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PLANO, Texas - Alkami Technology, Inc. (NASDAQ: ALKT), a cloud-based digital banking solutions provider with a market capitalization of $2.79 billion and impressive revenue growth of 26% over the last twelve months, today announced plans for a private offering of $300 million in convertible senior notes due 2030. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 3.98, indicating robust short-term financial health. The offering is aimed at qualified institutional buyers, with an additional option for purchasers to acquire up to $45 million more in notes within 13 days of issuance.
The notes, set to mature on March 15, 2030, will be senior, unsecured obligations and accrue interest payable semi-annually. Noteholders will have the option to convert their notes under certain conditions. Alkami can settle conversions with cash, common stock, or a combination thereof. The company’s conservative approach to leverage is evident in its low debt-to-equity ratio of 0.05, as reported by InvestingPro.
Alkami may redeem the notes in whole or in part for cash after March 20, 2028, and before the 62nd scheduled trading day before maturity, subject to specific conditions including the company’s stock price exceeding 130% of the conversion price.
The interest rate and initial conversion rate will be determined at the offering’s pricing. Alkami intends to use the net proceeds to finance the capped call transactions and, alongside other funds, to complete the acquisition of MANTL. If the acquisition does not close, the proceeds will be used for general corporate purposes. While the stock has experienced a 25.57% decline year-to-date, InvestingPro analysts project improved performance with expected profitability this year. Discover 10+ additional exclusive insights and real-time analysis with an InvestingPro subscription.
In conjunction with the offering, Alkami plans to enter into capped call transactions to reduce potential stock dilution or offset cash payments upon note conversion. The transactions could affect Alkami’s common stock market price, and the option counterparties may engage in various derivative transactions that could influence the stock price and the notes’ market value.
The notes and any shares of common stock issuable upon conversion will not be registered under the Securities Act or any other securities laws, and cannot be offered or sold without registration or an exemption.
This announcement, based on a press release statement, contains forward-looking statements about the offering’s terms, use of proceeds, capped call transactions, and the MANTL acquisition, which involve risks and uncertainties. The completion of the offering is not contingent on the MANTL acquisition, which may not close timely or at all.
In other recent news, Alkami Technology Inc. reported its fourth-quarter 2024 earnings, revealing a significant miss on earnings per share (EPS) expectations, posting an EPS of -0.08 against the forecasted 0.08. Despite this, the company experienced a 26% year-over-year revenue increase, reaching $89.66 million for the quarter. For the full year 2024, Alkami’s revenue grew to $333.8 million, marking a 26% increase, and the company achieved a positive adjusted EBITDA of $26.9 million, a notable improvement from a previous loss. In a strategic move, Alkami announced its intention to acquire MANTL, a provider of omnichannel account opening solutions, aiming to enhance its product offerings and secure new banking clients. Analyst Alex Markgraff from KeyBanc revised Alkami’s stock price target to $45 from $50, maintaining an Overweight rating, following the company’s revenue report and acquisition plans. The MANTL acquisition is expected to boost Alkami’s fiscal year 2025 revenue, although it may initially affect organic revenue growth projections. Alkami’s fiscal year 2025 guidance suggests a revenue range of $440-$445 million, with the MANTL acquisition anticipated to contribute $30 million in revenue. Looking ahead, the inclusion of MANTL is projected to be accretive to Alkami’s adjusted EBITDA by 2026.
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