<< Back

Press Release

Sep 14,2023

Mitek Delivers Record Fiscal Second Quarter Revenue, Up 35% Year Over Year; Reiterates Fiscal Full Year Guidance

SAN DIEGO--(BUSINESS WIRE)--Sep. 14, 2023-- Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity and digital fraud prevention, today reported financial results for its second quarter of fiscal 2023 ended March 31, 2023. Total revenue increased 35% year over year, reaffirming Mitek’s market-leading position.

Fiscal 2023 Second Quarter Financial Highlights

  • Total revenue increased 35% year over year to $45.3 million in a record second quarter.
  • GAAP net income was $4.4 million, or $0.10 per diluted share.
  • Non-GAAP net income was $13.1 million, or $0.29 per diluted share.
  • Cash flow from operations was $6.3 million.
  • Total cash and investments were $114.5 million on March 31, 2023.

Fiscal 2023 First Six Months Financial Highlights

  • Total revenue increased 38% year over year to $91.0 million.
  • GAAP net income was $9.2 million, or $0.20 per diluted share.
  • Non-GAAP net income was $27.4 million, or $0.60 per diluted share.
  • Cash flow from operations was $11.6 million.

Mitek CEO Max Carnecchia’s Comments

"Our strong performance in the second quarter highlights the market-leading position of our solutions in the large and growing markets we address. Our Identity revenue was up 35% year over year in the second quarter, reinforcing our position as a leader in the ever-changing identity and fraud landscape. Our Deposits business also delivered another strong quarter, with revenue up 35% year over year. Looking ahead, we expect revenue growth in the second half of the year to moderate as a result of timing of deals falling in the first half of the year, as well as the difficult macroeconomic environment; however with our strong first half performance we are reiterating our full year guidance which calls for 18% revenue growth year over year at the midpoint and non-GAAP operating margins in the range of 30% to 31%."

Fiscal 2023 Full Year Guidance

Mitek is reiterating its fiscal 2023 guidance for the year ending September 30, 2023, expecting revenue to be in the range of $169.0 million to $171.0 million, an increase of approximately 18% year over year from the mid-point of the guidance range. Mitek expects its non-GAAP operating margin for fiscal 2023 to be in the range of 30.0% to 31.0%.

Conference Call Information

Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company’s financial results for the three and six months ending March 31, 2023. To access the live call, dial 877-270-2148 (US and Canada) or +1 412-902-6510 (International) and ask to join the Mitek call.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. The phone call replay can be accessed by dialing 877-344-7529 (US or Canada) or 1-412-317-0088 (International) and entering the passcode: 7439372.

About Mitek Systems, Inc.

Mitek (NASDAQ: MITK) is a global leader in digital identity and digital fraud prevention, with technology to bridge the physical and digital worlds. Mitek’s advanced identity verification technologies and global platform make digital access faster and more secure than ever, providing companies new levels of control, deployment ease and operation, while protecting the entire customer journey. More than 7,800 organizations use Mitek to enable trust and convenience for mobile check deposit, new account opening and more. Learn more at www.miteksystems.com. [(MITK-F)]

Follow Mitek on LinkedIn, Twitter and YouTube, and read Mitek’s latest blog posts here.

Notice Regarding Forward-Looking Statements

Statements contained in this news release relating to the Company or its management’s intentions, hopes, beliefs, expectations or predictions of the future, including, but not limited to, statements relating to the Company’s long-term prospects and market opportunities and the effects of the macroeconomic environment are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, risks related to the Company’s ability to withstand negative conditions in the global economy, a lack of demand for or market acceptance of the Company’s products, the impact of the Company’s acquisition of HooYu Ltd. including any operational or cultural difficulties associated with the integration of the businesses of Mitek and HooYu Ltd., the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner, the Company’s ability to capitalize on a growing market, quarterly variations in revenue, the profitability of certain sectors of the Company, the performance of the Company’s growth initiatives, the outcome of any pending or threatened litigation, and the timing of the implementation and launch of the Company’s products by the Company’s signed customers.

