Company Reiterates Guidance for Fiscal 2024
Please replace the release dated April 15, 2024, with the
following corrected version due to revisions to the sixth and
seventh bulleted sentences, and to the first sentence of
Conference Call Information.
The updated release reads:
MITEK REPORTS FISCAL 2024 FIRST QUARTER
FINANCIAL RESULTS AND PROVIDES PRELIMINARY SECOND QUARTER REVENUE
RESULTS
Company Reiterates Guidance for Fiscal 2024
Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek”
or the “Company”), a global leader in digital identity and fraud
prevention, today reported financial results for its first quarter
ended December 31, 2023, and provided select preliminary results
for its second quarter ended March 31, 2024. Mitek also reiterated
its previously provided guidance for its 2024 fiscal year ending
September 30, 2024.
Fiscal 2024 First Quarter Financial Results
- Total revenue was $36.9 million, compared to $45.7 million a
year ago.
- GAAP operating loss was $6.9 million, an operating margin of
negative 19%, compared to GAAP operating income of $8.4 million, an
operating margin of 18% a year ago.
- GAAP net loss was $5.8 million, or negative $0.13 per diluted
share, compared to GAAP net income of $4.7 million, or $0.10 per
diluted share a year ago.
- Non-GAAP operating income was $5.6 million and non-GAAP
operating margin was 15%, compared to non-GAAP operating income of
$18.4 million and a non-GAAP operating margin of 40% last
year.
- Non-GAAP net income was $6.3 million, or $0.14 per diluted
share, compared to $14.3 million, or $0.31 per diluted share last
year.
- Cash flow from operations was a negative $9.5 million,
primarily driven by $7.8 million in cash taxes paid for FY2023
during the quarter.
- Total cash and investments was $123.9 million at December 31,
2023, compared to $134.9 million on September 30, 2023. The
decrease was primarily driven by the $7.8 million cash taxes paid
mentioned above and $4.6 million in cash paid for the final ID
R&D earnout payment.
Preliminary Fiscal 2024 Second Quarter Revenue
Results
- Mitek expects fiscal second quarter revenue to be in the range
of $46 million to $47 million. The Company’s independent auditor
has not reviewed or audited these preliminary estimated financial
results. The Company’s actual results may differ materially from
these preliminary financial results, and may be outside the
estimated ranges. This preliminary financial data has been prepared
by and is the responsibility of the Company. The Company has not
fully completed its review of these preliminary financial results
for the fiscal quarter ended March 31, 2024.
Mitek CEO Max Carnecchia’s Comments
“As previously discussed, in the first quarter of last year we
had a large one-time multi-year mobile deposit reorder that pulled
forward about $7 million of future year revenue into that quarter,
including $2.7 million that would have been recognized in fiscal
Q1’24, creating a very difficult year over year comparison. It’s
important to note that this quarter’s results are not
representative of a business trend, in fact, to the contrary. With
our fiscal 2024 guidance, which we are reiterating today, we expect
our Deposits product revenue to grow 10 to 12% year over year on a
normalized basis and our Identity product revenue to grow 10 to 12%
year over year. We anticipate that much of this growth will occur
in the second half of the fiscal year, with growth continuing in
fiscal 2025. Having achieved product market fit with our new
products, including Check Fraud Defender, MiVIP, MiPass and ID
R&D biometrics software products, we have several growth
drivers in place leveraging advanced AI and machine learning to
meet evolving customer needs to enhance trust and convenience in
digital interactions.”
Fiscal 2024 Full Year Guidance
Mitek is reiterating its previously provided guidance for its
fiscal year ending September 30, 2024, as follows:
- Mitek expects full-year revenue to be in the range of $180.0
million to $185.0 million, a 6% growth rate at the midpoint of the
range. In fiscal 2023, Mitek signed a large multi-year mobile
deposit reorder with one customer that locked in favorable pricing
over a four-year period. Due to the unique terms of this contract,
Mitek recognized additional license revenue relating to future
years of approximately $7.0 million in fiscal 2023. If the Company
backs out the future year revenue of $7 million from its fiscal
2023 revenue and attributes the $2.7 million that would have been
attributable to fiscal 2024 to the midpoint of the fiscal 2024
revenue guidance, it would represent growth of approximately 12.0%
at the revised midpoint.
- Mitek expects its non-GAAP operating margin for fiscal 2024 to
be between 30.0% and 31.0%.
