Directors of Alkami Technology, Inc. (NASDAQ:ALKT) have sold a significant portion of the company's stock, according to a recent filing with the Securities and Exchange Commission. On November 25, 2024, General Atlantic (AL), L.P. conducted an open market sale of 3 million shares at a price of $39.75 per share, totaling approximately $119.25 million.
Following this transaction, General Atlantic (AL), L.P. retains ownership of 9,680,049 shares. The sale was executed on behalf of a group of investment funds and entities, including General Atlantic Partners and GAP Coinvestments, which are associated with General Atlantic, a global growth equity firm.
The transaction reflects continued trading activity by institutional shareholders in Alkami Technology, a provider of digital banking solutions.
In other recent news, Alkami Technology has launched a secondary offering of 7.5 million shares, with the proceeds going entirely to the selling stockholders affiliated with General Atlantic, S3 Ventures, George B. Kaiser, and Brian R. Smith. The underwriter, J.P. Morgan Securities LLC, has also been granted a 30-day option to buy up to an additional 1,125,000 shares.
In financial developments, Alkami Technology reported a significant 27% increase in Q3 revenue to $85.9 million and an adjusted EBITDA of $8.3 million, exceeding expectations. The company's annual recurring revenue (ARR) grew by 24% to $342 million, although falling slightly short of analyst expectations. In response, KeyBanc Capital Markets raised its price target for Alkami Technology to $45 and maintained an Overweight rating.
Alkami Technology also reported nine new digital banking wins and secured 14 renewals, indicating strong demand for its services. The company's implementation backlog now includes 36 clients, accounting for 1.3 million users.
Looking ahead, Alkami Technology forecasts Q4 2024 revenue between $89 million and $90 million, with full-year guidance of $333.2 million to $334.2 million. Despite a favorable environment for mergers and acquisitions, Alkami has not made any recent acquisitions. The company's data technology is increasingly seen as a market differentiator, with over 70% of new client wins in 2024 incorporating data and marketing products.
InvestingPro Insights
The recent stock sale by General Atlantic (AL), L.P. comes at a time when Alkami Technology (NASDAQ:ALKT) is experiencing significant market momentum. According to InvestingPro data, ALKT has seen a strong 76.4% price return over the past year, with a particularly impressive 44.85% gain in the last six months. This performance aligns with an InvestingPro Tip indicating that the company has enjoyed a "high return over the last year."
Despite the substantial stock sale, Alkami's financial position appears robust. An InvestingPro Tip notes that the company's "liquid assets exceed short term obligations," suggesting a solid balance sheet. This is further supported by another tip stating that Alkami "operates with a moderate level of debt," which could be reassuring for investors concerned about the company's financial stability following the large insider sale.
The company's growth trajectory is also noteworthy, with revenue growth of 26.73% over the last twelve months as of Q3 2024, reaching $315.56 million. This strong top-line performance is complemented by a healthy gross profit margin of 58.11% for the same period.
However, investors should be aware that Alkami is currently trading at high multiples, with a Price / Book ratio of 11.66 as of Q3 2024. An InvestingPro Tip also highlights that the company is "trading at a high revenue valuation multiple," which may suggest that the stock is priced for high growth expectations.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Alkami Technology, providing a more comprehensive view of the company's financial health and market position.
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