Company to Host Call on September 14th
Following its Second Quarter Earnings Release
Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek”
or the “Company”), a global leader in digital identity and digital
fraud prevention, today reported financial results for its first
quarter of fiscal 2023 ended December 31, 2022. Total revenue
increased 41% year over year, reaffirming Mitek’s market-leading
position.
Fiscal First Quarter 2023 Financial Highlights
- Total revenue increased 41% year over year to a record $45.7
million due in part to a large, multi-year mobile deposit contract
signed and partially recognized during the quarter.
- GAAP net income was $4.7 million, or $0.10 per diluted
share.
- Non-GAAP net income was $14.3 million, or $0.31 per diluted
share.
- Cash flow from operations was $5.3 million.
- Total cash and investments were $107.6 million on December 31,
2022.
Mitek CEO Max Carnecchia’s Comments
“Our strong performance in the first quarter highlights the
continued relevance of our industry-leading solutions in the large
and growing markets we address. As new types of fraud and scams
emerge and existing ones see a resurgence, like check fraud, I’m
proud of Mitek’s innovation and speed in responding to these
growing threats. Our Identity revenue was up 15% year over year in
the first quarter despite the difficult macro environment,
reinforcing our solid position as a leader in the ever-changing
identity and fraud landscape. Further bolstering our financial
performance, our Deposits business delivered a particularly strong
quarter, up 59% year over year, largely due to the signing of a
large multi-year contract that locked in favorable pricing for
Mitek over four years. Due to the unique terms of this one
contract, we recognized additional license revenue relating to
future periods of approximately $7.0 million in the first quarter.
Looking ahead, we expect to release our fiscal 2023 second quarter
results on September 14th, and we will host a conference call at
that time to discuss the first half performance.”
Fiscal 2023 Guidance
Mitek is raising its fiscal 2023 guidance for the year ending
September 30, 2023, and now expects revenue to be in the range of
$169.0 million to $171.0 million, an increase of approximately 18%
year over year from the mid-point of the guidance range. In
addition, Mitek now expects its non-GAAP operating margin for
fiscal 2023 to be in the range of 30.0% to 31.0%.
Conference Call Information
Mitek management plans on hosting a conference call and live
webcast for analysts and investors following the release of its
fiscal second quarter earnings release on September 14, 2023, at
1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the
first six months results. The company will provide the conference
call details in a separate press release prior to the call.
About Mitek Systems, Inc.
Mitek (NASDAQ: MITK) is a global leader in digital identity and
digital fraud prevention, with technology to bridge the physical
and digital worlds. Mitek’s advanced identity verification
technologies and global platform make digital access faster and
more secure than ever, providing companies new levels of control,
deployment ease and operation, while protecting the entire customer
journey. More than 7,800 organizations use Mitek to enable trust
and convenience for mobile check deposit, new account opening and
more. Learn more at www.miteksystems.com. [(MITK-F)]
Follow Mitek on LinkedIn, Twitter and YouTube, and read Mitek’s
latest blog posts here.
Notice Regarding Forward-Looking Statements
Statements contained in this news release relating to the
Company or its management’s intentions, hopes, beliefs,
expectations or predictions of the future, including, but not
limited to, statements relating to the Company’s long-term
prospects and market opportunities are forward-looking statements.
Such forward-looking statements are subject to a number of risks
and uncertainties, including, but not limited to, risks related to
the Company’s ability to withstand negative conditions in the
global economy, a lack of demand for or market acceptance of the
Company’s products, the impact of the Company’s acquisition of
HooYu Ltd. including any operational or cultural difficulties
associated with the integration of the businesses of Mitek and
HooYu Ltd., the Company’s ability to continue to develop, produce
and introduce innovative new products in a timely manner, the
Company’s ability to capitalize on a growing market, quarterly
variations in revenue, the profitability of certain sectors of the
Company, the performance of the Company’s growth initiatives, the
outcome of any pending or threatened litigation, and the timing of
the implementation and launch of the Company’s products by the
Company’s signed customers.
Additional risks and uncertainties faced by the Company are
contained from time to time in the Company’s filings with the U.S.
Securities and Exchange Commission (SEC), including, but not
limited to, the Company’s Annual Report on Form 10-K for the fiscal
year ended September 30, 2022, as filed with the SEC on December
13, 2021 and its quarterly reports on Form 10-Q and current reports
on Form 8-K, which you may obtain for free on the SEC’s website at
www.sec.gov. Collectively, these risks and uncertainties could
cause the Company’s actual results to differ materially from those
projected in its forward-looking statements and you are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company disclaims any
intention or obligation to update, amend or clarify these
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Note Regarding Use of Non-GAAP Financial Measures
This news release contains non-U.S. generally accepted
accounting principles (“GAAP”) financial measures for non-GAAP net
income and non-GAAP net income per share that exclude
acquisition-related costs and expenses, intellectual property
litigation costs, executive transition costs, stock compensation
expenses, restructuring costs, amortization of debt discount and
issuance costs, income tax effect of pre-tax adjustments, and the
cash tax difference. These financial measures are not calculated in
accordance with GAAP and are not based on any comprehensive set of
accounting rules or principles. In evaluating the Company’s
performance, management uses certain non-GAAP financial measures to
supplement financial statements prepared under GAAP. Management
believes these non-GAAP financial measures provide a useful measure
of the Company’s operating results, a meaningful comparison with
historical results and with the results of other companies, and
insight into the Company’s ongoing operating performance. Further,
management and the Board of Directors of the Company utilize these
non-GAAP financial measures to gain a better understanding of the
Company’s comparative operating performance from period-to-period
and as a basis for planning and forecasting future periods.
