024, our total revenues were $113.0 million and $85.9 million, respectively, representing a 31.5% increase period-over-period.

For the nine months ended September 30, 2025 and 2024, our total revenues were $322.8 million and $244.2 million, respectively, representing an increase of 32.2% period-over-period.

SaaS subscription revenues, as further described below, represented 95.5% and 94.9% of total revenues for the three and nine months ended September 30, 2025, respectively, and 95.5% and 95.6% of total revenues for the three and nine months ended September 30, 2024, respectively.

We incurred net losses of $14.8 million and $36.2 million for the three and nine months ended September 30, 2025, respectively, and net losses of $9.4 million and $33.2 million for the three and nine months ended September 30, 2024, respectively, largely on the basis of significant continued investment in sales, marketing, product development and post-sales client activities.

Recent Developments

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A key part of our strategy is to grow our FI client base.

As of June 30, 2025, we served 280 FIs through the Alkami Digital Banking Platform and more than 900 clients when including unique clients only subscribing to one or a combination of ACH Alert, Segmint, or MANTL 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.

As of September 30, 2025, we served 291 FIs through the Alkami Digital Sales and Service Platform and more than 1,000 clients when including unique clients only subscribing to one or a combination of ACH Alert, Segmint, or MANTL products.

Each of our digital sales and service platform 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.

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The depth of our product suite is a function of technology and platform partnerships.

Our platform model with more than 300 integrations as of June 30, 2025 enables us to deliver thousands of configurations aligned with the digital platform strategies adopted by our clients.

Our platform model with more than 300 integrations as of September 30, 2025 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.

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Client renewals 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 6 and 10 client renewals for the three and six months ended June 30, 2025, respectively.

We had 6 and 16 client renewals for the three and nine months ended September 30, 2025, respectively.

We expect client renewals to continue to play a key role in our future success.

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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 27.0% and 27.2% of our revenues for the three and six months ended June 30, 2025, respectively.

We remain committed to investing in our platform, notably through our research and development spend, which was 26.6% and 27.0% of our revenues for the three and nine months ended September 30, 2025, respectively.

Our future success will depend on our continued leadership in innovation.

Components of Results of Operations

Our client relationships are predominantly based on multi-year contracts for the Alkami Digital Banking Platform that have had an average contract life of approximately 70 months as of June 30, 2025.

We derive the majority of our revenues from SaaS subscription services charged for the use of our digital banking solution.

Our client relationships are predominantly based on multi-year contracts for the Alkami Digital Sales and Service Platform that have had an average contract life of approximately 70 months as of September 30, 2025.

We derive the majority of our revenues from SaaS subscription services charged for the use of our digital sales and service platform.

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 and termination fees for clients leaving our digital banking platform.

The promised consideration may include fixed or variable amounts and termination fees for clients leaving our digital sales and service platform.

For our clients with enterprise license contracts, they are invoiced on an agreed upon monthly rate throughout the contract term, which may include fixed monthly or annual rate escalations.

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SaaS subscription services also include annual and monthly charges for maintenance and support services, which are recognized on a straight-line basis over the contract term.

We receive implementation and other upfront fees for the implementation, configuration and integration of our digital banking platform.

We receive implementation and other upfront fees for the implementation, configuration and integration of our digital sales and service platform.

We typically invoice these services as a fixed price per contract.

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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 six months ended June 30, 2025 and 2024 by major source:

Three months ended June 30,

Six months ended June 30,

The following table disaggregates our revenues for the three and nine months ended September 30, 2025 and 2024 by major source:

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

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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.

These costs are deferred and amortization begins when our solution is made available to our client.

The amortization period is typically five to seven years, which represents the expected period of client benefit.

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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 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 six months ended June 30, 2025 was 58.6% and 58.8%, respectively, and 59.4% and 58.6% for the three and six months ended June 30, 2024, respectively.

The major components of cost of revenues are represented in the following table as percentages of revenues for the three and six months ended June 30, 2025 and 2024, respectively:

Three months ended June 30,

Six months ended June 30,

Our gross margin for the three and nine months ended September 30, 2025 was 56.8% and 58.1%, respectively, and 58.9% and 58.7% for the three and nine months ended September 30, 2024, respectively.

