MITK Mitek Systems Inc

Mitek Systems, Inc. (NASDAQ: MITK, www.miteksystems.com, “Mitek” or the “Company”), a global leader in digital identity verification, mobile capture and fraud management, today reported financial results for its fourth quarter ended September 30, 2024 and provided guidance for its 2025 fiscal year ending September 30, 2025.

“We reported a solid quarter of year over year revenue growth, profitability and cash generation driven by our team’s hard work and operational focus,” stated Mitek CFO, Dave Lyle. “The Mitek team has done a tremendous job in delivering value to our customers while we are focusing on driving efficient revenue growth over the long-term.”

"Mitek has a rich and deep history with financial institutions and other highly regulated businesses that require comprehensive, enterprise level solutions. This experience, combined with our market leading technologies, innovation and domain expertise, position us well following a year of significant change,” commented Ed West, Mitek’s recently appointed CEO. “By advancing our AI-driven solutions and expanding our fraud and identity detection capabilities, we are well positioned to address the growing fraud threats of the digital economy. In the near term, we are focused on refining strategies and optimizing resources to ensure organic growth and operational excellence, while building a foundation for long-term success and driving shareholder value,” added West.

Fiscal 2024 Fourth Quarter Financial Highlights

GAAP

• Revenue of $43.2 million grew 15% year-over-year, compared to $37.7 million a year ago.
• GAAP operating income was $7.7 million, compared to negative $3.3 million a year ago.
• GAAP operating margin was 18%, compared to negative 9% a year ago.
• GAAP net income was $8.6 million, compared to a GAAP net loss of $1.4 million a year ago.
• GAAP net income per diluted share was $0.18, compared to negative $0.03 a year ago.
• Total cash and investments was $141.8 million at September 30, 2024, an increase of $8.6 million from $133.2 million at June 30, 2024.
• Mitek repurchased 1.4 million shares at an average per share price of $9.94, totaling approximately $14.2 million.

Non-GAAP

• Adjusted EBITDA was $15.4 million, compared to $5.9 million a year ago.
• Adjusted EBITDA margin was 36%, compared to 16% a year ago.
• Non-GAAP operating income was $15.0 million, compared to $5.4 million a year ago.
• Non-GAAP operating margin was 35%, compared to 14% a year ago.
• Non-GAAP net income was $15.5 million, compared to $6.9 million a year ago.
• Non-GAAP net income per diluted share was $0.33, compared to $0.15 a year ago.

Fiscal 2024 Full Year Financial Highlights

GAAP

• Revenue was $172.1 million, compared to $172.6 million a year ago.
• GAAP operating income was $2.2 million, compared to $15.6 million a year ago.
• GAAP operating margin was 1%, compared to 9% a year ago.
• GAAP net income was $3.3 million, compared to $8.0 million a year ago.
• GAAP net income per diluted share was $0.07, compared to $0.17 per diluted share a year ago.
• Mitek repurchased 2.2 million shares at an average per share price of $10.78, totaling approximately $24.2 million with a plan that was authorized in May of this year.

Non-GAAP

• Adjusted EBITDA was $46.7 million, compared to $55.0 million a year ago.
• Adjusted EBITDA margin was 27%, compared to 32% a year ago.
• Non-GAAP operating income was $44.9 million, compared to $51.2 million a year ago.
• Non-GAAP operating margin was 26%, compared to 30% a year ago.
• Non-GAAP net income was $45.4 million, compared to $44.4 million a year ago.
• Non-GAAP net income per diluted share was $0.96, compared to $0.95 a year ago.
• Free Cash Flow was $30.3 million, compared to $30.6 million a year ago.

Fiscal 2025 Full Year Guidance

Mitek is providing guidance for its fiscal year ending September 30, 2025, as follows:

• Mitek expects fiscal 2025 full-year revenue to be between $170 million and $180 million.
• Mitek expects its fiscal 2025 full-year adjusted EBITDA margin to be between 24% and 28%.

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 its fiscal 2024 fourth quarter and full year ended September 30, 2024. To access the live call, dial 844-481-3005 (US and Canada) or +1 412-317-1889 (International) and ask to be joined to the Mitek call. A live and archived conference call webcast 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 after the end of the call and 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: 2834298.

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. With solutions trusted by 7,900 organizations around the world, including the majority of North American financial institutions which rely on our mobile check deposit solutions, 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 fiscal 2025 guidance, 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 or investigation, 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, 2024, as filed with the SEC on December 16, 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 cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income, non-GAAP net income per share, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin and non-GAAP operating expense 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, restructuring costs and amortization of debt discount and issuance 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. The Company expects these items may have a potentially significant impact on future GAAP financial results.

We define free cash flow as net cash provided by operating activities, less cash used for purchases of property and equipment. We define free cash flow margin as free cash flow as a percentage of revenue. In addition to the reasons stated above, we believe that free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment in order to enhance the strength of our balance sheet and further invest in our business and potential strategic initiatives. A limitation of the utility of free cash flow as a measure of our liquidity is that it does not represent the total increase or decrease in our cash balance for the period. We use free cash flow in conjunction with traditional U.S. GAAP measures as part of our overall assessment of our liquidity, including the preparation of our annual operating budget and quarterly forecasts and to evaluate the effectiveness of our business strategies. There are a number of limitations related to the use of free cash flow as compared to net cash provided by operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

Mitek encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate Mitek’s business.

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,

 

2024

 

2023

 

2024

 

2023

Revenue

 

 

 

 

 

 

 

Software and hardware

$

18,341

 

$

15,291

 

 

$

81,872

 

 

$

88,374

 

Services and other

 

24,881

 

 

22,365

 

 

 

90,211

 

 

 

84,178

 

Total revenue

 

43,222

 

 

37,656

 

 

 

172,083

 

 

 

172,552

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of revenue—software and hardware (exclusive of depreciation & amortization)

 

186

 

 

597

 

 

 

309

 

 

 

1,413

 

Cost of revenue—services and other (exclusive of depreciation & amortization)

 

5,978

 

 

5,675

 

 

 

24,086

 

 

 

21,538

 

Selling and marketing

 

9,538

 

 

11,117

 

 

 

40,769

 

 

 

40,551

 

Research and development

 

6,073

 

 

6,484

 

 

 

34,642

 

 

 

28,988

 

General and administrative

 

9,908

 

 

13,212

 

 

 

52,993

 

 

 

43,338

 

Amortization and acquisition-related costs

 

3,710

 

 

3,744

 

 

 

15,291

 

 

 

19,046

 

Restructuring costs

 

114

 

 

114

 

 

 

1,762

 

 

 

2,114

 

Total operating costs and expenses

 

35,507

 

 

40,943

 

 

 

169,852

 

 

 

156,988

 

Operating income (loss)

 

7,715

 

 

(3,287

)

 

 

2,231

 

 

 

15,564

 

Interest expense

 

2,364

 

 

2,401

 

 

 

9,259

 

 

 

9,063

 

Other income (expense), net

 

1,851

 

 

2,121

 

 

 

6,119

 

 

 

3,840

 

Income (loss) before income taxes

 

7,202

 

 

(3,567

)

 

 

(909

)

 

 

10,341

 

Income tax benefit (provision)

 

1,371

 

 

2,123

 

 

 

4,187

 

 

 

(2,314

)

Net income (loss)

$

8,573

 

$

(1,444

)

 

$

3,278

 

 

$

8,027

 

Net income (loss) per share—basic

$

0.19

 

$

(0.03

)

 

$

0.07

 

 

$

0.18

 

Net income (loss) per share—diluted

$

0.18

 

$

(0.03

)

 

$

0.07

 

 

$

0.17

 

Shares used in calculating net income (loss) per share—basic

 

45,952

 

 

45,997

 

 

 

46,560

 

 

 

45,533

 

Shares used in calculating net income (loss) per share—diluted

 

46,573

 

 

47,050

 

 

 

47,468

 

 

 

46,461

 

MITEK SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(amounts in thousands except share data)

 

 

 

 

 

September 30, 2024

 

September 30, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

93,456

 

 

$

58,913

 

Short-term investments

 

36,884

 

 

 

74,700

 

Accounts receivable, net

 

31,682

 

 

 

32,132

 

Contract assets, current portion

 

15,818

 

 

 

18,355

 

Prepaid expenses

 

4,514

 

 

 

3,513

 

Other current assets

 

2,697

 

 

 

2,396

 

Total current assets

 

185,051

 

 

 

190,009

 

Long-term investments

 

11,410

 

 

 

1,304

 

Property and equipment, net

 

2,564

 

 

 

2,829

 

Right-of-use assets

 

4,662

 

 

 

4,140

 

Goodwill and intangible assets

 

185,711

 

 

 

188,222

 

Deferred income tax assets

 

19,145

 

 

 

11,645

 

Contract assets, non-current portion

 

3,620

 

 

 

5,579

 

Other non-current assets

 

1,590

 

 

 

1,647

 

Total assets

$

413,753

 

 

$

405,375

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,236

 

 

$

7,589

 

Accrued payroll and related taxes

 

10,324

 

 

 

10,554

 

Accrued liabilities

 

424

 

 

 

26

 

Accrued interest payable

 

205

 

 

 

305

 

Income tax payables

 

162

 

 

 

4,329

 

Deferred revenue, current portion

 

21,231

 

 

 

17,360

 

Lease liabilities, current portion

 

805

 

 

 

1,902

 

Acquisition-related contingent consideration

 

—

 

 

 

7,976

 

Other current liabilities

 

1,760

 

 

 

1,456

 

Total current liabilities

 

42,147

 

 

 

51,497

 

Convertible senior notes

 

143,601

 

 

 

135,516

 

Deferred revenue, non-current portion

 

753

 

 

 

957

 

Lease liabilities, non-current portion

 

4,230

 

 

 

2,867

 

Deferred income tax liabilities

 

3,889

 

 

 

6,476

 

Other non-current liabilities

 

4,332

 

 

 

2,874

 

Total liabilities

 

198,952

 

 

 

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, 44,998,939 and 45,591,199 issued and outstanding, as of September 30, 2024 and September 30, 2023, respectively

 

45

 

 

 

46

 

Additional paid-in capital

 

247,326

 

 

 

228,691

 

Accumulated other comprehensive loss

 

(2,302

)

 

 

(14,237

)

Accumulated deficit

 

(30,268

)

 

 

(9,312

)

Total stockholders’ equity

 

214,801

 

 

 

205,188

 

Total liabilities and stockholders’ equity

$

413,753

 

 

$

405,375

 

MITEK SYSTEMS, INC.

DISAGGREGATION OF REVENUE BY PRODUCT AND TYPE

(Unaudited)

(amounts in thousands except share data)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Deposits

 

 

 

 

 

 

 

Deposits software and hardware

 

 

 

 

 

 

 

Software

$

15,773

 

$

13,243

 

$

74,108

 

$

78,212

Hardware

 

—

 

 

—

 

 

—

 

 

—

Total deposits software and hardware

 

15,773

 

 

13,243

 

 

74,108

 

 

78,212

Deposits services

 

 

 

 

 

 

 

SaaS

 

1,799

 

 

1,281

 

 

6,406

 

 

4,299

Maintenance

 

5,846

 

 

5,511

 

 

22,275

 

 

20,710

Professional services / other

 

266

 

 

264

 

 

769

 

 

913

Total deposits services

 

7,911

 

 

7,056

 

 

29,450

 

 

25,922

Total deposits revenue

 

23,684

 

 

20,299

 

 

103,558

 

 

104,134

 

 

 

 

 

 

 

 

Identity

 

 

 

 

 

 

 

Identity software and hardware

 

 

 

 

 

 

 

Software

 

2,568

 

 

1,801

 

 

7,631

 

 

8,796

Hardware

 

—

 

 

247

 

 

133

 

 

1,366

Total identity software and hardware

 

2,568

 

 

2,048

 

 

7,764

 

 

10,162

Identity services

 

 

 

 

 

 

 

SaaS

 

16,188

 

 

14,178

 

 

57,182

 

 

55,149

Maintenance

 

463

 

 

723

 

 

2,074

 

 

1,910

Professional services / other

 

319

 

 

408

 

 

1,505

 

 

1,197

Total identity services

 

16,970

 

 

15,309

 

 

60,761

 

 

58,256

Total identity revenue

 

19,538

 

 

17,357

 

 

68,525

 

 

68,418

Total Revenue

$

43,222

 

$

37,656

 

$

172,083

 

$

172,552

MITEK SYSTEMS, INC.

NON-GAAP GROSS PROFIT RECONCILIATION

(Unaudited)

(amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Software and Hardware

 

 

 

 

 

 

 

Revenue

$

18,341

 

 

$

15,291

 

 

$

81,872

 

 

$

88,374

 

Cost of revenue (exclusive of depreciation and amortization)

 

186

 

 

 

597

 

 

 

309

 

 

 

1,413

 

Depreciation and amortization

 

1,189

 

 

 

1,113

 

 

 

4,634

 

 

 

4,436

 

GAAP gross profit for software and hardware

 

16,966

 

 

 

13,581

 

 

 

76,929

 

 

 

82,525

 

Depreciation and amortization

 

1,189

 

 

 

1,113

 

 

 

4,634

 

 

 

4,436

 

Non-GAAP gross profit for software and hardware

$

18,155

 

 

$

14,694

 

 

$

81,563

 

 

$

86,961

 

 

 

 

 

 

 

 

 

GAAP gross margin for software and hardware

 

92.5

%

 

 

88.8

%

 

 

94.0

%

 

 

93.4

%

Non-GAAP gross margin for software and hardware

 

99.0

%

 

 

96.1

%

 

 

99.6

%

 

 

98.4

%

 

 

 

 

 

 

 

 

Services & Other

 

 

 

 

 

 

 

Services and other revenue

$

24,881

 

 

$

22,365

 

 

$

90,211

 

 

$

84,178

 

Cost of revenue (exclusive of depreciation and amortization)

 

5,978

 

 

 

5,675

 

 

 

24,086

 

 

 

21,538

 

Depreciation and amortization

 

2,162

 

 

 

2,062

 

 

 

8,473

 

 

 

8,201

 

GAAP gross profit for services and other

 

16,741

 

 

 

14,628

 

 

 

57,652

 

 

 

54,439

 

Depreciation and amortization

 

2,162

 

 

 

2,062

 

 

 

8,473

 

 

 

8,201

 

Stock-based compensation expense

 

127

 

 

 

152

 

 

 

574

 

 

 

468

 

Non-GAAP gross profit for services and other

$

19,030

 

 

$

16,842

 

 

$

66,699

 

 

$

63,108

 

 

 

 

 

 

 

 

 

GAAP gross margin for services and other

 

67.3

%

 

 

65.4

%

 

 

63.9

%

 

 

64.7

%

Non-GAAP gross margin for services and other

 

76.5

%

 

 

75.3

%

 

 

73.9

%

 

 

75.0

%

 

 

 

 

 

 

 

 

Consolidated Results

 

 

 

 

 

 

 

Total revenue

$

43,222

 

 

$

37,656

 

 

$

172,083

 

 

$

172,552

 

Cost of revenue (exclusive of depreciation and amortization)

 

6,164

 

 

 

6,272

 

 

 

24,395

 

 

 

22,951

 

Depreciation and amortization

 

3,351

 

 

 

3,175

 

 

 

13,107

 

 

 

12,637

 

GAAP gross profit

 

33,707

 

 

 

28,209

 

 

 

134,581

 

 

 

136,964

 

Depreciation and amortization

 

3,351

 

 

 

3,175

 

 

 

13,107

 

 

 

12,637

 

Stock-based compensation expense

 

127

 

 

 

152

 

 

 

574

 

 

 

468

 

Non-GAAP gross profit

$

37,185

 

 

$

31,536

 

 

$

148,262

 

 

$

150,069

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

78.0

%

 

 

74.9

%

 

 

78.2

%

 

 

79.4

%

Non-GAAP gross margin

 

86.0

%

 

 

83.7

%

 

 

86.2

%

 

 

87.0

%

MITEK SYSTEMS, INC.

NON-GAAP OPERATING EXPENSE RECONCILIATION

(Unaudited)

(amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Selling and marketing

$

9,538

 

 

$

11,117

 

$

40,769

 

$

40,551

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation expense

 

462

 

 

 

600

 

 

3,041

 

 

3,023

Non-GAAP Selling and marketing

$

9,076

 

 

$

10,517

 

$

37,728

 

$

37,528

 

 

 

 

 

 

 

 

Research and development

$

6,073

 

 

$

6,484

 

$

34,642

 

$

28,988

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation expense

 

(383

)

 

 

660

 

 

3,368

 

 

2,757

Non-GAAP Research and development

$

6,456

 

 

$

5,824

 

$

31,274

 

$

26,231

 

 

 

 

 

 

 

 

General and administrative

$

9,908

 

 

$

13,212

 

$

52,993

 

$

43,338

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation expense

 

1,517

 

 

 

1,261

 

 

5,641

 

 

4,215

Litigation and other legal costs

 

251

 

 

 

250

 

 

3,496

 

 

1,369

Executive transition costs

 

599

 

 

 

7

 

 

2,632

 

 

679

Non-recurring audit fees

 

931

 

 

 

1,816

 

 

5,956

 

 

4,001

Enterprise risk, portfolio positioning and other related costs

 

—

 

 

 

—

 

 

996

 

 

—

Non-GAAP General and administrative

$

6,610

 

 

$

9,878

 

$

34,272

 

$

33,074

 

 

 

 

 

 

 

 

Total Non-GAAP Operating Expense

$

22,142

 

 

$

26,219

 

$

103,274

 

$

96,833

MITEK SYSTEMS, INC.

STOCK-BASED COMPENSATION EXPENSE

(Unaudited)

(amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Cost of revenue

$

127

 

 

$

152

 

$

574

 

$

468

Selling and marketing

 

462

 

 

 

600

 

 

3,041

 

 

3,023

Research and development

 

(383

)

 

 

660

 

 

3,368

 

 

2,757

General and administrative

 

1,517

 

 

 

1,261

 

 

5,641

 

 

4,215

Total stock-based compensation expense

$

1,723

 

 

$

2,673

 

$

12,624

 

$

10,463

MITEK SYSTEMS, INC.

NON-GAAP OPERATING INCOME RECONCILIATION

(Unaudited)

(amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

GAAP operating income (loss)

$

7,715

 

 

$

(3,287

)

 

$

2,231

 

 

$

15,564

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

3,711

 

 

 

3,784

 

 

 

15,156

 

 

 

16,992

 

Net changes in estimated fair value of acquisition-related contingent consideration

 

—

 

 

 

(38

)

 

 

136

 

 

 

2,056

 

Intellectual property litigation and other legal costs

 

251

 

 

 

250

 

 

 

3,496

 

 

 

1,369

 

Executive transition costs

 

599

 

 

 

7

 

 

 

2,632

 

 

 

679

 

Stock-based compensation expense

 

1,723

 

 

 

2,673

 

 

 

12,624

 

 

 

10,463

 

Non-recurring audit fees

 

931

 

 

 

1,816

 

 

 

5,956

 

 

 

4,001

 

Enterprise risk, portfolio positioning and other related costs

 

—

 

 

 

—

 

 

 

996

 

 

 

—

 

Restructuring costs

 

114

 

 

 

114

 

 

 

1,762

 

 

 

2,114

 

Non-GAAP operating income (loss)

$

15,044

 

 

$

5,319

 

 

$

44,989

 

 

$

53,238

 

Revenue

$

43,222

 

 

$

37,656

 

 

$

172,083

 

 

$

172,552

 

Non-GAAP Operating Margin

 

35

%

 

 

14

%

 

 

26

%

 

 

31

%

MITEK SYSTEMS, INC.

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

(amounts in thousands except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP net income (loss)

$

8,573

 

 

$

(1,444

)

 

$

3,278

 

 

$

8,027

 

Add:

 

 

 

 

 

 

 

Income tax (benefit) provision

 

(1,371

)

 

 

(2,123

)

 

 

(4,187

)

 

 

2,314

 

Other (income) expense, net

 

(1,851

)

 

 

(2,121

)

 

 

(6,119

)

 

 

(3,840

)

Interest Expense

 

2,364

 

 

 

2,401

 

 

 

9,259

 

 

 

9,063

 

GAAP operating income (loss)

$

7,715

 

 

$

(3,287

)

 

$

2,231

 

 

$

15,564

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

Depreciation and amortization

$

375

 

 

$

540

 

 

$

1,755

 

 

$

1,727

 

Amortization of intangibles

 

3,711

 

 

 

3,784

 

 

 

15,156

 

 

 

16,992

 

Net changes in estimated fair value of acquisition-related contingent consideration

 

—

 

 

 

(38

)

 

 

136

 

 

 

2,056

 

Litigation and other legal costs

 

251

 

 

 

250

 

 

 

3,496

 

 

 

1,369

 

Executive transition costs

 

599

 

 

 

7

 

 

 

2,632

 

 

 

679

 

Stock-based compensation expense

 

1,723

 

 

 

2,673

 

 

 

12,624

 

 

 

10,463

 

Non-recurring audit fees

 

931

 

 

 

1,816

 

 

 

5,956

 

 

 

4,001

 

Enterprise risk, portfolio positioning and other related costs

 

—

 

 

 

—

 

 

 

996

 

 

 

—

 

Restructuring costs

 

114

 

 

 

114

 

 

 

1,762

 

 

 

2,114

 

Adjusted EBITDA

$

15,419

 

 

$

5,859

 

 

$

46,744

 

 

$

54,965

 

Total revenue

$

43,222

 

 

$

37,656

 

 

$

172,083

 

 

$

172,552

 

Adjusted EBITDA margin

 

36

%

 

 

16

%

 

 

27

%

 

 

32

%

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,

 

2024

 

2023

 

2024

 

2023

Net income (loss)

$

8,573

 

 

$

(1,444

)

 

$

3,278

 

 

$

8,027

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles

 

3,711

 

 

 

3,784

 

 

 

15,156

 

 

 

16,992

 

Net changes in estimated fair value of acquisition-related contingent consideration

 

—

 

 

 

(38

)

 

 

136

 

 

 

2,056

 

Litigation and other legal costs(1)

 

251

 

 

 

250

 

 

 

3,496

 

 

 

1,369

 

Executive transition costs

 

599

 

 

 

7

 

 

 

2,632

 

 

 

679

 

Stock-based compensation expense

 

1,723

 

 

 

2,673

 

 

 

12,624

 

 

 

10,463

 

Non-recurring audit fees

 

931

 

 

 

1,816

 

 

 

5,956

 

 

 

4,001

 

Enterprise risk, portfolio positioning and other related costs(2)

 

—

 

 

 

—

 

 

 

996

 

 

 

—

 

Restructuring costs(3)

 

114

 

 

 

114

 

 

 

1,762

 

 

 

2,114

 

Amortization of debt discount and issuance costs

 

2,112

 

 

 

1,937

 

 

 

8,169

 

 

 

7,546

 

Income tax effect of pre-tax adjustments

 

(2,696

)

 

 

(1,002

)

 

 

(11,970

)

 

 

(10,115

)

Cash tax difference(4)

 

211

 

 

 

(1,175

)

 

 

3,151

 

 

 

1,235

 

Non-GAAP net income

$

15,529

 

 

$

6,922

 

 

$

45,386

 

 

$

44,367

 

Non-GAAP income per share—basic

$

0.34

 

 

$

0.15

 

 

$

0.97

 

 

$

0.97

 

Non-GAAP income per share—diluted

$

0.33

 

 

$

0.15

 

 

$

0.96

 

 

$

0.95

 

Shares used in calculating non-GAAP net income per share—basic

 

45,952

 

 

 

45,997

 

 

 

46,560

 

 

 

45,533

 

Shares used in calculating non-GAAP net income per share—diluted

 

46,573

 

 

 

47,050

 

 

 

47,468

 

 

 

46,461

 

(1)

During the twelve months ended month periods ended September 30, 2023 and September 30, 2024, our legal team used third party legal experts to perform and provide advice regarding a variety of activities including intellectual property litigation matters and risk analysis and in providing support for customers in their litigation, matters and options related to getting our SEC filings current, the process for a potential delisting from the Nasdaq Capital Market, ongoing litigation support, and various other projects.

(2)

During the twelve months ended September 30, 2024, we used three third party experts to evaluate our product portfolio positioning, competitive landscape, enterprise risk and other related analyses.

(3)

Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $1.8 million in the twelve months ended September 30, 2024 and were related to expenses incurred to relocate employees and a restructuring that occurred in the third quarter of fiscal 2024. Restructuring costs were $2.1 million in the twelve months ended September 30, 2023 and were related to a restructuring plan that was initially implemented in June and November 2022.

(4)

The Company’s non-GAAP net income is calculated using a cash tax rate of 9% in fiscal 2024 and 23% 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 461% and 22%, respectively.

MITEK SYSTEMS, INC.

NON-GAAP FREE CASH FLOW RECONCILIATION

(Unaudited)

(amounts in thousands)

 

Twelve Months Ended September 30,

 

2024

 

2023

 

2022

Net cash provided by (used in) operating activities

$

31,688

 

 

$

31,586

 

 

$

21,119

 

Less:

 

 

 

 

 

Purchases of property and equipment, net

 

(1,438

)

 

 

(1,034

)

 

 

(1,126

)

Free Cash Flow

$

30,250

 

 

$

30,552

 

 

$

19,993

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216914766/en/

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