alk-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-40321

ALKAMI TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		45-3060776
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

5601 Granite Parkway,	Suite 120
Plano,	TX	75024
(Address of Principal Executive Offices)		(Zip Code)

(877) 725-5264

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	ALKT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of registrant’s common stock outstanding as of March 31, 2026 was 107,019,174.


TABLE OF CONTENTS


PART I ‑ FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Operations	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27

PART II ‑ OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29

Signatures		30

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(UNAUDITED)


	March 31,		December 31,
	2026		2025
Assets
Current assets
Cash and cash equivalents	$	40,412	$	63,457
Marketable securities	37,234		35,635
Accounts receivable, net	51,435		51,494
Deferred costs, current	16,385		15,894
Prepaid expenses and other current assets	24,070		20,736
Total current assets	169,536		187,216
Property and equipment, net	27,888		26,652
Right-of-use assets	17,774		13,462
Deferred costs, net of current portion	48,224		47,430
Intangibles, net	152,323		158,943
Goodwill	403,404		403,404
Other assets	10,190		10,120
Total assets	$	829,339	$	847,227
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	4,039	$	5,842
Accrued liabilities	33,539		47,359
Deferred revenues, current portion	34,004		34,770
Lease liabilities, current portion	2,178		1,576
Total current liabilities	73,760		89,547
Deferred revenues, net of current portion	25,815		25,800
Deferred income taxes	2,835		2,625
Convertible senior notes, net	336,706		336,230
Revolving loan	—		15,000
Lease liabilities, net of current portion	19,327		15,739
Other non-current liabilities	242		237
Total liabilities	458,685		485,178
Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized; and 107,019,174 and 106,101,875 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	107		106
Additional paid-in capital	904,363		885,796
Accumulated deficit	(533,816)		(523,853)
Total stockholders’ equity	370,654		362,049
Total liabilities and stockholders' equity	$	829,339	$	847,227

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(UNAUDITED)


	Three months ended March 31,
	2026		2025
Revenues	$	126,138	$	97,835
Cost of revenues(1)	52,269		40,075
Gross profit	73,869		57,760
Operating expenses:
Research and development	31,000		26,885
Sales and marketing	19,955		17,899
General and administrative	26,912		27,804
Amortization of acquired intangibles	1,707		568
Total operating expenses	79,574		73,156
Loss from operations	(5,705)		(15,396)
Non-operating income (expense):
Interest income	762		1,096
Interest expense	(2,267)		(801)
Loss before income taxes	(7,210)		(15,101)
Provision for (benefit from) income taxes	2,753		(7,285)
Net loss	$	(9,963)	$	(7,816)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.09)	$	(0.08)
Weighted-average number of shares of common stock outstanding:
Basic and diluted	106,387,125		102,430,673

(1) Includes amortization of acquired technology of $4.9 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(UNAUDITED)


		Three months ended March 31, 2026
	Common Stock		Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
		Shares			Amount
Balance January 1, 2026		106,101,875	$	106		$	885,796	$	(523,853)	$	362,049
Stock-based compensation		—	—			17,594		—		17,594
Issuance of common stock upon restricted stock unit vesting		805,506	1			(1)		—		—
Exercised stock options		111,793	—			974		—		974
Net loss		—	—			—		(9,963)		(9,963)
Balance March 31, 2026		107,019,174	$	107		$	904,363	$	(533,816)	$	370,654


		Three months ended March 31, 2025
	Common Stock		Additional Paid-in Capital			Accumulated Deficit		Total Stockholders’ Equity
		Shares			Amount
Balance January 1, 2025		102,088,783	$	102		$	833,129	$	(476,201)	$	357,030
Stock-based compensation		—	—			16,365		—		16,365
Issuance of common stock upon restricted stock unit vesting		697,506	1			(1)		—		—
Exercised stock options		233,687	—			1,523		—		1,523
Capped calls		—	—			(33,879)		—		(33,879)
Share-based compensation replacement awards related to merger consideration and attributable to pre-combination services		—	—			821		—		821
Net loss		—	—			—		(7,816)		(7,816)
Balance March 31, 2025		103,019,976	$	103		$	817,958	$	(484,017)	$	334,044

