Financial Data and Key Metrics Changes - Total revenue reached a record $51.9 million, up 11% year over year in Q2 [27] - Non-GAAP gross profit for the quarter was $45.6 million, representing an 88% non-GAAP gross margin [28] - Adjusted EBITDA came in at $20.2 million, representing a 39% margin, reflecting a 52% increase year over year [35] Business Line Data and Key Metrics Changes - Deposit products revenue increased by 14% year over year to $33.7 million, driven by strong mobile deposit renewal activity [28][29] - Identity products revenue grew by 4% year over year to $18.2 million, highlighted by a 9% increase in Identity SaaS revenue [30] - Check Fraud Defender's SaaS revenue rose 64% year over year, indicating growing traction [30] Market Data and Key Metrics Changes - The company now has data sets covering approximately 23% of U.S. checking accounts, up from 18% [18] - SaaS revenue grew 15% year over year and now accounts for 40% of total last twelve months revenue, up from 39% [21][32] Company Strategy and Development Direction - The company aims to drive organic growth, increase the percentage of SaaS revenue, expand margins, and improve free cash flow conversion [9] - The focus is on enhancing automation, product development, and data analytics to support durable profitable growth [13] - The strategy includes a shift towards a layered signal-rich approach for identity verification, combining biometrics and behavioral data [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted resilience in the business despite macroeconomic uncertainties, with no cancellations observed [37] - The full-year revenue guidance remains at $170 million to $180 million, with an expectation for Q3 revenue to modestly exceed Q4 [38] - Adjusted EBITDA margin guidance has been raised to 26% to 29%, reflecting strong first-half performance [38] Other Important Information - The company generated $47 million in free cash flow over the last twelve months, with an 86% conversion rate [22] - A $100 million senior credit facility was closed to support capital allocation strategies [36] Q&A Session Summary Question: What has gone well and what has been difficult for the company? - Management highlighted strong execution and traction in the past quarter, with positive feedback from customers regarding the focus on fraud and identity [42][46] Question: Can you discuss the guidance and any pull-forwards that helped drive the strength in the quarter? - A large mobile deposit customer order came in earlier than expected, contributing to the overachievement in Q2 [47][48] Question: How is the company progressing towards its target of reaching $20 million ACV? - The company is seeing substantial ramp-up in volumes and partnerships, indicating positive leading indicators for future growth [49][51] Question: Can you quantify the improvements from the modernized document onboarding system? - While specific data was not provided, management indicated meaningful acceleration in cycle times and improved customer experience [56][58] Question: What is the expected trend for SaaS revenue mix in the coming years? - The goal is for SaaS revenue to represent more than half of total revenue by 2026, driven by growth in fraud and identity verification products [60][62] Question: How does the company plan to achieve organic growth? - The focus is on adding new customers while expanding existing relationships through new products and solutions [71]

Financial Data and Key Metrics Changes - Total revenue reached a record $51.9 million, up 11% year over year in Q2 2025 [25] - Non-GAAP gross profit for the quarter was $45.6 million, representing an 88% non-GAAP gross margin [26] - Adjusted EBITDA came in at $20.2 million, reflecting a 39% margin, which slightly exceeded expectations [26][34] Business Line Data and Key Metrics Changes - Deposit products revenue increased by 14% year over year to $33.7 million, driven by strong mobile deposit renewal activity [26][28] - Identity products revenue grew by 4% year over year to $18.2 million, highlighted by a 9% increase in Identity SaaS revenue [29] - Check Fraud Defender's SaaS revenue rose 64% year over year, indicating growing traction [28] Market Data and Key Metrics Changes - The company now has data set coverage on approximately 23% of all U.S. checking accounts, up from 18% [16] - SaaS revenue grew 15% year over year and now accounts for 40% of total last twelve months revenue, up from 39% [19][31] Company Strategy and Development Direction - The company aims to drive organic growth, increase the percentage of SaaS revenue, expand margins, and improve free cash flow conversion [8] - Mitek is focusing on a layered signal-rich approach to identity verification, combining biometrics and behavioral data to enhance security [21][22] - The leadership team has been strengthened with the appointment of a new COO to focus on scaling automation and product development [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment remains uncertain, but the business has shown resilience and has not seen cancellations related to macroeconomic factors [36] - The company is maintaining its full-year revenue guidance range of $170 million to $180 million, reflecting a cautious approach to the current environment [37] - Adjusted EBITDA margin guidance has been raised to 26% to 29%, up from the previous range of 25% to 28% [37] Other Important Information - The company generated $47 million in free cash flow over the last twelve months, with an 86% conversion rate [20] - A $100 million senior credit facility was closed to support capital allocation strategies [35] Q&A Session Summary Question: What has gone well and what has been difficult for the company? - Management highlighted strong execution and traction in the past quarter, with no cancellations observed from the macro environment [44][45] Question: Can you discuss the guidance and any pull-forwards that helped drive the strength in the quarter? - A large mobile deposit customer order was received earlier than expected, contributing to the overachievement in Q2 [46] Question: How is the company progressing towards its target of reaching $20 million ACV? - The company is seeing substantial ramp-up in volumes and partnerships, indicating positive leading indicators for future growth [48][49] Question: Can you quantify the improvements from the modernized document onboarding system? - While specific data was not provided, management indicated that the automation significantly accelerates cycle times and improves customer experience [54][56] Question: What is the expected trend for SaaS revenue in the coming years? - The company aims for SaaS revenue to represent more than half of total revenue by 2026, driven by growth in fraud and identity verification products [58][59] Question: How does the company plan to balance new business growth with expansion in existing clients? - The focus is on both acquiring new clients and expanding relationships with existing ones through new product offerings [67][69]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 001-35231 MITEK SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 87-0418827 (State or other jurisdiction of incorpo ...

