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REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Contract assets, current	$ 17,305	$ 18,355	$ 6,223	$ 7,037
Contract assets, non-current	7,216	5,579	10,741	4,218
Contract liabilities (deferred revenue), current	18,330	17,360	12,647	21,350
Contract liabilities (deferred revenue), non-current	$ 1,051	$ 957	$ 1,236	$ 1,775

INVESTMENTS (Tables)

3 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Investments by Type of Security

The following tables summarize investments by type of security as of December 31, 2023 and September 30, 2023 (amounts in thousands):


December 31, 2023:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	31,755	$	15	$	(83)	$	31,687


Commercial paper, short-term	18,622		—		—		18,622
Corporate debt securities, short-term	9,054		51		(41)		9,064





Total	$	59,431	$	66	$	(124)	$	59,373


September 30, 2023:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	40,329	$	1	$	(76)	$	40,254


Corporate debt securities, short-term	34,545		—		(99)		34,446
U.S. Treasury, long-term	1,371		—		(67)		1,304


Total	$	76,245	$	1	$	(242)	$	76,004

Schedule of Fair Value of Investments Measured on Recurring Basis

The following tables represent the fair value hierarchy of the Company’s investments and acquisition-related contingent consideration as of December 31, 2023 and September 30, 2023, respectively (amounts in thousands):


December 31, 2023:	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	$	31,687	$	31,687	$	—	$	—
Commercial paper	18,622		—		18,622		—

Corporate debt securities	9,064		—		9,064		—
Total short-term investments at fair value	59,373		31,687		27,686		—









Total assets at fair value	$	59,373	$	31,687	$	27,686	$	—


September 30, 2023:	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	$	40,254	$	40,254	$	—	$	—


Corporate debt securities	34,446		—		34,446		—
Total short-term investments at fair value	74,700		40,254		34,446		—
Long-term investments:
U.S. Treasury	1,304		1,304		—		—


Total long-term investments at fair value	1,304		1,304		—		—



Total assets at fair value	$	76,004	$	41,558	$	34,446	$	—
Liabilities:

Acquisition-related contingent consideration	$	7,976	$	—	$	—	$	7,976



Total liabilities at fair value	$	7,976	$	—	$	—	$	7,976

Schedule of Acquisition-related Contingent Consideration Measured at Fair Value

The following table includes a roll-forward of the contingent consideration liability during the three months ended December 31, 2023 (amounts in thousands):


Balance at September 30, 2023	$	7,976

Expenses recorded due to changes in fair value	136
Cash payment of contingent consideration associated with the ID R&D acquisition	(4,641)
Issuance of common stock as contingent consideration associated with the ID R&D acquisition	(3,471)

Balance at December 31, 2023	$	—

STOCKHOLDERS’ EQUITY - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Oct. 02, 2023	Sep. 30, 2023	Jan. 31, 2020	Mar. 07, 2018	Mar. 10, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense related to outstanding stock options and RSUs	$ 33,700
Weighted average period for unrecognized compensation expense expected to be recognized (in years)	2 years 8 months 12 days
Purchase of common stock (in shares)	554,635			651,269
Recognized compensation expense	$ 3,430	$ 2,442
Options granted (in shares)	0	0
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 10 months 24 days
Awards outstanding (in shares)	2,759,633			2,188,296
Recognized compensation expense	$ 2,300	$ 1,600
Unrecognized compensation expense related to nonvested awards	$ 24,600
Performance 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 1 month 6 days
Awards outstanding (in shares)	1,203,203			730,393
Recognized compensation expense	$ 1,000	700
Unrecognized compensation expense related to nonvested awards	9,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense	9	100
Unrecognized compensation expense related to options outstanding	$ 0
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)			5,108,000		4,500,000
Number of common stock reserved for future grants (in shares)	4,481,932
2020 Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)	2,381,995
2020 Plan \| Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)	1,203,203
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)	337,456
Prior Plans \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)	8,850
ESPP common stock equivalents
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)						1,000,000
Number of common stock reserved for future grants (in shares)	270,876
Issuance of common stock under employee stock purchase plan (in shares)	729,124
Discount rate from market price, offering date	15.00%
Recognized compensation expense	$ 100	$ 100
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)	0
Director Plan \| RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock (in shares)	259,513

LEASES (Tables)

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities as of December 31, 2023 were as follows (amounts in thousands):


	Operating leases
2024 - remaining	$	1,416
2025	743
2026	732
2027	644
2028	431
2029 and thereafter	600

Total lease payments	4,566
Less: amount representing interest	(205)
Present value of future lease payments	$	4,361

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands

3 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Operating activities:

Net income (loss)

$ (5,793)

$ 4,726

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Stock-based compensation expense

3,430

2,442

Amortization of intangible assets

3,847

4,487

Depreciation and amortization

391

343

Amortization of investment premiums & other

(1,398)

Accretion and amortization on debt securities

1,970

1,844

Net changes in estimated fair value of acquisition-related contingent consideration

136

330

Deferred taxes

(1,708)

(3,459)

Changes in assets and liabilities, net of acquisitions:

Accounts receivable

(2,771)

Contract assets

(511)

(5,507)

Other assets

(3,192)

(154)

Accounts payable

2,520

980

Accrued payroll and related taxes

(3,704)

(4,174)

Income taxes payable

^[1]

(4,254)

5,149

Deferred revenue

857

(1,521)

Restructuring accrual

(651)

Other liabilities

^[1]

717

354

Net cash provided by (used in) operating activities

(9,463)

5,260

Investing activities:

Purchases of investments

(14,991)

Sales and maturities of investments

33,121

18,750

Purchases of property and equipment, net

(241)

(154)

Net cash provided by (used in) investing activities

17,889

18,596

Financing activities:

Proceeds from the issuance of equity plan common stock

856

662

Payment of acquisition-related contingent consideration

(4,641)

Proceeds from other borrowings

707

Principal payments on other borrowings

(36)

Net cash provided by (used in) financing activities

(3,114)

626

Foreign currency effect on cash and cash equivalents

313

574

Net increase in cash and cash equivalents

5,625

25,056

Cash and cash equivalents at beginning of period

58,913

32,059

Cash and cash equivalents at end of period

64,538

57,115

Supplemental disclosures of cash flow information:

Issuance of common stock for acquisition-related contingent consideration

3,471

Cash paid for income taxes

7,838

213

Supplemental disclosures of non-cash investing and financing activities:

Unrealized holding gain on available for sale investments

$ 102

$ 352

[1]	December 31, 2022 condensed consolidated statement of cash flows reflects reclassifications to conform to the current year presentation.

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2023

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,” the “Company,” “we,” “us,” and “our”) is a leading innovator of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and document Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance. The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences. Mitek’s identity verification and authentication technologies and services make it possible for banks, financial services organizations and the world’s leading marketplace and sharing platforms to verify an individual’s identity during digital transactions, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services. Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more.

Mitek 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. Our partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company as of December 31, 2023 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, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 19, 2024.

Results for the three months ended December 31, 2023, are not necessarily indicative of results for any other interim period or for a full fiscal year.

Principles of Consolidation

The condensed 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.

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.

Net Income (Loss) Per Share

For the three months ended December 31, 2023 and 2022, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive (amounts in thousands):


	Three Months Ended December 31,
		2023	2022
Stock options		594	502
RSUs		1,749	860
ESPP common stock equivalents		49	130
Performance options		476	741
Performance RSUs		1,312	296
Convertible senior notes		7,448	7,448
Warrants		7,448	7,448
Total potentially dilutive common shares outstanding		19,076	17,425

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


	Three Months Ended December 31,
		2023		2022
Net income (loss)		$	(5,793)	$	4,726
Weighted-average shares outstanding—basic		46,294		44,930
Common stock equivalents		—		704
Weighted-average shares outstanding—diluted		46,294		45,634
Net income (loss) per share:
Basic		$	(0.13)	$	0.11
Diluted		$	(0.13)	$	0.10

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") in 2017. These agreements have repayment periods of five to twelve years and bear no interest. As of December 31, 2023, $2.0 million was outstanding under these agreements and $0.2 million and $1.8 million is recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets. As of September 30, 2023, $1.3 million was outstanding under these agreements and approximately $0.2 million and $1.1 million is recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.

Recently Adopted Accounting Pronouncements

The Company did not adopt any new accounting pronouncements in the quarter ended December 31, 2023.

Change in Significant Accounting Policy

The Company’s significant accounting policies are disclosed in the Company’s audited condensed consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on March 19, 2024. There have been no changes to these accounting policies through December 31, 2023.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on its income tax disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the condensed consolidated financial statements.

No other new accounting pronouncement issued or effective during the three months ended December 31, 2023 had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Income tax provision (benefit)	$ (1,744)	$ 1,846
Effective tax rate (as a percent)	23.00%	28.00%

- Definition

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

+ References + Details

CONDENSED 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, 2022		44,680,000
Beginning Balance at Sep. 30, 2022	$ 170,980	$ 44	$ 216,493	$ (17,338)	$ (28,219)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		83,000
Exercise of stock options	662		662
Settlement of restricted stock units (in shares)		486,000
Settlement of restricted stock units	0	$ 1	(1)
Stock-based compensation expense	2,442		2,442
Components of comprehensive income:
Net (loss) income	4,726			4,726
Currency translation adjustment	12,703				12,703
Change in unrealized gain (loss) on investments	352				352
Comprehensive income	17,781
Ending balance (in shares) at Dec. 31, 2022		45,249,000
Ending Balance at Dec. 31, 2022	$ 191,865	$ 45	219,596	(12,612)	(15,164)
Beginning balance (in shares) at Sep. 30, 2023	45,591,199	45,591,000
Beginning Balance at Sep. 30, 2023	$ 205,188	$ 46	228,691	(9,312)	(14,237)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	96,634	97,000
Exercise of stock options	$ 856		856
Settlement of restricted stock units (in shares)		633,000
Settlement of restricted stock units	0	$ 1	(1)
Acquisition-related shares issued (in shares)		311,000
Acquisition-related shares issued	3,471		3,471
Stock-based compensation expense	3,430		3,430
Components of comprehensive income:
Net (loss) income	(5,793)			(5,793)
Currency translation adjustment	6,544				6,544
Change in unrealized gain (loss) on investments	102				102
Comprehensive income	$ 853
Ending balance (in shares) at Dec. 31, 2023	46,631,594	46,632,000
Ending Balance at Dec. 31, 2023	$ 213,798	$ 47	$ 236,447	$ (15,105)	$ (7,591)

STOCKHOLDERS’ EQUITY (Tables)

3 Months Ended

Dec. 31, 2023

Equity [Abstract]

Schedule of Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense related to restricted stock units (“RSUs”), stock options, and Employee Stock Purchase Plan (“ESPP”) shares, which was allocated as follows (amounts in thousands):