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)


	Three months ended March 31,
	2026		2025
Cash flows from operating activities:
Net loss	$	(9,963)	$	(7,816)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	8,124		3,430
Accrued interest on marketable securities, net	46		(279)
Stock-based compensation expense	17,310		16,093
Amortization of discount and debt issuance costs	548		192
Loss on impairment of intangible assets	—		1,655
Deferred taxes	210		(8,312)
Changes in operating assets and liabilities:
Accounts receivable	59		(6,572)
Prepaid expenses and other assets	(3,639)		(5,416)
Accounts payable and accrued liabilities	(15,740)		(2,002)
Deferred costs	(1,004)		(158)
Deferred revenues	(751)		3,521
Net cash used in operating activities	(4,800)		(5,664)
Cash flows from investing activities:
Purchase of marketable securities	(17,595)		(21,883)
Proceeds from sales, maturities, and redemptions of marketable securities	15,950		9,900
Purchases of property and equipment	(387)		(485)
Capitalized software development costs	(2,187)		(1,446)
Acquisition of business, net of cash acquired	—		(375,499)
Net cash used in investing activities	(4,219)		(389,413)
Cash flows from financing activities:
Payments on revolving loan	(15,000)		—
Debt issuance costs paid	—		(779)
Proceeds from issuance of convertible senior notes	—		335,513
Proceeds from borrowing under revolving loan	—		60,000
Purchase of capped calls	—		(33,879)
Proceeds from stock option exercises	974		1,523
Net cash (used in) provided by financing activities	(14,026)		362,378
Net decrease in cash and cash equivalents	(23,045)		(32,699)
Cash and cash equivalents, beginning of period	63,457		94,359
Cash and cash equivalents, end of period	$	40,412	$	61,660

Supplemental information and non-cash activities
Accrued but unpaid debt issuance costs	$	—	$	1,119

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

ALKAMI TECHNOLOGY, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

(Unaudited)

Note 1. Organization

Description of Business

Alkami Technology, Inc. (the “Company”) is a cloud-based digital sales and service platform provider. The Company inspires and empowers community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States. The Company’s solution, the Alkami Digital Sales & Service Platform, consisting of the Alkami Digital Banking Platform, Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture. The Company cultivates deep relationships with its clients through long-term, subscription-based contractual arrangements, aligning its growth with its clients’ success and generating an attractive unit economic model. The Company was incorporated in Delaware in August 2011, and its principal offices are located in Plano, Texas.

Note 2. Summary of Significant Accounting Policies

The accompanying Condensed Consolidated Financial Statements reflect the application of significant accounting policies as described below.

Basis of Presentation and Consolidation

The interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All intercompany accounts and transactions are eliminated.

In the Company's opinion, the accompanying interim Unaudited Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim Unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes for the fiscal year ended December 31, 2025, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. Operating results for the three months ended March 31, 2026 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2026.

The Company has no sources of other comprehensive income, and accordingly, net loss presented each period is the same as comprehensive loss.

The Company has reclassified certain prior period amounts in the Unaudited Condensed Consolidated Statements of Operations and Notes to the Unaudited Condensed Consolidated Financial Statements to conform to current periods presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates and assumptions include determining the timing and amount of revenue recognition and business combinations.

Operating Segment

The Company's chief operating decision maker, the Chief Executive Officer, assesses performance for the Company's single reportable segment and decides how to allocate resources based on the Company’s net loss (see the Unaudited Condensed Consolidated Statements of Operations).

See the accompanying Condensed Consolidated Financial Statements for single reportable segment-level financial information, total assets, revenues from external customers, depreciation and amortization expense, interest income and interest expense, provision for (benefit from) income taxes, and significant non-cash transactions.

