0000807863-21-000063 | 10-Q | XBRL Viewer

Cover - shares	6 Months Ended
Cover - shares	Mar. 31, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
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		43,053,605
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000807863
Current Fiscal Year End Date	--09-30

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 53,935	$ 19,986
Short-term investments	131,314	40,035
Accounts receivable, net	14,162	15,612
Contract assets	3,577	5,187
Prepaid expenses	2,143	1,338
Other current assets	2,059	1,968
Total current assets	207,190	84,126
Long-term investments	34,258	1,963
Property and equipment, net	3,502	3,610
Right-of-use assets	4,791	5,407
Intangible assets, net	16,044	19,289
Goodwill	35,728	35,669
Deferred income tax assets	13,963	13,484
Convertible senior notes hedge	34,719	0
Other non-current assets	5,606	5,606
Total assets	355,801	169,154
Current liabilities:
Accounts payable	2,878	3,909
Accrued payroll and related taxes	7,586	8,882
Deferred revenue, current portion	11,353	7,973
Lease liabilities, current portion	1,755	1,819
Acquisition-related contingent consideration	0	753
Other current liabilities	994	1,020
Total current liabilities	24,566	24,356
Convertible senior notes	117,692	0
Embedded conversion derivative	34,719	0
Deferred revenue, non-current portion	585	1,597
Lease liabilities, non-current portion	4,636	5,327
Deferred income tax liabilities	4,673	4,649
Other non-current liabilities	1,201	982
Total liabilities	188,072	36,911
Stockholders’ equity:
Preferred stock, $0.001 par value, 1,000,000 shares authorized, zero issued and outstanding	0	0
Common stock, $0.001 par value, 60,000,000 shares authorized, 43,052,478 and 41,779,853 issued and outstanding, as of March 31, 2021 and September 30, 2020, respectively	43	42
Additional paid-in capital	178,891	146,518
Accumulated other comprehensive loss	(397)	(323)
Accumulated deficit	(10,808)	(13,994)
Total stockholders’ equity	167,729	132,243
Total liabilities and stockholders’ equity	$ 355,801	$ 169,154

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	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)	43,052,478	41,779,853
Common stock, shares outstanding (in shares)	43,052,478	41,779,853

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

6 Months Ended

Mar. 31, 2021

Mar. 31, 2020

Mar. 31, 2021

Mar. 31, 2020

Total revenue

$ 28,773

$ 23,192

$ 54,748

$ 45,259

Operating costs and expenses

Selling and marketing expense

8,530

6,686

^[1]

15,915

13,334

^[1]

Research and development expense

6,691

5,581

^[1]

12,855

10,873

^[1]

General and administrative

5,718

5,210

10,776

10,498

Acquisition-related costs and expenses

1,659

1,579

3,352

3,187

Restructuring costs

(114)

Total operating costs and expenses

26,390

22,128

50,828

43,897

Operating income

2,383

1,064

3,920

1,362

Interest expense

1,319

Other income, net

372

468

335

Income before income taxes

1,436

1,096

3,069

1,697

Income tax benefit (provision)

(417)

(188)

117

(229)

Net income

$ 1,019

$ 908

$ 3,186

$ 1,468

Net income per share – basic (in dollars per share)

$ 0.02

$ 0.07

$ 0.04

Net income per share - diluted (in dollars per share)

$ 0.02

$ 0.07

$ 0.03

Shares used in calculating net income per share – basic (in shares)

43,138

41,022

42,835

40,817

Shares used in calculating net income per share – diluted (in shares)

44,554

42,028

44,367

42,030

Other comprehensive income (loss)

Net income

$ 1,019

$ 908

$ 3,186

$ 1,468

Foreign currency translation adjustment

(2,648)

(1,064)

112

189

Unrealized gain (loss) on investments

(133)

(186)

Other comprehensive income (loss)

(1,762)

(100)

3,112

1,715

Software and hardware

Total revenue

13,013

11,453

25,315

22,968

Operating costs and expenses

Cost of revenue

670

864

1,915

1,635

Services and other

Total revenue

15,760

11,739

29,433

22,291

Operating costs and expenses

Cost of revenue

$ 3,122

$ 2,322

$ 6,015

$ 4,484

[1]	March 31, 2020 consolidated statements of operations reflect reclassifications to conform to the current year presentation.

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)		185,000
Exercise of stock options	645		645
Settlement of restricted stock units (in shares)		586,000
Settlement of restricted stock units	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan (in shares)		75,000
Issuance of common stock under employee stock purchase plan	606		606
Stock-based compensation expense	4,611		4,611
Repurchases and retirements of common stock (in shares)		(137,000)
Repurchases and retirements of common stock	(1,002)			(1,002)
Components of other comprehensive income (loss):
Net income	1,468			1,468
Foreign currency translation adjustment	189				189
Unrealized gain (loss) on investments	58				58
Other comprehensive income (loss)	1,715
Ending Balance (in shares) at Mar. 31, 2020		41,076,000
Ending Balance at Mar. 31, 2020	113,908	$ 41	138,021	(20,340)	(3,814)
Beginning Balance (in shares) at Dec. 31, 2019		40,865,000
Beginning Balance at Dec. 31, 2019	111,524	$ 41	134,535	(20,246)	(2,806)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		161,000
Exercise of stock options	572		572
Settlement of restricted stock units (in shares)		112,000
Settlement of restricted stock units	0
Issuance of common stock under employee stock purchase plan (in shares)		75,000
Issuance of common stock under employee stock purchase plan	606		606
Stock-based compensation expense	2,308		2,308
Repurchases and retirements of common stock (in shares)		(137,000)
Repurchases and retirements of common stock	(1,002)			(1,002)
Components of other comprehensive income (loss):
Net income	908			908
Foreign currency translation adjustment	(1,064)				(1,064)
Unrealized gain (loss) on investments	56				56
Other comprehensive income (loss)	(100)
Ending Balance (in shares) at Mar. 31, 2020		41,076,000
Ending Balance at Mar. 31, 2020	$ 113,908	$ 41	138,021	(20,340)	(3,814)
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)	259,865	260,000
Exercise of stock options	$ 1,958		1,958
Settlement of restricted stock units (in shares)		935,000
Settlement of restricted stock units	0	$ 1	(1)
Issuance of common stock under employee stock purchase plan (in shares)		77,000
Issuance of common stock under employee stock purchase plan	792		792
Stock-based compensation expense	5,715		5,715
Sale of convertible senior notes warrants	23,909		23,909
Repurchases and retirements of common stock	0
Components of other comprehensive income (loss):
Net income	3,186			3,186
Foreign currency translation adjustment	112				112
Unrealized gain (loss) on investments	(186)				(186)
Other comprehensive income (loss)	$ 3,112
Ending Balance (in shares) at Mar. 31, 2021	43,052,478	43,052,000
Ending Balance at Mar. 31, 2021	$ 167,729	$ 43	178,891	(10,808)	(397)
Beginning Balance (in shares) at Dec. 31, 2020		42,668,000
Beginning Balance at Dec. 31, 2020	141,753	$ 43	151,153	(11,827)	2,384
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		18,000
Exercise of stock options	69		69
Settlement of restricted stock units (in shares)		289,000
Settlement of restricted stock units	(1)		(1)
Issuance of common stock under employee stock purchase plan (in shares)		77,000
Issuance of common stock under employee stock purchase plan	793		793
Stock-based compensation expense	2,968		2,968
Sale of convertible senior notes warrants	23,909		23,909
Components of other comprehensive income (loss):
Net income	1,019			1,019
Foreign currency translation adjustment	(2,648)				(2,648)
Unrealized gain (loss) on investments	(133)				(133)
Other comprehensive income (loss)	$ (1,762)
Ending Balance (in shares) at Mar. 31, 2021	43,052,478	43,052,000
Ending Balance at Mar. 31, 2021	$ 167,729	$ 43	$ 178,891	$ (10,808)	$ (397)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities:
Net income	$ 3,186	$ 1,468
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation expense	5,715	4,611
Amortization of intangible assets	3,352	3,187
Depreciation and amortization	774	749
Amortization of investment premiums & other	315	(39)
Accretion and amortization on debt securities	1,147	0
Deferred taxes	(464)	474
Changes in assets and liabilities:
Accounts receivable	1,444	1,240
Contract assets	2,177	(3,570)
Other assets	(1,474)	242
Accounts payable	(1,047)	(635)
Accrued payroll and related taxes	(1,305)	(849)
Deferred revenue	2,379	3,623
Restructuring accrual	0	(1,208)
Other liabilities	(138)	(924)
Net cash provided by operating activities	16,061	8,369
Investing activities:
Purchases of investments	(147,524)	(19,113)
Sales and maturities of investments	23,441	11,700
Purchases of property and equipment	(660)	(422)
Net cash used in investing activities	(124,743)	(7,835)
Financing activities:
Proceeds from the issuance of convertible senior notes	155,250	0
Payment for convertible senior notes issuance costs	(5,513)	0
Purchase of 2026 convertible senior notes hedge	(33,192)	0
Proceeds from issuance of convertible senior notes warrants	23,909	0
Proceeds from the issuance of equity plan common stock	2,751	1,251
Repurchases and retirements of common stock	0	(1,002)
Payment of acquisition-related contingent consideration	(782)	(478)
Proceeds from other borrowings	251	0
Principal payments on other borrowings	(39)	(96)
Net cash provided by (used in) financing activities	142,635	(325)
Foreign currency effect on cash and cash equivalents	(4)	(29)
Net increase in cash and cash equivalents	33,949	180
Cash and cash equivalents at beginning of period	19,986	16,748
Cash and cash equivalents at end of period	53,935	16,928
Supplemental disclosures of cash flow information:
Cash paid for income taxes	373	0
Supplemental disclosures of non-cash investing and financing activities:
Unrealized holding gain (loss) on available for sale investments	$ (186)	$ 58

Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2021

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 five billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of March 31, 2021, the Company has been granted 71 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 March 31, 2021 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. 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 six months ended March 31, 2021 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 loss in the consolidated balance sheets. The Company recorded a net loss resulting from foreign exchange translation of $2.6 million for the three months ended March 31, 2021 and a net loss resulting from foreign exchange translation of $1.1 million for the three months ended March 31, 2020. The Company recorded a net gain resulting from foreign exchange translation of $0.1 million and $0.2 million for the six months ended March 31, 2021 and 2020, respectively.