Mitek Reports Record Fiscal 2025 Second Quarter Financial Results Raises Adjusted EBITDA Margin Guidance Range for Fiscal 2025 Secures Term Loan Facility to Retire 2026 Convertible Notes SAN DIEGO, CA, May 8, 2025 - Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, "Mitek" or the "Company"), a global leader in digital identity verification, mobile capture and fraud management, today reported financial results for its second quarter ended March 31, 2025 and raised its adjusted EBITDA margin guidance r ...

Core Viewpoint - The article discusses potential investment opportunities in MITK, indicating a possible long position within the next 72 hours [1]. Group 1 - The analyst has no current stock, option, or similar derivative position in any of the companies mentioned [1]. - There is an intention to initiate a beneficial long position through stock purchase or call options in MITK [1].

Financial Data and Key Metrics Changes - Total revenue for fiscal Q1 was $37.3 million, slightly ahead of last year's results, with a 9% year-over-year decline in deposit products revenue and a 13% increase in identity products revenue [33][34] - Non-GAAP gross profit was $31.5 million, representing an 84% non-GAAP gross margin, with adjusted EBITDA reaching $7.8 million, a 21% margin, both exceeding expectations due to cost efficiencies [34][41] - Total SaaS revenue grew 29% year-over-year, with deposit SaaS revenue up 64% and identity SaaS revenue up 26% [29][34] Business Line Data and Key Metrics Changes - Deposit products revenue declined 9% year-over-year to $19.3 million, primarily due to a 21% decline in deposit software license revenue [35] - Identity products revenue increased by 13% year-over-year to $18 million, driven by a 26% year-over-year increase in identity SaaS revenue [40] - Services revenue streams grew by 21% year-over-year, offsetting a 25% decline in software and hardware sales [40] Market Data and Key Metrics Changes - The company processed approximately 1.2 billion transactions annually, maintaining stable transactional volumes [39] - The Check Fraud Defender's annual contract value (ACV) approached $12 million, with data sets on approximately 18% of all checking accounts in the country [25][26] Company Strategy and Development Direction - The company aims to enhance solutions, achieve operational excellence, and strengthen its foundation for durable, profitable revenue growth in fiscal '26 and beyond [11][30] - A four-pronged framework guides the company's transformation, focusing on strengthening the foundation, scaling the identity platform, expanding fraud solutions, and maintaining operational excellence [12] - The company is focused on integrating its identity verification engines into a unified platform, MiVIP, to enhance customer experience and competitive position [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to double-digit growth CAGR, driven by ongoing improvements and customer engagement [52][55] - The company anticipates continued growth in identity and fraud solutions, with a focus on addressing increasing threats from fraud and cyberattacks [8][11] - Management highlighted the importance of customer relationships and the strategic value provided to high-assurance businesses [22][24] Other Important Information - The company generated $40.2 million in free cash flow over the last 12 months and repurchased $27.2 million worth of shares [45] - Fiscal 2025 revenue guidance remains at $170 million to $180 million, with adjusted EBITDA margin guidance raised to 25% to 28% [48] Q&A Session Summary Question: Near-term opportunities and growth confidence - Management remains confident in the business's ability to return to double-digit growth, citing encouraging customer interactions and market conditions [52][55] Question: Check Fraud Defender partner channel trends - Partnerships are growing, and the value of the solution is compelling for financial institutions facing increasing fraud [58][60] Question: Update on ID R&D deals and sales cycle - Sales cycles for larger deals are long, but management expects benefits to materialize in the second half of fiscal '25 and into '26 [64][65] Question: Competitive environment and pricing pressures - The focus is on growing MiVIP, which is expected to reduce pricing pressures over time as more business shifts to the platform [90][92] Question: Revenue opportunity comparison between Check Fraud Defender and mobile deposits - Management refrained from providing specific revenue comparisons but emphasized the growth potential of Check Fraud Defender in addressing fraud challenges [112][113]