Recent Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). The amendments in the ASU are intended to simplify the capitalization guidance by removing all references to software development project stages so that guidance is neutral to different software development methods. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption on its Condensed Consolidated Financial Statements.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the Condensed Consolidated Statements of Operations, as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adoption on its Condensed Consolidated Financial disclosures.

Note 3. Business Combination

MANTL

On March 17, 2025, the Company consummated its previously announced merger with Fin Technologies, Inc., dba MANTL (“MANTL”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated February 27, 2025, with MANTL surviving as a wholly owned subsidiary of the Company. MANTL provides onboarding and account opening solutions that allow financial institutions to acquire commercial, business and retail customers through a variety of channels for many deposit account types.

The aggregate consideration paid in exchange for all of the outstanding equity interests of MANTL was approximately $375 million, net of cash acquired (the "Merger Consideration"). A portion of the Merger Consideration of approximately $9.1 million was placed into escrow to secure certain post-closing obligations as defined in the Merger Agreement.

As of December 31, 2025, the allocation of the purchase price for MANTL had been finalized. The preliminary purchase price allocations were based upon the preliminary valuation of assets and liabilities. These estimates and assumptions were subject to change as the Company obtained additional information during the measurement period. The following table summarizes the fair value of the amounts recognized as of the acquisition date for each major class of asset acquired or liability assumed, as well as adjustments made during the measurement period:


(in thousands)	Preliminary Fair Value as of March 17, 2025		Measurement Period Adjustments		Adjusted Fair Value as of December 31, 2025
Cash	$	2,784	$	—	$	2,784
Trade accounts receivables	1,479		—		1,479
Prepaid expenses and other current assets	2,826		105		2,931
Property and equipment, net	217		—		217
Goodwill	252,108		3,246		255,354
Intangible assets	153,500		—		153,500
Right-of-use assets	336		—		336
Total assets acquired	$	413,250	$	3,351	$	416,601
Accounts payable	$	1,653	$	—	$	1,653
Accrued liabilities	1,163		—		1,163
Lease liabilities, current portion	180		—		180
Deferred revenues, current portion	12,056		(409)		11,647
Deferred tax liability	8,836		3,760		12,596
Lease liabilities, net of current portion	167		—		167
Deferred revenues, net of current portion	10,091		—		10,091
Total liabilities assumed	34,146		3,351		37,497
Net assets acquired	$	379,104	$	—	$	379,104
Less cash acquired	(2,784)		—		(2,784)
Less stock-based compensation replacement awards related to merger consideration and attributable to pre-combination services	(821)		—		(821)
Total cash consideration for acquisition, less cash acquired	$	375,499	$	—	$	375,499

Measurement period adjustments, finalized as of December 31, 2025, were related to post-closing working capital adjustments, a deferred revenue adjustment, and assumption of deferred tax liabilities.

The table below outlines the purchased identifiable intangible assets:


	Weighted-Average Amortization Period	Total
	(in years)	(in thousands)
Customer relationships	15	$	72,500
Developed technology	5	75,300
Tradenames	10	5,700
Total identifiable intangible assets		$	153,500

Goodwill resulted from the acquisition as it is intended to augment and diversify the Company’s single reportable segment and provide a complementary solution to its existing platform offering. The Company accounted for the acquisition as a business combination. As a result of the acquisition of the stock of MANTL, the goodwill is not deductible for tax purposes.

The Company estimated and recorded a net deferred tax liability of $12.6 million after offsetting the acquired available tax attributes with the identifiable intangible assets shown in the table above.

In connection with the acquisition of MANTL, the vesting of certain outstanding unvested equity awards was accelerated. These awards were settled in cash upon the closing of the transaction and were accounted for as post-combination stock-based compensation expense. As a result, the Company recognized stock-based compensation expense of $3.9 million, of which $1.0 million, $1.0 million, $0.3 million, and $1.6 million are included in cost of revenues, research and development, sales and marketing, and general and administrative, respectively, in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2025.

