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Press Release

Jun 29,2023

Mitek Announces Record Revenue and Earnings for Full Year Fiscal 2022

Total Revenue for Fiscal 2022 Increased 20% Year Over Year; Company Guides for Continued Revenue and Earnings Growth in Fiscal 2023

SAN DIEGO--(BUSINESS WIRE)--Jun. 29, 2023-- Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity and digital fraud prevention, today reported financial results for both its fourth quarter and fiscal 2022 full year ended September 30, 2022. Total revenue for the full year fiscal 2022 increased 20% year over year, driven by additional revenue as a result of the acquisition of HooYu Ltd. (“HooYu”), as well as increased demand for both Mitek’s digital identity verification and deposits solutions, as commerce continues its rapid shift to digital channels.

Fiscal 2022 Business Accomplishments

  • Continued deposits business growth driven by increasing consumer usage of Mobile Check Deposit and strong adoption of Check Fraud Defender by several leading financial institutions.
  • Successful integration of HooYu into the Mitek Identity line of business which streamlined operations and yielded significant synergies in product development and go to market.
  • Launched the integrated identity platform, Mitek’s Verified Identity Platform (MiVIP), which expanded Mitek’s addressable market and delivered improved unit economics.
  • Shortly following the close of the fiscal 2022, Mitek launched MiPass, the industry’s first multi-model biometric solution for continuous identity authentication, which further expanded Mitek’s total addressable market.

Fiscal 2022 Full Year Financial Highlights

  • Total revenue increased 20% year over year to a record $143.9 million.
  • GAAP net operating income was $11.3 million.
  • GAAP net income was $3.0 million, or $0.07 per diluted share.
  • Non-GAAP net operating income was $43.5 million, operating margin of 30%, up 86 basis points year over year.
  • Non-GAAP net income increased 16% year over year to a record $39.6 million, or $0.87 per diluted share.
  • Cash flow from operations was $26.4 million.
  • Total cash and investments were $101.0 million at September 30, 2022.

Fiscal Fourth Quarter 2022 Financial Highlights

  • Total revenue increased 17% year over year to $38.8 million.
  • GAAP net operating income was $2.9 million.
  • GAAP net loss was $0.3 million, or $0.01 per diluted share.
  • Non-GAAP net operating income was $11.0 million, operating margin of 28%.
  • Non-GAAP net income was $9.0 million, or $0.20 per diluted share.

Mitek CEO, Max Carnecchia’s Comments

“Fiscal 2022 was another record year for Mitek. We again achieved record revenue and earnings and delivered strong cash flow from operations, as we continued to deliver industry leading products that make digital commerce faster and safer. This ongoing momentum reinforces our unwavering optimism about our long-term prospects and our ability to further penetrate our large target addressable markets.”

Fiscal 2023 Guidance

Mitek expects revenue for the year ending September 30, 2023 to be in the range of $162.0 million to $165.0 million, an increase of approximately 14% year over year from the mid-point of the guidance range. In addition, Mitek expects its non-GAAP operating margin for fiscal 2023 to be in the range of 29.5% to 30.5%.

Conference Call Information

Mitek management will host a conference call and live webcast for analysts and investors today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the Company’s financial results. To access the live call, dial 877-270-2148 (US and Canada) or +1 412-902-6510 (International) and ask to join the Mitek call.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. The phone call replay can be access by dialing 877-344-7529 (US or Canada) or 1-412-317-0088 (International) and entering the passcode: 9370119.

About Mitek Systems, Inc.

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

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

Notice Regarding Forward-Looking Statements

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

Additional risks and uncertainties faced by the Company are contained from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the SEC on December 13, 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-U.S. generally accepted accounting principles (“GAAP”) financial measures for non-GAAP net income and non-GAAP net income per share that exclude amortization and acquisition-related costs, intellectual property litigation costs, executive transition costs, stock compensation expenses, restructuring costs, amortization of debt discount and issuance costs, income tax effect of pre-tax adjustments, and the cash tax difference. These financial measures are not calculated in accordance with GAAP and are not based on any comprehensive set of accounting rules or principles. In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement financial statements prepared under GAAP. Management believes these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company’s ongoing operating performance. Further, management and the Board of Directors of the Company utilize these non-GAAP financial measures to gain a better understanding of the Company’s comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. Management believes these non-GAAP financial measures, when read in conjunction with the Company’s GAAP financial statements, are useful to investors because they provide a basis for meaningful period-to-period comparisons of the Company’s ongoing operating results, including results of operations against investor and analyst financial models, which helps identify trends in the Company’s underlying business and provides a better understanding of how management plans and measures the Company’s underlying business.

