Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Mitek Delivers 21% Year Over Year Revenue Growth and Transformative Acquisition of Orchestration Provider During the Quarter By: Mitek Systems, Inc. via Business Wire April 28, 2022 at 16:05 PM EDT Mitek Adds End-to-End KYC Platform to Industry Leading Biometrics to Create Comprehensive Identity Provider Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity (ID) and fraud prevention solutions, today reported financial results for its second quarter of fiscal 2022 ended March 31, 2022. Total revenue increased 21% year over year as commerce continues its rapid shift to digital channels. Mitek capped the quarter with the March acquisition of HooYu, the United Kingdom’s leading Know Your Customer (KYC) technology pioneer. The acquisition allows Mitek to offer customers a powerful end-to-end, easy-to-use platform capable of managing the entire customer identity journey, including account opening, workflow, case management, analytics and re-verification/authentication. Fiscal Second Quarter 2022 Financial Highlights Total revenue increased 21% year over year to $34.7 million in a record second quarter. GAAP net income increased 88% year over year to $1.9 million, or $0.04 per diluted share. Non-GAAP net income increased 49% year over year to $10.8 million, or $0.24 per diluted share. Cash flow from operations was $7.4 million. Total cash and investments were $93.4 million at the end of the quarter. “Digital identity verification has moved beyond just being an enabler of digital commerce, it now serves as an integral element of most organizations’ technology stack,” said CEO Max Carnecchia. “We believe the next decade of fraud prevention will be defined by an organization’s approach to the lifecycle of identity and access management capabilities. With our acquisition of HooYu, Mitek is significantly expanding access to these services through our low code no code orchestration platform.” “Our acquisition of HooYu continues to expand our digital identity offering allowing for a more seamless and complete customer identification experience at scale while also significantly bolstering our fraud prevention capabilities,” added CFO Frank Teruel. “We are excited about the opportunity to bring these capabilities to more use cases and industries helping them increase customer acceptance while reducing fraud and operational costs.” Conference Call Information Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company’s financial results. To access the live call, dial 888-204-4368 (US and Canada) or +1 323-994-2093 (International) and give the participant passcode 5221376. A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay dial-in information, please click here. About Mitek Systems, Inc. Mitek (NASDAQ: MITK) is a global leader in digital identity and fraud prevention solutions built on the latest advancements in computer vision and artificial intelligence. Mitek’s digital identity solutions enable organizations to verify an individual’s identity during digital transactions to reduce risk and meet regulatory requirements, while increasing revenue from digital channels. More than 7,500 organizations use Mitek to enable trust and convenience for mobile check deposit, new account opening, and more. Mitek is based in San Diego, Calif., with offices across the U.S. and Europe. 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, the extent to which the COVID-19 outbreak and measures taken in response thereto impact its business, results of operations and financial condition, 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, the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner or 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, 2021, 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 stock compensation expenses, intellectual property litigation costs, acquisition-related costs and expenses, 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. CONSOLIDATED BALANCE SHEETS (Unaudited) (amounts in thousands except share data) March 31, 2022 September 30, 2021 ASSETS Current assets: Cash and cash equivalents $ 23,984 $ 30,312 Short-term investments 37,910 149,057 Accounts receivable, net 23,858 16,602 Contract assets 4,503 4,080 Prepaid expenses 2,409 1,920 Other current assets 1,849 2,085 Total current