	Three Months Ended December 31,
		2023		2022
Cost of revenue		$	129	$	126
Selling and marketing		820		491
Research and development		1,041		554
General and administrative		1,440		1,271
Stock-based compensation expense included in expenses		$	3,430	$	2,442

Schedule of Stock Option Activity

The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at September 30, 2023	651,269	$	7.37	3.6	$	2,185
Granted	—	$	—
Exercised	(96,634)	$	8.85		169
Canceled	—	$	—
Outstanding at December 31, 2023	554,635	$	7.11	4.0	3,291
Vested and Expected to Vest at December 31, 2023	554,635	$	7.11	4.0	3,291
Exercisable at December 31, 2023	554,635	$	7.11	4.0	3,291

Schedule of RSU Activity

The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2023	2,188,296	$	11.49
Granted	1,078,233	11.16
Settled	(445,729)	11.17
Canceled	(61,167)	11.88
Outstanding at December 31, 2023	2,759,633	11.40

Schedule of Performance RSU Activity

The following table summarizes Performance RSU activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2023	730,393	$	13.37
Granted	700,846	10.85
Settled	(187,454)	11.23
Canceled	(40,582)	13.31
Outstanding at December 31, 2023	1,203,203	12.24

CONVERTIBLE SENIOR NOTES - Interest Costs Recognized on 2026 Notes (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total interest expense recognized	$ 2,263	$ 2,137
Convertible Debt \| 2026 Notes
Debt Instrument [Line Items]
Contractual interest expense	293	293
Amortization of debt discount and issuance costs	1,970	1,844
Total interest expense recognized	$ 2,263	$ 2,137

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1D
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
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-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Paragraph 1F
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-Subparagraph (b)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	11. SUBSEQUENT EVENTS On February 13, 2024 (the “Closing Date”), the Company, A2iA Corp., and ID R&D, Inc. (jointly and severally, individually and collectively, “Borrower”) entered into a Loan and Security Agreement (the “Credit Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Bank”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement. The Credit Agreement provides for a revolving line of credit whereby Borrower may borrow up to $35.0 million (the “Revolving Line”) with an additional $15.0 million to be advanced under the Revolving Line at the sole discretion of the Bank. The Revolving Line is secured on a first priority basis by Borrower’s assets. Any newly formed or acquired subsidiary of Borrower or any Guarantor, will either join the Credit Agreement as a co-borrower or become a Guarantor under the Credit Agreement, as determined by the Bank in its sole discretion. Borrower intends to use the Revolving Line for working capital and general business purposes. The Revolving Line terminates, and any outstanding principal amount of all advances made thereunder, and any accrued and unpaid interest thereon, become immediately due and payable on the earlier of (a) the three year anniversary of the Closing Date and (b) the date that is within 90 days of the maturity date of the “2026 Convertible Note” if such notes are outstanding as of such date. “2026 Senior Convertible Note” means the existing unsecured Indebtedness issued pursuant to that certain Indenture between the Company as issuer and UMB Bank, National Association as Indenture Trustee dated as of February 5, 2021, which provide for the issuance from time to time of debentures, notes or other debt instruments of Borrower, to be issued in one or more series. Borrowings under the Credit Agreement generally bear interest at a variable rate equal to (a) term SOFR plus a specified margin or (b) WSJ prime plus a specified margin, in each case which will be adjusted based on the Company’s net leverage ratio at the time of borrowing. Borrower must also pay Bank (i) a commitment fee of $87,500 and (ii) an “Unused Revolving Line Facility Fee” of 0.25% per annum of the average unused portion of the Revolving Line. The Credit Agreement contains representations, warranties, and negative and affirmative covenants customary for transactions of this type. These include covenants limiting the ability of Borrower, and any of their subsidiaries, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any merger or consolidation with, or acquire all or substantially all of the equity or property of, another person, (iv) dispose of any of their business or property, (v) make or permit any payment on subordinated debt, or (vi) pay any dividend, make any other distribution, or redeem any equity. The Credit Agreement contains customary events of default and also provides that an event of default includes any default resulting in a right by third parties to accelerate maturity of indebtedness in excess of $500,000. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. In addition, Borrower may be required to deposit cash with the Bank in an amount equal to 105% of any undrawn letters of credit denominated in U.S. Dollars or 115% of any undrawn letters of credit denominated in a foreign currency.

STOCKHOLDERS’ EQUITY - RSU Activity (Details) - RSUs	3 Months Ended
STOCKHOLDERS’ EQUITY - RSU Activity (Details) - RSUs	Dec. 31, 2023 $ / shares shares
Number of Shares
Outstanding at beginning of period (in shares) \| shares	2,188,296
Granted (in shares) \| shares	1,078,233
Settled (in shares) \| shares	(445,729)
Canceled (in shares) \| shares	(61,167)
Outstanding at end of period (in shares) \| shares	2,759,633
Weighted-Average Fair Market Value Per Share
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 11.49
Granted (in dollars per share) \| $ / shares	11.16
Settled (in dollars per share) \| $ / shares	11.17
Canceled (in dollars per share) \| $ / shares	11.88
Outstanding at end of period (in dollars per share) \| $ / shares	$ 11.40

REVENUE RECOGNITION - Narrative (Details) - USD ($)	3 Months Ended
REVENUE RECOGNITION - Narrative (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue recognized included in contract liability balance at the beginning of the period	$ 9,100,000	$ 6,600,000
Unbilled receivables	600,000		$ 900,000
Impairment losses recognized on contract costs	0	0
Selling and marketing
Disaggregation of Revenue [Line Items]
Contract costs included in selling and marketing expenses	400,000	$ 400,000
Other Current and Non-current Assets
Disaggregation of Revenue [Line Items]
Contract costs	$ 2,400,000		$ 2,600,000
Minimum
Disaggregation of Revenue [Line Items]
Estimated useful lives of intangible assets (in years)	3 years
Minimum \| Software
Disaggregation of Revenue [Line Items]
Estimated useful lives of intangible assets (in years)	1 year
Maximum
Disaggregation of Revenue [Line Items]
Estimated useful lives of intangible assets (in years)	7 years
Maximum \| Software
Disaggregation of Revenue [Line Items]
Estimated useful lives of intangible assets (in years)	3 years

REVENUE RECOGNITION - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 36,917	$ 45,703
Deposits revenue
Disaggregation of Revenue [Line Items]
Total revenue	21,077	30,281
Deposits software and hardware \| Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Total revenue	14,048	24,453
Deposits services and other \| Transferred over Time
Disaggregation of Revenue [Line Items]
Total revenue	7,029	5,828
Identity verification revenue
Disaggregation of Revenue [Line Items]
Total revenue	15,840	15,422
Identity verification software and hardware \| Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Total revenue	1,932	1,923
Identity verification services and other \| Transferred over Time
Disaggregation of Revenue [Line Items]
Total revenue	$ 13,908	$ 13,499

STOCKHOLDERS’ EQUITY - Performance RSU Activity (Details) - Performance RSUs	3 Months Ended
	Dec. 31, 2023 $ / shares shares
Number of Shares
Outstanding at beginning of period (in shares) \| shares	730,393
Granted (in shares) \| shares	700,846
Settled (in shares) \| shares	(187,454)
Canceled (in shares) \| shares	(40,582)
Outstanding at end of period (in shares) \| shares	1,203,203
Weighted-Average Fair Market Value Per Share
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 13.37
Granted (in dollars per share) \| $ / shares	10.85
Settled (in dollars per share) \| $ / shares	11.23
Canceled (in dollars per share) \| $ / shares	13.31
Outstanding at end of period (in dollars per share) \| $ / shares	$ 12.24

LEASES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
LEASES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Leases [Abstract]
Weighted average remaining lease term of operating leases (in years)	4 years 4 months 24 days
Weighted average discount rate of operating leases(as a percent)	3.50%
Right-of-use assets	$ 3,837		$ 4,140
ROU liabilities	4,361		4,800
Lease liabilities, current portion	1,569		1,902
Lease liabilities, non-current portion	2,792		$ 2,867
Operating lease costs	500	$ 500
Operating cash flows for operating leases paid	$ 600

STOCKHOLDERS’ EQUITY - Stock-based Compensation Expense Related to Stock Options and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 3,430	$ 2,442
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	129	126
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	820	491
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	1,041	554
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense included in expenses	$ 1,440	$ 1,271

REVENUE CONCENTRATION (Tables)

3 Months Ended

Dec. 31, 2023

Risks and Uncertainties [Abstract]

Revenue from External Customers by Geographic Areas

Revenue for the three months ended December 31, 2023 and 2022 were as follows (amounts in thousands):


	Three Months Ended December 31,
	2023		2022
United States	$	28,429	$	38,427
United Kingdom	3,846		NA
All other countries	4,642		7,276
Total revenue	$	36,917	$	45,703

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Goodwill and Intangible Assets [Line Items]
Goodwill	$ 127,664		$ 123,548
Amortization of intangible assets	$ 3,847	$ 4,487
Minimum
Goodwill and Intangible Assets [Line Items]
Estimated useful lives of intangible assets (in years)	3 years
Maximum
Goodwill and Intangible Assets [Line Items]
Estimated useful lives of intangible assets (in years)	7 years

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

REVENUE CONCENTRATION (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
REVENUE CONCENTRATION (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Revenue, Major Customer [Line Items]
Revenue	$ 36,917	$ 45,703
Accounts receivable, net	35,267		$ 32,132
Customer Concentration Risk \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Revenue	9,700	19,400
Customer Concentration Risk \| Accounts Receivable
Revenue, Major Customer [Line Items]
Accounts receivable, net	$ 11,200	$ 12,500
Customer Concentration Risk \| Customer One \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Total revenue, percentage	16.00%	29.00%
Customer Concentration Risk \| Customer Two \| Sales Revenue Net
Revenue, Major Customer [Line Items]
Total revenue, percentage	10.00%	13.00%
Geographic Concentration Risk \| Long-term Assets \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	72.00%
Geographic Concentration Risk \| Long-term Assets, Excluding Goodwill and Other Intangibles \| International
Revenue, Major Customer [Line Items]
Total revenue, percentage	22.00%		23.00%

STOCKHOLDERS’ EQUITY

3 Months Ended

Dec. 31, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

5. STOCKHOLDERS’ EQUITY

Stock-Based Compensation Expense


	Three Months Ended December 31,
		2023		2022
Cost of revenue		$	129	$	126
Selling and marketing		820		491
Research and development		1,041		554
General and administrative		1,440		1,271
Stock-based compensation expense included in expenses		$	3,430	$	2,442

No options were granted in either of the three months ended December 31, 2023 or 2022. As of December 31, 2023, the Company had $33.7 million of unrecognized compensation expense expected to be recognized over a weighted-average period of approximately 2.7 years.