For the three months ended March 31, 2026 and 2025, the Company recognized acquisition-related expenses of $0.4 million and $2.4 million, respectively, related to the acquisition of MANTL. Acquisition-related expenses are included in general and administrative in the Condensed Consolidated Statements of Operations.

The revenue contribution from the MANTL acquisition was $14.9 million for the three months ended March 31, 2026 and $1.4 million for the period of March 18, 2025 through March 31, 2025.

Note 4. Property and Equipment, Net

Depreciation and amortization expense was $1.5 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively.

Property and equipment, net, includes the following amounts at March 31, 2026 and December 31, 2025:


(in thousands)	Useful Life	March 31, 2026		December 31, 2025
Capitalized software development costs	5 years	30,274		27,803
Equipment and software	3 to 5 years	3,591		3,283
Leasehold improvements	3 to 10 years	10,233		10,230
		$	44,098	$	41,316
Less: accumulated depreciation and amortization		(16,210)		(14,664)
Property and equipment, net		$	27,888	$	26,652

See Note 15 for information related to a capitalized software development costs impairment for the three months ended March 31, 2025.

Note 5. Revenues and Deferred Costs

The following table disaggregates the Company's revenue by major source for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
(in thousands)	2026		2025
SaaS subscription services	$	120,778	$	92,808
Implementation services	3,659		2,272
Other services	1,701		2,755
Total revenues	$	126,138	$	97,835

The Company recognized approximately $12.5 million of revenue during the three months ended March 31, 2026 that was included in deferred revenues in the accompanying Condensed Consolidated Balance Sheets as of the beginning of the reporting period. For those contracts that were wholly or partially unsatisfied as of March 31, 2026, the Company’s remaining performance obligation totaled approximately $1.7 billion. The Company expects to recognize approximately 50.2% of these remaining obligations as revenue over the next 24 months, an additional 33.7% in the next 25 to 48 months, and the remaining balance thereafter. This estimate does not include estimated consideration for excess user and transaction processing fees that the Company expects to earn under its subscription contracts.

Contract assets totaled $3.8 million and $3.6 million as of March 31, 2026 and December 31, 2025, respectively, which are included in other assets in the accompanying Condensed Consolidated Balance Sheets.

Deferred Cost Recognition

The Company capitalized $1.5 million and $1.0 million in deferred commissions costs during the three months ended March 31, 2026 and 2025, respectively, and recognized amortization of $1.9 million and $1.5 million during the three months ended March 31, 2026 and 2025, respectively. Amortization expense is included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Operations. Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying Condensed Consolidated Balance Sheets in the amount of $32.6 million and $32.9 million as of March 31, 2026 and December 31, 2025, respectively.

The Company capitalized implementation costs of $3.6 million and $2.5 million during the three months ended March 31, 2026 and 2025, respectively, and recognized amortization of $2.0 million and $1.4 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense is included in cost of revenues in the accompanying Condensed Consolidated Statements of Operations. These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying Condensed Consolidated Balance sheets in the amount of $32.0 million and $30.4 million as of March 31, 2026 and December 31, 2025, respectively.

The Company periodically reviews the carrying amount of deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. No material impairment losses were recognized in relation to these capitalized costs for the three months ended March 31, 2026 and 2025.