assets 94,513 204,056 Long-term investments 31,493 48,051 Property and equipment, net 3,938 3,671 Right-of-use assets 6,098 7,056 Goodwill and intangible assets 233,253 91,830 Deferred income tax assets 16,479 10,511 Convertible senior notes hedge — 48,208 Other non-current assets 5,292 6,310 Total assets $ 391,066 $ 419,693 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,359 $ 2,507 Accrued payroll and related taxes 8,271 11,776 Deferred revenue, current portion 9,700 10,381 Lease liabilities, current portion 1,944 1,943 Acquisition-related contingent consideration 10,790 11,050 Other current liabilities 3,469 1,552 Total current liabilities 39,533 39,209 Convertible senior notes 124,370 120,918 Embedded conversion derivative — 48,208 Deferred revenue, non-current portion 1,053 955 Lease liabilities, non-current portion 5,485 6,588 Deferred income tax liabilities 22,100 4,117 Other non-current liabilities 6,250 6,868 Total liabilities 198,791 226,863 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, 44,344,361 and 44,168,745 issued and outstanding, as of March 31, 2022 and September 30, 2021, respectively 44 44 Additional paid-in capital 213,398 199,935 Accumulated other comprehensive loss (5,170 ) (943 ) Accumulated deficit (15,997 ) (6,066 ) Treasury stock, at cost, no shares and 7,773 shares as of March 31, 2022 and September 30, 2021, respectively — (140 ) Total stockholders’ equity 192,275 192,830 Total liabilities and stockholders’ equity $ 391,066 $ 419,693 MITEK SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Revenue Software and hardware $ 19,280 $ 13,013 $ 34,725 $ 25,315 Services and other 15,434 15,760 32,461 29,433 Total revenue 34,714 28,773 67,186 54,748 Operating costs and expenses Cost of revenue—software and hardware 310 670 688 1,915 Cost of revenue—services and other 3,000 3,122 5,978 6,015 Selling and marketing 9,206 8,530 17,644 15,915 Research and development 8,236 6,691 15,842 12,855 General and administrative 6,073 5,718 12,037 10,776 Acquisition-related costs and expenses 3,056 1,659 5,335 3,352 Total operating costs and expenses 29,881 26,390 57,524 50,828 Operating income 4,833 2,383 9,662 3,920 Interest expense 2,040 1,319 4,048 1,319 Other income (expense), net (231 ) 372 (96 ) 468 Income before income taxes 2,562 1,436 5,518 3,069 Income tax benefit (provision) (651 ) (417 ) (483 ) 117 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Net income per share—basic $ 0.04 $ 0.02 $ 0.11 $ 0.07 Net income per share—diluted $ 0.04 $ 0.02 $ 0.11 $ 0.07 Shares used in calculating net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating net income per share—diluted 46,097 44,554 46,206 44,367 MITEK SYSTEMS, INC. NON-GAAP NET INCOME RECONCILIATION (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Non-GAAP adjustments: Acquisition-related costs and expenses(2) 3,417 1,659 5,696 3,352 Intellectual property litigation costs 286 275 661 517 Stock compensation expense 3,298 2,968 6,429 5,715 Amortization of debt discount and issuance costs 1,738 1,147 3,453 1,147 Income tax effect of pre-tax adjustments (2,185 ) (1,391 ) (4,060 ) (2,468 ) Cash tax difference(1) 2,377 1,621 3,793 2,006 Non-GAAP net income 10,842 7,298 21,007 13,455 Non-GAAP income per share—basic $ 0.24 $ 0.17 $ 0.47 $ 0.31 Non-GAAP income per share—diluted $ 0.24 $ 0.16 $ 0.45 $ 0.30 Shares used in calculating non-GAAP net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating non-GAAP net income per share—diluted 46,097 44,554 46,206 44,367 (1) The Company’s non-GAAP net income is calculated using a cash tax rate of 3% in both fiscal 2022 and 2021. 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 March 31, 2022 and 2021 was 25% and 29%, respectively. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the six months ended March 31, 2022 and 2021 was 9% and negative 4%, respectively. (2) Included in acquisition-related costs and expenses is $0.3 million of foreign exchange and investment losses incurred in connection with the acquisition of HooYu Ltd. which is included in other income (expense), net in the consolidated statements of operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006229/en/Contacts Investor Contact: Todd Kehrli or Jim Byers MKR Group, Inc. mitk@mkr-group.