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, fair value of debt derivatives, 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 $0.8 million for the three months ended March 31, 2020. Product management costs were $1.4 million for the six months ended March 31, 2020.

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, convertible senior notes and warrants, 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 and six months ended March 31, 2021 and 2020, 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 March 31,		Six Months Ended March 31,
	2021	2020	2021	2020
Stock options	556	279	634	302
RSUs	1,371	1,789	1,238	1,555
ESPP common stock equivalents	28	32	15	—
Performance options	267	—	200	—
Performance RSUs	156	—	127	—
Convertible senior notes	4,551	—	2,251	—
Warrants	4,551	—	2,251	—
Total potentially dilutive common shares outstanding	11,480	2,100	6,716	1,857

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


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net income	$	1,019	$	908	$	3,186	$	1,468
Weighted-average shares outstanding—basic	43,138		41,022		42,835		40,817
Common stock equivalents	1,416		1,006		1,532		1,213
Weighted-average shares outstanding—diluted	44,554		42,028		44,367		42,030
Net income per share:
Basic	$	0.02	$	0.02	$	0.07	$	0.04
Diluted	$	0.02	$	0.02	$	0.07	$	0.03

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 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 (loss). No other-than-temporary impairment charges were recognized in the three and six months ended March 31, 2021 and 2020.

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.

Convertible Senior Notes Hedge and Embedded Conversion Derivative

In February 2021, the Company issued $155.3 million aggregate principal amount of 0.75% convertible notes due 2026 (the “2026 Notes”). Concurrently with the issuance of the 2026 Notes, the Company entered into privately-negotiated convertible senior note hedge (the “Notes Hedge”) and warrant transactions (the “Warrant Transactions”) which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes. The Company could not elect to issue the shares of common stock upon settlement of the 2026 Notes due to insufficient authorized share capital. As a result, the embedded conversion option (the “embedded conversion derivative”) is accounted for as a derivative liability and the Notes Hedge as a derivative asset with the resulting gain (or loss) was reported in other income, net, in the consolidated statement of operations to the extent the valuation changed from the date of issuance of the 2026 Notes. The Warrant Transactions were recorded in additional paid-in-capital in the consolidated balance sheet and are not remeasured as long as they continue to meet the conditions for equity classification. See Note 7. “Convertible Senior Notes” for additional information related to these transactions.

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 $34,000 of write-offs to the allowance for doubtful accounts for the six months ended March 31, 2021 and no write-offs in the six months ended March 31, 2020. The Company maintained an allowance for doubtful accounts of $0.2 million as of both March 31, 2021 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 six months ended March 31, 2021 and 2020, 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 six months ended March 31, 2021 and 2020.

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 $0.4 million and $0.1 million of costs related to computer software developed for internal use during the six months ended March 31, 2021 and 2020, respectively. The Company had $0.2 million in amortization expense from internal use software during each of the six months ended March 31, 2021 and 2020.

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 six months ended March 31, 2021 and 2020.

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 March 31, 2021, $0.9 million was outstanding under these agreements and $0.1 million and $0.8 million is recorded in other current liabilities and other non-current liabilities, respectively, in the consolidated balance sheets. As of September 30, 2020, $0.7 million, was outstanding under these agreements and approximately $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 (Loss)

Comprehensive income (loss) 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 loss of $0.4 million and $0.3 million at March 31, 2021 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

Except for the accounting policy for Convertible Senior Notes Hedge and Embedded Conversion Derivative, established in connection with the issuance of the 2026 Notes, there have been no significant changes to the Company’s significant accounting policies in Note 2. “Summary of Significant Accounting Policies,” of the notes to consolidated financial statements included in Item 8 of the Company’s Form 10-K.

Recently Issued Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features through equity. Without an initial allocation of proceeds to the conversion option, the debt will likely have a lower discount, thereby resulting in less noncash interest expense through accretion. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for such exception. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. ASU 2020-06 is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impacts of ASU 2020-06 and plans to early adopt ASU 2020-06 for its fiscal year beginning October 1, 2021.

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 six months ended March 31, 2021 had, or is expected to have, a material impact on the Company’s consolidated financial statements.

Revenue Recognition

6 Months Ended

Mar. 31, 2021

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 March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Major product category
Deposits software and hardware	$	12,134	$	10,317	$	22,888	$	20,600
Deposits services and other	5,063		4,305		9,924		8,673
Deposits revenue	17,197		14,622		32,812		29,273
Identity verification software and hardware	879		1,136		2,427		2,368
Identity verification services and other	10,697		7,434		19,509		13,618
Identity verification revenue	11,576		8,570		21,936		15,986
Total revenue	$	28,773	$	23,192	$	54,748	$	45,259

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):


	March 31, 2021		September 30, 2020
Contract assets, current	$	3,577	$	5,187
Contract assets, non-current	3,900		4,468
Contract liabilities (deferred revenue), current	11,353		7,973
Contract liabilities (deferred revenue), non-current	585		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 $7.9 million and $4.8 million of revenue during the six months ended March 31, 2021 and 2020, 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 $2.2 million and $1.5 million as of March 31, 2021 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 (loss) and totaled $0.3 million and $0.2 million during the three months ended March 31, 2021 and 2020, respectively, and $0.5 million and $0.4 million during the six months ended March 31, 2021

and 2020, respectively. There were no impairment losses recognized during both the six months ended March 31, 2021 and 2020 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
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

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
-Topic 606
-SubTopic 10
-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

Investments

6 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

3. INVESTMENTS

The following tables summarize investments by type of security as of March 31, 2021 and September 30, 2020, respectively (amounts shown in thousands):


March 31, 2021:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	7,735	$	3	$	—	$	7,738
Asset-backed securities, short-term	5,616		6		(1)		5,621
Corporate debt securities, short-term	118,004		10		(59)		117,955
U.S. Treasury, long-term	6,532		2		(1)		6,533
Asset-backed securities, long-term	959		—		(1)		958
Corporate debt securities, long-term	26,804		1		(38)		26,767
Total	$	165,650	$	22	$	(100)	$	165,572


September 30, 2020:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	10,245	$	38	$	—	$	10,283
Asset-backed securities, short-term	4,723		36		—		4,759
Corporate debt securities, short-term	24,956		37		—		24,993

Corporate debt securities, long-term	1,966		—		(3)		1,963
Total	$	41,890	$	111	$	(3)	$	41,998

The cost of securities sold is based on the specific identification method. Amortization of premiums, accretion of discounts, interest, dividend income and realized gains and losses are included in other income, net in the consolidated statements of operations and other comprehensive income (loss).

The Company determines the appropriate designation of investments at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company’s investments are designated as available-for-sale debt securities. As of March 31, 2021 and September 30, 2020, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date and the Company’s long-term investments have maturity dates of greater than one year from the balance sheet date.

Available-for-sale marketable securities are carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of taxes, and reported as a separate component of stockholders’ equity. Management reviews the fair value of the portfolio at least monthly and evaluates individual securities with fair value below amortized cost at the balance sheet date. For debt securities, in order to determine whether impairment is other-than-temporary, management must conclude whether the Company intends to sell the impaired security and whether it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. If management intends to sell an impaired debt security or it is more likely than not that the Company will be required to sell the security prior to recovering its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The amount of an other-than-temporary impairment on debt securities related to a credit loss, or securities that management intends to sell before recovery, is recognized in earnings. The amount of an other-than-temporary impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of stockholders’ equity in other comprehensive income. No other-than-temporary impairment charges were recognized in the three and six months ended March 31, 2021 and 2020. There were no realized gains or losses from the sale of available-for-sale securities during the three and six months ended March 31, 2021 and 2020.

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.

The following tables represent the fair value hierarchy of the Company’s investments, convertible senior notes hedge, acquisition-related contingent consideration, and embedded conversion derivative as of March 31, 2021 and September 30, 2020, respectively (amounts shown in thousands):


March 31, 2021:	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments:
U.S. Treasury	$	7,738	$	7,738	$	—	$	—
Asset-backed securities	5,621		—		5,621		—
Corporate debt securities	52,354		—		52,354		—
Commercial paper	65,601		—		65,601		—
Total short-term investments at fair value	131,314		7,738		123,576		—
Long-term investments:
U.S. Treasury	6,533		6,533		—		—
Foreign government and agency securities	2,929		—		2,929		—
Asset-backed securities	958		—		958		—
Corporate debt securities	23,838		—		23,838		—
Total long-term investments at fair value	34,258		6,533		27,725		—

Convertible senior notes hedge	34,719		—		34,719		—

Total assets at fair value	$	200,291	$	14,271	$	186,020	$	—
Liabilities:
Embedded conversion derivative	34,719		—		34,719		—
Total liabilities at fair value	$	34,719	$	—	$	34,719	$	—


September 30, 2020:	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments:
U.S. Treasury	$	10,283	$	10,283	$	—	$	—
Asset-backed securities, short-term	4,759		—		4,759		—
Corporate debt securities	9,619		—		9,619		—
Commercial paper	15,374		—		15,374		—
Total short-term investments at fair value	40,035		10,283		29,752		—
Long-term investments:
U.S. Treasury	—		—		—		—
Corporate debt securities	1,963		—		1,963		—
Total long-term investments at fair value	1,963		—		1,963		—

Total assets at fair value	$	41,998	$	10,283	$	31,715	$	—
Liabilities:
Acquisition-related contingent consideration	753		—		—		753
Total liabilities at fair value	$	753	$	—	$	—	$	753

•Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities.

