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Press Release

Jan 27,2022

Mitek Reports 25% Year Over Year Revenue Growth and Another Record Quarter

Artificial intelligence and biometrics are the winning combination to fight fraud online

SAN DIEGO--(BUSINESS WIRE)--Jan. 27, 2022-- Mitek (NASDAQ: MITK) (www.miteksystems.com), a global leader in digital fraud prevention, today reported financial results for its fiscal 2022 first quarter ended December 31, 2021. Total revenue increased 25% year over year, driven by increased demand for both digital identity verification solutions and mobile deposit, as commerce continues its rapid shift to digital channels.

Fiscal First Quarter 2022 Financial Highlights

  • Total revenue increased 25% year over year to a first quarter record $32.5 million.
  • GAAP net income increased 44% year over year to $3.1 million, or $0.07 per diluted share.
  • Non-GAAP net income increased 65% year over year to $10.2 million, or $0.22 per diluted share.
  • Cash flow from operations was $2.3 million.
  • Total cash and investments were $218.2 million at the end of the quarter.

“I am proud that the world’s leading brands trust Mitek to protect their companies and their customers from growing online fraud,” said CEO Max Carnecchia. “Biometrics are transforming the way we deliver authentication solutions. Our team will continue to innovate to build trust and keep people safe online.”

"Mitek is combating fraud in more ways, in more countries and in more industries than ever before,” CFO Frank Teruel added. “We also delivered record first quarter revenue, which is evidence of the positive impact our technology is making on financial services and marketplace businesses, mitigating business operation costs and fraud losses.”

Conference Call Information

Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the company’s financial results.

To access the live call, dial 800-437-2398 (US and Canada) or +1 323-289-6576 (International) and give the participant passcode 5800312.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay dial-in information, please click here.

About Mitek

Mitek (NASDAQ: MITK) is a global leader in digital fraud prevention using its mobile capture and digital identity verification solutions built on the latest advancements in computer vision and artificial intelligence. Mitek’s identity verification solutions enable organizations to protect their customers by verifying an individual’s identity during digital transactions to reduce risk and meet regulatory requirements, while increasing revenue from digital channels. More than 7,500 organizations use Mitek to enable trust and convenience for mobile check deposit, new account opening, account protection, and more. Mitek is based in San Diego, Calif., with offices across the U.S. and Europe. Learn more at www.miteksystems.com. [(MITK-F)]

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

Notice Regarding Forward-Looking Statements

Statements contained in this news release relating to the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future, including, but not limited to, statements relating to the company’s long-term prospects and market opportunities are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, risks related to the company’s ability to withstand negative conditions in the global economy, the extent to which the COVID-19 outbreak and measures taken in response thereto impact our business, results of operations and financial condition, a lack of demand for or market acceptance of the company’s products, the company’s ability to continue to develop, produce and introduce innovative new products in a timely manner or the outcome of any pending or threatened litigation and the timing of the implementation and launch of the company’s products by the company’s signed customers.

Additional risks and uncertainties faced by the company are contained from time to time in the company’s filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021, and its quarterly reports on Form 10-Q and current reports on Form 8-K, which you may obtain for free on the SEC’s website at www.sec.gov. Collectively, these risks and uncertainties could cause the company’s actual results to differ materially from those projected in its forward-looking statements and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company disclaims any intention or obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Note Regarding Use of Non-GAAP Financial Measures

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

MITEK SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands except share data)

 

 

December 31, 2021

 

September 30, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

24,214

 

 

$

30,312

 

Short-term investments

 

137,753

 

 

 

149,057

 

Accounts receivable, net

 

16,930

 

 

 

16,602

 

Contract assets

 

4,406

 

 

 

4,080

 

Prepaid expenses

 

2,540

 

 

 

1,920

 

Other current assets

 

2,500

 

 

 

2,085

 

Total current assets

 

188,343

 

 

 

204,056

 

Long-term investments

 

56,255

 

 

 

48,051

 

Property and equipment, net

 

3,654

 

 

 

3,671

 

Right-of-use assets

 

6,564

 

 

 

7,056

 

Intangible assets, net

 

26,285

 

 

 

28,734

 

Goodwill

 

62,305

 

 

 

63,096

 

Deferred income tax assets

 

10,677

 

 

 

10,511

 

Convertible senior notes hedge

 

42,821

 

 

 

48,208

 

Other non-current assets

 

6,097

 

 

 

6,310

 

Total assets

$

403,001

 

 

$

419,693

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,571

 

 

$

2,507

 

Accrued payroll and related taxes

 

7,206

 

 

 

11,776

 

Deferred revenue, current portion

 

8,168

 

 

 

