0000807863-21-000016 | 10-Q | XBRL Viewer

Cover - shares	3 Months Ended
Cover - shares	Dec. 31, 2020	Jan. 31, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	001-35231
Entity Registrant Name	MITEK SYSTEMS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-0418827
Entity Address, Address Line One	600 B Street, Suite 100
Entity Address, City or Town	San Diego,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92101
City Area Code	619
Local Phone Number	269-6800
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MITK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		42,687,378
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000807863
Current Fiscal Year End Date	--09-30

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 26,723	$ 19,986
Short-term investments	40,238	40,035
Accounts receivable, net	12,714	15,612
Contract assets	4,465	5,187
Prepaid expenses	1,473	1,338
Other current assets	1,838	1,968
Total current assets	87,451	84,126
Long-term investments	5,597	1,963
Property and equipment, net	3,674	3,610
Right-of-use assets	5,122	5,407
Intangible assets, net	18,423	19,289
Goodwill	37,323	35,669
Deferred income tax assets, net	14,211	13,484
Other non-current assets	5,231	5,606
Total assets	177,032	169,154
Current liabilities:
Accounts payable	3,472	3,909
Accrued payroll and related taxes	6,467	8,882
Deferred revenue, current portion	9,742	7,973
Lease liabilities, current portion	1,751	1,819
Acquisition-related contingent consideration	790	753
Other current liabilities	940	1,020
Total current liabilities	23,162	24,356
Deferred revenue, non-current portion	1,154	1,597
Lease liabilities, non-current portion	5,018	5,327
Deferred income tax liabilities	4,924	4,649
Other non-current liabilities	1,021	982
Total liabilities	35,279	36,911
Stockholders’ equity:
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.001 par value, 60,000,000 shares authorized, 42,668,376 and 41,779,853 issued and outstanding, as of December 31, 2020 and September 30, 2020, respectively	43	42
Additional paid-in capital	151,153	146,518
Accumulated other comprehensive income (loss)	2,384	(323)
Accumulated deficit	(11,827)	(13,994)
Total stockholders’ equity	141,753	132,243
Total liabilities and stockholders’ equity	$ 177,032	$ 169,154

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Total revenue	$ 25,976	$ 22,067
Operating costs and expenses
Selling and marketing	7,385	6,648
Research and development	6,165	5,292
General and administrative	5,058	5,288
Acquisition-related costs and expenses	1,693	1,608
Total operating costs and expenses	24,439	21,769
Operating income	1,537	298
Other income, net	96	303
Income before income taxes	1,633	601
Income tax benefit (provision)	534	(41)
Net income	$ 2,167	$ 560
Net income per share – basic (in dollars per share)	$ 0.05	$ 0.01
Net income per share - diluted (in dollars per share)	$ 0.05	$ 0.01
Shares used in calculating net income per share – basic (in shares)	42,476	40,615
Shares used in calculating net income per share – diluted (in shares)	43,897	41,828
Other comprehensive income
Net income	$ 2,167	$ 560
Foreign currency translation adjustment	2,760	1,253
Unrealized gain (loss) on investments	(53)	2
Other comprehensive income	4,874	1,815
Software and hardware
Total revenue	12,303	11,515
Operating costs and expenses
Cost of revenue	1,245	771
Services and other
Total revenue	13,673	10,552
Operating costs and expenses
Cost of revenue	$ 2,893	$ 2,162

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning Balance (in shares) at Sep. 30, 2019		40,367,000
Beginning Balance at Sep. 30, 2019	$ 107,333	$ 40	$ 132,160	$ (20,806)	$ (4,061)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		24,000
Exercise of stock options	73		73
Settlement of restricted stock units (in shares)		474,000
Settlement of restricted stock units	0	$ 1	(1)
Stock-based compensation expense	2,303		2,303
Components of other comprehensive loss:
Net income	560			560
Foreign currency translation adjustment	1,253				1,253
Unrealized gain (loss) on investments	2				2
Other comprehensive income	1,815
Ending Balance (in shares) at Dec. 31, 2019		40,865,000
Ending Balance at Dec. 31, 2019	$ 111,524	$ 41	134,535	(20,246)	(2,806)
Beginning Balance (in shares) at Sep. 30, 2020	41,779,853	41,780,000
Beginning Balance at Sep. 30, 2020	$ 132,243	$ 42	146,518	(13,994)	(323)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	241,490	241,000
Exercise of stock options	$ 1,889		1,889
Settlement of restricted stock units (in shares)		647,000
Settlement of restricted stock units	0	$ 1	(1)
Stock-based compensation expense	2,747		2,747
Components of other comprehensive loss:
Net income	2,167			2,167
Foreign currency translation adjustment	2,760				2,760
Unrealized gain (loss) on investments	(53)				(53)
Other comprehensive income	$ 4,874
Ending Balance (in shares) at Dec. 31, 2020	42,668,376	42,668,000
Ending Balance at Dec. 31, 2020	$ 141,753	$ 43	$ 151,153	$ (11,827)	$ 2,384

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net income	$ 2,167	$ 560
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	2,747	2,303
Amortization of intangible assets	1,693	1,608
Depreciation and amortization	390	406
Amortization of investment premiums and other	72	(38)
Deferred taxes	(669)	66
Changes in assets and liabilities:
Accounts receivable	3,084	2,179
Contract assets	1,529	(1,759)
Other assets	(342)	(226)
Accounts payable	(501)	677
Accrued payroll and related taxes	(2,514)	(1,895)
Deferred revenue	1,273	2,427
Restructuring accrual	0	(923)
Other liabilities	(199)	(195)
Net cash provided by operating activities	8,730	5,190
Investing activities:
Purchases of investments	(12,111)	(10,132)
Sales and maturities of investments	8,141	3,150
Purchases of property and equipment	(400)	(205)
Net cash used in investing activities	(4,370)	(7,187)
Financing activities:
Proceeds from the issuance of equity plan common stock	1,889	73
Principal payments on other borrowings	(18)	(78)
Net cash provided by (used in) financing activities	1,871	(5)
Foreign currency effect on cash and cash equivalents	506	47
Net increase (decrease) in cash and cash equivalents	6,737	(1,955)
Cash and cash equivalents at beginning of period	19,986	16,748
Cash and cash equivalents at end of period	26,723	14,793
Supplemental disclosures of cash flow information:
Cash paid for income taxes	149	0
Supplemental disclosures of non-cash investing and financing activities:
Unrealized holding gain (loss) on available for sale investments	$ (53)	$ 2

Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Mitek Systems, Inc. (“Mitek” or the “Company”) is a leading innovator of mobile image capture and digital identity verification solutions. Mitek is a software development company with expertise in computer vision, artificial intelligence, and machine learning. The Company is currently serving more than 7,500 financial services organizations and leading marketplace and financial technology (“fintech”) brands across the globe. The Company’s solutions are embedded in native mobile apps and browsers to facilitate better online user experiences, fraud detection and reduction, and compliant transactions.

Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposit. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. Mitek’s Mobile Deposit® solution is embedded within the financial institutions’ digital banking apps used by consumers and has now processed over four billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of December 31, 2020, the Company has been granted 69 patents and it has an additional 17 patent applications pending.

Mitek’s Mobile Verify® verifies a user’s identity online enabling organizations to build safer digital communities. Scanning an identity document helps enable an enterprise to verify the identity of the person with whom they are conducting business, to comply with growing governmental Anti-Money Laundering and Know Your Customer regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek’s Mobile Verify Face Comparison provides an additional layer of online verification and compares the face on the submitted identity document with the live selfie photo of the user.

The combination of identity document capture and data extraction process enables the organization to prefill the end user’s application, with far fewer key strokes, thus reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of our solutions, but there is accelerated adoption by marketplaces, sharing economy, and hospitality sectors. Mitek uses artificial intelligence and machine learning to constantly improve the product performance of Mobile Verify® such as speed and accuracy of approvals of identification documents. The core of Mitek’s user experience is driven by Mitek MiSnap™, the leading image capture technology, which is incorporated across the Company’s product lines. It provides a simple, intuitive, and superior user-experience, making digital transactions faster, more accurate, and easier for the consumer. Mobile Fill® automates application prefill of any form with user data by simply snapping a picture of the driver’s license or other similar user identity document.

CheckReader™ enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader™ speeds the time to deposit for financial institutions and enables them to comply with check clearing regulations.

The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company’s partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company’s products into their solutions to meet the needs of their customers.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company as of December 31, 2020 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. Certain reclassifications were made to previously reported amounts in the consolidated statements of cash flows to make them consistent with the current period presentation. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the U.S. Securities and Exchange Commission on December 7, 2020, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K”), filed with the SEC on December 11, 2020.

Results for the three months ended December 31, 2020 are not necessarily indicative of results for any other interim period or for a full fiscal year.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Foreign Currency

The Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets. The Company recorded a net gain resulting from foreign exchange translation of $2.8 million for the three months ended December 31, 2020 and a net gain resulting from foreign exchange translation of $1.3 million for the three months ended December 31, 2019.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes.

Reclassifications

Certain reclassifications have been made to prior year presentation to conform to the current year presentation. Prior to fiscal 2020, the Company had included its product management costs in selling and marketing expenses. Due to certain personnel and functional responsibility changes in this function, the Company has reclassified these costs to research and development expenses. To conform to the current period’s presentation, prior year’s financials have been reclassified accordingly. The Company has determined that this reclassification was not material to previously reported financial statements. Product management costs were $0.7 million for three months ended December 31, 2019.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and its related amendments (collectively known as “ASC 606”). ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company generates revenue primarily from the delivery of licenses (to both on premise and transactional software as a service (“SaaS”) products) and related services, as well as the delivery of hardware and professional services. Revenue is measured

based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time. See Note 2 of the consolidated financial statements for additional details.

