General Atlantic, L.P., a significant stakeholder in Alkami Technology, Inc. (NASDAQ:ALKT), has sold 3 million shares of the company's common stock. The transaction, which took place on November 25, 2024, was executed at a price of $39.75 per share, totaling approximately $119.25 million.
Following this sale, General Atlantic, through its entities, holds 9,680,049 shares of Alkami Technology. This divestiture is part of an open market sale, as noted in the company's recent SEC filing.
The transaction reflects General Atlantic's ongoing management of its investment in Alkami Technology, a Plano, Texas-based provider of digital banking solutions. The sale was conducted by General Atlantic (AL), L.P., a Delaware limited partnership, with the shares being sold for the benefit of various investment funds associated with General Atlantic.
While the transaction reduces General Atlantic's stake in Alkami Technology, the firm remains a significant shareholder, continuing to hold a substantial number of shares in the company.
In other recent news, Alkami Technology has 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 slightly below analyst expectations. KeyBanc Capital Markets has responded to these developments by raising its price target for Alkami Technology to $45 and maintaining an Overweight rating.
Alkami Technology also announced the initiation of a secondary offering of 7.5 million shares, sold by entities affiliated with General Atlantic, S3 Ventures, George B. Kaiser, and Brian R. Smith. The proceeds will go entirely to the selling stockholders, with J.P. Morgan Securities LLC acting as the underwriter and sole book-running manager.
Furthermore, Alkami Technology has 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 Technology forecasts Q4 2024 revenue between $89 million and $90 million, with full-year guidance of $333.2 million to $334.2 million. 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
Alkami Technology's recent stock performance aligns with General Atlantic's decision to sell a portion of its stake. According to InvestingPro data, ALKT has shown a strong return over the last three months, with a 19.19% price total return. Even more impressive is the company's 76.4% price total return over the past year, indicating substantial growth that may have prompted the partial exit by the investment firm.
Despite the sale, Alkami's market position remains robust. The company boasts a market capitalization of $3.95 billion, reflecting its significant presence in the digital banking solutions sector. Moreover, InvestingPro Tips highlight that Alkami operates with a moderate level of debt and has liquid assets exceeding short-term obligations, suggesting a solid financial foundation.
However, investors should note that Alkami is currently trading at a high revenue valuation multiple and a high Price / Book multiple of 11.66. This could indicate that the stock is priced at a premium, which might have factored into General Atlantic's decision to realize some gains.
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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