Mitek Systems(US:MITK)2022-01-28 00:50Financial Data and Key Metrics Changes - Mitek reported record first quarter revenue of $32.5 million, a 25% increase year-over-year [12][30] - Non-GAAP net income increased 65% year-over-year to $10.2 million or $0.22 per diluted share [12][35] - GAAP net income for the quarter increased 44% to $3.1 million or $0.07 per diluted share [34] - Cash flow from operations was $2.3 million, with total cash and investments reaching $218.2 million [36] Business Line Data and Key Metrics Changes - Digital identity verification revenue grew 30% year-over-year to $13.4 million [12][31] - Deposits business revenue increased 22% year-over-year to $19.1 million [12][31] - Software and hardware revenue was $15.4 million, up 26% year-over-year [30][31] - Transactional SaaS revenue increased 31% year-over-year to $11.6 million [31] Market Data and Key Metrics Changes - The demand for digital banking continues to drive growth in the deposits business [12][24] - The increasing use of mobile devices and demand for user experience are key drivers of digital transformation in banks [24] Company Strategy and Development Direction - Mitek aims to double the revenue derived from channel partners in the identity business over the next two years [45] - The company is focused on innovation and exploring avenues for product superiority through partnerships and acquisitions [23][88] - Mitek is committed to addressing the growing challenges of fraud in the digital economy [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities ahead, citing strong results and growing demand for their offerings [27] - The company believes the next decade of fraud prevention will be defined by continuous identity and access management capabilities [16] - Management highlighted the urgency of digital transformation and the integral role of digital identity verification in organizations' technology stacks [10][14] Other Important Information - Mitek's Mobile Verify solution is used across over 80 million mobile devices globally [19] - The company launched the Document Liveness product, IDLive Doc, to enhance fraud detection capabilities [20][21] Q&A Session Summary Question: Insights on Mobile Deposit business growth - Management noted that growth is driven by increased adoption of mobile check deposits, modest price increases, and new capabilities like Check Fraud Defender [41] Question: Progress of partnerships in identity verification - Management reported that approximately 20% of identity business revenue comes from channel partners, with a goal to double that in two years [45][46] Question: Market size for ID Live Doc product - Management indicated that while they believe the market is material, they do not have a precise market size yet [57] Question: Sales cycle duration for identity verification services - Management stated that sales cycles can vary significantly, from quick implementations with partners to longer cycles for direct sales, which can take several quarters [63] Question: Impact of lawsuits on selling new products - Management clarified that there has been no pushback from customers regarding the adoption of new products due to ongoing lawsuits [65] Question: Cash reserves and acquisition strategy - Management confirmed they are actively looking for acquisition opportunities to expand capabilities [73][74] Question: Update on profitability timeline for identity verification business - Management reiterated that they expect to reach profitability by the end of fiscal 2023 [89]