General Atlantic, L.P., a significant stakeholder in Alkami Technology, Inc. (NASDAQ:ALKT), has sold 2.5 million shares of the company's common stock. The shares were sold at a price of $37.50 each, resulting in a total transaction value of $93.75 million. This sale was conducted as part of a registered block trade that concluded on November 8, 2024.
Following this transaction, General Atlantic holds approximately 13,055,049 shares of Alkami Technology. The shares are held through various investment funds and entities, including General Atlantic (AL), L.P. and other affiliated entities. The details of ownership and the entities involved are specified in the footnotes of the filing.
This transaction highlights General Atlantic's ongoing management of its investment portfolio, which includes significant holdings in the fintech sector. Alkami Technology, a provider of cloud-based digital banking solutions, continues to be a part of General Atlantic's diverse investment strategy.
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. The company has also reported a strong Q3 performance, with a notable 27% increase in revenue to $85.9 million and an adjusted EBITDA of $8.3 million. Alkami's annual recurring revenue (ARR) grew by 24% to $342 million, albeit slightly short of analyst expectations. KeyBanc Capital Markets has subsequently raised its price target for Alkami to $45, maintaining an Overweight rating.
In addition to these financial highlights, Alkami reported nine new digital banking wins and secured 14 renewals, demonstrating strong demand for its services. The company's implementation backlog now includes 36 clients, accounting for 1.3 million users. Looking ahead, Alkami 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. However, 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
As General Atlantic reduces its stake in Alkami Technology, Inc. (NASDAQ:ALKT), investors may find additional context in recent financial data and expert insights. According to InvestingPro, Alkami has demonstrated strong performance, with a remarkable 76.61% price total return over the past year. This aligns with the company's impressive revenue growth of 26.73% in the last twelve months as of Q3 2024, reaching $315.56 million.
Despite the positive momentum, it's worth noting that Alkami is not currently profitable, with an operating income margin of -15.48%. However, InvestingPro Tips suggest that analysts predict the company will turn profitable this year, which could explain General Atlantic's decision to capitalize on the recent stock price appreciation.
The company's Price to Book ratio stands at 11.24, indicating a high valuation relative to its book value. This premium valuation is further supported by an InvestingPro Tip highlighting that Alkami is trading at a high revenue valuation multiple.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Alkami Technology, providing a deeper understanding of the company's financial health and market position.
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