MITEK SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands except share data)

 

 

September 30, 2022

 

September 30, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

32,059

 

 

$

30,312

 

Short-term investments

 

58,268

 

 

 

149,057

 

Accounts receivable, net

 

27,874

 

 

 

16,602

 

Contract assets

 

6,273

 

 

 

4,080

 

Prepaid expenses

 

2,000

 

 

 

1,920

 

Other current assets

 

2,622

 

 

 

2,085

 

Total current assets

 

129,096

 

 

 

204,056

 

Long-term investments

 

10,633

 

 

 

48,051

 

Property and equipment, net

 

3,493

 

 

 

3,671

 

Right-of-use assets

 

5,155

 

 

 

7,056

 

Goodwill and intangible assets

 

195,942

 

 

 

91,830

 

Deferred income tax assets

 

10,245

 

 

 

10,511

 

Convertible senior notes hedge

 

—

 

 

 

48,208

 

Other non-current assets

 

5,846

 

 

 

6,310

 

Total assets

$

360,410

 

 

$

419,693

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,974

 

 

$

2,507

 

Accrued payroll and related taxes

 

10,393

 

 

 

11,776

 

Accrued liabilities(1)

 

1,155

 

 

 

480

 

Deferred revenue, current portion

 

13,394

 

 

 

10,381

 

Lease liabilities, current portion

 

2,110

 

 

 

1,943

 

Acquisition-related contingent consideration

 

5,920

 

 

 

11,050

 

Restructuring accrual

 

901

 

 

 

—

 

Other current liabilities(1)

 

1,650

 

 

 

1,072

 

Total current liabilities

 

40,497

 

 

 

39,209

 

Convertible senior notes

 

127,970

 

 

 

120,918

 

Embedded conversion derivative

 

—

 

 

 

48,208

 

Deferred revenue, non-current portion

 

1,775

 

 

 

955

 

Lease liabilities, non-current portion

 

4,106

 

 

 

6,588

 

Deferred income tax liabilities, non current portion

 

14,132

 

 

 

4,117

 

Other non-current liabilities

 

1,613

 

 

 

6,868

 

Total liabilities

 

190,093

 

 

 

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, 120,000,000 shares authorized, 44,680,429 and 44,168,745 issued and outstanding, as of September 30, 2022 and September 30, 2021, respectively

 

44

 

 

 

44

 

Additional paid-in capital

 

216,493

 

 

 

199,935

 

Accumulated other comprehensive loss

 

(28,219

)

 

 

(943

)

Accumulated deficit

 

(18,001

)

 

 

(6,066

)

Treasury stock, at cost, no shares and 7,773 shares as of September 30, 2022 and September 30, 2021, respectively

 

—

 

 

 

(140

)

Total stockholders’ equity

 

170,317

 

 

 

192,830

 

Total liabilities and stockholders’ equity

$

360,410

 

 

$

419,693

 

(1)

September 30, 2021 consolidated balance sheet reflects reclassifications to conform to the current year presentation.

MITEK SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

 

 

 

 

Software and hardware

$

19,815

 

 

$

17,781

 

 

$

72,925

 

 

$

60,069

 

Services and other

 

18,950

 

 

 

15,490

 

 

 

71,018

 

 

 

59,728

 

Total revenue

 

38,765

 

 

 

33,271

 

 

 

143,943

 

 

 

119,797

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of revenue—software and hardware

 

380

 

 

 

260

 

 

 

1,576

 

 

 

2,468

 

Cost of revenue—services and other

 

4,838

 

 

 

2,940

 

 

 

18,432

 

 

 

16,482

 

Selling and marketing

 

9,951

 

 

 

8,449

 

 

 

38,841

 

 

 

32,497

 

Research and development

 

8,278

 

 