Additional risks and uncertainties faced by the Company are contained from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022, as filed with the SEC on July 31, 2023 and its quarterly reports on Form 10-Q and current reports on Form 8-K, which you may obtain for free on the SEC’s website at www.sec.gov. Collectively, these risks and uncertainties could cause the Company’s actual results to differ materially from those projected in its forward-looking statements and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention or obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Note Regarding Use of Non-GAAP Financial Measures

This news release contains non-U.S. generally accepted accounting principles (“GAAP”) financial measures for non-GAAP net income and non-GAAP net income per share that exclude amortization and acquisition-related costs, intellectual property litigation costs, executive transition costs, stock compensation expenses, non-recurring audit fees, restructuring costs, amortization of debt discount and issuance costs, income tax effect of pre-tax adjustments, and the cash tax difference. These financial measures are not calculated in accordance with GAAP and are not based on any comprehensive set of accounting rules or principles. In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement financial statements prepared under GAAP. Management believes these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company’s ongoing operating performance. Further, management and the Board of Directors of the Company utilize these non-GAAP financial measures to gain a better understanding of the Company’s comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. Management believes these non-GAAP financial measures, when read in conjunction with the Company’s GAAP financial statements, are useful to investors because they provide a basis for meaningful period-to-period comparisons of the Company’s ongoing operating results, including results of operations against investor and analyst financial models, which helps identify trends in the Company’s underlying business and provides a better understanding of how management plans and measures the Company’s underlying business.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands except share data)

 

 

March 31, 2023

 

September 30, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

83,047

 

 

$

32,059

 

Short-term investments

 

26,711

 

 

 

58,268

 

Accounts receivable, net

 

35,132

 

 

 

27,874

 

Contract assets, current portion

 

8,845

 

 

 

6,273

 

Prepaid expenses

 

2,789

 

 

 

2,000

 

Other current assets

 

2,849

 

 

 

2,622

 

Total current assets

 

159,373

 

 

 

129,096

 

Long-term investments

 

4,767

 

 

 

10,633

 

Property and equipment, net

 

3,152

 

 

 

3,493

 

Right-of-use assets

 

4,625

 

 

 

5,155

 

Goodwill and intangible assets

 

203,598

 

 

 

195,942

 

Deferred income tax assets

 

16,965

 

 

 

10,245

 

Contract assets, non-current portion

 

6,839

 

 

 

4,218

 

Other non-current assets

 

1,645

 

 

 

1,628

 

Total assets

$

400,964

 

 

$

360,410

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

5,453

 

 

$

4,974

 

Accrued payroll and related taxes

 

7,892

 

 

 

10,393

 

Accrued liabilities

 

1,493

 

 

 

1,155

 

Accrued interest payable

 

219

 

 

 

202

 

Income tax payables

 

8,606

 

 

 

194

 

Deferred revenue, current portion

 

11,956

 

 

 

13,394

 

Lease liabilities, current portion

 

2,023

 

 

 

2,110

 

Acquisition-related contingent consideration

 

6,070

 

 

 

5,920

 

Restructuring accrual

 

—

 

 

 

901

 

Other current liabilities

 

1,326

 

 

 

1,254

 

Total current liabilities

 

45,038

 

 

 

40,497

 

Convertible senior notes

 

131,670

 

 

 

127,970

 

Deferred revenue, non-current portion

 

1,211

 

 

 

1,775

 

Lease liabilities, non-current portion

 

3,487

 

 

 

4,106

 

Deferred income tax liabilities, non current portion

 

15,670

 

 

 

14,132

 

Other non-current liabilities

 

1,587

 

 

 

1,613

 

Total liabilities

 

198,663

 

 

 

190,093

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding

 

—

 

 

 

—

 

Common stock, $0.001 par value, 120,000,000 shares authorized, 45,409,185 and 44,680,429 issued and outstanding, as of March 31, 2023 and September 30, 2022, respectively

 

45

 

 

 

44

 

Additional paid-in capital

 

222,933

 

 

 

216,493

 

Accumulated other comprehensive loss

 

(11,854

)

 

 

(28,219

)

Accumulated deficit

 

(8,823

)

 

 

(18,001

)

Treasury stock, at cost, no shares and 7,773 shares as of March 31, 2023 and September 30, 2022, respectively

 

—

 

 

 

—

 

Total stockholders’ equity

 

202,301

 

 

 

170,317

 

Total liabilities and stockholders’ equity

$

400,964

 

 

$

360,410

 

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

 

 

 

 

 

 

Software and hardware

$

25,260

 

 

$

18,150

 

 

$

51,636

 

 

$

33,595

 

Services and other

 

20,054

 

 

 

15,360

 

 

 

39,381

 

 

 

32,387

 

Total revenue

 

45,314

 

 

 

33,510

 

 

 

91,017

 

 

 

65,982

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of revenue—software and hardware (exclusive of depreciation & amortization)

 

219

 

 

 

310

 

 

 

388

 

 

 

688

 

Cost of revenue—services and other (exclusive of depreciation & amortization)

 

5,679

 

 

 

4,141

 

 

 

10,579

 

 

 

8,318

 

Selling and marketing

 

9,623

 

 

 

9,206

 

 

 

19,138

 

 

 

17,644

 

Research and development

 

7,373

 

 

 

7,095

 

 

 

15,043

 

 

 

13,502

 