•Level 2: Convertible Senior Notes. On February 5, 2021, the Company issued $155.3 million aggregate principal amount of 0.75% 2026 Notes as further described in Note 7. “Convertible Senior Notes.” Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes. Initially, conversion of the 2026 Notes will be settled solely in cash; however, following satisfaction of certain share reservation conditions, conversion of the 2026 Notes may be settled in cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election. The embedded conversion derivative associated with the 2026 Notes currently meets the criteria for an embedded derivative liability which required bifurcation and separate accounting. The Notes Hedge and Warrant Transactions are also currently classified as a derivative asset and as an increase to additional paid-in capital, respectively, on the Company’s consolidated balance sheet. On the date the Company increases its authorized shares of common stock and satisfies the share reservation condition, the Notes Hedge and embedded conversion derivative will be reclassified to additional paid-in capital as the equity classification criteria is met. Changes in the fair value of these derivatives prior to being classified in equity are reflected in Other income, net, in the Company’s consolidated statement of operations.

The fair value of the Notes Hedge and the embedded conversion derivative are estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level 2 as significant inputs are observable, either directly or indirectly. The significant inputs and assumptions used in the models to calculate the fair value of the derivatives include the Company’s common stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term.

The Company carries the 2026 Notes at face value less unamortized discount and issuance costs on its consolidated balance sheets. Based on the fair value hierarchy, the Company classified the 2026 Notes as Level 2 as they are not actively traded.

•Level 3: During the quarter-ended March 31, 2021, the Company paid the outstanding balance of the acquisition-related contingent consideration. The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the six months ended March 31, 2021 (amounts shown in thousands):


Balance at September 30, 2020	$	753




Foreign currency effect on contingent consideration	29
Payment of contingent consideration	$	(782)
Balance at March 31, 2021	$	—

Goodwill and Intangible Assets

6 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company had a goodwill balance of $35.7 million at March 31, 2021, representing the excess of costs over fair value of assets of businesses acquired. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized, but instead is tested for impairment at least annually in accordance with ASC 350. The following table summarizes changes in the balance of goodwill during the six months ended March 31, 2021 (amounts shown in thousands):


Balance at September 30, 2020	$	35,669

Foreign currency effect on goodwill	59
Balance at March 31, 2021	$	35,728

Intangible Assets

Intangible assets include the value assigned to purchased completed technology, customer relationships, and trade names. The estimated useful lives for all of these intangible assets range from two to seven years. Intangible assets as of March 31, 2021 and September 30, 2020, respectively, are summarized as follows (amounts shown in thousands, except for years):


March 31, 2021:	Weighted Average Amortization Period	Cost		Accumulated Amortization		Net
Completed technologies	6.4 years	$	20,341	$	11,026	$	9,315
Customer relationships	4.8 years	17,628		11,000		6,628
Trade names	4.5 years	618		517		101
Total intangible assets		$	38,587	$	22,543	$	16,044


September 30, 2020:	Weighted Average Amortization Period	Cost		Accumulated Amortization		Net
Completed technologies	6.4 years	$	20,341	$	9,416	$	10,925
Customer relationships	4.8 years	17,628		9,390		8,238
Trade names	4.5 years	618		492		126
Total intangible assets		$	38,587	$	19,298	$	19,289

Amortization expense related to acquired intangible assets was $1.7 million and $1.6 million for the three months ended March 31, 2021 and 2020, respectively, and $3.4 million and $3.2 million during the six months ended March 31, 2021 and 2020, respectively, and is recorded within acquisition-related costs and expenses on the consolidated statements of operations and other comprehensive income (loss).

The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands):


	Estimated Future Amortization Expense
2021—remaining	$	3,104
2022	5,965
2023	3,915
2024	1,860
2025	1,200

Total	$	16,044

Stockholders' Equity

6 Months Ended

Mar. 31, 2021

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 March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Cost of revenue	$	82	$	65	$	169	$	126
Selling and marketing	892		594		1,680		1,166
Research and development	777		680		1,517		1,354
General and administrative	1,217		969		2,349		1,965
Stock-based compensation expense included in expenses	$	2,968	$	2,308	$	5,715	$	4,611

As of March 31, 2021, the Company had $22.8 million of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.4 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 March 31, 2021, (i) 873,211 RSUs and 547,976 Performance RSUs were outstanding under the 2020 Plan, and 2,758,605 shares of Common Stock were reserved for future grants under the 2020 Plan and (ii) stock options to purchase an aggregate of 592,851 shares of Common Stock and 1,184,531 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 March 31, 2021, (i) 427,669 shares have been issued to participants pursuant to the ESPP and (ii) 572,331 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018. Subsequent offering periods commence semi-annually in February and August each year.

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 $0.2 million in stock-based compensation expense related to the ESPP in each of the three months ended March 31, 2021 and 2020. The Company recognized $0.3 million and $0.2 million in stock-based compensation expense related to the ESPP during the six months ended March 31, 2021 and 2020, respectively.

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 March 31, 2021, (i) 328,346 RSUs were outstanding under the Director Plan and (ii) 220,361 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 six months ended March 31, 2021:


	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	(259,865)	$	7.54
Canceled	—	$	—
Outstanding at March 31, 2021	902,640	$	7.50	6.0	$	11,368
Vested and Expected to Vest at March 31, 2021	902,640	$	7.50	6.0	$	11,368
Exercisable at March 31, 2021	625,015	$	6.61	5.2	$	4,979

The Company recognized $0.2 million in stock-based compensation expense related to outstanding stock options in each of the three months ended March 31, 2021 and 2020. The Company recognized $0.4 million and $0.3 million in stock-based compensation expense related to outstanding stock options in the six months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company had $1.3 million of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.0 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 six months ended March 31, 2021 and 2020 was $1.4 million and $1.0 million, respectively. There were no options granted during the six months ended March 31, 2021. The per-share weighted-average fair value of options granted during the six months ended March 31, 2020 was $4.32.

Restricted Stock Units

The following table summarizes RSU activity under the Company’s equity plans during the six months ended March 31, 2021:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020	2,661,943	$	7.95
Granted	706,412	$	12.27
Settled	(845,420)	$	7.39
Canceled	(77,635)	$	9.20
Outstanding at March 31, 2021	2,445,300	$	9.35

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 $2.1 million and $1.7 million in stock-based compensation expense related to outstanding RSUs in the three months ended March 31, 2021 and 2020, respectively. The Company recognized $4.0 million and $3.4 million in stock-based compensation expense related to outstanding RSUs in the six months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company had $17.6 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.4 years.

Performance Restricted Stock Units

The following table summarizes Performance RSU activity under the Company’s equity plans during the six months ended March 31, 2021:


	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	(90,345)	$	6.06
Canceled	—	$	—
Outstanding at March 31, 2021	547,976	$	10.06

The Company recognized $0.3 million and $0.1 million in stock-based compensation expense related to outstanding Performance RSUs in the three months ended March 31, 2021 and 2020, respectively. The Company recognized $0.6 million and $0.3 million in stock-based compensation expense related to outstanding Performance RSUs in the six months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company had $3.3 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.5 years. During the three months ended March 31, 2021, 117,848 Performance RSUs vested as the performance criteria had been met.

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 March 31, 2021 and 2020. The Company recognized $0.4 million in stock-based compensation expense related to outstanding Performance Options in each of the six months ended March 31, 2021 and 2020. As of March 31, 2021, the Company had $0.5 million of unrecognized compensation expense related to outstanding Performance Options expected to be recognized over a weighted-average period of approximately 0.6 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.

Income Taxes	6 Months Ended
Income Taxes	Mar. 31, 2021
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 and six months ended March 31, 2021, the Company recorded an income tax provision of $0.4 million and an income tax benefit of $0.1 million, respectively, which yielded an effective tax rate of 29% and negative 4%, respectively. For each of the three and six months ended March 31, 2020, the Company recorded an income tax provision of $0.2 million, which yielded an effective tax rate of 17% and 13%, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the six months ended March 31, 2021 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. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the six months ended March 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Convertible Senior Notes

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

CONVERTIBLE SENIOR NOTES

7. CONVERTIBLE SENIOR NOTES

The carrying values of the Company’s 2026 Notes are as follows (in thousands):


	March 31, 2021
2026 Notes:
Principal amount	$	155,250
Less: unamortized discount and issuance costs, net of amortization	(37,558)
Carrying amount	$	117,692

2026 Notes embedded conversion derivative	$	34,719

In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional

Notes, as defined below). The 2026 Notes are senior unsecured obligations of the Company. The 2026 Notes were issued pursuant to an Indenture, dated February 5, 2021 (the “Indenture”), between the Company and UMB Bank, National Association, as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the 2026 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the 2026 Notes become automatically due and payable. The Company granted the Initial Purchasers (as defined below) of the 2026 Notes a 13-day option to purchase up to an additional $20.25 million aggregate principal amount of the 2026 Notes (the “Additional Notes”), which was exercised in full. The 2026 Notes were purchased in a transaction that was completed on February 5, 2021.