Contract Assets and Liabilities

The Company recognizes revenue when control of the license is transferred to the customer. The Company records a contract asset when the revenue is recognized prior to the date payments become due. Contract assets that are expected to be paid within one year are recorded in current assets on the consolidated balance sheets. All other contract assets are recorded in other non-current assets in the consolidated balance sheet. Contract liabilities consist of deferred revenue. When the performance obligation is expected to be fulfilled within one year, the deferred revenue is recorded in current liabilities in the consolidated balance sheet. When the performance obligation is expected to be fulfilled beyond one year, the deferred revenue is recorded in non-current liabilities in the consolidated balance sheet. The Company reports net contract asset or liability positions on a contract-by-contract basis at the end of each reporting period.

Contract Costs

The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions incurred only if a contract is obtained. When the commission rate for a customer renewal is not commensurate with the commission rate for a new contract, the commission is capitalized if expected to be recovered. Such costs are capitalized and amortized using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates. Contract costs are recorded in other current and non-current assets in the consolidated balance sheets.

Net Income Per Share

The Company calculates net income per share in accordance with FASB ASC Topic 260, Earnings per Share. Basic net income per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss per share because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss per share is the same.

For the three months ended December 31, 2020 and 2019, the following potentially dilutive common shares were excluded from the calculation of net income per share, as they would have been antidilutive (amounts in thousands):


	Three Months Ended December 31,
	2020	2019
Stock options	721	325
RSUs	1,253	1,482
ESPP common stock equivalents	66	70
Performance options	179	—
Performance RSUs	74	—
Total potentially dilutive common shares outstanding	2,293	1,877

The calculation of basic and diluted net income per share is as follows (amounts in thousands, except per share data):


	Three Months Ended December 31,
	2020		2019
Net income	$	2,167	$	560
Weighted-average shares outstanding—basic	42,476		40,615
Common stock equivalents	1,421		1,213
Weighted-average shares outstanding—diluted	43,897		41,828
Net income per share:
Basic	$	0.05	$	0.01
Diluted	$	0.05	$	0.01

Investments

Investments consist of corporate notes and bonds, commercial paper, U.S. Treasury securities, and asset-backed securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income. No other-than-temporary impairment charges were recognized in the three months ended December 31, 2020 and 2019.

All investments whose maturity or sale is expected within one year are classified as “current” on the consolidated balance sheets. All other securities are classified as “long-term” on the consolidated balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. The Company had $1,000 of write-offs to the allowance for doubtful accounts for the three months ended December 31, 2020 and no write-offs in the three months ended December 31, 2019. The Company maintained an allowance for doubtful accounts of $0.2 million as of both December 31, 2020 and September 30, 2020.

Capitalized Software Development Costs

Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases, and amortization of capitalized software development costs commences when the products are available for general release. For the three months ended December 31, 2020 and 2019, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material or were not realizable. We had no amortization expense from capitalized software costs during the three months ended December 31, 2020 and 2019.

Costs related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. The Company defines the design, configuration, and coding process as the application development stage. The Company capitalized $0.2 million and $23,000 of costs related to computer software developed for internal use during the three months ended December 31, 2020 and 2019, respectively. The Company had $0.1 million in amortization expense from internal use software during each of the three months ended December 31, 2020 and 2019.

Goodwill and Purchased Intangible Assets

The Company’s goodwill and intangible assets resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), the Company reviews its goodwill and indefinite-lived intangible assets for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. No such events or circumstances have occurred since the last impairment assessment was performed.

The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC 350 and ASC Topic 280, Segment Reporting, management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services

and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believes this represents the best evidence of fair value. In the fourth quarter of fiscal 2020, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization.

Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of the Company’s common stock, par value $0.001 per share (“Common Stock”). For example, a significant decline in the price of the Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot assure that when it completes its future reviews of goodwill for impairment a material impairment charge will not be recorded.

Intangible assets are amortized over their useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. The carrying amount of such assets is reduced to fair value if the undiscounted cash flows used in the test for recoverability are less than the carrying amount of such assets. No impairment charge related to the impairment of intangible assets was recorded during the three months ended December 31, 2020 and 2019.

Other Borrowings

The Company has certain loan agreements with Spanish government agencies which were assumed when the Company acquired ICAR Vision Systems, S.L. ("ICAR"). These agreements have repayment periods of five to twelve years and bear no interest. As of December 31, 2020 and September 30, 2020, $0.7 million was outstanding under these agreements and $0.1 million and $0.6 million is recorded in other current liabilities and other non-current liabilities, respectively, in the consolidated balance sheets.

Guarantees

In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years.

Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 6 of the consolidated financial statements for additional details.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details.

Stock-Based Compensation

The Company issues RSUs, stock options, performance options, and performance RSUs as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation. Forfeitures are recorded as they occur.

The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant.

The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods.

The Company estimates the fair value of performance options, Senior Executive Performance RSUs, and similar awards using the Monte-Carlo simulation. The Monte-Carlo simulation requires subjective assumptions, including the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the stock performance targets, and a 20-trading-day average stock price.

Comprehensive Income

Comprehensive income consists of net income, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments. Included on the consolidated balance sheets is accumulated other comprehensive income (loss) of $2.4 million and $(0.3) million at December 31, 2020 and September 30, 2020, respectively.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. The Company adopted ASU 2018-15 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), to eliminate, add, and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The Company adopted ASU 2018-13 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted ASU 2017-04 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements.

Change in Significant Accounting Policy

The Company has consistently applied the accounting policies to all periods presented in its consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on the consolidated financial statements.

No other new accounting pronouncement issued or effective during the three months ended December 31, 2020 had, or is expected to have, a material impact on the Company’s consolidated financial statements.

Revenue Recognition

3 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

2. REVENUE RECOGNITION

Nature of Goods and Services

The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below.

Software and Hardware

Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. For software license agreements that are distinct, the Company recognizes software license revenue upon delivery and after evidence of a contract exists. Hardware revenue is recognized in the period that the hardware is shipped.

Services and Other

Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services. The Company recognizes services and other revenue over the period in which such services are performed. The Company’s model typically includes an up-front fee and a periodic commitment from the customer that commences upon completion of the implementation through the remainder of the customer life. The up-front fee is the initial setup fee, or the implementation fee. The periodic commitment includes, but is not limited to, a fixed periodic fee and/or a transactional fee based on system usage that exceeds committed minimums. If the up-front fee is not distinct, revenue is deferred until the date the customer commences use of the Company’s services, at which point the up-front fee is recognized ratably over the life of the customer arrangement. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct.

Significant Judgments in Application of the Guidance

The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize:

Identification of Performance Obligations

For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation.

Determination of Transaction Price

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

Assessment of Estimates of Variable Consideration

Many of the Company’s contracts with customers contain some component of variable consideration; however, the constraint will generally not result in a reduction in the estimated transaction price for most forms of variable consideration. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted.

Allocation of Transaction Price

The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In instances where there are observable selling prices for professional services and support and maintenance, the Company may apply the residual approach to estimate the standalone selling price of software licenses. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer.

Disaggregation of Revenue

The following table presents the Company's revenue disaggregated by major product category (amounts in thousands):


	Three Months Ended December 31,
	2020		2019
Major product category
Deposits software and hardware	$	10,755	$	10,283
Deposits services and other	4,861		4,368
Deposits revenue	15,616		14,651
Identity verification software and hardware	1,548		1,232
Identity verification services and other	8,812		6,184
Identity verification revenue	10,360		7,416
Total revenue	$	25,976	$	22,067

Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services.

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers (amounts in thousands):


	December 31, 2020		September 30, 2020
Contract assets, current	$	4,465	$	5,187
Contract assets, non-current	3,671		4,468
Contract liabilities (deferred revenue), current	9,742		7,973
Contract liabilities (deferred revenue), non-current	1,154		1,597

Contract assets, reported within current assets and other long-term assets in the consolidated balance sheets, primarily result from revenue being recognized when a license is delivered and payments are made over time. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue), for which transfer of control occurs, and therefore revenue is recognized as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $4.9 million and $3.6 million of revenue during the three months ended December 31, 2020 and 2019, respectively, which was included in the contract liability balance at the beginning of each such period.

Contract Costs

Contract costs included in other current and non-current assets on the consolidated balance sheets totaled $1.9 million and $1.5 million as of December 31, 2020 and September 30, 2020, respectively. Contract costs are amortized based on the transfer of goods or services to which the asset relates. The amortization period also considers expected customer lives and whether the asset relates to goods or services transferred under a specific anticipated contract. These costs are included in selling and marketing expenses in the consolidated statement of operations and other comprehensive income and totaled $0.2 million during both the three months ended December 31, 2020 and 2019, respectively. There were no impairment losses recognized during both the three months ended December 31, 2020 and 2019 related to capitalized contract costs.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Stockholders' Equity

3 Months Ended

Dec. 31, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY

5. STOCKHOLDERS’ EQUITY

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to RSUs, stock options, and ESPP shares, which was allocated as follows (amounts shown in thousands):


	Three Months Ended December 31,
	2020		2019
Cost of revenue	$	87	$	61
Selling and marketing	788		572
Research and development	740		674
General and administrative	1,132		996
Stock-based compensation expense included in expenses	$	2,747	$	2,303

As of December 31, 2020, the Company had $25.0 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.7 years.