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, 2025 and 2024, respectively:

Three months ended September 30,

Nine months ended September 30,

(Cost component as a % of revenue) 2025 2024 2025 2024

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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 Banking Platform.

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 and Service Platform.

Sales and Marketing.

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Our effective tax rate differs from the statutory tax rate primarily due to the impact of the valuation allowance against our deferred tax assets and state tax expense.

As a result of our valuation allowance, benefit from income taxes consists primarily of state 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.

As a result of our valuation allowance, (benefit from) provision for income taxes consists primarily of state 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 Notes 3 and 10 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

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The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this filing.

The financial results of MANTL, for the period of March 18, 2025 through June 30, 2025, are included in the Company’s condensed consolidated financial statements and notes.

The following table presents our selected condensed consolidated statements of operations data for the three and six months ended June 30, 2025 and 2024.

Three months ended June 30,

Six months ended June 30,

The financial results of MANTL, for the period of March 18, 2025 through September 30, 2025, are included in the Company’s condensed consolidated financial statements and notes.

The following table presents our selected condensed consolidated statements of operations data for the three and nine months ended September 30, 2025 and 2024.

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

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Interest expense (2,978) (180) (6,967) (327)

Loss on financial instruments — (112) — —

Loss before income taxes

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$ (14,804) $ (9,442) $ (36,211) $ (33,192)

(1) Includes amortization of acquired technology of $4.9 million and $1.4 million for the three months ended June 30, 2025 and 2024, respectively, and $6.8 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively.

(1) Includes amortization of acquired technology of $4.9 million and $1.3 million for the three months ended September 30, 2025 and 2024, respectively, and $11.7 million and $4.0 million for the nine months ended September 30, 2025 and 2024, respectively.

(2) Includes stock-based compensation expenses as follows:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

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The following table presents our reconciliation of GAAP net loss to adjusted EBITDA for the periods indicated.

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

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(Benefit from) provision for income taxes (29) (19) (11,610) 355

Loss on financial instruments — 112 — —

Interest expense (income), net 1,952 (967) 3,681 (3,163)

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Stock-based compensation expense 20,729 15,257 60,246 43,822

Secondary offering costs (1)

Acquisition-related expenses 247 — 3,138 195

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$ 15,964 $ 8,318 $ 39,954 $ 16,681

(1) Pursuant to the requirements of the Fourth Amended and Restated Investors’ Rights Agreement, dated as of September 24, 2020, by and among the Company and the investors listed therein, the Company incurred secondary offering costs on behalf of the selling stockholders related to an underwritten secondary offering that closed on August 12, 2024.

(2) 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.

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We define adjusted EBITDA as net loss before (benefit from) provision for income taxes;

loss on financial instruments;

interest expense (income), net;

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stock-based compensation expense;

secondary offering costs;

acquisition-related expenses;

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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.

Comparison of Three and Six Months ended June 30, 2025 and 2024

Three months ended June 30,

Change Six months ended June 30,

Comparison of Three and Nine Months ended September 30, 2025 and 2024

Three months ended September 30,

Change Nine months ended September 30,

(in thousands) 2025 2024 $ % 2025 2024 $ %

Revenues $ 112,954 $ 85,906 $ 27,048 31.5 % $ 322,848 $ 244,193 $ 78,655 32.2 %

September 30,

Annual Recurring Revenue (ARR) $ 449,034 $ 342,101 $ 106,933 31.3 %

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Revenue per Registered User (RPU) $ 20.83 $ 17.54 $ 3.29 18.8 %

Revenues increased $29.9 million, or 36.4%, and $51.6 million, or 32.6%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

The increase of $29.9 million in revenues for the three months ended June 30, 2025 was primarily due to user growth on our digital banking platform from both existing client digital user growth and new client implementations, selling additional solutions to existing clients resulting in increased RPU, and higher termination fees from customers leaving our digital banking platform due to mergers and acquisitions.

The revenue contribution from the MANTL acquisition was $10.3 million for the three months ended June 30, 2025.