The 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted. The 2026 Notes will bear interest from February 5, 2021 at a rate of 0.750% per year payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding August 1, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of the Company’s common stock, $0.001 par value (the “Common Stock”) exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Common Stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Common Stock. On or after August 1, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash and, if applicable at the Company’s election, shares of the Common Stock, based on the applicable conversion rate(s); provided that the Company will be required to settle conversions solely in cash unless and until the Company (i) receives stockholder approval to increase the number of authorized shares of the Common Stock and (ii) reserves such amount of shares of the Common Stock for future issuance as required pursuant to the Indenture that governs the 2026 Notes. The conversion rate for the 2026

Notes will initially be 47.9731 shares of the Common Stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $20.85 per share of the Common Stock. The initial conversion price of the 2026 Notes represents a premium of approximately 37.5% to the $15.16 per share last reported sale price of the Common Stock on February 2, 2021. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

The net proceeds from this offering were approximately $149.7 million, after deducting the Initial Purchasers’ discounts and commissions and the Company’s estimated offering expenses related to the offering. The Company used approximately $9.3 million of the net proceeds from the offering to pay the cost of the Notes Hedge (as defined below) (after such cost is partially offset by the proceeds from the Warrant Transactions described below). The Initial Purchasers exercised their option to purchase Additional Notes in full and the Company used a portion of the net proceeds from the sale of such Additional Notes to enter into additional Notes Hedges (after such cost is partially offset by the proceeds from the additional Warrant Transactions) with the Option Counterparties (as defined below). The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions.

As of March 31, 2021, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes is less than the maximum number of underlying shares that will be required to settle the 2026 Notes into equity. Accordingly, unless and until the Company has a number of authorized shares that have not been issued or reserved for any other purpose that equals or exceeds the maximum number of underlying shares (“share reservation condition”), the Company will pay to the converting holder in respect of each $1,000 principal amount of notes being converted solely cash in an amount equal to the sum of the daily conversion values for each of the 40 consecutive trading days during the related observation period. However, following satisfaction of the share reservation condition, the Company may settle conversions of notes through payment or delivery, as the case may be, of cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election.

In accounting for the issuance of the 2026 Notes, the conversion option of the 2026 Notes was deemed an embedded derivative requiring bifurcation from the 2026 Notes (“host contract”) and separate accounting as an embedded derivative liability, as a result of the Company not having the necessary number of authorized but unissued shares of its common stock available to settle the conversion option of the 2026 Notes in shares. The proceeds from the 2026 Notes are first allocated to the embedded derivative liability and the remaining proceeds are then allocated to the host contract. On February 5, 2021, the fair value of the embedded derivative liability representing the conversion option was $33.2 million and the remaining $116.5 million was allocated to the host contract. The difference between the principal amount of the 2026 Notes and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the 2026 Notes.

As of March 31, 2021, the embedded derivative liability is included in embedded conversion derivative in the consolidated balance sheet and the change in fair value of derivative is included in Other income, net in the consolidated statement of operations. The carrying amount of the embedded derivative liability was determined using a Black-Scholes option valuation model.

The following table presents the fair value and the change in fair value for the embedded conversion derivative (in thousands):


Embedded conversion derivative
Fair value as of February 5, 2021	$	33,192
Change in fair value	1,527
Fair value as of March 31, 2021	$	34,719

Debt issuance costs for the issuance of the 2026 Notes were approximately $5.5 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the 2026 Notes. Transaction costs were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized using the effective interest method to interest expense over the term of the 2026 Notes.

The following table presents the total amount of interest cost recognized relating to the 2026 Notes (in thousands):


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Contractual interest expense	$	172	$	—	$	172	$	—
Amortization of debt discount and issuance costs	1,147		—		1,147		—
Total interest expense recognized	$	1,319	$	—	$	1,319	$	—

The derived effective interest rate on the 2026 Notes host contract was determined to be 6.71%, which remains unchanged from

the date of issuance. The remaining unamortized debt discount was $37.6 million as of March 31, 2021, and will be amortized over approximately 4.8 years.

Convertible Senior Notes Hedge and Warrants

In connection with the pricing of the 2026 Notes, the Company entered into the Notes Hedge with Bank of America, N.A., Jefferies International Limited and Goldman Sachs & Co. LLC (the “Option Counterparties”). The Notes Hedge provided the Company with the option to acquire, on a net settlement basis, approximately 7.4 million shares of common stock at a strike price of $20.85, which is equal to the number of shares of common stock that notionally underlie and corresponds to the conversion price of the 2026 Notes. The Company also entered into Warrant Transactions with the Option Counterparties relating to the same number of shares of the Common Stock, subject to customary anti-dilution adjustments. The strike price of the Warrant Transactions is $26.53 per share, which represents a 75.0% premium to the last reported sale price of the Common Stock on The NASDAQ Capital Market on February 2, 2021, and is subject to certain adjustments under the terms of the Warrant Transactions.

As the Company is required to settle the Notes Hedge in cash, they do not qualify for the scope exception for contracts involving an issuer’s own equity in ASC 815 and have been accounted for as a derivative asset. Upon initial purchase, the Notes Hedge was recorded in our consolidated balance sheets in convertible senior notes hedge at $33.2 million. As of March 31, 2021, the Notes Hedge is included in convertible senior notes hedge in the consolidated balance sheet and the change in fair value is included in Other income, net in the consolidated statement of operations. As of March 31, 2021, the Company had not purchased any shares under the Notes Hedge.

As a result of the Warrant Transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $26.53 for any fiscal quarter. During the three months ended March 31, 2021, there was no dilution of earnings per share. The Warrant Transactions expire over a period of 80 trading days commencing on May 1, 2026 and may be settled in net shares of common stock or net cash at the Company’s election. Upon initial sale, the Warrant Transactions were recorded as an increase in additional paid-in capital within stockholders’ equity of $23.9 million. As of March 31, 2021, the Warrant Transactions had not been exercised and remained outstanding.

Commitments and Contingencies

6 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

8. 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 March 31, 2021, the weighted-average remaining lease term for the Company’s operating leases was 4.0 years and the weighted-average discount rate was 4.6%.

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 March 31, 2021, the Company had operating ROU assets of $4.8 million. Total operating lease liabilities of $6.4 million were comprised of current lease liabilities of $1.8 million and non-current lease liabilities of $4.6 million. As of September 30, 2020, the Company had operating ROU assets of $5.4 million. Total operating lease liabilities of $7.1 million were comprised of current lease liabilities of $1.8 million and non-current lease liabilities of $5.3 million.

The Company recognized $0.5 million of operating lease costs in the three months ended March 31, 2021, and $1.1 million of operating lease costs in the six months ended March 31, 2021. 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 (loss).

The Company paid $1.4 million in operating cash flows for operating leases in the six months ended March 31, 2021.

Maturities of our operating lease liabilities as of March 31, 2021 were as follows (amounts shown in thousands):


	Operating leases
2021—remaining	$	1,089
2022	1,824
2023	1,722
2024	1,388
2025	302
2026	296
Thereafter	377
Total lease payments	6,998
Less: amount representing interest	(607)
Present value of future lease payments	$	6,391

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. USAA and Wells Fargo subsequently reached a settlement, and on April 1, 2021 the court granted the parties’ joint motion and stipulation of dismissal of the Wells Lawsuits with prejudice.

Wells Fargo also 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.

On September 30, 2020, USAA filed suit against PNC Bank (the “First 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 First 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. On February 2, 2021, NCR Corporation sent a second indemnification demand to the Company requesting indemnification of the claims described in the amended complaint. On March 31, 2021, USAA filed another suit against PNC Bank in the Eastern District of Texas alleging infringement of two patents from the Second Wells Lawsuit, U.S. Patent Nos. 10,013,605 and 10,013,681 (the “Second PNC Lawsuit” and together with the First PNC Lawsuit, the “PNC Lawsuits”).

While neither the Wells Lawsuits nor the PNC Lawsuits 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 April 28, 2021, the court in the Eastern District of Texas granted USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds. The Court’s ruling did not address the merits of the Company’s claim of non-infringement. 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, 2020, December 17, 2020, and February 23, 2021, the Company filed requests for rehearing and Precedential Opinion Panel (“POP”) review of the four denied IPR petitions.

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. In March 2021, the PTAB decided not to institute the two petitions.

The Company incurred legal fees of $0.5 million in the six months ended March 31, 2021 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 (loss).

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 or (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.

Revenue Concentration	6 Months Ended
Revenue Concentration	Mar. 31, 2021
Risks and Uncertainties [Abstract]
REVENUE CONCENTRATION	9. REVENUE CONCENTRATION For the three months ended March 31, 2021, the Company derived revenue of $6.7 million from one customer, with such customer accounting for 23% of the Company’s total revenue. For the three months ended March 31, 2020, the Company derived revenue of $6.6 million from two customers, with each customer accounting for 14% of the Company’s total revenue. For the six months ended March 31, 2021, the Company derived revenue of $10.6 million from one customer, with such customer accounting for 19% of the Company’s total revenue. For the six months ended March 31, 2020, the Company derived revenue of $11.8 million from two customers, with such customers accounting for 16% and 11% 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 $3.8 million and $5.0 million at March 31, 2021 and 2020, 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 26% and 25% of the Company’s total revenue for the three months ended March 31, 2021 and 2020, respectively. International sales accounted for approximately 28% and 25% of the Company’s total revenue for the six months ended March 31, 2021 and 2020, respectively. From a geographic perspective, approximately 35% and 66% of the Company’s total long-term assets as of March 31, 2021 and September 30, 2020, respectively, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 5% and 15% of the Company’s total long-term assets excluding goodwill and other intangible assets as of March 31, 2021 and September 30, 2020, respectively, are associated with the Company’s international subsidiaries.