2020 Incentive Plan

In January 2020, the Company’s Board of Directors (the “Board”) adopted the Mitek Systems, Inc. 2020 Incentive Plan (the “2020 Plan”) upon the recommendation of the Compensation Committee of the Board. On March 4, 2020, the Company’s stockholders approved the 2020 Plan. The total number of shares of Common Stock reserved for issuance under the 2020 Plan is 4,500,000 shares plus such number of shares, not to exceed 107,903, as remained available for issuance under the 2002 Stock Option Plan, 2006 Stock Option Plan, 2010 Stock Option Plan, and 2012 Incentive Plan (collectively, the “Prior Plans”) as of January 17, 2020, plus any shares underlying awards under the Prior Plans that are terminated, forfeited, cancelled, expire unexercised or are settled in cash after January 17, 2020. As of December 31, 2023, (i) 2,381,995 RSUs and 1,203,203 performance-based restricted stock unit awards (“Performance RSUs”) were outstanding under the 2020 Plan, (ii) 4,481,932 shares of Common Stock were reserved for future grants under the 2020 Plan, and (iii) stock options to purchase an aggregate of 337,456 shares of Common Stock and 8,850 RSUs were outstanding under the Prior Plans.

On October 2, 2023, the Company held an annual meeting of its stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved an amendment and restatement of the 2020 Plan to increase the number of shares authorized for issuance thereunder by 5,108,000 shares (the 2020 Plan as so amended and restated, the “A&R 2020 Plan”).

The A&R 2020 Plan had been previously approved, subject to stockholder approval, by the Company’s Board of Directors (the “Board”), upon recommendation of the Compensation Committee of the Board, on August 9, 2023. A summary of the A&R 2020 Plan was included in the Company’s definitive proxy statement for the Annual Meeting filed with the U.S. Securities and Exchange Commission on August 22, 2023, as supplemented and amended on September 19, 2023 (the “Proxy Statement”).

Employee Stock Purchase Plan

In January 2018, the Board adopted the ESPP. On March 7, 2018, the Company’s stockholders approved the ESPP. The total number of shares of Common Stock reserved for issuance thereunder is 1,000,000 shares. As of December 31, 2023, (i) 729,124 shares have been issued to participants pursuant to the ESPP and (ii) 270,876 shares of Common Stock were reserved for future purchases under the ESPP. The Company commenced the initial offering period on April 2, 2018.

The ESPP enables eligible employees to purchase shares of Common Stock at a discount from the market price through payroll deductions, subject to certain limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, at which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $0.1 million in stock-based compensation expense related to the ESPP in each of the three months ended December 31, 2023 and 2022.

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 to increase the number of shares of Common Stock available for future grants. The total number of shares of Common Stock reserved for issuance thereunder is 1,500,000 shares. The Director Plan expired on December 31, 2022. As of December 31, 2023, (i) 259,513 RSUs were outstanding under the Director Plan and (ii) no shares of Common Stock were reserved for future grants under the Director Plan.

Stock Options

The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at September 30, 2023	651,269	$	7.37	3.6	$	2,185
Granted	—	$	—
Exercised	(96,634)	$	8.85		169
Canceled	—	$	—
Outstanding at December 31, 2023	554,635	$	7.11	4.0	3,291
Vested and Expected to Vest at December 31, 2023	554,635	$	7.11	4.0	3,291
Exercisable at December 31, 2023	554,635	$	7.11	4.0	3,291

The Company recognized $9,000 and $0.1 million in stock-based compensation expense related to outstanding stock options during the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had no unrecognized compensation expense related to outstanding stock options.

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. There were no options granted during either of the three months ended December 31, 2023 or 2022.

Restricted Stock Units

The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2023	2,188,296	$	11.49
Granted	1,078,233	11.16
Settled	(445,729)	11.17
Canceled	(61,167)	11.88
Outstanding at December 31, 2023	2,759,633	11.40

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 $2.3 million and $1.6 million in stock-based compensation expense related to outstanding RSUs during the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had $24.6 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.9 years.

Performance Restricted Stock Units

The following table summarizes Performance RSU activity under the Company’s equity plans during the three months ended December 31, 2023:


	Number of Shares	Weighted-Average Fair Market Value Per Share
Outstanding at September 30, 2023	730,393	$	13.37
Granted	700,846	10.85
Settled	(187,454)	11.23
Canceled	(40,582)	13.31
Outstanding at December 31, 2023	1,203,203	12.24

The cost of Performance RSUs is determined using a Monte Carlo simulation to estimate the fair value on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $1.0 million and $0.7 million in stock-based compensation expense related to outstanding Performance RSUs during the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had $9.0 million of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.1 years.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 13
-Subparagraph (h)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

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


	Three Months Ended December 31,
		2023	2022
Stock options		594	502
RSUs		1,749	860
ESPP common stock equivalents		49	130
Performance options		476	741
Performance RSUs		1,312	296
Convertible senior notes		7,448	7,448
Warrants		7,448	7,448
Total potentially dilutive common shares outstanding		19,076	17,425

Schedule of Calculation of Basic and Diluted Net Income (Loss) per Share

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


	Three Months Ended December 31,
		2023		2022
Net income (loss)		$	(5,793)	$	4,726
Weighted-average shares outstanding—basic		46,294		44,930
Common stock equivalents		—		704
Weighted-average shares outstanding—diluted		46,294		45,634
Net income (loss) per share:
Basic		$	(0.13)	$	0.11
Diluted		$	(0.13)	$	0.10

CONVERTIBLE SENIOR NOTES

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

CONVERTIBLE SENIOR NOTES

7. CONVERTIBLE SENIOR NOTES

The carrying values of the 0.75% convertible notes due 2026 issued by the Company in an initial aggregate principal amount of $155.3 million (the “2026 Notes”) are as follows (amounts in thousands):


2026 Notes:	December 31, 2023		September 30, 2023
Principal amount	$	155,250	$	155,250
Less: unamortized discount and issuance costs, net of amortization	(17,764)		(19,734)
Carrying amount	$	137,486	$	135,516

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 of the 2026 Notes (collectively, the “Initial Purchasers”) 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. As of January 13, 2024 (“Date of Noncompliance”), the Company was not in compliance with certain of the covenants in the Indenture as a result of the Company not timely filing its Form 10-K for the fiscal year ended September 30, 2023 (“Form 10-K”) with the SEC. As a result of not being in compliance, the 2026 Notes began to accrue additional special interest of 0.25% of the outstanding principal of the 2026 Notes for the 90 days after the Date of Noncompliance and 0.50% of the outstanding

principal of the 2026 Notes for the 91st through 180th day after the Date of Noncompliance. The Company subsequently did not timely file its Form 10-Q for the quarter ended December 31, 2023 with the SEC. The Company filed its Form 10-K with the SEC on March 19, 2024. As of the filing of this Quarterly Report on Form 10-Q for the period ended December 31, 2023, the Company is in compliance with the covenants in the Indenture as all of its required annual and quarterly reports to date have been filed with the SEC.

The 2026 Notes will mature on February 1, 2026, unless earlier redeemed, repurchased or converted. The 2026 Notes 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 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, 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 December 31, 2023, the number of authorized and unissued shares of Common Stock that are not reserved for other purposes is sufficient to settle the 2026 Notes into equity. Accordingly, the Company may settle conversions of notes through payment or delivery, as the case may be, of cash, shares of Common Stock or a combination of cash and shares of 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 were first allocated to the embedded derivative liability and the remaining proceeds were 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.

In the second quarter of fiscal 2022, the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. As a result of the increase to the number of authorized shares of Common Stock, the Company reclassified the embedded conversion derivative to additional paid-in capital.

As of December 31, 2023, the embedded conversion derivative is included in additional paid-in capital in the condensed consolidated balance sheets and will not be remeasured provided the requirements to qualify for the scope exception in Accounting Standards Codification (“ASC”) 815-10-15-74(a) continue to be met.

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 (amounts in thousands):


	Three Months Ended December 31,
		2023		2022
Contractual interest expense		$	293	$	293
Amortization of debt discount and issuance costs		1,970		1,844
Total interest expense recognized		$	2,263	$	2,137

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 $17.8 million as of December 31, 2023, and will be amortized over approximately 2.1 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 correspond 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.

The Company was initially required to settle the Notes Hedge in cash, as they did not qualify for the scope exception for contracts involving an issuer’s own equity in ASC 815 and were accounted for as a derivative asset. Upon initial purchase, the Notes Hedge was recorded in convertible senior notes hedge at $33.2 million in our condensed consolidated balance sheets. In the second quarter of fiscal 2022, the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. As a result of the increase to the number of authorized shares of Common Stock, the Company reclassified the Notes Hedge to additional paid-in capital.

As of December 31, 2023, the Notes Hedge is included in additional paid-in capital in the condensed consolidated balance sheet and will not be remeasured provided the requirements to qualify for the scope exception in ASC 815-10-15-74(a) continue to be met and 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 December 31, 2023, 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 December 31, 2023, the Warrant Transactions had not been exercised and remained outstanding.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1E
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

REVENUE CONCENTRATION - (Details) - USD ($) $ in Thousands	3 Months Ended
REVENUE CONCENTRATION - (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Revenue, Major Customer [Line Items]
Revenue	$ 36,917	$ 45,703
United States
Revenue, Major Customer [Line Items]
Revenue	28,429	38,427
United Kingdom
Revenue, Major Customer [Line Items]
Revenue	3,846
All other countries
Revenue, Major Customer [Line Items]
Revenue	$ 4,642	$ 7,276

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

INVESTMENTS - Summary of Investments by Type of Security (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Debt Securities, Available-for-sale [Line Items]
Cost	$ 59,431	$ 76,245
Gross Unrealized Gains	66	1
Gross Unrealized Losses	(124)	(242)
Fair Market Value	59,373	76,004
Short-Term \| U.S. Treasury
Debt Securities, Available-for-sale [Line Items]
Cost	31,755	40,329
Gross Unrealized Gains	15	1
Gross Unrealized Losses	(83)	(76)
Fair Market Value	31,687	40,254
Short-Term \| Commercial Paper
Debt Securities, Available-for-sale [Line Items]
Cost	18,622
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Market Value	18,622
Short-Term \| Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Cost	9,054	34,545
Gross Unrealized Gains	51	0
Gross Unrealized Losses	(41)	(99)
Fair Market Value	$ 9,064	34,446
Long-Term \| U.S. Treasury
Debt Securities, Available-for-sale [Line Items]
Cost		1,371
Gross Unrealized Gains		0
Gross Unrealized Losses		(67)
Fair Market Value		$ 1,304

INVESTMENTS

3 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

3. INVESTMENTS

The following tables summarize investments by type of security as of December 31, 2023 and September 30, 2023 (amounts in thousands):


December 31, 2023:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	31,755	$	15	$	(83)	$	31,687


Commercial paper, short-term	18,622		—		—		18,622
Corporate debt securities, short-term	9,054		51		(41)		9,064





Total	$	59,431	$	66	$	(124)	$	59,373


September 30, 2023:	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
Available-for-sale securities:
U.S. Treasury, short-term	$	40,329	$	1	$	(76)	$	40,254


Corporate debt securities, short-term	34,545		—		(99)		34,446
U.S. Treasury, long-term	1,371		—		(67)		1,304


Total	$	76,245	$	1	$	(242)	$	76,004

All of the Company’s investments are designated as available-for-sale debt securities. As of December 31, 2023 and September 30, 2023, 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. The contractual maturities of the available-for-sale securities held at December 31, 2023 are as follows: $59.4 million within one year and none beyond one year to five years. As of September 30, 2023, the contractual maturities of the available-for-sale securities were $74.7 million within one year and $1.3 million beyond one year to five years.


