Alkami Technology (NASDAQ:ALKT) Is Carrying A Fair Bit Of Debt

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We note that Alkami Technology, Inc. (NASDAQ:ALKT) does have debt on its balance sheet. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Alkami Technology Carry?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Alkami Technology had US$394.7m of debt, an increase on none, over one year. However, because it has a cash reserve of US$95.3m, its net debt is less, at about US$299.4m.

How Healthy Is Alkami Technology's Balance Sheet?

The latest balance sheet data shows that Alkami Technology had liabilities of US$63.3m due within a year, and liabilities of US$439.8m falling due after that. Offsetting these obligations, it had cash of US$95.3m as well as receivables valued at US$46.8m due within 12 months. So its liabilities total US$361.0m more than the combination of its cash and short-term receivables.

Given Alkami Technology has a market capitalization of US$3.11b, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Alkami Technology can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Check out our latest analysis for Alkami Technology

In the last year Alkami Technology wasn't profitable at an EBIT level, but managed to grow its revenue by 27%, to US$356m. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

While we can certainly appreciate Alkami Technology's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Indeed, it lost US$43m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. For example, we would not want to see a repeat of last year's loss of US$37m. So we do think this stock is quite risky. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. Be aware that Alkami Technology is showing 1 warning sign in our investment analysis , you should know about...

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.