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 second
quarter of fiscal 2023 ended March 31, 2023. Total revenue
increased 35% year over year, reaffirming Mitek’s market-leading
position.
Fiscal 2023 Second Quarter Financial Highlights
- Total revenue increased 35% year over year to $45.3 million in
a record second quarter.
- GAAP net income was $4.4 million, or $0.10 per diluted
share.
- Non-GAAP net income was $13.1 million, or $0.29 per diluted
share.
- Cash flow from operations was $6.3 million.
- Total cash and investments were $114.5 million on March 31,
2023.
Fiscal 2023 First Six Months Financial Highlights
- Total revenue increased 38% year over year to $91.0
million.
- GAAP net income was $9.2 million, or $0.20 per diluted
share.
- Non-GAAP net income was $27.4 million, or $0.60 per diluted
share.
- Cash flow from operations was $11.6 million.
Mitek CEO Max Carnecchia’s Comments
"Our strong performance in the second quarter highlights the
market-leading position of our solutions in the large and growing
markets we address. Our Identity revenue was up 35% year over year
in the second quarter, reinforcing our position as a leader in the
ever-changing identity and fraud landscape. Our Deposits business
also delivered another strong quarter, with revenue up 35% year
over year. Looking ahead, we expect revenue growth in the second
half of the year to moderate as a result of timing of deals falling
in the first half of the year, as well as the difficult
macroeconomic environment; however with our strong first half
performance we are reiterating our full year guidance which calls
for 18% revenue growth year over year at the midpoint and non-GAAP
operating margins in the range of 30% to 31%."
Fiscal 2023 Full Year Guidance
Mitek is reiterating its fiscal 2023 guidance for the year
ending September 30, 2023, expecting 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. Mitek
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 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 for
the three and six months ending March 31, 2023. To access the live
call, dial 877-270-2148 (US and Canada) or +1 412-902-6510
(International) and ask to join the Mitek call.
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. The phone call replay
can be accessed by dialing 877-344-7529 (US or Canada) or
1-412-317-0088 (International) and entering the passcode:
7439372.
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 and the effects of the
macroeconomic environment 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 July 31,
2023 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 amortization
and acquisition-related costs, intellectual property litigation
costs, executive transition costs, stock compensation expenses,
non-recurring audit fees, 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)
March 31, 2023
September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
83,047
$
32,059
Short-term investments
26,711
58,268
Accounts receivable, net
35,132
27,874
Contract assets, current portion
8,845
6,273
Prepaid expenses
2,789
2,000
Other current assets
2,849
2,622
Total current assets
159,373
129,096
Long-term investments
4,767
10,633
Property and equipment, net
3,152
3,493
Right-of-use assets
4,625
5,155
Goodwill and intangible assets
203,598
195,942
Deferred income tax assets
16,965
10,245
Contract assets, non-current portion
6,839
4,218
Other non-current assets
1,645
1,628
Total assets
$
400,964
$
360,410
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
5,453
$
4,974
Accrued payroll and related taxes
7,892
10,393
Accrued liabilities
1,493
1,155
Accrued interest payable
219
202
Income tax payables
8,606
194
Deferred revenue, current portion
11,956
13,394
Lease liabilities, current portion
2,023
2,110
Acquisition-related contingent
consideration
6,070
5,920
Restructuring accrual
—
901
Other current liabilities
1,326
1,254
Total current liabilities
45,038
40,497
Convertible senior notes
131,670
127,970
Deferred revenue, non-current portion
1,211
1,775
Lease liabilities, non-current portion
3,487