December 31, 2023:	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	$	31,687	$	31,687	$	—	$	—
Commercial paper	18,622		—		18,622		—

Corporate debt securities	9,064		—		9,064		—
Total short-term investments at fair value	59,373		31,687		27,686		—









Total assets at fair value	$	59,373	$	31,687	$	27,686	$	—


September 30, 2023:	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	$	40,254	$	40,254	$	—	$	—


Corporate debt securities	34,446		—		34,446		—
Total short-term investments at fair value	74,700		40,254		34,446		—
Long-term investments:
U.S. Treasury	1,304		1,304		—		—


Total long-term investments at fair value	1,304		1,304		—		—



Total assets at fair value	$	76,004	$	41,558	$	34,446	$	—
Liabilities:

Acquisition-related contingent consideration	$	7,976	$	—	$	—	$	7,976



Total liabilities at fair value	$	7,976	$	—	$	—	$	7,976

•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: Corporate debt securities. Corporate debt securities are valued using 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.

As of December 31, 2023, no acquisition-related contingent consideration is recorded in the condensed consolidated balance sheets. The Company recorded the acquisition date fair value based on the likelihood of contingent earnout payments related to the Company’s acquisition of ID R&D Inc., as part of the consideration transferred. The earnout payments consist of cash payments and issuances of Common Stock and are subsequently remeasured to fair value each reporting date. Additionally, for contingent consideration to be settled in a variable number of shares of Common Stock, the Company used the most recent Mitek share price as reported by the Nasdaq Capital Market to determine the fair value of the shares expected to be issued. The Company previously classified the contingent consideration as Level 3, due to the lack of relevant observable inputs and market activity. The second earnout period ended on May 28, 2023 and the Company recorded the value based on the calculated final payout and reclassified the contingent consideration as Level 2 during the third quarter of fiscal 2023. The contingent consideration was settled during the three months ended December 31, 2023.

The following table includes a roll-forward of the contingent consideration liability during the three months ended December 31, 2023 (amounts in thousands):


Balance at September 30, 2023	$	7,976

Expenses recorded due to changes in fair value	136
Cash payment of contingent consideration associated with the ID R&D acquisition	(4,641)
Issuance of common stock as contingent consideration associated with the ID R&D acquisition	(3,471)

Balance at December 31, 2023	$	—

INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]
Contractual maturities of available-for-sale securities due within one year	$ 59,400	$ 74,700
Contractual maturities of available-for-sale securities due beyond one year to five years	0	1,300
Acquisition-related consideration, current	$ 0	$ 7,976

GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 11,305
2025	13,895
2026	12,647
2027	11,488
2028	9,769
Thereafter	4,069
Total	$ 63,173	$ 64,674

INVESTMENTS - Summary of Fair Value of Investments Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Assets:
Short-term investments:	$ 59,373	$ 74,700
Long-term investments:		1,304
Total assets at fair value	59,373	76,004
Liabilities:
Acquisition-related contingent consideration	0	7,976
Total liabilities at fair value		7,976
U.S. Treasury
Assets:
Short-term investments:	31,687	40,254
Long-term investments:		1,304
Commercial paper
Assets:
Short-term investments:	18,622
Corporate debt securities
Assets:
Short-term investments:	9,064	34,446
Quoted Prices in Active Markets (Level 1)
Assets:
Short-term investments:	31,687	40,254
Long-term investments:		1,304
Total assets at fair value	31,687	41,558
Liabilities:
Acquisition-related contingent consideration		0
Total liabilities at fair value		0
Quoted Prices in Active Markets (Level 1) \| U.S. Treasury
Assets:
Short-term investments:	31,687	40,254
Long-term investments:		1,304
Quoted Prices in Active Markets (Level 1) \| Commercial paper
Assets:
Short-term investments:	0
Quoted Prices in Active Markets (Level 1) \| Corporate debt securities
Assets:
Short-term investments:	0	0
Significant Other Observable Inputs (Level 2)
Assets:
Short-term investments:	27,686	34,446
Long-term investments:		0
Total assets at fair value	27,686	34,446
Liabilities:
Acquisition-related contingent consideration		0
Total liabilities at fair value		0
Significant Other Observable Inputs (Level 2) \| U.S. Treasury
Assets:
Short-term investments:	0	0
Long-term investments:		0
Significant Other Observable Inputs (Level 2) \| Commercial paper
Assets:
Short-term investments:	18,622
Significant Other Observable Inputs (Level 2) \| Corporate debt securities
Assets:
Short-term investments:	9,064	34,446
Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments:	0	0
Long-term investments:		0
Total assets at fair value	0	0
Liabilities:
Acquisition-related contingent consideration		7,976
Total liabilities at fair value		7,976
Significant Unobservable Inputs (Level 3) \| U.S. Treasury
Assets:
Short-term investments:	0	0
Long-term investments:		0
Significant Unobservable Inputs (Level 3) \| Commercial paper
Assets:
Short-term investments:	0
Significant Unobservable Inputs (Level 3) \| Corporate debt securities
Assets:
Short-term investments:	$ 0	$ 0

REVENUE RECOGNITION

3 Months Ended

Dec. 31, 2023

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. Software is typically sold as a time-based license with a term of one to three years. 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 at a point in time upon shipment and after evidence of a contract exists.

Services and Other

Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. 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, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. 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 or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time.

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 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 certain situations, primarily transactional SaaS revenue described above, the Company allocates variable consideration to a series of distinct goods or services within a contract. The Company allocates variable payments to one or more, but not all, of the distinct goods or services or to a series of distinct goods or services in a contract when (i) the variable payment relates specifically to the Company’s efforts to transfer the distinct good or service and (ii) the variable payment is for an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods or services to its customer.

Disaggregation of Revenue

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


	Three Months Ended December 31,
		2023		2022
Major product category
Deposits software and hardware		$	14,048	$	24,453
Deposits services and other		7,029		5,828
Deposits revenue		21,077		30,281
Identity verification software and hardware		1,932		1,923
Identity verification services and other		13,908		13,499
Identity verification revenue		15,840		15,422
Total revenue		$	36,917	$	45,703

Contract Balances

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


	December 31, 2023		September 30, 2023		December 31, 2022		September 30, 2022
Contract assets, current	$	17,305	$	18,355	$	6,223	$	7,037
Contract assets, non-current	7,216		5,579		10,741		4,218
Contract liabilities (deferred revenue), current	18,330		17,360		12,647		21,350
Contract liabilities (deferred revenue), non-current	1,051		957		1,236		1,775

Contract assets, reported within a separate line in current assets and the other non-current assets line in the condensed consolidated balance sheets, primarily result from when the right to consideration is conditional upon factors other than the passage of 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 $9.1 million and $6.6 million of revenue during the three months ended December 31, 2023, and 2022, respectively, which was included in the contract liability balance at the beginning of each such period. Unbilled receivables are included within accounts receivable, net on the condensed consolidated balance sheets and were $0.6 million and $0.9 million as of December 31, 2023 and September 30, 2023, respectively.

Contract assets, current and contract liabilities (deferred revenue), current, for the three months ended December 31, 2022 have been revised, as previously disclosed in Note 15 in the Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on March 19, 2024. These immaterial revisions are made for consistency.

Contract Costs

Contract costs included in other current and non-current assets on the condensed consolidated balance sheets totaled $2.4 million and $2.6 million as of December 31, 2023 and September 30, 2023, respectively. Contract origination costs consist primarily of: (1) sales commissions and incentive payments made to the Company’s direct and indirect sales personnel, and (2) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees. Contract origination costs are amortized based on the transfer of goods or services to which the asset relates, including consideration of the expected customer benefit period. Contract fulfillment costs related to goods or services transferred under a specific anticipated contract have historically been immaterial. These costs are included in selling and marketing expenses in the condensed consolidated statement of operations and comprehensive income and totaled $0.4 million during each of the three months ended December 31, 2023 and 2022. There were no impairment losses recognized during both the three months ended December 31, 2023 and 2022 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.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenue
Total revenue	$ 36,917	$ 45,703
Operating costs and expenses
Selling and marketing	9,856	9,515
Research and development	8,874	7,670
General and administrative	15,538	8,479
Amortization and acquisition-related costs	3,983	4,821
Restructuring costs	48	1,776
Total operating costs and expenses	43,833	37,330
Operating income (loss)	(6,916)	8,373
Interest expense	2,263	2,137
Other income, net	1,642	336
Income (loss) before income taxes	(7,537)	6,572
Income tax benefit (provision)	1,744	(1,846)
Net income (loss)	$ (5,793)	$ 4,726
Net income (loss) per share – basic (in dollars per share)	$ (0.13)	$ 0.11
Net income (loss) per share - diluted (in dollars per share)	$ (0.13)	$ 0.10
Shares used in calculating net income (loss) per share – basic (in shares)	46,294	44,930
Shares used in calculating net income (loss) per share – diluted (in shares)	46,294	45,634
Comprehensive income
Net income (loss)	$ (5,793)	$ 4,726
Foreign currency translation adjustment	6,544	12,703
Unrealized gain on investments	102	352
Comprehensive income	853	17,781
Software and hardware
Revenue
Total revenue	15,980	26,376
Operating costs and expenses
Cost of revenue	40	169
Services and other
Revenue
Total revenue	20,937	19,327
Operating costs and expenses
Cost of revenue	$ 5,494	$ 4,900

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Net income (loss)	$ (5,793)	$ 4,726
Weighted-average shares outstanding - basic (in shares)	46,294	44,930
Common stock equivalents (in shares)	0	704
Weighted-average shares outstanding - diluted (in shares)	46,294	45,634
Net income (loss) per share:
Net income (loss) per share – basic (in dollars per share)	$ (0.13)	$ 0.11
Net income (loss) per share - diluted (in dollars per share)	$ (0.13)	$ 0.10