Group 1 - Mitek Systems reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, and showing a slight increase from $0.14 per share a year ago, resulting in an earnings surprise of 15.38% [1] - The company achieved revenues of $37.25 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.93%, and compared to $36.92 million in the same quarter last year [2] - Mitek Systems has outperformed consensus revenue estimates three times over the last four quarters [2] Group 2 - The stock has underperformed the market, losing about 5.8% since the beginning of the year, while the S&P 500 has gained 2.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.24 on revenues of $47.02 million, and for the current fiscal year, it is $0.87 on revenues of $175.36 million [7] Group 3 - The Computer - Optical Imaging industry, to which Mitek Systems belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The current estimate revisions trend for Mitek Systems is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6]

Revenue Performance - Total revenue for the three months ended December 31, 2024, was $37.3 million, a 1% increase from $36.9 million in the same period of 2023[130] - Software and hardware revenue decreased by $4.0 million, or 25%, to $12.0 million, primarily due to lower sales of Mobile Deposit® software products[138] - Services and other revenue increased by $4.3 million, or 21%, to $25.3 million, driven by higher transactional SaaS revenue from identity verification products[138] Net Loss and Cash Flow - Net loss for the three months ended December 31, 2024, was $4.6 million, or negative $0.10 per diluted share, an improvement from a net loss of $5.8 million, or negative $0.13 per diluted share, in the same period of 2023[130] - Cash provided by operating activities was $0.6 million for the three months ended December 31, 2024, compared to cash used in operating activities of $9.5 million in the same period of 2023[130] - Net cash provided by operating activities for the three months ended December 31, 2024 was $0.6 million, an increase of $10.0 million compared to a net cash used of $9.5 million in the same period of 2023[149] Expenses - General and administrative expenses decreased by $3.6 million, or 23%, to $11.9 million, primarily due to lower legal and professional fees[142] - Research and development expenses decreased by $0.6 million, or 6%, to $8.3 million, mainly due to lower personnel-related costs[141] - Selling and marketing expenses decreased by $0.2 million, or 2%, to $9.7 million, attributed to lower personnel-related costs[140] Other Income and Tax - Other income decreased by $1.1 million, or 66%, to $0.6 million, primarily due to higher foreign currency exchange transactional losses[146] - For the three months ended December 31, 2024, the company recorded an income tax benefit of $0.3 million, resulting in an effective tax rate of 6%, compared to a benefit of $1.7 million and a 23% effective tax rate for the same period in 2023[147] Cash and Securities - As of December 31, 2024, the company had $137.9 million in cash and cash equivalents, a decrease of $3.9 million or 3% from $141.8 million on September 30, 2024[148] - Net cash provided by investing activities was $0.8 million for the three months ended December 31, 2024, a decrease of $17.0 million from $17.9 million in the same period of 2023[150] - As of December 31, 2024, the Company had $47.3 million in available-for-sale debt securities, representing 12% of total assets[174] Financing Activities - The company used $3.1 million in financing activities during the three months ended December 31, 2024, primarily due to repurchases of Common Stock[151] - The company issued $155.3 million in 0.75% Convertible Senior Notes due 2026, with a conversion price of approximately $20.85 per share, representing a 37.5% premium to the last reported sale price on February 2, 2021[152] - The company entered into a revolving line of credit agreement allowing borrowing up to $35.0 million, with an additional $15.0 million at the bank's discretion[158] Share Repurchase and Leverage - The company has a share repurchase program authorized for up to $50.0 million, effective from May 16, 2024, to May 16, 2026[165] - As of December 31, 2024, the company's net leverage ratio was 1.79 to 1.00, in compliance with the covenant of the Credit Agreement[163] - The Company purchased 363,378 shares for $3.3 million at an average price of $8.99 per share during the three months ended December 31, 2024[166] Working Capital and Securities Classification - Working capital decreased to $138.3 million at December 31, 2024, down from $142.9 million at September 30, 2024[168] - The Company classified $30.6 million of available-for-sale securities as current and $16.7 million as long-term as of December 31, 2024[167] Market Conditions and Accounting Estimates - A hypothetical 100 basis point change in market interest rates would not materially impact the fair value of the Company's cash equivalents and debt securities[175] - The Company operates in the UK, France, the Netherlands, and Spain, exposing it to foreign currency exchange rate fluctuations[176] - Inflation did not have a material effect on the Company's financial condition or results of operations during the three months ended December 31, 2024[177] - The Company has not made any material changes to its critical accounting estimates from those disclosed in the 2024 Annual Report[170] - The fair value of cash equivalents and debt securities is subject to changes in market interest rates and issuer creditworthiness[175] - The Company believes its current cash and cash equivalents will be adequate to satisfy working capital needs for at least the next twelve months[168]