 

8,241

 

 

 

30,192

 

 

 

23,632

 

General and administrative

 

7,993

 

 

 

6,081

 

 

 

26,591

 

 

 

22,490

 

Acquisition-related costs and expenses

 

4,395

 

 

 

3,375

 

 

 

15,172

 

 

 

8,951

 

Restructuring costs

 

(7

)

 

 

—

 

 

 

1,800

 

 

 

—

 

Total operating costs and expenses

 

35,828

 

 

 

29,346

 

 

 

132,604

 

 

 

106,520

 

Operating income

 

2,937

 

 

 

3,925

 

 

 

11,339

 

 

 

13,277

 

Interest expense

 

2,107

 

 

 

1,587

 

 

 

8,232

 

 

 

5,129

 

Other income (expense), net

 

(368

)

 

 

106

 

 

 

(370

)

 

 

654

 

Income before income taxes

 

462

 

 

 

2,444

 

 

 

2,737

 

 

 

8,802

 

Income tax benefit (provision)

 

(773

)

 

 

(637

)

 

 

295

 

 

 

(824

)

Net income (loss)

$

(311

)

 

$

1,807

 

 

$

3,032

 

 

$

7,978

 

Net income (loss) per share—basic

$

(0.01

)

 

$

0.04

 

 

$

0.07

 

 

$

0.18

 

Net income (loss) per share—diluted

$

(0.01

)

 

$

0.04

 

 

$

0.07

 

 

$

0.18

 

Shares used in calculating net income (loss) per share—basic

 

44,693

 

 

 

44,616

 

 

 

44,595

 

 

 

43,509

 

Shares used in calculating net income (loss) per share—diluted

 

45,311

 

 

 

46,236

 

 

 

45,780

 

 

 

45,083

 

MITEK SYSTEMS, INC.

NON-GAAP NET INCOME RECONCILIATION

(Unaudited)

(amounts in thousands except per share data)

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

(311

)

 

$

1,807

 

 

$

3,032

 

 

$

7,978

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization and acquisition-related costs(2)

 

4,395

 

 

 

3,375

 

 

 

15,533

 

 

 

8,951

 

Intellectual property litigation costs

 

348

 

 

 

330

 

 

 

1,446

 

 

 

974

 

Executive transition costs

 

—

 

 

 

—

 

 

 

—

 

 

 

428

 

Stock compensation expense

 

3,278

 

 

 

2,950

 

 

 

13,363

 

 

 

11,532

 

Restructuring costs

 

(7

)

 

 

—

 

 

 

1,800

 

 

 

—

 

Amortization of debt discount and issuance costs

 

1,813

 

 

 

1,292

 

 

 

7,053

 

 

 

4,373

 

Income tax effect of pre-tax adjustments

 

(2,457

)

 

 

(1,802

)

 

 

(9,799

)

 

 

(6,013

)

Cash tax difference(1)

 

1,935

 

 

 

2,179

 

 

 

7,210

 

 

 

5,961

 

Non-GAAP net income

 

8,994

 

 

 

10,131

 

 

 

39,638

 

 

 

34,184

 

Non-GAAP income per share—basic

$

0.20

 

 

$

0.23

 

 

$

0.89

 

 

$

0.79

 

Non-GAAP income per share—diluted

$

0.20

 

 

$

0.22

 

 

$

0.87

 

 

$

0.76

 

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

 

44,693

 

 

 

44,616

 

 

 

44,595

 

 

 

43,509

 

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

 

45,311

 

 

 

46,236

 

 

 

45,780

 

 

 

45,083

 

(1)

The Company’s non-GAAP net income is calculated using a cash tax rate of 5.4% and 3% in fiscal 2022 and 2021, respectively. 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 (loss) for the three months ended September 30, 2022 and 2021 was 167% and 26%, respectively. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the twelve months ended September 30, 2022 and 2021 was negative 11% and 9%, respectively.

(2)

Included in acquisition-related costs and expenses is $0.3 million of foreign exchange and investment losses incurred in connection with the acquisition of HooYu Ltd. which is included in other income (expense), net in the consolidated statements of operations for the twelve months ended September 30, 2022.

 

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

Source: Mitek Systems, Inc.