The increase of $51.6 million for the six months ended June 30, 2025 was primarily due to user growth on our digital banking platform from both existing client digital user growth and new client implementations, selling additional solutions to existing clients resulting in increased RPU, and higher termination fees from customers leaving our digital banking platform due to mergers and acquisitions.

Revenues increased $27.0 million, or 31.5%, and $78.7 million, or 32.2%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

The increase of $27.0 million in revenues for the three months ended September 30, 2025 was primarily due to user growth on our digital banking platform from both existing client digital user growth and new client implementations, selling additional solutions to existing clients resulting in increased RPU, and higher termination fees from customers leaving our digital banking platform due to mergers and acquisitions.

The revenue contribution from the MANTL acquisition was $11.0 million for the three months ended September 30, 2025.

The increase of $78.7 million for the nine months ended September 30, 2025 was primarily due to user growth on our digital banking platform from both existing client digital user growth and new client implementations, selling additional solutions to existing clients resulting in increased RPU, and higher termination fees from customers leaving our digital banking platform due to mergers and acquisitions.

Our existing clients added 1.4 million digital users and we implemented 32 new clients onto our platform representing 0.9 million digital users.

In addition, the revenue contribution from the MANTL acquisition was $11.7 million for the six months ended June 30, 2025.

In addition, the revenue contribution from the MANTL acquisition was $22.7 million for the nine months ended September 30, 2025.

Cost of Revenues

Three months ended June 30,

Change Six months ended June 30,

Three months ended September 30,

Change Nine months ended September 30,

(in thousands) 2025 2024 $ % 2025 2024 $ %

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Percentage of revenues 43.2 % 41.1 % 2.1 % 5.1 % 41.9 % 41.3 % 0.6 % 1.5 %

Cost of revenues increased $13.1 million, or 39.1%, and $21.0 million, or 32.1%, for the three and six months ended June 30, 2025, respectively compared to the same period in 2024.

Gross margin for the three months ended June 30, 2025 and 2024 was 58.6% and 59.4%, respectively.

The driver for the decrease in gross margin for the three months ended June 30, 2025 compared to the same period in 2024 is primarily related to the increased amortization of intangibles included in cost of revenues due to the acquisition of MANTL.

For the six months ended June 30, 2025, our revenue growth outpaced our cost of revenues growth, leading to an improved gross margin of 58.8% compared to a gross margin of 58.6% for the same period in 2024.

The increase in cost of revenues for the three months ended June 30, 2025, was primarily driven by $6.1 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, a $3.6 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL, a $2.5 million increase in personnel-related costs (which includes stock-based compensation of $0.4 million), $0.5 million in higher hosting costs, and net other miscellaneous costs of $0.4 million.

The increase in cost of revenues for the six months ended June 30, 2025, was primarily driven by $9.9 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, a $5.6 million increase in personnel-related costs (which includes stock-based compensation of $1.8 million, of which $1.0 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), a $4.1 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL, $0.6 million in higher hosting costs, and net other miscellaneous costs of $0.9 million.

Cost of revenues increased $13.5 million, or 38.3%, and $34.6 million, or 34.3%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

Our gross margin for the three and nine months ended September 30, 2025 was 56.8% and 58.1%, respectively, and 58.9% and 58.7% for the three and nine months ended September 30, 2024, respectively.

The driver for the decrease in gross margin for the three and nine months ended September 30, 2025 compared to the same periods in 2024 is primarily related to the increased amortization of intangible assets included in cost of revenues due to the acquisition of MANTL.

The increase in cost of revenues for the three months ended September 30, 2025, was primarily driven by $5.9 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, a $3.6 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL, a $3.1 million increase in personnel-related costs (which includes stock-based compensation of $0.7 million), $0.6 million in higher hosting costs, and higher net other miscellaneous costs of $0.3 million.

The increase in cost of revenues for the nine months ended September 30, 2025, was primarily driven by $15.8 million in higher costs of our third-party partners where we resell their solutions as part of the digital platform, a $9.1 million increase in personnel-related costs (which includes stock-based compensation of $2.5 million, of which $1.0 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), a $7.7 million increase in amortization of intangible assets, primarily related to the acquisition of MANTL, $1.2 million in higher hosting costs, and higher net other miscellaneous costs of $0.8 million.