Note 6. Accounts Receivable, net

Accounts receivable, net includes the following amounts at March 31, 2026 and December 31, 2025:


	March 31,		December 31,
(in thousands)	2026		2025
Trade accounts receivable	$	44,310	$	44,136
Unbilled receivables	7,741		7,914
Total receivables	52,051		52,050
Allowance for credit losses	(460)		(460)
Reserve for estimated credits	(156)		(96)
Total accounts receivable, net	$	51,435	$	51,494

Note 7. Accrued Liabilities

Accrued liabilities consisted of the following at March 31, 2026 and December 31, 2025:


	March 31,		December 31,
(in thousands)	2026		2025
Bonus accrual	$	4,317	$	15,865
Commissions accrual	966		4,090
Client refund liability	538		1,388
Self-insured reserve	1,830		2,040
Accrued third-party solution costs	10,167		10,154
Accrued vendor purchases	7,211		6,113
Other accrued liabilities	8,510		7,709
Total accrued liabilities	$	33,539	$	47,359

Note 8. Debt

Amended Credit Facility

On February 27, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, and other lenders party thereto. The Third Amendment, among other things, (i) extended the maturity date of the revolving commitment from April 29, 2027 to February 27, 2030, (ii) increased the amount of the revolving loan commitment by $100 million, for a total revolving commitment of $225 million (the “Revolving Facility”), (iii) extended the Financial Covenant Trigger Date (as defined therein) to December 31, 2026 or such earlier date as designated by the Company, (iv) reduced the applicable interest rate margins (1) prior to the Financial Covenant Trigger Date, from SOFR plus 3.00% to 3.50% per annum to SOFR plus 2.75% to 3.25% per annum, based on the Recurring Revenue Leverage Ratio (as defined therein) and (2) on or after the Financial Covenant Trigger Date, from SOFR plus 1.50% to 3.00% per annum to SOFR plus 1.25% to 2.50% per annum, based on the Consolidated Total Net Leverage Ratio (as defined therein), (v) permitted the acquisition of MANTL pursuant to the terms of the Merger Agreement, (vi) permitted certain Permitted Convertible Indebtedness and Permitted Equity Derivative Transactions (as such terms are defined therein), subject to certain restrictions, and (vii) modified certain covenants.

Revolving Facility loans under the Amended Credit Agreement may be voluntarily prepaid and re-borrowed. The Amended Credit Agreement previously provided for a term loan, which was fully repaid in December 2023 and cannot be re-borrowed. The Company had borrowings of $60 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of MANTL. The Company repaid the remaining $15.0 million outstanding during the three months ended March 31, 2026. As of March 31, 2026, there were no borrowings outstanding under the Revolving Facility. The interest rate in effect for the Revolving Facility as of March 31, 2025 was 9.75%. In April 2025, the rate decreased to 7.68%, in July 2025, the rate increased to approximately 7.70%, and in December 2025, the rate decreased to 7.13%, which remained the effective interest rate as of December 31, 2025. In January 2026, the rate decreased to 7.02%, which remained the effective interest rate as of March 31, 2026. Interest expense related to the outstanding borrowings on the Revolving Facility was $0.2 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Obligations under the Amended Credit Agreement are guaranteed by the Company’s subsidiaries and secured by all or substantially all of the assets of the Company and its subsidiaries pursuant to an Amended and Restated Guarantee and Collateral Agreement.

The Amended Credit Agreement contains customary affirmative and negative covenants. Before the Financial Covenant Trigger Date, the following covenants are applicable: (i) an annual recurring revenue growth covenant requiring the loan parties to have recurring revenues in any four consecutive fiscal quarter period in an amount that is at least 10% greater than the recurring revenues for the corresponding four consecutive quarter period in the previous year; and (ii) a liquidity (defined as the aggregate amount of cash in bank accounts subject to a control agreement plus availability under the Revolving Facility) covenant, requiring the loan parties to have liquidity, tested on the last day of each calendar month, of $35.0 million or more. After the Financial Covenant Trigger Date, the existing annual recurring revenue growth and liquidity financial covenants are no longer applicable, and the following covenants take effect: (i) a Consolidated Total Net Leverage Ratio requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 5.50:1.00; (ii) a Consolidated Interest Coverage Ratio (as defined therein) requiring the ratio, for any fiscal quarter ending as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be more than 3.00:1.00; and (iii) a Consolidated Senior Net Leverage Ratio (as defined therein) requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 3.50:1.00.