Nature of Operations and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2021
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 five billion check deposits. Mitek began selling Mobile Deposit® in early 2008 and received its first patent for this product in August 2010. As of March 31, 2021, the Company has been granted 71 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 March 31, 2021 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. 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 six months ended March 31, 2021 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 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, fair value of debt derivatives, 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 $0.8 million for the three months ended March 31, 2020. Product management costs were $1.4 million for the six months ended March 31, 2020.
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, convertible senior notes and warrants, 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 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 (loss). No other-than-temporary impairment charges were recognized in the three and six months ended March 31, 2021 and 2020. 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.
Convertible Senior Note Hedge and Embedded Conversion Derivative	Convertible Senior Notes Hedge and Embedded Conversion Derivative In February 2021, the Company issued $155.3 million aggregate principal amount of 0.75% convertible notes due 2026 (the “2026 Notes”). Concurrently with the issuance of the 2026 Notes, the Company entered into privately-negotiated convertible senior note hedge (the “Notes Hedge”) and warrant transactions (the “Warrant Transactions”) which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes. The Company could not elect to issue the shares of common stock upon settlement of the 2026 Notes due to insufficient authorized share capital. As a result, the embedded conversion option (the “embedded conversion derivative”) is accounted for as a derivative liability and the Notes Hedge as a derivative asset with the resulting gain (or loss) was reported in other income, net, in the consolidated statement of operations to the extent the valuation changed from the date of issuance of the 2026 Notes. The Warrant Transactions were recorded in additional paid-in-capital in the consolidated balance sheet and are not remeasured as long as they continue to meet the conditions for equity classification.
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 six months ended March 31, 2021 and 2020, 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 six months ended March 31, 2021 and 2020. 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 (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) 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 Except for the accounting policy for Convertible Senior Notes Hedge and Embedded Conversion Derivative, established in connection with the issuance of the 2026 Notes, there have been no significant changes to the Company’s significant accounting policies in Note 2. “Summary of Significant Accounting Policies,” of the notes to consolidated financial statements included in Item 8 of the Company’s Form 10-K. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features through equity. Without an initial allocation of proceeds to the conversion option, the debt will likely have a lower discount, thereby resulting in less noncash interest expense through accretion. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for such exception. ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. ASU 2020-06 is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impacts of ASU 2020-06 and plans to early adopt ASU 2020-06 for its fiscal year beginning October 1, 2021. 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 six months ended March 31, 2021 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. Level 1: Includes investments in U.S. Government and agency securities, which are valued based on recently executed transactions in the same or similar securities. •Level 2: Convertible Senior Notes. On February 5, 2021, the Company issued $155.3 million aggregate principal amount of 0.75% 2026 Notes as further described in Note 7. “Convertible Senior Notes.” Concurrently with the issuance of the 2026 Notes, the Company entered into the Notes Hedge and Warrant Transactions which in combination are intended to reduce the potential dilution from the conversion of the 2026 Notes. Initially, conversion of the 2026 Notes will be settled solely in cash; however, following satisfaction of certain share reservation conditions, conversion of the 2026 Notes may be settled in cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election. The embedded conversion derivative associated with the 2026 Notes currently meets the criteria for an embedded derivative liability which required bifurcation and separate accounting. The Notes Hedge and Warrant Transactions are also currently classified as a derivative asset and as an increase to additional paid-in capital, respectively, on the Company’s consolidated balance sheet. On the date the Company increases its authorized shares of common stock and satisfies the share reservation condition, the Notes Hedge and embedded conversion derivative will be reclassified to additional paid-in capital as the equity classification criteria is met. Changes in the fair value of these derivatives prior to being classified in equity are reflected in Other income, net, in the Company’s consolidated statement of operations. The fair value of the Notes Hedge and the embedded conversion derivative are estimated using a Black-Scholes model. Based on the fair value hierarchy, the Company classified the Notes Hedge and the embedded conversion derivative as Level 2 as significant inputs are observable, either directly or indirectly. The significant inputs and assumptions used in the models to calculate the fair value of the derivatives include the Company’s common stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. The Company carries the 2026 Notes at face value less unamortized discount and issuance costs on its consolidated balance sheets. Based on the fair value hierarchy, the Company classified the 2026 Notes as Level 2 as they are not actively traded. •Level 3: During the quarter-ended March 31, 2021, the Company paid the outstanding balance of the acquisition-related contingent consideration.

Nature of Operations and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share


	Three Months Ended March 31,		Six Months Ended March 31,
	2021	2020	2021	2020
Stock options	556	279	634	302
RSUs	1,371	1,789	1,238	1,555
ESPP common stock equivalents	28	32	15	—
Performance options	267	—	200	—
Performance RSUs	156	—	127	—
Convertible senior notes	4,551	—	2,251	—
Warrants	4,551	—	2,251	—
Total potentially dilutive common shares outstanding	11,480	2,100	6,716	1,857

Schedule of Calculation of Basic and Diluted Net Income Per Share

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


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net income	$	1,019	$	908	$	3,186	$	1,468
Weighted-average shares outstanding—basic	43,138		41,022		42,835		40,817
Common stock equivalents	1,416		1,006		1,532		1,213
Weighted-average shares outstanding—diluted	44,554		42,028		44,367		42,030
Net income per share:
Basic	$	0.02	$	0.02	$	0.07	$	0.04
Diluted	$	0.02	$	0.02	$	0.07	$	0.03

Revenue Recognition (Tables)

6 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

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


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Major product category
Deposits software and hardware	$	12,134	$	10,317	$	22,888	$	20,600
Deposits services and other	5,063		4,305		9,924		8,673
Deposits revenue	17,197		14,622		32,812		29,273
Identity verification software and hardware	879		1,136		2,427		2,368
Identity verification services and other	10,697		7,434		19,509		13,618
Identity verification revenue	11,576		8,570		21,936		15,986
Total revenue	$	28,773	$	23,192	$	54,748	$	45,259

Schedule of Contract Balances

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


	March 31, 2021		September 30, 2020
Contract assets, current	$	3,577	$	5,187
Contract assets, non-current	3,900		4,468
Contract liabilities (deferred revenue), current	11,353		7,973
Contract liabilities (deferred revenue), non-current	585		1,597

Investments (Tables)

6 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Schedule of Investments by Type of Security

The following tables summarize investments by type of security as of March 31, 2021 and September 30, 2020, respectively (amounts shown in thousands):


March 31, 2021:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	7,735	$	3	$	—	$	7,738
Asset-backed securities, short-term	5,616		6		(1)		5,621
Corporate debt securities, short-term	118,004		10		(59)		117,955
U.S. Treasury, long-term	6,532		2		(1)		6,533
Asset-backed securities, long-term	959		—		(1)		958
Corporate debt securities, long-term	26,804		1		(38)		26,767
Total	$	165,650	$	22	$	(100)	$	165,572


September 30, 2020:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	10,245	$	38	$	—	$	10,283
Asset-backed securities, short-term	4,723		36		—		4,759
Corporate debt securities, short-term	24,956		37		—		24,993

Corporate debt securities, long-term	1,966		—		(3)		1,963
Total	$	41,890	$	111	$	(3)	$	41,998

Schedule of Fair Value of Investments Measured on Recurring Basis


March 31, 2021:	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments:
U.S. Treasury	$	7,738	$	7,738	$	—	$	—
Asset-backed securities	5,621		—		5,621		—
Corporate debt securities	52,354		—		52,354		—
Commercial paper	65,601		—		65,601		—
Total short-term investments at fair value	131,314		7,738		123,576		—
Long-term investments:
U.S. Treasury	6,533		6,533		—		—
Foreign government and agency securities	2,929		—		2,929		—
Asset-backed securities	958		—		958		—
Corporate debt securities	23,838		—		23,838		—
Total long-term investments at fair value	34,258		6,533		27,725		—

Convertible senior notes hedge	34,719		—		34,719		—

Total assets at fair value	$	200,291	$	14,271	$	186,020	$	—
Liabilities:
Embedded conversion derivative	34,719		—		34,719		—
Total liabilities at fair value	$	34,719	$	—	$	34,719	$	—


September 30, 2020:	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments:
U.S. Treasury	$	10,283	$	10,283	$	—	$	—
Asset-backed securities, short-term	4,759		—		4,759		—
Corporate debt securities	9,619		—		9,619		—
Commercial paper	15,374		—		15,374		—
Total short-term investments at fair value	40,035		10,283		29,752		—
Long-term investments:
U.S. Treasury	—		—		—		—
Corporate debt securities	1,963		—		1,963		—
Total long-term investments at fair value	1,963		—		1,963		—

Total assets at fair value	$	41,998	$	10,283	$	31,715	$	—
Liabilities:
Acquisition-related contingent consideration	753		—		—		753
Total liabilities at fair value	$	753	$	—	$	—	$	753

Schedule of Contingent Consideration Measured at Fair Value

The following table includes a summary of the contingent consideration measured at fair value using significant unobservable inputs (Level 3) during the six months ended March 31, 2021 (amounts shown in thousands):


Balance at September 30, 2020	$	753




Foreign currency effect on contingent consideration	29
Payment of contingent consideration	$	(782)
Balance at March 31, 2021	$	—

The following table presents the fair value and the change in fair value for the embedded conversion derivative (in thousands):


Embedded conversion derivative
Fair value as of February 5, 2021	$	33,192
Change in fair value	1,527
Fair value as of March 31, 2021	$	34,719

Goodwill and Intangible Assets (Tables)

6 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes changes in the balance of goodwill during the six months ended March 31, 2021 (amounts shown in thousands):


Balance at September 30, 2020	$	35,669

Foreign currency effect on goodwill	59
Balance at March 31, 2021	$	35,728

Schedule of Intangible Assets

Intangible assets as of March 31, 2021 and September 30, 2020, respectively, are summarized as follows (amounts shown in thousands, except for years):


March 31, 2021:	Weighted Average Amortization Period	Cost		Accumulated Amortization		Net
Completed technologies	6.4 years	$	20,341	$	11,026	$	9,315
Customer relationships	4.8 years	17,628		11,000		6,628
Trade names	4.5 years	618		517		101
Total intangible assets		$	38,587	$	22,543	$	16,044


September 30, 2020:	Weighted Average Amortization Period	Cost		Accumulated Amortization		Net
Completed technologies	6.4 years	$	20,341	$	9,416	$	10,925
Customer relationships	4.8 years	17,628		9,390		8,238
Trade names	4.5 years	618		492		126
Total intangible assets		$	38,587	$	19,298	$	19,289