- 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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+ Details

GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes changes in the balance of goodwill during the three months ended December 31, 2023 (amounts shown in thousands):


Balance at September 30, 2023	$	123,548
Foreign currency effect on goodwill	4,116
Balance at December 31, 2023	$	127,664

Schedule of Intangible Assets

Intangible assets as of December 31, 2023 and September 30, 2023, respectively, are summarized as follows (amounts in thousands, except for years):


December 31, 2023:	Weighted Average Amortization Period (in years)	Cost		Accumulated Amortization		Net
Completed technologies	6.9	$	95,761	$	40,262	$	55,499
Customer relationships	4.7	25,168		21,710		3,458
Trade names	5.0	7,088		3,109		3,979
Covenants not to compete	3.0	600		363		237
Total intangible assets		$	128,617	$	65,444	$	63,173


September 30, 2023:	Weighted Average Amortization Period (in years)	Cost		Accumulated Amortization		Net
Completed technologies	6.9	$	95,761	$	39,254	$	56,507
Customer relationships	4.7	25,168		21,396		3,772
Trade names	5.0	7,088		2,967		4,121
Covenants not to compete	3.0	600		326		274
Total intangible assets		$	128,617	$	63,943	$	64,674

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 in thousands):


	Estimated Future Amortization Expense
2024	11,305
2025	13,895
2026	12,647
2027	11,488
2028	9,769
Thereafter	4,069
Total	$	63,173

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

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+ Details

GOODWILL AND INTANGIBLE ASSETS - Changes in Goodwill (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 123,548
Foreign currency effect on goodwill	4,116
Ending balance	$ 127,664

- Definition

+ References + Details

INCOME TAXES	3 Months Ended
INCOME TAXES	Dec. 31, 2023
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 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 (loss) 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. For the three months ended December 31, 2023 and 2022, the Company recorded an income tax benefit of $1.7 million and an income tax provision of $1.8 million, respectively, which yielded an effective tax rate of 23% and 28%, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the three months ended December 31, 2023 and 2022 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation as well as the impact of state taxes, and federal and state research and development credits on the 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.

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+ Details

LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Leases [Abstract]
2024 - remaining	$ 1,416
2025	743
2026	732
2027	644
2028	431
2029 and thereafter	600
Total lease payments	4,566
Less: amount representing interest	(205)
Present value of future lease payments	$ 4,361	$ 4,800

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	8. COMMITMENTS AND CONTINGENCIES Legal Proceedings Claim Against ICAR On June 11, 2018, a claim was filed before Court of First Instance 5 (Juzgado de Primera Instancia) of Barcelona, Spain, the first instance court in the Spanish civil procedure system, against ICAR. The claim, also directed towards Mr. Xavier Codó Grasa, the former controlling shareholder of ICAR and its current General Manager at the time the claim was filed, was brought by the Spanish company Global Equity & Corporate Consulting, S.L. for an alleged breach by ICAR of a services agreement entered into in the context of the sale of all of the shares in ICAR to Mitek Holding B.V., a wholly owned subsidiary of the Company. ICAR responded to the claim on September 7, 2018. After several postponements as a consequence of the COVID-19 pandemic, on March 3, 2022 the trial was held. On June 7, 2022, the Court of First Instance 5 of Barcelona issued a judgment which fully upheld the claim and declared that Mr. Xavier Codó Grasa and ICAR had to pay the amount and damages claimed by Global Equity & Corporate Consulting, S.L. equal to €0.8 million (or $0.8 million as of December 31, 2023), plus the interest accrued and the legal fees. ICAR and Mr Xavier Codó Grasa submitted an appeal against this judgment on July 13, 2022. Global Equity & Corporate Consulting, S.L. filed an opposition to that appeal on September 2, 2022. The next procedural step will be the voting and issuing of the ruling on the appeal. Global Equity & Corporate Consulting, S.L. requested the provisional enforcement of the judgment, asking ICAR and Mr. Xavier Codó Grasa to deposit the damages awarded plus 30% to cover the possible interests that may continue to accrue during the appeal (€1.1 million in total) with the Court. According 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. As a consequence, the escrow (€0.9 million) was released pursuant to the provisional enforcement of the judgment, and Mr. Xavier Codó Grasa deposited the remaining €0.2 million. Global Equity & Corporate Consulting, S.L. also requested that ICAR and Mr. Xavier Codó Grasa bear the costs of the provisional enforcement. This amounted to €16,475 for the accrued interests and €10,995 as legal costs. ICAR and Mr. Xavier Codó Grasa have complied with this request, having such amounts charged to the damages deposited with the Court. Third Party Claims Against the Company’s 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 nor at any 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 the Company’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 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 U.S. Patent No. 9,818,090 (“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 U.S. Patent Nos. 8,977,571 (“the ‘571 Patent”), 8,699,779 (“the ‘779 Patent”), or 9,336,517 (“the ‘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 (“the ‘432 Patent”) 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 Bank 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—the ’779 Patent and the ’571 Patent. 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 (“the ‘605 Patent”) and 10,013,681 (“the ‘681 Patent”) (the “Second PNC Lawsuit”). On July 7, 2021, USAA filed a third lawsuit against PNC Bank (the “Third PNC Lawsuit” and together with the First PNC Lawsuit and the Second PNC Lawsuit, the “PNC Lawsuits”) asserting infringement of U.S. Patents 10,769,598; 10,402,638; and 9,224,136. A jury trial was held in May 2022 on the consolidated First PNC Lawsuit and Second PNC Lawsuit. The jury found that PNC willfully infringed at least one patent claim and awarded USAA $218 million in damages. The Court denied PNC Bank’s equitable defenses and entered a Final Judgment in the consolidated First PNC Lawsuit and Second PNC Lawsuit on August 19, 2022. A jury trial was held in September 2022 on the Third PNC Lawsuit. The jury found that PNC infringed at least one patent claim and awarded USAA $4.3 million in damages. The Court entered a Final Judgment in the Third PNC Lawsuit on February 16, 2023. 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 the Company’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, the ’517 Patent, and 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 the Company’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 appealed the ruling on the motion to dismiss and the decision to transfer the declaratory judgment action from California to Texas to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit heard oral argument on the Company’s appeal on April 4, 2022 and on May 20 2022, issued an opinion vacating and remanding the district court’s order granting USAA’s motion to dismiss. On August 1, 2022, the parties submitted additional briefing to the district court in light of Federal Circuit’s opinion. The court held another hearing on USAA’s motion to dismiss the Company’s declaratory judgment action on jurisdictional grounds, and once again granted USAA’s motion to dismiss on February 23, 2023. The Company timely filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. The appeal is fully briefed, and the Company is awaiting oral argument. 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, 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 each of 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. The Patent Office denied the requests for rehearing and for POP review. In September 2020, the Company filed an additional two petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ‘681 Patent and the ‘605 Patent—two of the patents at issue in the Second Wells Lawsuit. In March 2021, the PTAB decided not to institute the two petitions. On July 7, July 14, and July 21 2021, PNC Bank filed six additional petitions for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’779 Patent, the ’571 Patent, the ‘559 Patent, and the ‘432 Patent. On August 27, 2021, PNC filed two additional petitions for IPR challenging the validity of the ‘681 Patent and the ‘605 Patent. In October and November of 2021, PNC Bank filed four more petitions for IPR challenging the validity of the ‘638 Patent, the ‘136 Patent, and the ‘598 Patent. The Patent Office denied institution with respect to the petitions challenging the ‘432 Patent, the ‘605 Patent, the ‘681 Patent, and the ‘638 Patent, but instituted inter partes review on the petitions relating to the ‘779 Patent, the ‘571 Patent, the ‘559 Patent, and the ‘598 Patent—finding a reasonable likelihood that at least one challenged patent claim was invalid. The U.S. Patent & Trademark Office issued a final written decision in each of the IPRs challenging the ‘779 Patent, the ‘571 Patent, and the ‘559 Patent and found all challenged claims of each patent unpatentable. USAA filed requests for rehearing and requests for POP review. The requests for POP review and for rehearing were denied in March 2023. On August 16, 2021, USAA filed suit against BBVA USA (“BBVA”) in the Eastern District of Texas alleging infringement of the same patents at issue in the PNC Lawsuits. While the Company’s IPR petitions were mentioned in the complaint, the Company was not named as a defendant or mentioned in connection with any alleged infringement. BBVA then sent the Company an indemnification demand on September 7, 2021. For the same reasons discussed above in connection with PNC Bank and the PNC Lawsuits, the Company does not believe it is obligated to indemnify BBVA. On June 6, 2022, the Court granted the parties’ request to administratively close the case and stay all deadlines in view of the pending appeal in the PNC Lawsuits. On July 29, 2022, USAA filed another patent infringement lawsuit against Truist Bank (“Truist”) in the Eastern District of Texas. The lawsuit alleges infringement of the ’090 Patent, the ’432 Patent, and the U.S. Patent No. 11,182,753 (“the ’753 Patent”). The Company was not named as a defendant or mentioned in connection with any alleged infringement. On October 5, 2022, Truist’s integration partner, NCR Corporation, sent an indemnification demand to the Company requesting indemnification from all claims related to the lawsuit. For the same reasons discussed above in connection with the PNC Lawsuits, 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 October 7, 2022, Truist filed a motion to transfer venue to the Western District of North Carolina. The motion was denied on April 8, 2023. On December 30, 2022, Truist filed a motion for leave to file counterclaims against USAA alleging patent infringement of U.S. Patent Nos. 7,336,813; 7,519,214; 8,136,721; and 9,760,797, which was granted on April 8, 2023. On March 13, 2023, USAA moved for leave to file a First Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,544,944 (“the ’944 Patent”). On April 4, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the lawsuit. On May 3, 2023, USAA moved for leave to file a Second Amended Complaint, adding an additional allegation of patent infringement of U.S. Patent No. 11,625,770 (“the ’770 Patent”). On May 30, 2023, Truist sent another indemnification demand to the Company requesting indemnification related to the Second Amended Complaint. On October 6, 2023, the parties filed a Notice of Settlement and Joint Motion and Stipulation of Dismissal. All claims and causes of action between the parties were dismissed with prejudice on October 10, 2023 in view of the settlement. In October and November of 2022, Truist filed a petition for IPR with the U.S. Patent & Trademark Office challenging the validity of the ’090 Patent, the ’432 Patent, and the ’753 Patent. The Patent Office instituted the petitions directed to the ’090 and ’753 Patents, but denied institution of the petition directed to the ’432 Patent. In view of the settlement between USAA and Truist, the IPRs were withdrawn. The Company incurred legal fees of $0.6 million and $0.3 million in the three months ended December 31, 2023 and 2022, respectively, related to third party claims against our customers. Such fees are included in general and administrative expenses in the condensed consolidated statement of operations and comprehensive income. Claim Against UrbanFT, Inc. On July 31, 2019, the Company filed a lawsuit against one of its customers, UrbanFT, Inc. (“UrbanFT”) in the United States District Court for the Southern District of California (case No. 19-CV-1432-CAB-DEB). UrbanFT is delinquent in payment and attempted to justify its non-payment by asserting that the Company is or may be infringing on purported UrbanFT patents. The Company filed such lawsuit to collect the delinquent payments and to obtain a declaratory judgment of non-infringement of five purported UrbanFT patents. UrbanFT filed an answer and later asserted infringement of two of the five patents-at-issue in the Company’s lawsuit against UrbanFT. The Company thereafter filed counterclaims seeking a declaration that the two patents now asserted by UrbanFT are invalid in addition to being not infringed. During the course of the litigation, the Company learned that a judgment had been entered against UrbanFT’s affiliates and its predecessor owner in which an Oregon court ordered that the patents in issue revert to a prior owner, Mr. Stevens, because UrbanFT’s affiliates did not pay the purchase price owed to the prior owner. On September 8, 2020, the Company filed a motion for summary judgment on its breach of contract claim. On September 15, 2020, the district court issued an order to show cause regarding jurisdiction over patent issues in light of the Oregon judgment. On December 17, 2020, the district court dismissed Mitek’s claims for declaratory judgment of non-infringement and UrbanFT’s counterclaims for patent infringement and related affirmative defenses based on infringement of the patents for lack of subject matter jurisdiction because UrbanFT does not own the patents. The district court then dismissed the remaining state law claims without prejudice to refiling in state court. On December 18, 2020, the Company filed a new suit against UrbanFT in the Superior Court of the State of California, County of San Diego (case no. 37-2020-00046670-CU-BC-CTL) asserting claims for breach of contract, open book account, and monetary damages. UrbanFT filed an answer and did not assert any cross-claims. The Company filed a motion for summary judgment which was heard on April 15, 2022. The Court granted the Company’s motion and on June 2, 2022, entered a judgment in favor of the Company for $1.7 million in compensatory damages, plus costs, including attorney’s fees. The Court awarded the Company $2,600 in costs plus $0.6 million in attorneys’ fees for a total judgment of $2.3 million. The time for UrbanFT to appeal the $1.7 million in compensatory damage judgment has expired but the time for UrbanFT to appeal the attorneys’ fee and cost award has not. No appeal has been filed. On August 2, 2023, the Company filed a separate lawsuit against Richard Steggall, UFT (North America), LLC fka Urban FT LLC; Urban FT Group, Inc; Urban FT Client Solutions, LLC; UFT Professional Services, LLC; and X-35 Financial Technologies, in the San Diego Superior Court, (case No. 37-2023-00033005-CU-FR-CTL) (“Fraud Conveyance Action”). The Fraud Conveyance Action alleges that the Mr. Steggall orchestrated a scheme to strip UFT (North America), LLC of any assets and effectively transfer the Urban FT business to other entities he owns and controls, all to avoid the Company’s collection efforts. The Fraud Conveyance Action also alleges that Mr. Steggall funnels Urban FT’s revenues through a web of other entities he owns and controls, all to ensure that creditors, including the Company, cannot collect their debts. The parties have started discovery. On February 23, 2024, the Court set the Fraud Conveyance Action for trial on March 14, 2025. Separately, the Company filed two motions to compel discovery set for April 12, 2024. The defendants have filed a motion to quash the Company’s subpoena to Chase Bank and the defendants filed an Order to Show Cause to hold the Company in contempt for violating the parties’ Protective Order. The Company anticipates filing its own motion for sanctions against defendants for their frivolous contempt motion. Claim Against Maplebear, Inc (dba Instacart): On December 13, 2021, Mitek filed a lawsuit against Maplebear Inc., d/b/a Instacart (“Instacart”), in California Superior Court – San Diego County (Case No, 37-2021-00052089-CU-BC-CTL)) (the “Instacart Lawsuit”). Mitek alleged causes of action for breach of contract as well as breach of the implied covenant and requested over $2.0 million in damages. On August 3, 2018 Instacart entered into a Master Services Agreement (the “Master Services Agreement”) with Mitek agreeing to purchase a subscription to Mitek’s Mobile Verify Advanced service. On June 19, 2020, the parties entered into a second Order Form in connection with the Master Services Agreement. The Order Form had a term of June 18, 2020 to December 31, 2023 and called for an annual commitment of $1.2 million. On September 23, 2021, Instacart sent a letter to Mitek purporting to outline breaches under the Master Services Agreement. Mitek responded on November 11, 2021, refuting Instacart’s claims and offering to engage in further discussions. Instacart thereafter sent a Notice of Termination of the Master Services Agreement dated November 24, 2021. The Parties participated in mediation on March 15, 2022. The mediation did not result in the resolution of the case and, following mediation, the Parties stipulated that Instacart’s response to Mitek’s complaint would be due on April 27, 2022. In lieu of filing a response to the complaint, Instacart elected to file a Motion to Transfer Venue to the County of San Francisco, which the Court denied, thereby keeping the case in the County of San Diego. On November 28, 2022, Instacart filed a cross-complaint against Mitek alleging: (1) Fraudulent Inducement; (2) Intentional Misrepresentation; (3) False Advertising; (4) Fraudulent Business Practices; (5) Unlawful Business Practices; (6) Unfair Business Practices; (7) Breach of Contract; and (8) Breach of the Implied Covenant of Good Faith and Fair Dealing. On January 27, 2023, Mitek filed a demurrer to the cross-complaint (the functional equivalent of a motion to dismiss). Both Parties also filed motions to compel further responses to written discovery requests. The Court did not decide the demurrer or the motions to compel before the Parties resolved and dismissed the case. On September 29, 2023, the Parties reached an agreement to resolve the case. The terms of the settlement were completed and, on October 24, 2023, the Company filed a Request for Dismissal, signed by counsel for both parties and asking the clerk of the Court to dismiss the Company’s complaint and causes of action as well as Instacart’s cross-complaint and causes of action. The Court entered the Request for Dismissal on October 24, 2023 and dismissed the Parties’ respective claims with prejudice. Biometric Information Privacy Act Claims On December 16, 2021, the Company was sued in a putative class action in the Circuit Court of Cook County, Illinois alleging that the Company had violated the Illinois Biometric Information Privacy Act (“BIPA”) with respect to identity verification services that the Company provided to its customer HyreCar, Inc. (“HyreCar”) for HyreCar’s customers in Illinois (the “BIPA Lawsuit”). Plaintiff claimed that the Company had not obtained the required consent to collect and use Plaintiff’s biometric information, and that Plaintiff and a class of similarly situated individuals therefore are entitled to statutory damages under BIPA. The Company removed the BIPA Lawsuit to the U.S. District Court for the Northern District of Illinois, and on March 4, 2022 the Company filed a Motion to Compel Arbitration based on HyreCar’s terms and conditions requiring HyreCar customers to arbitrate on an individual (non-class) basis (the “Arbitration Motion”). On May 4, 2022 the trial court denied the Arbitration Motion. On December 21, 2022, the trial court’s ruling was upheld on appeal, and the case subsequently was remanded back to the trial court. On March 10, 2023, Plaintiff filed an Amended Complaint adding a second named plaintiff, who is also a HyreCar end-user, but otherwise not materially changing the allegations. On March 27, 2023, the Company filed a Motion to Dismiss or, in the Alternative, to Strike Class Allegations. On May 11, 2023, and after the Company’s Motion to Dismiss or, in the Alternative, to Strike Class Allegations had been fully briefed, Plaintiffs filed a Motion for Leave to File a Second Amended Complaint seeking to add two new named plaintiffs, who are end-users of the Company’s customers Instacart and Roadie, and to remove one named plaintiff. The Company opposed the Motion for Leave. On September 13, 2023, Plaintiffs filed a Notice of Voluntary Dismissal. On September 14, 2023, the Court dismissed the lawsuit without prejudice, ending the litigation. 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.