The Third Amendment revised the free cash flow covenant, as calculated at the last day of each fiscal quarter for the period of 12 consecutive months then ending, requiring free cash flow to be not less than $(25.0) million for the fiscal quarters ending on or prior to September 30, 2025 and requiring free cash flow to be not less than $0 for the fiscal quarters ending on or after December 31, 2025 and on or prior to September 30, 2026.

The Amended Credit Agreement also contains customary events of default which, if they occur, could result in the termination of commitments under the Amended Credit Agreement, the declaration that all outstanding loans are immediately due and payable in whole or in part, and the requirement to maintain cash collateral deposits in respect of outstanding letters of credit. The Company was in compliance with all covenants as of March 31, 2026.

2030 Convertible Notes

On March 13, 2025, the Company issued $345 million principal amount of 1.50% convertible senior notes due March 15, 2030 (the “2030 Convertible Notes” or “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 13, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2030 Convertible Notes are the Company’s senior, unsecured obligations and bear interest at a rate of 1.50% per year payable semiannually in arrears on March 15 and September 15 of each year, which began on September 15, 2025. Each $1,000 principal amount of the 2030 Convertible Notes will be convertible into 30.4681 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $32.82 per share, subject to adjustment upon the occurrence of specified events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As the Company issued the 2030 Convertible Notes on March 13, 2025, ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” became effective for the Company on January 1, 2025.

The 2030 Convertible Notes are convertible at the option of the holders of the 2030 Convertible Notes before November 15, 2029, only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such

10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of the 2030 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) if the Company calls (or is deemed to have called) the 2030 Convertible Notes for redemption; or (4) upon the occurrence of certain corporate events or distributions on the Company’s common stock. From and after November 15, 2029, noteholders may convert their Notes at any time at their election, until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

The 2030 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after March 20, 2028 and on or before the 62nd scheduled trading day immediately before the maturity date, but only if (i) the Notes are “freely tradable” (as defined in the Indenture) as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the most recent interest payment date occurring on or before the date the Company sends such notice; and (ii) the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends such redemption notice; and (2) the trading day immediately before the date the Company sends such redemption notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $75.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. No sinking fund is provided for the 2030 Convertible Notes, which means the Company is not required to redeem or retire the 2030 Convertible Notes periodically.

If certain corporate events that constitute a “fundamental change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of “fundamental change” includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

As of March 31, 2026, the conditions allowing holders of the 2030 Convertible Notes to convert were not met.

The net carrying amount of the 2030 Convertible Notes consisted of the following (in thousands):


(in thousands)	March 31, 2026
Principal	$	345,000
Unamortized debt discount	(7,555)
Unamortized debt issuance costs	(739)
Net carrying amount	$	336,706

The debt discount and issuance costs are being amortized to interest expense over the term of the 2030 Convertible Notes using the effective interest rate method. The effective interest rate used to amortize the discount and issuance costs of the 2030 Convertible Notes is 2.14%. For the three months ended March 31, 2026, interest expense related to the 2030 Convertible Notes consisted of the following (in thousands):


	Three months ended March 31,
(in thousands)	2026		2025
Contractual interest expense	$	1,294	$	216
Amortization of debt discount and issuance costs	476		136
Total interest expense	$	1,770	$	352

As of March 31, 2026, the 2030 Convertible Notes had a principal amount of $345 million and an estimated fair value of $310 million. The estimated fair value of the 2030 Convertible Notes, which are Level 2 financial instruments, was determined based on the quoted bid prices of the 2030 Convertible Notes in an over-the-counter market on the last trading day of the reporting period.