2020 Incentive Plan

In January 2020, the Company’s board of directors (the “Board”) adopted the Mitek Systems, Inc. 2020 Incentive Plan (the “2020 Plan”) upon the recommendation of the compensation committee of the Board. On March 4, 2020, the Company’s stockholders

approved the 2020 Plan. The total number of shares of Common Stock reserved for issuance under the 2020 Plan is 4,500,000 shares plus such number of shares, not to exceed 107,903, as remained available for issuance under the 2002 Stock Option Plan, 2006 Stock Option Plan, 2010 Stock Option Plan, and 2012 Incentive Plan (collectively, the “Prior Plans”) as of January 17, 2020, plus any shares underlying awards under the Prior Plans that are terminated, forfeited, cancelled, expire unexercised or are settled in cash after January 17, 2020. As of December 31, 2020, (i) 975,746 RSUs and 638,321 Performance RSUs were outstanding under the 2020 Plan, and 2,719,465 shares of Common Stock were reserved for future grants under the 2020 Plan and (ii) stock options to purchase an aggregate of 611,226 shares of Common Stock and 1,264,921 RSUs were outstanding under the Prior Plans.

Employee Stock Purchase Plan

In January 2018, the Board adopted the ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of December 31, 2020, (i) 350,674 shares have been issued to participants pursuant to the ESPP and (ii) 649,326 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018.

The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $0.1 million in stock-based compensation expense related to the ESPP in each of the three months ended December 31, 2020 and 2019.

Director Restricted Stock Unit Plan

In January 2011, the Board adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”). On March 10, 2017, the Company’s stockholders approved an amendment to the Director Plan. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. As of December 31, 2020, (i) 327,946 RSUs were outstanding under the Director Plan and (ii) 267,533 shares of Common Stock were reserved for future grants under the Director Plan.

Stock Options

The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2020:


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at September 30, 2020	1,162,505	$	7.51	6.1	$	6,081
Granted	—	$	—
Exercised	(241,490)	$	7.82
Canceled	—	$	—
Outstanding at December 31, 2020	921,015	$	7.43	6.2	$	9,536
Vested and Expected to Vest at December 31, 2020	921,015	$	7.43	6.2	$	9,536
Exercisable at December 31, 2020	585,487	$	6.25	5.1	$	6,750

The Company recognized $0.2 million in stock-based compensation expense related to outstanding stock options in each of the three months ended December 31, 2020 and 2019. As of December 31, 2020, the Company had $1.4 million of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.3 years.

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price, multiplied by the number of options outstanding and exercisable. The total intrinsic value of options exercised during the three months ended December 31, 2020 and 2019 was $1.5 million and $0.1 million, respectively.

Restricted Stock Units

The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2020:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020	2,661,943	$	7.95
Granted	647,052	$	11.92
Settled	(647,035)	$	7.32
Canceled	(34,135)	$	8.39
Outstanding at December 31, 2020	2,627,825	$	9.07

The cost of RSUs is determined using the fair value of Common Stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.9 million and $1.7 million in stock-based compensation expense related to outstanding RSUs in the three months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $19.2 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.8 years.

Performance Restricted Stock Units

The following table summarizes Performance RSU activity under the Company’s equity plans during the three months ended December 31, 2020:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020	353,556	$	6.06
Granted	284,765	$	11.84
Settled	—	$	—
Canceled	—	$	—
Outstanding at December 31, 2020	638,321	$	8.64

The Company recognized $0.3 million and $0.2 million in stock-based compensation expense related to outstanding Performance RSUs in each of the three months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $3.6 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.8 years.

Performance Options

On November 6, 2018, as an inducement grant pursuant to Nasdaq Listing Rule 5635(c)(4), the Company’s Chief Executive Officer was granted performance options (the “Performance Options”) to purchase up to 800,000 shares of Common Stock at an exercise price of $9.50 per share, the closing market price for a share of Common Stock on the date of the grant. As long as he remains employed by the Company, such Performance Options shall vest upon the closing market price of Common Stock achieving certain predetermined levels and his serving as the Chief Executive Officer of the Company for at least 3.0 years. In the event of a change of control of the Company, all of the unvested Performance Options will vest if the per share price payable to the stockholders of the Company in connection with the Change of Control is an amount reaching those certain predetermined levels required for the Performance Options to otherwise vest. The Company recognized $0.2 million in stock-based compensation expense related to outstanding Performance Options in each of the three months ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the Company had $0.7 million of unrecognized compensation expense related to outstanding Performance Options expected to be recognized over a weighted-average period of approximately 0.8 years.

Share Repurchase Program

On December 13, 2019, the Board authorized and approved a share repurchase program for up to $10 million of the currently outstanding shares of our Common Stock. The share repurchase program expired on December 16, 2020. Total purchases made under the share repurchase program were $1.0 million or approximately 137,000 shares at an average price of $7.33. The purchases under the share repurchase program were made through open market trades.

Rights Agreement

On October 23, 2018, the Company entered into the Section 382 Rights Agreement (the “Rights Agreement”) and issued a dividend of one preferred share purchase right (a “Right”) for each share of Common Stock payable on November 2, 2018 to the stockholders of record of such shares on that date. Each Right entitles the registered holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series B Junior Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company, at a price of $35.00 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement.

The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement). Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.

At any time prior to the time any person becomes an Acquiring Person (as defined in the Rights Agreement), the Board may redeem the Rights in whole, but not in part, at a price of $0.0001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

The Rights will expire on the earlier of (i) the close of business on October 22, 2021, (ii) the time at which the Rights are redeemed, and (iii) the time at which the Rights are exchanged.

On February 28, 2019, the Company entered into an Amendment No. 1 to the Rights Agreement for the purpose of (i) modifying the definitions of “Beneficial Owner,” “Beneficially Own,” and “Beneficial Ownership” under the Rights Agreement to more closely align such definitions to the actual and constructive ownership rules under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) or such similar provisions of the Tax Cuts and Jobs Act of 2017 and the rules and regulations promulgated thereunder, and (ii) adding an exemption request process for persons to seek an exemption from becoming an “Acquiring Person” under the Rights Agreement in the event such person wishes to acquire 4.9% or more of the Common Stock then outstanding.

Commitments and Contingencies

3 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

Leases

The Company’s principal executive offices, as well as its research and development facility, are located in approximately 29,000 square feet of office space in San Diego, California and the term of the lease continues through June 30, 2024. The Company’s other offices are located in Paris, France; Amsterdam, The Netherlands; New York, New York; Barcelona, Spain; and London, United Kingdom. Other than the lease for office space in San Diego, California, the Company does not believe that the leases for the offices are material to the Company. The Company believes its existing properties are in good condition and are sufficient and suitable for the conduct of its business.

The Company’s leases have remaining terms of one to seven years. Certain leases contain renewal options for varying periods, which are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s right-of-use (“ROU”) assets and lease liabilities. As of December 31, 2020, the weighted-average remaining lease term for the Company’s operating leases was 4.2 years and the weighted-average discount rate was 4.7%.

Lease liabilities expected to be paid within one year are recorded in current liabilities in the consolidated balance sheets. All other lease liabilities are recorded in non-current liabilities in the consolidated balance sheets. As of December 31, 2020, the Company had operating ROU assets of $5.1 million. Total operating lease liabilities of $6.8 million were comprised of current lease liabilities of $1.8 million and non-current lease liabilities of $5.0 million.

The Company recognized $0.5 million of operating lease costs in the three months ended December 31, 2020. Operating lease costs are included within cost of revenue, selling and marketing, research and development, and general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statement of operations and other comprehensive income.

The Company paid $0.7 million in operating cash flows for operating leases in the three months ended December 31, 2020.

Maturities of our operating lease liabilities as of December 31, 2020 were as follows (amounts shown in thousands):


	Operating leases
2021—remaining	$	1,571
2022	1,737
2023	1,735
2024	1,399
2025	314
2026	310
Thereafter	395
Total lease payments	7,461
Less: amount representing interest	(692)
Present value of future lease payments	$	6,769

Legal Proceedings

Claim Against ICAR

On June 11, 2018, a claim was filed before the Juzgado de Primera Instancia number 5 of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed to Mr. Xavier Codó Grasa, former controlling shareholder of ICAR and its current General Manager, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for the alleged breach by ICAR of a services agreement entered into in the context of the sale of the shares in ICAR to Mitek Holding B.V. ICAR responded to the claim on September 7, 2018 and the court process is ongoing but has been delayed as a consequence of the COVID-19 pandemic.

The amount claimed is €0.8 million (or $0.9 million), plus the interest accrued during the court proceedings.

Pursuant and subject to the terms of the sale and purchase agreement concerning the acquisition of the shares in ICAR, Mitek Holding B.V. is to be indemnified in respect of any damages suffered by ICAR and/or Mitek Holding B.V. in respect of this claim.

Third Party Claims Against Our Customers

The Company receives indemnification demands from end-user customers who received third party patentee offers to license patents and allegations of patent infringement. Some of the offers and allegations have resulted in ongoing litigation. The Company is not a party to any such litigation. License offers to and infringement allegations against the Company’s end-customers were made by Lighthouse Consulting Group, LLC; Lupercal, LLC; Pebble Tide, LLC; Dominion Harbor Group, LLC; and IP Edge, LLC, which appear to be non-practicing entities (“NPEs”)—often called “patent trolls”—and not the Company’s competitors. These NPEs may seek to extract settlements from our end-customers, resulting in new or renewed indemnification demands to the Company. At this time, the Company does not believe it is obligated to indemnify any customers or end-customers resulting from license offers or patent infringement allegations by the companies listed above. However, the Company could incur substantial costs if it is determined that it is required to indemnify any customers or end-customers in connection with these offers or allegations. Given the potential for impact to other customers and the industry, the Company is actively monitoring the offers, allegations and any resulting litigation.