Schedule of Estimated Future Amortization Expense

The estimated future amortization expense related to intangible assets for each of the five succeeding fiscal years is expected to be as follows (amounts shown in thousands):


	Estimated Future Amortization Expense
2021—remaining	$	3,104
2022	5,965
2023	3,915
2024	1,860
2025	1,200

Total	$	16,044

Stockholders' Equity (Tables)

6 Months Ended

Mar. 31, 2021

Equity [Abstract]

Schedule of Stock-Based Compensation Expense Related to Stock Options and RSUs

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 March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Cost of revenue	$	82	$	65	$	169	$	126
Selling and marketing	892		594		1,680		1,166
Research and development	777		680		1,517		1,354
General and administrative	1,217		969		2,349		1,965
Stock-based compensation expense included in expenses	$	2,968	$	2,308	$	5,715	$	4,611

Schedule of Stock Option Activity

The following table summarizes stock option activity under the Company’s equity plans during the six months ended March 31, 2021:


	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	(259,865)	$	7.54
Canceled	—	$	—
Outstanding at March 31, 2021	902,640	$	7.50	6.0	$	11,368
Vested and Expected to Vest at March 31, 2021	902,640	$	7.50	6.0	$	11,368
Exercisable at March 31, 2021	625,015	$	6.61	5.2	$	4,979

Schedule of RSU Activity

The following table summarizes RSU activity under the Company’s equity plans during the six months ended March 31, 2021:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020	2,661,943	$	7.95
Granted	706,412	$	12.27
Settled	(845,420)	$	7.39
Canceled	(77,635)	$	9.20
Outstanding at March 31, 2021	2,445,300	$	9.35

Schedule of Performance RSU Activity

Performance Restricted Stock Units

The following table summarizes Performance RSU activity under the Company’s equity plans during the six months ended March 31, 2021:


	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	(90,345)	$	6.06
Canceled	—	$	—
Outstanding at March 31, 2021	547,976	$	10.06

Convertible Senior Notes (Tables)

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Carrying Values of Company's 2026 Notes

The carrying values of the Company’s 2026 Notes are as follows (in thousands):


	March 31, 2021
2026 Notes:
Principal amount	$	155,250
Less: unamortized discount and issuance costs, net of amortization	(37,558)
Carrying amount	$	117,692

2026 Notes embedded conversion derivative	$	34,719

Schedule of Changes in Fair Value of Embedded Conversion Derivative


Balance at September 30, 2020	$	753




Foreign currency effect on contingent consideration	29
Payment of contingent consideration	$	(782)
Balance at March 31, 2021	$	—

The following table presents the fair value and the change in fair value for the embedded conversion derivative (in thousands):


Embedded conversion derivative
Fair value as of February 5, 2021	$	33,192
Change in fair value	1,527
Fair value as of March 31, 2021	$	34,719

Schedule of Interest Costs Recognized Related to 2026 Notes

The following table presents the total amount of interest cost recognized relating to the 2026 Notes (in thousands):


	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Contractual interest expense	$	172	$	—	$	172	$	—
Amortization of debt discount and issuance costs	1,147		—		1,147		—
Total interest expense recognized	$	1,319	$	—	$	1,319	$	—

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Commitments and Contingencies (Tables)

6 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Maturities of Operating Lease Liabilities

Maturities of our operating lease liabilities as of March 31, 2021 were as follows (amounts shown in thousands):


	Operating leases
2021—remaining	$	1,089
2022	1,824
2023	1,722
2024	1,388
2025	302
2026	296
Thereafter	377
Total lease payments	6,998
Less: amount representing interest	(607)
Present value of future lease payments	$	6,391

Nature of Operations and Summary of Significant Accounting Policies - Narrative (Details)
$ / shares in Units, check_deposit in Billions

3 Months Ended

6 Months Ended

Mar. 31, 2021

USD ($)

institution

check_deposit

patent

$ / shares

Dec. 31, 2020

USD ($)

Mar. 31, 2020

USD ($)

Mar. 31, 2021

USD ($)

institution

check_deposit

patent

segment

$ / shares

Mar. 31, 2020

USD ($)

Feb. 05, 2021

USD ($)

Sep. 30, 2020

USD ($)

$ / shares

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 (over five billion) | check_deposit

Number of patents granted | patent

Number of pending patent applications | patent

(Loss) gain resulting from foreign exchange translation

$ (2,648,000)

$ (1,064,000)

$ 112,000

$ 189,000

Product management costs

6,691,000

5,581,000

^[1]

12,855,000

10,873,000

^[1]

Other than temporary impairment charges recognized on investments

Write-offs of allowance for doubtful accounts

34,000

Allowance for doubtful accounts receivable

200,000

$ 200,000

Capitalized software development costs

Amortization expense of capitalized software development costs

$ 0

Capitalized software development costs for internal use

400,000

100,000

Amortization expense from capitalized software development costs for internal use

$ 200,000

200,000

Number of operating segments | segment

Number of reporting units | segment

Goodwill impairment

$ 0

Common stock, par value (in dollars per share) | $ / shares

$ 0.001

Impairment charges related to intangible assets

$ 0

Trading-day average stock price period

20 days

Accumulated other comprehensive loss

$ 397,000

$ 323,000

Convertible Debt | 2026 Notes

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Debt issued

$ 155,300,000

Debt interest rate

0.75%

Revision of Prior Period, Reclassification, Adjustment

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Product management costs

$ 800,000

$ 1,400,000

ICAR | Spanish Government Agencies

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Debt interest rate

0.00%

Amount outstanding under loan agreement

$ 900,000

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

ICAR | Spanish Government Agencies | Other non-current liabilities

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Amount outstanding under loan agreement

$ 800,000

$ 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

[1]	March 31, 2020 consolidated statements of operations reflect reclassifications to conform to the current year presentation.

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		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	11,480	2,100	6,716	1,857
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	556	279	634	302
RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	1,371	1,789	1,238	1,555
ESPP common stock equivalents
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	28	32	15	0
Performance options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	267	0	200	0
Performance RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	156	0	127	0
Convertible senior notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	4,551	0	2,251	0
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	4,551	0	2,251	0

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		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Accounting Policies [Abstract]
Net income	$ 1,019	$ 908	$ 3,186	$ 1,468
Weighted-average shares outstanding - basic (in shares)	43,138	41,022	42,835	40,817
Common stock equivalents (in shares)	1,416	1,006	1,532	1,213
Weighted-average shares outstanding - diluted (in shares)	44,554	42,028	44,367	42,030
Net income per share:
Basic (in dollars per share)	$ 0.02	$ 0.02	$ 0.07	$ 0.04
Diluted (in dollars per share)	$ 0.02	$ 0.02	$ 0.07	$ 0.03

- 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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+ Details

Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Total revenue	$ 28,773	$ 23,192	$ 54,748	$ 45,259
Deposits revenue
Disaggregation of Revenue [Line Items]
Total revenue	17,197	14,622	32,812	29,273
Identity verification revenue
Disaggregation of Revenue [Line Items]
Total revenue	11,576	8,570	21,936	15,986
Transferred at Point in Time \| Deposits software and hardware
Disaggregation of Revenue [Line Items]
Total revenue	12,134	10,317	22,888	20,600
Transferred at Point in Time \| Identity verification software and hardware
Disaggregation of Revenue [Line Items]
Total revenue	879	1,136	2,427	2,368
Transferred over Time \| Deposits services and other
Disaggregation of Revenue [Line Items]
Total revenue	5,063	4,305	9,924	8,673
Transferred over Time \| Identity verification services and other
Disaggregation of Revenue [Line Items]
Total revenue	$ 10,697	$ 7,434	$ 19,509	$ 13,618

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Revenue from Contract with Customer [Abstract]
Contract assets, current	$ 3,577	$ 5,187
Contract assets, non-current	3,900	4,468
Contract liabilities (deferred revenue), current	11,353	7,973
Contract liabilities (deferred revenue), non-current	$ 585	$ 1,597

Revenue Recognition - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
Revenue Recognition - Narrative (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue recognized included in contract liability balance at the beginning of the period			$ 7,900,000	$ 4,800,000
Impairment losses recognized on contract costs			0	0
Selling and marketing
Disaggregation of Revenue [Line Items]
Contract costs included in selling and marketing expenses	$ 300,000	$ 200,000	500,000	$ 400,000
Other Current and Non-current Assets
Disaggregation of Revenue [Line Items]
Contract costs	$ 2,200,000		$ 2,200,000		$ 1,500,000

Investments - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Schedule Of Available For Sale Securities [Line Items]
Cost	$ 165,650	$ 41,890
Gross Unrealized Gains	22	111
Gross Unrealized Losses	(100)	(3)
Fair Market Value	165,572	41,998
Short-term investments \| U.S. Treasury
Schedule Of Available For Sale Securities [Line Items]
Cost	7,735	10,245
Gross Unrealized Gains	3	38
Gross Unrealized Losses	0	0
Fair Market Value	7,738	10,283
Short-term investments \| Asset-backed securities
Schedule Of Available For Sale Securities [Line Items]
Cost	5,616	4,723
Gross Unrealized Gains	6	36
Gross Unrealized Losses	(1)	0
Fair Market Value	5,621	4,759
Short-term investments \| Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Cost	118,004	24,956
Gross Unrealized Gains	10	37
Gross Unrealized Losses	(59)	0
Fair Market Value	117,955	24,993
Long-term investments \| U.S. Treasury
Schedule Of Available For Sale Securities [Line Items]
Cost	6,532
Gross Unrealized Gains	2
Gross Unrealized Losses	(1)
Fair Market Value	6,533
Long-term investments \| Asset-backed securities
Schedule Of Available For Sale Securities [Line Items]
Cost	959
Gross Unrealized Gains	0
Gross Unrealized Losses	(1)
Fair Market Value	958
Long-term investments \| Corporate debt securities
Schedule Of Available For Sale Securities [Line Items]
Cost	26,804	1,966
Gross Unrealized Gains	1	0
Gross Unrealized Losses	(38)	(3)
Fair Market Value	$ 26,767	$ 1,963