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Mitek Delivers 21% Year Over Year Revenue Growth and Transformative Acquisition of Orchestration Provider During the Quarter By: Mitek Systems, Inc. via Business Wire April 28, 2022 at 16:05 PM EDT Mitek Adds End-to-End KYC Platform to Industry Leading Biometrics to Create Comprehensive Identity Provider Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity (ID) and fraud prevention solutions, today reported financial results for its second quarter of fiscal 2022 ended March 31, 2022. Total revenue increased 21% year over year as commerce continues its rapid shift to digital channels. Mitek capped the quarter with the March acquisition of HooYu, the United Kingdom’s leading Know Your Customer (KYC) technology pioneer. The acquisition allows Mitek to offer customers a powerful end-to-end, easy-to-use platform capable of managing the entire customer identity journey, including account opening, workflow, case management, analytics and re-verification/authentication. Fiscal Second Quarter 2022 Financial Highlights Total revenue increased 21% year over year to $34.7 million in a record second quarter. GAAP net income increased 88% year over year to $1.9 million, or $0.04 per diluted share. Non-GAAP net income increased 49% year over year to $10.8 million, or $0.24 per diluted share. Cash flow from operations was $7.4 million. Total cash and investments were $93.4 million at the end of the quarter. “Digital identity verification has moved beyond just being an enabler of digital commerce, it now serves as an integral element of most organizations’ technology stack,” said CEO Max Carnecchia. “We believe the next decade of fraud prevention will be defined by an organization’s approach to the lifecycle of identity and access management capabilities. With our acquisition of HooYu, Mitek is significantly expanding access to these services through our low code no code orchestration platform.” “Our acquisition of HooYu continues to expand our digital identity offering allowing for a more seamless and complete customer identification experience at scale while also significantly bolstering our fraud prevention capabilities,” added CFO Frank Teruel. “We are excited about the opportunity to bring these capabilities to more use cases and industries helping them increase customer acceptance while reducing fraud and operational costs.” Conference Call Information Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company’s financial results. To access the live call, dial 888-204-4368 (US and Canada) or +1 323-994-2093 (International) and give the participant passcode 5221376. A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay dial-in information, please click here. About Mitek Systems, Inc. Mitek (NASDAQ: MITK) is a global leader in digital identity and fraud prevention solutions built on the latest advancements in computer vision and artificial intelligence. Mitek’s digital identity solutions enable organizations to verify an individual’s identity during digital transactions to reduce risk and meet regulatory requirements, while increasing revenue from digital channels. More than 7,500 organizations use Mitek to enable trust and convenience for mobile check deposit, new account opening, and more. Mitek is based in San Diego, Calif., with offices across the U.S. and Europe. 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, the extent to which the COVID-19 outbreak and measures taken in response thereto impact its business, results of operations and financial condition, 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, the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner or 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, 2021, 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 stock compensation expenses, intellectual property litigation costs, acquisition-related costs and expenses, 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. CONSOLIDATED BALANCE SHEETS (Unaudited) (amounts in thousands except share data) March 31, 2022 September 30, 2021 ASSETS Current assets: Cash and cash equivalents $ 23,984 $ 30,312 Short-term investments 37,910 149,057 Accounts receivable, net 23,858 16,602 Contract assets 4,503 4,080 Prepaid expenses 2,409 1,920 Other current assets 1,849 2,085 Total current assets 94,513 204,056 Long-term investments 31,493 48,051 Property