COMMITMENTS AND CONTINGENCIES (Details) € in Thousands, $ in Thousands																		1 Months Ended			2 Months Ended		3 Months Ended
	May 11, 2023 plaintiff	Feb. 16, 2023 USD ($) patent	Sep. 02, 2022 EUR (€)	Jun. 07, 2022 EUR (€)	Jun. 02, 2022 USD ($)	Dec. 13, 2021 USD ($)	Aug. 27, 2021 patent	Jul. 21, 2021 patent	Mar. 31, 2021 patent	Dec. 18, 2020 patent	Dec. 04, 2020 patent	Sep. 30, 2020 patent	Jan. 10, 2020 USD ($) patent	Nov. 06, 2019 USD ($) patent	Jul. 31, 2019 patent	Aug. 17, 2018 patent	Jul. 07, 2018 patent	May 31, 2022 USD ($) patent	Mar. 31, 2021 patent	Sep. 30, 2020 patent	Nov. 30, 2021 patent	Jan. 26, 2021 patent	Dec. 31, 2023 USD ($) patent	Dec. 31, 2022 USD ($)	Feb. 23, 2021 patent	Jun. 19, 2020 USD ($)
Loss Contingencies [Line Items]
=Number of new plaintiffs \| plaintiff	2
Number of plaintiff to be removed \| plaintiff	1
Maplebear, Inc (dba Instacart) \| Subscription to Mobile Verify Advance Service
Loss Contingencies [Line Items]
Other commitment, annual amount committed \| $																										$ 1,200
Pending Litigation \| General and administrative
Loss Contingencies [Line Items]
Legal fees incurred related to third-party claims against customers \| $																							$ 600	$ 300
Pending Litigation \| UrbanFT
Loss Contingencies [Line Items]
Number of patents allegedly infringed										2					5
Number of patents invalid										2
Number of patents not infringed										2
Global Equity & Corporate Consulting, S.L. \| ICAR Vision Systems S.L. \| Pending Litigation
Loss Contingencies [Line Items]
Damages awarded				€ 800																			$ 800
Global Equity & Corporate Consulting, S.L.- Breach of Services Agreement \| ICAR Vision Systems S.L. \| Pending Litigation
Loss Contingencies [Line Items]
Settlement interest (as a percent)			30.00%
Litigation settlement interest \| €			€ 1,100
Claims against escrow funds \| €			900
Escrow deposit \| €			200
Accrued interest \| €			16,475
Litigation expense \| €			€ 10,995
USAA \| Pending Litigation \| Wells Fargo
Loss Contingencies [Line Items]
Number of patents allegedly infringed													2	3		5	4			2					4
Number of patents infringed													1	1
Amount awarded in damages to other party \| $													$ 102,000	$ 200,000
Number of patents dropped																2
Number of patents invalid																1
Number of patents instituted																						3
Number of patents denied institution																						1
USAA \| Pending Litigation \| PNC Bank
Loss Contingencies [Line Items]
Number of patents allegedly infringed									2		2	2						1					1
Amount awarded in damages to other party \| $																		$ 218,000
Number of patents denied institution							2	6											2		4
USAA \| Settled Litigation \| PNC Bank
Loss Contingencies [Line Items]
Number of patents infringed		1
Amount awarded in damages to other party \| $		$ 4,300
UrbanFT \| Settled Litigation
Loss Contingencies [Line Items]
Amount awarded to the Company \| $					$ 2,300
UrbanFT \| Settled Litigation \| Compensatory Damages
Loss Contingencies [Line Items]
Amount awarded to the Company \| $					1,700
UrbanFT \| Settled Litigation \| Costs Of Judgement Awarded
Loss Contingencies [Line Items]
Amount awarded to the Company \| $					2,600
UrbanFT \| Settled Litigation \| Attorneys' Fees
Loss Contingencies [Line Items]
Amount awarded to the Company \| $					$ 600
Maplebear, Inc (dba Instacart) \| Pending Litigation
Loss Contingencies [Line Items]
Amount claimed during court proceedings \| $						$ 2,000