Operating Expenses

Three months ended June 30,

Change Six months ended June 30,

Three months ended September 30,

Change Nine months ended September 30,

2025 2024 $ % 2025 2024 $ %

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Research and Development

Research and development expenses increased $6.3 million, or 26.4%, and $10.4 million, or 22.2%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended June 30, 2025, the increase was primarily due to a $5.4 million increase in personnel-related costs (which includes stock-based compensation of $1.2 million) resulting from headcount growth in our engineering, information technology and product teams dedicated to platform enhancements and innovation, $0.5 million in higher hosting costs, and net other miscellaneous costs of $0.5 million.

These expenses were partially offset by an increase of $0.1 million in capitalized development costs.

For the six months ended June 30, 2025, the increase was primarily due to an $8.3 million increase in personnel-related costs (which includes stock-based compensation of $2.6 million, of which $1.0 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), resulting from headcount growth in our engineering, information technology and product teams dedicated to platform enhancements and innovation, $1.3 million in higher costs for consulting, $0.8 million in higher hosting costs, and $0.6 million in higher various other net costs.

Research and development expenses increased $6.0 million, or 24.7%, and $16.3 million, or 23.1%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended September 30, 2025, the increase was primarily due to a $5.5 million increase in personnel-related costs (which includes stock-based compensation of $1.2 million) resulting from headcount growth in our engineering, information technology and product teams dedicated to platform enhancements and innovation, $0.4 million in higher hosting costs, and higher net other miscellaneous costs of $0.1 million.

For the nine months ended September 30, 2025, the increase was primarily due to a $13.8 million increase in personnel-related costs (which includes stock-based compensation of $3.8 million, of which $1.0 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), resulting from headcount growth in our engineering, information technology and product teams dedicated to platform enhancements and innovation, $1.2 million in higher hosting costs, $1.0 million in higher costs for consulting, and $0.8 million in higher various other net costs.

These expenses were partially offset by an increase of $0.5 million in capitalized development costs.

Sales and Marketing

Sales and marketing expenses increased $6.0 million, or 35.5%, and $10.1 million or 32.7%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended June 30, 2025, the increase was primarily due to a $5.5 million increase in personnel-related costs (which includes stock-based compensation of $1.3 million), resulting from headcount growth in our sales and marketing teams.

In addition, we incurred $0.4 million in higher consulting costs and $0.1 million in higher various other net costs.

For the six months ended June 30, 2025, the increase was primarily due to an $8.3 million increase in personnel-related costs (which includes stock-based compensation of $2.1 million, of which $0.3 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), resulting from headcount growth in our sales and marketing teams.

In addition, we incurred $1.0 million in higher costs related to industry conferences and trade shows, including enhanced client experiences at our in-person client conference, Co:lab, $0.4 million in higher consulting costs, and $0.4 million in higher various other costs.

Sales and marketing expenses increased $4.9 million, or 34.2%, and $15.0 million or 33.2%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended September 30, 2025, the increase was primarily due to a $4.2 million increase in personnel-related costs (which includes stock-based compensation of $1.2 million), resulting from headcount growth in our sales and marketing teams.

In addition, we incurred $0.4 million in higher consulting costs and $0.3 million in higher net other miscellaneous costs.

For the nine months ended September 30, 2025, the increase was primarily due to a $12.2 million increase in personnel-related costs (which includes stock-based compensation of $3.3 million, of which $0.3 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), resulting from headcount growth in our sales and marketing teams.

In addition, we incurred $0.9 million in higher consulting costs, $0.8 million in higher costs related to industry conferences and trade shows, including enhanced client experiences at our in-person client conference, Co:lab, $0.5 million higher travel costs for the sales team, and $0.6 million in higher net other miscellaneous costs.

General and Administrative

General and administrative expenses increased by $5.4 million, or 26.3%, and $9.9 million, or 24.8%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended June 30, 2025, the increase was primarily due to a $3.9 million increase in personnel-related costs (which includes stock-based compensation of $1.7 million), $0.5 million in higher audit and consulting costs, $0.4 million of higher software costs, and $0.6 million in higher various other net costs.