On July 7, 2018, United Services Automobile Association (“USAA”) filed a lawsuit against Wells Fargo Bank, N.A. (“Wells Fargo”) in the Eastern District of Texas alleging that Wells Fargo’s remote deposit capture systems (which in part utilize technology provided by the Company to Wells Fargo through a partner) infringe four USAA owned patents related to mobile deposits (the “First Wells Lawsuit”). On August 17, 2018, USAA filed a second lawsuit (the “Second Wells Lawsuit” and together with the First Wells Lawsuit, the “Wells Lawsuits”) against Wells Fargo in the Eastern District of Texas asserting that an additional five patents owned by USAA were infringed by Wells Fargo’s remote deposit capture system. In neither lawsuit was the Company named in the Complaint

as an infringer and at no time did USAA allege specifically that the Company’s products by themselves infringed any of the asserted patents. Subsequently, on November 6, 2019, a jury in the First Wells Lawsuit found that Wells Fargo willfully infringed at least one of the Subject Patents (as defined below) and awarded USAA $200 million in damages. In the Second Wells Lawsuit, USAA dropped two of the patents from the litigation, and the judge in the case found that one of the remaining three patents was invalid. On January 10, 2020, a jury in the Second Wells Lawsuit found that Wells Fargo willfully infringed at least one of the patents at issue in that case and awarded USAA $102 million in damages. No Mitek product was accused of infringing either of the two patents in question in the Second Wells Lawsuit as the litigation involved broad banking processes and not Mitek’s specific mobile deposit features. The jury verdicts are subject to post-trial motions and appeal by Wells Fargo. The Wells Lawsuits are ongoing and no final judgments or awards have been made to date. Wells Fargo filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the four patents in the First Wells Lawsuit. Three of those four petitions were instituted, while one (relating to the ‘090 Patent) was denied institution. On November 24, 2020 and January 26, 2021, the PTAB issued final written decisions determining that Wells Fargo had not demonstrated by a preponderance of the evidence that any claims of the ‘571 Patent, the ‘779 Patent, or ‘517 Patent were unpatentable. Wells Fargo can request rehearing of these decisions and/or appeal the decisions to the U.S. Court of Appeals for the Federal Circuit.

On September 30, 2020, USAA filed suit against PNC Bank (the “PNC Lawsuit”) in the Eastern District of Texas alleging infringement of U.S. Patent Nos. 10,482,432 and 10,621,559. These two patents are continuations of an asserted patent in the Second Wells Lawsuit and relate to similar subject matter. On October 19, 2020, PNC Bank’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the PNC Lawsuit. The complaint against PNC does not claim that any Company product infringes any of the asserted patents. At this time, the Company does not believe it is obligated to indemnify NCR Corporation or end-users of NCR Corporation resulting from the patent infringement allegations by USAA. On December 4, 2020, USAA filed an amended complaint against PNC Bank also asserting two patents at issue in the First Wells Lawsuit—U.S. Patent Nos. 8,699,779 (“the ’779 Patent”) and 8,977,571 (“the ’571 Patent”). Also on December 4, 2020, PNC Bank filed a complaint for declaratory judgement of non-infringement of the ’779 Patent and the ’571 Patent in the Western District of Pennsylvania. On January 19, 2021, USAA filed a motion to dismiss that action in view of the pending lawsuit between the parties in the Eastern District of Texas.

While neither the Wells Lawsuits nor the PNC Lawsuit name the Company as a defendant, given (among other factors) the Company’s prior history of litigation with USAA and the continued use of Mitek’s products by its customers, on November 1, 2019, the Company filed a Complaint in the U.S. District Court for the Northern District of California seeking declaratory judgment that its products do not infringe the ’779 Patent, the ’571 Patent, U.S. Patent No. 9,336,517 (“the ’517 Patent”), and U.S. Patent No. 9,818,090 (“the ’090 Patent”) (collectively, the “Subject Patents”). On January 15, 2020, USAA filed motions requesting the dismissal of the declaratory judgement of the Subject Patents and transfer of the case to the Eastern District of Texas, both of which the Company opposed. On April 21, 2020, the court in the Northern District of California transferred Mitek’s declaratory judgement action to the Eastern District of Texas and did not rule on USAA’s motion to dismiss. On July 15, 2020, the court in the Eastern District of Texas held a hearing on USAA’s motion to dismiss, but has not yet issued a ruling. The Company continues to believe that its products do not infringe the Subject Patents and will vigorously defend the right of its end-users to use its technology.

In April, May, and June 2020, the Company filed petitions for IPR with the PTAB of the U.S. Patent & Trademark Office challenging the validity of the Subject Patents. On November 6 and 17, 2020 and January 26, 2021, the PTAB decided to exercise its discretion and deny institution of the four petitions due to the alleged relationship between the Company and Wells Fargo, who previously filed petitions for IPR on the Subject Patents. The PTAB did not address the merits of the Company’s petitions or the prior art cited in those petitions. The Company continues to believe that the prior art cited in the petitions renders all the claims of the Subject Patents invalid. On December 6 and 17, 2020, the Company filed requests for rehearing and Precedential Opinion Panel (“POP”) review of three of the four denied IPR petitions. The Company is evaluating all of it options with respect to the remaining petition, including a request for rehearing and POP review.

In September 2020, the Company filed an additional two petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of U.S. Patent Nos. 10,013,681 and 10,013,605—two of the patents at issue in the Second Wells Lawsuit. Those petitions remain pending with institution decisions expected in March 2021.

The Company incurred legal fees of $0.2 million in the three months ended December 31, 2020 related to third party claims against our customers. Such fees are included in general and administrative expenses in the consolidated statement of operations and other comprehensive income.

Claim Against UrbanFT, Inc.

On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on purported UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five purported UrbanFT patents. UrbanFT filed an answer and later asserted infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. During the course of the litigation, the Company learned that a judgment had been entered against UrbanFT’s affiliates and its predecessor owner in which an Oregon court ordered that the patents in issue revert to a prior owner, Mr. Stevens, because UrbanFT’s affiliates did not pay the purchase price owed to the prior owner. On

September 8, 2020, the Company filed a motion for summary judgment on its breach of contract claim. On September 15, 2020, the district court issued an order to show cause regarding jurisdiction over patent issues in light of the Oregon judgment. On December 17, 2020, the district court dismissed Mitek’s claims for declaratory judgment of non-infringement and UrbanFT’s counterclaims for patent infringement and related affirmative defenses based on infringement of the patents for lack of subject matter jurisdiction because UrbanFT does not own the patents. The district court then dismissed the remaining state law claims without prejudice to refiling in state court.

On December 18, 2020, the Company filed a new suit against UrbanFT in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL) asserting claims for breach of contract, open book account, and monetary damages. UrbanFT filed an answer and has not asserted any cross-claims as of now. We intend to vigorously pursue our claims and defend any cross-claims if any are filed at a later date.

Other Legal Matters

In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. The Company accrues for such liabilities when it is both (i) probable that a loss has occurred and (ii) the amount of the loss can be reasonably estimated in accordance with ASC 450, Contingencies. While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations.

Revolving Credit Facility

On May 3, 2018, the Company and ID Checker, Inc. (together, the “Co-Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”). Pursuant to the Loan Agreement, the Company arranged for a $10.0 million secured revolving credit facility (the “Revolver”) with a floating per annum interest rate equal to the greater of the Wall Street Journal prime rate, plus 0.25%, or 4.5%. The Co-Borrowers must maintain, at all times when any amounts are outstanding under the Revolver, either (i) minimum unrestricted cash at SVB and unused availability on the Revolver of at least $15.0 million and (ii) Adjusted Quick Ratio of 1.75:1.00. In May 2019, the Company and SVB entered into an amendment of the Loan Agreement to extend the maturity of the Revolver to September 30, 2020, which was subsequently not renewed. There were no borrowings outstanding under the Revolver as of September 30, 2020.

