Mitek Systems(US:MITK)2020-01-31 02:30Financial Data and Key Metrics Changes - Mitek reported record Q1 revenue of $22.1 million, representing a 25% year-over-year growth [9][30] - Non-GAAP net income increased to $5 million or $0.12 per diluted share, up 377% year-over-year [9][37] - Cash flow from operations was $5.2 million, with total cash and investments reaching $39.9 million [9][38] Business Line Data and Key Metrics Changes - Deposits revenue increased by 23% to $14.7 million, while identity verification revenue grew by 28% to $7.4 million [32][30] - Transactional SaaS revenue grew 39% year-over-year to $6.1 million [31][30] - Software and hardware revenue was $11.5 million, an increase of 15% year-over-year [30] Market Data and Key Metrics Changes - The identity verification solutions saw a 39% growth in transactional SaaS revenue and transactions [18] - Over 6,500 financial institutions are using Mitek's deposit products, indicating strong market penetration [25] Company Strategy and Development Direction - Mitek is focused on expanding partnerships in the identity verification market, particularly in financial services and the gig economy [9][24] - The company aims to innovate and deliver the most accurate identity verification solutions, with ongoing investments in technology [24] - Mitek is positioned to leverage its unique offerings and market leadership to drive future growth [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing momentum in the identity verification market and the potential for further growth [9][28] - The company reiterated its full-year revenue guidance of $98 million to $102 million, representing a growth of approximately 16% to 21% year-over-year [39] Other Important Information - Mitek is involved in ongoing patent litigation, which could impact its operations and market perception [10][16] - The company is actively defending its technology and patents, which it believes are essential for maintaining its competitive edge [16][54] Q&A Session Summary Question: Impact of U.S. bank promotions on new business - Management noted that many banks are running programs to drive check traffic to mobile channels, but there is no direct cause and effect observed in quarterly results [44][45] Question: Changes in competitive dynamics post-rulings - Management indicated no change in competitive dynamics and emphasized their commitment to protecting their technology and patents [50][54] Question: Initial contract sizes and follow-on growth rates - Management explained that initial contracts vary by institution and typically start small, with gradual growth as implementations progress [56][60] Question: Impact of jury awards on mobile deposit offerings - Management confirmed that the jury awards do not affect the continued use of their mobile deposit offerings [63] Question: Guidance for the year despite strong Q1 performance - Management stated that it is early in the year, and they prefer to maintain conservative guidance despite a strong quarter [66] Question: Update on buyback program - Management confirmed that the buyback program was announced just before entering a blackout period, and any activity will be reported in quarterly filings [67] Question: Clarification on patent legal actions - Management clarified that the declaratory judgment action is aimed at providing clarity regarding their patents without seeking damages [69] Question: Profitability expectations for the identity segment - Management anticipates the identity segment could turn profitable by the end of 2021, with gradual improvements in gross margins over time [72]