Mitek (NASDAQ: MITK, www.miteksystems.com), a global leader in
mobile capture and digital identity verification solutions, today
announced its financial results for the fiscal 2019 fourth quarter
and full year ended September 30, 2019.
Fiscal Fourth Quarter 2019 Financial
Highlights
- Total revenue increased 19% year over year to $25.0 million in
a record quarter.
- GAAP net income was $3.3 million, or $0.08 per diluted
share.
- Non-GAAP net income was $8.7 million, or $0.21 per diluted
share.
Fiscal 2019 Full Year Financial Highlights
- Total revenue increased by $21.0 million or 33% year over year
to a record $84.6 million.
- GAAP net loss was $(0.7) million, or $(0.02) per diluted
share.
- Non-GAAP net income increased 57% year over year to $17.3
million, or $0.42 per diluted share.
- Full year cash flow from operations was $14.3 million.
- Total cash and investments were $34.8 million at the end of
fiscal 2019.
Commenting on the results, Max Carnecchia, CEO of Mitek,
said:
“2019 was another outstanding fiscal year for Mitek and our
second consecutive year with record revenues for each quarter. Our
strong performance, driven by continued customer growth from both
our mobile deposit and identity verification products, emphasizes
the momentum in the digital economy for solutions that empower
trust and convenience. Mitek is outpacing the market growth for
identity verification and we are seeing a significant uplift in
financial services adopting our technology to help them capture
more good new customers in the onboarding process.”
Fiscal 2020 Financial Guidance
For the fiscal year ending September 30, 2020, the Company
expects full year total revenue to be between $98 million and $102
million, which would represent growth of approximately 16% to 21%
year over year and expects to generate a non-GAAP operating margin
of approximately 20% to 22%.
New Board Member
Mitek today announced the appointment of Donna Wells to its
Board of Directors. Ms. Wells built a career in Silicon Valley at
some of the most forward-thinking companies in the region. She
served as President, CEO and Board Director at Mindflash, as CMO
for Mint.com (acquired by Intuit), and acting CMO for Intuit. Her
nearly 20-year career in the financial services industry also
includes executive positions with companies such as Charles Schwab
and American Express. Ms. Wells has served on Mitek’s advisory
board since 2017 and has a Master of Business Administration from
the Stanford Graduate School of Business and a Bachelor of Science
in Economics from the Wharton School at the University of
Pennsylvania. Her appointment is effective as of November 4,
2019.
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 800-367-2403 (US and Canada) or +1
334-777-6978 (International) and give the participant passcode
7870727.
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
Mitek (NASDAQ: MITK) is a global leader in mobile capture and
digital identity verification solutions built on the latest
advancements in computer vision and machine learning. Mitek’s
identity verification solutions enable an enterprise to verify a
user’s identity during a digital transaction, which assists
businesses operating in highly regulated markets to reduce
financial risk and meet regulatory requirements while increasing
revenue from digital channels. Financial services, marketplaces and
other organizations around the world use Mitek to reduce friction
creating the digital experiences their customers expect. Mobile
Deposit® and Mobile Verify® are used by millions of consumers for
check deposit, new account opening and more. The company is based
in San Diego with offices in New York, London, Amsterdam,
Barcelona, Paris and St Petersburg. Learn more at
www.miteksystems.com. [(MITK-F)]
Notice Regarding Forward-Looking Statements
Statements contained in this news release relating to the
Company’s or 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 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, 2018, 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-GAAP financial measures for