Capped Calls

In connection with the 2030 Convertible Notes, the Company has entered into privately negotiated capped call transactions with certain financial institutions pursuant to capped call confirmations (collectively, the “Capped Calls”). The premiums paid for the purchases of the Capped Calls were approximately $33.9 million. The Capped Calls have an initial strike price of approximately $32.82 per share, subject to certain adjustments substantially similar to those applicable to the corresponding 2030 Convertible Notes. The Capped Calls have an initial cap price of $47.74 per share, subject to certain adjustments.

The Capped Calls are generally expected to reduce potential dilution to the Company’s common stock and/or offset any potential cash payments that the Company could be required to make in excess of the principal amount of any converted 2030 Convertible Notes, with such reduction and/or offset subject to a cap.

The Capped Calls are separate transactions and are not part of the terms of the 2030 Convertible Notes. The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock and meet the requirements to be classified in equity and, as

such, are not remeasured each reporting period. The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ equity during the three months ended March 31, 2025.

Note 9. Stockholders' Equity

Equity Compensation Plans

Stock-based compensation expense was included in the Condensed Consolidated Statements of Operations as follows:


	Three months ended March 31,
(in thousands)	2026		2025
Cost of revenues	$	1,430	$	2,636
Research and development	5,245		5,434
Sales and marketing	2,958		2,847
General and administrative	7,677		9,085
Total stock-based compensation expenses	$	17,310	$	20,002

In connection with the acquisition of MANTL in March 2025, the vesting of certain outstanding unvested equity awards were accelerated and settled in cash, resulting in the Company recognizing $3.9 million of stock-based compensation expense for the three months ended March 31, 2025. See Note 3 for additional information.

Note 10. Income Taxes

The Company recorded income tax expense of $2.8 million and income tax benefit of $7.3 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an effective tax rate of (38.2)% and 48.2%, respectively.

The Company’s effective tax rates for the three months ended March 31, 2026 and 2025 differ from the U.S. statutory tax rate primarily due to unfavorable permanent differences and changes in the valuation allowance recorded against the Company’s deferred tax assets. For the three months ended March 31, 2025, the effective tax rate was further impacted by a deferred tax benefit resulting from the partial release of a pre-existing valuation allowance in connection with the MANTL business combination.

The Company recognizes deferred tax assets and liabilities based on the estimated future tax effects of temporary differences between the financial statement basis and tax basis of assets and liabilities given the provisions of enacted tax law. Management reviews deferred tax assets to assess their future realization by considering all available evidence, both positive and negative, to determine whether a valuation allowance is needed for all or some portion of the deferred tax assets, using a “more likely than not” standard. The assessment considers, among other matters: historical losses, a forecast of future taxable income, the duration of statutory carryback and carryforward periods, and ongoing prudent and feasible tax planning strategies. As a result, the Company has established a valuation allowance against most of its deferred tax assets as realization is not reasonably assured based upon a “more likely than not” threshold. The Company reassesses the realizability of deferred tax assets regularly, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available.

Note 11. Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these instruments. Cash equivalents include amounts held in money market accounts that are measured at fair value using observable market prices. Marketable securities include debt securities that are measured at fair value using observable inputs.

The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.

Level 3. Significant unobservable inputs that are supported by little or no market activity.

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following tables summarize the Company’s financial assets measured at fair value as of March 31, 2026 and December 31, 2025 and indicate the fair value hierarchy of the valuation:


			Fair Value at Reporting Date Using
(in thousands)	March 31, 2026		Level 1		Level 2		Level 3
Assets:
Cash equivalents(1)	$	29,062	$	29,062	$	—	$	—
Marketable securities:
Corporate bonds	10,124		—		10,124		—
Commercial paper	4,947		—		4,947		—
U.S. Treasury debt securities	22,163		22,163		—		—
Total marketable securities	37,234		22,163		15,071		—
Total assets	$	66,296	$	51,225	$	15,071	$	—

(1) Includes insured cash sweep account, cash sweep account, money market account and money market funds that have investments primarily in U.S. Government Agency debt, U.S. Treasury debt, U.S. Treasury Repurchase Agreements, U.S. Government Agency Repurchase Agreements, and corporate bonds that have a maturity of three months or less from the original acquisition date.