Conference Call Information
Mitek management will host a conference call and live webcast
for analysts and investors today at 2:00 p.m. Pacific Time (5:00
p.m. Eastern Time) to discuss the Company’s financial results for
the first quarter ending December 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 also be accessible on the
Investor Relations section of the Company’s website at
www.miteksystems.com. 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: 1577571.
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, X 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 select preliminary
revenue results for the second quarter ended March 31, 2024, the
Company’s fiscal 2024 guidance, its expectation regarding timing of
revenue growth, its intent to use its growth drivers in place that
leverage advanced AI and machine learning to meet evolving customer
needs and its intent to enhance trust and convenience in digital
interactions, 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, 2023, as filed with the SEC on March 19,
2024 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, litigation and other legal
costs, executive transition costs, stock compensation expense,
non-recurring audit fees, enterprise risk, portfolio positioning
and other related costs, and restructuring costs. 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.
MITEK SYSTEMS, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(amounts in thousands except
share data)
December 31, 2023
September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
64,538
$
58,913
Short-term investments
59,373
74,700
Accounts receivable, net
35,267
32,132
Contract assets, current portion
17,305
18,355
Prepaid expenses
6,908
3,513
Other current assets
2,573
2,396
Total current assets
185,964
190,009
Long-term investments
—
1,304
Property and equipment, net
2,695
2,829
Right-of-use assets
3,837
4,140
Goodwill and intangible assets
190,837
188,222
Deferred income tax assets
13,388
11,645
Contract assets, non-current portion
7,216
5,579
Other non-current assets
1,453
1,647
Total assets
405,390
405,375
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
10,169
7,589
Accrued payroll and related taxes
7,063
10,554
Accrued interest payable
598
305
Income tax payables
51
4,329
Deferred revenue, current portion
18,330
17,360
Lease liabilities, current portion
1,569
1,902
Acquisition-related contingent
consideration
—
7,976
Other current liabilities
1,820
1,482
Total current liabilities
39,600
51,497
Convertible senior notes
137,486
135,516
Deferred revenue, non-current portion
1,051
957
Lease liabilities, non-current portion
2,792
2,867
Deferred income tax liabilities,
non-current portion
6,757
6,476
Other non-current liabilities
3,906
2,874
Total liabilities
191,592
200,187
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, 46,631,594 and 45,591,199 issued and
outstanding, as of December 31, 2023 and September 30, 2023,
respectively
47
46
Additional paid-in capital
236,447
228,691
Accumulated other comprehensive loss
(7,591
)
(14,237
)
Accumulated deficit
(15,105
)
(9,312
)
Total stockholders’ equity
213,798
205,188
Total liabilities and stockholders’
equity
$
405,390
$
405,375
MITEK SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(amounts in thousands except
per share data)
Three Months Ended December
31,
2023
2022
Revenue
Software and hardware
$
15,980
$
26,376
Services and other
20,937
19,327
Total revenue
36,917
45,703
Operating costs and expenses
Cost of revenue—software and hardware
(exclusive of depreciation & amortization)
40
169
Cost of revenue—services and other
(exclusive of depreciation & amortization)
5,494
4,900
Selling and marketing
9,856
9,515
Research and development
8,874
7,670
General and administrative
15,538
8,479
Amortization and acquisition-related
costs
3,983
4,821
Restructuring costs
48
1,776
Total operating costs and expenses
43,833
37,330
Operating income (loss)
(6,916
)
8,373
Interest expense
2,263
2,137
Other income, net
1,642
336
Income (loss) before income taxes
(7,537
)
6,572
Income tax benefit (provision)
1,744
(1,846
)
Net income (loss)
$
(5,793
)
$
4,726
Net income (loss) per share—basic
$
(0.13
)
$
0.11
Net income (loss) per share—diluted
$
(0.13
)
$
0.10
Shares used in calculating net income
(loss) per share—basic
46,294
44,930
Shares used in calculating net income
(loss) per share—diluted
46,294
45,634