non-GAAP net income and non-GAAP net income per share that exclude
stock compensation expenses, intellectual property litigation
costs, insurance settlement received, acquisition-related costs and
expenses, costs associated with our strategic process, executive
transition costs, restructuring costs, income tax effect of pre-tax
adjustments, impact of tax reform on deferred taxes, and the cash
tax difference. These financial measures are not calculated in
accordance with generally accepted accounting principles (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 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)
|
September 30, 2019 |
|
September 30, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
16,748 |
|
|
$ |
9,028 |
|
Short-term investments |
16,502 |
|
|
8,448 |
|
Accounts receivable, net |
14,938 |
|
|
16,821 |
|
Contract assets |
2,350 |
|
|
— |
|
Prepaid expenses |
1,487 |
|
|
2,278 |
|
Other current assets |
2,105 |
|
|
1,053 |
|
Total current assets |
54,130 |
|
|
37,628 |
|
Long-term investments |
1,552 |
|
|
— |
|
Property and equipment, net |
4,231 |
|
|
4,665 |
|
Goodwill and intangible
assets |
57,041 |
|
|
67,354 |
|
Deferred income tax assets |
16,596 |
|
|
15,356 |
|
Other non-current assets |
2,347 |
|
|
2,147 |
|
Total assets |
$ |
135,897 |
|
|
$ |
127,150 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
3,555 |
|
|
$ |
3,573 |
|
Accrued payroll and related taxes |
6,410 |
|
|
7,915 |
|
Deferred revenue, current portion |
5,612 |
|
|
4,792 |
|
Acquisition-related contingent consideration |
1,036 |
|
|
1,849 |
|
Restructuring accrual |
1,526 |
|
|
— |
|
Other current liabilities |
1,909 |
|
|
2,278 |
|
Total current liabilities |
20,048 |
|
|
20,407 |
|
Deferred revenue, non-current
portion |
736 |
|
|
485 |
|
Deferred income tax
liabilities |
5,555 |
|
|
8,162 |
|
Other non-current
liabilities |
2,225 |
|
|
2,702 |
|
Total liabilities |
28,564 |
|
|
31,756 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value, 1,000,000 shares authorized,
none issued and outstanding, as of September 30, 2019 and September
30, 2018 |
— |
|
|
— |
|
Common stock, $0.001 par value, 60,000,000 shares authorized,
40,367,456 and 37,961,224 issued and outstanding, as of September
30, 2019 and September 30, 2018, respectively |
40 |
|
|
38 |
|
Additional paid-in capital |
132,160 |
|
|
116,944 |
|
Accumulated other comprehensive loss |
(4,061 |
) |
|
(586 |
) |
Accumulated deficit |
(20,806 |
) |
|
(21,002 |
) |
Total stockholders’ equity |
107,333 |
|
|
95,394 |
|
Total liabilities and
stockholders’ equity |
$ |
135,897 |
|
|
$ |
127,150 |
|
MITEK SYSTEMS,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(amounts in
thousands except per share
data)
|
Three Months Ended September 30, |
|
Twelve Months Ended September 30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
Software and hardware |
$ |
14,377 |
|
|
$ |
14,261 |
|
|
$ |
46,845 |
|
|
$ |
40,698 |
|
Service and other |
10,641 |
|
|
6,776 |
|
|
37,745 |
|
|
22,861 |
|
Total revenue |
25,018 |
|
|
21,037 |
|
|
84,590 |
|
|
63,559 |
|
Operating costs and expenses |
|
|
|
|
|
|
|
Cost of revenue—software and hardware |
1,121 |
|
|
837 |
|
|
3,711 |
|
|
3,064 |
|
Cost of revenue—service and other |
2,108 |
|
|
1,837 |
|
|
8,555 |
|
|
5,622 |
|
Selling and marketing |
6,510 |
|
|
5,837 |
|
|
27,405 |
|
|
21,700 |
|
Research and development |
4,577 |
|
|
4,731 |
|
|
19,018 |
|
|
15,673 |
|
General and administrative |
4,118 |
|
|
6,538 |
|
|
19,861 |
|
|
17,067 |
|
Acquisition-related costs and expenses |
2,202 |
|
|
2,623 |
|
|
7,563 |
|
|
8,239 |
|
Restructuring costs |
(147 |
) |
|
— |
|
|
3,067 |
|
|
— |
|
Total operating costs and expenses |
20,489 |
|
|
22,403 |
|
|
89,180 |
|
|
71,365 |
|
Operating income (loss) |
4,529 |
|
|
(1,366 |
) |
|
(4,590 |
) |
|
(7,806 |
) |
Other income (expense), net |
350 |
|
|
22 |
|
|
602 |
|
|
(935 |
) |
Income (loss) before income
taxes |