			Fair Value at Reporting Date Using
(in thousands)	December 31, 2025		Level 1		Level 2		Level 3
Assets:
Cash equivalents(1)	$	51,426	$	51,426	$	—	$	—
Marketable securities:
Corporate bonds	9,732		—		9,732		—
Commercial paper	995		—		995		—
U.S. Treasury debt securities	23,905		23,905		—		—
International debt securities	1,003		—		1,003		—
Total marketable securities	35,635		23,905		11,730		—
Total assets	$	87,061	$	75,331	$	11,730	$	—

Note 12. Earnings Per Share

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Because the Company has reported a net loss for the three months ended March 31, 2026 and 2025, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.

In connection with the offering of the 2030 Convertible Notes, the Company entered into Capped Calls that are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion. The impact of the Capped Calls is not included when calculating potentially dilutive shares since their effect is anti-dilutive.

The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three months ended March 31, 2026 and 2025:


	Three months ended March 31,
(in thousands, except shares and per share amounts)	2026		2025
Net loss	$	(9,963)	$	(7,816)
Weighted-average shares of common stock outstanding - basic and diluted	106,387,125		102,430,673
Net loss per common share - basic and diluted	$	(0.09)	$	(0.08)

The following potential shares of common stock were excluded from diluted net loss per share as the Company had a net loss in each of the periods presented:


	As of March 31,
	2026	2025
Stock options	775,554	1,063,698
Restricted Stock Units	8,906,410	8,276,824
ESPP	191,260	104,466
2030 Convertible Notes	10,511,495	10,511,495
Total anti-dilutive common share equivalents	20,384,719	19,956,483

Note 13. Commitments and Contingencies

Legal Proceedings

The Company may become party to various legal actions during the ordinary course of business. Defending such proceedings is costly and can impose a significant burden on management and employees, it may receive unfavorable preliminary or interim rulings during litigation, and there can be no assurances that favorable final outcomes will be obtained. In addition, the Company’s industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets and other intellectual property and proprietary rights. Companies in our industry are often required to defend against litigation claims based on allegations of infringement or other violations of intellectual property rights. Furthermore, client agreements typically require the Company to indemnify clients against liabilities incurred in connection with claims alleging its solutions infringe the intellectual property rights of a third party. From time to time, the Company has been involved in disputes related to patent and other intellectual property rights of third parties, none of which has resulted in material liabilities. The Company expects these types of disputes may continue to arise in the future. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims that are likely to be asserted, is not reasonably likely to be material to the Company’s financial position, results of operations, or cash flows, taking into account established accruals for estimated liabilities.

Note 14. Leases

The Company leases office space under non-cancellable operating leases for its corporate headquarters in Plano, Texas.

On February 24, 2026, the Company entered into an agreement for an office lease in India that became effective on March 9, 2026, with a lease term of five years. The Company recognized a lease liability and ROU asset of $4.8 million for the India lease, included in the Condensed Consolidated Balance Sheets.

Operating lease expense consisted of:


	Three months ended March 31,
(in thousands)	2026		2025
Operating lease expense	$	772	$	672
Short-term lease expense and other (1)	306		175
Total lease expense	$	1,078	$	847
(1) Other lease expense includes variable lease expense.

Supplemental Cash Flow Information


	Three months ended March 31,
Cash flow information (in thousands)	2026		2025
Cash paid for operating lease liabilities	$	731	$	672
Right-of-use assets obtained in exchange for operating lease obligations(1)	$	4,797	$	—

(1) For the three months ended March 31, 2026, right-of-use assets obtained in exchange for operating lease obligations is related to the commencement of the Company’s lease agreement in India.

The future maturities of operating lease liabilities are as follows:

SEC Form 10-Q filed by Alkami Technology Inc.