Cover - shares	3 Months Ended
Cover - shares	Dec. 31, 2023	Mar. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
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	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		46,790,611
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000807863
Current Fiscal Year End Date	--09-30

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2023 USD ($) institution	Sep. 30, 2023 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of financial services organizations, leading marketplace and financial technology brands (more than) \| institution		7,900
Spanish Government Agencies \| HooYu
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt interest rate (as a percent)	0.00%
Amount outstanding under loan agreement		$ 2.0	$ 1.3
Spanish Government Agencies \| HooYu \| Other current liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Current loans payable		0.2	0.2
Spanish Government Agencies \| HooYu \| Other non-current liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Noncurrent loans payable		$ 1.8	$ 1.1
Spanish Government Agencies \| Minimum \| HooYu
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Term of loan agreement (in years)	5 years
Spanish Government Agencies \| Maximum \| HooYu
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Term of loan agreement (in years)	12 years

LEASES

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

9. LEASES

Leases

The Company leases office and research and development facility leases under non-cancelable operating leases for various terms through 2030. Certain lease agreements include renewal options, rent abatement periods, and rental increases throughout the

term. As of December 31, 2023, the weighted-average remaining lease term for the Company’s operating leases was 4.4 years and the weighted-average discount rate was 3.5%.

As of December 31, 2023, the Company had operating ROU assets of $3.8 million. As of December 31, 2023, total operating lease liabilities of $4.4 million were comprised of current lease liabilities of $1.6 million and non-current lease liabilities of $2.8 million. As of September 30, 2023, the Company had operating ROU assets of $4.1 million. As of September 30, 2023, total operating lease liabilities of $4.8 million were comprised of current lease liabilities of $1.9 million and non-current lease liabilities of $2.9 million.

The Company recognized $0.5 million of operating lease costs in each of the three months ended December 31, 2023 and 2022. 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 condensed consolidated statement of operations and comprehensive income.

The Company paid $0.6 million in operating cash flows for operating leases in the three months ended December 31, 2023.

Maturities of operating lease liabilities as of December 31, 2023 were as follows (amounts in thousands):


	Operating leases
2024 - remaining	$	1,416
2025	743
2026	732
2027	644
2028	431
2029 and thereafter	600

Total lease payments	4,566
Less: amount representing interest	(205)
Present value of future lease payments	$	4,361

GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Indefinite Lived Intangible Assets By Major Class [Line Items]
Cost	$ 128,617	$ 128,617
Accumulated Amortization	65,444	63,943
Total	$ 63,173	$ 64,674
Completed technologies
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period (in years)	6 years 10 months 24 days	6 years 10 months 24 days
Cost	$ 95,761	$ 95,761
Accumulated Amortization	40,262	39,254
Total	$ 55,499	$ 56,507
Customer relationships
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period (in years)	4 years 8 months 12 days	4 years 8 months 12 days
Cost	$ 25,168	$ 25,168
Accumulated Amortization	21,710	21,396
Total	$ 3,458	$ 3,772
Trade names
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period (in years)	5 years	5 years
Cost	$ 7,088	$ 7,088
Accumulated Amortization	3,109	2,967
Total	$ 3,979	$ 4,121
Covenants not to compete
Indefinite Lived Intangible Assets By Major Class [Line Items]
Weighted Average Amortization Period (in years)	3 years	3 years
Cost	$ 600	$ 600
Accumulated Amortization	363	326
Total	$ 237	$ 274

SUBSEQUENT EVENTS (Details) - Revolving Credit Facility - Subsequent Event	Feb. 13, 2024 USD ($)
SOFR
Subsequent Event [Line Items]
Unused revolving line facility fee (as a percent)	0.25%
Line of Credit
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 35,000,000
Additional value, line of credit facility, maximum borrowing capacity	15,000,000
Indebtedness amount	500,000
Line of Credit \| SOFR
Subsequent Event [Line Items]
Commitment fees	$ 87,500
Domestic Letter Of Credit
Subsequent Event [Line Items]
Cash deposit, percentage	105.00%
Foreign Letter Of Credit
Subsequent Event [Line Items]
Cash deposit, percentage	115.00%

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company had a goodwill balance of $127.7 million at December 31, 2023, representing the excess of costs over fair value of assets of businesses acquired. The following table summarizes changes in the balance of goodwill during the three months ended December 31, 2023 (amounts shown in thousands):


Balance at September 30, 2023	$	123,548
Foreign currency effect on goodwill	4,116
Balance at December 31, 2023	$	127,664

Intangible Assets

Intangible assets include the value assigned to purchased completed technology, customer relationships, trade names and covenants not to compete. The estimated useful lives for all of these intangible assets range from three to seven years and they are amortized on a straight-line basis. Intangible assets as of December 31, 2023 and September 30, 2023, respectively, are summarized as follows (amounts in thousands, except for years):


December 31, 2023:	Weighted Average Amortization Period (in years)	Cost		Accumulated Amortization		Net
Completed technologies	6.9	$	95,761	$	40,262	$	55,499
Customer relationships	4.7	25,168		21,710		3,458
Trade names	5.0	7,088		3,109		3,979
Covenants not to compete	3.0	600		363		237
Total intangible assets		$	128,617	$	65,444	$	63,173


September 30, 2023:	Weighted Average Amortization Period (in years)	Cost		Accumulated Amortization		Net
Completed technologies	6.9	$	95,761	$	39,254	$	56,507
Customer relationships	4.7	25,168		21,396		3,772
Trade names	5.0	7,088		2,967		4,121
Covenants not to compete	3.0	600		326		274
Total intangible assets		$	128,617	$	63,943	$	64,674

Amortization expense related to acquired intangible assets was $3.8 million and $4.5 million during the three months ended December 31, 2023 and, 2022, respectively, and is recorded within amortization and acquisition-related costs on the condensed consolidated statements of operations and comprehensive income.

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


	Estimated Future Amortization Expense
2024	11,305
2025	13,895
2026	12,647
2027	11,488
2028	9,769
Thereafter	4,069
Total	$	63,173

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net income (loss)	$ (5,793)	$ 4,726

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Sep. 30, 2023
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)	120,000,000	120,000,000
Common stock, shares issued (in shares)	46,631,594	45,591,199
Common stock, shares outstanding (in shares)	46,631,594	45,591,199

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potentially Dilutive Common Shares Excluded from Calculation of Net Income per Share (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	19,076	17,425
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	594	502
RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	1,749	860
ESPP common stock equivalents
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	49	130
Performance options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	476	741
Performance RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	1,312	296
Convertible senior notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	7,448	7,448
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total potentially dilutive common shares outstanding (in shares)	7,448	7,448

INVESTMENTS - Summary of Contingent Consideration Measured at Fair Value (Details) - Contingent Consideration $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 7,976
Expenses recorded due to changes in fair value	136
Cash payment of contingent consideration associated with the ID R&D acquisition	(4,641)
Issuance of common stock as contingent consideration associated with the ID R&D acquisition	(3,471)
Ending Balance	$ 0

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
Nature of Operations	Nature of Operations Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a leading innovator of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Customers count on Mitek to deliver trusted and convenient online experiences, detect and reduce fraud, and document Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) regulatory compliance. The Company’s solutions are embedded in native mobile apps and web browsers to facilitate digital consumer experiences. Mitek’s identity verification and authentication technologies and services make it possible for banks, financial services organizations and the world’s leading marketplace and sharing platforms to verify an individual’s identity during digital transactions, allowing them to reduce risk and meet regulatory requirements. The Company’s advanced mobile deposit system enables secure, fast and convenient deposit services. Thousands of organizations use Mitek solutions to optimize the security of mobile check deposits, new account openings and more. Mitek 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. Our partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company as of December 31, 2023 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, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 19, 2024. Results for the three months ended December 31, 2023, are not necessarily indicative of results for any other interim period or for a full fiscal year.
Principles of Consolidation	Principles of Consolidation The condensed 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.
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.
Other Borrowings	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") in 2017. These agreements have repayment periods of five to twelve years and bear no interest.
Recently Adopted Accounting Pronouncements, Change in Significant Accounting Policy and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements in the quarter ended December 31, 2023. Change in Significant Accounting Policy The Company’s significant accounting policies are disclosed in the Company’s audited condensed consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on March 19, 2024. There have been no changes to these accounting policies through December 31, 2023. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on its income tax disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. The Company will adopt Topic 848 when the relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 will have a material impact on the condensed consolidated financial statements. No other new accounting pronouncement issued or effective during the three months ended December 31, 2023 had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.
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. Software is typically sold as a time-based license with a term of one to three years. 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 at a point in time upon shipment and after evidence of a contract exists. Services and Other Services and other revenue is generated from the sale of software as a service (“SaaS”) products and services, maintenance associated with the sale of on premise software licenses and consulting and professional services. The Company’s SaaS offerings give customers the option to be charged upon their incurred usage in arrears (“Pay as You Go”), or commit to a minimum spend over their contracted period, with the ability to purchase unlimited additional transactions above the minimum during the contract term. Revenue related to Pay as You Go contracts are recognized based on the customer’s actual usage, in the period of usage. For contracts which include a minimum commitment, the Company is standing ready to provide as many transactions as desired by the customer throughout the contract term, and revenue is recognized on a ratable basis over the contract period including an estimate of usage above the minimum commitment. Usage above minimum commitment is estimated by looking at historical usage, expected volume, and other factors to project out for the remainder of the contract term. The estimated usage-based revenues are constrained to the amount the Company expects to be entitled to receive in exchange for providing access to its platform. If professional services are deemed to be distinct, revenue is recognized as services are performed. 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, variable consideration will only be included in the transaction price to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. 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 or due to uncertainty surrounding collectability. The Company estimates variable consideration in its contracts primarily using the expected value method as the Company believes this method represents the most appropriate estimate for this consideration, based on historical usage trends, the individual contract considerations, and its best judgment at the time. 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 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 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. Contract assets, reported within a separate line in current assets and the other non-current assets line in the condensed consolidated balance sheets, primarily result from when the right to consideration is conditional upon factors other than the passage of 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 condensed consolidated balance sheetsContract origination costs are amortized based on the transfer of goods or services to which the asset relates, including consideration of the expected customer benefit period. Contract fulfillment costs related to goods or services transferred under a specific anticipated contract have historically been immaterial. These costs are included in selling and marketing expenses in the condensed consolidated statement of operations and comprehensive income
Fair Value Measurements and Disclosures	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: Corporate debt securities. Corporate debt securities are valued using 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.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