Nature of Operations and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Mitek Systems, Inc. (“Mitek” or the “Company”) is a leading innovator of mobile image capture and digital identity verification solutions. Mitek is a software development company with expertise in computer vision, artificial intelligence, and machine learning. The Company is currently serving more than 7,500 financial services organizations and leading marketplace and financial technology (“fintech”) brands across the globe. The Company’s solutions are embedded in native mobile apps and browsers to facilitate better online user experiences, fraud detection and reduction, and compliant transactions. Mitek’s Mobile Deposit® solution is used today by millions of consumers in the United States (“U.S.”) and Canada for mobile check deposit. Mobile Deposit® enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet. Mitek’s Mobile Deposit® solution is embedded within the financial institutions’ digital banking apps used by consumers and has now processed over four billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of December 31, 2020, the Company has been granted 69 patents and it has an additional 17 patent applications pending. Mitek’s Mobile Verify® verifies a user’s identity online enabling organizations to build safer digital communities. Scanning an identity document helps enable an enterprise to verify the identity of the person with whom they are conducting business, to comply with growing governmental Anti-Money Laundering and Know Your Customer regulatory requirements, and to improve the overall customer experience for digital onboarding. To be sure the person submitting the identity document is who they say they are, Mitek’s Mobile Verify Face Comparison provides an additional layer of online verification and compares the face on the submitted identity document with the live selfie photo of the user. The combination of identity document capture and data extraction process enables the organization to prefill the end user’s application, with far fewer key strokes, thus reducing keying errors, and improving both operational efficiency and the customer experience. Today, the financial services verticals (banks, credit unions, lenders, payments processors, card issuers, fintech companies, etc.) represent the greatest percentage of use of our solutions, but there is accelerated adoption by marketplaces, sharing economy, and hospitality sectors. Mitek uses artificial intelligence and machine learning to constantly improve the product performance of Mobile Verify® such as speed and accuracy of approvals of identification documents. The core of Mitek’s user experience is driven by Mitek MiSnap™, the leading image capture technology, which is incorporated across the Company’s product lines. It provides a simple, intuitive, and superior user-experience, making digital transactions faster, more accurate, and easier for the consumer. Mobile Fill® automates application prefill of any form with user data by simply snapping a picture of the driver’s license or other similar user identity document. CheckReader™ enables financial institutions to automatically extract data from a check image received across any deposit channel—branch, ATM, remote deposit capture, and mobile. Through the automatic recognition of all fields on checks, whether handwritten or machine print, CheckReader™ speeds the time to deposit for financial institutions and enables them to comply with check clearing regulations. The Company markets and sells its products and services worldwide through internal, direct sales teams located in the U.S., Europe, and Latin America as well as through channel partners. The Company’s partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate the Company’s products into their solutions to meet the needs of their customers.
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements of the Company as of December 31, 2020 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. Certain reclassifications were made to previously reported amounts in the consolidated statements of cash flows to make them consistent with the current period presentation. You should read these financial statements and the accompanying notes in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020, filed with the U.S. Securities and Exchange Commission on December 7, 2020, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K”), filed with the SEC on December 11, 2020. Results for the three months ended December 31, 2020 are not necessarily indicative of results for any other interim period or for a full fiscal year.
Principles of Consolidation	Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Foreign Currency	Foreign CurrencyThe Company has foreign subsidiaries that operate and sell products and services in various countries and jurisdictions around the world. As a result, the Company is exposed to foreign currency exchange risks. For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, deferred taxes, and related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards, fair value of assets and liabilities acquired, impairment of goodwill, useful lives of intangible assets, standalone selling price related to revenue recognition, contingent consideration, and income taxes.
Reclassifications	Reclassifications Certain reclassifications have been made to prior year presentation to conform to the current year presentation. Prior to fiscal 2020, the Company had included its product management costs in selling and marketing expenses. Due to certain personnel and functional responsibility changes in this function, the Company has reclassified these costs to research and development expenses. To conform to the current period’s presentation, prior year’s financials have been reclassified accordingly. The Company has determined that this reclassification was not material to previously reported financial statements. Product management costs were $0.7 million for three months ended December 31, 2019.
Revenue Recognition, Contract Assets and Liabilities and Contract Costs	Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and its related amendments (collectively known as “ASC 606”). ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle, involving a five-step process, of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generates revenue primarily from the delivery of licenses (to both on premise and transactional software as a service (“SaaS”) products) and related services, as well as the delivery of hardware and professional services. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time. See Note 2 of the consolidated financial statements for additional details. Contract Assets and Liabilities The Company recognizes revenue when control of the license is transferred to the customer. The Company records a contract asset when the revenue is recognized prior to the date payments become due. Contract assets that are expected to be paid within one year are recorded in current assets on the consolidated balance sheets. All other contract assets are recorded in other non-current assets in the consolidated balance sheet. Contract liabilities consist of deferred revenue. When the performance obligation is expected to be fulfilled within one year, the deferred revenue is recorded in current liabilities in the consolidated balance sheet. When the performance obligation is expected to be fulfilled beyond one year, the deferred revenue is recorded in non-current liabilities in the consolidated balance sheet. The Company reports net contract asset or liability positions on a contract-by-contract basis at the end of each reporting period. Contract Costs The Company incurs incremental costs to obtain a contract, consisting primarily of sales commissions incurred only if a contract is obtained. When the commission rate for a customer renewal is not commensurate with the commission rate for a new contract, the commission is capitalized if expected to be recovered. Such costs are capitalized and amortized using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates. Contract costs are recorded in other current and non-current assets in the consolidated balance sheets. Nature of Goods and Services The following is a description of principal activities from which the Company generates its revenue. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. Software and Hardware Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. For software license agreements that are distinct, the Company recognizes software license revenue upon delivery and after evidence of a contract exists. Hardware revenue is recognized in the period that the hardware is shipped. Services and Other Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services. The Company recognizes services and other revenue over the period in which such services are performed. The Company’s model typically includes an up-front fee and a periodic commitment from the customer that commences upon completion of the implementation through the remainder of the customer life. The up-front fee is the initial setup fee, or the implementation fee. The periodic commitment includes, but is not limited to, a fixed periodic fee and/or a transactional fee based on system usage that exceeds committed minimums. If the up-front fee is not distinct, revenue is deferred until the date the customer commences use of the Company’s services, at which point the up-front fee is recognized ratably over the life of the customer arrangement. The Company does not view the signing of the contract or the provision of initial setup services as discrete earnings events that are distinct. Significant Judgments in Application of the Guidance The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Identification of Performance Obligations For contracts that contain multiple performance obligations, which include combinations of software licenses, maintenance, and services, the Company accounts for individual goods or services as a separate performance obligation if they are distinct. The good or service is distinct if the good or service is separately identifiable from other items in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Determination of Transaction Price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. The Company includes any fixed charges within its contracts as part of the total transaction price. To the extent that variable consideration is not constrained, the Company includes an estimate of the variable amount, as appropriate, within the total transaction price and updates its assumptions over the duration of the contract. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Assessment of Estimates of Variable Consideration Many of the Company’s contracts with customers contain some component of variable consideration; however, the constraint will generally not result in a reduction in the estimated transaction price for most forms of variable consideration. The Company may constrain the estimated transaction price in the event of a high degree of uncertainty as to the final consideration amount owed because of an extended length of time over which the fees may be adjusted. Allocation of Transaction Price The transaction price, including any discounts, is allocated between separate goods and services in a contract that contains multiple performance obligations based on their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using available information such as market conditions and internally approved pricing guidelines. In instances where there are observable selling prices for professional services and support and maintenance, the Company may apply the residual approach to estimate the standalone selling price of software licenses. In certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer. Software and hardware revenue is generated from on premise software license sales, as well as sales of hardware scanner boxes and on premise appliance products. Services and other revenue is generated from the sale of transactional SaaS products and services, maintenance associated with the sale of software and hardware, and consulting and professional services.Contract assets, reported within current assets and other long-term assets in the consolidated balance sheets, primarily result from revenue being recognized when a license is delivered and payments are made over time. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue), for which transfer of control occurs, and therefore revenue is recognized as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. Contract costs included in other current and non-current assets on the consolidated balance sheetsContract costs are amortized based on the transfer of goods or services to which the asset relates. The amortization period also considers expected customer lives and whether the asset relates to goods or services transferred under a specific anticipated contract.
Net Income Per Share	Net Income Per Share The Company calculates net income per share in accordance with FASB ASC Topic 260, Earnings per Share. Basic net income per share is based on the weighted-average number of common shares outstanding during the period. Diluted net income per share also gives effect to all potentially dilutive securities outstanding during the period, such as restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, if dilutive. In a period with a net loss position, potentially dilutive securities are not included in the computation of diluted net loss per share because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss per share is the same.
Investments	Investments Investments consist of corporate notes and bonds, commercial paper, U.S. Treasury securities, and asset-backed securities. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations and other comprehensive income. No other-than-temporary impairment charges were recognized in the three months ended December 31, 2020 and 2019. All investments whose maturity or sale is expected within one year are classified as “current” on the consolidated balance sheets. All other securities are classified as “long-term” on the consolidated balance sheets.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful AccountsTrade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected.
Capitalized Software Development Costs	Capitalized Software Development Costs Costs incurred for the development of software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases, and amortization of capitalized software development costs commences when the products are available for general release. For the three months ended December 31, 2020 and 2019, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material or were not realizable. We had no amortization expense from capitalized software costs during the three months ended December 31, 2020 and 2019. Costs related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. The Company defines the design, configuration, and coding process as the application development stage.
Goodwill and Purchased Intangible Assets	Goodwill and Purchased Intangible Assets The Company’s goodwill and intangible assets resulted from prior acquisitions. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate that their value may no longer be recoverable. In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), the Company reviews its goodwill and indefinite-lived intangible assets for impairment at least annually in its fiscal fourth quarter and more frequently if events or changes in circumstances occur that indicate a potential reduction in the fair value of its reporting unit and/or its indefinite-lived intangible asset below their respective carrying values. Examples of such events or circumstances include: a significant adverse change in legal factors or in the business climate, a significant decline in the Company’s stock price, a significant decline in the Company’s projected revenue or cash flows, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or the presence of other indicators that would indicate a reduction in the fair value of a reporting unit. No such events or circumstances have occurred since the last impairment assessment was performed. The Company’s goodwill is considered to be impaired if management determines that the carrying value of the reporting unit to which the goodwill has been assigned exceeds management’s estimate of its fair value. Based on the guidance provided by ASC 350 and ASC Topic 280, Segment Reporting, management has determined that the Company operates in one segment and consists of one reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services and customers. Because the Company has only one reporting unit, and because the Company is publicly traded, the Company determines the fair value of the reporting unit based on its market capitalization as it believes this represents the best evidence of fair value. In the fourth quarter of fiscal 2020, management completed its annual goodwill impairment test and concluded that the Company’s goodwill was not impaired. The Company’s conclusion that goodwill was not impaired was based on a comparison of its net assets to its market capitalization. Because the Company determines the fair value of its reporting unit based on its market capitalization, the Company’s future reviews of goodwill for impairment may be impacted by changes in the price of the Company’s common stock, par value $0.001 per share (“Common Stock”). For example, a significant decline in the price of the Common Stock may cause the fair value of its goodwill to fall below its carrying value. Therefore, the Company cannot assure that when it completes its future reviews of goodwill for impairment a material impairment charge will not be recorded. Intangible assets are amortized over their useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. The carrying amount of such assets is reduced to fair value if the undiscounted cash flows used in the test for recoverability are less than the carrying amount of such assets.
Guarantees	Guarantees In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Topic 460, Guarantees (“ASC 460”), except for standard indemnification and warranty provisions that are contained within many of the Company’s customer license and service agreements and certain supplier agreements, and give rise only to the disclosure requirements prescribed by ASC 460. Indemnification and warranty provisions contained within the Company’s customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in the Company’s industry. The Company has not historically incurred significant obligations under customer indemnification or warranty provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations.
Income Taxes	Income Taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Management evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance reduces deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. See Note 6 of the consolidated financial statements for additional details. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. See Note 6 of the consolidated financial statements for additional details.
Stock-Based Compensation	Stock-Based Compensation The Company issues RSUs, stock options, performance options, and performance RSUs as awards to its employees. Additionally, eligible employees may participate in the Company’s ESPP. Employee stock awards are measured at fair value on the date of grant and expense is recognized using the straight-line single-option method in accordance with FASB ASC Topic 718, Compensation—Stock Compensation. Forfeitures are recorded as they occur. The Company assigns fair value to RSUs based on the closing stock price of its Common Stock on the date of grant. The Company estimates the fair value of stock options and ESPP shares using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected life of the grant effective as of the date of the grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. The Company estimates the fair value of performance options, Senior Executive Performance RSUs, and similar awards using the Monte-Carlo simulation. The Monte-Carlo simulation requires subjective assumptions, including the Company’s valuation date stock price, the annual risk-free interest rate, expected volatility, the probability of reaching the stock performance targets, and a 20-trading-day average stock price.
Comprehensive Income	Comprehensive Income Comprehensive income consists of net income, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments.
Recently Adopted Accounting Pronouncements, Change in Significant Accounting Policy and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. The Company adopted ASU 2018-15 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), to eliminate, add, and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The Company adopted ASU 2018-13 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted ASU 2017-04 in the first quarter of fiscal 2021, and the adoption did not have a material impact on its consolidated financial statements. Change in Significant Accounting Policy The Company has consistently applied the accounting policies to all periods presented in its consolidated financial statements. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on the consolidated financial statements. No other new accounting pronouncement issued or effective during the three months ended December 31, 2020 had, or is expected to have, a material impact on the Company’s consolidated financial statements.
Fair Value Measurements and Disclosures	Fair Value Measurements and Disclosures FASB ASC Topic 820, Fair Value Measurements (“ASC 820”) defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last, unobservable: •Level 1—Quoted prices in active markets for identical assets or liabilities; •Level 2—Inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, check_deposit in Billions	3 Months Ended
	Dec. 31, 2020 USD ($) institution check_deposit patent segment $ / shares	Sep. 30, 2020 USD ($) $ / shares	Dec. 31, 2019 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of financial institutions signed agreements to deploy mobile deposit (more than) \| institution	7,500
Number of check deposits processed (more than) \| check_deposit	4
Number of patents granted \| patent	69
Number of pending patent applications \| patent	17
Net gain resulting from foreign exchange translation	$ 2,760,000		$ 1,253,000
Research and development	6,165,000		5,292,000
Other than temporary impairments recognized on investments	0		0
Write-offs of allowance for doubtful accounts	1,000		0
Allowance for doubtful accounts receivable	200,000	$ 200,000
Capitalized software development costs	0		0
Amortization expense of capitalized software development costs	0		0
Capitalized software development costs for internal use	200,000		23,000
Amortization expense from capitalized software development costs for internal use	$ 100,000		100,000
Number of operating segments \| segment	1
Number of reporting units \| segment	1
Goodwill impairment		$ 0
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001
Impairment charges related to intangible assets	$ 0		0
Trading-day average stock price period	20 days
Accumulated other comprehensive income (loss)	$ 2,384,000	$ (323,000)
Revision of Prior Period, Reclassification, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Research and development			$ 700,000
ICAR \| Spanish Government Agencies
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Interest rate on loan agreement	0.00%
Amount outstanding under loan agreement	$ 700,000	700,000
ICAR \| Spanish Government Agencies \| Other current liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amount outstanding under loan agreement	100,000	100,000
ICAR \| Spanish Government Agencies \| Other non-current liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Amount outstanding under loan agreement	$ 600,000	$ 600,000
Minimum \| ICAR \| Spanish Government Agencies
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Term of loan agreement	5 years
Maximum \| ICAR \| Spanish Government Agencies
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Term of loan agreement	12 years