Financial Performance - Mitek reported fiscal 2025 first quarter revenue of $37.3 million, relatively flat year-over-year compared to $36.9 million[5]. - GAAP net loss for the quarter was $4.6 million, an improvement from a net loss of $5.8 million a year ago[5]. - Adjusted EBITDA increased to $7.8 million, up from $5.9 million a year ago, with an adjusted EBITDA margin of 21%, compared to 16% a year ago[5]. - Non-GAAP net income was $6.6 million, slightly up from $6.3 million a year ago, with non-GAAP net income per diluted share at $0.15[5]. - Total revenue for the three months ended December 31, 2024, was $37,254,000, representing an increase of 0.9% compared to $36,917,000 in the same period of 2023[19]. - GAAP net loss for Q4 2024 was $4,612,000, an improvement from a loss of $5,793,000 in Q4 2023[25]. - Adjusted EBITDA for Q4 2024 was $7,845,000, with an adjusted EBITDA margin of 21%, compared to $5,949,000 and 16% in Q4 2023[25]. - Non-GAAP net income for the same period was $6,633 thousand, compared to $6,325 thousand in 2023, reflecting a year-over-year increase of 4.9%[28]. - Non-GAAP income per share—basic and diluted for Q4 2024 was $0.15, up from $0.14 in Q4 2023[28]. Revenue Segmentation - SaaS products grew 29% year-over-year, contributing positively to the overall performance[2]. - Total deposits revenue decreased to $19,285,000 in Q4 2024, down 8.5% from $21,077,000 in Q4 2023[19]. - Total identity revenue increased to $17,969,000 in Q4 2024, up 13.4% from $15,840,000 in Q4 2023[19]. Cash and Investments - Total cash and investments decreased to $137.9 million from $141.8 million at the end of the previous fiscal year[5]. - Total current assets decreased to $176,837,000 as of December 31, 2024, down from $185,051,000 as of September 30, 2024[18]. - Free cash flow for the twelve months ended December 31, 2024, was $40,184 thousand, compared to $15,742 thousand for the twelve months ended December 31, 2023, indicating a significant increase[30]. - Operating cash flow for the three months ended December 31, 2024, was $7,064 thousand, compared to $6,301 thousand in the same period of 2023[30]. Guidance and Future Outlook - Mitek is maintaining its fiscal 2025 full-year revenue guidance of between $170 million and $180 million[5]. - The company raised the lower end of its fiscal 2025 adjusted EBITDA margin guidance by 100 basis points to a range of 25%-28%[5]. - The company is focused on strengthening its foundation for durable, profitable revenue growth in fiscal 2026 and beyond[2]. Expenses and Liabilities - Non-GAAP operating expenses for Q4 2024 were $24,021,000, a decrease from $25,955,000 in Q4 2023[23]. - Total liabilities decreased to $195,042,000 as of December 31, 2024, compared to $198,952,000 as of September 30, 2024[18]. - Stockholders' equity decreased to $200,917,000 as of December 31, 2024, down from $214,801,000 as of September 30, 2024[18]. - Total stock-based compensation expense for Q4 2024 was $4,465 thousand, an increase from $3,430 thousand in Q4 2023[32]. Taxation - The estimated cash tax rate for fiscal 2025 is 15%, compared to 9% for fiscal 2024, reflecting a change in tax strategy[28]. - The effective tax rate for GAAP net income was 6% for fiscal 2025, down from 23% for fiscal 2024, indicating improved tax efficiency[28]. Strategic Initiatives - The company utilized third-party experts for product portfolio evaluation and competitive landscape analysis during Q4 2023, indicating a focus on strategic positioning[28]. - Mitek repurchased 0.4 million shares at an average price of $8.99, totaling approximately $3.3 million[5]. - Restructuring costs for the three months ended December 31, 2024, were $808 thousand, significantly higher than $48 thousand in the same period of 2023[28].

Group 1 - Mitek (NASDAQ: MITK) reported strong quarterly results with effective cost control and solid revenue growth in key product areas, particularly in ID and Check Fraud Defender [2] - The Value Lab focuses on long-only value investment strategies, targeting international mispriced equities with a portfolio yield of approximately 4% [1][2] - The Valkyrie Trading Society consists of analysts sharing high-conviction investment ideas that are expected to generate non-correlated and outsized returns in the current economic environment [3]