Mitek Systems(MITK)2025-02-10 21:08Revenue 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]