For the six months ended June 30, 2025, the increase was primarily due to a $7.9 million increase in personnel-related costs (which includes stock-based compensation of $4.5 million, of which $1.6 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), $0.8 million in higher software costs, $0.6 million in higher audit and consulting costs, and $0.6 million in higher various other net costs.

General and administrative expenses increased by $3.5 million, or 15.8%, and $13.4 million, or 21.6%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

For the three months ended September 30, 2025, the increase was primarily due to a $3.7 million increase in personnel-related costs (which includes stock-based compensation of $2.3 million), $0.3 million in higher audit and consulting costs and $0.3 million of higher software costs.

These expenses were partially offset by a $0.8 million decrease in costs associated with secondary offerings, as no such offering occurred in the current period.

For the nine months ended September 30, 2025, the increase was primarily due to a $11.6 million increase in personnel-related costs (which includes stock-based compensation of $6.8 million, of which $1.6 million was related to certain unvested equity awards settled in cash in conjunction with the acquisition of MANTL), $1.1 million in higher software costs, $0.9 million in higher audit and consulting costs and $0.3 million in higher net other miscellaneous costs.

These expenses were partially offset by a decrease of $0.5 million in insurance costs.

Acquisition-Related Expenses

Acquisition-related expenses was $0.5 million and $2.9 million for the three and six months ended June 30, 2025, respectively, primarily related to insurance, legal, consulting, and professional fees incurred for the acquisition of MANTL.

Acquisition-related expenses were $0.2 million and $3.1 million for the three and nine months ended September 30, 2025, respectively, primarily related to insurance, legal, consulting, and professional fees incurred for the acquisition of MANTL.

Amortization of Acquired Intangibles

Amortization of acquired intangibles was $1.7 million and $2.3 million for the three and six months ended June 30, 2025, respectively, and $0.4 million and $0.7 million for the three and six months ended June 30, 2024, respectively.

Amortization of acquired intangibles increased for the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily due to the acquisition of intangible assets as part of the acquisition of MANTL in March 2025 and related additional amortization.

Amortization of acquired intangibles was $1.7 million and $4.0 million for the three and nine months ended September 30, 2025, respectively, and $0.4 million and $1.1 million for the three and nine months ended September 30, 2024, respectively.

Amortization of acquired intangibles increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024, primarily due to the acquisition of intangible assets as part of the acquisition of MANTL in March 2025 and related additional amortization.

Loss on Impairment of Intangible Assets

Loss on impairment of intangible assets was $1.7 million for the six months ended June 30, 2025, related to impairment of certain historical developed technology intangible assets, customer relationship intangible assets, and capitalized developed software assets (included in property and equipment, net on the condensed consolidated balance sheets) as a result of the acquisition of MANTL.

Loss on impairment of intangible assets was $1.7 million for the nine months ended September 30, 2025, related to impairment of certain historical developed technology intangible assets, customer relationship intangible assets, and capitalized developed software assets (included in property and equipment, net on the condensed consolidated balance sheets) as a result of the acquisition of MANTL.

Non-Operating Income (Expense)

Non-operating expense increased by $3.1 million and $3.9 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to a $3.2 million and $3.9 million increase in net interest expense, respectively.

Non-operating expense increased by $2.9 million and $6.8 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, due to the increase in net interest expense.

(Benefit from) Provision for Income Taxes

The Company recorded income tax benefit of $4.3 million and $11.6 million for the three and six months ended June 30, 2025, respectively, resulting in an effective tax rate of 24.0% and 35.1%, respectively, compared to income tax expense of $0.2 million and $0.4 million for the three and six months ended June 30, 2024, respectively, resulting in an effective tax rate of (1.5)% and (1.6)%, respectively.

The Company’s effective tax rates for the three and six months ended June 30, 2025 and 2024 differ from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense, 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.

The Company recorded an 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, compared to income tax benefit of less than $0.1 million and income tax expense of $0.4 million for the three and nine months ended September 30, 2024, respectively, resulting in an effective tax rate of 0.2% and (1.1)%, respectively.

The Company’s effective tax rates for the three and nine months ended September 30, 2025 and 2024 differ from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense, 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.

