Mitek Systems(US:MITK)2021-11-05 01:32Financial Data and Key Metrics Changes - Mitek achieved record revenue of $119.8 million for fiscal 2021, representing an 18% year-over-year growth [8][26] - Non-GAAP net income reached $34.2 million, or $0.76 per diluted share, up 19% year-over-year [8][28] - Cash flow from operations was a record $37.4 million for the full year [29] Business Line Data and Key Metrics Changes - Software and hardware revenue for Q4 was $17.8 million, down 1% year-over-year, primarily due to lower software revenue from legacy on-prem ID products [21] - Services and other revenues increased by 22% year-over-year to $15.5 million, driven by a 26% increase in transactional SaaS revenue [22] - Identity verification revenue increased 24% year-over-year to $11.3 million, while deposits revenue increased 2% year-over-year to $21.9 million [22] Market Data and Key Metrics Changes - The identity verification market is projected to grow significantly, with an estimated spend of $800 million in 2021 expected to rise to $1.2 billion by 2025, indicating a CAGR of around 15% [42] - The biometric segments are anticipated to hold the largest market share in digital identity solutions [13] Company Strategy and Development Direction - Mitek is focusing on expanding its product offerings and markets served, with key investments in technology and personnel [8][9] - The acquisition of ID R&D enhances Mitek's capabilities in AI-based voice and face biometrics, addressing sophisticated fraud threats [9][10] - The company plans to invest further in strategic acquisitions to accelerate innovation in fraud prevention [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for growth, citing strong demand for fraud-fighting offerings amid increasing digital transactions [19] - The ongoing digital transformation and the need for high-trust identity verification services are seen as key growth drivers [13][14] Other Important Information - Mitek's Check Fraud Defender technology has been adopted by 20% of the top 25 U.S. banks, demonstrating strong initial traction [11] - The company repurchased approximately 10,000 shares for $190,000 as part of a $15 million share buyback program [29] Q&A Session Summary Question: How is the sales process for Check Fraud Defender going? - Management indicated strong pull from large banks familiar with the on-premise solution, while smaller banks are more evangelical in their adoption [35][36] Question: What is the normalized growth for identity verification excluding on-prem business? - Management believes that growth rates for identity verification will exceed the reported 24% once legacy products are excluded [40][41] Question: Is the identity services business profitable? - The identity business is currently a cash consumer, but management expects it to be breakeven to cash flow positive by FY 2023 [70][71] Question: How do operating expenses relate to revenue growth? - Management stated that operating expenses will grow slower than revenue, with disciplined investments planned [73]