General and administrative

 

10,059

 

 

 

6,073

 

 

 

18,538

 

 

 

12,037

 

Amortization and acquisition-related costs

 

4,274

 

 

 

4,005

 

 

 

9,095

 

 

 

6,284

 

Restructuring costs

 

210

 

 

 

—

 

 

 

1,986

 

 

 

—

 

Total operating costs and expenses

 

37,437

 

 

 

30,830

 

 

 

74,767

 

 

 

58,473

 

Operating income

 

7,877

 

 

 

2,680

 

 

 

16,250

 

 

 

7,509

 

Interest expense

 

2,163

 

 

 

2,040

 

 

 

4,300

 

 

 

4,048

 

Other income (expense), net

 

454

 

 

 

(225

)

 

 

794

 

 

 

(90

)

Income before income taxes

 

6,168

 

 

 

415

 

 

 

12,744

 

 

 

3,371

 

Income tax benefit (provision)

 

(1,720

)

 

 

20

 

 

 

(3,566

)

 

 

188

 

Net income

$

4,448

 

 

$

435

 

 

$

9,178

 

 

$

3,559

 

Net income per share—basic

$

0.10

 

 

$

0.01

 

 

$

0.20

 

 

$

0.08

 

Net income per share—diluted

$

0.10

 

 

$

0.01

 

 

$

0.20

 

 

$

0.08

 

Shares used in calculating net income per share—basic

 

45,377

 

 

 

44,775

 

 

 

45,317

 

 

 

44,795

 

Shares used in calculating net income per share—diluted

 

45,634

 

 

 

46,097

 

 

 

45,634

 

 

 

46,206

 

MITEK SYSTEMS, INC.

NON-GAAP NET INCOME RECONCILIATION

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income

$

4,448

 

 

$

435

 

 

$

9,178

 

 

$

3,559

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization and acquisition-related costs(2)

 

4,274

 

 

 

4,366

 

 

 

9,095

 

 

 

6,646

 

Intellectual property litigation costs

 

473

 

 

 

286

 

 

 

725

 

 

 

660

 

Executive transition costs

 

581

 

 

 

—

 

 

 

581

 

 

 

—

 

Stock compensation expense

 

2,714

 

 

 

3,298

 

 

 

5,161

 

 

 

6,429

 

Non-recurring audit fees

 

633

 

 

 

—

 

 

 

1,373

 

 

 

—

 

Restructuring costs

 

210

 

 

 

—

 

 

 

1,986

 

 

 

—

 

Amortization of debt discount and issuance costs

 

1,857

 

 

 

1,738

 

 

 

3,700

 

 

 

3,453

 

Income tax effect of pre-tax adjustments

 

(2,705

)

 

 

(2,422

)

 

 

(5,697

)

 

 

(4,297

)

Cash tax difference(1)

 

599

 

 

 

1,957

 

 

 

1,262

 

 

 

3,373

 

Non-GAAP net income

 

13,084

 

 

 

9,658

 

 

 

27,364

 

 

 

19,823

 

Non-GAAP income per share—basic

$

0.29

 

 

$

0.22

 

 

$

0.60

 

 

$

0.44

 

Non-GAAP income per share—diluted

$

0.29

 

 

$

0.21

 

 

$

0.60

 

 

$

0.43

 

Shares used in calculating non-GAAP net income per share—basic

 

45,377

 

 

 

44,775

 

 

 

45,317

 

 

 

44,795

 

Shares used in calculating non-GAAP net income per share—diluted

 

45,634

 

 

 

46,097

 

 

 

45,634

 

 

 

46,206

 

(1)

 

The Company’s non-GAAP net income is calculated using a cash tax rate of 23% in fiscal 2023 and 3% in fiscal 2022. The estimated cash tax rate is the estimated annual tax payable on the Company’s tax returns as a percentage of estimated annual non-GAAP pre-tax net income. The Company uses an estimated cash tax rate to adjust for the historical variation in the effective book tax rate associated with the reversal of valuation allowances. The fiscal 2022 cash tax rate includes a beneficial impact of reduced taxes payable due to the utilization of research and development tax credits and the utilization of loss carryforward. The Company believes that the cash tax rate provides a more transparent view of the Company’s operating results. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the three months ended March 31, 2023 and 2022 was 28% and negative 5%, respectively. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the six months ended March 31, 2023 and 2022 was 28% and negative 6%, respectively.

(2)

 

Included in acquisition-related costs and expenses is $0.3 million of foreign exchange and investment losses incurred in connection with the acquisition of HooYu Ltd. which is included in other income (expense), net in the consolidated statements of operations.

 

Investor Contact:
Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
mitk@mkr-group.com

Source: Mitek Systems, Inc.