Investments - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
Investments - Narrative (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Feb. 05, 2021
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Other-than-temporary impairment charges recognized	$ 0	$ 0	$ 0	$ 0
Realized gains (losses) from sale of available-for-sale securities	$ 0	$ 0	$ 0	$ 0
2026 Notes \| Convertible Debt
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Debt issued					$ 155,300,000
Debt interest rate					0.75%

Investments - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Assets
Short-term investments	$ 131,314	$ 40,035
Long-term investments	34,258	1,963
Convertible senior notes hedge	34,719
Total assets at fair value	200,291	41,998
Liabilities
Embedded conversion derivative	34,719
Acquisition-related contingent consideration		753
Total liabilities at fair value	34,719	753
U.S. Treasury
Assets
Short-term investments	7,738	10,283
Long-term investments	6,533	0
Asset-backed securities
Assets
Short-term investments	5,621	4,759
Long-term investments	958
Corporate debt securities
Assets
Short-term investments	52,354	9,619
Long-term investments	23,838	1,963
Commercial paper
Assets
Short-term investments	65,601	15,374
Foreign government and agency securities
Assets
Long-term investments	2,929
Quoted Prices in Active Markets (Level 1)
Assets
Short-term investments	7,738	10,283
Long-term investments	6,533	0
Convertible senior notes hedge	0
Total assets at fair value	14,271	10,283
Liabilities
Embedded conversion derivative	0
Acquisition-related contingent consideration		0
Total liabilities at fair value	0	0
Quoted Prices in Active Markets (Level 1) \| U.S. Treasury
Assets
Short-term investments	7,738	10,283
Long-term investments	6,533	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
Assets
Short-term investments	0	0
Long-term investments	0	0
Quoted Prices in Active Markets (Level 1) \| Commercial paper
Assets
Short-term investments	0	0
Quoted Prices in Active Markets (Level 1) \| Foreign government and agency securities
Assets
Long-term investments	0
Significant Other Observable Inputs (Level 2)
Assets
Short-term investments	123,576	29,752
Long-term investments	27,725	1,963
Convertible senior notes hedge	34,719
Total assets at fair value	186,020	31,715
Liabilities
Embedded conversion derivative	34,719
Acquisition-related contingent consideration		0
Total liabilities at fair value	34,719	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	5,621	4,759
Long-term investments	958
Significant Other Observable Inputs (Level 2) \| Corporate debt securities
Assets
Short-term investments	52,354	9,619
Long-term investments	23,838	1,963
Significant Other Observable Inputs (Level 2) \| Commercial paper
Assets
Short-term investments	65,601	15,374
Significant Other Observable Inputs (Level 2) \| Foreign government and agency securities
Assets
Long-term investments	2,929
Significant Unobservable Inputs (Level 3)
Assets
Short-term investments	0	0
Long-term investments	0	0
Convertible senior notes hedge	0
Total assets at fair value	0	0
Liabilities
Embedded conversion derivative	0
Acquisition-related contingent consideration		753
Total liabilities at fair value	0	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
Assets
Short-term investments	0	0
Long-term investments	0	0
Significant Unobservable Inputs (Level 3) \| Commercial paper
Assets
Short-term investments	0	$ 0
Significant Unobservable Inputs (Level 3) \| Foreign government and agency securities
Assets
Long-term investments	$ 0

Investments - Summary of Contingent Consideration Measured at Fair Value (Details) - Contingent Consideration $ in Thousands	6 Months Ended
	Mar. 31, 2021 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Payment of contingent consideration	$ (782)
Significant Unobservable Inputs (Level 3)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	753
Foreign currency effect on contingent consideration	29
Ending Balance	$ 0

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Goodwill and Intangible Assets [Line Items]
Goodwill	$ 35,728		$ 35,728		$ 35,669
Amortization of intangible assets	$ 1,700	$ 1,600	$ 3,352	$ 3,187
Minimum
Goodwill and Intangible Assets [Line Items]
Estimated useful lives of intangible assets (in years)			2 years
Maximum
Goodwill and Intangible Assets [Line Items]
Estimated useful lives of intangible assets (in years)			7 years

Goodwill and Intangible Assets - Changes in Goodwill (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill [Roll Forward]
Balance at September 30, 2020	$ 35,669
Foreign currency effect on goodwill	59
Balance at March 31, 2021	$ 35,728

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Sep. 30, 2020
Indefinite Lived Intangible Assets By Major Class [Line Items]
Cost	$ 38,587	$ 38,587
Accumulated Amortization	22,543	19,298
Net	$ 16,044	$ 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	11,026	9,416
Net	$ 9,315	$ 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	11,000	9,390
Net	$ 6,628	$ 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	517	492
Net	$ 101	$ 126

Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
2021—remaining	$ 3,104
2022	5,965
2023	3,915
2024	1,860
2025	1,200
Net	$ 16,044	$ 19,289

Stockholders' Equity - Stock-Based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 2,968	$ 2,308	$ 5,715	$ 4,611
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	82	65	169	126
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	892	594	1,680	1,166
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	777	680	1,517	1,354
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 1,217	$ 969	$ 2,349	$ 1,965

Stockholders' Equity - Narrative (Details)		3 Months Ended		6 Months Ended		12 Months Ended
Stockholders' Equity - Narrative (Details)	Nov. 06, 2018 $ / shares shares	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares	Dec. 16, 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 \| $		$ 22,800,000		$ 22,800,000
Weighted average period for unrecognized compensation expense expected to be recognized (in years)				2 years 4 months 24 days
Purchase of common stock (in shares)		902,640		902,640			1,162,505
Discount rate from market price, purchase date				0.15
Recognized compensation expense \| $		$ 2,968,000	$ 2,308,000	$ 5,715,000	$ 4,611,000
Total intrinsic value of options exercised \| $				$ 1,400,000	$ 1,000,000.0
Options granted (in shares)				0
Weighted-average fair value of options granted (in dollars per share) \| $ / shares				$ 0	$ 4.32
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 4 months 24 days
Awards outstanding (in shares)		2,445,300		2,445,300			2,661,943
Recognized compensation expense \| $		$ 2,100,000	1,700,000	$ 4,000,000.0	$ 3,400,000
Unrecognized compensation expense related to nonvested awards \| $		17,600,000		17,600,000
Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $		$ 3,300,000		$ 3,300,000
Weighted average period for unrecognized compensation expense expected to be recognized (in years)				2 years 6 months
Awards outstanding (in shares)		547,976		547,976			353,556
Recognized compensation expense \| $		$ 300,000	100,000	$ 600,000	300,000
Stock performance shares resulting in vesting (in shares)		117,848
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
Recognized compensation expense \| $		$ 200,000	200,000	$ 400,000	300,000
Unrecognized compensation expense related to outstanding stock options \| $		1,300,000		1,300,000
Performance options \| Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $		500,000		$ 500,000
Weighted average period for unrecognized compensation expense expected to be recognized (in years)				7 months 6 days
Number of common stock reserved for future grants (in shares)	800,000
Recognized compensation expense \| $		$ 200,000	200,000	$ 400,000	400,000
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)		2,758,605		2,758,605
2020 Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		873,211		873,211
2020 Plan \| Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		547,976		547,976
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)		592,851		592,851
Prior Plans \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)		1,184,531		1,184,531
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)		572,331		572,331								1,000,000
Shares issued to participants pursuant to employee stock purchase plan (in shares)				427,669
Discount rate from market price, offering date				15.00%
Recognized compensation expense \| $		$ 200,000	$ 200,000	$ 300,000	$ 200,000
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)		220,361		220,361
Director Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock (in shares)		328,346		328,346

Stockholders' Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Number of Shares
Outstanding at September 30, 2020 (in shares)	1,162,505
Granted (in shares)	0
Exercised (in shares)	(259,865)
Canceled (in shares)	0
Outstanding at March 31, 2021 (in shares)	902,640		1,162,505
Weighted-Average Exercise Price
Outstanding at September 30, 2020 (in dollars per share)	$ 7.51
Granted (in dollars per share)	0	$ 4.32
Exercised (in dollars per share)	7.54
Canceled (in dollars per share)	0
Outstanding at March 31, 2021 (in dollars per share)	$ 7.50		$ 7.51
Options, Additional Disclosures
Outstanding at September 30, 2020, Weighted-Average Remaining Contractual Term (in Years)	6 years		6 years 1 month 6 days
Outstanding at March 31, 2021, Weighted-Average Remaining Contractual Term (in Years)	6 years		6 years 1 month 6 days
Outstanding at September 30, 2020, Aggregate Intrinsic Value (in thousands)	$ 11,368		$ 6,081
Outstanding at March 31, 2021, Aggregate Intrinsic Value (in thousands)	$ 11,368		$ 6,081
Options, Vested and Expected to Vest
Vested and Expected to Vest at March 31, 2021 (in shares)	902,640
Vested and Expected to Vest at March 31, 2021, Weighted Average Exercise Price (in dollars per share)	$ 7.50
Vested and Expected to Vest at March 31, 2021, Weighted Average Remaining Contractual Term (in Years)	6 years
Vested and Expected to Vest at March 31, 2021, Aggregate Intrinsic Value (in thousands)	$ 11,368
Exercisable at March 31, 2021 (in shares)	625,015
Exercisable at March 31, 2021, Weighted Average Exercise Price (in dollars per share)	$ 6.61
Exercisable at March 31, 2021, Weighted Average Remaining Contractual Term (in Years)	5 years 2 months 12 days
Exercisable at March 31, 2021, Aggregate Intrinsic Value (in thousands)	$ 4,979