4,106
Deferred income tax liabilities, non
current portion
15,670
14,132
Other non-current liabilities
1,587
1,613
Total liabilities
198,663
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, 45,409,185 and 44,680,429 issued and
outstanding, as of March 31, 2023 and September 30, 2022,
respectively
45
44
Additional paid-in capital
222,933
216,493
Accumulated other comprehensive loss
(11,854
)
(28,219
)
Accumulated deficit
(8,823
)
(18,001
)
Treasury stock, at cost, no shares and
7,773 shares as of March 31, 2023 and September 30, 2022,
respectively
—
—
Total stockholders’ equity
202,301
170,317
Total liabilities and stockholders’
equity
$
400,964
$
360,410
MITEK SYSTEMS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(amounts in thousands except
per share data)
Three Months Ended March
31,
Six Months Ended March
31,
2023
2022
2023
2022
Revenue
Software and hardware
$
25,260
$
18,150
$
51,636
$
33,595
Services and other
20,054
15,360
39,381
32,387
Total revenue
45,314
33,510
91,017
65,982
Operating costs and expenses
Cost of revenue—software and hardware
(exclusive of depreciation & amortization)
219
310
388
688
Cost of revenue—services and other
(exclusive of depreciation & amortization)
5,679
4,141
10,579
8,318
Selling and marketing
9,623
9,206
19,138
17,644
Research and development
7,373
7,095
15,043
13,502
General and administrative
10,059
6,073
18,538
12,037
Amortization and acquisition-related
costs
4,274
4,005
9,095
6,284
Restructuring costs
210
—
1,986
—
Total operating costs and expenses
37,437
30,830
74,767
58,473
Operating income
7,877
2,680
16,250
7,509
Interest expense
2,163
2,040
4,300
4,048
Other income (expense), net
454
(225
)
794
(90
)
Income before income taxes
6,168
415
12,744
3,371
Income tax benefit (provision)
(1,720
)
20
(3,566
)
188
Net income
$
4,448
$
435
$
9,178
$
3,559
Net income per share—basic
$
0.10
$
0.01
$
0.20
$
0.08
Net income per share—diluted
$
0.10
$
0.01
$
0.20
$
0.08
Shares used in calculating net income per
share—basic
45,377
44,775
45,317
44,795
Shares used in calculating net income per
share—diluted
45,634
46,097
45,634
46,206
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,
2023
2022
2023
2022
Net income
$
4,448
$
435
$
9,178
$
3,559
Non-GAAP adjustments:
Amortization and acquisition-related
costs(2)
4,274
4,366
9,095
6,646
Intellectual property litigation costs
473
286
725
660
Executive transition costs
581
—
581
—
Stock compensation expense
2,714
3,298
5,161
6,429
Non-recurring audit fees
633
—
1,373
—
Restructuring costs
210
—
1,986
—
Amortization of debt discount and issuance
costs
1,857
1,738
3,700
3,453
Income tax effect of pre-tax
adjustments
(2,705
)
(2,422
)
(5,697
)
(4,297
)
Cash tax difference(1)
599
1,957
1,262
3,373
Non-GAAP net income
13,084
9,658
27,364
19,823
Non-GAAP income per share—basic
$
0.29
$
0.22
$
0.60
$
0.44
Non-GAAP income per share—diluted
$
0.29
$
0.21
$
0.60
$
0.43
Shares used in calculating non-GAAP net
income per share—basic
45,377
44,775
45,317
44,795
Shares used in calculating non-GAAP net
income per share—diluted
45,634
46,097
45,634
46,206
(1)
The Company’s non-GAAP net income is
calculated using a cash tax rate of 23% in fiscal 2023 and 3% in
fiscal 2022. The estimated cash tax rate is the estimated annual
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 fiscal 2022 cash tax rate includes a
beneficial impact of reduced taxes payable due to the utilization
of research and development tax credits and the utilization of loss
carryforward. 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, 2023 and 2022
was 28% and negative 5%, respectively. The Company’s effective tax
rate used for the purposes of calculating GAAP net income for the
six months ended March 31, 2023 and 2022 was 28% and negative 6%,
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/20230914536789/en/
Investor Contact: Todd Kehrli or Jim Byers MKR Investor
Relations, Inc. mitk@mkr-group.com
Mitek Systems (NASDAQ:MITK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Mitek Systems (NASDAQ:MITK)
Historical Stock Chart
From Jul 2023 to Jul 2024