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CONVERTIBLE SENIOR NOTES - Carrying Value of 2026 Notes (Details) - Convertible Debt - 2026 Notes - USD ($)	Dec. 31, 2023	Sep. 30, 2023	Feb. 28, 2021	Feb. 05, 2021
Debt Instrument [Line Items]
Debt interest rate (as a percent)	75.00%			0.75%
Debt issued	$ 155,300,000		$ 155,300,000
Principal amount	155,250,000	$ 155,250,000
Less: unamortized discount and issuance costs, net of amortization	(17,764,000)	(19,734,000)
Carrying amount	$ 137,486,000	$ 135,516,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

REVENUE CONCENTRATION

3 Months Ended

Dec. 31, 2023

Risks and Uncertainties [Abstract]

REVENUE CONCENTRATION

10. REVENUE CONCENTRATION

For the three months ended December 31, 2023, the Company derived revenue of $9.7 million from two customers, with such customers accounting for 16% and 10% of the Company’s total revenue, respectively. For the three months ended December 31, 2022, the Company derived revenue of $19.4 million from two customers, with such customers accounting for 29% and 13% 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 $11.2 million and $12.5 million at December 31, 2023 and 2022, respectively.

From a geographic perspective, approximately 72% of the Company’s total long-term assets as of each of December 31, 2023 and September 30, 2023, are associated with the Company’s international subsidiaries. From a geographic perspective, approximately 22% and 23% of the Company’s total long-term assets excluding goodwill and other intangible assets as of December 31, 2023 and September 30, 2023, respectively, are associated with the Company’s international subsidiaries.

The United States and the United Kingdom were the only countries that accounted for more than 10% of the Company’s revenue in the three months ended December 31, 2023. The United States was the only country that accounted for more than 10% of the Company’s revenue in the three months ended December 31, 2022. Revenue for the three months ended December 31, 2023 and 2022 were as follows (amounts in thousands):


	Three Months Ended December 31,
	2023		2022
United States	$	28,429	$	38,427
United Kingdom	3,846		NA
All other countries	4,642		7,276
Total revenue	$	36,917	$	45,703

CONVERTIBLE SENIOR NOTES (Tables)

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Carrying Values of Company's 2026 Notes


2026 Notes:	December 31, 2023		September 30, 2023
Principal amount	$	155,250	$	155,250
Less: unamortized discount and issuance costs, net of amortization	(17,764)		(19,734)
Carrying amount	$	137,486	$	135,516

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 (amounts in thousands):


	Three Months Ended December 31,
		2023		2022
Contractual interest expense		$	293	$	293
Amortization of debt discount and issuance costs		1,970		1,844
Total interest expense recognized		$	2,263	$	2,137

- 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.

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 64,538	$ 58,913
Short-term investments	59,373	74,700
Accounts receivable, net	35,267	32,132
Contract assets, current portion	17,305	18,355
Prepaid expenses	6,908	3,513
Other current assets	2,573	2,396
Total current assets	185,964	190,009
Long-term investments	0	1,304
Property and equipment, net	2,695	2,829
Right-of-use assets	3,837	4,140
Intangible assets, net	63,173	64,674
Goodwill	127,664	123,548
Deferred income tax assets	13,388	11,645
Contract assets, non-current portion	7,216	5,579
Other non-current assets	1,453	1,647
Total assets	405,390	405,375
Current liabilities:
Accounts payable	10,169	7,589
Accrued payroll and related taxes	7,063	10,554
Accrued interest payable	598	305
Income tax payables	51	4,329
Deferred revenue, current portion	18,330	17,360
Lease liabilities, current portion	1,569	1,902
Acquisition-related contingent consideration	0	7,976
Other current liabilities	1,820	1,482
Total current liabilities	39,600	51,497
Convertible senior notes	137,486	135,516
Deferred revenue, non-current portion	1,051	957
Lease liabilities, non-current portion	2,792	2,867
Deferred income tax liabilities, non-current portion	6,757	6,476
Other non-current liabilities	3,906	2,874
Total liabilities	191,592	200,187
Stockholders’ equity:
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.001 par value, 120,000,000 and 120,000,000 shares authorized, 46,631,594 and 45,591,199 issued and outstanding, as of December 31, 2023 and September 30, 2023, respectively	47	46
Additional paid-in capital	236,447	228,691
Accumulated other comprehensive loss	(7,591)	(14,237)
Accumulated deficit	(15,105)	(9,312)
Total stockholders’ equity	213,798	205,188
Total liabilities and stockholders’ equity	$ 405,390	$ 405,375

CONVERTIBLE SENIOR NOTES- Narrative (Details)		3 Months Ended
CONVERTIBLE SENIOR NOTES- Narrative (Details)	Feb. 05, 2021 USD ($) shares tradingDay $ / shares	Dec. 31, 2023 USD ($) shares	Sep. 30, 2023 USD ($)	Jan. 13, 2023	Feb. 28, 2021 USD ($)	Feb. 02, 2021 $ / shares
Debt Instrument [Line Items]
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]		Convertible senior notes
2026 Notes \| Convertible Debt
Debt Instrument [Line Items]
Debt issued		$ 155,300,000			$ 155,300,000
Debt interest rate (as a percent)	0.75%	75.00%
Debt conversion ratio (per $1,000 principal amount)	0.0479731000
Debt conversion price (in dollars per share) \| $ / shares	$ 20.85
Conversion price premium percentage						37.50%
Proceeds from debt offerings, net of discounts, commissions and expenses	$ 149,700,000
Debt issuance costs	$ 5,500,000
Remaining unamortized debt discount		$ 17,764,000	$ 19,734,000
2026 Notes \| Convertible Debt \| Common Stock
Debt Instrument [Line Items]
Share price (in dollars per share) \| $ / shares						$ 15.16
2026 Notes \| Convertible Debt \| During any calendar quarter commencing after the calendar quarter ending on June 30, 2021
Debt Instrument [Line Items]
Debt conversion price percentage	130.00%
Trading days in period (in days) \| tradingDay	20
Consecutive trading days in period (in days) \| tradingDay	30
2026 Notes \| Convertible Debt \| Measurement period
Debt Instrument [Line Items]
Debt conversion price percentage	98.00%
Consecutive trading days in period (in days) \| tradingDay	5
2026 Notes \| Convertible Debt \| Embedded Derivative Financial Instruments
Debt Instrument [Line Items]
Payment costs related to hedge transactions	$ 9,300,000
Embedded derivative, fair value of embedded derivative liability	33,200,000
Value of remaining embedded derivative allocated to host contract	$ 116,500,000
Derivative interest rate		6.71%
Remaining unamortized debt discount		$ 17,800,000
Remaining debt discount amortization period (in years)		2 years 1 month 6 days
2026 Notes \| Convertible Debt \| Interest Rate Period One
Debt Instrument [Line Items]
Additional interest percentage				0.25%
Interest rate threshold period				90 days
2026 Notes \| Convertible Debt \| Interest Rate Period Two
Debt Instrument [Line Items]
Additional interest percentage				0.50%
Interest rate threshold period				180 days
Additional Notes \| Convertible Debt
Debt Instrument [Line Items]
Option period to purchase additional notes (in days)	13 days
Additional aggregate principal amount purchased	$ 20,250,000
Notes Hedge \| Convertible Debt
Debt Instrument [Line Items]
Debt conversion price (in dollars per share) \| $ / shares	$ 20.85
Conversion price premium percentage						75.00%
Number of shares that can initially be converted into common stock (in shares) \| shares	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
Notes Hedge \| Convertible Debt \| Observation period
Debt Instrument [Line Items]
Consecutive trading days in period (in days) \| tradingDay	80
Incremental dilution of earnings per share of warrants (in shares) \| shares		0

REVENUE RECOGNITION (Tables)

3 Months Ended

Dec. 31, 2023

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 December 31,
		2023		2022
Major product category
Deposits software and hardware		$	14,048	$	24,453
Deposits services and other		7,029		5,828
Deposits revenue		21,077		30,281
Identity verification software and hardware		1,932		1,923
Identity verification services and other		13,908		13,499
Identity verification revenue		15,840		15,422
Total revenue		$	36,917	$	45,703

Schedule of Contract Balances

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


	December 31, 2023		September 30, 2023		December 31, 2022		September 30, 2022
Contract assets, current	$	17,305	$	18,355	$	6,223	$	7,037
Contract assets, non-current	7,216		5,579		10,741		4,218
Contract liabilities (deferred revenue), current	18,330		17,360		12,647		21,350
Contract liabilities (deferred revenue), non-current	1,051		957		1,236		1,775

STOCKHOLDERS’ EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Number of Shares
Outstanding at beginning of period (in shares)	651,269
Granted (in shares)	0	0
Exercised (in shares)	(96,634)
Canceled (in shares)	0
Outstanding at end of period (in shares)	554,635		651,269
Weighted-Average Exercise Price (in dollars per share)
Outstanding at beginning of period (in dollars per share)	$ 7.37
Granted (in dollars per share)	0
Exercised (in dollars per share)	8.85
Canceled (in dollars per share)	0
Outstanding at end of period (in dollars per share)	$ 7.11		$ 7.37
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Vested and Expected to Vest (in shares)	554,635
Exercisable (in shares)	554,635
Vested and Expected to Vest, Weighted-Average Exercise Price (in dollars per share)	$ 7.11
Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 7.11
Outstanding, Weighted-Average Remaining Contractual Terms (in Years)	4 years		3 years 7 months 6 days
Vested and Expected to Vest, Weighted-Average Remaining Contractual Term (in Years)	4 years
Exercisable, Weighted-Average Remaining Contractual Term (in Years)	4 years
Outstanding, Aggregate Intrinsic Value	$ 3,291		$ 2,185
Exercised, aggregate intrinsic value	169
Vested and Expected to Vest, Aggregate Intrinsic Value	3,291
Exercisable, Aggregate Intrinsic Value	$ 3,291