mitk-20231231

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, 2023


☐			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 46,790,611 shares of the registrant’s common stock outstanding as of March 31, 2024.

MITEK SYSTEMS, INC.

FORM 10-Q

For The Quarterly Period Ended December 31, 2023

INDEX


	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets at December 31, 2023 (Unaudited) and September 30, 2023	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) for the Three Months Ended December 31, 2023 and 2022	2
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the Three Months Ended December 31, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2023 and 2022	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	35

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands except share data)


	December 31, 2023 (Unaudited)		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
Intangible assets, net	63,173		64,674
Goodwill	127,664		123,548
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 and 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

See accompanying notes to condensed consolidated financial statements.

MITEK SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(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
Comprehensive income
Net income (loss)		$	(5,793)	$	4,726
Foreign currency translation adjustment		6,544		12,703
Unrealized gain on investments		102		352
Comprehensive income		$	853	$	17,781

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, 2023
	Common Stock			Additional Paid-In Capital		Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount
Balance, September 30, 2023	45,591	$	46	$	228,691		$	(9,312)	$	(14,237)	$	205,188
Exercise of stock options	97	—		856			—		—		856
Settlement of restricted stock units	633	1		(1)			—		—		—

Acquisition-related shares issued	311	—		3,471			—		—		3,471
Stock-based compensation expense	—	—		3,430			—		—		3,430

Components of comprehensive income:
Net loss	—	—		—			(5,793)		—		(5,793)
Currency translation adjustment	—	—		—			—		6,544		6,544
Change in unrealized gain (loss) on investments	—	—		—			—		102		102
Total comprehensive income											853
Balance, December 31, 2023	46,632	$	47	$	236,447		$	(15,105)	$	(7,591)	$	213,798


	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	$	(17,338)	$	(28,219)	$	170,980
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 comprehensive income:
Net income	—	—		—		4,726		—		4,726
Currency translation adjustment	—	—		—		—		12,703		12,703
Change in unrealized gain (loss) on investments	—	—		—		—		352		352
Total comprehensive income										17,781
Balance, December 31, 2022	45,249	$	45	$	219,596	$	(12,612)	$	(15,164)	$	191,865

See accompanying notes to condensed consolidated financial statements.

MITEK SYSTEMS, INC.

CONDENSED 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(1)	(4,254)		5,149
Deferred revenue	857		(1,521)
Restructuring accrual	—		(651)
Other liabilities(1)	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
Supplemental disclosures of cash flow information:
Issuance of common stock for acquisition-related contingent consideration	$	3,471	$	—

Cash paid for income taxes	$	7,838	$	213
Supplemental disclosures of non-cash investing and financing activities:

Unrealized holding gain on available for sale investments	$	102

SEC Form 10-Q filed by Mitek Systems Inc.