Nature of Operations and Summary of Significant Accounting Policies - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Net income	$ 2,167	$ 560
Weighted-average shares outstanding - basic (in shares)	42,476	40,615
Common stock equivalents (in shares)	1,421	1,213
Weighted-average shares outstanding - diluted (in shares)	43,897	41,828
Net income per share:
Basic (in dollars per share)	$ 0.05	$ 0.01
Diluted (in dollars per share)	$ 0.05	$ 0.01

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Stockholders' Equity - Narrative (Details)		3 Months Ended		13 Months Ended
Stockholders' Equity - Narrative (Details)	Nov. 06, 2018 $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) $ / shares shares	Sep. 30, 2020 $ / shares shares	Jan. 31, 2020 shares	Dec. 13, 2019 USD ($)	Feb. 28, 2019	Oct. 23, 2018 $ / right $ / shares shares	Mar. 07, 2018 shares	Mar. 10, 2017 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $		$ 25,000,000.0		$ 25,000,000.0
Weighted average period for unrecognized compensation expense expected to be recognized (in years)		2 years 8 months 12 days
Purchase of common stock (in shares)		921,015		921,015	1,162,505
Discount rate from market price, purchase date		0.15
Recognized compensation expense \| $		$ 2,747,000	$ 2,303,000
Total intrinsic value of options exercised \| $		$ 1,500,000	100,000
Amount authorized and approved under share repurchase program \| $							$ 10,000,000
Amount of shares repurchased \| $				$ 1,000,000.0
Number of shares repurchased (in shares)				137,000
Average price of shares repurchased (in dollars per share) \| $ / shares				$ 7.33
Preferred stock, par value (in dollars per share) \| $ / shares		$ 0.001		$ 0.001	$ 0.001
Percentage of common stock outstanding for acquiring person under right agreement								4.90%
Series B Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of preferred share purchase right for each share of common stock (in shares)									1
Preferred stock, share conversion ratio									0.001000
Preferred stock, par value (in dollars per share) \| $ / shares									$ 0.001
Preferred stock, purchase price per right (in dollars per right) \| $ / right									35.00
Preferred stock, redemption price per share (in dollars per share) \| $ / shares									$ 0.0001
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period for unrecognized compensation expense expected to be recognized (in years)		2 years 9 months 18 days
Awards outstanding (in shares)		2,627,825		2,627,825	2,661,943
Recognized compensation expense \| $		$ 1,900,000	1,700,000
Unrecognized compensation expense related to nonvested awards \| $		19,200,000		$ 19,200,000
Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $		$ 3,600,000		$ 3,600,000
Weighted average period for unrecognized compensation expense expected to be recognized (in years)		2 years 9 months 18 days
Awards outstanding (in shares)		638,321		638,321	353,556
Recognized compensation expense \| $		$ 300,000	200,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average period for unrecognized compensation expense expected to be recognized (in years)		2 years 3 months 18 days
Recognized compensation expense \| $		$ 200,000	200,000
Unrecognized compensation expense related to outstanding stock options \| $		1,400,000		$ 1,400,000
Performance options \| Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $		$ 700,000		$ 700,000
Weighted average period for unrecognized compensation expense expected to be recognized (in years)		9 months 18 days
Number of common stock reserved for future grants (in shares)	800,000
Recognized compensation expense \| $		$ 200,000	200,000
Exercise price per share (in dollars per share) \| $ / shares	$ 9.50
Vesting period of awards	3 years
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)						4,500,000
Number of common stock reserved for future grants (in shares)		2,719,465		2,719,465
2020 Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		975,746		975,746
2020 Plan \| Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		638,321		638,321
Prior Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)						107,903
Purchase of common stock (in shares)		611,226		611,226
Prior Plans \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		1,264,921		1,264,921
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)		649,326		649,326						1,000,000
Shares issued to participants pursuant to employee stock purchase plan (in shares)		350,674
Recognized compensation expense \| $		$ 100,000	$ 100,000
ESPP \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Discount rate from market price, offering date		15.00%
Director Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)											1,500,000
Number of common stock reserved for future grants (in shares)		267,533		267,533
Director Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock (in shares)		327,946		327,946

Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Dec. 31, 2020	Jun. 30, 2020	Sep. 30, 2020
Number of Shares
Outstanding at September 30, 2020 (in shares)	1,162,505
Granted (in shares)	0
Exercised (in shares)	(241,490)
Canceled (in shares)	0
Outstanding at December 31, 2020 (in shares)	921,015
Weighted-Average Exercise Price
Outstanding at September 30, 2020 (in dollars per share)	$ 7.51
Granted (in dollars per share)	0
Exercised (in dollars per share)	7.82
Canceled (in dollars per share)	0
Outstanding at December 31, 2020 (in dollars per share)	$ 7.43
Weighted-Average Remaining Contractual Term (in Years)
Outstanding	6 years 2 months 12 days	6 years 1 month 6 days
Outstanding, Aggregate Intrinsic Value	$ 9,536		$ 6,081
Vested and Expected to Vest at December 31, 2020
Outstanding (in shares)	921,015
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 7.43
Outstanding, Weighted Average Remaining Contractual Term (in Years)	6 years 2 months 12 days
Outstanding, Aggregate Intrinsic Value (in thousands)	$ 9,536
Exercisable at December 31, 2020 (in shares)	585,487
Exercisable at December 31, 2020, Weighted Average Exercise Price (in dollars per share)	$ 6.25
Exercisable at December 31, 2020, Weighted Average Remaining Contractual Term (in Years)	5 years 1 month 6 days
Exercisable at December 31, 2020, Aggregate Intrinsic Value (in thousands)	$ 6,750

Commitments and Contingencies - Narrative (Details) ft² in Thousands, € in Millions												3 Months Ended	13 Months Ended
	Dec. 04, 2020 patent	Nov. 17, 2020 patent	Sep. 30, 2020 USD ($) patent	Jan. 10, 2020 USD ($) product patent	Nov. 06, 2019 USD ($) patent day	Jul. 31, 2019 patent	Aug. 17, 2018 patent	Jul. 07, 2018 patent	Jun. 11, 2018 USD ($)	Jun. 11, 2018 EUR (€)	May 03, 2018 USD ($)	Dec. 31, 2020 USD ($) ft²	Feb. 01, 2021 USD ($) patent
Leases
Weighted average remaining lease term of operating leases												4 years 2 months 12 days
Weighted average discount rate of operating leases												4.70%
ROU assets \| $			$ 5,407,000									$ 5,122,000
ROU liabilities \| $												6,769,000
Lease liabilities, current portion \| $			1,819,000									1,751,000
Lease liabilities, non-current portion \| $			$ 5,327,000									5,018,000
Operating lease costs \| $												500,000
Operating cash flows for operating leases paid \| $												$ 700,000
Minimum
Leases
Remaining operating lease term												1 year
Maximum
Leases
Remaining operating lease term												7 years
Line of Credit \| Revolving Credit Facility
Revolving Credit Facility
Maximum borrowing capacity \| $											$ 10,000,000.0
Interest rate floor											4.50%
Minimum unrestricted cash and unused borrowing capacity \| $											$ 15,000,000.0
Adjusted quick ratio requirement											1.75
Borrowings outstanding \| $												$ 0
Line of Credit \| Revolving Credit Facility \| Prime Rate
Revolving Credit Facility
Basis spread on variable rate											0.25%
Building
Leases
Office space subject to the lease \| ft²												29
Pending Litigation \| General and administrative
Legal Proceedings
Legal fees \| $												$ 200,000
Pending Litigation \| UrbanFT
Legal Proceedings
Number of patents allegedly infringed \| patent						5
Number of patents infringed \| patent						2
Number of invalid patents \| patent						2
Number of patents not infringed \| patent						2
Pending Litigation \| Global Equity & Corporate Consulting, S.L. \| ICAR
Legal Proceedings
Contingency amount claimed									$ 900,000	€ 0.8
Pending Litigation \| USAA \| Wells Fargo
Legal Proceedings
Number of patents allegedly infringed		4	2	2	3		5	4
Number of patents infringed \| patent				1	1
Amount awarded in damages to other party \| $				$ 102,000,000	$ 200,000,000
Number of patents dropped \| patent							2
Number of invalid patents \| patent							1
Number of products accused of patent infringement \| product				0
Number of patents denied institution \| patent		3
Pending Litigation \| USAA \| Wells Fargo \| Subsequent Event
Legal Proceedings
Number of patents allegedly infringed \| patent													4
Amount awarded in damages to other party \| $													$ 0
Number of patents instituted \| patent													3
Number of patents denied institution \| patent													1
Pending Litigation \| USAA \| PNC Bank
Legal Proceedings
Number of patents allegedly infringed \| patent	2		2

Income Taxes	3 Months Ended
Income Taxes	Dec. 31, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	6. INCOME TAXES The Company’s tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, management updates the estimate of the annual effective tax rate, and any changes in the annual effective tax rate are recorded in a cumulative adjustment in that quarter. The quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant volatility due to several factors, including management’s ability to accurately predict the portion of income before income taxes in multiple jurisdictions, the tax effects of our stock-based compensation awards, and the effects of acquisitions and the integration of those acquisitions. The annual effective tax rate differs from the U.S. statutory rate primarily due to foreign and state taxes. For the three months ended December 31, 2020, the Company recorded an income tax benefit of $0.5 million, which yielded an effective tax rate of negative 33%. For the three months ended December 31, 2019, the Company recorded an income tax provision of $41,000, which yielded an effective tax rate of 7%. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three months ended December 31, 2020 is primarily due to excess tax benefits resulting from the exercise of stock options and vesting of RSUs, the impact of foreign and state taxes, and the impact of federal and state research and development credits on its tax provision.

Revenue Concentration	3 Months Ended
Revenue Concentration	Dec. 31, 2020
Risks and Uncertainties [Abstract]
REVENUE CONCENTRATION	8. REVENUE CONCENTRATION For the three months ended December 31, 2020, the Company derived revenue of $3.9 million from one customer, with such customer accounting for 15% of the Company’s total revenue. For the three months ended December 31, 2019, the Company derived revenue of $8.1 million from two customers, with such customers accounting for 20% and 17% of the Company’s total revenue, respectively. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $0.1 million and $4.4 million at December 31, 2020 and 2019, respectively. The Company’s revenue is derived primarily from sales by the Company to channel partners, including systems integrators and resellers, and end-users of licenses to sell products covered by the Company’s patented technologies. These contractual arrangements do not obligate the Company’s channel partners to order, purchase or distribute any fixed or minimum quantities of the Company’s products. In most cases, the channel partners purchase the license from the Company after they receive an order from an end-user. The channel partners receive orders from various individual end-users; therefore, the sale of a license to a channel partner may represent sales to multiple end-users. End-users can purchase the Company’s products through more than one channel partner. Revenues can fluctuate based on the timing of license renewals by channel partners. When a channel partner purchases or renews a license, the Company receives a license fee in consideration for the grant of a license to sell the Company’s products and there are no future payment obligations related to such agreement; therefore, the license fee the Company receives with respect to a particular license renewal in one period does not have a correlation with revenue in future periods. During the last several quarters, sales of licenses to one or more channel partners have comprised a significant part of the Company’s revenue. This is attributable to the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. The Company believes that it is not dependent upon any single channel partner, even those from which revenues were in excess of 10% of the Company’s total revenue in a specific reporting period, and that the loss or termination of the Company’s relationship with any such channel partner would not have a material adverse effect on the Company’s future operations because either the Company or another channel partner could sell the Company’s products to the end-user that had purchased from the channel partner the Company lost. International sales accounted for approximately 31% and 25% of the Company’s total revenue for the three months ended December 31, 2020 and 2019, respectively. From a geographic perspective, approximately 64% and 66% of the Company’s total long-term assets as of December 31, 2020 and September 30, 2020, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 15% of the Company’s total long-term assets excluding goodwill and other intangible assets as of December 31, 2020 and September 30, 2020, respectively, are associated with the Company’s international subsidiaries.

Investments - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Schedule Of Available For Sale Securities [Line Items]
Cost	$ 45,781	$ 41,890
Gross Unrealized Gains	55	111
Gross Unrealized Losses	(1)	(3)
Fair Market Value	45,835	41,998
Short-term investments \| U.S. Treasury
Schedule Of Available For Sale Securities [Line Items]
Cost	9,557	10,245
Gross Unrealized Gains	14	38
Gross Unrealized Losses	0	0
Fair Market Value	9,571	10,283
Short-term investments \| Asset-backed securities
Schedule Of Available For Sale Securities [Line Items]
Cost	3,914	4,723
Gross Unrealized Gains	21	36
Gross Unrealized Losses	0	0
Fair Market Value	3,935	4,759
Short-term investments \| Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Cost	26,713	24,956
Gross Unrealized Gains	20	37
Gross Unrealized Losses	(1)	0
Fair Market Value	26,732	24,993
Long-term investments \| U.S. Treasury
Schedule Of Available For Sale Securities [Line Items]
Cost	2,745
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Market Value	2,745
Long-term investments \| Asset-backed securities
Schedule Of Available For Sale Securities [Line Items]
Cost	962
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Market Value	962
Long-term investments \| Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Cost	1,890	1,966
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(3)
Fair Market Value	$ 1,890	$ 1,963