4,879 |
|
|
(1,344 |
) |
|
(3,988 |
) |
|
(8,741 |
) |
Income tax benefit
(provision) |
(1,597 |
) |
|
(783 |
) |
|
3,264 |
|
|
(3,066 |
) |
Net income (loss) |
$ |
3,282 |
|
|
$ |
(2,127 |
) |
|
$ |
(724 |
) |
|
$ |
(11,807 |
) |
Net income (loss) per
share—basic |
$ |
0.08 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.33 |
) |
Net income (loss) per
share—diluted |
$ |
0.08 |
|
|
$ |
(0.06 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.33 |
) |
Shares used in calculating net
income (loss) per share—basic |
40,252 |
|
|
37,858 |
|
|
39,341 |
|
|
35,811 |
|
Shares used in calculating net
income (loss) per share—diluted |
41,635 |
|
|
37,858 |
|
|
39,341 |
|
|
35,811 |
|
MITEK SYSTEMS,
INC.NON-GAAP NET INCOME
RECONCILIATION(Unaudited)(amounts
in thousands except per share
data)
|
Three Months Ended September 30, |
|
Twelve Months Ended September 30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income (loss) |
$ |
3,282 |
|
|
$ |
(2,127 |
) |
|
$ |
(724 |
) |
|
$ |
(11,807 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Acquisition-related costs and expenses(1) |
2,202 |
|
|
2,623 |
|
|
7,563 |
|
|
9,491 |
|
Litigation costs |
515 |
|
|
— |
|
|
849 |
|
|
50 |
|
Insurance settlement received(2) |
(1,000 |
) |
|
— |
|
|
(1,000 |
) |
|
— |
|
Costs associated with strategic process |
— |
|
|
— |
|
|
1,224 |
|
|
— |
|
Executive transition costs(3) |
— |
|
|
1,636 |
|
|
251 |
|
|
1,636 |
|
Stock compensation expense |
2,346 |
|
|
3,023 |
|
|
9,637 |
|
|
8,950 |
|
Restructuring costs |
(147 |
) |
|
— |
|
|
3,067 |
|
|
— |
|
Income tax effect of pre-tax adjustments |
(879 |
) |
|
(2,184 |
) |
|
(4,851 |
) |
|
(6,038 |
) |
Impact of tax reform on deferred taxes |
— |
|
|
484 |
|
|
— |
|
|
4,901 |
|
Cash tax difference(4) |
2,426 |
|
|
2,262 |
|
|
1,264 |
|
|
3,819 |
|
Non-GAAP net income |
8,745 |
|
|
5,717 |
|
|
17,280 |
|
|
11,002 |
|
Non-GAAP income per
share—basic |
$ |
0.22 |
|
|
$ |
0.15 |
|
|
$ |
0.44 |
|
|
$ |
0.31 |
|
Non-GAAP income per
share—diluted |
$ |
0.21 |
|
|
$ |
0.14 |
|
|
$ |
0.42 |
|
|
$ |
0.29 |
|
Shares used in calculating
non-GAAP net income per share—basic |
40,252 |
|
|
37,858 |
|
|
39,341 |
|
|
35,811 |
|
Shares used in calculating
non-GAAP net income per share—diluted |
41,635 |
|
|
39,693 |
|
|
41,259 |
|
|
37,780 |
|
- Includes a $1.3 million foreign currency exchange remeasurement
loss related to euros purchased for the A2iA acquisition during the
twelve months ended September 30, 2018.
- The insurance settlement received in the fourth quarter of
fiscal 2019 relates to the recovery of litigation costs incurred in
prior fiscal years. This amount is included in general and
administrative expenses in the consolidated statements of
operations.
- Comprised of costs associated with the transition of the
Company’s executive officers. Our non-GAAP financial measures
exclude these transition costs as we believe that such expense is
inconsistent with the normally recurring operations of our Company
and the inclusion of these costs makes it difficult to make
period-to-period comparisons of our operating performance.
- The Company’s non-GAAP net income is calculated using a cash
tax rate of 2% and 3% in fiscal years 2019 and 2018, 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 (loss) for the three months
ended September 30, 2019 and 2018 was 33% and negative 58%,
respectively. The Company’s effective tax rate used for the
purposes of calculating GAAP net loss for the twelve months ended
September 30, 2019 and 2018 was 82% and negative 35%,
respectively.
________________
Follow Mitek on
LinkedIn: http://www.linkedin.com/company/mitek-systems-inc-Follow
Mitek on Twitter: @miteksystemsConnect with Mitek on Facebook:
http://www.facebook.com/MitekSystemsSee Mitek on YouTube:
http://www.youtube.com/miteksystemsRead Mitek’s latest blog post:
http://www.miteksystems.com/blog
Investor Contact:Todd Kehrli or Jim ByersMKR
Group, Inc.mitk@mkr-group.com
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