Stockholders' Equity - RSU Activity (Details) - RSUs	6 Months Ended
Stockholders' Equity - RSU Activity (Details) - RSUs	Mar. 31, 2021 $ / shares shares
Number of Shares
Outstanding at September 30, 2020 (in shares) \| shares	2,661,943
Granted (in shares) \| shares	706,412
Settled (in shares) \| shares	(845,420)
Canceled (in shares) \| shares	(77,635)
Outstanding at March 31, 2021 (in shares) \| shares	2,445,300
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	12.27
Settled (in dollars per share) \| $ / shares	7.39
Canceled (in dollars per share) \| $ / shares	9.20
Outstanding at March 31, 2021 (in dollars per share) \| $ / shares	$ 9.35

Stockholders' Equity - Performance RSU Activity (Details) - Performance RSUs	6 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of Shares
Outstanding at September 30, 2020 (in shares) \| shares	353,556
Granted (in shares) \| shares	284,765
Settled (in shares) \| shares	(90,345)
Canceled (in shares) \| shares	0
Outstanding at March 31, 2021 (in shares) \| shares	547,976
Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2020 (in dollars per share) \| $ / shares	$ 6.06
Granted (in dollars per share) \| $ / shares	11.84
Settled (in dollars per share) \| $ / shares	6.06
Canceled (in dollars per share) \| $ / shares	0
Outstanding at March 31, 2021 (in dollars per share) \| $ / shares	$ 10.06

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income tax benefit (provision)	$ (417)	$ (188)	$ 117	$ (229)
Effective tax rate	29.00%	17.00%	(4.00%)	13.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Convertible Senior Notes - Carrying Value of 2026 Notes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Feb. 05, 2021
Debt Instrument [Line Items]
2026 Notes embedded conversion derivative	$ 34,719
Convertible Debt \| 2026 Notes
Debt Instrument [Line Items]
Principal amount	155,250
Less: unamortized discount and issuance costs, net of amortization	(37,558)
Carrying amount	117,692
Convertible Debt \| 2026 Notes \| Embedded conversion derivative
Debt Instrument [Line Items]
Less: unamortized discount and issuance costs, net of amortization	37,600
2026 Notes embedded conversion derivative	$ 34,719	$ 33,200

Convertible Senior Notes - Narrative (Details)		2 Months Ended	3 Months Ended	6 Months Ended
Convertible Senior Notes - Narrative (Details)	Feb. 05, 2021 USD ($) patent $ / shares	Mar. 31, 2021 USD ($) shares	Mar. 31, 2021 USD ($) shares	Mar. 31, 2021 USD ($) shares	Mar. 31, 2020 USD ($)	Feb. 02, 2021 $ / shares	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Payment costs related to hedge transactions				$ 33,192,000	$ 0
Embedded conversion derivative		$ 34,719,000	$ 34,719,000	34,719,000
Senior notes hedge balance		34,719,000	34,719,000	34,719,000			$ 0
Increase in additional paid-in-capital for sale or warrants			23,909,000	23,909,000
Convertible Debt \| 2026 Notes
Debt Instrument [Line Items]
Debt issued	$ 155,300,000
Debt interest rate	0.75%
Debt conversion ratio (per $1,000 principal amount)	0.0479731000
Debt conversion price (in dollars per share) \| $ / shares	$ 20.85
Conversion price premium percentage						0.375
Proceeds from debt offerings, net of discounts, commissions and expenses	$ 149,700,000
Debt issuance costs	$ 5,500,000
Remaining unamortized debt discount		37,558,000	37,558,000	37,558,000
Convertible Debt \| 2026 Notes \| Common Stock
Debt Instrument [Line Items]
Share price (in dollars per share) \| $ / shares						$ 15.16
Convertible Debt \| 2026 Notes \| During any calendar quarter commencing after the calendar quarter ending on June 30, 2021
Debt Instrument [Line Items]
Debt conversion price percentage	1.30
Trading days in period \| patent	20
Consecutive trading days in period \| patent	30
Convertible Debt \| 2026 Notes \| During any calendar quarter commencing after the calendar quarter ending on June 30, 2021 \| Common Stock
Debt Instrument [Line Items]
Sale price per share of common stock at par value \| $ / shares	$ 0.001
Convertible Debt \| 2026 Notes \| Measurement period
Debt Instrument [Line Items]
Debt conversion price percentage	0.98
Consecutive trading days in period \| patent	5
Convertible Debt \| 2026 Notes \| Observation period
Debt Instrument [Line Items]
Consecutive trading days in period \| patent	40
Convertible Debt \| 2026 Notes \| Embedded conversion derivative
Debt Instrument [Line Items]
Payment costs related to hedge transactions	$ 9,300,000
Embedded conversion derivative	33,200,000	34,719,000	34,719,000	34,719,000
Value of remaining embedded derivative allocated to host contract	$ 116,500,000
Derivative interest rate	6.71%
Remaining unamortized debt discount		$ (37,600,000)	$ (37,600,000)	$ (37,600,000)
Remaining debt discount amortization period	4 years 9 months 18 days
Convertible Debt \| Additional Notes
Debt Instrument [Line Items]
Option period to purchase additional notes	13 days
Additional aggregate principal amount purchased	$ 20,250,000
Convertible Debt \| Notes Hedge
Debt Instrument [Line Items]
Debt conversion price (in dollars per share) \| $ / shares	$ 20.85
Conversion price premium percentage						0.750
Number of shares that can initially be converted into common stock \| patent	7,400,000
Strike price of warrants (in dollar per share) \| $ / shares	$ 26.53
Senior notes hedge balance	$ 33,200,000
Shares purchased under the notes hedge (in shares) \| shares		0
Increase in additional paid-in-capital for sale or warrants		$ 23,900,000
Warrants exercised (in shares) \| shares		0
Warrants outstanding (in shares) \| shares		0	0	0
Convertible Debt \| Notes Hedge \| Observation period
Debt Instrument [Line Items]
Consecutive trading days in period \| patent	80
Incremental dilution of earnings per share of warrants (in shares) \| shares			0

Convertible Senior Notes - Change in Fair Value of Embedded Conversion Derivative (Details) - Convertible Debt - 2026 Notes - Embedded conversion derivative $ in Thousands	2 Months Ended
	Mar. 31, 2021 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 33,192
Change in fair value	1,527
Ending Balance	$ 34,719

Convertible Senior Notes - Interest Costs Recognized on 2026 Notes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Debt Instrument [Line Items]
Total interest expense recognized	$ 1,319	$ 0	$ 1,319	$ 0
Convertible Debt \| 2026 Notes
Debt Instrument [Line Items]
Contractual interest expense	172	0	172	0
Amortization of debt discount and issuance costs	1,147	0	1,147	0
Total interest expense recognized	$ 1,319	$ 0	$ 1,319	$ 0

Commitments and Contingencies - Narrative (Details) ft² in Thousands, € in Millions												3 Months Ended		6 Months Ended	13 Months Ended
	Mar. 31, 2021 USD ($) ft² patent	Dec. 04, 2020 patent	Sep. 30, 2020 USD ($) 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 ($)	Jun. 11, 2018 EUR (€)	May 03, 2018 USD ($)	Mar. 31, 2021 USD ($) ft²	Feb. 23, 2021 patent	Mar. 31, 2021 USD ($) ft²	Feb. 01, 2021 patent
Leases
Weighted average remaining lease term of operating leases	4 years											4 years		4 years
Weighted average discount rate of operating leases	4.60%											4.60%		4.60%
ROU assets \| $	$ 4,791,000		$ 5,407,000									$ 4,791,000		$ 4,791,000
ROU liabilities \| $	6,391,000		7,100,000									6,391,000		6,391,000
Lease liabilities, current portion \| $	1,755,000		1,819,000									1,755,000		1,755,000
Lease liabilities, non-current portion \| $	$ 4,636,000		$ 5,327,000									4,636,000		4,636,000
Operating lease costs \| $												$ 500,000		1,100,000
Operating cash flows for operating leases paid \| $														$ 1,400,000
Minimum
Leases
Remaining operating lease term	1 year											1 year		1 year
Maximum
Leases
Remaining operating lease term	7 years											7 years		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											$ 0		$ 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											29		29
Pending Litigation \| General and administrative
Legal Proceedings
Legal fees \| $														$ 500,000
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			2	2	3		5	4							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 instituted \| patent															3
Number of patents denied institution petition \| patent													4		1
Pending Litigation \| USAA \| PNC Bank
Legal Proceedings
Number of patents allegedly infringed \| patent	2	2	2
Number of patents denied institution petition \| patent	2

Commitments and Contingencies - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
2021—remaining	$ 1,089
2022	1,824
2023	1,722
2024	1,388
2025	302
2026	296
Thereafter	377
Total lease payments	6,998
Less: amount representing interest	(607)
Present value of future lease payments	$ 6,391	$ 7,100

Revenue Concentration (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
Revenue Concentration (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Revenue, Major Customer [Line Items]
Revenue	$ 28,773	$ 23,192	$ 54,748	$ 45,259
Accounts receivable, net	14,162		14,162		$ 15,612
Customer Concentration Risk \| Accounts Receivable
Revenue, Major Customer [Line Items]
Accounts receivable, net	3,800	$ 5,000	3,800	$ 5,000
Customer Concentration Risk \| Customer One \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Revenue	$ 6,700		$ 10,600
Total revenue, percentage	23.00%	14.00%	19.00%	16.00%
Customer Concentration Risk \| Customer Two \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Total revenue, percentage		14.00%		11.00%
Customer Concentration Risk \| Customers One and Two \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Revenue		$ 6,600		$ 11,800
Geographic Concentration Risk \| Sales Revenue Net \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	26.00%	25.00%	28.00%	25.00%
Geographic Concentration Risk \| Long-term Assets \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage			35.00%		66.00%
Geographic Concentration Risk \| Long-term Assets, Excluding Goodwill and Other Intangibles \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage			5.00%		15.00%