Management believes these non-GAAP financial measures, when read in
conjunction with the Company’s GAAP financial statements, are
useful to investors because they provide a basis for meaningful
period-to-period comparisons of the Company’s ongoing operating
results, including results of operations against investor and
analyst financial models, which helps identify trends in the
Company’s underlying business and provides a better understanding
of how management plans and measures the Company’s underlying
business.
MITEK SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(amounts in thousands except
share data)
December 31, 2022
September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
57,115
$
32,059
Short-term investments
44,814
58,268
Accounts receivable, net
28,262
27,874
Contract assets, current portion
5,458
6,273
Prepaid expenses
2,269
2,000
Other current assets
2,773
2,622
Total current assets
140,691
129,096
Long-term investments
5,674
10,633
Property and equipment, net
3,367
3,493
Right-of-use assets
5,031
5,155
Goodwill and intangible assets
204,785
195,942
Deferred income tax assets
13,759
10,245
Convertible senior notes hedge
—
—
Contract assets, non-current
portion(1)
10,741
4,218
Other non-current assets(1)
1,565
1,628
Total assets
$
385,613
$
360,410
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
6,080
$
4,974
Accrued payroll and related taxes
6,379
10,393
Accrued liabilities
1,234
1,155
Accrued interest payable(1)
495
202
Deferred revenue, current portion
12,744
13,394
Lease liabilities, current portion
2,098
2,110
Acquisition-related contingent
consideration
6,250
5,920
Restructuring accrual
295
901
Income tax payables(1)
5,343
194
Other current liabilities(1)
1,437
1,254
Total current liabilities
42,355
40,497
Convertible senior notes
129,814
127,970
Deferred revenue, non-current portion
1,236
1,775
Lease liabilities, non-current portion
3,893
4,106
Deferred income tax liabilities, non
current portion
15,344
14,132
Other non-current liabilities
1,765
1,613
Total liabilities
194,407
190,093
Stockholders’ equity:
Preferred stock, $0.001 par value,
1,000,000 shares authorized, none issued and outstanding
—
—
Common stock, $0.001 par value,
120,000,000 shares authorized, 45,248,743 and 44,680,429 issued and
outstanding, as of December 31, 2022 and September 30, 2022,
respectively
45
44
Additional paid-in capital
219,596
216,493
Accumulated other comprehensive loss
(15,164
)
(28,219
)
Accumulated deficit
(13,271
)
(18,001
)
Treasury stock, at cost, no shares and
7,773 shares as of December 31, 2022 and September 30, 2022,
respectively
—
—
Total stockholders’ equity
191,206
170,317
Total liabilities and stockholders’
equity
$
385,613
$
360,410
(1)
September 30, 2022 condensed consolidated balance sheet reflects
reclassifications to conform to the current year presentation.
MITEK SYSTEMS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(amounts in thousands except
per share data)
Three Months Ended December
31,
2022
2021
Revenue
Software and hardware
$
26,376
$
15,445
Services and other
19,327
17,028
Total revenue
45,703
32,473
Operating costs and expenses
Cost of revenue—software and hardware
(exclusive of depreciation & amortization)
169
378
Cost of revenue—services and other
(exclusive of depreciation & amortization)
4,900
4,177
Selling and marketing
9,515
8,438
Research and development
7,670
6,407
General and administrative
8,479
5,965
Amortization and acquisition-related
costs
4,821
2,279
Restructuring costs
1,776
—
Total operating costs and expenses
37,330
27,644
Operating income
8,373
4,829
Interest expense
2,137
2,008
Other income, net
340
135
Income before income taxes
6,576
2,956
Income tax benefit (provision)
(1,846
)
168
Net income
$
4,730
$
3,124
Net income per share—basic
$
0.11
$
0.07
Net income per share—diluted
$
0.10
$
0.07
Shares used in calculating net income per
share—basic
44,930
44,788
Shares used in calculating net income per
share—diluted
45,634
46,155
MITEK SYSTEMS, INC.
NON-GAAP NET INCOME
RECONCILIATION
(Unaudited)
(amounts in thousands except
per share data)
Three Months Ended December
31,
2022
2021
Net income
$
4,730
$
3,124
Non-GAAP adjustments:
Amortization and acquisition-related
costs
4,821
2,279
Intellectual property litigation costs
253
374
Stock compensation expense
2,442
3,132
Non-recurring audit fees
740
—
Restructuring costs
1,776
—
Amortization of debt discount and issuance
costs
1,844
1,715
Income tax effect of pre-tax
adjustments
(2,992
)
(1,875
)
Cash tax difference(1)
662
1,415
Non-GAAP net income
14,276
10,164
Non-GAAP income per share—basic
$
0.32
$
0.23
Non-GAAP income per share—diluted
$
0.31
$
0.22
Shares used in calculating non-GAAP net
income per share—basic
44,930
44,788
Shares used in calculating non-GAAP net
income per share—diluted
45,634
46,155
(1)
The Company’s non-GAAP net income is calculated using a cash tax
rate of 24% and 3% in fiscal 2023 and 2022, respectively. The
estimated cash tax rate is the estimated tax payable on the
Company’s tax returns as a percentage of estimated annual non-GAAP
pre-tax net income. The Company uses an estimated cash tax rate to
adjust for the historical variation in the effective book tax rate
associated with the reversal of valuation allowances, the
utilization of research and development tax credits, and the
utilization of loss carryforwards which currently have an overall
effect of reducing taxes payable. The Company believes that the
cash tax rate provides a more transparent view of the Company’s
operating results. The Company’s effective tax rate used for the
purposes of calculating GAAP net income for the three months ended
December 31, 2022 and 2021 was 28% and 6%, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230905770375/en/
Investor Contact: Todd Kehrli or Jim Byers MKR Investor
Relations, Inc. mitk@mkr-group.com
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