The acquisition of MANTL resulted in the recognition of a net deferred tax liability of $12.6 million.

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Liquidity and Capital Resources

As of June 30, 2025, we had $87.1 million in cash and cash equivalents and marketable securities, and an accumulated deficit of $497.6 million.

Our net losses have been driven by our investments in developing our digital banking platform, expanding our sales, marketing and implementation organizations and scaling our administrative functions to support our rapid growth.

As of September 30, 2025, we had $90.9 million in cash and cash equivalents and marketable securities, and an accumulated deficit of $512.4 million.

Our net losses have been driven by our investments in developing our digital sales and 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 under the Amended Credit Agreement (the “Revolving Facility”), and cash from our balance sheet.

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The following table summarizes our cash flows for the periods indicated:

Six months ended June 30,

Nine months ended September 30,

(in thousands) 2025 2024

Net cash (used in) provided by operating activities $ (4,507) $ 1,499

Net cash provided by operating activities $ 26,300 $ 12,486

Net cash (used in) provided by investing activities $ (393,464) $ 26,046

Net cash provided by (used in) financing activities $ 354,934 $ (3,269)

Net Cash (Used in) Provided by Operating Activities

During the six months ended June 30, 2025, net cash used in operating activities was $4.5 million, which consisted of a net loss of $21.4 million, adjusted by non-cash charges of $36.7 million and net cash outflows from the change in net operating assets and liabilities of $19.8 million.

The non-cash charges were primarily comprised of depreciation and amortization expense of $11.2 million, stock-based compensation expense of $35.6 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 $0.2 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 $7.5 million increase in

accounts receivable, a $15.8 million increase in prepaid expenses and other assets (inclusive of $2.9 million of prepaid stock-based compensation related to the acquisition of MANTL), and a $2.3 million increase in deferred costs, partially offset by a $4.2 million increase in accounts payable and accrued liabilities and a $1.5 million increase in deferred revenues.

The increase in prepaid expenses and other assets was primarily due to a $9.1 million pending vendor refund receivable as of June 30, 2025.

The Company received the $9.1 million vendor refund in full in July 2025, subsequent to the period end.

During the six months ended June 30, 2024, net cash provided by operating activities was $1.5 million, which consisted of a net loss of $23.8 million, adjusted by non-cash charges of $33.1 million and net cash outflows from the change in net operating assets and liabilities of $7.8 million.

The non-cash charges were primarily comprised of depreciation and amortization expense of $5.2 million, stock-based compensation expense of $28.6 million, and net other non-cash charges of $0.1 million, partially offset by accrued interest on marketable securities, net of $0.8 million.

The net cash outflows from the change in our net operating assets and liabilities were primarily due to a $3.5 million increase in accounts receivable, a $3.8 million increase in prepaid expenses and other current assets, a $0.7 million decrease in accounts payable and accrued liabilities and a $2.6 million increase in deferred costs, partially offset by a $2.6 million increase in deferred revenues.

Net cash provided by financing activities $ 330,121 $ 1,497

Net Cash Provided by Operating Activities

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.

During the nine months ended September 30, 2024, net cash provided by operating activities was $12.5 million, which consisted of a net loss of $33.2 million, adjusted by non-cash charges of $51.0 million and net cash outflows from the change in net operating assets and liabilities of $5.3 million.

The non-cash charges were primarily comprised of depreciation and amortization expense of $7.9 million, stock-based compensation expense of $43.8 million, and other non-cash charges of $0.2 million, partially offset by accrued interest on marketable securities, net of $0.9 million.

The net cash outflows from the change in our net operating assets and liabilities were primarily due to a $6.9 million increase in accounts receivable, $5.1 million increase in deferred costs, and a $2.6 million increase in prepaid expenses and other assets, partially offset by a $6.3 million increase in accounts payable and accrued liabilities and a $3.0 million increase in deferred revenues.

Net Cash (Used in) Provided by Investing Activities

During the six months ended June 30, 2025, net cash used in investing activities was $392.4 million, primarily consisting of $375.5 million related to our acquisition of MANTL, $30.0 million in purchases of marketable securities, $3.2 million related to capitalized software development costs and $0.9 million related to capital expenditures related to updates for computers and other equipment, partially offset by $17.2 million in proceeds from sales, maturities, and redemptions of marketable securities.