and equipment, net 3,938 3,671 Right-of-use assets 6,098 7,056 Goodwill and intangible assets 233,253 91,830 Deferred income tax assets 16,479 10,511 Convertible senior notes hedge — 48,208 Other non-current assets 5,292 6,310 Total assets $ 391,066 $ 419,693 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,359 $ 2,507 Accrued payroll and related taxes 8,271 11,776 Deferred revenue, current portion 9,700 10,381 Lease liabilities, current portion 1,944 1,943 Acquisition-related contingent consideration 10,790 11,050 Other current liabilities 3,469 1,552 Total current liabilities 39,533 39,209 Convertible senior notes 124,370 120,918 Embedded conversion derivative — 48,208 Deferred revenue, non-current portion 1,053 955 Lease liabilities, non-current portion 5,485 6,588 Deferred income tax liabilities 22,100 4,117 Other non-current liabilities 6,250 6,868 Total liabilities 198,791 226,863 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, 44,344,361 and 44,168,745 issued and outstanding, as of March 31, 2022 and September 30, 2021, respectively 44 44 Additional paid-in capital 213,398 199,935 Accumulated other comprehensive loss (5,170 ) (943 ) Accumulated deficit (15,997 ) (6,066 ) Treasury stock, at cost, no shares and 7,773 shares as of March 31, 2022 and September 30, 2021, respectively — (140 ) Total stockholders’ equity 192,275 192,830 Total liabilities and stockholders’ equity $ 391,066 $ 419,693 MITEK SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Revenue Software and hardware $ 19,280 $ 13,013 $ 34,725 $ 25,315 Services and other 15,434 15,760 32,461 29,433 Total revenue 34,714 28,773 67,186 54,748 Operating costs and expenses Cost of revenue—software and hardware 310 670 688 1,915 Cost of revenue—services and other 3,000 3,122 5,978 6,015 Selling and marketing 9,206 8,530 17,644 15,915 Research and development 8,236 6,691 15,842 12,855 General and administrative 6,073 5,718 12,037 10,776 Acquisition-related costs and expenses 3,056 1,659 5,335 3,352 Total operating costs and expenses 29,881 26,390 57,524 50,828 Operating income 4,833 2,383 9,662 3,920 Interest expense 2,040 1,319 4,048 1,319 Other income (expense), net (231 ) 372 (96 ) 468 Income before income taxes 2,562 1,436 5,518 3,069 Income tax benefit (provision) (651 ) (417 ) (483 ) 117 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Net income per share—basic $ 0.04 $ 0.02 $ 0.11 $ 0.07 Net income per share—diluted $ 0.04 $ 0.02 $ 0.11 $ 0.07 Shares used in calculating net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating net income per share—diluted 46,097 44,554 46,206 44,367 MITEK SYSTEMS, INC. NON-GAAP NET INCOME RECONCILIATION (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Non-GAAP adjustments: Acquisition-related costs and expenses(2) 3,417 1,659 5,696 3,352 Intellectual property litigation costs 286 275 661 517 Stock compensation expense 3,298 2,968 6,429 5,715 Amortization of debt discount and issuance costs 1,738 1,147 3,453 1,147 Income tax effect of pre-tax adjustments (2,185 ) (1,391 ) (4,060 ) (2,468 ) Cash tax difference(1) 2,377 1,621 3,793 2,006 Non-GAAP net income 10,842 7,298 21,007 13,455 Non-GAAP income per share—basic $ 0.24 $ 0.17 $ 0.47 $ 0.31 Non-GAAP income per share—diluted $ 0.24 $ 0.16 $ 0.45 $ 0.30 Shares used in calculating non-GAAP net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating non-GAAP net income per share—diluted 46,097 44,554 46,206 44,367 (1) The Company’s non-GAAP net income is calculated using a cash tax rate of 3% in both fiscal 2022 and 2021. 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 March 31, 2022 and 2021 was 25% and 29%, respectively. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the six months ended March 31, 2022 and 2021 was 9% and negative 4%, respectively. (2) Included in acquisition-related costs and expenses is $0.3 million of foreign exchange and investment losses incurred in connection with the acquisition of HooYu Ltd. which is included in other income (expense), net in the consolidated statements of operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006229/en/Contacts Investor Contact: Todd Kehrli or Jim Byers MKR Group, Inc. mitk@mkr-group.com
Mitek Adds End-to-End KYC Platform to Industry Leading Biometrics to Create Comprehensive Identity Provider
Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity (ID) and fraud prevention solutions, today reported financial results for its second quarter of fiscal 2022 ended March 31, 2022. Total revenue increased 21% year over year as commerce continues its rapid shift to digital channels. Mitek capped the quarter with the March acquisition of HooYu, the United Kingdom’s leading Know Your Customer (KYC) technology pioneer. The acquisition allows Mitek to offer customers a powerful end-to-end, easy-to-use platform capable of managing the entire customer identity journey, including account opening, workflow, case management, analytics and re-verification/authentication. Fiscal Second Quarter 2022 Financial Highlights Total revenue increased 21% year over year to $34.7 million in a record second quarter. GAAP net income increased 88% year over year to $1.9 million, or $0.04 per diluted share. Non-GAAP net income increased 49% year over year to $10.8 million, or $0.24 per diluted share. Cash flow from operations was $7.4 million. Total cash and investments were $93.4 million at the end of the quarter. “Digital identity verification has moved beyond just being an enabler of digital commerce, it now serves as an integral element of most organizations’ technology stack,” said CEO Max Carnecchia. “We believe the next decade of fraud prevention will be defined by an organization’s approach to the lifecycle of identity and access management capabilities. With our acquisition of HooYu, Mitek is significantly expanding access to these services through our low code no code orchestration platform.” “Our acquisition of HooYu continues to expand our digital identity offering allowing for a more seamless and complete customer identification experience at scale while also significantly bolstering our fraud prevention capabilities,” added CFO Frank Teruel. “We are excited about the opportunity to bring these capabilities to more use cases and industries helping them increase customer acceptance while reducing fraud and operational costs.” Conference Call Information Mitek management will host a conference call and live webcast for analysts and investors today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the Company’s financial results. To access the live call, dial 888-204-4368 (US and Canada) or +1 323-994-2093 (International) and give the participant passcode 5221376. A live and archived webcast of the conference call will be accessible on the Investor Relations section of the Company’s website at www.miteksystems.com. In addition, a phone replay will be available approximately two hours following the end of the call, and it will remain available for one week. To access the call replay dial-in information, please click here. About Mitek Systems, Inc. Mitek (NASDAQ: MITK) is a global leader in digital identity and fraud prevention solutions built on the latest advancements in computer vision and artificial intelligence. Mitek’s digital identity solutions enable organizations to verify an individual’s identity during digital transactions to reduce risk and meet regulatory requirements, while increasing revenue from digital channels. More than 7,500 organizations use Mitek to enable trust and convenience for mobile check deposit, new account opening, and more. Mitek is based in San Diego, Calif., with offices across the U.S. and Europe. 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, the extent to which the COVID-19 outbreak and measures taken in response thereto impact its business, results of operations and financial condition, 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, the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner or 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, 2021, 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 stock compensation expenses, intellectual property litigation costs, acquisition-related costs and expenses, 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. CONSOLIDATED BALANCE SHEETS (Unaudited) (amounts in thousands except share data) March 31, 2022 September 30, 2021 ASSETS Current assets: Cash and cash equivalents $ 23,984 $ 30,312 Short-term investments 37,910 149,057 Accounts receivable, net 23,858 16,602 Contract assets 4,503 4,080 Prepaid expenses 2,409 1,920 Other current assets 1,849 2,085 Total current assets 