MITEK SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(amounts in thousands)
Three Months Ended December
31,
2023
2022
Operating activities:
Net income (loss)
$
(5,793
)
$
4,726
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Stock-based compensation expense
3,430
2,442
Amortization of intangible assets
3,847
4,487
Depreciation and amortization
391
343
Amortization of investment premiums &
other
(1,398
)
13
Accretion and amortization on debt
securities
1,970
1,844
Net changes in estimated fair value of
acquisition-related contingent consideration
136
330
Deferred taxes
(1,708
)
(3,459
)
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable
(2,771
)
58
Contract assets
(511
)
(5,507
)
Other assets
(3,192
)
(154
)
Accounts payable
2,520
980
Accrued payroll and related taxes
(3,704
)
(4,174
)
Income taxes payable
(4,254
)
5,149
Deferred revenue
857
(1,521
)
Restructuring accrual
—
(651
)
Other liabilities
717
354
Net cash provided by (used in) operating
activities
(9,463
)
5,260
Investing activities:
Purchases of investments
(14,991
)
—
Sales and maturities of investments
33,121
18,750
Purchases of property and equipment,
net
(241
)
(154
)
Net cash provided by (used in) investing
activities
17,889
18,596
Financing activities:
Proceeds from the issuance of equity plan
common stock
856
662
Payment of acquisition-related contingent
consideration
(4,641
)
—
Proceeds from other borrowings
707
—
Principal payments on other borrowings
(36
)
(36
)
Net cash provided by (used in) financing
activities
(3,114
)
626
Foreign currency effect on cash and cash
equivalents
313
574
Net increase in cash and cash
equivalents
5,625
25,056
Cash and cash equivalents at beginning of
period
58,913
32,059
Cash and cash equivalents at end of
period
$
64,538
$
57,115
MITEK SYSTEMS, INC.
DISAGGREGATION OF
REVENUE
(Unaudited)
(amounts in thousands)
Three Months Ended December
31,
2023
2022
Major product category
Deposits software and hardware
$
14,048
$
24,453
Deposits services and other
7,029
5,828
Deposits revenue
21,077
30,281
Identity verification software and
hardware
1,932
1,923
Identity verification services and
other
13,908
13,499
Identity verification revenue
15,840
15,422
Total revenue
$
36,917
$
45,703
MITEK SYSTEMS, INC.
NON-GAAP NET INCOME
RECONCILIATION
(Unaudited)
(amounts in thousands except
per share data)
Three Months Ended December
31,
2023
2022
Net income (loss)
$
(5,793
)
$
4,726
Non-GAAP adjustments:
Acquisition-related costs and expenses
3,984
4,821
Litigation and other legal costs
2,169
253
Executive transition costs
209
—
Stock compensation expense
3,430
2,442
Non-recurring audit fees
1,638
740
Enterprise risk, portfolio positioning and
other related costs
996
—
Restructuring costs
48
1,776
Amortization of debt discount and issuance
costs
1,970
1,844
Income tax effect of pre-tax
adjustments
(2,967
)
(2,992
)
Cash tax difference(1)
641
662
Non-GAAP net income
$
6,325
$
14,272
Non-GAAP income per share—basic
$
0.14
$
0.32
Non-GAAP income per share—diluted
$
0.14
$
0.31
Shares used in calculating non-GAAP net
income per share—basic
46,294
44,930
Shares used in calculating non-GAAP net
income per share—diluted
46,294
45,634
(1)
The Company’s non-GAAP net income is
calculated using a cash tax rate of 13% in fiscal 2024 and 24% in
fiscal 2023. 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, and the utilization of research and
development tax credits 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 fiscal 2024 and 2023 was 23% and
28%, respectively.
MITEK SYSTEMS, INC.
NON-GAAP OPERATING INCOME
RECONCILIATION
(Unaudited)
(amounts in thousands)
Three Months Ended December
31,
2023
2022
GAAP operating income
$
(6,916
)
$
8,373
Non-GAAP adjustments:
Acquisition-related costs and expenses
3,984
4,821
Litigation and other legal costs
2,169
253
Executive transition costs
209
—
Stock compensation expense
3,430
2,442
Non-recurring audit fees
1,638
740
Enterprise risk, portfolio positioning and
other related costs
996
—
Restructuring costs
48
1,776
Non-GAAP operating income
$
5,558
$
18,405
Total Revenue
$
36,917
$
45,703
Non-GAAP operating margin
15
%
40
%
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version on businesswire.com: https://www.businesswire.com/news/home/20240415818276/en/
Investor Contact: Todd Kehrli or Jim Byers MKR Investor
Relations, Inc. mitk@mkr-group.com
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