Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek”
or the “Company”), a global leader in digital identity and fraud
prevention, today reported preliminary financial results for its
full fiscal year ended September 30, 2023, and provides guidance
for its 2024 fiscal year ending September 30, 2024.
Preliminary Fiscal 2023 Full-Year Financial
Highlights
- Total revenue increased 19% year over year to $171.9
million.
- GAAP net income was $7.8 million, or $0.17 per diluted
share.
- Non-GAAP net income was $43.8 million, or $0.94 per diluted
share.
- Cash flow from operations was $31.4 million.
- Total cash and investments were $134.9 million on September 30,
2023.
These preliminary unaudited financial results for the fiscal
year ended September 30, 2023 are estimates based on currently
available information and the Company has not yet completed its
year end audit of such financial results. These preliminary
unaudited estimates of the Company’s revenue, net income, cash flow
and cash and investments have been prepared by and are the
responsibility of management. The Company’s actual results may
differ from these preliminary estimates after the completion of our
year end audit by our independent registered public accounting
firm, and related final adjustments and review by the Company’s
staff and management. The Company’s independent registered public
accounting firm has not conducted a review of and does not express
an opinion or any other form of assurance with respect to these
preliminary estimates.
Mitek CEO Max Carnecchia’s Comments
"We are happy to announce that we exceeded our fiscal 2023
revenue guidance and delivered full-year revenue growth of 19% and
a non-GAAP operating margin of 31% for our fiscal year ended
September 30, 2023. Our Deposits revenue grew 21% for our full
fiscal year, while Identity revenue grew 18% year over year. Also,
for the full fiscal year 2023, Mitek’s net revenue retention rate
was over 115%, which again underscores the value our solutions
deliver in the growing markets we serve. We also generated
significant cash flow and strengthened our balance sheet in fiscal
2023, and with our market leading product portfolio in place, we
believe that we do not need to do additional acquisitions to
further penetrate the significant market opportunities we address.
Instead, we are focused on using our cash flow to drive shareholder
value in other ways, and we routinely assess all capital allocation
alternatives, including opportunistic share repurchase programs. At
this time, we are in a blackout period as we finalize our year-end
audit and are thus limited in the actions we can take until we are
outside of our blackout period."
Fiscal 2024 Full Year Guidance
For its fiscal year ending September 30, 2024, Mitek expects
full-year revenue to be in the range of $180.0 million to $185.0
million and its non-GAAP operating margin for fiscal 2024 to be in
the range of 30.0% to 31.0%.
Mitek Interim CFO Fuad Ahmad’s Comments
"In fiscal 2023, we signed a large multi-year mobile deposit
reorder that locked in favorable pricing over a four year period.
Due to the unique terms of this contract we recognized additional
license revenue relating to future years of approximately $7.0
million in fiscal 2023. If we back out the future year revenue from
our preliminary fiscal 2023 revenue, and attribute the portion of
the $7.0 million that would have been recognized in fiscal 2024 to
the midpoint of our guidance, our fiscal 2024 revenue guidance
would represent growth of 12% at the midpoint. Additionally, we are
committed to our Identity business reaching at least breakeven from
a profitability standpoint by the end of fiscal 2024, which ends
September 30, 2024.”
Filing Status
As a result of delays in filing its Quarterly Reports on Form
10-Q for fiscal 2023 (all of which are now on file), the Company
was late in starting its year-end audit for fiscal 2023, and
therefore currently anticipates that it will be delayed in filing
its Annual Report on Form 10-K for the year ended September 30,
2023, which is due on December 14, 2023. If the Company’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2023 is
not filed on time, Nasdaq will likely issue a delist determination
letter and the Company will have an opportunity to request a new
hearing and an extension to complete the filing of such report. The
Company plans to request such a hearing following receipt of a
delist determination letter.
About Mitek Systems, Inc.
Mitek (NASDAQ: MITK) is a global leader in digital access,
founded 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. Trusted by 99% of U.S. banks for
mobile check deposits and 7,900 of the world’s largest
organizations, Mitek helps companies reduce risk and meet
regulatory requirements. Learn more at www.miteksystems.com.
[(MITK-F)]
Follow Mitek on LinkedIn 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 preliminary
results for the year ended September 30, 2023 and its fiscal 2024
guidance, long-term prospects and market opportunities of the
Company, the Company’s anticipated delay in the filing of its
Annual Report on Form 10-K for the fiscal year ended September 30,
2023, and its related plan to request an extension from Nasdaq, the
Company’s belief that it does not need additional acquisitions to
further penetrate the significant market opportunities it
addresses, the Company’s focus on using its cash flow to drive
shareholder value and the Company’s expectations regarding
profitability of its Identity business. 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 expense,
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.
The Company has not provided a reconciliation of its forward
outlook for non-GAAP operating margin with its forward-looking GAAP
operating margin in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company
is unable, without unreasonable efforts, to quantify share-based
compensation expense, which is excluded from our non-GAAP operating
margin, as it requires additional inputs such as the number of
shares granted and market prices that are not ascertainable due to
the volatility of the Company’s share price. Additionally, a
significant portion of the Company’s operations are in foreign
countries and the transactional currencies are primarily Euros and
British pound sterling and the Company is not able to predict
fluctuations in those currencies without unreasonable efforts.
Key Business Metrics
We monitor net revenue retention to help us evaluate our
business, identify trends affecting our business, formulate
business plans, and make strategic decisions.
To calculate net revenue retention, the Company first calculates
total revenue (including expansion revenue) and reduce that amount
by revenue churn (e.g. contract expirations, cancellations,
downgrades, or other reductions). To calculate net revenue
retention rate, the Company specifies a measurement period
consisting of the trailing 12 months from its current period end.
The Company then calculates its net revenue retention rate as the
quotient obtained by dividing its total revenue in the second year
of the measurement period by its revenue in the first year of the
measurement period (i.e. the numerator excludes revenue generated
by customers newly acquired in the second year of measurement). The
net revenue retention rate is subject to adjustments for
acquisitions, consolidations, spin-offs, and other market activity,
and the Company presents its net revenue retention rate for
historical periods reflecting these adjustments.
MITEK SYSTEMS, INC.
NON-GAAP NET INCOME
RECONCILIATION
(Unaudited)
(amounts in thousands except
per share data)
Twelve Months Ended September
30,
2023
2022
Net income (loss)
$
7,813
$
3,032
Non-GAAP adjustments:
Amortization and acquisition-related
costs(2)
19,046
15,533
Intellectual property litigation costs
1,262
1,446
Executive transition costs
679
—
Stock compensation expense
10,433
13,363
Non-recurring audit fees
3,451
—
Restructuring costs
2,114
1,800
Amortization of debt discount and issuance
costs
7,546
7,053
Income tax effect of pre-tax
adjustments
(11,207
)
(9,799
)
Cash tax difference(1)
2,651
7,210
Non-GAAP net income
43,788
39,638
Non-GAAP income per share—basic
$
0.96
$
0.89
Non-GAAP income per share—diluted
$
0.94
$
0.87
Shares used in calculating non-GAAP net
income per share—basic
45,651
44,595
Shares used in calculating non-GAAP net
income per share—diluted
46,343
45,780
(1)
The Company’s non-GAAP net income is
calculated using a cash tax rate of 20% 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 fiscal 2023 and 2022 was 25% and negative 11%,
respectively.
(2)
Included in acquisition-related costs and
expenses in fiscal 2022 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/20231207305451/en/
Investor Contact: Todd Kehrli or Jim Byers MKR Investor
Relations, Inc. mitk@mkr-group.com
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