94,513 204,056 Long-term investments 31,493 48,051 Property and equipment, net 3,938 3,671 Right-of-use assets 6,098 7,056 Goodwill and intangible assets 233,253 91,830 Deferred income tax assets 16,479 10,511 Convertible senior notes hedge — 48,208 Other non-current assets 5,292 6,310 Total assets $ 391,066 $ 419,693 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,359 $ 2,507 Accrued payroll and related taxes 8,271 11,776 Deferred revenue, current portion 9,700 10,381 Lease liabilities, current portion 1,944 1,943 Acquisition-related contingent consideration 10,790 11,050 Other current liabilities 3,469 1,552 Total current liabilities 39,533 39,209 Convertible senior notes 124,370 120,918 Embedded conversion derivative — 48,208 Deferred revenue, non-current portion 1,053 955 Lease liabilities, non-current portion 5,485 6,588 Deferred income tax liabilities 22,100 4,117 Other non-current liabilities 6,250 6,868 Total liabilities 198,791 226,863 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, 44,344,361 and 44,168,745 issued and outstanding, as of March 31, 2022 and September 30, 2021, respectively 44 44 Additional paid-in capital 213,398 199,935 Accumulated other comprehensive loss (5,170 ) (943 ) Accumulated deficit (15,997 ) (6,066 ) Treasury stock, at cost, no shares and 7,773 shares as of March 31, 2022 and September 30, 2021, respectively — (140 ) Total stockholders’ equity 192,275 192,830 Total liabilities and stockholders’ equity $ 391,066 $ 419,693 MITEK SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Revenue Software and hardware $ 19,280 $ 13,013 $ 34,725 $ 25,315 Services and other 15,434 15,760 32,461 29,433 Total revenue 34,714 28,773 67,186 54,748 Operating costs and expenses Cost of revenue—software and hardware 310 670 688 1,915 Cost of revenue—services and other 3,000 3,122 5,978 6,015 Selling and marketing 9,206 8,530 17,644 15,915 Research and development 8,236 6,691 15,842 12,855 General and administrative 6,073 5,718 12,037 10,776 Acquisition-related costs and expenses 3,056 1,659 5,335 3,352 Total operating costs and expenses 29,881 26,390 57,524 50,828 Operating income 4,833 2,383 9,662 3,920 Interest expense 2,040 1,319 4,048 1,319 Other income (expense), net (231 ) 372 (96 ) 468 Income before income taxes 2,562 1,436 5,518 3,069 Income tax benefit (provision) (651 ) (417 ) (483 ) 117 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Net income per share—basic $ 0.04 $ 0.02 $ 0.11 $ 0.07 Net income per share—diluted $ 0.04 $ 0.02 $ 0.11 $ 0.07 Shares used in calculating net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating net income per share—diluted 46,097 44,554 46,206 44,367 MITEK SYSTEMS, INC. NON-GAAP NET INCOME RECONCILIATION (Unaudited) (amounts in thousands except per share data) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Net income $ 1,911 $ 1,019 $ 5,035 $ 3,186 Non-GAAP adjustments: Acquisition-related costs and expenses(2) 3,417 1,659 5,696 3,352 Intellectual property litigation costs 286 275 661 517 Stock compensation expense 3,298 2,968 6,429 5,715 Amortization of debt discount and issuance costs 1,738 1,147 3,453 1,147 Income tax effect of pre-tax adjustments (2,185 ) (1,391 ) (4,060 ) (2,468 ) Cash tax difference(1) 2,377 1,621 3,793 2,006 Non-GAAP net income 10,842 7,298 21,007 13,455 Non-GAAP income per share—basic $ 0.24 $ 0.17 $ 0.47 $ 0.31 Non-GAAP income per share—diluted $ 0.24 $ 0.16 $ 0.45 $ 0.30 Shares used in calculating non-GAAP net income per share—basic 44,775 43,138 44,795 42,835 Shares used in calculating non-GAAP net income per share—diluted 46,097 44,554 46,206 44,367 (1) The Company’s non-GAAP net income is calculated using a cash tax rate of 3% in both fiscal 2022 and 2021. 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 March 31, 2022 and 2021 was 25% and 29%, respectively. The Company’s effective tax rate used for the purposes of calculating GAAP net income for the six months ended March 31, 2022 and 2021 was 9% and negative 4%, respectively. (2) Included in acquisition-related costs and expenses is $0.3 million of foreign exchange and investment losses incurred in connection with the acquisition of HooYu Ltd. which is included in other income (expense), net in the consolidated statements of operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006229/en/