10,381

 

Lease liabilities, current portion

 

1,970

 

 

 

1,943

 

Acquisition-related contingent consideration

 

11,210

 

 

 

11,050

 

Other current liabilities

 

1,646

 

 

 

1,552

 

Total current liabilities

 

32,771

 

 

 

39,209

 

Convertible senior notes

 

122,632

 

 

 

120,918

 

Embedded conversion derivative

 

42,821

 

 

 

48,208

 

Deferred revenue, non-current portion

 

644

 

 

 

955

 

Lease liabilities, non-current portion

 

6,004

 

 

 

6,588

 

Deferred income tax liabilities

 

4,020

 

 

 

4,117

 

Other non-current liabilities

 

6,680

 

 

 

6,868

 

Total liabilities

 

215,572

 

 

 

226,863

 

Stockholders’ equity:

 

 

 

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

 

—

 

 

 

—

 

Common stock, $0.001 par value, 60,000,000 shares authorized, 44,296,771 and 44,168,745 issued and outstanding, as of December 31, 2021 and September 30, 2021, respectively

 

44

 

 

 

44

 

Additional paid-in capital

 

203,091

 

 

 

199,935

 

Accumulated other comprehensive loss

 

(2,480

)

 

 

(943

)

Accumulated deficit

 

(13,226

)

 

 

(6,066

)

Treasury stock, at cost, no shares and 7,773 shares as of December 31, 2021 and September 30, 2021, respectively

 

—

 

 

 

(140

)

Total stockholders’ equity

 

187,429

 

 

 

192,830

 

Total liabilities and stockholders’ equity

$

403,001

 

 

$

419,693

 

MITEK SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended December 31,

 

2021

 

2020

Revenue

 

 

 

Software and hardware

$

15,445

 

$

12,303

Services and other

 

17,028

 

 

13,673

Total revenue

 

32,473

 

 

25,976

Operating costs and expenses

 

 

 

Cost of revenue—software and hardware

 

378

 

 

1,245

Cost of revenue—services and other

 

2,978

 

 

2,893

Selling and marketing

 

8,438

 

 

7,385

Research and development

 

7,606

 

 

6,165

General and administrative

 

5,965

 

 

5,058

Acquisition-related costs and expenses

 

2,279

 

 

1,693

Total operating costs and expenses

 

27,644

 

 

24,439

Operating income

 

4,829

 

 

1,537

Interest expense

 

2,008

 

 

—

Other income, net

 

135

 

 

96

Income before income taxes

 

2,956

 

 

1,633

Income tax benefit

 

168

 

 

534

Net income

$

3,124

 

$

2,167

Net income per share—basic

$

0.07

 

$

0.05

Net income per share—diluted

$

0.07

 

$

0.05

Shares used in calculating net income per share—basic

 

44,788

 

 

42,476

Shares used in calculating net income per share—diluted

 

46,155

 

 

43,897

MITEK SYSTEMS, INC.

NON-GAAP NET INCOME RECONCILIATION

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended December 31,

 

2021

 

2020

Net income

$

3,124

 

 

$

2,167

 

Non-GAAP adjustments:

 

 

 

Acquisition-related costs and expenses

 

2,279

 

 

 

1,693

 

Intellectual property litigation costs

 

374

 

 

 

241

 

Stock compensation expense

 

3,132

 

 

 

2,747

 

Amortization of debt discount and issuance costs

 

1,715

 

 

 

—

 

Income tax effect of pre-tax adjustments

 

(1,875

)

 

 

(1,077

)

Cash tax difference(1)

 

1,415

 

 

 

385

 

Non-GAAP net income

 

10,164

 

 

 

6,156

 

Non-GAAP income per share—basic

$

0.23

 

 

$

0.14

 

Non-GAAP income per share—diluted

$

0.22

 

 

$

0.14

 

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

 

44,788

 

 

 

42,476

 

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

 

46,155

 

 

 

43,897

 

(1)

The company’s non-GAAP net income is calculated using a cash tax rate of 3% in both fiscal 2022 and 2021. The estimated cash tax rate is the estimated tax payable on the company’s tax returns as a percentage of estimated annual non-GAAP pre-tax net income. The company uses an estimated cash tax rate to adjust for the historical variation in the effective book tax rate associated with the reversal of valuation allowances, the utilization of research and development tax credits, and the utilization of loss carryforwards which currently have an overall effect of reducing taxes payable. The company believes that the cash tax rate provides a more transparent view of the company’s operating results. The company’s effective tax rate used for the purposes of calculating GAAP net income for the three months ended December 31, 2021 and 2020 was negative 6% and negative 33%, respectively.

 

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

Source: Mitek