Mitek Surpasses $100 Million in Annual Revenue and Sets Financial Records

Rhea-AI Summary

Mitek (NASDAQ: MITK) reported record financial results for FY 2020, with fourth quarter revenue up 22% to $30.6 million and a full-year revenue increase of 20% to $101.3 million. GAAP net income for Q4 was $5.0 million, or $0.12 per diluted share, while non-GAAP net income rose 31% to $11.4 million, or $0.26 per diluted share. The company's strong performance is attributed to growing demand for mobile deposit and identity verification services. Mitek also appointed Kimberly S. Stevenson to its Board of Directors.

Positive

• Fourth quarter revenue rose 22% year over year to $30.6 million.
• Full year revenue increased 20% year over year to $101.3 million.
• GAAP net income for Q4 was $5.0 million, or $0.12 per diluted share.
• Non-GAAP net income for Q4 grew 31% year over year to $11.4 million.
• Cash flow from operations was $6.7 million in Q4.
• Total cash and investments reached $62.0 million at the end of Q4.
• Non-GAAP net income for the full year increased 66% to $28.6 million.

Negative

• None.

Strong growth fueled by increased demand for both mobile deposit and identity verification

SAN DIEGO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Mitek (NASDAQ: MITK, www.miteksystems.com) today reported record financial results for both its fiscal 2020 fourth quarter and full year ended September 30, 2020. Total fourth quarter revenue increased 22% and full year revenue increased 20% year over year. These results were fueled by an increase in demand for both mobile deposit and identity verification capabilities, as more people and businesses transact online.

Fiscal Fourth Quarter 2020 Financial Highlights

• Total revenue increased 22% year over year to $30.6 million in a record quarter.
• GAAP net income was $5.0 million, or $0.12 per diluted share.
• Non-GAAP net income increased 31% year over year to a record $11.4 million, or $0.26 per diluted share.
• Cash flow from operations was $6.7 million.
• Total cash and investments were $62.0 million at the end of the fiscal fourth quarter.

Fiscal 2020 Full Year Financial Highlights

• Total revenue increased 20% year over year to a record $101.3 million.
• GAAP net income was $7.8 million, or $0.18 per diluted share.
• Non-GAAP net income increased 66% year over year to a record $28.6 million, or $0.67 per diluted share.
• Full year cash flow from operations was $24.1 million.

Commenting on the results, Max Carnecchia, CEO of Mitek, said:

“Fiscal 2020 was another outstanding year for Mitek and our third consecutive year with record revenue for each quarter. Mitek’s strong financial performance reflects the team’s commitment to helping our customers and partners navigate this challenging environment as they accelerate their digital transformation.”

Mitek is committed to providing convenience while preventing fraud in the digital world. The company’s technology ensures that more businesses can transact digitally and secure their platforms through easy, fast and secure identity verification. Also, Mitek remains the clear market leader with its remote check deposit solution, with thousands of financial organizations using its products, and more than four billion transactions processed.

New Board Member

Today, Mitek announced the appointment of Kimberly S. Stevenson to its Board of Directors. Ms. Stevenson is a technology innovator who has transformed processes at some of the industry’s leading companies including Lenovo, Intel, DXC Technology, and IBM. She is currently a senior vice president and general manager at NetApp, Inc. In addition, she serves on the board of directors for Skyworks Solutions, Inc. and Boston Private Financial Holdings and previously held board positions with Riverbed Technology, Cloudera, and the National Center for Women and Information Technology. Ms. Stevenson has a Masters in Business Administration from Cornell University and a Bachelor of Science degree from Northeastern University.

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 800-353-6461 (US and Canada) or +1 334-323-0501 (International) and give the participant passcode 2685329.

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 built on the latest advancements in computer vision and artificial intelligence. Mitek’s identity verification 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’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, the extent to which the COVID-19 outbreak and measures taken in response thereto impact our business, results of operations and financial condition, 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, 2019, 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, acquisition-related costs and expenses, costs associated with our strategic process, executive transition costs, restructuring costs, income tax effect of pre-tax adjustments, 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, 2020				September 30, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	19,986			$	16,748
Short-term investments	40,035				16,502
Accounts receivable, net	15,612				14,938
Contract assets	5,187				2,350
Prepaid expenses	1,338				1,487
Other current assets	1,968				2,105
Total current assets	84,126				54,130
Long-term investments	1,963				1,552
Property and equipment, net	3,610				4,231
Right-of-use assets	5,407				—
Goodwill and intangible assets	54,958				57,041
Deferred income tax assets	13,484				16,596
Other non-current assets	5,606				2,347
Total assets	$	169,154			$	135,897
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,909			$	3,555
Accrued payroll and related taxes	8,882				6,410
Deferred revenue, current portion	7,973				5,612
Lease liabilities, current portion	1,819				—
Acquisition-related contingent consideration	753				1,036
Restructuring accrual	—				1,526
Other current liabilities	1,020				1,909
Total current liabilities	24,356				20,048
Deferred revenue, non-current portion	1,597				736
Lease liabilities, non-current portion	5,327				—
Deferred income tax liabilities	4,649				5,555
Other non-current liabilities	982				2,225
Total liabilities		36,911				28,564
Stockholders’ equity:
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding, as of September 30, 2020 and September 30, 2019	—				—
Common stock, $0.001 par value, 60,000,000 shares authorized, 41,779,853 and 40,367,456 issued and outstanding, as of September 30, 2020 and September 30, 2019, respectively	42				40
Additional paid-in capital	146,518				132,160
Accumulated other comprehensive loss	(323		)		(4,061		)
Accumulated deficit	(13,994		)		(20,806		)
Total stockholders’ equity	132,243				107,333
Total liabilities and stockholders’ equity	$	169,154			$	135,897

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,
	2020				2019				2020				2019
Revenue
Software and hardware	$	17,972			$	14,377			$	54,152			$	46,845
Services and other	12,666				10,641				47,158				37,745
Total revenue	30,638				25,018				101,310				84,590
Operating costs and expenses
Cost of revenue—software and hardware	1,045				1,121				3,303				3,711
Cost of revenue—services and other	2,532				2,108				9,889				8,555
Selling and marketing(1)	7,302				5,946				27,646				24,550
Research and development(1)	6,096				5,141				22,859				21,873
General and administrative	5,902				4,118				22,284				19,861
Acquisition-related costs and expenses	1,691				2,202				6,575				7,563
Restructuring costs	—				(147		)		(114		)		3,067
Total operating costs and expenses	24,568				20,489				92,442				89,180
Operating income (loss)	6,070				4,529				8,868				(4,590		)
Other income, net	61				350				541				602
Income (loss) before income taxes	6,131				4,879				9,409				(3,988		)
Income tax benefit (provision)	(1,135		)		(1,597		)		(1,595		)		3,264
Net income (loss)	$	4,996			$	3,282			$	7,814			$	(724	)
Net income (loss) per share—basic	$	0.12			$	0.08			$	0.19			$	(0.02	)
Net income per share—diluted	$	0.12			$	0.08			$	0.18			$	(0.02	)
Shares used in calculating net income (loss) per share—basic	41,770				40,252				41,410				39,341
Shares used in calculating net income (loss) per share—diluted	43,101				41,635				42,533				39,341

(1)   September 30, 2019 consolidated statements of operations reflect reclassifications to conform to the current year presentation.

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,
	2020				2019				2020				2019
Net income (loss)	$	4,996			$	3,282			$	7,814			$	(724	)
Non-GAAP adjustments:
Acquisition-related costs and expenses	1,691				2,202				6,575				7,563
Intellectual property litigation costs	1,186				515				3,217				849
Insurance settlement received(1)	—				(1,000		)		—				(1,000		)
Costs associated with strategic process	—				—				—				1,224
Executive transition costs(2)	—				—				—				251
Stock compensation expense	2,439				2,346				9,551				9,637
Restructuring costs	—				(147		)		(114		)		3,067
Income tax effect of pre-tax adjustments	(1,067		)		(879		)		(4,267		)		(4,851		)
Cash tax difference(3)	2,173				2,426				5,832				1,264
Non-GAAP net income	11,418				8,745				28,608				17,280
Non-GAAP income per share—basic	$	0.27			$	0.22			$	0.69			$	0.44
Non-GAAP income per share—diluted	$	0.26			$	0.21			$	0.67			$	0.42
Shares used in calculating non-GAAP net income per share—basic	41,770				40,252				41,410				39,341
Shares used in calculating non-GAAP net income per share—diluted	43,101				41,635				42,533				41,259

(1)	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.
(2)	Comprised of costs associated with the transition of the company’s former 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.
(3)	The company’s non-GAAP net income is calculated using a cash tax rate of 0% and 3% in fiscal years 2020 and 2019, 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 for the three months ended September 30, 2020 and 2019 was 19% and 33%, respectively. The company’s effective tax rate used for the purposes of calculating GAAP net income for the twelve months ended September 30, 2020 and 2019 was 17% and 82%, respectively.

________________ 

Investor Contact:
Todd Kehrli or Jim Byers
MKR Group, Inc.
mitk@mkr-group.com

FAQ

What were Mitek's fourth quarter results for 2020?

Mitek reported a 22% increase in fourth quarter revenue, reaching $30.6 million, with GAAP net income of $5.0 million.

How did Mitek perform in fiscal year 2020?

For fiscal year 2020, Mitek's total revenue increased by 20% to $101.3 million, with a GAAP net income of $7.8 million.

What is Mitek's stock symbol?

Mitek's stock symbol is MITK.

Who was appointed to Mitek's Board of Directors?

Kimberly S. Stevenson was appointed to Mitek's Board of Directors.

What factors contributed to Mitek's revenue growth?

Mitek's revenue growth was fueled by increased demand for mobile deposit and identity verification services.