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01/11 08:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance with significant revenue growth, improved EBITDA, and successful integration of the Mantle acquisition. The company's guidance is optimistic, projecting continued revenue and ARR growth. Despite some transitional challenges with offshore capabilities, the focus on digital banking and cross-selling opportunities with Mantle are promising. The shareholder return plan and credit facility expansion are also positive indicators. Given the market cap of approximately $2.7 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Total Revenue $97,800,000 (up 28.5% year-over-year); growth driven by strong demand and the Mantle acquisition.
Adjusted EBITDA $12,100,000 (up from $3,800,000 year-over-year); improvement attributed to revenue growth and operational efficiencies.
Subscription Revenue Grew 27% year-over-year, representing 95% of total revenue; driven by strong client demand and the Mantle acquisition.
Annual Recurring Revenue (ARR) $68,000,000 in backlog (up 33% year-over-year); growth driven by new client acquisitions and the Mantle acquisition.
Registered Users 20,500,000 (up 2,300,000 or 13% year-over-year); increase attributed to successful client onboarding and acquisitions.
Revenue Per User (RPU) $19.74 (up 18% year-over-year); growth driven by the Mantle acquisition and higher average RPU from new clients.
Gross Margin 64.3% (up 250 basis points year-over-year); expansion due to improved hosting costs and operational efficiencies.
Operating Expenses $51,200,000 (52% of revenue); represented year-over-year operating leverage of approximately 500 basis points.
Remaining Performance Obligation (RPO) $1,600,000,000 (up 31% year-over-year); growth driven by strong sales and renewals.
Product Investments: Alchemy is focusing R&D investments on onboarding and account opening, retail and commercial functionality, user experience, and personalization.
Mantle Acquisition: Mantle acquisition closed on March 17, 2025, enhancing product offerings and generating significant interest in account opening and onboarding.
Market Demand: Demand for digital banking remains strong, with clients prioritizing digital agendas despite macroeconomic uncertainties.
User Growth: Registered users on the Alchemy platform increased to 20.5 million, up 2.3 million year-over-year.
Client Engagement: Over 900 attendees from more than 300 institutions participated in the CoLab user conference, indicating strong market interest.
Operational Efficiency: Adjusted EBITDA improved to $12.1 million, up from $3.8 million year-over-year, reflecting operational leverage.
Offshore Initiative: Alchemy is investing $5 million in an offshore development center in India to enhance product and engineering capacity.
Strategic Focus: Alchemy aims to differentiate itself by integrating digital banking, onboarding, and data platform capabilities.
Leadership Transition: CFO Brian Hill announced retirement, ensuring a smooth transition with an extended timeline for onboarding a new CFO.
Forward Looking Statements: The company acknowledges that forward-looking statements are subject to various risks and uncertainties, which may lead to actual results differing materially from expectations.
Demand Environment: Despite macroeconomic uncertainty, there is a consistent demand for digital banking, with clients prioritizing their digital agendas. However, clients are managing expenses more closely and may cut other projects, but not their digital banking initiatives.
Regulatory Issues: There are discussions around potential deregulation in the banking industry, particularly regarding open banking, which could present opportunities for clients if they have the right technology.
Supply Chain Challenges: The company is investing in offshore capabilities to enhance product and engineering capacity, which may involve transitional challenges as they move from third-party providers.
Economic Factors: Clients are managing their expenses more closely due to economic conditions, but they are not slowing down their digital banking projects, indicating a strong commitment to digital transformation.
Client Churn: The company expects to churn four clients in 2025, representing less than 1% of ARR, primarily due to mergers and acquisitions within their client base.
Mantle Acquisition: The integration of Mantle is ongoing, and while there are no major blockers, the company is focused on ensuring successful cross-selling and operational integration.
Revenue Growth: ALCOMI grew revenue over 28% in Q1 2025, achieving total revenue of $97,800,000.
Adjusted EBITDA: Generated over $12,100,000 in adjusted EBITDA, improving from $3,800,000 in the prior year.
User Growth: Exited the quarter with 20,500,000 registered users, an increase of 2,300,000 compared to the previous year.
Mantle Acquisition: Successfully closed the Mantle acquisition, which is expected to enhance product offerings and cross-selling opportunities.
R&D Investments: Investments will focus on onboarding, account opening, retail and commercial functionality, user experience, and personalization.
Alchemy India: Building a strategic development center in India to increase product and engineering capacity.
Q2 2025 Revenue Guidance: Guidance for revenue in the range of $109,000,000 to $110,500,000, representing growth of 33% to 35%.
Full Year 2025 Revenue Guidance: Guidance for revenue in the range of $443,000,000 to $447,000,000, representing growth of 33% to 34%.
Adjusted EBITDA Guidance: For Q2 2025, guidance in the range of $9,000,000 to $10,000,000; for full year 2025, guidance of $49,500,000 to $52,500,000.
Mantle Contribution: Expect Mantle’s ARR under contract at 12/31/2025 to be approximately $60,000,000, with a growth rate above 30%.
Shareholder Return Plan: Alchemy announced a convertible notes offering and expanded its credit facility, which includes a $5,000,000 investment in offshore capabilities. The company also completed the acquisition of Mantle for an enterprise value of $400,000,000, which is expected to enhance shareholder value in the long term.
Convertible Notes Offering: The convertible notes were issued with a 1.5% coupon and a 37.5% conversion premium, effectively raising the conversion premium to 100%.
Credit Facility Expansion: The credit facility was expanded from $125,000,000 to $225,000,000, extending the maturity date.
Acquisition Impact: The Mantle acquisition is expected to be accretive to adjusted EBITDA in 2026, with an anticipated ARR under contract of approximately $60,000,000 by the end of 2025.
The earnings call summary shows strong financial performance with revenue growth and optimistic guidance, despite some margin pressures. The MANTL acquisition and cross-selling opportunities are driving growth, and the company's strategic expansion in engineering talent indicates long-term positive impact. The Q&A highlighted management's confidence in market opportunities and product innovation. The market cap suggests moderate sensitivity to news, thus predicting a positive stock price movement of 2% to 8%.
The earnings call presents strong financial metrics, including a 28% revenue growth, improved EBITDA, and a gross margin expansion. The MANTL acquisition is positioned as a growth driver, and revenue guidance is optimistic. Despite some unclear responses from management, the overall sentiment from the Q&A is positive, with analysts showing interest in MANTL's potential. The market cap indicates a moderate reaction, leading to a positive prediction for stock price movement (2% to 8%) over the next two weeks.
The earnings call reflects strong financial performance with significant revenue growth, improved EBITDA, and successful integration of the Mantle acquisition. The company's guidance is optimistic, projecting continued revenue and ARR growth. Despite some transitional challenges with offshore capabilities, the focus on digital banking and cross-selling opportunities with Mantle are promising. The shareholder return plan and credit facility expansion are also positive indicators. Given the market cap of approximately $2.7 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
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