During the six months ended June 30, 2024, net cash provided by investing activities was $22.3 million, primarily consisting of $41.6 million in proceeds from maturities and redemptions of marketable securities, partially offset by $15.6 million in purchases of marketable securities, $3.0 million related to capitalized software development costs and $0.7 million related to capital expenditures related to updates for computer and other equipment.

Net Cash Provided by (Used in) Financing Activities

For the six months ended June 30, 2025, net cash provided by financing activities was $354.9 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, $2.3 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, $10.0 million of payments on revolving loan, and $1.9 million of debt issuance costs paid.

For the six months ended June 30, 2024, net cash used in financing activities was $3.3 million, which was primarily due to $12.8 million in payments for taxes related to net settlement of equity awards, partially offset by $6.9 million in proceeds from the exercise of stock options to purchase 1.0 million shares of our common stock and proceeds from issuances under the Employee Stock Purchase Plan of $2.6 million.

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.

During the nine months ended September 30, 2024, net cash provided by investing activities was $26.0 million, primarily consisting of $62.8 million in proceeds from maturities and redemptions of marketable securities, partially offset by $30.7 million in purchases of marketable securities, $5.0 million related to capitalized software development costs and $1.0 million related to capital expenditures related to updates for computer and other equipment.

Net Cash Provided by Financing Activities

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 Employee Stock Purchase Plan (“ESPP”), $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.

For the nine months ended September 30, 2024, net cash provided by financing activities was $1.5 million, which was primarily due to $12.1 million in proceeds from the exercise of stock options to purchase 1.8 million shares of our common stock and proceeds from issuances under the ESPP of $2.6 million, partially offset by $12.8 million in payments for taxes related to net settlement of equity awards and $0.4 million of debt issuance costs paid.

Debt Transactions

On February 27, 2025, the Company entered into the Third Amendment and subsequently borrowed $60 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of MANTL.

As of June 30, 2025, $50 million remained outstanding on the Revolving Facility.

As of September 30, 2025, $25 million remained outstanding on the Revolving Facility.

Refer to Note 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for more information regarding the Amended Credit Agreement.

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Refer to Note 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for more information regarding the 2030 Convertible Notes and Capped Calls.

Total interest expense, including commitment fees and unused line fees, was $3.2 million and $4.0 million for the three and six months ended June 30, 2025, respectively, and $0.1 million for both the three and six months ended June 30, 2024.

Interest expense related to the 2030 Convertible Notes and Revolving Facility was $1.7 million and $1.2 million, respectively, for the three months ended June 30, 2025, and $2.1 million and $1.5 million, respectively, for the six months months ended June 30, 2025.

Total interest expense, including commitment fees and unused line fees, was $3.0 million and $7.0 million for the three and nine months ended September 30, 2025, respectively, and $0.2 million and $0.3 million for the three and nine months ended September 30, 2024, respectively.

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 March 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.

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See Note 8 to the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.

Unamortized discounts and debt issuance costs totaled $11.2 million and $0.5 million as of June 30, 2025 and December 31, 2024, respectively.

Amortization expense related to unamortized discounts and debt issuance costs (included in interest expense in the condensed consolidated statements of operations) totaled $0.5 million and $0.6 million for the three and six months ended June 30, 2025, respectively, and $0.1 million for both the three and six months ended June 30, 2024.

Unamortized discounts and debt issuance costs totaled $10.6 million and $0.5 million as of September 30, 2025 and December 31, 2024, respectively.

Amortization expense related to unamortized discounts and debt issuance costs (included in interest expense in the condensed consolidated statements of operations) totaled $0.6 million and $1.4 million for the three and nine months ended September 30, 2025, respectively, and $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively.

Contractual Obligations and Commitments

There were no material changes to our contractual obligations and commitments as of June 30, 2025, compared to those discussed as of December 31, 2024 in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.

There were no material changes to our contractual obligations and commitments as of September 30, 2025, compared to those discussed as of December 31, 2024 in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis