mitk-20221231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-35231

MITEK SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Delaware						87-0418827
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

600 B Street, Suite 100
San Diego, California						92101
(Address of principal executive offices)						(Zip Code)

(619) 269-6800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MITK	The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 45,589,575 shares of the registrant’s common stock outstanding as of August 31, 2023.

MITEK SYSTEMS, INC.

FORM 10-Q

For The Quarterly Period Ended December 31, 2022

INDEX


	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets at December 31, 2022 (Unaudited) and September 30, 2022	1
	Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) for the Three Months Ended December 31, 2022 and 2021	2
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the Three Months Ended December 31, 2022 and 2021	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2022 and 2021	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	Signatures	36

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands except share data)


	December 31, 2022 (Unaudited)		September 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	57,115	$	32,059
Short-term investments	44,814		58,268
Accounts receivable, net	28,262		27,874
Contract assets, current portion	5,458		6,273
Prepaid expenses	2,269		2,000
Other current assets	2,773		2,622
Total current assets	140,691		129,096
Long-term investments	5,674		10,633
Property and equipment, net	3,367		3,493
Right-of-use assets	5,031		5,155
Intangible assets, net	76,601		75,756
Goodwill	128,184		120,186
Deferred income tax assets	13,759		10,245

Contract assets, non-current portion(1)	10,741		4,218
Other non-current assets(1)	1,565		1,628
Total assets	$	385,613	$	360,410
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,080	$	4,974
Accrued payroll and related taxes	6,379		10,393
Accrued liabilities	1,234		1,155
Accrued interest payable(1)	495		202
Deferred revenue, current portion	12,744		13,394
Lease liabilities, current portion	2,098		2,110
Acquisition-related contingent consideration	6,250		5,920
Restructuring accrual	295		901
Income tax payables(1)	5,343		194
Other current liabilities(1)	1,437		1,254
Total current liabilities	42,355		40,497
Convertible senior notes	129,814		127,970

Deferred revenue, non-current portion	1,236		1,775
Lease liabilities, non-current portion	3,893		4,106
Deferred income tax liabilities, non current portion	15,344		14,132
Other non-current liabilities	1,765		1,613
Total liabilities	194,407		190,093

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 and 120,000,000 shares authorized, 45,248,743 and 44,680,429 issued and outstanding, as of December 31, 2022 and September 30, 2022, respectively	45		44
Additional paid-in capital	219,596		216,493
Accumulated other comprehensive loss	(15,164)		(28,219)
Accumulated deficit	(13,271)		(18,001)

Total stockholders’ equity	191,206		170,317
Total liabilities and stockholders’ equity	$	385,613	$	360,410

(1) September 30, 2022 condensed consolidated balance sheet reflects reclassifications to conform to the current year presentation.

See accompanying notes to condensed consolidated financial statements.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

(Unaudited)

(amounts in thousands except per share data)


	Three Months Ended December 31,
	2022		2021
Revenue
Software and hardware	$	26,376	$	15,445
Services and other	19,327		17,028
Total revenue	45,703		32,473
Operating costs and expenses
Cost of revenue—software and hardware (exclusive of depreciation & amortization)	169		378
Cost of revenue—services and other (exclusive of depreciation & amortization)	4,900		4,177
Selling and marketing	9,515		8,438
Research and development	7,670		6,407
General and administrative	8,479		5,965
Amortization and acquisition-related costs	4,821		2,279
Restructuring costs	1,776		—
Total operating costs and expenses	37,330		27,644
Operating income	8,373		4,829
Interest expense	2,137		2,008
Other income, net	340		135
Income before income taxes	6,576		2,956
Income tax benefit (provision)	(1,846)		168
Net income	$	4,730	$	3,124
Net income per share—basic	$	0.11	$	0.07
Net income per share—diluted	$	0.10	$	0.07
Shares used in calculating net income (loss) per share - basic	44,930		44,788
Shares used in calculating net income (loss) per share - diluted	45,634		46,155
Other comprehensive income
Net income	$	4,730	$	3,124
Foreign currency translation adjustment	12,703		(1,267)
Unrealized gain (loss) on investments	352		(270)
Other comprehensive income	$	17,785	$	1,587

See accompanying notes to condensed consolidated financial statements.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(amounts in thousands)


	Three Months Ended December 31, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount
Balance, September 30, 2022	44,680	$	44	$	216,493		$	(18,001)	$	(28,219)	$	170,317
Exercise of stock options	83	—		662			—		—		662
Settlement of restricted stock units	486	1		(1)			—		—		—


Stock-based compensation expense	—	—		2,442			—		—		2,442



Components of other comprehensive income:
Net income	—	—		—			4,730		—		4,730
Currency translation adjustment	—	—		—			—		12,703		12,703
Change in unrealized gain (loss) on investments	—	—		—			—		352		352
Total other comprehensive income											17,785
Balance, December 31, 2022	45,249	$	45	$	219,596		$	(13,271)	$	(15,164)	$	191,206


	Three Months Ended December 31, 2021
	Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance, September 30, 2021	44,169	$	44	$	199,935	(8)	$	(140)	$	(6,066)	$	(943)	$	192,830
Exercise of stock options	9	—		25		—

SEC Form 10-Q filed by Mitek Systems Inc.