Investments - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Assets
Short-term investments	$ 40,238	$ 40,035
Total assets at fair value	45,835	41,998
Liabilities
Acquisition-related contingent consideration	790	753
Total liabilities at fair value	790	753
U.S. Treasury
Assets
Short-term investments	9,571	10,283
Long-term investments	2,745	0
Asset-backed securities
Assets
Short-term investments	3,935	4,759
Long-term investments	962
Corporate debt securities \| Financial
Assets
Short-term investments	6,387	7,695
Long-term investments	0	977
Corporate debt securities \| Industrial
Assets
Short-term investments	1,913	1,924
Long-term investments	1,890	986
Commercial paper \| Financial
Assets
Short-term investments	12,488	13,479
Commercial paper \| Industrial
Assets
Short-term investments	5,944	1,895
Quoted Prices in Active Markets (Level 1)
Assets
Short-term investments	9,571	10,283
Total assets at fair value	12,316	10,283
Liabilities
Acquisition-related contingent consideration	0	0
Total liabilities at fair value	0	0
Quoted Prices in Active Markets (Level 1) \| U.S. Treasury
Assets
Short-term investments	9,571	10,283
Long-term investments	2,745	0
Quoted Prices in Active Markets (Level 1) \| Asset-backed securities
Assets
Short-term investments	0	0
Long-term investments	0
Quoted Prices in Active Markets (Level 1) \| Corporate debt securities \| Financial
Assets
Short-term investments		0
Long-term investments		0
Quoted Prices in Active Markets (Level 1) \| Corporate debt securities \| Industrial
Assets
Short-term investments		0
Long-term investments		0
Quoted Prices in Active Markets (Level 1) \| Commercial paper \| Financial
Assets
Short-term investments		0
Quoted Prices in Active Markets (Level 1) \| Commercial paper \| Industrial
Assets
Short-term investments		0
Significant Other Observable Inputs (Level 2)
Assets
Short-term investments	30,667	29,752
Total assets at fair value	33,519	31,715
Liabilities
Acquisition-related contingent consideration	0	0
Total liabilities at fair value	0	0
Significant Other Observable Inputs (Level 2) \| U.S. Treasury
Assets
Short-term investments	0	0
Long-term investments	0	0
Significant Other Observable Inputs (Level 2) \| Asset-backed securities
Assets
Short-term investments	3,935	4,759
Long-term investments	962
Significant Other Observable Inputs (Level 2) \| Corporate debt securities \| Financial
Assets
Short-term investments	6,387	7,695
Long-term investments	0	977
Significant Other Observable Inputs (Level 2) \| Corporate debt securities \| Industrial
Assets
Short-term investments	1,913	1,924
Long-term investments	1,890	986
Significant Other Observable Inputs (Level 2) \| Commercial paper \| Financial
Assets
Short-term investments	12,488	13,479
Significant Other Observable Inputs (Level 2) \| Commercial paper \| Industrial
Assets
Short-term investments	5,944	1,895
Significant Unobservable Inputs (Level 3)
Assets
Short-term investments	0	0
Total assets at fair value	0	0
Liabilities
Acquisition-related contingent consideration	790	753
Total liabilities at fair value	790	753
Significant Unobservable Inputs (Level 3) \| U.S. Treasury
Assets
Short-term investments	0	0
Long-term investments	0	0
Significant Unobservable Inputs (Level 3) \| Asset-backed securities
Assets
Short-term investments	0	0
Long-term investments	0
Significant Unobservable Inputs (Level 3) \| Corporate debt securities \| Financial
Assets
Short-term investments	0	0
Long-term investments		0
Significant Unobservable Inputs (Level 3) \| Corporate debt securities \| Industrial
Assets
Short-term investments	0	0
Long-term investments		0
Significant Unobservable Inputs (Level 3) \| Commercial paper \| Financial
Assets
Short-term investments	0	0
Significant Unobservable Inputs (Level 3) \| Commercial paper \| Industrial
Assets
Short-term investments	$ 0	$ 0

Investments - Summary of Contingent Consideration Measured at Fair Value (Details) - Contingent Consideration $ in Thousands	3 Months Ended
	Dec. 31, 2020 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
September 30, 2020	$ 753
Foreign currency effect on contingent consideration	37
Balance at December 31, 2020	$ 790

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Sep. 30, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	60,000,000	60,000,000
Common stock, shares issued (in shares)	42,668,376	41,779,853
Common stock, shares outstanding (in shares)	42,668,376	41,779,853

Nature of Operations and Summary of Significant Accounting Policies - Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	2,293	1,877
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	721	325
RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	1,253	1,482
ESPP common stock equivalents
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	66	70
Performance options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	179	0
Performance RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	74	0

Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenue	$ 25,976	$ 22,067
Deposits revenue
Disaggregation of Revenue [Line Items]
Total revenue	15,616	14,651
Identity verification revenue
Disaggregation of Revenue [Line Items]
Total revenue	10,360	7,416
Transferred at Point in Time \| Deposits software and hardware
Disaggregation of Revenue [Line Items]
Total revenue	10,755	10,283
Transferred at Point in Time \| Identity verification software and hardware
Disaggregation of Revenue [Line Items]
Total revenue	1,548	1,232
Transferred over Time \| Deposits services and other
Disaggregation of Revenue [Line Items]
Total revenue	4,861	4,368
Transferred over Time \| Identity verification services and other
Disaggregation of Revenue [Line Items]
Total revenue	$ 8,812	$ 6,184

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Revenue from Contract with Customer [Abstract]
Contract assets, current	$ 4,465	$ 5,187
Contract assets, non-current	3,671	4,468
Contract liabilities (deferred revenue), current	9,742	7,973
Contract liabilities (deferred revenue), non-current	$ 1,154	$ 1,597

Revenue Recognition - Narrative (Details) - USD ($)	3 Months Ended
Revenue Recognition - Narrative (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue recognized included in contract liability balance at the beginning of the period	$ 4,900,000	$ 3,600,000
Impairment losses recognized on contract costs	0	0
Selling and marketing
Disaggregation of Revenue [Line Items]
Contract costs included in selling and marketing expenses	200,000	$ 200,000
Other Current and Non-current Assets
Disaggregation of Revenue [Line Items]
Contract costs	$ 1,900,000		$ 1,500,000

Investments - Narrative (Details) - USD ($)	3 Months Ended
Investments - Narrative (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Other-than-temporary impairment charges recognized	$ 0	$ 0
Realized gains (losses) from sale of available-for-sale securities	0	$ 0
Acquisition-related contingent consideration	$ 790,000		$ 753,000

Goodwill and Intangible Assets - Changes in Goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2020 USD ($)
Goodwill [Roll Forward]
Balance at September 30, 2020	$ 35,669
Foreign currency effect on goodwill	1,654
Balance at December 31, 2020	$ 37,323

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020
Indefinite Lived Intangible Assets By Major Class [Line Items]
Cost	$ 38,587	$ 38,587
Accumulated Amortization	20,164	19,298
Net	$ 18,423	$ 19,289
Completed technologies
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period	6 years 4 months 24 days	6 years 4 months 24 days
Cost	$ 20,341	$ 20,341
Accumulated Amortization	9,736	9,416
Net	$ 10,605	$ 10,925
Customer relationships
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period	4 years 9 months 18 days	4 years 9 months 18 days
Cost	$ 17,628	$ 17,628
Accumulated Amortization	9,928	9,390
Net	$ 7,700	$ 8,238
Trade names
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period	4 years 6 months	4 years 6 months
Cost	$ 618	$ 618
Accumulated Amortization	500	492
Net	$ 118	$ 126

Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
2021—remaining	$ 4,935
2022	6,209
2023	4,075
2024	1,947
2025	1,257
Net	$ 18,423	$ 19,289

Stockholders' Equity - Stock-Based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 2,747	$ 2,303
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	87	61
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	788	572
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	740	674
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 1,132	$ 996

Stockholders' Equity - RSU Activity (Details) - RSUs	3 Months Ended
Stockholders' Equity - RSU Activity (Details) - RSUs	Dec. 31, 2020 $ / shares shares
Number of Shares
Outstanding at September 30, 2020 (in shares) \| shares	2,661,943
Granted (in shares) \| shares	647,052
Settled (in shares) \| shares	(647,035)
Canceled (in shares) \| shares	(34,135)
Outstanding at December 31, 2020 (in shares) \| shares	2,627,825
Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020 (in dollars per share) \| $ / shares	$ 7.95
Granted (in dollars per share) \| $ / shares	11.92
Settled (in dollars per share) \| $ / shares	7.32
Canceled (in dollars per share) \| $ / shares	8.39
Outstanding at December 31, 2020 (in dollars per share) \| $ / shares	$ 9.07

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax (benefit) provision	$ (534)	$ 41
Effective tax rate	(33.00%)	7.00%

Commitments and Contingencies - Maturity of Operating Lease Liabilities (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2021—remaining	$ 1,571
2022	1,737
2023	1,735
2024	1,399
2025	314
2026	310
Thereafter	395
Total lease payments	7,461
Less: amount representing interest	(692)
Present value of future lease payments	$ 6,769

Revenue Concentration (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Revenue Concentration (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Revenue, Major Customer [Line Items]
Revenue	$ 25,976	$ 22,067
Accounts receivable, net	12,714		$ 15,612
Customer Concentration Risk \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Revenue	3,900	8,100
Customer Concentration Risk \| Accounts Receivable
Revenue, Major Customer [Line Items]
Accounts receivable, net	$ 100	$ 4,400
Customer Concentration Risk \| Customer One \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Total revenue, percentage	15.00%	20.00%
Customer Concentration Risk \| Customer Two \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Total revenue, percentage		17.00%
Geographic Concentration Risk \| Sales Revenue Net \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	31.00%	25.00%
Geographic Concentration Risk \| Long-term Assets \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	64.00%		66.00%
Geographic Concentration Risk \| Long-term Assets, Excluding Goodwill and Other Intangibles \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	15.00%		15.00%